jtimon

The end of the foundation

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When Freicoin was launched, we thought the Freicoin Foundation could be a good way to use "excesive rewards to miners" for good causes and to promote Freicoin adoption. Since then, 3 of the people initially in the foundation have distanced themselves from the project (in part, because of the foundation), we haven't been able to keep up even with the matched donations distribution program, which also hasn't move towards a more decentralized implementation (like republicoin) and no other distribution programs have been implemented.  
 
I haven't been maintaining the website properly and Mark hasn't done the matching often enough. We apologize for that.
 
Many potential users distrust Freicoin "because of the foundation's 'premine'". Sites are often confused about Freicoin's monetary base of 100 M because of the foundation's funds, and people often belive that Freicoin still has inflation on top of the demurrage (but the inflation was supposed to only last the first 3 years).
 
The foundation has also been a constant source of friction and conflict within the Freicoin community, often demotivating both users and developers when not causing direct confrontation between each other. It has also taken volunteer resources which could have otherwise gone to actual development and innovation.
 
At this point, I'm convinced that the Foundation has not only not helped Freicoin but actually has done the opposite.
 
On top of all that, the ecosystem has been invaded with "Initial Coin Offerings" and other schemes which I personally consider scams. And although I think the foundation is very different and not a scam, I'm no longer sure regulators will be able to tell the difference when the time comes. The last thing I had in mind when proposing Freicoin was going to jail because of the foundation (which actually was a later idea, wasn't there in the initial proposal).
 
We explained that if the foundation ever misbehaved or got their funds stolen, Users could activate a softfork to destroy those funds.
The foundation can also destroy those funds unilaterally, but we want to ask the community what would be the preferred way to close the foundation, since there are several ways to achieve this technically.
 
Since it was promised to match 100% instead of 10% and some more donations were done with that expectation, we can do one last matching (including going from 10% to 100% retroactively as promised) before destroying the remaining funds.
 
Here are some other options, please, 
 
1) Simply destroy them by sending them to an OP_RETURN output. This has the disadvantage that there will be inflation again and it will take very long until all the 100 M are issued.
 
2) Turn them back into mining rewards by creating txs only with fees that are locked in time, so that each block can take one. We can decide at which rate they're given to miners and for how long (until they're gone). With this we can get to the 100 M much faster and has the additional advantage that provides more incentive to mine (which is currently extremly low).
 
3) Distribute proportionally to the current freicoin holders. This has this has the disadvantage that chosing a given time may look unfair. Is it after the final matching, right after, wait for the donation receivers to spend their coins? This may also cause a price crash, but it's hard to tell.
 
4) Destroy the remaining funds like in option one, but also do a softfork to reduce the current miner subsidy so that instead of the monetary base growing to 100 M, it just remains to whatever it is now without the remaining foundation funds. This requires a consensus change, may cause a hasrate crash (because the incentive for miners will suddenly much lower) and we lose the round and beauty 100 M figure.
 
My favourite option is number 2, although it has more parameters to discuss.
 
If anybody thinks of another option, please, share it.
 
One more time, we apologize for how the foundation was handled, I wish we had never done it in the first place, but this is where we're at.
 

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Option 3 some months after the matching is done.

 

UPDATE:

I see no use in having just more coins for mining. Just more coins does not mean more security, because increased supply will most likely reduce the price so that security wise it stays the same.

 

I propose to bring the remaining foundation coins after matching is done in circulation as block reward and combine it with a softfork that makes sure that some part of the block reward is used for Freicoin related projects.  The softfork is enough if enforced by the main Freicoin economic nodes, so that it is easy to change later.

For example, create time locked transactions that spent (100% as fee) of the foundation coins over a three year period with unlocking one transaction every 10 minutes.

 

Then add a softfort:

the main economic Freicoin nodes enforce that a certain part of the block reward is send to a specific address if less then 100.000 coins are on the address.

if we don't empty the address than at max 100.000 coins will hang on it. 

In the future we could implement a smarter distribution mechanism like outlined in other posts.

 

 

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Is there a way to boost mining rewards? maybe double every 5th block or something to add a bit more of a randomness to mining and a bonus for those that have been mining and still are mining and keeping the blocks turning over? I think some sort of benefit to mining and/or taking away the transaction fee or if these funds could subsidise the fees for the remainder of the foundations coins. As it stands, Freicoin doesnt hold any value these days so the quicker the foundation is laid to rest and could be announced on forums the better. It would help in starting the promotion of the coin again if thats where everyone wants to head. 

