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Minimal Denomination Enforcement [Proposal]

crowning

Well-known member
In the thread here there's a long discussion going on about how to solve the problem of non-anonymizable "dead change" and how it could be implemented.

  1. Due to psychological reasons there will ALWAYS be prices like 0.99, 9.99, 99.99, 1.99, no matter which currency you look at. Those are the pathological amounts we have to deal with.
  2. If we use a static minimal amount of e.g. 0.01 DRK for denominations to avoid all issues this might be too high if Darkcoin hits $1000 per coin (lots of sub-0.01 DRK payments), or not high enough if it falls a lot.
  3. I propose to couple the minimal possible denomination amount to the DRK exchange rate of the most used currencies (USD, EUR, CNY, CHF and whatnot), enforced by the Masternodes. Same can be done for the maximum possible denomination amount.
Pros:
  1. It solves the problem.
  2. Every currency has a minimal amount of 0.01 coins for payments, so there's no reason (after exchange to DRK) to go below that.
  3. Blockchain-bloat will always be at the minimum rate needed to solve the problem
  4. The demand for lower denominations WILL show up when DRK value hits a certain level, so we should deal with the problem NOW and not when it's desperately needed.
  5. Easy to implement.
Problems:
  1. The Masternodes cannot automatically calculate the proper exchange rate without abuse possibilities, so the enforcement amount must be adjusted (more or less) by hand.
  2. Public reception of adjustments done "by hand".
  3. Blockchain bloat.

Thoughts about the problems:
  1. Could be done similar to the current Masternodes-payment enforcement, maybe after a public voting for consensus.
  2. Not a big problem because there's no influence of the coin's value/supply/difficulty itself. No real abuse possibilities for the people who have control over the privkey which controls the enforcement.
  3. Not really an issue because if the value of DRK increases (or decreases) dramatically, the amount of the average payment just shifts up or down proportional to the value. The number of payments itself, and coupled with that the demand for denominations, is still only bound to Darkcoin'ss adoption in the real world.
tl;dr: Masternodes enforce minimun/maximum possible denomination amount proportional to average DRK exchange rate.

Thoughts?
 
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I'm still not following what you mean by tying to the DRK exchange rate. Further, are you saying clip any numbers after the .01 place value?
 
I'm still not following what you mean by tying to the DRK exchange rate. Further, are you saying clip any numbers after the .01 place value?

I mean tying the minimum amount which can be denominated to the exchange rate, not DRK itself.

Right now the minimum amount of DRK that can be denominated is 1 DRK. This means when e.g. you buy something for 1.70 DRK, you'll get 0.30 DRK change which cannot be denominated and leads to anonymity problems when this change is used in later transactions.

One proposal was to decrease the minimum amount to 0.01 DRK and throw away/donate/whatever is below that.
That would be fine right now, but if DRK would reach $1000 that would mean a) either throw away/donate $10 per change (not acceptable), or b) decrease the minimum amount again, lets say to 0.001 DRK.

The latter, in a halfway automated way (automatically adjusted by the Masternodes, but triggered "by hand"), is what my proposal is about.
 
I think you'll run into issues with the source of the exchange rate and current manipulation on thin order books.
 
I think it overcomplicates the solution. I don't think DRK value will be up 10x in next month so we can always shift it later.
And actually bitcoin has already done that - they forked to lower the fees. No need to reinvent the wheel I guess :wink:

What is interesting in this proposal for me is that crowning is actually tries to find new "applications" for masternode network...
And that is something to brain-storm on :smile:
 
What is interesting in this proposal for me is that crowning is actually tries to find new "applications" for masternode network...
And that is something to brain-storm on :smile:

This!

Masternodes (more precise: the Masternodes Darkcoin offers) are one of the best things ever invented in crypto-land.

They can solve so much problems, whenever I see a problem or opportunity I look at the Masternodes first, because those problems which are (almost) impossible to solve in traditionaly blockchain-based currencies become (almost) trivial when you have such a powerful Masternode network at hand.

Evan's enforcement for the Masternode-payments caused that "click" in my thinking :smile:

I think when the InstantX-testing is over we should indeed start a brainstorm-thread. Lots of ideas need to be written down...
 
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