Paper: Application Specific, Autonomous, Self Boot-Strapping Consensus Platforms

[bitbro]

I'm not sure why this is stickied, toast


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[bitbro]

Could monster.com function as a DAC?


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[marcelus]

Question: When all the money from the initial fundraising/coin issue runs out, what are the options available to DACs deal with recurring costs? All I can think of is investors voluntarily spending their own money for the good of the project, a devaluation of the coin base through further rounds of issuance or designing the token like freicoin to extract funds from stakeholders for the foundation.

What are the options for Bitcoin?  A DAC that is successful will grow on its own once born.

Bitcoin doesn't incur recurring costs however. Neither does Bitshares or Mastercoin, etc. They only have start-up costs (as far as I know). DACs that do require continuous funding (most businesses do) cannot be structured like bitcoin. I have thought of some solutions for specific services. For example a service that is non-continuous and has limited capacity like cinemacoin could introduce trade transaction fees that are sent to the DACs foundation to address liabilities. One would imagine that because it is non-continuous and there is limited capacity there will always be market forces to buy and sell and therefore enough liquidity (if the fee structure was correctly modelled) to cover the costs of operating the cinema. There are obviously also ways to cover costs for a DAC that offers a good like phonecoin, tvcoin, etc. The solution is not so clear when one enters the realm of unlimited supply and continuous service however, like with a DAC such as facebookcoin. How would facebookcoin pay for its staff, data storage, etc? Or do these businesses not fall under the DAC categorisation as they are not completely automated?

[bytemaster]

Question: When all the money from the initial fundraising/coin issue runs out, what are the options available to DACs deal with recurring costs? All I can think of is investors voluntarily spending their own money for the good of the project, a devaluation of the coin base through further rounds of issuance or designing the token like freicoin to extract funds from stakeholders for the foundation.

What are the options for Bitcoin?  A DAC that is successful will grow on its own once born. 

[marcelus]

Question: When all the money from the initial fundraising/coin issue runs out, what are the options available to DACs deal with recurring costs? All I can think of is investors voluntarily spending their own money for the good of the project, a devaluation of the coin base through further rounds of issuance or designing the token like freicoin to extract funds from stakeholders for the foundation.

[MrJeans]

We wish them well and if their scripting language and contract design proves useful as a means for very special purpose contracts then we suspect we will be able to adapt it to a more efficient, profitable, AGS honoring DAC.

You mean AGS and PTS honoring, right?

[santaclause102]

you should have a look at mastercoin's distribution. I think 3 people have 35%. But I am definitely not sure...

[MassiveAction]

Quote from the article

"Aside from the obvious caveat that there could be as of yet uncovered critical mistakes in the software, there are stakeholders out there who presently own more than 50 million out of the total 1billion coins issued. This means there are multiple individuals who individually own more than 5% of the total stake each."

while these are very true and valid concerns...the first possible issue "uncovered critical mistakes in the software" is most likely a non-issue since several experienced software developers have joined the effort to discover and scrub any bugs in the code. There are even bounty rewards offered to spotters of such bugs. see here: https://bitcointalk.org/index.php?topic=397183.0

The 5% stake ownership issue is still a valid and concern to me...this issue is not localized to NXT...bitcoin also has this issue but its much worse with bitcoin..Still there are discussions to get these few 5% to donate significant portions to project bounties.

[smiley35]

Quote from the article

"Aside from the obvious caveat that there could be as of yet uncovered critical mistakes in the software, there are stakeholders out there who presently own more than 50 million out of the total 1billion coins issued. This means there are multiple individuals who individually own more than 5% of the total stake each."

[MassiveAction]

Appendix A - Consensus Realities can be modified or re-written by the Consensus “The Merlin Requirement”

Is this a dangerous idea?

Is consensus reality the same as alternate reality? I'm not familiar with the term. Some good ideas though.

That thought came out of a conversation with an acquaintance who has quite a few bitcoins.  He knows I've been working on alternative cryptocurrency theory recently and know people building new coins.  He wants a coin that has essentially a voting mechanism that would let people who are the victims of crime and lose their bitcoins illegitimately to have the consensus be able to reverse or cancel transactions.   

This is very possible, but the problem is who gets to decide what is a good reason?  He wanted a "council of 12" or something, who would approve claims to be voted on by the coin holders but no matter how you do it you create a situation where because the rules can be broken for a good enough reason, the people who judge the reasons become the holders of a lot of power.

