The prototype of the payment cryptosystem. Adventure project
Not so long ago, I published an article on Habrahabr about a new method of guaranteeing trust in blockchains. The proposed method is called all-round bail (ARB), which, in the free Russian translation, sounds like “collective responsibility”.
Any method is only a tool whose value is determined by its practical application. Initially, the ARB method was developed for use in corporate blockchain projects. But it seems that their time has not come yet, so it was decided to create a public cryptocurrency service based on this method.
To understand the essence of the project and the ideas embodied in the proposed implementation, I want to pay a little attention to the economic and philosophical aspects. Studying a lot of cryptocurrency projects as samples, I drew attention to the same features, in my opinion, errors that will sooner or later lead to the collapse of most of these undertakings.
Plato is my friend but the truth is dearer
')
Suspecting that tomatoes and more weighty subjects will fly into me, nevertheless, I will express a "seditious thought": Satoshi Nakamoto was a first-class programmer and cryptographer, but a mediocre economist. Wishing to launch a virtual currency and get rid of intermediaries in the implementation of electronic payments in the framework of Internet commerce, as he himself says in his famous memorandum, Satoshi managed to create virtual gold. Medieval alchemists would have envied him for sure, but the original goal was not achieved.
Let's try to figure out what eventually happened and why it happened. In this article, I am not going to set forth in detail the theory of money and the history of their development. To eliminate terminological confusion, by the term “money” I will understand the units of account that are used as a means of payment and a means of accumulation. In the general case, money is a commodity with a high degree of liquidity, which is accepted by all participants in the turnover.
It is a reasonable question: where does Satoshi Nakamoto’s Bitcoin contradict the above? Formally, there is no contradiction, but if you remember about the turnover of money in the economy, then everything falls into place. It is quite obvious that for sustained economic development, incentives are needed to speed up money turnover, conditions are necessary so that money will remain more a means of payment, but not accumulation, and certainly not a means of forming treasures. The most important such incentive is inflation, to clarify, a small inflation.
Understanding the fact of a gradual “cheapening” of money leads to the need to spend it, invest in a business, in deposits, etc. As the Americans say, money is crumpled in your pocket. You can hear the indignation, they say this situation contributes to the development of a consumer society. Yes, this is true, but precisely because of the “consumer” race, humanity has reached the present level of development, including in technological terms.
Deflation, in contrast to inflation, is accompanied by a decrease in consumption, since the purchasing power of money only increases with time. Therefore, why spend today, if tomorrow you can purchase more goods with available funds? Tomorrow we will again postpone the purchase, as the day after tomorrow we will be able to buy even more. And so on the growing spiral, the higher the level of deflation, the faster the spiral is gaining momentum.
As you know, Satoshi Nakamoto consciously made his cryptocurrency deflationary, naively believing that splitting each Bitcoin into 100 million cents, later called Satoshi, would be able to compensate for the negative effects of the money supply restriction. The laws of economics are as inexorable as physical laws. If you can dream of inventing a perpetual motion machine, then why can't you dream of creating the perfect money?
It is important to understand that bitcoins are not money. Bitcoins are a form of treasure, they are valuables, such as gold, diamonds, masterpieces of painting, antiques, etc. It can be argued that if bitcoins were not money, then there would be no transactions in the system. But the fact that transactions do not make Bitcoin money, because there is a market for gold, diamonds, antiques, and these goods do not become means of payment. And the number of transactions in the Bitcoin ecosystem is quite small against the background of its current capitalization. For comparison, for the same amount of capital, for example, a greater number of transactions go through the Visa system by orders of magnitude. In absolute terms, the number of Bitcoin transactions becomes vanishingly small against the background of the number of transactions in Visa.
