I recommend an AGS-style fundraiser be used to get money for this project and allocate part of the initial supply.
For those that don't know, AGS are the "virtual" shares represented by addresses of people who sent money to special fundraising addresses for the bitshares ecosystem. It is similar to how Mastercoin raised money, except that instead of fixing a price per BTC and letting the supply be variable, the supply is fixed and the price per share is determined by splitting the fixed shares-per-day among all the donators from any particular day. (Personally I think you should count time in terms of blocks instead of days, but whatever).
Of course if we're going with bitshares_toolkit we should allocate 10%/10% AGS/PTS.
There is also value in dropping a fraction onto BTC or MSC/XCP.
Maybe 30%-50% allocation for "Proto-Truthcoins" (the virtual TC fundraiser share)?
I do *not* recommend distributing shares to miners. Mining has not been "fair" or "decentralized" for like a year now. Even if you go with POW, their rewards should be paid explicitly from the network's income rather than implicitly via coin/share dilution. Miners are subcontractors for your network.
I do *not* recommend a dev premine. That's the point of this type of fundraiser.
There is also a question of coin distribution vs share distribution. Whichever is the one that pays fees is the one that should be preallocated to AGS/PTS/"PTC".
This is exactly the question I've tried to avoid for as long as possible.
Quote from: toast on May 28, 2014, 12:51:18 AM
There is also a question of coin distribution vs share distribution. Whichever is the one that pays fees is the one that should be preallocated to AGS/PTS/"PTC".
This is a very important consideration. The actual "Truthcoins" as I designed them, are the voting shares. You must vote on outcomes (but are paid for doing so). In theory the coin layer could be a complete snapshot of the Bitcoin unspent set, ie to guarantee that you own Truthcoin-currency, you would just own Bitcoin on some chosen future date (block number).
I'm very interested in this (snapping Bitcoin for the coin-distribution [which would pay the fees]), primarily for signaling purposes: it is completely the opposite approach to that of every Altcoin so far. I want people not just to understand, but to know, that what is happening here is not at all anything like what has been happening. I want anyone who claims otherwise to be speechless. I think the marketing, and onboarding of the Bitcoin community, would be worth
a ton.
That still leaves us with the shares to play with. However, investors must know that they have to use these shares to vote on outcomes or they slowly disappear. I can't really hold the shares for people...that really defeats the whole point, doesn't it?
I've never known exactly what to do about this...I think I may need to
*gasp* ask for advice.
Sorry, could you clarify? I tried to find the coins vs shares in the whitepaper and couldn't.
From what you just described, both the coins and the shares are the "voting shares" used for outcomes. What is used for what? What charges fees for what?
People have tried everything, and are still trying even more things than that to market their coin. The altcoin community may be blind and stupid, but so is evolution, and in the last two years they have evolved a lot. From the emerging strategies I have seen, the safe thing to do is to collect a lot of money by IPO, which seconds as an initial hype of your product. This will get you investors who do not sell low, which will get your coin up a reasonable distance at coinmarketcap once it launches, and it will get you enough money to hire someone to do web-page and viral marketing.
Dropping everything on Bitcoin is extremely risky, and to be honest it feels like an attempt at coming up with some unique marketing. I would not want you to risk your neck on a single marketing stunt like that when you have no experience with marketing. Instead, let your code and product speak for itself to savvy, wealthy investors who are eager to listen and get involved, and then later try all the stunts you want, and hire professionals marketers to draw in the faceless horde.
/2cents
First of all I work during the day...trying to only work on Truthcoin in the afternoon.
Quote from: toast on May 28, 2014, 02:37:29 AM
Sorry, could you clarify? I tried to find the coins vs shares in the whitepaper and couldn't.
From what you just described, both the coins and the shares are the "voting shares" used for outcomes. What is used for what? What charges fees for what?
The reason you are confused, is that the whitepaper assumes that these will be Bitcoin prediction markets. Therefore when the paper mentions Bitcoin it is talking about coins and when it mentions TRU or Truthcoin it is talking about shares. When I said "Truthcoins" I mean shares, when I said Truthcoin-currency I mean coins. Does that help?
