fedde 311 Posted August 4, 2017 Share Posted August 4, 2017 yay Rik8119 1 Link to post Share on other sites
Skaro 129 Posted August 4, 2017 Share Posted August 4, 2017 Thank you. But I already counted you @fedde. We still need one more 'yay' to say this was decided Link to post Share on other sites
fedde 311 Posted August 4, 2017 Share Posted August 4, 2017 Damn... tought i had double vote ???? Adilado, Rik8119 and Skaro 3 Link to post Share on other sites
Bicknellski 276 Posted August 5, 2017 Share Posted August 5, 2017 YAY! Yes on option #4, Skaro, fedde and Adilado 3 Link to post Share on other sites
Skaro 129 Posted August 5, 2017 Share Posted August 5, 2017 Well, that's as official as things get here. We got a majority of 'Yays' agreeing that Option 4 represents the communities choice for ending the foundation. So its done, decided. LET'S DO THIS! Bicknellski, Adilado, Rik8119 and 1 other 4 Link to post Share on other sites
Mark Friedenbach 92 Posted August 7, 2017 Share Posted August 7, 2017 Wow, what a thread! Jorge told me of his intention to post this, and I told him that although I had some feedback to give he should post anyway and I will provide my own thoughts as a comment. Now that I've wrapped up being a block chain trainer at the BC-2 workshop in Japan, I actually have time to do so. First, I'm very thankful to see that most of the community are of the same mind regarding this issue (also, hi galambo!). The foundation was created for the purpose of solving a problem we perceived with the two competing requirements of the distribution mechanism: we wanted it to be fast so that the monetary base stabilized quickly and we could test Gesell's theory of money, but we also wanted to avoid plausible allegations of pre-mining. Sadly we must recognize that we accomplished neither -- the inflation rate of freicoin is unclear so long as the future of the foundation funds is undetermined, and the "foundation" has been misconstrued by many to resemble other foundations with more centralized purposes. Really all we did was punt the issue. We hoped that we could come up with another fair, decentralized mechanism for distribution of the foundation funds. In reality that task proved nearly impossible, and certainly not doable with the manpower available. Republicoin remains on the drawing board as we were unable to come up with a suitably decentralized version that didn't compromise privacy and fungibility goals, let alone implement any of the half-working solutions. The charity matching program is technically still live but hasn't been operational as the backend suffers some major exploitable flaws. So reason number 1 to kill the foundation is that it seems we are unable to meet the technical goals for distribution, and arguably we should all prefer to see those funds destroyed in a publicly verifiable way rather than compromise on those ideals and do something that could be construed as an actual pre-mine. The second reason is regulatory. Coin Center released in 2016 a good legal brief for deciding whether a cryptocurrency offering should be considered a security or not, which has grave regulatory implications. You can read the report here: https://coincenter.org/entry/is-bitcoin-a-security https://coincenter.org/entry/framework-for-securities-regulation-of-cryptocurrencies That's how people in bitcoin space were hoping the issue would be handled. Just a few weeks ago any uncertainty about what regulators are thinking was cleared up when the SEC announced that they would use basically the same rules for deciding whether a crypto token is an unlicensed security offering. Notably they say that the DAO was a security, and presumably so was most if not all of the ICOs. You can read that report here: https://www.sec.gov/news/press-release/2017-131 What would it mean if the SEC decided that freicoin was a securities offering? Well, in the frightening worst case it could mean that those responsible for creating the currency (gulp, me and a few others) could be forced to pay exorbitant fines AND go to federal prison for decades of our lives, as well as prevent us from ever working in the financial industry ever again. Conceivably it might not even matter if those involved are US persons given the way the US uses extradition treaties to enforce its laws around the globe. So please, let's take this seriously. (In case I frightened anyone too much, note that the SEC decided not to take action on the DAO, presumably because the regulatory situation was not clear at the time it was created. Now there's no excuse. The legal advice I received is that as long as we take proactive action to to make maximally sure we're in complicance, we should be okay. So as long as we take the actions I mention here, I'm still in this for the long run ) The gold standard for whether an offering is a security is the Howey test. Quoting the Coin Center page: "An investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person . . . invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party Invests his money? Well people can buy freicoin on exchanges, does that count? Unclear. Certainly it would be bad if the Foundation (a kinda-sortof pre-mine) sold its coins to investors. If this were a regular proof-of-work mined only currency the answer would be no, but honestly the existence of the foundation complicates this in hard to determine ways. Whether freicoin meets this test is really up to the prejudices of the SEC, which I have no insight