Freicoin & sidechains: open for business!

[Mark Friedenbach 92]

By this point I assume that everyone here has heard about the new venture capital funded startup that is making waves in the Bitcoin space with its public unveiling and the release of the sidechains whitepaper. You may have also noticed that beyond being co-authors of the paper, Jorge and myself are co-founders of this new company. I’ll avoid mentioning it by name because I want to speak to the Freicoin community here, not people finding this thread through Google. Why are Jorge and myself proponents of sidechains? Why have we joined up with an ostensibly bitcoin-focused company? What does this mean for Freicoin? I hope to answer these questions.

The promise of sidechains is simple: by pegging asset value across chains, users are given the freedom to apply functionality of one chain (e.g. privacy offered by monero, or p2p markets provided by freimarkets) to assets originating on another (e.g. bitcoin or freicoin). Want to send your coins anonymously? Send them to a chain that supports ring signatures or zerocash protocol. Want to participate on a peer-to-peer marketplace? Send your coins to a chain that supports native asset extensions, such as freicoin with the freimarkets extensions.

Sidechain is a new word for a rather old concept -- we had an early semi-trusted version of it in our first freimarkets proposal. Certainly the concept pre-dates bitcoin itself, as payment network gateways fulfill a similar role in the legacy financial system. However the trustless setup invented in whole by Greg Maxwell and independently in pieces by numerous others allows the gateway role to be fulfilled without trusting anything other than correct operation of a mechanical system. No longer is there a service in the middle able to steal funds or operate on fractional reserve, or the systemic risk which arises from such behavior being commonplace.

So, sidechains are exciting because they allow permissionless innovation. The two-way peg allows innovation in the space of block chain applications without fragmenting the marketplace with a new free-floating p2p currency for each project. The return peg is, in a way, the last major change that need ever happen to bitcoin or any cryptocurrency, the one change to rule them all.

Some people have over-hyped sidechains as “the death of altcoins.” I don’t like this language, but if sidechains harold the death of any coins, it is clone coins which have no differentiating characteristics from bitcoin. There is no longer any reason for native currencies to exist on namecoin, monero, zerocash, or other such “feature chains.” But worry not: freicoin is different species of currency which behaves different from bitcoin: the fixed inflationary or demurrage currency. Because such a currency is fundamentally compatible with bitcoin and able to exist side-by-side, freicoin holders need not fear that their niche will someday be displaced by bitcoin.

Rather than be threatened by sidechain technology, freicoin stands to benefit greatly. Freicoin need no longer be isolated in its own ecosystem, or limited by its poor adoption. By introducing desired features, in particular issued assets, privacy enhancing technology, and larger dynamic block sizes, the freicoin block chain could very likely see an influx of users bringing their bitcoins to our chain to do business. Open for business is the motto of the new freicoin block chain containing two-way pegged assets such as bitcoin.

Jorge and myself are particularly motivated to work on sidechain technology because it makes deployment of block chain technology innovation easier. Freicoin, freimarkets, and republicoin: these are all innovative applications of cryptocurrency technology which could not or would not ever be deployed to the main bitcoin block chain. But they can become accessible to the bitcoin ecosystem by means of the freicoin block chain, if and when freicoin is given sidechain features.

Not only does this bring new users, but freicoin users also stand to benefit from greater integration. By having more services track and support the freicoin block chain, it becomes easier for these services to support freicoin as a transactional currency. Instead of bringing freicoin to the market, we bring the markets home to freicoin.

In summary, by fixing longstanding issues in the bitcoin ecosystem, freicoin stands to gain new users and strengthen its position. And unlike other potential sidechains, freicoin has a perpetual mining subsidy through its native demurrage currency that gives our block chain mining incentives that are known to work, providing security buffer other sidechains would be lacking. Even if these new users primarily transact in bitcoin, this remains a tremendously good thing for holders of freicoin currency.