Quote from: CLains on May 28, 2014, 05:30:58 PM
People have tried everything, and are still trying even more things than that to market their coin. The altcoin community may be blind and stupid, but so is evolution, and in the last two years they have evolved a lot. From the emerging strategies I have seen, the safe thing to do is to collect a lot of money by IPO, which seconds as an initial hype of your product. This will get you investors who do not sell low, which will get your coin up a reasonable distance at coinmarketcap once it launches, and it will get you enough money to hire someone to do web-page and viral marketing.
Dropping everything on Bitcoin is extremely risky, and to be honest it feels like an attempt at coming up with some unique marketing. I would not want you to risk your neck on a single marketing stunt like that when you have no experience with marketing. Instead, let your code and product speak for itself to savvy, wealthy investors who are eager to listen and get involved, and then later try all the stunts you want, and hire professionals marketers to draw in the faceless horde.
/2cents
People become slavishly devoted to the coins they own, and oppose the coins they don't.
I have some savings of my own, and don't necessarily need investors at all (toast himself estimated it would only take on the order of weeks to build), but I do need a way to allocate the shares to make the project decentralized. I could have used the money a long time ago, when I was designing the project on weekends.
This project is no where near as involved as BitsharesX, NXT, or Etherium. (That's the major reason it's going to work). But I only need toast for a week, and he's under a related contract already. 4 other groups (of 1, 1, 2 and 2 coders) have contacted me and are interested in building Truthcoin.
The question is what to do about the two different coin layers, so that the project comes to life (once it is built) ASAP.
I really appreciate what you have done. I'm not a coder. What can I do to help you?
I think we should have an exchange, and put a MASSIVE sell order with all the coins.
As people buy them, we use the bitcoin they give us to put a buy order at 0.99* the sell order.
Everyone can easily convert back and forth, just by paying a 1% fee.
It is backed by bitcoin, and they have to trust the centralized organization to uphold this promise.
Eventually, truthcoin community outgrows the centralized institution. All the coins are purchased.
Then the price of truthcoin floats freely against bitcoin, and the centralized institution stops existing,
the investors keeping all the bitcoins as profit.
The centralized institution needs to decide on it's total profits from day one. 1,000 bitcoins? 10,000 bitcoins?
If you aim too high, a different centralized institution could undercut.
If you are too low, then your community wont be big enough to have stable truthcoin/bitcoin exchange rate.
Quote from: zack on May 29, 2014, 09:47:53 PM
I think we should have an exchange, and put a MASSIVE sell order with all the coins.
As people buy them, we use the bitcoin they give us to put a buy order at 0.99* the sell order.
Everyone can easily convert back and forth, just by paying a 1% fee.
It is backed by bitcoin, and they have to trust the centralized organization to uphold this promise.
Eventually, truthcoin community outgrows the centralized institution. All the coins are purchased.
Then the price of truthcoin floats freely against bitcoin, and the centralized institution stops existing,
the investors keeping all the bitcoins as profit.
The centralized institution needs to decide on it's total profits from day one. 1,000 bitcoins? 10,000 bitcoins?
If you aim too high, a different centralized institution could undercut.
If you are too low, then your community wont be big enough to have stable truthcoin/bitcoin exchange rate.
Price-fixing is never good. Traditional IPO model is totally broken. You can establish a market price in the presale by doing a AGS-style fundraiser. That way you actually get the money, and get however much money people were willing to invest.
Quote from: crimealone on May 29, 2014, 08:27:51 AM
I really appreciate what you have done. I'm not a coder. What can I do to help you?
Hey, thanks! One thing I wish people would do more is just submit pull requests to the central FAQ, instead of just email/forum their questions. You could do that, or make a list so that I could do that more easily (message or email it to me). Also, I've been advised to go on the podcast "Let's Talk Bitcoin", you could find the guy running it and see if he's interested. You don't by any chance go to / know anyone at Princeton? Many of the items here will require, at some point, careful attention from Bitcoin-dev-experts. Just spreading the word is nice, would like to get (smart) people talking about it so that we can get the criticism we need to produce a viable implementation. Answer people's questions. That's all I can think of right now.
