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Topics - Agent86

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General Discussion / Soledger Goals
« on: November 02, 2016, 02:37:18 am »
Hi Everyone,

I am writing to provide some more information and context about Soledger Inc. and our goals (prompted by this post,23474.0.html and follow up questions).

Vikram and I were both heavily involved in the BitShares community and it's where our passion for blockchain technology took root.

Some of the visions and goals discussed on this forum are extremely compelling.  So much so that despite setbacks there are a large number of community members that have remained engaged and following the forum in the hope of finding a way to bring the potential to life.

Most of us would agree the BitShares ecosystem is not yet all it could be.  More than anything, Vikram and I would like to see cool and compelling systems developed and brought to life and to be a part of that.  And as far as we are concerned, the BitShares community speaks our language.  This community comprises the people who are most likely to understand, appreciate, and enjoy the types of things Vikram and I would like to be a part of building.  In addition to being the people most likely to be able to offer useful support and constructive criticism.

When I talk of "our community" it's obviously hard to define. The community is far from unified; different people have different opinions on what's important, what's interesting, and have different goals.  It can't be entirely defined by the current allocation of BitShares stake as I think there are talented community members that may have sold for valid reasons.  But that doesn't mean they lost sight of the vision or have nothing to contribute.

Vikram and I have ideas about what is useful and compelling and worth working on.  But building such systems is also a huge undertaking and requires multiple people to risk time and mental energy at a significant opportunity cost.  Time that could be spent working on well paying careers with clear paths for advancement.  Broadly, our hope is to work in conjunction and as part of a sophisticated and understanding community.

General Discussion / Let's jumpstart share based voting / polling!
« on: June 26, 2015, 04:05:16 pm »
I think share polling is super important for a consensus system but unfortunately despite talk of its importance I don't feel like smartly implemented stake polling / governance features have been a sufficient priority.  This gives the impression that BTS is very centralized and prevents large changes from having a feeling of legitimacy.  Things like current delegates and even workers in BTS2.0 leave a lot to be desired in terms of use for polling and governance IMO.

The best thing I can think of for stakeholders to start voting on things now in a user friendly way would be to register 0% delegates.

We also need delegates to be able to "resign" so that voting in a delegate to express an opinion on a poll doesn't actually elect a block producer.  IMO it's best if a resign feature allows people to still vote for and view resigned delegates in gui, they just aren't part of the top 101 that produce blocks; that way they can be used for polls.  The resign feature should probably be ironed out regardless so delegates who have stopped producing blocks can resign.  I'm offering a $500 bitUSD bounty to get the resign feature for delegates fixed/complete asap (not waiting for BTS2).

I've registered two 0% delegates to start a poll:

upgrade-to-bts-2 (vote if you support the upgrade) (ID: 89386)
do-not-upgrade-to-bts-2 (vote for this if you don't support the upgrade) (ID: 89387)

I think it's obvious which way this poll will go but I still think it's important for stakeholders to show it if they are willing to take the time express themselves.  You can burn comments on the wall of poll delegates if you like too.  My feeling is that the success of BTS depends heavily on stakeholder voting, and if we are ever able to get over 50% of active stake agreement on some things that would be very helpful.  PLEASE VOTE! And if there are other polls people want to make then do the same thing and promote your poll.   If either are voted into top 101 I will get a delegate running and produce blocks or retire/resign the account(s).

General Discussion / Throttle delegate approval?
« on: November 12, 2014, 04:05:24 pm »
I want to see what people think of an idea to throttle approval of delegates.  The point is to allay fears that some entity accumulates a large secret stake and then quickly votes in otherwise unknown delegates before anyone has time to react.   Throttling could allow time to publicly demand an explanation if unknown delegates start getting huge support.  It would give time to "get out the vote" to coalesce around more well known delegates so the offending delegates don't get in or even prepare to consider the extreme measure of hard forking out stake if no one knows why these delegates have any support.  Basically there is no restriction on a delegate losing approval but a delegate can't gain more than X% approval in a 24 hr period or similar rule.  Kind of like the idea that trust takes time to gain but is quick to lose.

