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BCH.DO

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Avatar for SayoshiNakamario
Written by   1
3 weeks ago

Bitcoin Cash Decentralized Organization

Abstract. A decentralized organization with membership obtained through a small donation to the organization. Members can vote with their donated balance to fund projects with donations indirectly paying returns to members through increased user adoption.

A mixture of Patreon and Flipstarter, but members have a say in their funding choices. A cyclical loop of more members = more funding = more members, with the long-term goal of obtaining a large membership base that permits regular, large-scale funding of adoption projects.

NFT ‘badge’ tokens could be provided to backers by projects which provide ongoing utility and a tradable commodity to the community.

The Problem


    In a few decades when the reward gets too small, the transaction fee will         become the main compensation for nodes.  I'm sure that in 20 years there will         either be very large transaction volume or no volume.
                         Satoshi Nakamoto - February 14, 2010


It is possible that the Bitcoin experiment designed by Satoshi will fail.  

The Bitcoin network requires a critical mass of user adoption to become sustainable. If that critical mass does not occur quickly enough then the income incentivizing miners to continue securing the network will decline. 

At some point a low enough network hashrate would enable attack vectors against the network from competing SHA256 networks and hostile corporate or governmental entities.

Relying only on the contributions of the currently active individuals, groups,  and corporations pushing for adoption is a mistake. The Bitcoin network itself, the users, need to start pulling their own weight to guarantee the survival of the experiment. 

But they need the tools to do so.


The Next Step

Bitcoin is a decentralized network that incentivizes users to follow the rules to come to an agreed-upon truth, but it doesn’t organize the users beyond that. That is on all of us.

BCH.DO is a suggestion to the Bitcoin Cash community: 

Create the ability for users to organize themselves into a structured decentralized         organization to help further the adoption of Bitcoin Cash as a collective.

Such an organization could potentially result in individuals from all walks of life being continuously employed by the Bitcoin Cash network. 

The Organization

The idea is that a large number of users will voluntarily join the organization in their own self-interest to support the network's growth, investing into their own ecosystem. The success of many Flipstarter projects shows that a voluntary funding model may work.

If a million people paid $1 every month we would have 1 million dollars of funding to support the community. Every member that joins increases how much funding we have every month on a base level.

Incentives could be considered for being a member, but shouldn’t be something that incentivizes members' own self-enrichment at the expense of the entire network.

Projects could incorporate their own separate reward system into their proposal, e.g. a proposed DEX offers to give back some amount of their profits to the DO and/or to membership addresses, or a game project airdrops their token to funding members once it launches. 

Membership

Members are required to donate an amount (say $1) each month into a personal, but organization-controlled, wallet. This initial amount is considered ‘forfeited’ and cannot be withdrawn from the organizational wallet, and can only be used to fund proposals. 

As long as the member retains an Active membership the user retains the right to direct which project(s) their donations will fund. 


Members can voluntarily donate additional funds into their account to fund more towards a specific project. These additional funds can be withdrawn out of the users organizational wallet while their account is Active, but they will be forfeited if the account enters an Inactive state.

Inactive Funds

If a member doesn’t allocate their funds to a proposal after 3 months then their account is considered Inactive. 10% of their current balance is then redistributed to all other Active member accounts each week until their balance is depleted. These funds will be tagged as ‘Forfeited’ and will not be eligible for refund out of the DO and can only be used for funding proposals. 

If the members activity resumes then the account is marked as Active and redistribution stops, but already-forfeited funds are lost.

Reasoning:
Funds should be incentivized to be spent on funding proposals and inactive donations redistributed so they can be used for funding.

Attacks Mitigated:
    1. Avoids the DO from having to manage its own centralized treasury and keeps         power in the hands of individual members.
    2. If inactive funds were instead used to automatically fund proposals this could         be gameable with fake proposals. Redistributing to all members seems a lesser         risk.

Potential Attacks: A large amount of redistributed forfeited funds could incentivize users to create fake proposals in order to withdraw funds from the DO.

