We have not at any point slowed down or abandoned working towards the solution we originally proposed and as mentioned, are working with an outside consultant on some possible options as we speak....
I want to be completely 100% CLEAR here and state that The Crypti Foundation at has not, at any point, voted to make this change or progress with one of the possible secondary efforts to build a different form of Crypti. We ARE building background contingencies, but it is our full intention to continue developing the same solution we proposed from day 1. The conversation we are having here is about possible contingencies only at this point and is just an interesting conversation about possible innovations in the industry and ways to build out a network for a second generation currency.
I hope that clears up some possible confusion and relieves some of the worry that we will simply abandon forgers. Our goal right now is to find a solution to build the system that we said we would, build it, and then bring it to market.
Please Keep in mind that anything I say in regards to my thoughts or views on proposed solutions or systems here is only my view and comments and that the Crypti Foundation requires a majority vote of the Board members in order to make any changes, small or large, to the fundamental system. So even if I like the ideas here from time to time, or talk positively about them, it does not mean anything has changed.
We would have serious discussions here, initiated by us and probably with polls, before making any fundamental changes.
So while Crypti leadership continues with the PoT Plan A (as they should), let me discuss another critically important aspect of my blue-sky proposed Crypti Plan B.
The Plan B "no-PoT, vendor-oriented, random-selection, no-forging, zero-transaction-fee" system would make Crypti the ONLY legal cryptocoin in the United States and many other countries. This would force ALL current Bitcoin vendors to buy into a Crypti system ASAP to cover their asses and have a viable fallback cryptocurrency if and when Bitcoin (and its clones) crashes upon being declared illegal.
Before you call me crazy, hear me out. My logic is this.
Bitcoin has been declared legal by the US FEDERAL government agencies of the Department of Justice and the Internal Revenue Service.
DOJ has said BTC (and by extension all cryptocurrencies) are a "legitimate financial instrument":
http://www.dailydot.com/news/bitcoin-department-of-justice-securities-exchange-commission/IRS has said BTC (and by extension all cryptocurrencies) are "legal taxable property":
http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-GuidanceSo far, so good. But
gaming / gambling law in the United States is handled by the STATES, not the FEDS, and the
State Attorney Generals (AGs) have yet to rule on the legality of cryptocurrency mining / forging as a form of illegal gambling. Which it is, once you truly understand how BTC mining (and even PoS forging) works. The AGs don't understand this because
nobody has made it clear yet to the State AGs how Bitcoin (and clones, and even NXT) is running an illegal lottery.
By US Federal and State law, only US States can legally run lotteries. An illegal lottery is defined as any non-State activity that exhibits
ALL THREE elements of prize, chance and consideration. Google "lottery prize chance consideration" and you will come up with links like these :
http://www.marketingresources.com/pages/sweepstakes-101/38.phphttp://www.dca.ca.gov/publications/legal_guides/u-2.shtmlhttp://www.frostbrowntodd.com/resources-1069.htmlhttp://www.blankrome.com/index.cfm?contentID=37&itemID=2300So let's talk about prize, chance and consideration in the context of PoW / PoS mining / forging.
Prize: In general, anything of value provided to a "winner" of a lottery activity. For Bitcoin, this is currently 25 bitcoins currently worth between $7.5K-$10K awarded every ten minutes. Other PoW coins make similar awards differing only in their amount and timing, as determined by the rules of that coin. For "fixed supply" coins like NXT, the "prize" is the forging fees awarded every blocktime.
