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PurelyPeer update: funding exponential growth of BCH

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Written by   12
1 year ago
Topics: Wallets, BCH, Future, Wallet, Crypto, ...

How was your Bitcoin Whitepaper Day? We have been busy developing and thinking where we are, where we are headed.

Amazing 13 years have gone by since the idea of bitcoin - "a purely peer-to-peer version of electronic cash" - has been shared publicly. This PurelyPeer update is a developer team's response to 5 typical funding paths, written from the perspective of a team that has been actively bootstrapping development efforts since 2020:

(A) MythBusting 2021 World Challenge, specifically "IFP is the best funding option" (https://read.cash/@SofiaCBCH/2021-road-map-busting-small-blocker-myths-about-bitcoin-and-others-81b4fbeb, as per what the "IFP: Infrastructure Funding Proposal" was https://news.bitcoin.com/bitcoin-cash-ifp-debate) - i.e. Compulsory, Centralized Miner Tax

(B) Panmoni Foundation 2022 Strategy & Action Plan (https://bitcoincashsite.com/blog/panmoni-foundation-2022-strategy-action-plan) - i.e. Foundation

(C) Flipstarter drives with the breaks on! (https://www.reddit.com/r/btc/comments/oxyrxu/comment/h7qyz8k/?utm_source=share&utm_medium=web2x&context=3) + Smartstarter Flipstarter: Volunteer P2P Crowdfunding Powered By SmartBCH (https://www.reddit.com/r/btc/comments/qgwwdh/smartstarter_flipstarter_volunteer_p2p) + direct donations to preferred projects - i.e. Voluntary Crowdfunding

(C) Bitcoin Cash Decentralized Organization (https://read.cash/@SayoshiNakamario/bchdo-23dd53eb) - i.e. BCH DO

(D) startup and/or VC development - i.e. Private Funding


(1) MINIMUM VIABLE PRODUCT: What is PurelyPeer MVP going to be?

Since the last update - "PurelyPeer update: closing a loop in our purely peer-to-peer economy" (https://read.cash/@architect/purelypeer-update-closing-a-loop-in-our-purely-peer-to-peer-economy-d2b2d9db) - we have been busy improving our smart contracts on the BCH layer 1 and many other BCH wallet features. When released soon on Google Play (hopefully in November), PurelyPeer will have:

- primary funding built on the BCH layer 1 supported globally,
- no need for an obscure coin or a token to list microads (we call them cashdrops)
- listings that support a revolving PurelyPeer Builder Fund with economy of scale incentives to enhance exponential growth of BCH
- collected cashdrops paying out BCH + NFT (on SLP),
- BCH that can be used anywhere,
- NFTs that include a link back to the main listing (we call them quests) that can include an optional memo - that can be a coupon or specials or custom description like store hours etc.,
- UI with both BCH and sats₿ in mind, so that it is either fully decimal (8 decimal places) or integer interface (stressing the divisibility of BCH and providing a mental encouragement for newcomers to own "a lot" of sats₿),

- no need to create an account for the basic anonymous functions above (account management will be added later for extra features, some of which will be extra and free, while others will be extra and premium for secondary funding to cover all extra features)
- NFTs that can be used for gaming later (we have a few game ideas but no engine yet, our focus now is on the quest creation and cashdrop collection with closing the loop between the NFTs and the quest),
- and yes - calling an optional quest detail "memo" is intentional - eventually we plan to also integrate a frontend to the existing BCH's memo protocol (https://read.cash/@n00b/a-manifesto-for-the-memo-protocol-4dd5967b) so that the quests could become monetized social posts


(2) BUSINESS MODEL: How do we plan to fund PurelyPeer long-term?

During the proof-of-concept design at the CoinParty 2021 Hackathon, we had to compromise on decentralization for the sake of results within a short time frame. In order to have a sustainable business model, we first focused on adding a predictable, upfront revenue stream built into the BCH blockchain, using CashScript smart contracts (https://cashscript.org).