Refocusing here:
Quote from: toast on May 28, 2014, 12:51:18 AM
the supply is fixed and the price per share is determined by splitting the fixed shares-per-day among all the donators from any particular day. (Personally I think you should count time in terms of blocks instead of days, but whatever).
I'm having trouble with this, is it like this: http://en.wikipedia.org/wiki/Dutch_auction#Public_offerings If not, it seems you'd want to wait until a day when few people are donating.
Quote from: toast on May 28, 2014, 12:51:18 AM
I do *not* recommend distributing shares to miners. Mining has not been "fair" or "decentralized" for like a year now. Even if you go with POW, their rewards should be paid explicitly from the network's income rather than implicitly via coin/share dilution. Miners are subcontractors for your network.
If you read Satoshi's whitepaper, you'll see the blockrewards were distributed to miners for
two reasons. Firstly, they provided subcontracting, but secondly they "[provided] a way to initially distribute coins into circulation". Kaldor-Hicks (profitability) is not enough, a value network must be a Pareto Improvement (incentive compatible
for a critical mass) to get people to switch and re-create the network effects of money (which are paramount). This second reason contributed
more to Bitcoin's success, in my view, than the first "subcontractor" reason. If Satoshi had given (not mined) any coins to himself, he would invite an immediate fork(s) of the project, and critical mass and network effects would never have emerged.
Quote from: toast on May 28, 2014, 12:51:18 AM
There is also a question of coin distribution vs share distribution. Whichever is the one that pays fees is the one that should be preallocated to AGS/PTS/"PTC".
I still think the Coins should go to Bitcoin holders (for the allocation reason above), yet the first branch of Votecoins, with many held by / publicly endorsed by me (as I think that I can most inspire trust, after doing all of this work) should be distributed to developers/funders/contributors/etc. But its hardly a settled issue.
Again, the Votecoins are not "free", one must do the work of Voting (for which you are paid). This is a little inconvenient, I don't know how people would feel about this.
In the ancient past, shareholders did a lot of work, monitoring their corporation and electing its Board and Executive Managers. Today, people just kick back and do nothing. In my opinion, this is the source of much of today's economic failure (huge firms with none of the owners knowing or caring about what's going on).
Quote from: psztorc on May 30, 2014, 10:56:01 PM
If you read Satoshi's whitepaper, you'll see the blockrewards were distributed to miners for two reasons. Firstly, they provided subcontracting, but secondly they "[provided] a way to initially distribute coins into circulation". Kaldor-Hicks (profitability) is not enough, a value network must be a Pareto Improvement (incentive compatible for a critical mass) to get people to switch and re-create the network effects of money (which are paramount). This second reason contributed more to Bitcoin's success, in my view, than the first "subcontractor" reason. If Satoshi had given (not mined) any coins to himself, he would invite an immediate fork(s) of the project, and critical mass and network effects would never have emerged.
This worked because bitcoin was cpu mined for a huge chunk of the initial distribution. Claiming that mining gives a widespread distribution is ignoring the reality that mining power is *extremely* centralized, not much better than the few project leaders giving all shares to themselves.
Of course the *perception* that mining is "fair" might make you more resistant to a fork. But do you care about fork resistance if you're giving away the vast majority of the equity to a few miners?
I'm only giving the coins to miners as they mine in the future. The rest of the coins are going to Bitcoin owners.
Satoshi solved the allocation problem by distributing the coins not to whoever he thought deserved them, but to anyone interested enough in Bitcoin to prove that interest by CPU mining. The point was that he didn't make it about himself, or his preferences (because there are a lot of people in the world, who could have copied Bitcoin and made it about themselves or their preferences), but instead made it on the principle of building a network (and building network effects). That is what I am trying to emulate.
Its not about copying Bitcoin because Bitcoin is good, its about plugging into the best network.
Quote from: psztorc on May 31, 2014, 11:23:51 PM
I'm only giving the coins to miners as they mine in the future. The rest of the coins are going to Bitcoin owners.