General Discussion / Please don't rebrand BTSX to just BitShares
« on: October 31, 2014, 05:30:26 pm »
I know this decision is likely already made but I want to state my feeling before Nov 5th, because that is when the change is finalized.

I liked the branding of BitShares X as a bank and exchange.  I think just calling it "BitShares" is too generic and not descriptive enough of its function.  I still believe that one blockchain won't be all things to all people.

Trying desperately to make things "simple" to appeal to "investors" who apparently can't otherwise follow what we are doing is unnecessary in my opinion.

I just want to suggest an option when placing a standard sell order... you still enter your price and quantity as usual but you could have an optional check box that says don't sell below exchange rate (median feed).  So the price you enter then becomes the minimum BTSX you will accept for your bitUSD but you will get matched at the feed price ahead of all shorts and compete with them directly.  Priority should be first in first out.  This is more convenient than losing the spread by selling into whatever bid wall exists or having to carefully place your order just below feed price, only downside is you may have to wait a little for a buyer, but you will eventually move to the front of the line as other sell orders are matched and before any shorts execute.

KeyID / DNS business model and launch strategy
« on: September 22, 2014, 05:53:26 pm »
Quote from: toast link=topic=9126.msg119069#msg119069
OK I un-caved to agent (for the first TLD at least)... I'm too indecisive to be an effective project lead.
Ok, I was too late to reply before the prior thread was locked, so here are my thoughts…

There is a place for friendly competition and this can benefit investors in the long run.

How about the DNS DAC that toast is managing (with the snapshot date and distribution chosen by toast) launches with incentives that are more in line with what was originally discussed and expected by "investors/donors".

I would also feel way more comfortable taking a bigger role in managing the roll-out of any DNS DAC that followed the model outlined in the whitepaper I wrote.  I don't think anyone else believes in my idea as much as I do and I don't like having no say in the business development decisions that go along with it. 

I feel like Toast only half believes in the idea, and I don't believe he is able to lead and launch the DAC in a way that maximizes its value.  So if I am able to get in a position to take a lead on this, I will do so and then investors are free to choose the strategy they feel most comfortable with and confident about.

I'm not a big fan of using proof of burn for reputation as planned.  I want to propose an alternative.  I think although these ideas are more complex they are more useful.

Every username would have a birthday and three reputation metrics or scores:
   1) Trust
   2) Devotion
   3) Lifespan
Everything builds off the devotion metric which is accomplished by mining your user name via coin-day mining "CDM".  Essentially you can point a balance to a user name to increase (or decrease) it's devotion score proportional to the coin days of the stake directed toward the user name.  This metric is scarce because a given balance cannot mine multiple usernames at the same time.  Multiple balances can however mine a single username concurrently.

The process starts when someone pays a reasonable fee to register a username.  This initiates a 30 day "auction" that is decided by competitive coin-day mining.  If no one else competes for the username or mines against it, than the person who registered it/mined it the most gets it after 30days.  This date is the "birthday" of the user name.

The devotion score for a user name is generally given by the formula: supportive_CDM - opposing_CDM = devotion.

Any username may choose to trust, not trust, or remain neutral toward another username.  The user name's total trust score is determined by the sum of the devotion scores of all usernames who trust it minus the sum of the devotion scores of all usernames who distrust it.

The lifespan for most accounts will be equivalent to the age of the account since the birthdate and goes up with time.  However if a username's total devotion score is brought negative by opposing CDM, the lifespan instead decreases with time for as long as the devotion score remains negative.  If a username's lifespan goes to zero, the user "dies" (username is revoked and it may be re-registered by someone else.)

The robo-hash images can hash both the username and the birthdate so that if a username ever changes hands the robo-hash image also changes.