Thats the issue, otherwise I think its a great idea.

If they are random and those who judge have reputations and also get judged it might work. It would be a peer to peer moderation system. I think it's something which can be built in theory but getting it right in practice is very hard and it would require layers of anonymous voting.

One idea I stumbled upon was by a guy named Ola who is building a peer to peer based arbitration system( Coinsigner.com ). I think that idea is promising and would be a way to give incentives to the good actors in the system. There should not be a set number of how many people are on a counsel, it should not be a fixed number because that helps anyone trying to determine how to corrupt the system. Instead it should be a range and that range, also the aspect of randomness and anonymity secures things so that no one can know in advance who is on the jury.

I am ola, developer at 'consigner' previously mentioned in this thread which is temporally postponed due to work on a more important project at hand..this is another topic for discussion notwithstanding,

I had to respond to this thread because someone pointed me to it and I am an avid listener and follower of "lets talk bitcoin" show..Heck I am one of your donors…I am happy to see you finally take a step in the right direction as I was previously skeptical an a little disheartened on your position or just frustrated by your passive view towards regulation…welcoming it by passive inaction or playing devil's advocate for the case of regulation…I forget the particular episode I couldn't understand why someone so intelligent and eloquent couldn't see the truth as you argued with andreas for the case of regulation, which is just a luxury for the ~350 million western privileged compared to the other 6.5 billion. As andreas would say " no use screaming at the meteor and its trails if you are a dinosaur, you will be extinct"…I never really understood why human invent tools to further the global race and in one fell swoop revert or look for illusionary safety in the old way of doing things which they were fighting to get out of in the first place. But This particular post of your gives me hope and I am confident that you now understand that the very fabric and all main functionalities of centralized financial centers are either going to be extinct, outdated or second class…'Wall street' , 'The city' and the rest of them…

Reason for post
My main purpose of posting is to let you now that there is already a potentially better more nimble alternative to the ubiquitous mainstream crypto which is bitcoin. and all the concept which you describe is built right in to this crypto at the very  beginning…All this will be made evident on the 26th of Jan with the launch of the main client sporting : decentralized asset exchange (colored coins) (crypto to crypto without fees and crypto to fiat utilizing gateways), decentralized DNS, arbitrary messaging, instant transactions and transparent mining  and a little while after that it will enable decentralized a decentralized market, distributed storage, two phase payments, voting, reputation and much much more after certain number of blocks.
and need I mention, it will be first to market accessible through an easy to use client!! see here:  https://bitcointalk.org/index.php?topic=412138.0


the alternative protocol is called "NXT" and its already mentioned a few times by andreas antonopolous although I am not sure if he has delved deeply into the innovation to understand how things work.

What all this means is that this protocol will have a very useful economy baked right into the client, something bitcoin has to gradually attain by being gradually getting accepted by retailers..if you are thinking of immediate possible use cases, think about the shutting down of 'the global bitcoin stock exchange', bitfunder and a myriad of other avenues who patronizers are waiting in the shadows for a better alternative..This use case is only one example for starters…

Nxt already has a function equivalent of what you call a DACP which is the 'NXT' platform and DAC are being drawn up and created at this very moment..I know because I am involved in one and there are several others involved in the creation of others..this is in relation to the "more important project" which i mentioned earlier. These DACS will be voted upon come feb 3

Also what you call "voice holders" is your share of the 'nxt' currency and you can use this to effectively and democratically cast your vote ( your influence is proportional to your share )



the main difference is that bitcoin is a protocol with its first app as currency..Bitcoin had to mature and systematically coerce retailers and real world merchants to accept it thereby increasing its economic activity, driving price increase and adoption…Also plans for DAC support in bitcoin have been delayed until much more recently..NXT on the other hand comes baked with everything you could hope for in a truly decentralized protocol with layers of apps as currency, DACS,….. and an economy which will drive the adoption of the currency from the very beginning, whats more you have instant transaction confirmations.


of course Nxt is not perfect, especially with the currency distribution, but it is certainly a very innovative invention that I believe will rival bitcoin in the next coming months ..I believe it is worth your time to do a little research, then come away with what you think, objectively…I have not found an outside objective source reviewing the protocol without any bias..But there are some supporters who have written excellent articles, one example is below, I have also attached the main thread:

