Bitcoin Carols only Sung By Zhou Tonged

The Rise of the Company Coins

There have been a number of dominant company coins over the last 800 years or so, all privately issued.  Most of these however have been maintained as monopolies over certain geographical regions.  Some people call them national currencies or fiat.  However many other company coins have tried to get in on the game:

The trouble with this market is that a monopoly is tightly maintained by the issuer of the dominant coin in a region.  Witness in recent history the takedown of e-gold, Liberty Reserve, and of the Liberty Dollar.  While these takedowns were made with allegations of criminality, the truth is very clear: these folks were doing the same thing the dominant currency issuers were doing.

And so things would remain, if not for the pesky little issue of a decentralized coin technology emerging.  The difference with a decentralized public coin is that there's nobody to arrest to stop its use.  This means that now there are thousands of alternative coins for people to use.  The game has changed.

And since the door was opened by bitcoin et al., now - there is at least some room for new company coins.  And they have arrived in droves.  Ripple, Iota, ZCash (perhaps not an exact example of a company coin but certainly with some characteristics thereof), Stellar, Cardano Ada, and many more companies are issuing coins and promoting their use now that they don't fear the immediate wrath of the fiat issuers.  Some of these coins are at least partially public coins.

The public coin purist will of course recommend public and decentralized coins like Bitcoin, Litecoin, Woodcoin, and many others.

However, these company coins - while corruptible in some sense - may provide certain advantages.

Is it possible that in a world in which nobody fears the monopoly issuer will be one dominated by competing company coins?  OK, domination is probably far too strong a word here at a time when bitcoin dominance is still over 60% but at the very least we should keep an eye on this phenomenon: the rise of the company coin.

 

Scaling by Forking

By now you are probably familiar with the latest coins coming out which fork the BTC chain, effectively making an airdrop instead of a premine (or with a premine as well for the case of e.g. Bitcoin Gold).  The first that I know of to do this was CLAMS.  The biggest one is Bitcoin Cash.  What's the deal?  Who's doing this and why?

Basically this represents an acceptance of the by now well-known answer to the question of how bitcoin scales: altcoins.  Other coins enable all the scaling one could want and much much more.  Don't like the fees and congestion?  Move to another chain.  This solution is simple, cheap, and already works.  Altcoins have been around since day one and are the heart of the public coin ecosystem.

This is all well and good but once this was accepted by some of the big BTC holders (these guys got the nickname "nouveaux douche" over in the trollbox) they realized: why not get in on some of this action using our existing keys?  If we can build altcoins to take up some of the slack, in which we are already big holders, this is better for us than people jumping to coins that we didn't take stake in.  Plus if they fail, we didn't lose anything getting into the game.  Win - win, right?

So now you see the motivation behind this kind of coin launch.  Of course there are the other potential motivations which exist in any coin launch: to improve some aspect of the technology, and to enrich the founders (usually by way of a premine which is sold as an ICO).

Sadly a lot of coin users get all upset and imagine that coins other than the ones they hold are bad, because you know, fear the other or some childish thing like that.  In fact, public coin is public coin.  Giving people a chance to make an educated choice is always going to leave us better off.

 

 

Insane Facts About Bitcoin Infographic

By request, here's a nice large format infographic, for us to reminisce about the first 9 years of public coin.  Enjoy!  And follow the link at the bottom for more from bitcoinplay.net.

 

62 Insane Facts About Bitcoin [Infographic – Updated October 2017]

 

The Trouble with ICOs

The trouble in general is that it should be ICCOs.  There's an elided "colored" in "Initial coin offering".  It would more properly be called "Initial colored coin offering".  But hey, it's too much of a mouthful and perhaps has not as nice a flavor coming off the tongue so people went with the shorter but less accurate ICO.

Originally, this property of public coin (that it provided a means of tokenization) was called "colored coin".  The simplest architecture for such a scheme is that a certain chunk of coin can be labeled or "colored" such that it can be traded as distinct from other coin.  This would enable you to use it as a security, a frequent flyer mile, or whatever other use case you could dream up for such a limited supply public token.  Very useful wouldn't you say?

Newer architectures enable what is basically the same thing, a publicly auditable asset built on top of a public coin.  Notice that this isn't a new coin, it is an asset built from an existing coin, hence the name Colored Coin.  The most common such tokens are built on Ethereum as ERC20 tokens, or on Bitcoin as Mastershares or Omni tokens (like Tether-USD).  Let me propose a few other potential names for this thing that are less confusing:

Publicly Auditable Security

Blockchain Asset Offering

Blockchain Secured IPO

Initial Token Offering

You see, a coin is not an investment in a company, so an ICO shouldn't be an investment in a company.  Yet, often that is exactly what people are actually talking about.  A trade-ready public-audit-ready, investment in a company.

