Quote from: cunicula on November 12, 2013, 09:32:05 AM

There is a time and a place for this type of stuff, but i think it makes more sense to devote resources to radical innovation. Cryptocurrency is too young for it too be worthwhile making many small optimizations in an altcoin.

Hi Cunicula,
First, I just wanted to say that I enjoy your posts. Personally, I'm willing to fund netcoin regardless because even if I don't believe it is perfect enough (see my wishlist below), these small optimizations/fixes/improvements are such that they could eventually be imported into an even better future utopian crypto coin and thus save everyone the development time in the future. As such, netcoin will get some of my donation $$.

On a slight tangent, I was wondering if you could possibly share with us your thoughts on which worthwhile "radical innovation(s)" that benefit end-users could be?

Here's my utopia list:

Price Stability - This is almost like asking to see God, but maybe there's a few clever economists out there that could help out with a short-long term strategy. Bitcoin severely lacks price stability, this makes it a very poor choice for the masses to use as a currency for daily transactions - Aside from it being too confusing for sub 100 IQ humans to understand and keep up with, imagine employers trying to figure out how much less you should be paid every 2 weeks than the previous 2 weeks, or how much less to pay their 3rd party suppliers. Further, as already witnessed with bitcoin, aggressive deflation is likely to cause extreme speculation which results in massive mis-allocation of capital (aka. bubbles) and excessive savings impacts spending, which impacts employment stability, which impacts technological innovation across all sectors. Possibly, the most important negative is that it would allow for a massive disparity in rich vs poor mid-long term, which is the trigger for many civil revolutions, or in this case migration to another coin. Thus, I do not think this would allow for a stable economy mid-long term. Deflation is a clever trick to attract a lot of users initially, and I am ok with that short-term, but not mid-long term. I'm thinking we need something along the lines of: first 2 years: medium aggressive deflation (1/3 of bitcoin aggressiveness? 50-100%), years 3-7: low deflation (target 5-15%), year 7-20 (1-2% deflation a la Fed, but with deflation not inflation). Starting year 7, deflation would be measured not against the USD but against an SDR-like basket of currencies: 20% EUR, 20% USD, 20% Gold 20% Silver, 20% G20 stock indexes (or some such variation). Some time after year 20 this new coin should have achieved global reserve currency status or at least very wide spread adoption (primary currency usage by many countries, at which point, the SDR-like measure could be dropped and a mathematical formula could be devised to attain near price stability (0.5 deflation to + 0.5% inflation). In short, I'd like to see math replace biased central bank interest rate policy guidance to attain real (not CPI re-defined) price stability. From the average person's perspective, not only is price stability psychologically required, but it would hugely contribute to 'ease of use'. Systems that are simple to use are more widely adopted, faster.

Limited Government Taxation - I believe some capitalism is required for innovation to foster, but capitalism lacks a moral high ground like socialism or some other egalitarian political philosophies. Specifically, pure capitalism = full privatization of all sectors = rich get richer, poor get poorer. My point being, I don't believe everything should be privatized and I do believe there is a role for "government" to play, specifically in funding basic social services: Hospitals, Police, Fire Fighters, City infrastructure, Courts of law, Disaster Relief, Welfare, Waste Management, Defence and Policy makers (likely I missed a few here). Bitcoin can and will be used for tax avoidance by the citizenry. Governments today can enact laws to tax businesses using bitcoin, but taxing of clever individual citizens will be near impossible due to anonymous laundering systems. I see bitcoin laundering to eventually be automated with an app for every transaction, thus nearly all citizens would use it. As such, IMHO bitcoin will ultimately be crushed by government(s) before it gets too big. An utopian coin should use math to set aside a per transaction fee or some kind of yearly allotment that can only be collected by government officials of each nation. Further, dynamic math formulas built into the coin should be used to allocate budgetary capital for nearly all government departments as opposed to corporation lobbied/corrupt politicians allocating the capital. The justification to the solution that should be implemented for this is the stuff of not mere Phd thesis but likely voluminous books written by genius economic philosophers that ultimately will have to be translated to code. I'm thus officially naming the coin of my wishlist "utopia coin".