Fantastic growth rate of Bitcoin further compresses the scope of its use as a means of payment. You do not need to be a certified economist to understand a simple thing: why spend today, for example, 15,000 satoshes on a cup of coffee, if after a month or two you can buy two cups for this amount? No wonder the current investors in Bitcoin are willing to sell it only at a price of almost 200,000 dollars. I recommend to get acquainted with this interesting research . There are some very remarkable facts confirming my conclusions. For example, only 8.16% of bitcoin holders see them as a means of payment. And actually the very fact of investment speaks about this, because they invest not for the purpose of payment convenience, but for the purpose of earning income.
Economists know the law of Copernicus-Gresham, which indicates that the worst money is being squeezed out of circulation by the best. This law was formulated almost 500 years ago, in the era of metallic money, when it was preferred to receive gold as payment for its goods and services, but in turn pay for other goods and services with copper coins. The law did not lose relevance today. People gladly accept payment in Bitcoins, but do not rush to pay them.
Curiously, the second largest cryptocurrency Ethereum is an inflationary currency, since in theory there is no limit on the number of coins emitted. However, the broadcast has limited circulation as a means of payment. Why is this the topic of a separate article, but all the owners of the ethers dream of the growth of the value of this currency. The recent statements by Vitalik Buterin about the limitation of the emission and withdrawal of part of the coins are quite remarkable. It seems that the success of Bitcoin overshadows the mind of many, and the air is not destined to become a massive means of payment.
Conclusion number 1 . Payment cryptocurrency funds should be inflationary in order to become a tool for trading operations in everyday life. To preserve the attractiveness of a payment instrument, cryptocurrency inflation should be no more than 1-2%, and it is even better to periodically and briefly change to deflation in the amount of 1-2%.
Conclusion number 2 . Payment cryptocurrency funds must have direct or indirect tangible and intangible security of their value. Bitcoins are very well suited as material backing. Fiat money can be an indirect material support. Intangible security is understood as the convenience and value of using such means of payment.
The last thesis requires some explanation. What could be the value of using cryptographic money? An attempt to answer this question were the smart contracts of Ethereum. But this is only part of the answer.
According to this, intangible security of currency cryptocurrency should be a guarantee system, which includes both anonymity and identification of payments, protection against fraud with the possibility of recovering stolen funds without prejudice to the entire payment system, security of possession, resistance to changing and changing face value, etc. . If to summarize, the intangible security of cryptocurrency should be a TRUST to it from the users.
The transition to generalizations says that it’s time to get a little into cryptocurrency philosophy.
All new is forgotten old
As you know, one of the advantages of the current generation of cryptocurrencies is the peer-to-peer interaction model of participants, eliminating the centralized management of the system. Of course, there are certain “rules of the game,” which, like biblical commandments, were left by the creator of the system. Those who do not like these rules can simply ignore cryptocurrencies. Those who accepted the rules become equal members of a huge community.
In my personal opinion, Prince Kropotkin, the theorist of anarchism, would have stood by applauding this system. It really embodied the principles of true anarchism, which inspired the rebellious prince so much. Opponents may argue, on the contrary, the system, for example, Bitcoin looks like a mirror of a full-fledged democracy. Perhaps, perhaps, only in Bitcoin, democracy in its extremes, expressed in a somewhat vulgar "law of the chicken coop": push your neighbor, hit the bottom one and try to climb higher.
By the way, the author of Bitcoin cryptocurrency Satoshi Nakamoto, in the bibliography, in his bibliography under the first number puts the work, the author of which frankly calls himself a crypto-anarchist.
Of course, Nakamoto tried to make some orderliness in the system. The very principle of PoW is clearly taken from Protestant morality - you work harder, you live better. When applied to cryptocurrency, you go through caches faster, you earn more bitcoins. But with good intentions, as you know, the road to hell is paved. In practice, this leads to an obvious inequality of participants in the system. It happens as in the primary democracies of ancient Greece - those with stronger fists and louder voices are right.