Most names will have positive metrics for all three and the more positive the better. 

If there is a user you don't trust you can simply distrust the user and encourage others to do the same.  Any name with a negative trust score should typically not be trusted.

If the user is particularly offensive or the username is an attempt to spoof, you can opposition mine the name to destroy it's devotion score and eventually kill it/get it revoked. Any name with a negative devotion score is a huge red flag.  This account is quite likely a spoof/fake name and is on the road to revocation unless they can mine it to bring it positive.  There would be BIG warnings before sending any funds to a username with negative devotion.

The longer you have maintained your username in good standing the longer your lifespan and the longer time you have to react if someone starts opposition mining your username.

During the initial auction if there is more opposing CDM than the highest user competing to own the name then the name is never created.  So if someone tries to register an offensive name we can neg-mine it and it is killed in utero.

If you want to take a real close look at a username you can see specifically who trusts them, who doesn't, how recently was their devotion mined etc.

There is a natural opposition between trust & reputation and anonymity/privacy.  My feeling is that anonymity has generally been overemphasized at the expense of more important things.

I think making money off the spread by matching shorts that are below the feed with bids that are above it can reduce liquidity and hurt the peg.

I would much rather see shorts prioritized by amount of collateral.

How I would fine tune the market:
I would create a small delay from the time that new feeds are posted and the time they are active, maybe a few minutes.  That way traders can know the exact median feed price a little before it takes effect so all traders are on even ground.  Aggressive shorts can then enter their orders at the exact feed price and compete on who posts the most collateral to be first in line to be matched.  This allows traders to profit by shorting at $1 and quickly buying back at $.99 when they can.

If you match shorts that are below feed with higher bids you artificially increase transaction costs which hurts liquidity and only attract long term shorts who will be reluctant to cover (they can't turn around and cover at $.99 to make a profit because they may have only got $.95 or less worth of BTSX from their short).

General Discussion / BitUSD is not an interest bearing bond.
« on: August 28, 2014, 12:36:55 pm »
I want to give clarity about the difference between BitUSD and interest bearing bonds and how market based interest rates can be established.  I also want to emphasize what is needed to fix the BitUSD peg.

A couple comments from bytemaster have motivated this post:

BitUSD is a market between those who want leverage and those who want stability.  The "price" in this market will depend upon the interest rate people are willing to borrow at to get the leverage they desire.

Bottom line, you cannot get rid of "interest rates" or "premiums" by resorting to price feeds or price fixing.

BitUSD is not supposed to have an associated interest rate.  It's just supposed to track the dollar.  People will buy a bitUSD that reliably tracks the dollar for the purpose of facilitating trade, not for getting interest.

The current BitUSD market implementation is flawed and the peg is not working.  The notion that the difference between USD and bitUSD price is an "interest rate" is inaccurate.  There is nothing stopping the bitUSD price from falling further without intervention.

The method to fix the peg is to use the price feed to limit the creation of new bitUSD by preventing shorts from shorting below the USD price.

Interest bearing bonds require a separate market and implementation from the core BitUSD market.  A BTSX holder can sell a collateralized promise to pay a certain amount of bitUSD at a certain date in the future.  There can then be a "bond market" for these promissory notes.  The present day value of these future promises to pay BitUSD will determine short term and long term interest rates.

The first step however is to get the bitUSD implementation to accurately track the dollar.  And for this we must use the price feeds as I've described.

BitUSD should only be brought newly into existence when it is trading above the value of USD (extra demand for the extra benefits of the bitAsset version of BitUSD)

I suggest we use feeds to set a floor for shorting bitUSD.  You can short but it won't be matched with buy orders unless it is above the median feed price. You can let the market otherwise operate freely and still use the moving average to trigger margin calls.