So how did we arrive at this state of affairs?

Well, the problem is that there were in fact some real ICOs.  The first big one was Etherium.  Etherium was started with a premine, which means a big chunk of coin was created right at the start to be taken by the developer.  This is traditionally considered poor form in the public coin community, but hey - there's just no telling what some people will buy.  It turned out to be a very wise investment indeed.  Premine the coin, and offer it for sale before your coin is even running.  It's the old "prebuy" idea fresh from the butterfly labs era.  If your product is popular enough, it just might work.  The point here is that this is actually a coin - not a token built on a coin - but a coin itself.  So "ICO" is not a mistaken label in that case.

And on the heels of success comes imitators.  So other folks wishing to sell their tokens have chosen the same name, despite their product not being the same thing.

OK it's likely there are other problems with that ICO you are considering buying into, but I just wanted to get this one off my chest for now.

 

Three Years of Woodcoin

On this occasion, let's go through why the LOGarithmic bitcoin we know as woodcoin is still alive after three years, has increased in value steadily, and is set up for further increase in value:

1) Decentralized

There is no woodcoin company, no woodcoin premine, no woodcoin ICO.  Like bitcoin, there's no person or group of persons who can take a fall, get bought out, compromise, or tarnish this coin.  There's no system of checkpoints, no coordinator, no foundation, and no woodcoin.com login page.

2) Logarithmic Release

The logarithmic release is still the only crypto monetary policy with a long term plan that doesn't eventually either implode or explode.  Despite the existence of public coin, in which monetary policy is a real verifiable thing rather than a question of trusting some people with special titles and suits, there has been markedly little experimentation in monetary policy.  Lets look at the alternatives which have come up in public coin offerings:

Geometric

Many coins (litecoin, bitcoin, monero, ..) use a geometric curve to increase the supply.  This will quickly leave these coins in a state where their transaction confirmations (mining) will need to be supported by fees.  At that point, there will be a market force, namely the desire to make transactions without paying too much, which will force holders to make at least small investments in other coins.  While a geometric series coin looks great to the early adopters, we can say at that at the very least there will be negative market pressure on these coins as they asymptotically near their supply cap.

Linear

Many other coins (doge, eth, eth classic, ..) use a linear curve - simply paying a fixed amount to miners every block.  This has the advantage that it avoids the problem of the geometric series - there will always be payment for the miners, so the fees will be low.  However it introduces another problem - unlimited supply.  Without a supply cap to point to, it becomes difficult to convince an investor that this is a great store of value in the long term.

Exponential

Some coins, usually proof of stake coins, add a certain percentage of the total supply to the current supply every year.  This leads to an exponential growth in the money supply.  This is done to reward stakers.  While fees certainly will remain low in this scheme, and there is some early potential to benefit from price as people clamor to get some of the valuable initial capital, this scheme often implodes as a ponzi, or becomes centralized.

Delta function

Some coins (NEXT, ripple... ) simply issue all the currency up front in a 100% premine.  This leads to a centralized system, as the only people with the incentive to mine are those who wish to see the system continue, which are those who hold the coin.  Without a miner subsidy there is no other incentive to secure the network.  Such coins can indeed be public, but they are not so decentralized.  This leaves them vulnerable to issues of centralization.

Logarithmic

The logarithmic release schedule gives us a middle ground.  We have a capped supply (for the case of woodcoin, there will never be more than 28 million), so we don't lose the trust of those folks who are inflation averse.  However we also have a slowly decreasing reward schedule, which provides for non-vanishing coinbase rewards in the very long term future.  We also don't lose the folks who are high-fee averse.

3) Proof of Work

Woodcoin is the highest hashpower coin using solely the Skein hash function.  Proof of work is real value in a way that proof of stake cannot provide.  This is the original basis for decentralized consensus.  It represents an incentive to save energy, understand software algorithms, and build better hardware.

4) Public  

Woodcoin is a public coin like bitcoin.  Anyone can see how many coins are outstanding and every LOG creation event is auditable by all parties.  This means counterfeiting and other money supply fraud is not possible.

5) No Counterparty Risk

Like bitcoin and other decentralized coins, it is possible to make a long distance transfer with no counterparty risk.  While holding precious metals also can be done without counterparty risk, the transfer of value over large distances is more problematic.

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I'd love to say other benefits of woodcoin such as the ecologically aware community, their efforts to end financial colonialism and orcish patriarchy, and how they are good looking responsible and educated people.  However while this stuff is true, it isn't really part of the coin itself.

