The future is Digital Property (DP)

The future of Digital Property is 4 fold; the same forms of traditional property are also digital property.

1.  Currency
2. Collectible
3. Cash generating Asset (or just Asset but I like the 4 C's)
4. Commodity

In my previous posts I have described these well but I have more to add.  I have developed ideas for each of these property classes for the digital age.

Currency.  Currency derives value from it's fungibility and infinite divisibility.  Digital currency is now known as "cryptocurency" but I think a better term is Distributed digital currencies (DDC's) and central digital currencies (CDC's which use databases instead of blockchains).

Collectible.  Collectibles derive value from their non-fungibility and non-divisibility.  Sort of the opposite of currencies yet they are intertwind because coins like the half disme are collectibles that represent the currency of the dollar.  A digital collectible is a code, like the private key of a bitcoin wallet or the password to a world of warcraft account.  Private keys can be generated that can do anything the creator wants, something like open up a special page saying "congratulations you are the 100,098th customer!".  This is a digital collectible, the code cannot be divided up and the more unique (non-fungible) the code and/or reward is for a particular code, the better.

Asset.  Assets are something that by owning you are generating an income.  One spooky example of an asset is an IOU.  The reason an IOU is an asset is the proverb "the debtor is slave to the lender".  Debt is used to get people to do things that you want them to do, a form of income.  IRHN (IOU reciprocal handoff network -visit www.ir.hn for more info) is an example of a digital (and somewhat fungible) digital asset.

Commodity.  A commodity is something that provides for necessities of life; food, water, or shelter.  More generally; energy, solvents, and protection.  A commonly known commodity is gold, used to make electronics (energy), dental crowns (protection), etc.  A digital commodity is prime numbers or information regarding the primality or factorization of numbers.  Prime numbers are used in cryptography to provide the protection of data; encryption.  Prime numbers have value and can be sold (especially large primes) if desired

In the future all forms of digital property (dp) will be commonplace.  The benefits over traditional property is that digital property can be transferred at the speed of data and cannot always be censored or taxed.


New Proof of Work (POW) method based on factoring large numbers

The current state of the art in cryptocurrencies is using encryption algorithms to provide a target "hash".  Then the "nonce" (or key) needs to be found by brute force (trying every possible combination) in order to crack the hash and prove that you did work to gain coins and provide your version of the transaction history to the blockchain.

The problem with this is that vulnerabilities can be found in these encryption methods and not only that but the development of these algorithms are centralized, for example the NSA developed SHA-256 used in bitcoin and could theoretically know how to break it without brute force.  Not only this but the NSA already recommends against the continued use of SHA-256, no one knows the real reason why but my guess is that someone has been able to crack it and the NSA found out about it.  It can probably be cracked if given a few example hashes from a given nonce are known.  Also these encryption algorithms are almost always extremely parrallelizable, leading to specialized equipment like gpu's and asic's to be developed to hash very fast.  This practice is bad for cryptocurrency because this leads to central powers usually the ones who can develop such specialized hardware.  In cryptocurrency allowing everyone with a CPU to mine profitably helps ensure a distributed ownership of a coin and mke it less prone to pump and dumps or 51% attacks.

The point is we don't need encryption, we just need proof of work.  Mabye cryptocurrency was the wrong word.  Mabye a more general term like distributed digital currencies (DDC's), as opposed to centralized digital currencies, would be more ubiversally applicable.

We don't need cryptography for proof of work.  We can use prime numbers.  How do we do this?  That is the trillion dollar question.  Primecoin tried to use prime numbers but already it has been cracked by GPU's.  The interesting thing is that GPU's do poorly for large primes or large composite factoring because they aren't smart enough.  The problem is these large composite numbers take forever to prime factorize and thus doesn't seem like a good fit for a 10 minute blocktime or adjusting the difficulty easily.

The secret is we don't need a full prime factorization.  This realization came to me when reading this paper:

We can just find one factor (or any desired number, and the factors need not necessarily be prime) that meets our difficulty requirements.  For example we could ask for any 18 digit factor of a 100 digit number.  On an old computer this takes 50 minutes according to the above paper.  We can increase the digit size of the factor we want and/or increase the number digit size in order to increase the difficulty.  We could ask for 2 factors or any number we desire.  These large numbers would require sieving which would put GPU's at a disadvantage.  In order to generate these large numbers in the first place for example we can (do the following or any other method or combination if methods) hash the factor (with any encryption method(s)) and whole number of the last block; and truncate according to the difficulty.  To make it even easier and not use encryption algorithms at all we could just multiply the last number by it's winning factor and truncate according to the difficulty to guve us our next number to factor.

If a factor is not found in say 50% plus the blocktime (15 minutes or whatever is desired), then a new number generated (could just be the last number+1) because that previous number may be prime and not have any factors.  A side effect of this mining could give us a list of possible primes for further research.  So it isn't a worthless task.

This is a super clean method of PoW that will give the advantage to cpu's.  Also it can be combined with any other algorithms or methods to achieve any goals including making it even better for cpu's.  Another thing is in order to verify the factor is a winner all one needs to do is divide the number by the factor and see that it gives a whole number result.  Also verify that the number(s) is indeed the amount of digits required.