KeyID / Alternative DNS White Paper
« on: August 02, 2014, 03:55:10 pm »
The following white paper is a description of an alternative decentralized DNS system.  My opinion is that this proposal is far better and more useful than any current proposals.  I had hoped to get this out before DNS snapshots were announced.  I apologize for the length; there is a fair amount of background information included.  Many of the specifics are in the parameters section.

It is available in pdf format here:

The Path to a Decentralized DNS,
Overcoming Adoption Challenges, Domain Squatting, and Group Trap in Decentralized Systems


Domain name registry has become a controversial topic in recent times.  The internet namespace is relied on by the public across the globe. Control over this critical infrastructure must be considered carefully.  Events such as Edward Snowden's revelations about NSA spying have increased calls to move the domain name system out of the hands of ICANN and out of the control and jurisdiction of any single government. There is significant demand for a decentralized DNS managed in an incorruptible, transparent, and publically auditable manner.  The current marketplace for domain ownership is also costly and inefficient.  Domain squatting and domain sales remain sources of added cost and profiteering.  Domain ownership disputes may be settled with costly litigation; a system not equally accessible to all market participants.  The fair allocation of domains and avoidance of cybersquatting also presents a significant challenge to any replacement system.  Despite demand, no new DNS system outside of ICANN has achieved broad use or adoption.  In this paper a system is proposed to meet this market demand and overcome challenges to adoption.

Learning from the Past:

The concept of a decentralized DNS is not new.  One prominent attempt is a project called "Namecoin." Namecoin is a DNS based heavily on the technology behind Bitcoin (1).  Bitcoin introduced a novel method for a decentralized network to come to consensus on a shared ledger.  A shared, publicly auditable ledger, beyond the control of any single institution or government, is a desirable system on which to implement a publically auditable DNS.

Despite creating such a transparent domain name registry, Namecoin has failed to gain traction with the public for a number of reasons.  Firstly, Namecoin suffers from a lack of resources and economic incentives needed for growth and promotion.  There is no mechanism to effectively direct sufficient resources to developers and promoters.  Charitable donations toward these expenses are not sufficient.  Secondly, a primary flaw in the Namecoin model is the lack of a system to address domain name squatting.  While cybersquatting is a problem in our current system, there are some tools in place to address it.  These tools include trademark disputes, litigation, and administrative actions.  The problem of squatting is greatly amplified in systems that provide no feasible mechanism to address the issue.  Finally, the consensus mechanism for the Namecoin ledger, adopted from Bitcoin, is not ideal and suffers from a tendency toward centralization over time.

Bitcoin demonstrated that a decentralized ledger can be used to track ownership rights.  This concept has applications that go beyond tracking "coin" ownership as a form of money.  Dan Larimer, who founded the BitShares project, made the observation that ownership stake tracked on a decentralized ledger is similar to "shares" of a decentralized company (2, 3).  With this analogy in mind, we can more easily analyze the economic incentives for a decentralized system that provides a service.  Typically, the ownership stake of the system acts as an internal currency for services provided and thus creates demand for shares.  Payments to all shareholders are accomplished via destruction of shares such that each shareholder's percentage ownership is increased.  In this case, the service provided is a domain name registry.

A DNS must be useful to website owners and the general public to be successfully adopted.  Memorable domain names are a limited and valuable resource.  Users expect a domain name system in which memorable domains have useful and appropriate content.  Website owners want the ability to secure memorable and appropriate domain names at fair and competitive prices.  Users and website owners both benefit from websites free from censorship, confiscation, and "man in the middle" attacks.  Decentralized DNS models have an added market advantage of providing increased privacy to domain holders.

The BitShares analogy allows us to design a shareholder owned decentralized DNS service that provides for these market demands while financially rewarding shareholders for developing, maintaining and promoting the system.  This system can be designed to solve the problems hindering Namecoin and other DNS alternatives.


The concept of domain name ownership should be explored carefully.  The shareholders of a decentralized DNS may claim ultimate ownership interest of their namespace as they are burdened with maintaining it and promoting its widespread adoption.  Shareholders are incentivized to maximize the utility and value of the namespace for all parties.

