The reward of designing emergent systems.

One of the most rewarding experiences I’ve had, was in the early days of Tweekly.fm (when Twitter didn’t include links in searches), I could see the chatter about it. One day, up pops a tweet:

This left me incredibly happy. Something I brought into existence, put things in motion that did the above. Not really “knowing” what effect Tweekly.fm has on discussions in non, social-media life, this was so cool to see. It ACTUALLY resulted in people’s lives changing. It was emergent behaviour from an idea that was once just in my head.

The same has happened with TwimeMachine, in the most unexpected ways. I see people tweeting, saying they are laughing at their old tweets, or feeling some sort of introspection. It’s great knowing that NBA, Paulo Coelho, ESPN or Swedish House Mafia has used it, but it’s far more exciting to think of the small things that has been set in motion. What if that introspection led to significant change in someone’s life? You also find videos like this:

Was someone tasked to do this?! Was it for a school project? Why? Just… what? What is it?

It’s odd, but it’s very rewarding. It somehow came to this.

Which makes we want to come to my point. I’ve created things that spontaneously gave rise to emergent behaviour (without that being the intent). What happens when I create something whose purpose is to BE emergent?

I’m about 2-3 weeks from launching my own altcoin (cryptocurrency). It’s not just an altcoin, for the sake of it (like most copies these days). It will represent a new concept that hasn’t been tried yet. It’s goal is to be emergent, to let the idea loose and see what pops out. To say I’m excited is an understatement. If my idea has any merit (to the extent to which I think it does), it can set things in motion on a far greater scale than my previous projects. Even though I’m prepared now for emergent results, I can’t wait to see what surprises it will bring.

The web brought a new platform, where anyone (like me), could launch projects for next to nothing (TwimeMachine costs me $10 a month). 5 years ago, if you said I would be creating a currency, it would’ve seemed farfetched, but now I am. And just by thinking about the potential of it, has me incredibly excited. I’m burning to share it, but I want the launch to be perfect. Will probably announce it next week. Going to be fun!

The Bitcoin ‘waves’ of adoption: decentralized funding rounds.

I’ve been fascinated by the rate of Bitcoin’s adoption (and correlation to price). Here’s an interesting graph:image

From this post. And a bigger version.

This is a trend I’ve noticed too. Past performance don’t indicate future performance, but it is still interesting to wonder if there is any credence to these patterns. It seems that with each big ‘rally’ it was an order of magnitude higher. 0.1 - 1. 1 -> 10. 10 -> 100. 100 -> 1000. When it rallies, it rallies close to these patterns (an order of magnitude rally).

When the price rises, the media suddenly starts attributing external factors to it: trying to tie some reason for the price rise. When Zynga news broke, Bitcoin rallied, and media attributed it to that. But now, with even more massive retailers like Overstock, TigerDirect, Fancy, Porn.com, etc accepting it… the price didn’t climb. By correlation to Zynga, it should’ve rallied substantially more.

And then I look at the graph above, and wonder if there isn’t perhaps some other forces at stake here: tied to complexity and systems theory. It seems price leads adoption, not the other way around. It’s as if when a rally happens, it pulls the momentum of this complex network forward, and now allows more freedom and space for the actors in the system to catch up. That’s why: after a price rally, the ecosystem grows, and grows. But it’s not linear. With each wave, it’s been the same. Once the size of the ecosystem catches up to the price, it rallies again.

Then, another comparison comes along… Funding rounds of companies. “Price” leads adoption. VCs provide funding so that the companies can act on improving the network of the company. But it’s a leap of faith. The VC’s have to believe in the future potential and value of the company.

This, is the same with Bitcoin. One of the first, well-known ‘VC’ investments in Bitcoin was someone paying $42 for 10 000 (buying a guy a pizza). Someone was willing to take a risk to buy what could possibly be worth millions. That’s the same in VC. At first, small seed rounds, big risk. Then larger amounts of cash on the table as time goes on. But each time, price enables further adoption. That pizza was investment in Bitcoin, and kickstarted Bitcoin’s capability to create adoption.

With each ‘funding round’, all owners of Bitcoin become wealthier, and then have the capability to further create new parts to the ecosystem. Case in point: I can take time off now after my masters and work on Bitcoin stuff, because those that I bought last year has now appreciated.

What’s interesting to compare as well: with tech companies. Facebook, Dropbox, and Twitter all were valued around $8-10 billion after 5 years (Bitcoin’s age). And when an IPO, happens? Who are the underwriters? “Wall Street”. What’s one of the predictions to happen this year with Bitcoin? Institutional money is going to start pouring in.

As mistaclutch on Twitter replied to me when I linked this picture. It’s probably just apophenia: a tendency to seek patterns in random data. It’s still interesting to speculate. ;)

Personal coins and agency.

Since I’ve embarked on exploring the concept of personal coins, the most important part that I’m excited about is the agency it provides.

People form part of networks on various scales. You are a part of your family, your suburb, your town, your province/state, your country, your continent, the world, etc. All at different levels.

With each network you are a part of, you can play some role. The larger the network, the more difficult it becomes to make an impact (on a meaningful scale).

With cryptocurrencies, scarcity can be applied to any form of network: at any scale. Thus being able to quantify that network. Because of this revolutionary concept, owning a part of a network introduces agency to individuals on a scale never imagined.

Simply, by growing a network, you can create wealth. This exists on same scale today, through stocks, in companies. If you hold Apple stock, being an Apple enthusiast and talking about it, creates some ripple effect that might lead into an increase in price. But an individual can only do SO much in a network as big as Apple’s. However, now because we are able to quantify networks of any scale, the barrier to entry is much, much lower.

