Post
Topic
Board Announcements (Altcoins)
Re: [ANN] NEX :: descendant of NXT - Imagine Fairness!
by
nomailing
on 21/01/2014, 15:28:20 UTC
I would propose the following to get a really fair coin distribution for a 100% PoS coin:

Add the bitcoinj library to the NEX code and let it run in SPV mode.
Every NEX node continuously scans the bitcoin blockchain for P2SH transactions that are going to a proof-of-burn address.
You define a sliding window (i.e. 100 bitcoin blocks) and distribute rewards proportional to all bitcoins that were sent to the burn address within the last 100 bitcoin blocks.

You can define a decreasing reward curve for the next 1-4 years, such that after this initial bootstrapping rewarding phase the bitcoinj library can be excluded from the source code.

I think this would be the most fair distribution model, because there is no initial IPO. The price of the new coin will be determined always by the free market: If there is a period where more people are willing to burn their bitcoins for NEX coins, then they each get less NEX coins for their bitcoins. On the other hand if there is a period were no one wants to burn their bitcoins to get NEX coins, then everybody could just jump in and burn just a few satoshi to get almost the full NEX block reward without much competition. So you see fair distribution by market value.
It would make sure that the new coin actually really starts at value zero and will gradually improve to gain value. Therefore from an economic standpoint this would be the same distribution model as with Bitcoin.

It will borrow the fair distribution model from Bitcoin and the nice proof-of-stake model from NXT.
Of course this distribution model also has a much lower barrier to entry for every current bitcoin owner, even if he decides only after half a year to exchange some bitcoins for NEX coins. He could just look if he gets a better price at some exchange or if he goes the way to directly convert by burning bitcoins. This is the same mechanisms as someone interested in bitcoin could decide to buy a mining rig or to directly buy bitcoins on an exchange.
So instead of an initial-public-offering the coin has a continous-public-offering with decreasing reward over the next few years. This makes sure that the coins will be distributed quite broadly to many people.