There is another aspect that should not be forgotten. The peering architecture implies not only the absence of a single system control center, but also the absence of “third parties”, intermediaries in any relationship between the system participants. For example, a bank becomes unnecessary for financial transactions, and for a contractual relationship there is no need for a notary. On the one hand, this is not bad, even good, but on the other hand, it opens up broad prospects for fraud. Even in his memorandum, Satoshi warned about the attempts of fraudsters to play on the features of the implementation of the system.
So, the first generation cryptocurrencies, more precisely, the first generation blockchain class cryptosystems, are very similar to the initial models of the formation of civil society. As we know from history, there is a thorny path ahead for users of these systems.
Is there a way out? Everything new is just forgotten old. The choice of the scheme of organization of power in society was raised by Aristotle, his direct democracy caused a certain skepticism. History and daily life are constantly proving to us that a “flat” society (P2P) is by no means the most efficient. This idealistic model does not take root anywhere for a long time, neither among people nor among nature. According to Aristotle, an enlightened monarchy is the best form of governing society. Those who wish to challenge this conclusion can argue with Aristotle. Personally, I like this option, it is a pity that the great sage did not indicate the place where to look for enlightened monarchs.
There is another aspect to which Aristotle also pointed. This is the need to choose a management option from a specific situation in society. Applied to the crypto community and the blockchain technology - the choice of the method of finding a consensus depends on the specific tasks that we are going to solve with the help of the project being created.
It seems to me that the “enlightened monarchy” is the delegation of part of its rights by a society to a narrow circle of people for administrative decisions, but leaving the possibility of checking the decisions made. You can find more than one way to implement this principle. We will understand how it was done in the project under consideration.
You can not cook scrambled eggs without breaking eggs
Taking into account the philosophical and economic considerations expressed, it was decided to launch a project based on the mentioned ARB method . Let me remind you that this method embodies the principle of mutual trust, based on cryptographic functions and comprehensive control.
On the one hand, the goal of the project was to test the practical feasibility of the ARB method, on the other hand, an attempt was made to create a full-fledged cryptographic payment system. It is the payment system to ensure transactions with different options of online and offline business.
The system was originally incorporated the principle of inflation, self-regulating and distributed emissions. At the same time, there is a single center for monitoring emissions and transactions, according to the algorithm of the ARB method. Despite the existence of a single controlling center, a high, but not absolute degree of anonymity of users and their payments is provided. In reducing the level of anonymity, I do not see a departure from the principles of cryptocurrency, because even in Bitcoin anonymity is very conditional. With some perseverance in some cases it is quite possible to identify the owner.
The features of the proposed payment system include the use of two types of blockchains in it. This is a personal blockchain for each user, in which all his outgoing and incoming transactions are recorded. A guarantee of the immutability of personal blockchains is the main blockchain of the system, called Trust Blockchain, whose immutability, in turn, is provided by personal blockchains.
If the appearance of successive blocks in the personal blockchain is the result of each user transaction, then the creation of Trust blocks occurs on a competitive basis by all users. In this case, the creation of the next block of Trust becomes a fact of the issue of coins in the system.
Payment cryptosystem is built on a client-server architecture. Again, the system has a central core, a server. This has its pros and cons. But when developing the concept, the pros outweighed the cons.
In the current implementation, the payment system looks like a classic web service. As the project develops, part of its functionality will be peer-to-peer. This includes storage of personal blockchains independent of the central core and direct transactions between users.
A distinctive feature of the payment system under consideration is a constantly replenished collateral fund and linking the rate of coins to the size of this fund, as well as the exchange of coins for bitcoins and back in accordance with the current rate.
Meinim mind and ingenuity
Analyzing the existing mining algorithms, I came to the conclusion that all of them are inefficient and, in part, unfair. Therefore, the choice fell on the algorithm, which I prefer to call as PoM (Proof of Mind) , confirmation of the mind.