That’s the vision. But to get from here to there requires quite a bit of work, much more than is possible to be done by a few volunteers. By founding a company around sidechains and getting funded, we have been able to secure the resources necessary to make sure that not only sidechain technology gets implemented and deployed, but also all the cool extensions to bitcoin (e.g. freimarkets) that inspired us to propose sidechains in the first place.

Our employment contracts were specifically constructed such that the company has no claim to the intellectual property underlying freicoin, the freicoin code base, the freicoin branding, or anything else about the freicoin project, now or going into the future. Furthermore we have a specific moonlighting exception that allows us to continue contributing to freicoin moving forwards, including merging into freicoin of open-sourced code written for the company’s own products. And while I cannot be specific about what the company is working on right now, needless to say Jorge and I were brought in because of our work on freimarkets and other extensions of the bitcoin protocol we originally proposed to be implemented on the freicoin block chain. As such open source technology matures within the company, we will be regularly merging such features that are desired by the freicoin community into the freicoin reference client.

I'm drafting another post detailing what I foresee as a potential freicoin development roadmap, including both ideas for rebranding and hard fork features that might make it in 2015. In the mean time, I'd be happy to entertain any questions about sidechains and their impact to freicoin. Additionally, barring any technical glitches I'll be participating in the Freicoin Alliance meeting as well.

[Bicknellski 276]

I think we need to list a few important questions for Mark so he can give us some insight.

 

I have a few but others should read the paper and think about the implications of sidechains and ask some probing questions to help us focus our efforts inside the FA.

 

1. How might this affect current exchanges?

2. How should we in the FA proceed with things like the Android based Wallet?

3. Do we need to wait for sidechains if we are trying to get bootstrapped applications that might need new coding for sidechains?

4. How might this affect current service providers like cointopay does this make them obsolete or will they have to work on a new adaptation to sidechains when they are live?

5. How can we help support bootstrapping before during and after the implementation of sidechains? Meaning what areas should we focus on?

 

 

http://www.cointopay.com/

 

For Merchants and Consumers in a nutshell:
 

Make- and Receive Online payments

Buy and Sell Coins directly

Support for all crypto currencies like BitCoin

24x7 operational support for customers

Pay out in currency of choice

Free service: T-Zero instant Crypto payment technology
 

Your advantages with Cointopay in a nutshell:
 

Fully functional web wallet
Best possible exchange rates
Multiple crypto coin trading pairs
Real time balance sheet and dashboard
Full REAPI Support for your site and application
Personal Data encryption for high anonymity function
Autonomy mode

[Mark Friedenbach 92]

1. How might this affect current exchanges?

There are a couple of things you could mean by this, so I'll address
the ones I can think of. If you meant something else, let me know.

1. Within the sidechain paper we talk of the bitcoin mainchain and an
indefinite number of sidechains which share the bitcoin currency as an
imported asset. What this actually means is that on each of the
sidechains there exists an issued asset native to that chain, whose
issuance mechanism involves verifying that a corresponding number of
bitcoins were sent to a locking script of a particular form. Those
bitcoins are unlocked by provably undoing the issuance (locking or
destruction) on the sidechain side. We use bitcoin in the paper as an
example, freicoin could just as easily be the currency involved, so
long as demurrage is accounted for correctly.

This means that there are two assets on two different chains, the
bitcoins on the bitcoin chain, and the sidechain-bitcoins on the
sidechain, which are guaranteed to have approximately the same
value. This is because if there is any change in valuation due to
swings in supply and demand, someone somewhere will arbitrage away the
difference using the two-way peg. However since the proofs involved
are quite large the peg has a cost in terms of transaction fees, and
it takes a significant amount of time to execute a peg transfer. As a
result there will be a market for doing more efficient cross-chain
transfers by matching supply and demand parties, then executing
e.g. an atomic swap protocol.

That is to say, even though bitcoins and sidechain-bitcoins (or
freicoins and sidechain-freicoins) are nominally equal valued,
friction in the transmutation process will still ensure that there is
a spread between bids and asks in a market offering faster exchange
between the two. There will be room in this space for both exchange
operators and liquidity providers.