Comments please 🙂

 

 

 

The Lorax - Doctor Seuss

Well I have read this thing out loud hundreds of times, it's a great story and hugely important literature.  Thanks Dr. Seuss!  Here's the original text for you, a not-so-subtle reminder that Trees and not Coins are what everyone needs.

 

THE LORAX ~Dr. Seuss At the far end of town where the Grickle-grass grows and the wind smells slow-and-sour when it blows and no birds ever sing excepting old crows... is the Street of the Lifted Lorax. And deep in the Grickle-grass, some people say, if you look deep enough you can still see, today, where the Lorax once stood just as long as it could before somebody lifted the Lorax away. What was the Lorax? And why was it there? And why was it lifted and taken somewhere from the far end of town where the Grickle-grass grows? The old Once-ler still lives here. Ask him. He knows.

You won't see the Once-ler. Don't knock at his door. He stays in his Lerkim on top of his store. He lurks in his Lerkim, cold under the roof, where he makes his own clothes out of miff-muffered moof.

And on special dank midnights in August, he peeks out of the shutters and sometimes he speaks and tells how the Lorax was lifted away. He'll tell you, perhaps... if you're willing to pay.

On the end of a rope he lets down a tin pail and you have to toss in fifteen cents and a nail and the shell of a great-great-greatgrandfather snail.

Then he pulls up the pail, makes a most careful count to see if you've paid him the proper amount. Then he hides what you paid him away in his Snuvv, his secret strange hole in his gruvvulous glove. Then he grunts, "I will call you by Whisper-ma-Phone, for the secrets I tell you are for your ears alone."

SLUPP! Down slupps the Whisper-ma-Phone to your ear and the old Once-ler's whispers are not very clear, since they have to come down through a snergelly hose, and he sounds as if he had smallish bees up his nose. "Now I'll tell you,"he says, with his teeth sounding gray, "how the Lorax got lifted and taken away... It all started way back... such a long, long time back...

Way back in the days when the grass was still green and the pond was still wet and the clouds were still clean, and the song of the Swomee-Swans rang out in space... one morning, I came to this glorious place. And I first saw the trees! The Truffula Trees! The bright-colored tufts of the Truffula Trees! Mile after mile in the fresh morning breeze.

And, under the trees, I saw Brown Bar-ba-loots frisking about in their Bar-ba-loot suits as they played in the shade and ate Truffula fruits. From the rippulous pond came the comfortable sound of the Humming-Fish humming while splashing around. But those trees! Those trees! Those Truffula Trees! All my life I'd been searching for trees such as these. The touch of their tufts was much softer than silk. And they had the sweet smell of fresh butterfly milk.

I felt a great leaping of joy in my heart. I knew just what I'd do! I unloaded my cart. In no time at all, I had built a small shop. Then I chopped down a Truffula Tree with one chop. And with great skillful skill and with great speedy speed, I took the soft tuft, and I knitted a Thneed!

The instant I'd finished, I heard a ga-Zump! I looked. I saw something pop out of the stump of the tree I'd chopped down. It was sort of a man. Describe him?... That's hard. I don't know if I can. He was shortish. And oldish. And brownish. And mossy. And he spoke with a voice that was sharpish and bossy.

"Mister!" he said with a sawdusty sneeze, "I am the Lorax. I speak for the trees. I speak for the trees, for the trees have no tongues. And I'm asking you, sir, at the top if my lungs"- he was very upset as he shouted and puffed- "What's that THING you've made out of my Truffula tuft?"

"Look, Lorax," I said."There's no cause for alarm. I chopped just one tree. I am doing no harm. I'm being quite useful. This thing is a Thneed. A Thneed's a Fine-Something-That-All-People-Need! It's a shirt. It's a sock. It's a glove, It's a hat. But it has other uses. Yes, far beyond that. You can use it for carpets. For pillows! For sheets! Or curtains! Or covers for bicycle seats!" The Lorax said, "Sir! You are crazy with greed. There is no one on earth who would buy that fool Thneed!"

But the very next minute I proved he was wrong. For, just at that minute, a chap came along, and he thought the Thneed I had knitted was great. He happily bought it for three ninety-eight I laughed at the Lorax, "You poor stupid guy! You never can tell what some people will buy." "I repeat," cried the Lorax, "I speak for the trees!" "I'm busy," I told him. "Shut up, if you please."

I rushed 'cross the room, and in no time at all, built a radio-phone. I put in a quick call. I called all my brothers and uncles and aunts and I said, "Listen here! Here's a wonderful chance for the whole Once-ler Family to get mighty rich! Get over here fast! Take the road to North Nitch. Turn left at Weehawken. Sharp right at South Stitch."