No, no, I'm not going to force users on the mind to look for hashes with the SHA3 Keccak algorithm. Everything is much simpler and more accessible, for successful mining it is required to collect the well-known puzzle “Fifteen”, having complied with a certain number of moves for a certain time. The solution of the proposed variant of the puzzle becomes the fact of mining of the next block in the blockchain Trust. When creating such a block, the state of all personal blockchains at the current time is taken into account.
Puzzle "Fifteen" was not chosen by chance. The rules for its assembly are very simple and widely known, the math of the puzzle is no secret, this puzzle is often used for research in the field of artificial intelligence. In addition, Fifteen have neither legal nor ethical restrictions, which is important if you wish to scale the payment system globally. It is planned to use two variants of the puzzle: 4x4 and 5x5.
To maintain self-regulatory emissions, the principle of floating complexity is used. The issue volume is directly proportional to complexity. If during a certain time none of the users could solve the current difficulty puzzle, then a special block is formed in the blockchain Trust, called LordBlock.
The task of this block is to confirm the user's personal blockchains using the ARB method at the current time. The LordBlock block does not emit coins, but reduces the current difficulty level of the puzzle and, accordingly, the number of emitted coins. A kind of negative feedback, as in automatic control systems.
The starting combination of the mining puzzle is created in an “honest” way, by repeatedly mixing the chips from an ordered state. The number of mixing cycles is complexity.
Where is the money, Zin?
In the era of insane cryptocurrency HYIP, the first question becomes: where is the money in this project? Not the coins themselves, nominated by the power of the mind, but the despicable fiat dollar wrappers, in which they prefer to evaluate all, without exception, cryptocurrency.
I won’t be mistaken, assuming that 99.99% of all newly emerging cryptocurrencies, all forks and all ICOs are launched with the hope of a rapid increase in their value with subsequent sale at the peak. But it seems that there are almost no “scared idiots”, and the project initiators will have to look for other weighty arguments to attract investors.
In fact, the search for investors is a thankless task for a number of reasons. In my life I made several attempts, and each time I became convinced of the need to rely only on my own strength and available resources.
Therefore, in this project, I did not spend either the strength or the funds to attract external financing, although with it it is much more fun. It was decided to monetize the service itself. In addition to free (no commission) basic transactions and free connection with the maintenance of online stores, the system is planned to launch some products with advanced functionality. So far I don’t want to disclose the details prematurely, but all these services have perfectly working prototypes in the field of fiatnom online money circulation.
However, the project requires money now, without waiting for the launch of advanced functionality. In addition to the constant replenishment of the fund to provide currency, the necessary funds for current operating activities. Therefore, it was decided not to invent a bicycle, but to use the usual advertising model.Advertising revenues are divided in proportion: 70% to the security fund, 30% to operating activities.
Thanks to the collateral fund, it is possible to determine the real rate of cryptocurrency. At the moment, the project has only the possibility of buying coins for Bitcoins, and from September 1, 2018, the conversion of coins back to Bitcoins will be opened. Such a time lag is simply necessary for a more or less significant replenishment of the security fund.
I hope I am already quite intrigued by the public. But before giving alink to the project site I want to make a number of mandatory reservations.
1. Officially, the project will not be launched on the Russian market, even Russification is not envisaged. I'm sorry, but the talk of native officials about criminal responsibility for the release of cryptocurrency leaves no choice. I honor the criminal codes of all countries, so the jurisdiction of the project will determine the state in which cryptocurrency is officially allowed. The choice is small, but there is. While the article was being written, the first statistics appeared. Now the largest number of visitors from India. It pleases, Indians more than 1.3 billion people, a huge market.
2. The article was written with the secret aim of testing from the side. After all, as they say, “the eye has become soiled”, and my level of critical perception naturally decreased during the ongoing work on the project. In the comments I wait for reasoned criticism and wishes.
3. The proposed project site is a prototype version, do not judge strictly its appearance. It took me only a month and a half to implement the project from the first ideas to the working system, therefore the design issues are referred to the subsequent stages. And frankly, I'm not a designer.