A simple system for domain name registration is a "first come first served" model with a fixed registration fee per domain and a nominal annual renewal fee.  This is the model proposed by Namecoin.  This model is grossly insufficient to prevent domain name squatting.  When a system allows domain names to be purchased and held indefinitely at little cost it incentivizes early adopters to purchase large numbers of domain names with the hope of reselling some names at a profit to later adopters.  This practice discourages real website developers from buying domains by driving up acquisition costs and creating a difficult, unpredictable, and frustrating purchasing process.  These barriers ensure the system will never be broadly adopted or useful.

Rather than a simple "first come first served" model, it is possible to use an auction to initially award domains. This can also be followed by nominal renewal fees.  While this may generate more value for shareholders, it does not solve the problem of squatting.  Domains will still be bid on in mass for speculative value.  This leaves the cost and aggravation for future buyers who must negotiate directly with domain squatters.

A recently proposed solution to domain name squatting has been documented within the BitShares community (4, 5).  This system uses a modified initial auction format.  The system rewards bidders who are outbid during an auction.  The intention is to incentivize otherwise disinterested parties to bid up auction prices to ensure a "market rate" is reached.  The author makes an unsupported assumption that speculators would bid above the long-term speculative value of the domain and that this will alter resale behavior as speculators are “incentivized to sell back bad bets at a loss” (4).   There are also auction incentives that are hoped to encourage bidders to initially bid at the price they are willing to pay.  This complex proposal offers very little improvement over a standard auction.  The proposed system also does not address the root cause of squatting behavior which is the low cost to hold domains over time.

These deficiencies in addressing squatting behavior destroy the utility of all currently proposed decentralized DNS systems.  Our current domain name system, while costly and inefficient, has tools to address squatting including litigation and administrative procedures.  Without a system to address these challenges it is not plausible for an alternative DNS to compete for adoption.  While it is conceivable that shareholders of a decentralized system could set up an analogous dispute resolution process such as voting on domain disputes, these processes tend to be costly, time consuming, and unpredictable.

Distribution of valuable and memorable domain names must be perceived as fair, broadly accessibly, transparent, and must promote utilization.  A key to avoid abusive squatting is to make holding unused domains costly.  Shareholders can retain ownership of the namespace while leasing domains at market determined prices.  This tends to make it more profitable for speculators to hold shares of the DNS rather than squat domain names.  Lease terms must be fair and respect the needs of website owners who are likely to make significant investments over time into their chosen domains.


The following system parameters are designed to maximize utility and fairness:

A new domain can be registered for an initial 30 day trial and used immediately.  This is a benefit to users who want quick access to a domain. Doing so initiates a 30 day auction for a 1 year lease of the domain. The original auction initiator has access to the domain for the period of the auction. Parameters for the initial auction should be fair, easy to understand, and reduce the need for complex bidding strategy. 

Suggested auction parameters:

1)   30 day auction - ensures visibility of the auction so interested parties are unlikely to miss it.
2)   Bids must be 10% above prior bid to be accepted - easy to remember and reduces back and forth.
3)   Auction stays open after 30 days until there is 24 hours of inactivity - reduces desire to place a bid in the last minutes of the auction deadline. Auction is unlikely to remain open long after 30 days because the selling price would double at least every week (1.1^7 = 1.95).

After acquiring a lease, a domain holder may extend the lease at any time up to the max lease length.  The max lease length is defined by the formula: initial_lease_length +  time_domain_held = max_lease_length.  Domains acquired from the auction process have an initial lease length of 1 year.