And here lies one of our most recent bummer moments. The BCH CashScript documentation specifies max bytesize for contracts to be 520 bytes. That is true under usual circumstances but did not turn out to be our case since we use covenants. We use covenants for cashdrops locked in P2SH (pay-to-script-hash) addresses. When using covenants, the max bytesize for contracts is only 361 bytes for now (until May 2022 upgrade that will raise the protocol-level limits). Hence we had to go back to a drawing board and redesign our contracts that we use to create cashdrops automatically. It could have been that we missed this 520 vs. 361 distinction caveat, or it could be that the CashScript documentation was lacking when we reviewed it.

Either way, it would have surely helped had there been a funding option (B) Foundation. Such a Foundation could support new app builders directly, as well as provide support to existing infrastructure developers to provide better documentation. With more BCH funds centrally managed by a non-profit foundation initially funded by voluntary donations (though long-term majority funding should come back via successful BCH projects, similar to how Y-Combinator funds itself: https://www.ycombinator.com/about), more minds could be put together to build BCH ecosystem quicker. The distribution of funds would be efficient although, yes, it could be biased towards certain projects and not as objective as other, more decentralized options could be. Would this be "the best" funding option? No, but it would certainly be a welcomed, efficient funding option.

Note that until the recent bytesize hurdle, our approach was to have one smart contract that splits the quest payment transaction into X-many cashdrops. But as the tested maximum X dropped below 10 due to bytesize limitations in CashScript, we decided to prefix our single cashdrop-distribution smart contract with another smart contract in series and create multiple cashdrop-distribution contracts so that we can create multiple cashdrops in parallel and have the biggest impact on local collectors. So now we have a first smart contract that determines how many other cashdrop-distribution smart contracts need to follow and are testing with X as large as 30. That way, a PurelyPeer user (quest creator) could just specify the quest center location, enter a few details, decide on the count of cashsrops to create, and the rest will be taken care of automatically.

Why do we care about creating multiple cashdrops within each quest? We see that as a vehicle to grow BCH exponentially because more PurelyPeer users (cashdrop collectors) will be connected to other PurelyPeer users (quest creators). Also, PurelyPeer wants to grow BCH exponentially and give BCH to as many people as quickly as possible, while providing an economic incentive to quest creators to do so too. Therefore, for N cashdrops created, a portion of the total quest value equivalent to 1/N will be redirected to our PurelyPeer Builder Fund through the smart contract on BCH layer 1. For example, 1/N corresponds to 20% for a quest with 5 cashdrops but only 3.33% for a quest with 30 cashdrops.

Of course, there will be a few other sats₿ that will be necessary to cover overhead (BCH transaction costs, 3rd party APIs for indexers, etc.), but as the total quest value increases, each of those N created cashdrops will receive close to (1-1/N)/N of the total quest value. This will provide a good balance of passing as much BCH to cashdrop collectors as possible and of funding PurelyPeer Builder Fund to continue the app development and BCH outreach.


(3) STARTUP MODEL: How are we funding / do we plan to fund PurelyPeer short-term?

We have been bootstrapped since 2020 and are bootstrapped until the end of 2021. We hope to have the PurelyPeer app on Google Play in November 2021 and to start seeing PurelyPeer users (quest creators and cashdrop collectors) embrace the 1/N decentralized funding approach described above. Our long-term plan is to turn the PurelyPeer BCH wallet into a FOSS (free and open source software) DAPP (decentralized app) with integrated tools to fund other projects and builders. Such built-in tools would include (C) Voluntary Crowdfunding and (D) BCH DO where participating users could specifically designate fractions of their recurring payments and/or fractions of their transactions to support BCH projects. Would this be "the best" funding option? No, but it would certainly be a welcomed, pragmatic funding option that would support those projects that users want to see succeed.

Of course, turning PurelyPeer into FOSS and DAPP will not be possible right away and first we need to build PurelyPeer to sustain. After our MVP release on Google Play, we plan to launch PurelyPeer Flipstarter for 2022 development and to bring more features to the app.

We are also considering (D) Private Funding path, as long as potential funders align with our PurelyPeer roadmap and path to FOSS and DAPP. It would certainly help to get infused with human capital and to get connected with experts who have scaled up apps from small teams to hundreds or thousands of staff, and who have scaled up userbases from hundreds to thousands or millions of active users. Would this be "the best" funding option? No, but it would certainly be a welcomed, practical funding option that would grow BCH even more exponentially.