Any method is only a tool whose value is determined by its practical application. Initially, the ARB method was developed for use in corporate blockchain projects. But it seems that their time has not come yet, so it was decided to create a public cryptocurrency service based on this method.
To understand the essence of the project and the ideas embodied in the proposed implementation, I want to pay a little attention to the economic and philosophical aspects. Studying a lot of cryptocurrency projects as samples, I drew attention to the same features, in my opinion, errors that will sooner or later lead to the collapse of most of these undertakings.
A bit of economics
Plato is my friend but the truth is dearer
')
Suspecting that tomatoes and more weighty subjects will fly into me, nevertheless, I will express a "seditious thought": Satoshi Nakamoto was a first-class programmer and cryptographer, but a mediocre economist. Wishing to launch a virtual currency and get rid of intermediaries in the implementation of electronic payments in the framework of Internet commerce, as he himself says in his famous memorandum, Satoshi managed to create virtual gold. Medieval alchemists would have envied him for sure, but the original goal was not achieved.
Let's try to figure out what eventually happened and why it happened. In this article, I am not going to set forth in detail the theory of money and the history of their development. To eliminate terminological confusion, by the term “money” I will understand the units of account that are used as a means of payment and a means of accumulation. In the general case, money is a commodity with a high degree of liquidity, which is accepted by all participants in the turnover.
It is a reasonable question: where does Satoshi Nakamoto’s Bitcoin contradict the above? Formally, there is no contradiction, but if you remember about the turnover of money in the economy, then everything falls into place. It is quite obvious that for sustained economic development, incentives are needed to speed up money turnover, conditions are necessary so that money will remain more a means of payment, but not accumulation, and certainly not a means of forming treasures. The most important such incentive is inflation, to clarify, a small inflation.
Understanding the fact of a gradual “cheapening” of money leads to the need to spend it, invest in a business, in deposits, etc. As the Americans say, money is crumpled in your pocket. You can hear the indignation, they say this situation contributes to the development of a consumer society. Yes, this is true, but precisely because of the “consumer” race, humanity has reached the present level of development, including in technological terms.
Deflation, in contrast to inflation, is accompanied by a decrease in consumption, since the purchasing power of money only increases with time. Therefore, why spend today, if tomorrow you can purchase more goods with available funds? Tomorrow we will again postpone the purchase, as the day after tomorrow we will be able to buy even more. And so on the growing spiral, the higher the level of deflation, the faster the spiral is gaining momentum.
As you know, Satoshi Nakamoto consciously made his cryptocurrency deflationary, naively believing that splitting each Bitcoin into 100 million cents, later called Satoshi, would be able to compensate for the negative effects of the money supply restriction. The laws of economics are as inexorable as physical laws. If you can dream of inventing a perpetual motion machine, then why can't you dream of creating the perfect money?
It is important to understand that bitcoins are not money. Bitcoins are a form of treasure, they are valuables, such as gold, diamonds, masterpieces of painting, antiques, etc. It can be argued that if bitcoins were not money, then there would be no transactions in the system. But the fact that transactions do not make Bitcoin money, because there is a market for gold, diamonds, antiques, and these goods do not become means of payment. And the number of transactions in the Bitcoin ecosystem is quite small against the background of its current capitalization. For comparison, for the same amount of capital, for example, a greater number of transactions go through the Visa system by orders of magnitude. In absolute terms, the number of Bitcoin transactions becomes vanishingly small against the background of the number of transactions in Visa.
Fantastic growth rate of Bitcoin further compresses the scope of its use as a means of payment. You do not need to be a certified economist to understand a simple thing: why spend today, for example, 15,000 satoshes on a cup of coffee, if after a month or two you can buy two cups for this amount? No wonder the current investors in Bitcoin are willing to sell it only at a price of almost 200,000 dollars. I recommend to get acquainted with this interesting research . There are some very remarkable facts confirming my conclusions. For example, only 8.16% of bitcoin holders see them as a means of payment. And actually the very fact of investment speaks about this, because they invest not for the purpose of payment convenience, but for the purpose of earning income.