A domain name holder may post a sale offer for the remainder of their lease.  They may set a price and an optional time delay to allow for transition.  Selling at a price above their current lease rate sets a new higher market rate for the domain.  Selling at a loss will not lower the future lease rate for the domain.  The only way the shareholders will accept a lower lease rate on a domain is if the lease comes to the expiration date and a new 30 day auction is initiated.  The current lessee may initiate a new auction within the last 30 days of their lease and also bid in the auction if they choose.  They would retain control of the domain during the auction.  Keep in mind, a lease should not get close to expiration unless it is overpriced as it can be extended at any time up to the max lease length.

Whether or not a domain is posted for sale, a party interested in acquiring a currently leased domain may place an upfront deposit on that domain at a rate at least 10% above the current lease rate for the full length of the current lease. At this point the current domain holder may:

1)   Extend their lease at the higher market rate (this relinquishes the deposit back to the bidder)
2)   Hold the lease until the expiration date.  At this point the domain is relinquished to the higher bidder and the bidder takes over the lease with an initial term equal to the lease they bought out.
3)   "Sublease" the domain to the higher bidder at any time before the lease expiration.  Subleasing gives a profit to the original domain holder by the formula (higher_rate - rate_paid) * time_remaining_on_original_lease.  The new holder always takes over the domain with a lease term equal to the length of the lease they bought out.

When bidding on a currently leased domain, the funds of the high bidder are tied up and only released back to them in the event the current holder extends their lease at the higher market rate or if the bidder is outbid for the domain.  The high bidder may acquire control of the domain for the full amount of their deposit either through a sublease or the current lease expiration.

There may be times when a high bidder gets "buyer’s remorse" and would prefer to remove their offer to recover the deposit.  An advanced option can allow a bidder in this situation to offer a "buyout incentive."  This incentive is paid to anyone who takes action that releases them from their bid obligation.  It is either paid to the current domain holder if they extend their lease at the higher market rate or it is paid to anyone who outbids them for the domain.

Turning Squatters into Sales People:

The previously outlined parameters describe a system in which domains have a market based "carrying cost.”  Any individual who purchases a domain for the purpose of speculating on its future value must contend with this carrying cost.  Speculators cannot afford to pay the same costs to carry a domain as someone with a legitimate use for the domain.  Carrying costs motivate price speculators to promote names for a quicker sale; it turns squatters into sales people.  An apt analogy is "house flipping" where carrying costs, such as property taxes, motivate the flipper to promote the home and sell quickly.

Carrying costs also make it prohibitively expensive to lease domains desired by competitors or adversaries in order to deny use of the domain.  It is simply too expensive to maintain payments at high market rates for a multitude of unused domains.

Domain name holders who establish long term ownership interest in their domain are rewarded with very long lease options to have the certainty of future ownership.  They are also rewarded with a much greater profit opportunity in the event a buyer is interested in the domain.  As the system matures, long established leases may be available for purchase to those willing to pay the additional cost.

Group Trap:

A major barrier to adoption of a system such as Namecoin is the lack of resources and financial incentives for those who are promoting and developing the system.  All current systems of decentralized ownership tracking, often grouped under the term "crypto-currencies" (which includes Bitcoin) suffer from a problem of "group trap."  Group trap can be defined by the observation that working as a group toward a common goal may dilute the incentive for individual effort.  Essentially, these decentralized systems have no mechanism to effectively centralize the resources needed to incentivize developers and promoters of the system.  While those with stake in a particular currency have some motivation to promote it, the value of the work performed is diluted across all shareholders.  A developer or promoter working hard for such a system personally incurs the cost of that labor while other shareholders do not.  The shareholders who do not incur these extra costs derive comparatively better returns from their investment.

Many such systems begin with large stakeholders who work hard to promote and develop the system.  As they begin to sell stake to cover costs it becomes apparent that the work is not adequately rewarded.  Many of these projects leave investors holding stake in abandoned and underdeveloped projects.  Some projects raise initial capital from investors who are then granted stake.  This money is used on the honor system to develop the project.  This starting capital is inherently limited, it is not controlled and directed by shareholders proportional to stake, and it is not a sustainable funding method for long term project costs.