Quick article by and educated supporter of nxt:  http://info.nxtcrypto.org/why-nxt-ought-to-be-taken-seriously/

NXT thread: https://bitcointalk.org/index.php?topic=345619.0

[bytemaster]

Dan, here is what Charles wrote in response: https://bitcointalk.org/index.php?topic=412878.msg4497464#msg4497464

I'm not going to fully address Dan's concerns here. The questions he listed indicate they either didn't read or didn't comprehend the whitepaper. For example, the entire philosophy of Ethereum is to be a base layer for innovation thus the particular economic model of a DAC running on top of Ethereum is beyond the scope of our design. A person could indeed have dividends in a sub-currency, yet this point seems to have been missed or ignored.

As for P2P exchange, we have a close relationship with Open Transactions and combined with a namecoin style contract provided in the whitepaper and bitmessage makes a significantly more efficient distributive exchange than is possible with BitShares. Trust is not required as auditing can be done on Ethereum blockchain and we wouldn't suffer any bloat. 

Things like 7 again demonstrate either a lack of comprehension or ignorance of our design, contracts are more than robust enough to launch a proof of stake subcurrency. 6 seems to ignore ethereum script is turing complete and thus you can compile a language like c++ into it (anyone ever used coffeescript to write js)?

On a side note, I am honestly curious how Invictus intends on building DACs without a turing complete language? It seems like you would end in an infinite inductive process of having to build a bigger feature set for the next set of DACs. I guess they have a different philosophy and this is fine. I wish them well and hope they find success for the market's benefit.

There is one theme that keeps coming up in Charles's response:  1 chain to rule them all.  Unless you have many Ethereum clones each running a subset of the contracts it will become bottlenecked by bandwidth and centralized.  Then you need merged mining with all of its challenges.

BASIC is turing complete, but I wouldn't implement a blockchain in it even though technically I could.  They would have to provide a complete set of APIs, data structures, etc to build anything remotely complex.  The ether currency does not pay dividends and in fact is inflationary while it is mined into existence.   Theory and practice are two VERY DIFFERENT things so being turing complete is a necessary but insufficient condition.

If I was on their project I would eliminate mining and replace it with proof of stake and consensus.  Then all that remains is the viability of their generic contracts.   I will just assume that this is possible and that they will do this because it is an easy change.    Now they are left with the initial allocation problem.   

With the structure of the code I am writing for BitShares it is very easy to modify it to 'write new contracts' and with the need to worry about mining it is equally easy to launch new chains as it would be to launch a new high-volume contract. 

You cannot put all transactions from all contracts on a single chain while claiming to be decentralized.  So until they can produce some hard numbers on how many transactions per second they can process, how large their chain will grow, and the processing time required to validate their chain, their claims remain purely theoretical and not based in the reality of limited resources.  I am sure they can produce something that works well in the early days.

We have designs for a dozen different DACs each of which we estimate will max out the bandwidth an average individual would be willing to use even though we are taking extreme measures to minimize transaction volume.

Just imagine I implemented BitShares on top of Etherum and was attempting to process 10 trx per second through their scripting engine and manage an order book that requires a database of 10K bids/asks and that the state of this contract cannot be cached in memory because there are 100 other contracts each attempting to process 10 trx per second.  Every node would have to keep loading and unloading contracts from their 'archived state' in the blockchain to their 'in memory' state necessary to execute the transaction or the scripts would have to operate 'on disk'.

I am sure they can do some innovative stuff, but the one and only reason to have a turing complete scripting language in a blockchain is to gain the so-called security of common mining.  Without mining it is far easier to launch a new DAC from a common code base than to attempt to build a new DAC with one hand tied behind your back by etherums turing complete, but limited, scripting language.   The transaction fees of implementing BTS on Etherum would be very high.

It will be fun to watch how this all plays out.   I must congratulate Charles on being a great salesman because his arguments are very persuasive to anyone who hasn't been living and breathing block-chain designs and scalability issues for the past year.  I hope they produce something great because if they can then I will be very happy to improve upon it.   

[vikram]

Dan, here is what Charles wrote in response: https://bitcointalk.org/index.php?topic=412878.msg4497464#msg4497464

I'm not going to fully address Dan's concerns here. The questions he listed indicate they either didn't read or didn't comprehend the whitepaper. For example, the entire philosophy of Ethereum is to be a base layer for innovation thus the particular economic model of a DAC running on top of Ethereum is beyond the scope of our design. A person could indeed have dividends in a sub-currency, yet this point seems to have been missed or ignored.