Satoshi solved the allocation problem by distributing the coins not to whoever he thought deserved them, but to anyone interested enough in Bitcoin to prove that interest by CPU mining. The point was that he didn't make it about himself, or his preferences (because there are a lot of people in the world, who could have copied Bitcoin and made it about themselves or their preferences), but instead made it on the principle of building a network (and building network effects). That is what I am trying to emulate.
Its not about copying Bitcoin because Bitcoin is good, its about plugging into the best network.
Ah, that makes sense.
Still, I'm curious about why you care about network effect if you don't have anything to lose from a fork attempt. You could pick an allocation that is more favorable to yourself, and if it gets forked to pure BTC then you are no worse off than if you had started with a pure BTC distribution to begin with. (I'm assuming you're not secretly a large BTC holder).
Why didn't Satoshi pick a different allocation? I'm most-favored by the allocation which most-maximizes project-success.
Also, I honestly believe that the value-creation is in the Votecoins. That is the point of this project, to establish a reliable Truth-Serum for economic use. The currency will ebb and flow, and be used for all kinds of purposes, independent of this idea.
Finally, I think I would have something to lose from a false-start. It would be more than little a little chaotic, don't you think?
There are 2 types of prediction markets, one of which is designed for being using similar to how kickstarter is used. It is for gathering funds for a public good.
We should find the 1000 most profitable textbooks, and created a prediction market for each textbook. Each market should reward whoever is first to provide a torrent to the book.
This would bring a large amount of attention to the project, it would ruin some predatory industries, and it would allocate the initial funds.
That sounds both overly complex and out of scope.
People won't be able to "use" this software for anything until they believe that it will continue to work reliably for a few consecutive months. For many people, that will not be until they personally see it working for a few consecutive years.
...so You must guarantee, that Truthcoin is CPU mineable ?
No ASICs, no other special hardware etc
so, no Scrypt hashing...
What will You do ?
Quote from: Max on July 10, 2014, 09:45:16 PM
...so You must guarantee, that Truthcoin is CPU mineable ?
No ASICs, no other special hardware etc
so, no Scrypt hashing...
What will You do ?
http://forum.truthcoin.info/index.php/topic,20.0.html
Thanks for the link :)
I asked only because i worried about fairness of allocation in ASIC involved coin.
Maybe You can do something for fairness even with double SHA....who knows.
Quote from: Max on July 11, 2014, 08:28:21 AM
I asked only because i worried about fairness of allocation in ASIC involved coin.
Maybe You can do something for fairness even with double SHA....who knows.
Look at slide 4 of my presentation draft: https://github.com/psztorc/Truthcoin/raw/master/docs/TruthcoinValuable.pptx
(http://forum.truthcoin.info/index.php/topic,109.0.html)
If you already own Bitcoin, you'll own this coin as well. Future block rewards will likely go to ASIC-miners, as they do today for Bitcoin.
I have just finished another small presentation which examines this question more directly: https://github.com/psztorc/Truthcoin/raw/master/docs/InitialCoinAllocations.pdf
I like the idea of a snapshot of the Bitcoin distribution for the initial cash-coin distribution.
However, I would make a opt in process necessary afterwards. So the snapshot is done and afterwards every user has like 6 month to claim its cash coins. First, this would have a great marketing effect to get user to download and try out the client. And second, after the 6 month the uncertainty about how much cash-coins are in circulation is much smaller.
How much are you looking to fundraise?
Money actually isn't the bottleneck, dev talent is. (This thread was started by one of the rare breed of 'good blockchain developers', "toast" from the Bitshares dev team).
Whatever it takes to get 1-2 extremely high quality developers.
(So the answer depends on finding developers and asking them "What do you want?")
Dyffy is paying me $1000 a month (minus tax) to build their version of truthcoin.
I am not loyal. If anyone would pay me more, I would work on their ideas instead.
The python version of truthcoin I built is working pretty well. It does all the prediction market stuff truthcoin is supposed to do. We have tested it with 5 nodes at a time. We have run it continuously for 4 days without it crashing.
My head-start on creating this software is very big. It will be multiple months before we see any other implementation start to catch up to where I am.