Economists know the law of Copernicus-Gresham, which indicates that the worst money is being squeezed out of circulation by the best. This law was formulated almost 500 years ago, in the era of metallic money, when it was preferred to receive gold as payment for its goods and services, but in turn pay for other goods and services with copper coins. The law did not lose relevance today. People gladly accept payment in Bitcoins, but do not rush to pay them.
Curiously, the second largest cryptocurrency Ethereum is an inflationary currency, since in theory there is no limit on the number of coins emitted. However, the broadcast has limited circulation as a means of payment. Why is this the topic of a separate article, but all the owners of the ethers dream of the growth of the value of this currency. The recent statements by Vitalik Buterin about the limitation of the emission and withdrawal of part of the coins are quite remarkable. It seems that the success of Bitcoin overshadows the mind of many, and the air is not destined to become a massive means of payment.
Conclusion number 1 . Payment cryptocurrency funds should be inflationary in order to become a tool for trading operations in everyday life. To preserve the attractiveness of a payment instrument, cryptocurrency inflation should be no more than 1-2%, and it is even better to periodically and briefly change to deflation in the amount of 1-2%.
Conclusion number 2 . Payment cryptocurrency funds must have direct or indirect tangible and intangible security of their value. Bitcoins are very well suited as material backing. Fiat money can be an indirect material support. Intangible security is understood as the convenience and value of using such means of payment.
The last thesis requires some explanation. What could be the value of using cryptographic money? An attempt to answer this question were the smart contracts of Ethereum. But this is only part of the answer.
According to this, intangible security of currency cryptocurrency should be a guarantee system, which includes both anonymity and identification of payments, protection against fraud with the possibility of recovering stolen funds without prejudice to the entire payment system, security of possession, resistance to changing and changing face value, etc. . If to summarize, the intangible security of cryptocurrency should be a TRUST to it from the users.
The transition to generalizations says that it’s time to get a little into cryptocurrency philosophy.
A little philosophy
All new is forgotten old
As you know, one of the advantages of the current generation of cryptocurrencies is the peer-to-peer interaction model of participants, eliminating the centralized management of the system. Of course, there are certain “rules of the game,” which, like biblical commandments, were left by the creator of the system. Those who do not like these rules can simply ignore cryptocurrencies. Those who accepted the rules become equal members of a huge community.
In my personal opinion, Prince Kropotkin, the theorist of anarchism, would have stood by applauding this system. It really embodied the principles of true anarchism, which inspired the rebellious prince so much. Opponents may argue, on the contrary, the system, for example, Bitcoin looks like a mirror of a full-fledged democracy. Perhaps, perhaps, only in Bitcoin, democracy in its extremes, expressed in a somewhat vulgar "law of the chicken coop": push your neighbor, hit the bottom one and try to climb higher.
By the way, the author of Bitcoin cryptocurrency Satoshi Nakamoto, in the bibliography, in his bibliography under the first number puts the work, the author of which frankly calls himself a crypto-anarchist.
Of course, Nakamoto tried to make some orderliness in the system. The very principle of PoW is clearly taken from Protestant morality - you work harder, you live better. When applied to cryptocurrency, you go through caches faster, you earn more bitcoins. But with good intentions, as you know, the road to hell is paved. In practice, this leads to an obvious inequality of participants in the system. It happens as in the primary democracies of ancient Greece - those with stronger fists and louder voices are right.
There is another aspect that should not be forgotten. The peering architecture implies not only the absence of a single system control center, but also the absence of “third parties”, intermediaries in any relationship between the system participants. For example, a bank becomes unnecessary for financial transactions, and for a contractual relationship there is no need for a notary. On the one hand, this is not bad, even good, but on the other hand, it opens up broad prospects for fraud. Even in his memorandum, Satoshi warned about the attempts of fraudsters to play on the features of the implementation of the system.
