Exclusively to the Bitshares CommunityIntroduction
We welcome the Bitshares Community participation in a new permission based distributed ledger to be called IDentabit. This will be a new blockchain based on DPoS and will offer ensured privacy and identity for every transaction.
Like Bitshares, IDentabit is an undertaking with a passion for its importance, combined with a belief that you need to cozy up to the beast in order to get close enough to deal a fatal blow.
Best to clarify, the beasts we are intent on slaying are the central facilitators and institutions taking advantage of those that cannot defend themselves, we are intent upon winning and won’t be satisfied with anything less than the establishment of a global currency that realizes the potential promised by Bitcoin.
This is a long game and in the near term won't make much difference, given the disdain the broad community has for acknowledging the need for compliance, and the widely held belief that a solution to a decentralized identity based chain was and is infeasible.
So be prepared for a long determined journey because we are convinced that the door is open, timing is perfect and the reasoning behind IDentabit is sound. History
We became interested in Bitshares when looking for a suitable platform for Remitabit, close to a year ago.
However we became concerned that whilst anonymous currencies help to thwart government overreach, they empower theft of remitter assets and and we believe governments will never regulate in favor of anonymous cross border transactions or enable seamless integration with the financial gateways that remitters require.
A recent FATF report laid it out clearly, FATF are acting to influence banks to take a risk based approach, in essence giving banks the responsibility of choosing between high risk anonymity or lower risk [identity based] alternatives.
Against this backdrop and our passion for costless P2P transactions, we came to believe that if we were to act in the interests of remitters, there was and is a need for a decentralized identity based alternative to Bitcoin, one that offered the immediacy of P2P but the safety and accuracy of transfer that can be inherent in an identity ensured blockchain.
We believe if a community based, decentralized, open source identity based alternative to Bitcoin is not introduced, then we will see institutional alternatives define the future and the possibility of financial disruption and disintermediation will be cast aside. And therefore Satoshi’s only lasting achievement will have been as a messenger that guided institutions to even greater profits.
With this as our objective, we began consulting with thought leaders in crypto-currencies, including Dan and Stan Larimer, to discuss how to solve various issues facing the implementation of an identity based blockchain that would serve as the basis for Remitabit.
A road to assured privacy was ultimately revealed by Adam Back, with “Confidential Transactions”, which offer a more practical solution to User Transaction Privacy than Peter Todd’s work on Zerocash, thus cementing the reality of a private but identity based alternative to Bitcoin.
However, when faced with the realities of scaleable performance and our views on governance and sustainable funding, we came to believe in the the future of DPoS. And how, with the support of the Bitshares community, we would lay the foundations for the attributes we consider essential for the future of adoption, remittances and the end game as we see it, decentralized banking.
To this end we are focused on defining IDentabit, a decentralized alternative to Bitcoin. This being one step along the way to introducing Remitabit, a unique remittance model that will sit as a related chain atop the blockchain ultimately adopted by IDentabit.Note: We refer to DPoS as we believe it to be the common thread amongst all Bitshares born projects no matter their name or purpose. The more projects using DPoS the stronger the community network effect.Market FactorsInfluences that empower our belief in IDentabit’s future.
A lack of Bitcoin adoption at a consumer level due to a lack of institutional gateways
Institution's risk exposure should they contribute to counterparty anonymity
Consistency amongst regulators that AML/CTF must be part of the crypto future
Minimal network effect, if everyone on the network is anonymous, how is it possible to create a growing community of associated users, this inherent limitation leads to clumsy inaccurate transfer of value
Banks and IBM’s intentions to build institutional permission based chains
The reality and stigma of crime pervades digital currencies, once banks with the help of IBM introduce identity based alternatives that result in:
simplified user interfaces
- consequent viral adoption
Why will consumers care who or what technology or philosophy lies beneath, regular consumers are primarily concerned with safety and convenience?
We may all enjoy hearing Andreas speak of the power of the Bitcoin network effect but in reality user driven network effect has failed to materialize and by keeping the anonymity torch burning he is buying the banks more time to develop their alternatives.
Finally, if we don’t build it, someone else will! Indicators include, Accenture and SETL, which are not currency competition but are speaking to permission based networks.