into. So let's assume yes, but things would be much better if the foundation ceased to exist and the coins it managed were destroyed (this precludes, for example, directly giving out the coins to existing holders). A common enterprise? We're all here for demurrage money, right? Check. Expects profits? Let's be honest, everyone expects the freicoin price to rise if/when it sees significant usage. I would like to say that as demurrage money the freicoin price will be stable and only used as a medium of exchange. But while that might happen in the future, we are not there yet. Someone investing in freicoin today is probably expecting a return, not actually using it themselves (yet). Finally, expects those profits to come solely from the efforts of the promoter or a third party. Here again the foundation rears its ugly head. I'm happy to say that since freicoin was created we ALWAYS had an idea of the foundation only being involved in the initial issuance and then disbanding, and not doing anything else. The foundation doesn't even pay for the official freicoin website -- I pay out of pocket for those negligible hosting costs. However the SEC will be judging not based on what the foundation does but what a reasonable investor might think they do. And I'm sorry to say there's a lot of misinformation out there. Would a reasonable investor think that the Freicoin Foundation is like, say, the Litecoin Foundation or Ethereum Foundation, both of which pay for both development work and promotion of the coin itself? I don't know.. and that worries me. Both points (1) and (4) would be made SIGNIFICANTLY clearer if the foundation was unequivocally disbanded, and the funds it controls destroyed. I think there are some concessions that can be reasonably made. Namely we promised 1:1 matching of charitable contributions, which we haven't delivered on. In fact, those donations are still sitting on keys controlled by the foundation. We can forward those funds and do a retroactive 1:1 matching, before destroying the rest of the coins. The foundation has a few non-charitable causes listed on it. We'll have to figure out what to do with those. The original donations can obviously be forwarded, but I'm not sure we can reasonably match the contribution. We'll also have to figure out what we do with donations to the foundation itself -- both foundation and the freimarkets bounty fund. I think we CAN'T do anything like distribute the coins to current holders. Destroying the coins is the same economically anyway, and much clearer intent in the eyes of regulators. Finally, my own vote is for option number 1 (sorry!), but with a twist. I will separately be making some posts on this forum about my intention to release an elements-derived sidechain to freicoin that is proof-of-work mined (Rik, this addresses your comment from page 2, but is off topic for this thread). It is possible that we could, for example, allow pegs into this sidechain to be doubled in quantity 2:1 so that up to 50M freicoins can be moved from the old chain to the new chain, resulting in 100M on the other side. The new chain would also have its own subsidy so, if all goes well, there is a period of coexistence where both chains are used, until the peg pool is exhausted and the old chain is archived. We can quibble the details, but something LIKE this would allow us to maintain 100M total freicoins and achieve full issuance more quickly without the complications of a miner-incentive-reducing soft-fork. In any case, the option 4 is just option 1 followed by a soft-fork. So can we at least say that we are in agreement to finish the donation matching, destroy the funds, then start a conversation about the best way to handle the mis-match between subsidy, demurrage, and the total monetary base? Even if you guys want to go with the soft-fork, which I respect, the coins can be destroyed first whereas the soft-fork requries some development and testing. Bicknellski, Rik8119 and Skaro 3 Link to post Share on other sites
Skaro 129 Posted August 7, 2017 Share Posted August 7, 2017 Hi Maaku! Is what you are describing a currency split to bring remaining funds back up to a total supply of 100 million? Rik8119 1 Link to post Share on other sites
Rik8119 242 Posted August 7, 2017 Share Posted August 7, 2017 Hi @Mark Friedenbach, thanks for your commitment to the coin. And thanks for bringing up your ideas, i just dont see why we need a further inflation when the foundation is gone.. The foundation was thought to give the coins into market participants, now they are thrown direct on the exchange. For miners it is maybe great short term but inflation on top of demurrage really makes no sense to me and most likely scares of investors. Of course it was planned like this from the beginning but i didnt understood it in the first place ;). But ok lets save this for another thread and let the foundation coins burn as a first step to be continued... Skaro 1 Link to post Share on other sites
