shanen's Journal: Is it possible to imagine a sane cryptocurrency?

Is it plausible to regard the debt ceiling as a kind of artificial scarcity created to protect the increasingly imaginary value of the American dollar?

And yes, I am also thinking about the artificial scarcity claims for Bitcoin. But there is no there there, as in "There is no real value in any cryptocurrency. Just human fools who imagine they see a gold mine."

Already forgot which book triggered this line of speculation, but it got me to thinking about how to design a "better" cryptocurrency, assuming any positive adjective can be used with any cryptocurrency. Largely based on books I've read about Bitcoin and blockchain and a few higher level books on the related topics. The one that keeps coming to mind as the best is Going Infinite by the great Michael Lewis.

My design fantasy is called ULcoin for "Use it or Lose it coin". No fancy math or energy-intensive proofs of work, but just a simple lottery with clear limitations. It does depend on PKE for the identities and signatures of the participants, but each transaction only requires small resources.

The ULcoins are just allocated from the first integers. To spend a ULcoin (or fraction) you create a transaction that transfers your ULcoin to a different identity. The transactions start as pending, but they are collected into blocks favoring the oldest pending transactions. When the blocks get long enough, there will be a kind of election among the eligible participants to pick the next signer of the block. To become eligible, your computer would only have to collect enough pending transactions to make a block, including some number of the oldest pending transactions. The judges of the election would be picked from the previous signers, as recorded in the last signed block. Not sure how many judges you want, but you would go backwards from the latest signer until you find a large enough number of active computers to form the panel, stopping with an odd number to prevent ties. The number of candidates would be limited, too. The candidates would be a power of 2, perhaps around 1024 candidates for each possible new block of transaction data. Each member of the voting panel would then help with a binary search to determine the winner. If the number of candidates is 2^10, then ten bits needed and each member of the voting panel will make a random pick for each of those bits. If most of the voting panel picks 0, then that bit is a zero, and ditto for ones. Trivial enough computation and the resulting winner from the list of 2^n candidates gets to add itself to the new block and calculate the signature of the latest block. And the winner gets the next available ULcoin added to its own account.

What about the "use it or lose it" thing? The ULcoins will expire if they are not used within some limit determined by how many transaction blocks are retained. In other words, the blockchain will also create scarcity and you won't need infinite storage for an infinite amount of transaction data. If an ULcoin has a transaction within the active transaction blocks, then the ULcoin is still valid and the owner is the recipient of the ULcoin in that transaction. If no such transaction exists, the ULcoin has died and can be returned to the pool of ULcoins that can be given to new signers.

Any questions? But the answer to the first obvious question is "Yeah, ULcoin is obviously another crazy castle in the sky, but at least it isn't an infinite castle."

No

[JustAnotherOldGuy]

See subject line.

The things that make crypto 'attractive' are also its built-in weaknesses.