So, the first generation cryptocurrencies, more precisely, the first generation blockchain class cryptosystems, are very similar to the initial models of the formation of civil society. As we know from history, there is a thorny path ahead for users of these systems.
Is there a way out? Everything new is just forgotten old. The choice of the scheme of organization of power in society was raised by Aristotle, his direct democracy caused a certain skepticism. History and daily life are constantly proving to us that a “flat” society (P2P) is by no means the most efficient. This idealistic model does not take root anywhere for a long time, neither among people nor among nature. According to Aristotle, an enlightened monarchy is the best form of governing society. Those who wish to challenge this conclusion can argue with Aristotle. Personally, I like this option, it is a pity that the great sage did not indicate the place where to look for enlightened monarchs.
There is another aspect to which Aristotle also pointed. This is the need to choose a management option from a specific situation in society. Applied to the crypto community and the blockchain technology - the choice of the method of finding a consensus depends on the specific tasks that we are going to solve with the help of the project being created.
It seems to me that the “enlightened monarchy” is the delegation of part of its rights by a society to a narrow circle of people for administrative decisions, but leaving the possibility of checking the decisions made. You can find more than one way to implement this principle. We will understand how it was done in the project under consideration.
Attempt to implement the principles
You can not cook scrambled eggs without breaking eggs
Taking into account the philosophical and economic considerations expressed, it was decided to launch a project based on the mentioned ARB method . Let me remind you that this method embodies the principle of mutual trust, based on cryptographic functions and comprehensive control.
On the one hand, the goal of the project was to test the practical feasibility of the ARB method, on the other hand, an attempt was made to create a full-fledged cryptographic payment system. It is the payment system to ensure transactions with different options of online and offline business.
The system was originally incorporated the principle of inflation, self-regulating and distributed emissions. At the same time, there is a single center for monitoring emissions and transactions, according to the algorithm of the ARB method. Despite the existence of a single controlling center, a high, but not absolute degree of anonymity of users and their payments is provided. In reducing the level of anonymity, I do not see a departure from the principles of cryptocurrency, because even in Bitcoin anonymity is very conditional. With some perseverance in some cases it is quite possible to identify the owner.
The features of the proposed payment system include the use of two types of blockchains in it. This is a personal blockchain for each user, in which all his outgoing and incoming transactions are recorded. A guarantee of the immutability of personal blockchains is the main blockchain of the system, called Trust Blockchain, whose immutability, in turn, is provided by personal blockchains.
If the appearance of successive blocks in the personal blockchain is the result of each user transaction, then the creation of Trust blocks occurs on a competitive basis by all users. In this case, the creation of the next block of Trust becomes a fact of the issue of coins in the system.
Payment cryptosystem is built on a client-server architecture. Again, the system has a central core, a server. This has its pros and cons. But when developing the concept, the pros outweighed the cons.
In the current implementation, the payment system looks like a classic web service. As the project develops, part of its functionality will be peer-to-peer. This includes storage of personal blockchains independent of the central core and direct transactions between users.
A distinctive feature of the payment system under consideration is a constantly replenished collateral fund and linking the rate of coins to the size of this fund, as well as the exchange of coins for bitcoins and back in accordance with the current rate.
Proof of mind
Meinim mind and ingenuity
Analyzing the existing mining algorithms, I came to the conclusion that all of them are inefficient and, in part, unfair. Therefore, the choice fell on the algorithm, which I prefer to call as PoM (Proof of Mind) , confirmation of the mind.
No, no, I'm not going to force users on the mind to look for hashes with the SHA3 Keccak algorithm. Everything is much simpler and more accessible, for successful mining it is required to collect the well-known puzzle “Fifteen”, having complied with a certain number of moves for a certain time. The solution of the proposed variant of the puzzle becomes the fact of mining of the next block in the blockchain Trust. When creating such a block, the state of all personal blockchains at the current time is taken into account.