My guess for the most valuable truthcoin 2 years from now: Majority of coins will be owned by a rich person who can afford legal fees and advertising fees (and possibly mining fees). They will hire me to maintain it. Maybe it will be Dyffy, but I doubt it.
If truthcoin is launched as a proof-of-work blockchain, I expect there to be a period of time about as long as a year when we will need to pay $100-$1000 daily into mining costs. I cannot afford this. Until a rich person shows up willing to pay, I am focusing my attention on proof of stake, which will costs pennies a day to keep operational.
Who is Dyffy?
How did you come to your $100-$1000 daily mining cost estimate?
Dyffy is a startup trying to launch truthcoin.
We need to invest enough money into mining to making it prohibitively expensive to attack the chain.
If we invest $100 per day, then it would cost $4 to sustain an attack for an hour.
There is no magic number that would make us safe. If we do POW, it will be a compromise between needing security and not being able to afford security.
POW is a very expensive consensus mechanism.
Bitcoin costs $1.2 million per day to keep running right now.
So it would cost around $48,000 per hour to sustain an attack against bitcoin.
Bitcoin is actually a lot safer than $48,000 because the market for ASICS is not as liquid as the market for general purpose CPU cycles. Since our blockchain is going to be mined by CPU at first, it's market will be almost perfectly liquid. An attack will actually cost as much as my calculations show.
Proof of stake, if it works, would cost dollars a day to operate, even if the blockchain was as big as bitcoin.
I started studying how to make FPGAs. They are much more powerful than CPU mining, but not as powerful as ASICS.
It is an in-between step before making ASICS.
One way to make POW more affordable would be if we produced and sold custom truthcoin mining hardware that only worked for our blockchain.
Thanks for the reply!
Is there a link for Dyffy or any posts they made somewhere? Who runs it?
I am somewhat skeptical of changes to the POW hash function mainly because I don't think they have been necessary in the altcoin world (although I do not believe in alts in general -- Truthcoin is of course different as it is not really an alt). I think merged mining is always better as then you get the benefits of the bitcoin blockchain. In one of his papers, Poelstra mentions a few things to watch out for such as ease-of-verification, progress-freeness, optimization-freeness, and simplicity (mainly to avoid centralization).
POW is expensive but using resources in the real world seems to be the only way to protect decentralized consensus networks. I think Truthcoin might be hard enough to implement so why not stick to POW and use merged mining? Trying to create dedicated hardware at this point would be additional capital cost and be further centralization.
Would it be possible to do POW with a private blockchain at first for testing purposes?
Edit: Merged mining : http://dot-bit.org/Merged_Mining
Merged mining is dangerous unless all miners jump in as it would make it easier for one to do a 51% attack. (Like what Luke-Jr. did to CoiledCoin.)
Rather than either shares based on Bitcoin snapshot or shares to miners, I suggest a rewards of Truthcoin in proportion to total coin (Bitcoin + Truthcoin) time participation (which is proportional to Bitcoins bet on the wager). Having consistent rules independent of time or block number would avoid accusations of preming or unfair early adopter rules. Opportunities for participation will increase as the gambling increases, so although early adoptiong will have advantages, early adoption before gamblers become aware of the network will have only marginal advantage. I imagine initial Truthcoin shares would be sent to the Truthcoin address corresponding to the participating Bitcoin address. Voting/participating both your Bitcoin and Truthcoin shares would be easy because they are the same address on different networks, thus have the same keys and the same signature, making Truthcoin share payouts easy to compute. Bitcoin payouts of commission earning to Truthcoin shareholders would be accomplished simply by sending Bitcoin to the Bitcoin address
identical to the Truthcoin address. Mining rewards likewise would be sent to the Bitcoin address that the Truthcoin miner indicates - making Truthcoin among the first mergemining operation to pay miners in Bitcoin.