Or has the foundation tainted freicoin too much already? I think Bick is the best person for being straight up with the views of the foundations role with freicoin haha

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I'll vote for option 2, but I'm more  interested in a decision being made efficiently and implemented.

UPDATE:

so ill support any except option 3. It has bad optics and many wallets have been abandoned.

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I vote option 1.

I will share what I am thinking: I was never very comfortable with the idea of the foundation, because to me the idea of Bitcoin is using clever mathematics to avoid politics. A foundation picking winners and losers is the definition of politics, and I wasn't comfortable with being in that position.

There was some thought to use the foundation coin to come up with a provably fair way to distribute the foundation coins with a "faucet". But in my opinion this would take a level of mathematical innovation on the level of Bitcoin itself, and we are very unlikely to solve this problem if it is even possible.

Distributing the coin to miners is provably fair, but this is a political decision to reward the miners. Is there any indiciation that Freicoin needs a higher level of security which we would be buying with rewarding the miners at a higher rate?

Anyways, please consider opinion from someone who was involved in the release of this coin but not so much now, I apologize for that.

 

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Well if we want to compare it to Bitcoin - which does not make sense IMHO - i ask myself what the community would say if the core devs would decide to increase the coin supply by 5?

I can not imaginge atm that a social purpose can be decentralized. BItcoin f.e. is not decentralized either. 1m is owned by Satoshi and there are a handful pool and a few groups of devs ruling the bord.

Woergl f.e. was the most successful freigeld currency and they used it to pay for social infrastructure. And IMHO it is the only reasonable purpose to redistribute money to the poor.

I dont really see how it is fair to those that invest in FRC in the past dont follow the forum and one day wake up with an extreme amount of FRC pumped in mining - what in the end will lower the price and interest in the coin.

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Thanks everyone for sharing your views!

Woergl f.e. was the most successful freigeld currency and they used it to pay for social infrastructure. And IMHO it is the only reasonable purpose to redistribute money to the poor.

The purpose of freigeld is not to redistribute money to the poor, but rather remove the existence of poverty under the assumption that is caused by chronic interest and cyclic monetary velocity.

> option 2 is not fair to investors.

I don't see why not. The coins were planned to be put in circulation either way.
As "investor" I don't consider it unfair. 

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14 hours ago, jtimon said:

Thanks everyone for sharing your views!

Woergl f.e. was the most successful freigeld currency and they used it to pay for social infrastructure. And IMHO it is the only reasonable purpose to redistribute money to the poor.

The purpose of freigeld is not to redistribute money to the poor, but rather remove the existence of poverty under the assumption that is caused by chronic interest and cyclic monetary velocity.

> option 2 is not fair to investors.

I don't see why not. The coins were planned to be put in circulation either way.
As "investor" I don't consider it unfair. 

Thanks for the answer,

maybe its just me but i invested my time and money because i wanted to support demurrage used for common good. Usiing the funds to donate to social projects fulfilled that purpose. Supporting mining isnt what i had in mind, though it was in the code from the beginning.

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Realisticly and logically, Freicoin presently has no real value. It has only a few active users that only trade it for speculative purposes (arguably that's the case with most alt coins).  If any 'investor' would try to cash in their Freicoins, the exchange rate would crash. 

Also, the Foundation was supposed to put the funds in circulation in three years. Whatever social project received it was supposed to spend it. (On that note, if the only place to spend Freicoin is in the exchange markets, the social projects are no different from the miners. Until its swappable for labour or goods, any recipient will put the same downward pressure on the price. But I'm not an economist...).

So any value of Freicoin is a future eventEven a relatively small adoption of Freicoin will increase the no of transactions by 10x or 100x. Any increasing or decreasing of mining rewards has no real meaning. 

 

What Freicoin has going for it is:

1)still unique programmed monetary policy that discourages hoarding and speculation and encourages spending. Demurrage fee fixes a fast velocity of money. (And it works. People don't keep it.)

2)developers with strong CVs.

3)demurrage is a real world 1930s solution meeting 2015 technology (while people are trying to find problems for blockchain to fix, Freicoin modernizes a solution)

3) crazy guy in Norway that programs 24-7.

The Foundation was an attempt to distribute the currency in a more productive way. It didn't happen. Ethereum and Bitcoin were able to stimulate the crypt commmunity quite effectively. Some people viewed the Foundation as a con too. For that reason, ending the Foundation in a transparent easily verifiable way is an objective. 

so it's the future that counts. What ever we do with the Foundation should be transparent, verifiable, and appear reasonably fair.