Potential Enhancements: Inactive donation redistribution could be weighted higher towards more active members, e.g. accounts with higher levels/quantity of badges.

Badges

NFT ‘badges’ can be provided as rewards to members for completing goals within the DO. Account-level badges would not be tradable and would just be for bragging rights or possible utility, e.g. votes.

Project-level badges would optionally be rewarded by projects to backers. These badges could be used as voting rights for the project, or a token for receiving future rewards. 

Account Badges

  1. Member for X continuous months

  2. Backed X number of projects

  3. Donated X value to projects

  4. Backed project X

  5. Only members who have obtained badge-level X can perform an operation, vote, or receive a reward.

Project Badges

  1. Backed project X

  2. Tier levels: Bronze, Silver, Gold, etc. backed

  3. Only active members who hold a badge can vote to pause, resume, or cancel continued funding of a project

  4. Only active members who hold a badge of X tier receive Y bonuses from the project in the future.

Reasoning: Badges offer a simple incentive to users to collect and trade as they could be potentially valuable themselves. Another form of reward to backers rather than a token offering. Projects could make use of them for votes from backers, airdrop recipients, perks, etc.

Potential Enhancements: 

  1. Make the sale of a project badge automatically give a small percentage back to the proposal creator so they benefit from the secondary market of their badges.

  2. Badges = badger theme?

Proposals

Project proposals would be similar to existing Flipstarters, but with optional badges to incentivize longer-term participation of backers. Proposals could be re-opened for additional rounds of funding while retaining a history of previous proposals, backers, and rewards.

Specific settings would be up to the proposal creator, such as:

  1. Requested funding is a set amount vs timed/unlimited amount

  2. Requested funding is an immediately-payable lump sum vs a delayed release to project over time. E.g. $12,000 raised but released $1000 per month.

  3. Whether delayed release of funds has to be approved by backers each month, or is defaulted to approved but backers can vote to Pause or Cancel the payments.


Voting

If a proposal permits backers to vote on approval of fund payouts then the backers can also initiate a vote to Pause or Cancel a project. A majority of backers may vote for this if:

  1. The project is not living up to its promises.

  2. The project is not spending funds as it outlined.

  3. The project is harming the network's ecosystem or reputation.

  4. The project has a major event blocking its completion (e.g. loss of life)

  5. The project itself requests a pause.

A Paused project would simply halt payouts of any remaining funding until the backers pass a Resume vote.

A Canceled project would refund the backers a percentage of their initial funding based on the percentage of funds remaining.


So say we all.

Interested in discussing this and other marketing ideas for Bitcoin Cash? Join the Telegram group: https://t.me/BCHMarketing

v0 – 2021-9-25

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Comments

At some point a low enough network hashrate would enable attack vectors against the network from competing SHA256 networks and hostile corporate or governmental entities.

Bitcoin Cash has introduced a checkpoint every 10 blocks. So that the. 51% attacks and deep reorgs are not possible.

https://blog.bitmex.com/bitcoin-cash-abcs-rolling-10-block-checkpoints/

But an interesting proposal.

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3 weeks ago

True, but it doesn't stop attacks from at least being disruptive to the network, and as long as the network is disrupted it harms the user experience, adoption, and stability.

E.g. a hostile miner could still double-spend its own transaction at 9-blocks deep by releasing its own 10+ block chain. Not the end of the world, but still annoying if it's repeatedly happening.

In the same vein a massive miner could simply mine empty blocks for extended periods, severely overpowering the honest hashrate so they almost never mine blocks, causing excessive tx delays - not everything can rely on 0-confirmations. Again not the end of the world technically, but still harms the network in the social/usability sense which is just as bad.

The point though is that if hashrate falls to such a small amount when other players exist in the space then if they want to waste something like 0.0001% of their income to kill a potential competitor it would be in their financial interest to do it. And while it wouldn't kill BCH technically, if sustained long enough the harm done to adoption would be just as bad.

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3 weeks ago