Puzzle "Fifteen" was not chosen by chance. The rules for its assembly are very simple and widely known, the math of the puzzle is no secret, this puzzle is often used for research in the field of artificial intelligence. In addition, Fifteen have neither legal nor ethical restrictions, which is important if you wish to scale the payment system globally. It is planned to use two variants of the puzzle: 4x4 and 5x5.
To maintain self-regulatory emissions, the principle of floating complexity is used. The issue volume is directly proportional to complexity. If during a certain time none of the users could solve the current difficulty puzzle, then a special block is formed in the blockchain Trust, called LordBlock.
The task of this block is to confirm the user's personal blockchains using the ARB method at the current time. The LordBlock block does not emit coins, but reduces the current difficulty level of the puzzle and, accordingly, the number of emitted coins. A kind of negative feedback, as in automatic control systems.
The starting combination of the mining puzzle is created in an “honest” way, by repeatedly mixing the chips from an ordered state. The number of mixing cycles is complexity.
Little about finance
Where is the money, Zin?
In the era of insane cryptocurrency HYIP, the first question becomes: where is the money in this project? Not the coins themselves, nominated by the power of the mind, but the despicable fiat dollar wrappers, in which they prefer to evaluate all, without exception, cryptocurrency.
I won’t be mistaken, assuming that 99.99% of all newly emerging cryptocurrencies, all forks and all ICOs are launched with the hope of a rapid increase in their value with subsequent sale at the peak. But it seems that there are almost no “scared idiots”, and the project initiators will have to look for other weighty arguments to attract investors.
In fact, the search for investors is a thankless task for a number of reasons. In my life I made several attempts, and each time I became convinced of the need to rely only on my own strength and available resources.
Therefore, in this project, I did not spend either the strength or the funds to attract external financing, although with it it is much more fun. It was decided to monetize the service itself. In addition to free (no commission) basic transactions and free connection with the maintenance of online stores, the system is planned to launch some products with advanced functionality. So far I don’t want to disclose the details prematurely, but all these services have perfectly working prototypes in the field of fiatnom online money circulation.
However, the project requires money now, without waiting for the launch of advanced functionality. In addition to the constant replenishment of the fund to provide currency, the necessary funds for current operating activities. Therefore, it was decided not to invent a bicycle, but to use the usual advertising model.Advertising revenues are divided in proportion: 70% to the security fund, 30% to operating activities.
Thanks to the collateral fund, it is possible to determine the real rate of cryptocurrency. At the moment, the project has only the possibility of buying coins for Bitcoins, and from September 1, 2018, the conversion of coins back to Bitcoins will be opened. Such a time lag is simply necessary for a more or less significant replenishment of the security fund.
Required reservations
I hope I am already quite intrigued by the public. But before giving a
1. Officially, the project will not be launched on the Russian market, even Russification is not envisaged. I'm sorry, but the talk of native officials about criminal responsibility for the release of cryptocurrency leaves no choice. I honor the criminal codes of all countries, so the jurisdiction of the project will determine the state in which cryptocurrency is officially allowed. The choice is small, but there is. While the article was being written, the first statistics appeared. Now the largest number of visitors from India. It pleases, Indians more than 1.3 billion people, a huge market.
2. The article was written with the secret aim of testing from the side. After all, as they say, “the eye has become soiled”, and my level of critical perception naturally decreased during the ongoing work on the project. In the comments I wait for reasoned criticism and wishes.
3. The proposed project site is a prototype version, do not judge strictly its appearance. It took me only a month and a half to implement the project from the first ideas to the working system, therefore the design issues are referred to the subsequent stages. And frankly, I'm not a designer.
Source: https://habr.com/ru/post/344338/
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