2. The prime justification for implementing sidechains is to achieve
permissionless innovation -- the ability to create new features on a
new block chain while reusing an existing digital scarcity, such as
bitcoin or freicoin. One of the features oft requested, and one which
Jorge and myself have spent considerable time investigating, is the
ability to self-issue redeemable assets, and to exchange these assets
in a p2p, decentralized marketplace. We have called this proposal
freimarkets, and intend to implement it on the freicoin block chain,
with the permission of the community of course.

Freimarkets represents the future of exchanges in general: a protocol
for exchanging bids and asks over a peer-to-peer network, with miners
matching orders in a truly decentralized marketplace. So the answer to
your question might be that the freicoin block chain, with freimarkets
extensions for issued assets and freicoin as a native fee currency, is
the future of digital asset exchanges, replacing current centralized
"trust me" models.

3. It occurs to me that by "current exchanges" you might be talking
about the asset pairings on existing exchange markets, e.g.
BTC/LTC or BTC/DOGE. I hesitate to give forward-looking
statements. Markets are ultimately psychological, and assets are given
value because people value them (and that is not a recursive
statement). However speaking on purely technical grounds, it is hard
to imagine what value is left for just about every altcoin out there
once its technical innovations (if any) can be accessed with bitcoin
via a sidechain.

Thankfully freicoin is excluded from this analysis, and not because
I'm biased Freicoin's demurrage keeps it from competing with
bitcoin from either the bitcoin or freicoin perspective. But likewise
it could be said that network effects prevent litecoin from having any
utility in a sidechain universe, neither would clones of freicoin.

2. How should we in the FA proceed with things like the Android
based Wallet?

I certainly support these efforts: I've contributed to the android
wallet bounty. I'm not sure how the existence of sidechains could be
expected to impact the viability these wallet efforts, other than
requiring some work down the line to add sidechain feature support.

Once there exist sidechains, there will need to be effort invested in
making alternative wallets support these sidechains. This may involve
code being written for Electrum, bitcoinj, Green Address, and other
wallet software. Hopefully this work can be easily ported to their
freicoin versions.

3. Do we need to wait for sidechains if we are trying to get
bootstrapped applications that might need new coding for
sidechains?

Depends on the application I suppose. Kinda hard to answer without
knowing what you had in mind :\

4. How might this affect current service providers like
cointopay does this make them obsolete or will they have to work on a
new adaptation to sidechains when they are live?

There is plenty of room for bridge services to operate on top of a
sidechains enabled freicoin with freimarket extensions. Such service
providers would use more trustless technology to achieve the bridge,
holding customer funds for the smallest period of time possible, or
not at all. Neither sidechain technology nor freimarkets removes the
need for such players in the ecosystem.

5. How can we help support bootstrapping before during and
after the implementation of sidechains? Meaning what areas should we
focus on?

Deployment of sidechain technology will require changes to
freicoin. By staying observant to the changes that we are proposing,
and evaluating them yourself you both keep us honest and make sure
that the changes get sufficient review and are safe to deploy.

Deployment may involve adoption of merged mining. In this case we need
alternative mechanisms in place to maintain the community during the
transition period. There have been talks on IRC about a curecoin
approach of spending some of the foundation's 80% on subsidy for
folding@home work units, thereby enabling GPU "mining" issuance which
helps cure cancer rather than secure the network.

Those who have bitcoin coding skills can help us directly in writing
code. Please contact me or Jorge if you think you fall in this
category.

[Bicknellski 276]

Many thanks Mark.

 

I hope others have more directed and probing questions that could help enlighten us all on how sidechains will ultimately benefit Freicoin and the community.

[Arcurus 331]

Hi Marc.

thank you for your answer!

 

Many thanks Mark.

 

I hope others have more directed and probing questions that could help enlighten us all on how sidechains will ultimately benefit Freicoin and the community.

In a way the sidechain technology is not what will make Freicoin "different" then other coins.

As Marc said, the main thing that makes Freicoin different is, to be the first demurrage based global currency and on the same time tries to explore other more social coin distribution methods then mining.