As for P2P exchange, we have a close relationship with Open Transactions and combined with a namecoin style contract provided in the whitepaper and bitmessage makes a significantly more efficient distributive exchange than is possible with BitShares. Trust is not required as auditing can be done on Ethereum blockchain and we wouldn't suffer any bloat. 

Things like 7 again demonstrate either a lack of comprehension or ignorance of our design, contracts are more than robust enough to launch a proof of stake subcurrency. 6 seems to ignore ethereum script is turing complete and thus you can compile a language like c++ into it (anyone ever used coffeescript to write js)?

On a side note, I am honestly curious how Invictus intends on building DACs without a turing complete language? It seems like you would end in an infinite inductive process of having to build a bigger feature set for the next set of DACs. I guess they have a different philosophy and this is fine. I wish them well and hope they find success for the market's benefit.

[bytemaster]

Our technical team has evaluated the Ethereum proposal and design and have concluded the following:

1) Mining means the DAC will be operating at a loss or break-even at best.  No dividends.
2) Scripts will require more blockchain space and bandwidth resulting in lower transaction volume for the same level of decentralization.
3) We do not believe the scripts can efficiently implement a BitShares like market matching with automatic margin calls at scale. 
4) Merged mining would be required to secure parallel chains... this has its own challenges.
5) Mining will result in centralization one block at a time, something very bad for chains that implement markets.
6) Finding GPU developers is hard enough, defining a new dedicated language for this purpose will be even harder.
7) If you eliminate mining, then the cost of launching a new DAC is near 0 and you can simply use C++ to encode your contracts starting from a 'shell DAC' and launch without having to overload everyone not interested in your contract. 
NO 'competitor' thus far is willing to admit that multiple parallel blockchains will be required to handle the order of magnitude greater transaction volume an exchange experiences vs Bitcoin and this is for a SINGLE currency pair.  Imagine attempting to have every tradable market on one chain!   This will rapidly be centralized into trusted supernodes that can handle the bandwidth requirements.
9) You think bitcoin verification times have trouble scaling, imagine executing an interpreted language!

Conclusion: We believe Ethereum is an interesting computer science project with little compelling advantage in developing new DACs and many drawbacks.   

We wish them well and if their scripting language and contract design proves useful as a means for very special purpose contracts then we suspect we will be able to adapt it to a more efficient, profitable, AGS honoring DAC.
 

[AdamBLevine]

Ethereum is really ambitious and uses a lot of untested components.   I think Bitshares will beat Ethereum to market and will offer a competitive service of a different type.

That said, Ethereum looks like an awesome platform to build DACs on top of and for some applications that makes more sense than the blockchain approach.  Personally, I'm investing in all of these projects because they're all ambitious attempts at generational problems by smart, passionate people whom all have my respect.    Worst case scenario, Invictus doesn't bother building their own platform and just focuses on building and launching innovative DACs.

[smiley35]

You mentioned Ethereum. Could someone explain this in the common tongue? I have a limited understanding. I gather that it was conceived by Charles... ex ceo of invictus. I read the white paper and it seems like a very open DACP that allows people to build DACs as protocol layers within this more broad framework. Then I saw that it was going to be 25% pre mined, and I just wrote it off. Could anyone shed a little light on Ethereum for me?

Ethereum was conceptualized and created by Vitalik Buterin.   Charles joined the team this month in a senior role, the Ethereum ethos is very inclusive and they're looking to pull in as many partners as possible to help develop the ambitious project. 

Charles and I had been talking about starting a company that builds IPOcoins for people in December until the Ethereum whitepaper started circulating, it's a very very ambitious project but could skip a lot of headache if it works.

Personally, I'm a fan of all the projects in the space.

Ok, thanks for the clarification. Vitalik is a pretty rad dude. So lets say Ethereum takes off, does it rewrite the rules and swallow up projects like bitshares, and even potentially bitcoin itself? Will history have to bow into the fold of Ethereum or will it be just another way for people to play. It kinda sounds like tcp/ip(Ethereum) coming along after html(bitcoin). I realize that is a strange comparison as html wouldn't be that usefull if invented before tcp/ip, but what I'm getting at is is this a meta blockchain so to speak?