And, in no time at all, in the factory I built, the whole Once-ler Family was working full tilt. We were all knitting Thneeds just as busy as bees, to the sound of the chopping of Truffula Trees. Then... Oh! Baby! Oh! How my business did grow! Now, chopping one tree at a time was too slow. So I quickly invented my Super-Axe-Hacker which whacked off four Truffula Trees at one smacker. We were making Thneeds four times as fast as before! And that Lorax?... He didn't show up any more. But the next week he knocked on my new office door.

He snapped, "I am the Lorax who speaks for the trees which you seem to be chopping as fast as you please. But I'm also in charge of the Brown Bar-ba-loots who played in the shade in their Bar-ba-loot suits and happily lived, eating Truffula Fruits. "NOW... thanks to your hacking my trees to the ground, there's not enought Truffula Fruit to go 'round. And my poor Bar-ba-loots are all getting the crummies because they have gas, and no food, in their tummies! "They loved living here. But I can't let them stay. They'll have to find food. And I hope that they may. Good luck, boys," he cried. And he sent them away.

I, the old Once-ler, felt sad as I watched them all go. BUT... business is business! And business must grow regardless of crummies in tummies, you know. I meant no harm. I most truly did not. But I had to grow bigger.So bigger I got. I biggered my factory. I biggered my roads. I biggered my wagons. I biggered the loads of the Thneeds I shipped out. I was shipping them forth to the South! To the East! To the West! To the North! I went right on biggering... selling more Thneeds. And I biggered my money, which everyone needs.

Then again he came back! I was fixing some pipes when that old-nuisance Lorax came back with more gripes. "I am the Lorax," he coughed and he whiffed. He sneezed and he snuffled. He snarggled. He sniffed. "Once-ler!" he cried with a cruffulous croak. "Once-ler! You're making such smogulous smoke! My poor Swomee-Swans... why, they can't sing a note! No one can sing who has smog in his throat. "And so," said the Lorax, "-please pardon my cough - they cannot live here. So I'm sending them off. "Where will they go?... I don't hopefully know. They may have to fly for a month... or a year... To escape from the smog you've smogged up around here.

"What's more," snapped the Lorax. (His dander was up.) "Let me say a few words about Gluppity-Glupp. Your machine chugs on, day and night without stop making Gluppity-Glupp. Also Schloppity-Schlopp. And what do you do with this leftover goo?... I'll show you. You dirty old Once-ler man, you! "You're glumping the pond where the Humming-Fish hummed! No more can they hum, for their gills are all gummed. So I'm sending them off. Oh, their future is dreary. They'll walk on their fins and get woefully weary in search of some water that isn't so smeary."

And then I got mad. I got terribly mad. I yelled at the Lorax, "Now listen here, Dad! All you do is yap-yap and say, 'Bad! Bad! Bad! Bad!' Well, I have my rights, sir, and I'm telling you I intend to go on doing just what I do! And, for your information, you Lorax, I'm figgering On biggering and BIGGERING andBIGGERING and BIGGERING, turning MORE Truffula Trees into Thneeds which everyone, EVERYONE, EVERYONE needs!"

And at that very moment, we heard a loud whack! From outside in the fields came a sickening smack of an axe on a tree. Then we heard the tree fall. The very last Truffula Tree of them all!

No more trees. No more Thneeds. No more work to be done. So, in no time, my uncles and aunts, every one, all waved me good-bye. They jumped into my cars and drove away under the smoke-smuggered stars. Now all that was left 'neath the bad smelling-sky was my big empty factory... the Lorax... and I.

The Lorax said nothing. Just gave me a glance... just gave me a very sad, sad backward glance... as he lifted himself by the seat of his pants. And I'll never forget the grim look on his face when he heisted himself and took leave of this place, through a hole in the smog, without leaving a trace. And all that the Lorax left here in this mess was a small pile of rocks, with one word... "UNLESS." Whatever that meant, well, I just couldn't guess.

That was long, long ago. But each day since that day I've sat here and worried and worried away. Through the years, while my buildings have fallen apart, I've worried about it with all of my heart. "But now," says the Once-ler, "Now that you're here, the word of the Lorax seems perfectly clear. UNLESS someone like you cares a whole awful lot, nothing is going to get better. It's not. "SO... Catch!" calls the Once-ler. He lets something fall. "It's a Truffula Seed. It's the last one of all! You're in charge of the last of the Truffula Seeds. And Truffula Trees are what everyone needs. Plant a new Truffula.Treat it with care. Give it clean water. And feed it fresh air. Grow a forest. Protect it from axes that hack. Then the Lorax and all of his friends may come back."