So my questions that I have for the future is more about how is it going on with this coin distribution experiment?

What are the future plans for this?

What we as community can do?

What the developers can do?

Where do we want Freicoin to evolve to?

What is the plan for Republicoin?

But maybe we should better create another Topic for that, because I think this topic was more mend for side-chains and their implications.

I think for Freicoin sidechains and freimarkets could be great to have, especially if Freicoin will be the First to support them, but as said that will not be the think what makes Freicoin different in the end. The main thing is how to distribute coins in an fair and more energy save way other then mining.

All the good,

Arcurus

[Bicknellski 276]

Be nice if we can get updates on where the coin is going now.

[Arcurus 331]

best is to write to maaku directly.

for me priority would be to bring donation matching to run.

and maybe merge mining. would be good to have to pro and cons for it.

 

[Fabrizio 162]

Saw Mark and Jorge on the #Freicoin IRC channel chat about working on updating the client to catch up with the features implemented in Bitcoin.

Heres a pick from the logs:
"20:50:13 < jtimon> maybe we can do an IRC for you to help some people build freicoin 0.9 and maybe recommend some stuff to test?
20:50:20 < jtimon> IRC meeting
20:50:25 < maaku> heh maybe we need a #freicoin-wizards channel
20:50:39 < maaku> yes i think IRC meeting is good
20:50:54 < maaku> so I have a branch of 0.9 which solves that problem
20:51:17 < maaku> but I got hung up because it doesn't build with latest boost
20:51:23 < maaku> let me see what the status of that is...
20:51:49 < jtimon> ok @channel, please start suggesting date/hours for a let's-move-to-freicoin-0.9-IRC-meeting
20:52:48 < jtimon> great, I think it will be useful if you can push things for us to try realtime and stuff"

So what we as a community can do to help short term.. that would also, I'd think, help us with the FA stuff as well.. is to help with the updating/testing. Maybe start bounties and/or attach it to the freicoin giveaway.

Where the coin is going now? I've understood that both guys are pretty open to suggestions and opinions from the community and would like some input on that. As we're prettymuch the only active "community" in Freicoin-sphere, we could (should?) influence towards direction that would also help the FA vision. Heh, we dont have our aims straight with FA though.. or atleast I'm still clueless on which project we're going to drive onwards together.. so its a bit of a stuck situation.
I'd really wish we can have that meeting with all of us FA guys attending. If not meeting, lets get our schitt together here in the forums? Or email if people want to keep it private at first?

Threads for FA meetups:
(if anyones not up for Blab or Voice.. or has other recommendations for easy platform to have the meetups on, please post em on the threads)

 

 

[Bicknellski 276]

I think most important items to get going on are:

• Increase nodes and mining for foreseeable future for a more stable FRC until merged mining with Bitcoin.
• Mobile FRC Wallets Iphone and Android up in Google Play and Itunes so it is easy to acess. Temporary needs links on Freico.in and FA site,
• Get the coin out to people so they can use it for good. I think 2 or 3 fix distribution ideas / concepts from the FA should be put into place.
• Mining Farm for BTC buy FRC so we can at least stabilize the price of FRC to a degree.
• Work with other business people to help them use FRC as a gateway to BTC / Cryptocurrency.
   

[Arcurus 331]

17 hours ago, Fabrizio said:

Where the coin is going now?

I for my part focus to make a Freicoin Giveawy. In a way all other projects like Freipay, Basic Income, Freimining, Bick School project can be included in that.

In short, just post what you did, or want to do, and get some Freicoins. The donors decide them self which project they want to support.

The receivers then get the coins + some extra coins from the matching through the Freicoin Foundation / Freicoin Alliance.

Thats all.

 

For the meeting I would prefer IRC, because currently my connection here is too slow.  