So we get the recursive formulas. If
coin@n = (Bitcoin@n +Truthcoin stake @n), and
participation@n = (+/-)wagers@n, and
Truthcoin@(n+1) = Truthcoin@n + (coin@n)*(participation@n)
Then,
Truthcoin@(n+1) = Truthcoin@n + (B@n +Truthcoin stake @n)*((+/-)wagers@n)
Thus for the special case of constant wagers (wagers@n = w for all n = 0,N, otherwise wagers@n=0 for n<0) for each block, with no share transfers at a particular address so Bitcoin held @ n = constant B:
Truthcoin @ 1 = B*w
Truthcoin @ 2 = B*w + (B + Truthcoin@1)*w
= B*w + (Bitcoin + Bitcoin*w)*w = 2*B*w + B*w^2
Truthcoin @ N = N*B*w + (N-1)Bitcoin*w^2 + ... + 2*B*w^(N-1) + B*w^N
= B*Sum(N*w^(N+1-n))
Since I can't do infinite series as well as I could in college, I will now resort to proof by Wolfram:
http://www.wolframalpha.com/input/?i=B*sum+(N*w%5E(N%2B1-n)),+n%3D1+to+N (http://www.wolframalpha.com/input/?i=B*sum+(N*w%5E(N%2B1-n)),+n%3D1+to+N)
Truthcoin @ N = B*N*w*(w^(N-1))/(w-1)
(lim n->infinity)(w/(w-1)) = 1
Thus for large w, Truthcoin @ N ~ B*N*(w-1)^N, so "exponential" growth
Also
For small wagers, w = 0.5, Truthcoin @ N ~ N. (Exercise for the reader - I just verified this with a calculator at a few values of N.)
So basically participation has diminishing returns of shares with time unless wagers become at least 0.5 Bitcoin per block, which is where share growth linearly increases with time. The exact threshold can be changed by throwing in some adjustments, but accusations of premining shares become provably false because participation becomes increasingly valuable not only with persistence (large N) but even more so with large wagers. You can't really premine or even get an unwarranted early adopter advantage as long as wagers are still increasing and your Bitcoin value is constant.
So what is the incentive for early adoption then? Because the assumption of constant Bitcoin is false. Early adopters will get dividends in Bitcoin, which increases their Bitcoin share, giving them a further advantage over late adopters. This only works though if they have significant savings, that is they only spend a fraction of their income. If they plan to spend all their earnings, they will asymptotically approach the interest share of late adopters with the same Bitcoin holding. Also, Bitcoin is supposedly deflationary against fiat currency so people who are late adopters to both Bitcoin and Truthcoin are at a double disadvantage.
I believe this type of allocation will easily make the Truthcoin and Bitcoin networks self-reinforcing and make betrayal dis-incentivized. The time-invariance of rules is very important because it makes altcoins or alt-side-chains uncompetitive against an established network unless they have real added economic value by specializing. If rules have some explicit time dependency or "premining"/"preallocation" then a community of sufficiently wealthy investors might be motivate to make an independent network rather than sink capital into acquiring interest in an existing network. Early announcement doesn't eliminate that possibility, it only reduces it in the short term.
Additionally, if there are transaction fees for converting Bitcoin*participation->Truthcoin, it will encourage people to hold their Bitcoins in a single output. This will unburden the Bitcoin blockchain of unnessary transactions and untrimmable junk from multiple address/multiple output wallets. Outputs that are economically combinable into one output will get combined by Truthcoin shareholders seeking more Truthcoin, rather than waiting indefinitely long for "free" transaction eligibility. And this doesn't just happen once, but every block that pay Truthcoin dividends will incentives a transaction to combine multiple Bitcoin outputs into single Bitcoin outputs. Truthcoin will add a time value and transaction fees to Bitcoin beyond whatever time value and transaction fees it already has. This will benefit miners greatly - even if they irrationally don't participate in merge mining.
I don't understand turnpin's proposal at all.
Are you talking about allocating the initial coins?
Are you proposing to give the coins to miners? bitcoin holders? It sounds like you want to give them to gamblers.
It is possible for me to bet against myself, and neutralize my risk. It makes it look like I am gambling a lot.
The money is inaccessible for the time it is locked up to gamble. So this is identical to paying someone for making a security deposit. It runs into the same inefficiencies as a bond-based POS distribution http://www.truthcoin.info/blog/pow-cheapest/#the-coinbase-rot-paradox-less-is-more
search for "Tendermint"