Mark Friedenbach 92 Posted August 7, 2017 Share Posted August 7, 2017 Skaro, not a currency split, but rather a protocol upgrade by means of a sidechain. I'll post more about it in the 'Future of Friecoin' thread. Actually it occurs to me that you probably mean "currency split" in the same sense as "stock split" -- for each freicoin you own now, you get two on the other side. Yes, that is approximately what I am suggesting. To be clear, it is different from the type of "currency split" you see going on right now with BTC/BCH, which is why I was confused at first. Rik8119, well Freicoin has -5% demurrage, which is fixed, but also a constant subsidy that is equal to +5% per year. So the amount being created right now exactly counter-balances the amount being destroyed by demurrage. meaning there is zero net inflation. However that is only true if you consider the Freicoin Foundation funds as part of that calculation -- otherwise there is something like 14% inflation per year at this time. Even if the foundation funds were destroyed there would continue to be inflation for decades until the net usable issuance once again approximates 100M coins, at which point demurrage would equal subsidy. As Jorge points out in the beginning of this thread, this can be fixed by either distributing or issuing the coins more quickly (rightly rejected), or by doing a soft-fork to lower the subsidy. However that approach changes mining incentives and carries with it significant risks. A better approach, I argue, is to tie the subsidy fix to an opt-in protocol upgrade package. This gives us more options and lets us decouple the two issues of the future of the foundation and what to do about the resulting subsidy/demurage mismatch. Rik8119 1 Link to post Share on other sites
Skaro 129 Posted August 7, 2017 Share Posted August 7, 2017 @Mark Friedenbach Yup. I meant 'currency split' as in 'stock split'. Link to post Share on other sites
Bicknellski 276 Posted August 8, 2017 Share Posted August 8, 2017 Okay glad to get some important background on why the foundation needs to go bye bye. Thanks for sharing the road forward I am looking forward to the changes and further discussions as to pegging and moving old chain to new chain idea. I think a grand display of the destruction and the plan moving forward should be posted. Do a live stream ending the foundation coins perhaps? Link to post Share on other sites
Mark Friedenbach 92 Posted August 8, 2017 Share Posted August 8, 2017 I posted a little bit more about development roadmaps in the Future of Freicoin thread. Bicknellski 1 Link to post Share on other sites
Arcurus 331 Posted August 18, 2017 Share Posted August 18, 2017 @jtimon just for clarification i was not talking about developers, i was talking about foundation members. participating voluntarily as developer is a different responsibility than being in charge of 80% of the funds distribution. My suggested softfork would simply reduce the foundation risk to 100 K coins at a time. and yes it will not solve the decentralisation problem. This leads back to the original question. would there be some members that are willing to do the job of distribution until a decentralized alg is implemented and would the community agree to that? Link to post Share on other sites
Mark Friedenbach 92 Posted August 18, 2017 Share Posted August 18, 2017 Well, 5 years later it's still not clear that a decentralized solution is even possible. And if it's not decentralized.. then what are we doing here? It'd be so much simpler to have a central ledger that manages demurrage in that case. I will say that I am solely and exclusively interested in decentralized solutions only, in both the near and long term. Bicknellski and Skaro 2 Link to post Share on other sites
Arcurus 331 Posted August 19, 2017 Share Posted August 19, 2017 6 hours ago, Mark Friedenbach said: I will say that I am solely and exclusively interested in decentralized solutions only, in both the near and long term. i would be very happy, if you can take the time to outline why freirepublic (i dont call it a coin for clarity) cannot function? Up to now i described two different solutions. One i posted here in the forum, the second one is simple like dash does it. it would be great to have your technical feedback to that. but for sure in another topic. to foundation. im fine with destroying the funds. removing the inflaton with a soft fork would be great. so option 4 and 1. Link to post Share on other sites
Skaro 129 Posted August 19, 2017 Share Posted August 19, 2017 @Arcurus why don't you come sell me some of your DASH on FreiExchange? Link to post Share on other sites
Mark Friedenbach 92 Posted August 19, 2017 Share Posted August 19, 2017 Arcurus, all of the approaches I've seen described by you are either centralized, or vulnerable to attack if made anonymous and therefore trust/identity based. Please correct me if this is not the case. Republicoin was made nearly-decentralized by using proof of stake as a vote. 1 kria = 1 vote. However the problem is that the vote counting is done by miners in a chain, and while the miners can't create votes, they can censor them. So the miners really control the election by disenfranchising people they don't like. Not decentralized. There is a semi-trusted solution to this where a strong federation works together to do the vote counting. That could have been a solution 5 years ago, if the technology had been invented then. But alas none of this is compatible with confidential transactions. And I'd rather have confidential transactions than a semi-trusted republicoin. Bicknellski 1 Link to post Share on other sites