 

[Fabrizio 162]

Alright Arcurus As we managed to have several folks over at IRC today and it turned out to be a pretty cool way to communicate, so IRC meetup mainly it is ^^
That said though, I'd very gladly have a hangout on Blab or mumble at the same time. We (c/s)ould have the main discussion on the IRC, but also have quick/short followup comments or quizzes on mumble. If we were aiming to be as transparent as possible, we could then publish the IRC logs and mumble/blab recordings afterwards on the internets (on IPFS!!! And of course HASH 'EM ON THE BLOCKCHAIN!!! *hypehype*)? ^^

*edit: ohh yeah, I'll try to draft up some kinda agenda/topics we could wisely fit the 45min we have with maaku. I'll put it up (hopefully) later today and ask yer comments for it

Arcurus, when you know your schedule better and find out which one is better for you - Friday or Monday - for the meetup, can ye hit me up on IRC or post it in the hangout thread?

(yeah.. I'm pretty sleep deprived... hehe)

[Arcurus 331]

2 hours ago, Fabrizio said:

Friday or Monday

lol, we live here super spontaneous, so lets see

generally between 11 and 15 Tamil Nadu time is the best for me currently.

[Fabrizio 162]

Uhhs, 4pm UTC (when maaku is available) is 9:30pm IST? And 11pm WIB for Bick?

[Arcurus 331]

4 minutes ago, Fabrizio said:

Uhhs, 4pm UTC (when maaku is available) is 9:30pm IST? And 11pm WIB for Bick?

lol, always these time  problems with global movements

maybe we just should use forums or mail, or hope for spontaneous meeting in irc

so or so, i try to be there, but cant guarantee it

[Bicknellski 276]

I can do late nite is ok if I go downstairs. NO TALKING IN MY ROOM AFTER 9pm.

[Bicknellski 276]

I had mentioned to Fab in the IRC today that the FA Basic Income ideas should focus on programs that provide opportunities for people anywhere to improve the following:

1. Shelter
2. Food
3. Water
4. Power
5. Education

[Fabrizio 162]

Hehe, yeah Arc, brrrh! We need to get ye an satellite phone for internets access!

Hmmh, yeah, if Bick is not.. ahh, hehe You're free for the meetup.
Lets see how other folks might be able to participate, and if we get it going with bunch for Friday, lets collect the questions Arc's interested in and ask for him
If its better for Monday for most, lets have some discussion with Arc on the forum during tomorrow and during weekend (I'm planning to visit Helsinki though, so will not be on during sat&sun)

[Arcurus 331]

my questions are:

1. How to solve the current Node connection problem with Freicoin core

2. testing the mobile / Eletrum wallets and updating the websites with current wallets

3. Updating the freicoin fondation site to list 100% donation matching and bring the donation matching to run (at best once a week, once a month is too long to wait)

4. Concentrating on making small Freicoin giveawys

5. Suggestion to switch to coin voting for Freicoin Foundation issuing. Can be handled same way like currently donation matching, but orgs /projcts  are  allowed to give the Freicoins voted back to the voter

6. Suggestion Freimining project, in short one extra coin for common good projects for every mined coin. This could help to have coins for Freicoin projects, could also help to integrate miners more into the philosophy of freicoin / could help that  merge miner stay more behind freicoin ideals.

7. Merge mining pro + con.
 

 

 

 

 

 

 

[Fabrizio 162]

Alrighty!

Arcurus, maybe we should list a few examples to the FreiMining thread to open the idea a bit more. The current explanation is a bit hard to grasp/short
I'm sure we had them examples written somewhere on the forums.. or mabby it was SILC *hmm*.. but can find 'em now of course, heh. But lets continue with this in the thread:

 

[Arcurus 331]

48 minutes ago, Fabrizio said:

The current explanation is a bit hard to grasp/short

???

what is hard to grasp?

In short:

Participants of The Freimining Project can get up to one* extra Freicoin for each Freicoin they mined. The extra Freicoins can be spent for verified common good** / non profit projects on the participants choice. 

[Fabrizio 162]

As we chatted on IRC, I'll write up some example cases to the FreiMining thread to explain it 'for the dummies' style.. so even mi mom could understand the use/benefits of the experiment ^^