The solution to this "group trap" is shareholder directed reinvestment or distribution.  Following the BitShares analogy of shares in a profitable company we can see that shareholders can be given voting rights to direct capital.  These systems can be structured in a way that generates profit for shareholders.  For instance, a domain holder can pay a certain amount of stake to the network to lease a domain.  This stake is destroyed, increasing the percent ownership of all stakeholders.  The stakeholders can then sell that additional stake back to customers who use it to pay to lease domains on the network and the stake is again destroyed.  Destroyed stake is essentially "income" to the shareholders.  While destroyed shares are income, shareholders can pay expenses via creation of new shares.

A method to accomplish this is the election by popular vote of "workers" who are paid via the issuance of new shares.  Workers can be elected by a method called "approval voting."  Approval voting allows any stakeholder to approve or not approve of any candidate worker.  These approvals are weighted by ownership stake.  Workers with over 50% approval by stake become active and are paid a salary in newly issued shares.  This salary could be specified by the worker as part of their candidacy.  It is also possible to allow shareholders additional control of salary by approving a percentage of the requested salary during voting.  This percentage could be above or below the requested salary and a median can be taken to determine the actual paid salary.  This system allows shareholders to hire executives, developers, and promoters and appropriately incentivize them to work in the interests of the system.

A domain registration system is the type of system that requires a large network effect.  Utility of the system and adoption of the system are interdependent and each is reinforced by the other.  Promoting the system to the point that a network effect is established may require a large initial investment.  It is quite likely that expenses for development and promotion would outweigh income in the early stages of the system.  For this reason the system may create more shares than it destroys in early stages.  The system would grow in value by increasing adoption and attracting new investment capital to buy the newly created shares.


A final barrier to the long term success of Namecoin is the choice of consensus algorithm.  A detailed technical discussion of consensus algorithms is beyond the scope of this paper; however a useful overview can be given.

Namecoin uses a "proof of work" algorithm whereby adding a block of transactions to the shared ledger requires a solution to a difficult and computationally intensive problem.  This mathematical problem is difficult to solve but easy to check.  The network builds off and forms consensus on the ledger that represents the most verified "computational work."  The idea is that in order to control the ledger an entity must perform more computational work than the rest of the network combined.  This work is rewarded with the issuance of new shares or "coins."  Although Namecoin is secured via the same work and computers that secure the Bitcoin network (it does not require significant additional resources) this type of competitive computation inevitably leads to centralization.  Motivated by profit, specialized hardware is developed to reduce costs.  Due to economies of scale, only the largest and most efficient operations can profitably participate.  The computational energy required for proof of work is also unnecessarily wasteful when compared to other options for consensus.

A much improved algorithm for consensus is "proof of stake."  A specific form of proof of stake called "delegated proof of stake" (DPOS) has advantages over other implementations (6).  DPOS allows the election of representatives called “delegates” to validate transactions on the network.  This work is verifiable, and if not performed, delegates are removed.  Proof of stake rests power over the ledger ultimately in the hands of those with ownership stake.  Proof of work gives power over the ledger to those with access to the most computational resources.  Delegated proof of stake allows a more sustainable, cost efficient, and secure shared ledger than proof of work can provide.


This paper has outlined a structure for a decentralized DNS which may overcome current barriers and create the right incentives for broad adoption.  A sustainable funding and economic incentive model has been proposed.  Market parameters have been outlined that promote utility and fairness and discourage domain squatting.  A decentralized DNS can provide transparency and accessibility.  It can reduce costs and reduce the opportunity for any single entity or government to exercise control over the public DNS system.


1)   Double, Chris. May 2011. “Namecoin - A DNS alternative based on Bitcoin.”

2)   Larimer, Stan. September 2013. “Bitcoin & the Three Laws of Robotics.”

3)   Larimer, Dan. November 2013. “DAC Revisited.”

4)   Mushegian, Nikolai, June 2014. “DNS .p2p Auction Specification.”