We believe the journey begins here with you, we have solutions to the issues of
- AML/CTF compliance and institutional acceptance
- Absolute transparent governance
But we don’t have much time, if we don’t act now the decentralized currency movement will be killed by attrition and banks will win.Request for ConsiderationPositioning Constructs
Whilst, (as we point out below) we are long range fans of Bitshares’ comprehensive vision, in the near term we see the full feature set as distracting and intend to limit functionality to facilitate an apples to apples comparison (by the media) with Bitcoin. You will see from branding and issuance denominations, our desire to benefit from a subliminal association with Bitcoin.
We also believe, that in order to become a viable alternative to Bitcoin, we must focus on attacking PoW, it was Dan’s attacks on PoW that drew us in and we believe they must continue. Where there are massive inefficiencies there are also massive opportunities.Why we value Bitshares
Transaction speed and capacity - whilst irrelevant in the short term, success demands it is catered for.
An integrated vision - we see features that are valuable to our vision for various products and services.
Voting mechanisms - whilst not essential, addresses issues of decentralized independence and governance.
DPoS and its suitability for progressive release and sustainable funding.
Finally and most importantly, we believe in Dan and the team's capacity to deliver, software has been our life and we know what it takes !Invitation
Following are the details of our plan for IDentabit and the Bitshares Community and hoping it leads to your interest and ultimately, enthusiastic support.Objectives
To offer the first open source decentralized blockchain that ensures privacy from public scrutiny and precludes forensic analysis.
To offer the first open source digital currency that enables institutional support and adoption as a consequence of enabled counterparty identification and AML/CTF reporting.
To offer transparent governance of all foundation planned (and actual) expenditure, where the originators are limited to 5% of the committed release.IssuanceSustainability50% goes to sustainable funding, released via a method we refer to as Proof of Appreciation.Genesis Allocation
50% of the remaining issuance would be share dropped as follows.
20% in honour of the existing Bitshares community.
10% to Developers
20% to those identified as constructive contributors to Bitshares bettermentNote: Vesting conditions will apply. 50% of the remaining issuance would be shared as follows
10% to the originators
10% to investment partners
Marketing and Technology PartnersIssuance TableProject Manifesto
Agreement that value is determined by adoption and use, not by tech or ideology. If we look critically at Bitcoin we witness the disregard of adoption fundamentals for revered tech and the ideology surrounding anonymity, when in fact anonymity is preventing adoption of decentralized technologies and disruption of financial networks.
Recognition that IDentabit’s objectives are clearly stated:
Adoption by institutions. Bitcoiners may continue to rave about anonymity, but pigs will fly before we see institution's risk exposure to counterparty anonymity.
Adoption by way of known user association. True network effect is not possible if you don’t know who can receive what you send.
Accuracy of transfer must also be achieved by way of user association, by matching user address books to members of the IDentabit community.
Recognition that banks love anonymity. The more time we spend defending the importance of anonymity the more time it gives them to build the inevitable alternatives.
We must set a course and remain consistent. Deviation, no matter how well intended will divide the community.
Our goal must be to establish consensus through adoption. True consensus comes not from votes but rather rejection of proposed hard forks, not only by miners (delegates) but also gateways (exchanges), merchant's web wallets and users.
As we are using DPoS we will attract the attention of trolls seeking to attack the potential of centralized wealth and influence. As a consequence we must focus on:
Divestment of influence through the progressive issuance
Governance is core, courtesy of Governance Councils where checks and balances are transparent and visible to the community.Funding
We comfortably estimate the value of IDentabit based on an identity based chain, development to-date and community support to be between $50m and $200m. As a consequence we intend to raise between $2.5m and $10m by way of investment partners. Investment partners being organisations with capital and potential material influence over the value of IDentabits. These include known major institutional exchanges and technical partners seeking relevance in the payments industry.Governance
We strongly believe in the consensus model and introduce Governing Councils, community shared budgets, notification periods and full wallet transparency.
With 50% of the genesis pool being allocated to sustainability, the main concern relates to progressive issuance, its transparency and predictability. To this end we introduce the concept of “Market Maker Auctions”. A semi-annual event that only occurs when market conditions permit. Such auctions, based on a published formula, will (once stable) be managed by code from inception through to disbursement of funds.
All funds will be allocated to those supporting the network and the IDentabit Foundation Council. ALL expenditure will be budgeted by operating councils for comment by the community.DirectionIDentabit will reflect strategic thought, commitment and loyalty to its objectives.
Thank you for your consideration and we look forward to working with all of you that get behind, what is a serious and challenging objective.
Underwun - Out!