Our roadmap in progress, with a path to FOSS and DAPP later on, described in phases is:

(i) The proof of concept (GeoDrop) was centralized.

(ii) The MVP to be released on Google Play soon (PurelyPeer) will have the decentralized funding model built in along with other improvements.

(iii) The Flipstarter later will also aim to fund peer review from other developers to make sure it is safe to opensource as much of our codebase as possible so that hackers do not sweep all cashdrops with BCH and NFTs before real users do.

(iv) As we will be adding more features, we will be constantly evaluating means to shift PurelyPeer model into DAPP.

Right now our cashdrop collection verification is done through the Tendermint framework (https://tendermint.com), which we plan to open to other validators too. There is no smart-contract BCH L1 revenue for them yet, as we first need to evaluate the MVP viability and are also eagerly waiting for the May 2022 upgrade with bigger scripts for even more advanced smart contracts.

In BCH, we build steadily and carefully, in order to build something that could outlast all of us.


(4) MYTHBUSTING 2021: So is (A) Miner Tax "the best" funding option?

It is a funding option, yes. But it is definitely not "the best" funding option for a blockchain like BCH that, among other goals, also aims to elevate FOSS and DAPPs, while reducing the risk of corruption through central parties. (A) Compulsory, Centralized Miner Tax is a valid funding option for other projects and blockchains but not for BCH and its ethos. Sure, if there is another "IFP-style" proposal that is "voluntary, decentralized" (i.e. closer to the (C) Voluntary Crowdfunding and/or (C) BCH DO), it might be suitable for the BCH ecosystem.

So what is "the best" funding option for BCH projects? Well, we are sorry, life is not simple and the answer to this question is complex too - it depends!

In PurelyPeer's opinion and experience so far, it is a combination of:

(B) Foundation - the connector - to support linking new builders with existing projects via supplementary development grants and BCH-specific accelerator program (among other Foundation responsibilities correctly outlined by Panmoni, specifically OSM: Outreach. Story. Mentor.)

(C) Voluntary Crowdfunding - the voice of the people - to support what users need and want, ideally integrated into a FOSS wallet

(C) BCH DO - the immutable digital symbiosis (IDS - hey, we just coined a new term!) - to support what users need and want, ideally integrated into a DAPP wallet

(D) Private Funding - the angel and/or accelerator - to support initial viability explorations and/or to support scaling of BCH projects that will have proven to be desirable and viable, economically and technologically

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Avatar for architect
Written by   12
1 year ago
Topics: Wallets, BCH, Future, Wallet, Crypto, ...
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Comments

Claiming an IFP-style funding source is not for BCH hits the politics here perfectly and should gather you support. I am not convinced one could not be designed to avoid most or all the concerns raised, but this community is unlikely to explore that potential. Time will tell if the other sources provide fast enough development to get BCH where it needs to go before it is too late and other services take over most of our intended use case.

$ 0.00
1 year ago

Thank you for your comment, you raised a good clarification point. We evaluated "IFP miner tax" that was "compulsory, centralized" as per what the "IFP: Infrastructure Funding Proposal" was (https://news.bitcoin.com/bitcoin-cash-ifp-debate).

Sure, if there is another "IFP-style" proposal that is "voluntary, decentralized" (i.e. closer to the (C) Voluntary Crowdfunding and/or (C) BCH DO), it might be suitable for the BCH ecosystem.

Please do reach out to miners and wider community with your proposed implementation.

$ 0.10
1 year ago

I did try that in the past (before the eCash fork), almost no one seemed interested. You can see some of that in my articles here. Maybe a language barrier was a problem with the miners? Maybe people would be more open-minded now? After the abusive treatment pro-IFP-concept people received back then, I doubt any feel like trying to help BCH with new ideas along those lines. Time to see how their alternatives pan out...

$ 0.00
1 year ago

Perhaps. But the implementation is key, in my opinion. I think it was the compulsory, centralized nature that killed it in the BCH community. Had it been voluntary, decentralized, then perhaps it would have gathered more thought and support.