Arcurus 331 Posted August 19, 2017 Share Posted August 19, 2017 @Skaro if i find some time i will sell some dash to you on Freiexchange to @Mark Friedenbach so with normal transactions freirepublic could function? can you outline more in detail why not also with confidential transactions? if the balances are still known it should function or? for every coin hold you give per time period x one republicoin to vote. the votes could still be mixed using confidential transactions. a federation like in dash could enforce in layer two that miners do not block the vote. if the federation fails still the fallback is layer one mining. the federation could be purely implemented as softfork and enforce that a certain amount of the block reward is used according to the vote of the federation. Link to post Share on other sites
Mark Friedenbach 92 Posted August 19, 2017 Share Posted August 19, 2017 Hrm... I spent all morning dwelling on this and I think the situation might not be as hopeless as we (Jorge and I) thought before. I am on mobile and can't type a full description, but TL;DR mimblewimble demonstrates a mechanism for non interactively joining ballots together such that the resulting aggregate vote tally doesn't reveal the amounts of the individual vote. To limit loss of privacy if the federation is compromised or corrupt, you could do a coin join vote so that your individual holding is not revealed. I'm not sure how realistic that would be though. Bicknellski 1 Link to post Share on other sites
jtimon 36 Posted August 28, 2017 Author Share Posted August 28, 2017 > allow pegs into this sidechain to be doubled in quantity 2:1 so that up to 50M freicoins can be moved from the old chain to the new chain, resulting in 100M on the other side. The new chain would also have its own subsidy so, if all goes well, there is a period of coexistence where both chains are used, until the peg pool is exhausted and the old chain is archived. This sounds, in principle, as a very bad idea to me. Bicknellski, Rik8119 and Skaro 3 Link to post Share on other sites
Mark Friedenbach 92 Posted August 30, 2017 Share Posted August 30, 2017 Can you expand on that Jorge? Bicknellski 1 Link to post Share on other sites
jtimon 36 Posted September 1, 2017 Author Share Posted September 1, 2017 Well, first of all if one chain is planned to be abandoned after some 1wp period, some coins will get lost there. I don't see the point in doing any kind of peg between 2 currencies with different subsidies (money creation) in different chains. The 2:1 up to 50 M also seems pointless. I don't think another chain helps with the foundation problem in any way. Apart from that, I would prefer a hf to elements features or a spin-off (if we really want a new genesis block) than a one way peg. But I guess we can leave that for other threads. Bicknellski and Rik8119 2 Link to post Share on other sites
Skaro 129 Posted September 1, 2017 Share Posted September 1, 2017 It seems the idea of 2:1 the currency is a smart way of realizing option 3. Link to post Share on other sites
Mark Friedenbach 92 Posted September 3, 2017 Share Posted September 3, 2017 With a 1wp we cannot expect all coins to move to the new chain -- some wallets are lost for example, so when do you stop supporting old UTXOs? With a spinoff or hard fork it would be possible to inherit the old UTXO set, but at the cost of not being able to deprecate handling the old chain data structures. A sync from genesis requires understanding the old chain up to a certain height, then switching to code that handles the new chain. Alternatively you can dump the UTXO set and import it at the changeover height, but do you still handle old style transactions at that point? Do you flag day expire them so at some point you just drop compatibility? What date do you choose for that? None of the choices there seem obvious, clean, or desirable. The 1wp with dual subsidies is a middle ground. You allow people to voluntarily move coins over and the new chain code never has to understand the old one except as is required for the peg code. You limit the maximum transfer however to something slightly larger than the current issuance. It will take some time for subsidy to play out on the old chain enough to exhaust that peg in limit -- longer if there are substantial lost coins or if people are asleep at the wheel. During that time both chains are operational. But once it is done you can remove the pegin and legacy transaction handling code from the new chain, and the old chain dies off (because subsidy can no longer be transferred to the new chain so it loses value). As mentioned by Skaro it is relevant to this thread because it achieves something close to option 3, but in a regulatory compatible way while also incentivizing dual use of the chains during the upgrade process, and solving the old UTXO problem once and for all. Bicknellski and fedde 2 Link to post Share on other sites
Skaro 129 Posted September 4, 2017 Share Posted September 4, 2017 So this pegging is mostly about having a stream lined updated code that is then presumably better able to handle the new tech. So is the question of money supply and reward still mostly an arbitrary choice in this code upgrade? Are you trying to compensate for lost wallets? I'm certainly not an expert in regulations but .., my dad is a CA ;-). I would think that regulators would not be entirely looking into technical details but will also be asking general questions like where was the Foundation money before and with whom did the power lie, and where is it after? Also, the conspiracy theory prone crypto community has to satisfied. The latter is a large part branding and image.... unfortunately. which reminds me! I have a couple questions for another thread... Link to post Share on other sites
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