The Age of the Block Explorer: Simplest method of how to save Bitcoin

In my last post I discovered a problem in the bitcoin network.  Bitcoin has been hacked and is no longer decentralized.  This was done by China shutting down exchanges.  Whether you believe this development means that China now has control over the price of bitcoin or not, it shows undisputedly that the currency has lost its fungibility in china meaning people can no longer use it freely.  This is a fatal flaw and now trading crypto's is under threat everywhere by governments simply cracking down on exchanges.

My last post proposed the "trust factor" and "reversing transactions" to solve this issue.  While i think that method could work, I don't think it is practical to implement.  I have a new idea that would require not changing bitcoin at all,simply  utilizing  built in technology in order to bring the "exchanges" inside the blockchain itself, and thus make it impossible to hack.

Welcome OP RETURN!

OP return is a function in the bitcoin blockchain that had been added years ago but has thus been under-utilized.  What this does is allow for messages to be added to the blockchain and to transactions.  I have formulated an example language (very simple) that would allow for OP return to hold the key for making the blockchain into a self contained e-commerce platform thus negating the need for exchanges.

If you want to learn more about OP_Return here is a link:


Now back to the topic.

All messages are signed by your private key so you know which wallet sent the message.

Enter the age of the block explorer.  Block explorers will become to the blockchain what search engines are to the internet.  Originally the internet was based just on links (and it still is) but now search engines have become the go-to way for the average person to use the internet, not just going from link to link.  Now bots do that for us.  The block explorer will become the same for the blockchain.  In the future the way people interact and use the blockchain itself will be through block explorers.  We know google has a monopoly on search, which is dangerous, and a blockchain explorer would also have the risk of being a monopoly.  So this idea isn't foolproof, but this will be a quite robust system.

I don't want to sound like a block explorer is a new thing.  It isn't.  Block explorers are widespread now.  But currently they serve only niche uses.  What I am saying is that in the future most people will think of block explorers as the blockchain, as people currently think of search engines as the internet.  It will be a huge paradigm shift as blockchain goes mainstream.

The block explorer should show the value of the bitcoin address in question and how many blocks the address mined and how many days the address has existed.  This should give the person a feel for how trustworthy the address is that they are considering sending money to.  Also the explorer will show the bitcoin addresses feedback (#FB) for their transactions (which is explained below).

The following example language is used to tell block explorers information.  Think of this like the HTML of the blockchain.

Use hashtags to tell block explorers what type of info you are providing.  All of them are optional but some more than others.  What you will do is start your OP return message with the following and block explorers will know that the message should be filed under that sort of information.  Basically think of it like you are setting up your e-commerce site on the blockchain using the following commands to create your profile.

#FT: your "for trade" list.  BTC2USD 10000  (I will sell bitcoins for $10,000 usd each) USD2BTC 8000:100000 (I will buy up to $100,000 worth of bitcoins at $8,000 each.)  YTN2BTC 5000:20000 (I will sell up to 20,000 yenten for bitcoin at a rate of 5,000 yenten per Bitcoin). 

#AD: Your wallet addresses.  for example YTN:hekcuFekGI75Hnekzha BTC:wiUenxYGk8619GskzuH etc.

#WW: Your website for people to visit for more information about your warez. This is especially good if you have lots of physical things for sale and you don't just trade currency.  Block explorers should be able to pull info from your website too especially if you are using  hashtags to denote information.

#CI: your contact info.  Optional [if the buyer specifies a payment address and pays 1 bitcoin to seller and attaches a note to the transaction (TX) that says BTC2YTN then seller will send the amount of yenten he offered for 1 btc to buyer without any communication needed.]  But if you want something that can't be traded digitally then you should provide contact info.  Anonymous email addresses through TOR is a great way to do it.

#PO: what pay-out methods you offer. (Paypal, credit card, check, cash in the mail, amazon/itunes/steam gift cards, etc.)

#FB(TXID): Feedback for transactions.  Make sure you reference the transaction id (TXID).  The block explorer will know if your address was actually involved in the transaction.

If you sign a message with a hashtag you used previously, the block explorer will know to disregard your old #FT list for example and only consider your newest one as valid.  There is a 40 letter limit to OP return messages so techniques may need to be used like breaking posts up into several pieces or using abbreviations or whatnot.  I leave that up to you to figure out the technicalities for making this work in practice.

So basically using a block explorer people can search the blockchain in a way just like how localbitcoins.com works today.  We will have a fully decentralized exchange that is un-corruptible built into the blockchain itself.  I am aware that this will add size to the blockchain but Monero adds size to their blockchain to anonymize transactions, the least we can do is sacrifice some size in order to keep bitcoin and other crypto's fully decentralized and outside the influence of state powers.

PS: Wallets could help with this funcionality by providing a gui to help people compose thier profile.  Also wallets could connect with block explorers to function as peoples effective bitcoin trading search engine.

BONUS:  Something I just realized is this idea could be used to "automatically" convert the crypto that a person is mining into another crypto or even cash.  In the wallet the person mining could be mining yenten and have it automatically converted into bitcoin for them and sent to their bitcoin address for them.  The wallet would contain code to do this.  This could make mining much more mainstream if someone could mine Monero and see their paypal balance automatically grow.

Also if you recieve a bitcoin transaction you can have your wallet automatically convert it into monero and back again to bitcoin to "clean" the history from your bitcoin.