The Foundation is also different form the demurrage fee itself. The option of diverting demurrage to a different redistribution method is a separate, but intertwined question.

... my thoughts, IMHO.

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On 7/20/2017 at 0:26 PM, Rik8119 said:

maybe its just me but i invested my time and money because i wanted to support demurrage used for common good. Usiing the funds to donate to social projects fulfilled that purpose. Supporting mining isnt what i had in mind, though it was in the code from the beginning.

+1 for me just having demurrage is not what inspired me to support Freicoin

I invested in Freicoin with the promise that i could use these to get donation matching to encourage to support further projects. 

i understand that you want to close down the foundation. but simply increasing the mining reward and therefore inflate the coins it not what was promised.

if you want to bring the coins into circulation do that now and not in a constant drain through mining.

i don't see how higher mining rewards will benefit the coin, more coins means simply less price per coin.

if Freicoin stays like it is now with just demurrage to miners i'm out.

 

At best i would see if the coins would be distributed as negative exchange fees. this will bring liquidity which is most important for a currency.

 

 

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1 hour ago, Arcurus said:

+1 for me just having demurrage is not what inspired me to support Freicoin

I invested in Freicoin with the promise that i could use these to get donation matching to encourage to support further projects. 

i understand that you want to close down the foundation. but simply increasing the mining reward and therefore inflate the coins it not what was promised.

if you want to bring the coins into circulation do that now and not in a constant drain through mining.

i don't see how higher mining rewards will benefit the coin, more coins means simply less price per coin.

if Freicoin stays like it is now with just demurrage to miners i'm out.

 

At best i would see if the coins would be distributed as negative exchange fees. this will bring liquidity which is most important for a currency.

 

 

Thank you for sharing your thoughts. This is also what i was thinking.

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Maybe kick the can down the road a bit, if its possible? Move the Foundation coins to a time locked contract, spendable after certain day and/or require softfork? If not moved within certain amount of days/blocks -> destroy/redistribute/whatever.

Theres some neat technologies being built and getting realeases in the not-so-far-distant future, so could be useful to have the foundation coins for some use cases which might come available later. From what I understand, sidechains / drivechains will bring a lot of new possibilities for distribution mechanisms and other logics :) 

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If this could be done it only just shifts our problems into the future: Freicoin has no sustainable redistribution mechanism, concentrating power on the miners.

The other big problem is attention. Only projects that hare some fancy new tech are recognized and make new aths every few weeks. All is concentrated on them and people cant look through all those commercials (there are now facebook adds for Ethereum ICOs), to see that 90% of these are made of hot air.. But as many dont recognize those who see it have to follow the masses to make profits.

Im totally annoyed by this system but there is not much we can do about it atm. I think what Freicoin needs are two things: 1 a sustainable redistribution system QE for people not for miners 2. Another global depression.

In the end freicoin could only be prepared (what it is not).

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Until these points are met i will keep working on my Solidar project, which has a sustainable easy to use redistribution mechanism.

BTW does anyone know someone that is good at SEO? Solidar definitively needs more visibility in Google search results! Like "blockchain basic income" is ruled by grantcoin.

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i thought about it.

i would go along with option two if we combine it with a softfork, that allows to redistribute some part of the block reward other than mining.

In away it would be enough if the main Freicoin clients (currently this are mainly feddes nodes (exchange / mining pool)) runs this softfork, so we could change it easily without the need to change all nodes if we want to update the redistribution mechanism. 

the softfork could be that easy like this:

the main Freicoin nodes enforce that a certain part of the block reward is send to a specific address if less then 100.000 coins are on the address.

if we don't empty the address than at max 100.000 coins will hang on it. 

In the future we could implement a smarter distribution mechanism like outlined in other posts.

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@Arcurus combining destroying the Foundation with a soft fork, a wallet release, and alternative distribution mechanism  would be ideal. It could be marketed as almost a relaunch of Freicoin too. 

 

But i wanted to mention that there are something like 680000  distinct public address that have been generated. Probably most are change adresses that have tiny balances (I can actually do these queries relatively easily with readable keys with the way I have the explorer set up on my PC). Maybe many addresses are abandonned, but a vast majority probably belong to the mining pool (This should be partially varifiable linking addresses in the blockchain).  The method of selection you proposed would probably just transfer most of the money to the mining pool(s).

I would be quite interested to  do analytics to help this endeavor. It may be better to something like generate a list of unlinked adresses having max 80000 FRC and min 500 FRC that have performed more than 5 transactions. The query can be updated regularly and the addresses could be chosen then randomly, without replacement.

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