Balanced Mining - Assuming we can't come up with a more clever replacement for the concept of mining coins into existence, at present I see two possible extremes of which netcoin is one of them. Bitcoin allows for easy ASIC mining, thus in another year or two we'll end up with a dozen or less organizations that control 90% of all the mining, thus allowing for centralization of money creation. Netcoin might be going too far in the opposite direction by wanting to implement too many protocols to severely restrain ASIC mining. The problem created by severely restraining ASIC mining is that it will allow for a problem that is just as severe, the centralization of coin creation by use of botnets, which is worse since it is less energy efficient and illegally/immorally uses other people's computer resources without permission. So how do we achieve a balance here? I think the answer is something along the lines of use algos 1,2 & 3 for say 2 years, and then at the start of year 2, algo #1 gets replaced by new algo #4, such that now you have algo 4,2,3. Then in another 2 years, you replace 2 with 5. Whilst arguably environmentally wasteful from a PCB lifecycle perspective, this would severely restrain any one ASIC company from having long term coin creation control, as every 2 years the race begins anew. From a botnet perspective, botnet mining would be restricted to the time period from when the algo is reset to the time period that FPGA code could be implemented which would likely be a short window period of 2-6 months, which shortly after would be replaced by ASIC mining again until the next algo reset. Or probably even better would be an algo phase-in approach, such that hackers/botnets don't sit around waiting and slam the coin on X day of the reset.

Full Anonymity by default - Not just interacting/dependant on coinjoin, or use of Zerocoin with adverse/trade-off effects. I know, I'm a seemingly conflicted individual: I want some capitalism, some socialism and unquestionably some liberalism and *gasp* some anarchism. By solving the government taxation issue above, anonymity should be *less* of an issue for current elected government officials. Whilst terrorists, drug lords and pedophiles will be theoretically aided by this, one might argue that there should be less terrorists if every country on Earth were playing on an even economic playing field with a global crypto coins vs heavily manipulated fiat currencies. The major crux to implementing anonymity within the coin from day 1 is that it may actually prevent legal wide-spread adoption by brick and mortar merchants as governments would decree it illegal because "oh think of the children!". Without brick and mortar adoption, the coin could never reach wide-spread adoption. I'm thus conflicted at present as to how this dilemma can be resolved.

Network Security - I've said it before (NSA/Snowden issues), and I'll say it again: Whatever new utopian coin is created, it should have either embedded network security or a quick migration path to it after deployment. By this I mean, no reliance on a single TCP port 8333 that can be easily blocked by governments at Tier 1 ISPs. Further transaction security/encryption is required.

Global spot price - With the implementation of miraculous 'price stability', eventually and in theory we should be able to get closer to achieving a global spot price for utopia coin meaning that 1 utopia coin at an exchange in Russia has the same fiat currency / SDR-like value at any other exchange. Or do we still need some radical innovation to achieve global spot pricing. Can there be a peer to peer exchange protocol created such that it tracks the 'value' of all transactions and arrives at a dynamic average spot price that is periodically (1 min?) reported to all client/exchanges? Or should we just forget this idea and leave local supply/demand to determine utopian coin value?

Decimal points & Ease of use - How many decimal points most human brains can easily deal with is arguable. I believe we have all been taught/conditioned to handle 2 or max 3 with current currencies and the metric system. This is not to say in 2 or 3 generations from now, 8 decimal points for currency won't be easy to handle. Still, I believe simple is better. Utopia coin should include some kind of embedded code such that when the fiat or SDR-like value of the utopia point reaches a certain height, a currency conversion holiday occurs; meaning your 10.423 utopia coins are now 104.23 utopia coins. If this is done for all users or specifically across the entire public ledger, then nobody loses out and simplicity remains eternally. Tada! No more need to worry about dealing with 0.49258852 fractions of a coin. Arguably all external systems to the coin that track the coins value require Y2K like updates, unless they were coded to deal with this from day one - and they should be if this feature was included from day one.

Pool Voting Centralization Avoidance - I am not familiar enough with the under the hood workings of how BIPS feature voting in Bitcoin works, but I have read that pools essentially centralize voting power to the pool operators. If this is true, clearly this needs to be resolved.