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A tale of two coins

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10 months ago

This will be very different from most of my posts. It is a tale of two coins. One of them does not have a name yet, but they have things in common.

I will show you things from the coin that does have a name. For now the name doesn't matter. I have blurred it out in the initial parts of the post. I'm trying to draw attention to the plans, the execution, and the result. Names don't matter much.

This coin did something right - it has a whitepaper .

What follows are some explanations and positioning quotes from the coin's whitepaper. Just so we all have an idea of what it's about. They are fairly central tenets and objectives. The thing it wants this coin planned to do well. I will focus heavily on the governance component. My readers can guess why. Sometimes I highlight stuff I find interesting.

Yes, this is meant to sound familiar.
Right on! Who doesn't like efficient system evolution in a competitive environment?
Ok. Let's move on. :-)
Adopting POW - cool! Wait, didn't you say you were to "break through" this Nakamoto framework in the previous quote (section 3.9) ?
Hey, there's more detail and good intentions here than in many an other governance fund announcement.
Some caveats are understandable, no?
Ok, by now I've quoted most of the governance stuff.

I'll just mention from the table of contents, that the coin had a lot of other goodies on its menu:

  • Schnorr signatures

  • POW

  • SHA256 mining

  • Reduced confirmation time (1 minute vs Bitcoin Cash's 10 minutes)

  • Reorg protection similar to BCH - but 30 blocks deep, instead of 10

  • Same DAA

  • No premine, no ICO

  • The aforementioned Governance Fund

  • Annual reduction of mining rewards by 20% and annual halving of governance fund amounts

  • Tail emission by stopping block reward reduction after about 20 years

So, definitely an experiment, and willing to admit that it is an experiment too.

(NOTE: replay protection against BCH isn't mentioned.)

I am guessing most of you have never heard of this coin, despite it offering itself as a testbed for new BCH technology, and apparently aiming to incentivize BCH development through some kind of symbiosis with its management fund aka Governance Fund. Am I right?

I won't keep you in the dark anymore about the coin. It's called FreeCash (FCH), and it's a fork of Bitcoin Cash executed on January 1, 2020.

About its relationship to BCH, they publish this (highlights are mine as usual):

The intended relationship between this coin and BCH. I think this is news to most BCH developers who will never have heard of this coin. At least, I never heard of any BCH developers receiving any incentives from FCH.

I want to say that the coin is still active, has published (at least) two Contribution Assessment reports (basically, they have a process to allocate their governance funds via this assessment). Arguably, and I'm looking on this as an outsider, they did a decent job on their governance experiments (I had a look at the first PDF report published in English via Tor, the second report was in Chinese only, I could not find the English version).

They drew some lessons from their governance experiments that are actually worth reading - I quote only some extracts but you can find more in [5].

This brings me to a conclusion.

A coin was created, a fork of BCH, earlier this year.

It was very much a tree falling in a forest.

I have not yet spoken about the other coin that does not have a name yet.

It shares the following characteristics with Bitcoin Cash (BCH) and FreeCash (FCH):

  • Schnorr signatures

  • POW

  • SHA256 mining

  • Plans for reduced confirmation time (they claim they will be able to implement Avalanche-based confirmation within 1 second)

  • Reorg protection similar to BCH

  • Same DAA

  • No premine, no ICO

  • Plans for a Governance Fund, also funded from coinbase rewards. Details scant, not all worked out yet.

  • (No replay protection towards BCH)

Would it be safe to assume a similar result for an action which is so similar?

Time will tell, I guess.

In the meantime, those embarking on the second attempt might do well to study the lessons already learned, and to recall two sayings:

“Those who cannot remember the past are condemned to repeat it.”
- George Santayana, The Life of Reason: The Phases of Human Progress, Vol. I, Reason in Common Sense (1905-1906)

and

“Insanity is doing the same thing over and over again and expecting different results.”
- 1981 October 11, The Knoxville News-Sentinel: Al-Anon Helps Family, Friends to Orderly Lives by Betsy Pickle (Living Today Staff Writer), Quote Page F17, Column 2, Knoxville, Tennessee.


Final Note: It is perhaps unfair to use Freecash as an comparison example. They were marketing themselves as an experiment to some extent after all, although they were being quite ambivalent about it. In a competitive environment, I can't really tell whether they wanted to compete, or not.

What I'm confident about, is that competition is tough, and once you reach close to the end of the cryptocurrency ranking, it is extremely hard to recover.

From that, I will draw the lesson that even sincere attempts at governance are no magic bullet for success.


References:

  1. Whitepaper: https://freecash.org/pdf/whitepaper-en.pdf?v=0.2.4

  2. BitcoinTalk announcement: https://bitcointalk.org/index.php?topic=5212666.0

  3. Subreddit: r/FCH

  4. The Relation between FCH and BCH , a post from its subreddit

  5. Problems and Improvement of Freecash Contribution Assessment

  6. https://quoteinvestigator.com/2017/03/23/same/#note-15768-2


Lead image: Photo by Andrew Ly on Unsplash

Second tree image: Photo by Nick de Partee on Unsplash

Portrait of George Santayana by Samuel Johnson Woolf (1880-1948), Time magazine, from Wikipedia, in the public domain.

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Comments

Nice article please check my page and subscribe to my article thank you I love you

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6 months ago

printf(nice tale of two coins)

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10 months ago

Amazing bro

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10 months ago

Nice thought and exclusive article...

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10 months ago

Personally I believe that the technical characteristics of a coin only play a minor role in determining its success. So two coins could be rather similar technically and enjoy very different outcomes. I would also suggest that calling a coin something like Freecash wrongly implies it can be claimed free, like universal basic income (GoodDollar etc). But very good article - if I understood it correctly - thanks!

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10 months ago

I think you are right in both points, and particular you make a good observation about the naming of Freecash.

About your first point, I can also add that two coins may be very different and yet enjoy similar outcomes. Indicating that the market still does not value fundamentals well, but is quite stuck on names and brands. When and whether the market actually discovers that they've been sold a dud instead of a scalable p2p cash, remains to be seen.

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10 months ago

Awesome

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10 months ago

You have never heard of the FCH. Really like article everyday try to learn something new

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10 months ago

Super

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10 months ago

I don't think it was the governance fund that made freecash fall like a tree. Probably the same thing would happen if they had no fund. The only change would then be 1 minute confirmation. No one needs another Bitcoin. BSV is also basically superfluous. It is only there because a billionaire keeps it alive. BSV's death will therefore take a little longer. Nobody needs a new Bitcoin on November 15, therefore it will fail.

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10 months ago

Yes, the point of my article is more "a governance fund doesn't make it successful".

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10 months ago

This conclusion goes too far in my view. Freecash had no chance with or without a fund. This coin would make nothing successful.

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10 months ago

Great information about this article my Dear friend but you are also good writer And share a useful post

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10 months ago

Awesome

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User's avatar Win
10 months ago

Loved reading it

$ 0.05
10 months ago

Cool, happy you liked reading it.

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10 months ago