Though note that if it is to be voluntary and decentralized, then it might be redundant as miners could simply voluntarily skip the option to fund one or more known projects, or they could simply voluntarily choose to fund themselves. Unless paired with a UI change to block explorers to show what miners chose, there would be no real impact. If we were to see e.g. where each miner voluntarily redirects some funds, we could decide who to support more long-term (e.g. mining pools that support the ecosystem over mining pools that voluntarily support themselves or nobody at all).

And even with the block explorer UI change, the end result would be similar to having miners fund (C) Voluntary Crowdfunding and/or (C) BCH DO directly.

Personally, I see more legs in Shomari's proposal for https://pif.cash - Pay It Forward (PIF) infrastructure and development fund as outlined in the Stretch Goal 1 in https://smartstarter.cash/flipstarter recently introduced in https://www.reddit.com/r/btc/comments/qgwwdh/smartstarter_flipstarter_volunteer_p2p/.

$ 0.00
1 year ago

Re/ point 2, I would call that your business model actually, not how you plan to fund development. It would be interesting to see some scenarios for break-even points and what kind of ROI you might expect to have.

There is a base challenge here, which is who is going to use your system to market themselves? That requires a business ecosystem, which is still quite nascent for us.

Good thoughts, thanks for sharing!

$ 0.00
1 year ago

Awesome, thank you very much George for your feedback! I updated the headings and expanded sections 2 and 3 to include a bit more overall detail.

In terms of specific KPIs (Key Performance Indicators), we will share our models and targets later. Note that our MVP has a "Transparency Stats" section where anyone can keep an eye on details about quests and cashdrops (counts, averages, values, etc.). Our minimum quest size is set at 100k sats₿ with 5 cashdrops so that each quest contributes at least 20k sats₿ to the PurelyPeer Builder Fund fund. That is about $0.12 at current BCH rates (from a minimum $0.60 quest) and can give you a rough idea that we will be targeting a significant user growth. We will likely not scale as much and as quickly as Facebook did (https://www.vox.com/2019/2/4/18203992/facebook-15-year-anniversary-user-growth) but we will be aiming to have active users and repeat quest-makers. I will describe incentives for that in a later post, stay tuned!

As for the base challenge, I agree, we have to accelerate BCH business ecosystem too. Therefore, I see the (B) Foundation as an important connector between builders, users, businesses, and everyone else around them.

I hope that PurelyPeer will become an example of a sustainable business built on top of BCH and an inspiration for others to enter our permissionless, collaborative ecosystem.

$ 0.00
1 year ago

Looking forward to this as it rolls out. If I can fund cashdrops around the world, and the person collecting them sees an ad / image / link to my podcast, then I will start funding the drops as an advertising cost which also grows the entire scene. Win-win.

I am happy to pay a premium to do this (e.g. 10% of the price of buying cash drops goes to the PurelyPeer team for dev costs, or I will donate to the PurelyPeer team alongside funding cash drops) which makes sense to me as a business model.

$ 0.00
1 year ago

Thank you, you get it! 💚

$ 0.00
1 year ago

This is an amazing project with huge potential! Really looking forward to the progress here.

$ 0.00
1 year ago

Thank you! We are building steadily and carefully, hopefully something that will outlast all of us.

$ 0.01
1 year ago

Nano has WeNano which allows users to create spots where users can receive air drops of nano. It sounds like purely peer is the BCH version of that. There are already teams that are focusing on merchant onboarding so to be able to have purely peer to focus on consumer onboarding is incredible. This has potential to be BCHs "killer app" to fuel adoption and I'm really excited.

$ 0.00
1 year ago

Indeed, there are some parallels with WeNano though we are building our UI and UX with a different mindset and will have a different approach to connect consumers with merchants. We will introduce our UI in the next post but you understood it well already. 💚

We want to provide incentives for merchants to keep some BCH without exchanging most of it to fiat, and to use it for a recurring business expense (advertising) that supports and/or onboards more consumers directly.

$ 0.00
1 year ago