5)   Mushegian, Nikolai, April 2014. “Whitepaper Draft.”

6)   Larimer, Dan. April 2014. “Delegated Proof of Stake.”

General Discussion / Pic from Chicago Bitcoin conference
« on: July 27, 2014, 11:10:43 pm »

From left to right: Vitalik, Bo Shen, Super3, Agent86

General Discussion / Bootstrapping a BitAsset
« on: July 17, 2014, 03:49:59 pm »
I want to suggest a different way it may be possible to bootstrap a BitAsset other than picking a minimum "market depth."  Perhaps it also adds some additional safeguard or confidence to the market.

Allow delegates to provide price feeds for BitAssets (hear me out).  A BitAsset must be supported by 50% of delegates via price feeds for 30days before trading starts.  The price feed does not determine price, only acts as a safeguard: orders outside the median price feed +- 30% are rejected.

A BitAsset must have high visibility to be supported by most delegates and the wait time gives people a chance to get ready to participate in the market.  We can also pull the plug before the 30day wait if it seems a real market has not developed.

Price feeds might sound antithetical to the BitAsset idea, but keep in mind the market still functions in the same way as proposed.  The feed doesn’t determine price and if things work like we want over time the price feed would seem unnecessary.  It's more of a safeguard/redundancy protection against manipulation in thin markets.

The price feed is also decentralized: no single delegate can manipulate it and delegates can be removed by shareholders.

General Discussion / New DAC developers and investors, help wanted
« on: July 14, 2014, 12:53:15 pm »
I think there are some great ideas for DACs that I3 may or may not implement.  They don't have the time and resources to do everything.  With this in mind, I want to reach out to potential developers who are interested in creating DACs and to people who may be interested in investing.

If there is enough interest I would like to propose a DAC that is essentially the bitshares toolkit with one change. In addition to voting on delegates, shareholders can vote on a separate class called "workers".  Workers are paid via issuance of new shares and must have support from over 50% of the stake.

This allows the DAC to fund the development of new DACs that honor the shareholders.  It will be a more compelling case for our shareholders to be honored in new DACs when we are funding the development.  It is also easier to fund development over time rather than all at once and therefore protects investors.  If this DAC was successful, more ambitious DACs would be worked on.

This DAC would require active shareholders to be most successful so initial distribution should be handled carefully. 
Unfortunately I'm not in a position to create this DAC but I would be happy to invest to fund its creation with anyone who is convincingly able to do it.


General Discussion / BTSX Sales Brochure
« on: July 10, 2014, 12:45:16 am »
Hey guys, this is my rough draft for a BitShares X sales brochure (text only).  I wrote it for use at bitcoin conferences.  I just want to see any feedback.  I'm not sure if others have already done something like this so I'm happy to look at other works to put together a good version.

BitShares X
The New Consensus

The Bitcoin community share a belief that decentralized consensus technology will change the world in profound ways.  Bitshares X is an ambitious project born from this belief. Well before the recent collapse of Mt.Gox, the need for a decentralized exchange was recognized.  In 2013 Daniel Larimer, a software developer and longtime bitcoin community member, conceived of an idea for a decentralized exchange that would allow trading derivative assets that track the value of real-world assets, such as gold or USD, without counterparty risk or trusted price feeds.  A mechanism similar to a prediction market was designed which rewards traders who push the price toward consensus.

It has been over a year since this idea was formed and a massive effort has been undertaken to bring BitShares X to market.  Along the way, a new vision of the future of blockchain technology has emerged.  Mining has been eliminated from the consensus algorithm in favor of delegated proof of stake.  This eliminates the costly overhead of mining and potential for centralization of mining pools.  A team of dedicated developers have been assembled and over $5 million in donations was raised to grow the BitShares vision.  BitShares X is expected to launch within the month.  BitShares X is an open source project and public testnets of the software are currently running.  To find out more please visit and

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