If XCR implements PoT, it will have a forging fee prize.Chance: In general, any factor that makes the selection of the prize winner to have an element of randomness (as opposed to, say, skill - being judged by a fair panel of experts to have the best essay, for example). For Bitcoin and other PoW coins, this chance factor is determined by the nonce, difficulty factor and target.
https://en.bitcoin.it/wiki/Noncehttps://en.bitcoin.it/wiki/Difficultyhttps://en.bitcoin.it/wiki/TargetFor PoW Bitcoin, miners around the world compete against each other in an (illegal) lottery every ten minutes to win a prize of 25 bitcoins. They are running mining rigs to create cryptographically encoded blocks recording for posterity all Bitcoin transactions occurring in the previous ten minutes. Literally tens of thousands of mining rigs create literally thousands of millions of billions of trial blocks in the ten minute blocktime period. Each of these trial blocks are different from one another because they all use a different nonce that is randomly selected by the mining rig as part of the calculation process for each trial block. ANY ONE of these trial blocks could THEORETICALLY be added to the blockchain as the valid next block. IN PRACTICE, trillions of these trial blocks are rejected until one is created
by accident and by chance that has a required number of initial leading zeros specified by the current Bitcoin "difficulty factor". This determines the "winning miner" who actually DOES get to add his block to the blockchain- and he is determined BY CHANCE.
Bitcoin is no different that a bunch of guys throwing dice in a back alley, only the "dice" are mining rigs and the "back alley" is the Internet. Warehouses of ASIC mining rigs like this one is no different than an unlicensed basement casino :
http://www.coindesk.com/inside-north-americas-8m-bitcoin-mining-operation/PoS NXT uses something called "transparent forging" (too complicated to get into here) in selecting the forger who will add the next block to the block chain, and TF has a chance element, too.
If XCR implements PoT, it will choose between nodes that have been operational for identical lengths of time by using some kind of chance function.Consideration: In general, anything that requires a participant to expend a monetary amount or significant effort to participate, and in particular something that benefits the operator of the lottery activity. For any cryptocoin, this would be operation of computers by miners/forgers/vendors/users to calculate blocks during a blocktime, and in particular the addition by a "lottery winner" of a valid block to a blockchain.
Let me cut to the chase.
If Crypti is successful in perfecting a Plan A - "PoT" system and awards forging fees to forgers in return for those forgers adding valid blocks to its blockchains, then (just like Bitcoin, NXT, and every single other PoW crapcoin out there)
CRYPTI WILL BE RUNNING AN ILLEGAL LOTTERY. If Crypti chooses to implement a Plan B - "no-PoT, vendor-oriented, random-selection, no-forging, zero-transaction-fee" system, then
CRYPTI WILL NOT BE A LOTTERY AT ALL BECAUSE THERE IS NO PRIZE.
The competitive advantages between these two situations is HUGE. Plan A makes Crypti just like everybody else with little or no competitive advantage at all. Plan B makes Crypti legal when everybody else including Bitcoin is illegal - and that is the ULTIMATE competitive advantage.
If we get Crypti lined up and ready to go as a no-forging / no-transaction fee service, then on one single day of our choosing we can throw down the gauntlet by emailing every US State AG (here they are:
http://www.naag.org/current-attorneys-general.php ) demanding they enforce their State lottery laws against Bitcoin and shut down all Bitcoin miners in their State. On that same day we email every Bitcoin journalist and vendor we can find saying that the king is dead, long live the king - Bitcoin just had a heart attack and Crypti is ready to take its place starting today. Once we start this ball rolling, a decree from any one of 50+ State AGs could come at any time. The FUD (fear uncertainty and doubt) factor alone would force everybody to grab a stake in Crypri ASAP just as insurance in case Bitcoin really DOES stumble and crash via a subsequent surprise press release from an AG declaring Bitcoin an illegal lottery.
I call this the nuclear option. We nuke Bitcoin by going to war with it on day one, and we have the key advantage of being in the right while they are in the wrong. I agitated behind the scenes at NXT about setting their forging fees to zero and using this approach to nuke and sink Bitcoin, allowing NXT to slipstream into the lead. The NXT powers-that-be didn't even want to discuss this approach because they didn't want to rock the boat, much less start a war.
Round two. Now I am at Crypti. I say let's go big or go home....with Plan B.
