Lessons learned
1. Long term development costs.
Obviously as sound money, you can't dilute for development at a later stage without destroying your core value proposition so a new coin needs a development budget baked into allocation model.
DASH and new currency Decred do this via a reward subsidy and it is also possible to pre-allocate a % in a POS coin with a long term release schedule.
However a currency gains value from certainty, stability and very few changes, so the development budget can actually be quite conservative & ongoing basic development should actually be quite limited/restrained imo.
2. Utility, Utility, Utility. In property it's location, location, location. With a currency the key value is utility.
A currency gains value whenever it is added to an exchange/payment processor/large retailer/Atms/Vending Machines etc.
I suggest a coin should have
'Utility Reward Milestones' built in.
These would incentivize third parties who are capable of adding utility value. It also creates a compelling future because as the coin grows in value those rewards will become large enough to incentivize even the biggest players to integrate the coin, especially over otherwise equal competitors without such incentives.
3. Charity - The Moral High Ground Imagine 5% of total allocation was awarded to the 100 most widely supported charities in the world.
0.05% Each paid out over 50 years from the date the charity's official twitter/other account announces they'd like to start receiving their donation.
At Bitcoin's size this would be $3 million per charity or >$50 000 a year.
Now you have a global currency with a conscious. Not a currency only for the benefit of central bankers, governments, speculators or early adopters but one that helps make the world a better place. Imagine if at the end of every Bitcoin news segment, they also had to mention that with this new global currency that 5% was allocated to the world's most popular wildlife, children and other charities...
Again very few charities would have heard about or will claim during the growth phase of the coin, so you get all the positivity associated with this addition without any price pressure early on.
4. Bitcoin Sharedrop
I'm not a big fan of sharedrops but a large BTC sharedrop would be popular and well supported & ultimately help distribute the coin. However because BTC has such a high value vs. a new coin. The sharedrop would only be worth 1/2000th or less of a person's BTC position, so very few would claim in the first few years. Thereby giving you the PR sharedrop benefit but without the price suppressive effects associated with most sharedrops/giveaways.
5. POW Pow is extremely wasteful but extremely popular. I think Coinhoarders approach is a good one, with a rapid tapering off of POW rewards over time.
Ca. Use several different mining algorithms, with each having an their own separate difficulty and the same chance to find the next block (implemented in several coins.. MyriadCoin was the first)
Cb. Use at least one algorithm per different types of mining hardware (one for Scrypt ASICs, one for SHA256 ASICs, one for CPUs, one for ATI GPUs, one for NVIDIA GPUs, etc..)
Cc. The point of this is to allow people with all types of minin hardware to participate so it is inclusive of everyone.
6. Putting the supply in the Name '21 Million' / '2 Billion' If the coin will have any element of POS there will always be the fear that supply could be changed, even though this will be detrimental to value. By somehow incorporating the total supply into the brand name you would further ensure that supply changes would be untenable.
Even for newcomers to BTC, this is one of the most popular questions. How many will there be? Who creates them out of thin air? So branding these non physical coins in reference to the total supply could be positive here as well.
7. Masternodes/Lock Up Rewards. Everything above is about addressing the demand side of the equation. Creating a popular, distributed currency that will have development support and increase in utilty over time.
However just as important is addressing the supply side. Once the POW reward rapidly tapers off, I think a currency should have a very cost effective system and also have built in rewards in the early years for reducing available supply.
Examples:
- If you crowfund for some initial equity, claiming that equity before year 3 should be heavily penalized.
- Up to 5% could be set aside for those willing to lock up their stake for 12 months in the first few years.
8. Referral ProgrammeThe referral programme is a good concept but currently BTS doesn't have a compelling product/service to sell which is also the reason BTS wouldn't make a compelling addition to Microsoft Azure's BAAS yet either.
With a currency, the currency is the product so the referral programme would work quite well.
As a crypto-currency you would have to have competitive or percentage based TX fees, which may not make the referral programme lucrative for many Western marketers initially, which is OK.
9. USP Unique Selling PointFor BTSX it was the idea that a limited currency could be profitable and BitAssets. I would suggest a currency with only 4 BitAssets USD, Yuan, Gold, Silver. So the value proposition is very simple and clear.
A limited, high performance, low waste currency that also lets users and retailers hold balances in USD, Yuan, Gold and Silver.
I previously mentioned how Auroracoin achieved a short term $1 Billion valuation, through having very limited supply on the market and a compelling USP (Attempting to bootstrap Iceland, a community/economy that seemed small enough for a popular crypto-currency to realistically target and one that was jaded with traditional banking after their recent banking crisis).The market knows now that sharedrops of this kind suppress price and don't create adoption, however it's a good example of how a great USP works.
Imagine if instead of sharedropping a large amount of Aurora on the few hundred thousand Icelandic citizens, Auroracoin had instead directed the incentives to a few hundred Icelandic businesses & a payment processor only if they agreed to accept Auroracoin as payment for an agreed time period. Then you would have a currency that was accepted at hotels, restaurants, shops and vending machines all around Iceland and could easily be converted to Krona. So while I would direct the utility rewards suggested above primarily at third parties that already at least accept BTC, it may be worth revisiting the idea of creating a USP around bootstrapping a specific community but with a focus on providing currency utility within that community,
Topic: Lessons Learned from Alt Coins (Read 8508 times)
