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The relationship between goals and epiphanies is so key to understanding the constructs which fell out into the designs of Bakcoin that I am going to try to merge them in this section of this document.

Prime Directive:

The overarching goal is to provide support to those who wish to bring the exchange crypto-currencies to the public.  In order to do this, Bakcoin requires:
  • Adoption  <-- which requires
    • value
    • confidence  <--- which requires
      • reliability
      • transparency
    • best-of-breed design
Bakcoin protects itself as a primary goal only because it is impossible to achieve it's more more critical primary goal of backing exchange currencies if it fails here.


Critical view of value:

Q: Value for who?
A: the 'crypto-currency ecosystem'.

What we wish to engineer here is an 'ecosystem' which produces 'exchange currencies' which ultimately work best for the 'end user' (aka, 'Joe Sixpack', or whatever.)  If Bakcoin is a success, being a participant in this 'ecosystem' will impart a certain amount of credibility onto an 'exchange currency' and thus provide value to it. 

We've mentioned elsewhere that BKC holders are induced to support 'popular' exchange currencies.  But...
  • Q: what makes an exchange currency popular?
  • A: The end user choosing to use it. (Note the word choose which contrasts with compelled by law as is the case with 'legal tender', or compelled by lack of options.)
  • Q: Why does does the end-user choose an exchange currency?
  • A: it provides him/her the most value.
The system is designed such that the 'lowest energy state' (which all natural systems seek) is one where most individuals are volenteraly using crypto-currency solutions which suite their needs best.  Also that crypto-currency solutions which suite there needs even better are constantly evolving and becomming available to them.  Although it is not our goal to be 'exchange currency designers', we'll pop out some ideas we have on a seperate section  (TODO: link)

To really try to drive in the concept I'll put it one more way.
  • BKC holders are incentivized to support the 'best' exchange currencies for the user.
  • The exchange currencies want to attract BKC backing so they might have to be designed to give something back to the Bakcoin sponsors.
This scenario creates the conditions for compromise.  We hope and expect that the end-user community has the strong hand, but that it is not so strong that they can abuse the situation.  The potentially bad news for the BKC holders is that they end up competing with one another, and the more 'altruistic' of them have the broader range of popular options.  Almost certainly some of these BKC holders will have no interest at all in enriching themselves monetarily.

Another view value:

The state of the world as I write this is that there is basically one legitimate and viable crypto-currency (Bitcoin.)

Although many alternates have been started, they tend to not go far because the barrier to entry is high.  So far this has been just as well for the most part since a lot of the alternates were (in this author's opinion) pretty clearly 'scamcoins' who's goal was to make a handful of early adopters rich before they crashed and burnt.

In spite of the poor record of performance and value in the 'alternate crypto-currency' world, we believe that they promise the way forward.  Bakcoin facilitates this (if it becomes a success) by allowing 'instant credibility' to new 'exchange currencies' if enough people have enough confidence in them to 'sponsor' them (meaning, to invest BKC backing store on their behalf) and to acquire a sponsored slot within BKC.  (TODO - link about this)
As I write this, Bitcoin is having a certain amount of trouble with the BIP16/BIP17 battles.  This is slowing progress.  Because Bitcoin is a monolithic solution with no 'universally accepted' backing, and because it is the only viable crypto-currency out there, progress itself is scary.  Having a multitude of 'exchange currencies' would be the dividing the eggs between multiple baskets which is a good thing for someone, like the author, who values a robust crypto-currency economy more than a specific crypto-currency.)  So, value is gained by facilitating multiple competing, and hopefully sometimes symbiotically complementing crypto-currency end-user solutions.

Lastly, some developments within a particular crypto-currency my benefit by something of a re-set.  Like forming a new genisis block.  In fact it is possible that doing such a thing periodically by design could be part of the scaling strategy.  Having a backing store in the form of something like BKC could be of some use in shifts of this nature.


Epiphany alert:  Never trust anyone if there is any other way to obtain confidence.  Particularly when money is involved.

Bakcoin bends over backward to avoid any sort of trust.  Bakcoin does not trust it's users or it's 'supported exchange currencies' or anyone or anything.  Nor does Bakcoin request any trust except in the most unavoidable of circumstances.  The design is such that such circumstances are minimized to the extent possible.

Confidence in the system is gained by expecting transparency and calling attention to anywhere that it falls short.  Obviously the code is open-source and during the 'ramp-up' period (TODO - link to details), there may be some value floating around.  The amount of value will be minimized be design, and an accounting for the value will be completely open for inspection. 

Reliability is gained by keeping things as simple as possible.  A 'reserve currency' need have very few bells and whistles to increase usability so those will be left out.  It also needs minimal of code churn, particularly if the implementation is pretty good from the outset.  We don't expect a giant hurry on initial developement so there is time to get things right-ish.  We also expect to be able to rely heavily on existing proven code and concepts.

We expect and welcome challenges on every front an anticipate that they will result in a higher probability of realizing the primary goals of this project.

Gini vs. bottle:

Epiphany alert:  A forgone situation is inevitable and it is a waste of time and energy to fight it.  Recognize it in the design phase and work around it, or better, induce it to strengthen the design when possible.

Epiphany alert:  The rich get almost all the chips if they want them.  There is no end to the hand-wringing over this reality, but it is the way the world has always worked.

If BKC is a sought after commodity, it will be vacuumed up by those who have the means.  We design around this issue in several ways:
  • The value of owning a lot of BKC is minimal (but see below about voting.)
  • A high Gini Index in the BKC economy does not hamper it's primary goals.
  • Bakcoin sucks!  Yup, as an exchange currency it does.  (see below about Bakcoin suckage.)
Bakcoin is probably not going to help anyone to 'get rich quick' not necessarily because we despise such a thing but more because it simply does not further the goals of the project.  In actual fact, at least one of us (tvbcof) does kinda despise such a thing but more importantly believes that facilitating it attracts persons who do not share the primary goals (in the same way that shit attracts flies...)

BKC, like anything else, can be traded on exchanges or what-have-you.  We do not actively discourage this and people may be able to figure out how to make 'big $$$' off of it.  Have at it, Hoss.  The design of Bakcoin sort of forces BKC holders to deploy them for the benefit of end-users and thus it does not matter who holds them.  (For those who are drawn to the subject matter of these last few paragraphs, please do take special notice of the concept of 'altruism' as it relates to Bakcoin design.)

Direct Democracy:

Epiphany alert:  block-chain model crypto-currencies are damn good voting systems.  The beat the shit out of Diebold for some odd reason...

The concepts of Agents is utterly fascinating and while it is tempting to explore them as part of a reserve currency solution (to avoid human meddling and trust relationships), we feel that they are to cutting edge and complex for use at this time.

When unavoidable, certain decisions will be managed by a core team who also makes decisions about the codebase (in part because a certain level of trust is required of them anyway, they tend to have a better grasp of the technical concepts than most, and they have at least some skin in the game in terms of time and energy spent.)  For the most part decisions will take the form of code which will honor a vote solicited from BKC holders and propagated through the block chain.

It is here that if the Gini index becomes extreme, or the bulk of the BKC holders are malevolent and seek to damage the fundamental goals of the project, the 'core team' might be forced into taking evasive action.

Several classic examples of things which might be voted on:
  • Allow a new 'exchange currency' to be 'sponsored' (which won't likely be a 50%/50% vote.)
  • Adjust the 'evaporation rate'.

Bakcoin Suckage:

As an 'exchange currency' Bakcoin blows goat.  The simple reason for this is that it is not an 'exchange currency'.  This is actually a feature rather than a bug, and ultimately why we decided that the best results are to be had by separating 'exchange' and 'reserve' crypto-currencies. 

Here is how it sucks:
  • Bakcoin is high latency.  Roughly one block per day (?) plus some other nuisances to limit attack vectors to the SECs.
  • Bakcoin transaction fees are excessive.
  • Bakcoin will be stolen (and destroyed) if a keypair does not maintain enough of them.
  • Altruistic Bakcoin owners have an advantage in that they can back non-profitable exchange currencies.
In order to promote the primary goal of providing good support to SECs, we anticipate that BKC holders will primarily choose an SEC or set of SECs to support and stick with them for long periods of time.  So ultimately the suckage does not hurt people who are using Bakcoin as envisioned.  These 'features' will promote a more stable base for SECs which have more interesting problems to deal with than trying to react to BKC backing washing in and out of their systems.

Also, the Bakcoin solution makes great efforts to provide a small block-chain that survives forever, must be carried around by the SECs, and can be transmitted under a very primitive network system in 'worst case scenarios.'

In short, if a user does not like the unpleasant aspects of BKC ownership then the solution to their problem is quite simple;  Don't own any.