This means, any person now has the agency to do more with their lives than just having to resort to a job as the ‘value exchange’. The current mode of earning value (for most people) is intra-value trading in a network. The ‘network’ is the currency of the country you are living in. What’s happening is people are trading ‘stocks’ or parts of the ownership in the network of their country.

But the network you are a part, which that currency represents is your country… You CAN improve the value of it, but on a national scale it’s much more difficult to make a significant impact. But with smaller networks (of currencies), as the scale goes smaller, you have more control. Resulting in a new form of “wealth creation” that’s now available to people, that’s not a job. And it is much more feasible, as the barrier to entry to influencing smaller networks is lower.

The network you have most control over (and have the capability to influence), is the one you find yourself: resulting in personal coins.

Personal coins shouldn’t be about greed, or seeing it as obnoxious, or egotistical. It’s about granting agency to individuals in a world that’s being increasingly automated by software.

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Some of these ideas and concepts, I’m writing up in a book, which I plan to announce soon.

P.S. Speaking of personal coins. I’m putting Simoncoin on hold for now. I don’t think the current pure altcoin implementation is the best way to go. I’m looking at other implementations first.

Update on personal coins. What needs to happen for mainstream use.

In the past month since I announced my own planned personal coin, there’s been some new tech journalists launching their own: such as Alex Hern, and Joe Weisenthal. I’ve also discovered the first personality currency was Cinnamon Coin based on Cinnamon Carter. Indirectly, the Coinye West coin (or rather Coinye Coin due to “legal pressure”) is also coming.

Matt Corrallo also launched an altcoin maker: coingen. I was planning to make something similar, but I veered off into a more esoteric level: thinking of baking in alt coins securely onto the Bitcoin blockchain.

Slowly, but surely, it is starting…

To mint personal currencies, there’s currently 2 ways I see it can happen:

Pure altcoin & colored coins.

Pure altcoin:

This is what we are seeing with Dogecoin, Litecoin, and new personal coins such as Herncoin and Stalwartbucks. The concept is fine, BUT it lacks security: both in terms of technical chutzpah required by developers AND the problem of having chains with small hashing powers.

With coingen, in some manner, Matt has made it easier to create one, but it is still difficult to maintain one. A pure altcoin unfortunately also suffer from low hashing power risk. Someone can quickly come and derail a coin (if they were so inclined).

Colored coins:

Colored coins is the process of using Bitcoin as a proxy for other assets: basically allowing anyone to mint anything on the blockchain. You ‘color’ some satoshi that represents new assets. These assets can then be traded similarly to Bitcoin: they just then don’t use the nomimal value of BTC, the currency. So I can mint 1 million Simoncoin. This works well, because it uses the security of the Bitcoin blockchain AND it is now starting to be relatively easy, thanks to development in the area.

The problem with colored coins however, are that it is centralised. Making a personal coin decentralized will breed more trust, as I can’t manipulate AND I have additional incentive to be continuously involved in order to sustain it. In other words, I’d rather get involved with someone willingly relinquishing their personal coin to a decentralized approach.

So how do you combine them? Colored alts. And that’s what I’ve conceptually designed. Using the Bitcoin blockchain, users can mint any decentralized currencies on top of it.

Here’s the concept I’ve posted on the colored coins Google group. And here it is quickly on the Bitcointalk forums. I’m still looking for comments, but I think I’m in the right direction.

I believe a future of personal currencies means stripping away the worry of managing the technical sides (for everyday users). As you can see, it is tech journalists and tech savvy people playing with personal coins. This means, removing the worry of security AND the worry of maintenance.

So, I’ll see how far I get with it, as I would like to technically design it as well. This way I feel Simoncoin will have the best rate of success (you don’t want people moving coins halfway through). Making it future-proof. It also means anyone can hopefully create a personal coin by just a tap on their phone.

Announcing Simoncoin - world’s first individual altcoin.

In the previous post, I explain how it came to this. I’m going to run this experiment, and it’s going to be risky, but I would love to see this future come to fruition.

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image

Simoncoin is an investment in me, and my capability to make the world a better place.

It’s an experiment that I have conviction on! The cat is out of the bag. Whether this is how the future will look, it remains to be seen, but I do believe that individual cryptocurrencies lights up a path to a future where we can invest in each other’s capability to make the world a better place. Someone won’t have to work menial jobs just to get by. You can become a very ‘wealthy’ person simply by being altruistic: giving back to a community, helping elders across the street or fighting injustices.

Perhaps the future versions will be different: minting colored coins on the Bitcoin blockchain, or using systems such as Open Transactions. But for now, let’s start with this.

For now. Simoncoin is going to be launched in January 2014. I’m busy creating my own fork, setting the monetary policy, creating wallets, creating a block explorer, pools and so on, before the launch. Most of the basic altcoin code is done. I need to set up the rest of the infrastructure though, as well generate the merkle root. But I’m going on holiday with the family soon, and I want to be present and not want to worry about fixing bugs.

Allowing people to easily create their own cryptocoins is a next step: and then creating an exchange for all of them is what I want to work on for next year. If you like this idea and want to get in touch (as developer or investor, don’t hesitate to contact me).

After this, creating a system where each altcoin can float and make it possible to pay with any altcoin (no matter how new) at any store. (ie altcoin -> BTC -> Bitpay).

In the far future, if this idea takes off, creating a system where buying another person’s coins could simply be as easy as walking past them: making it possible to easily and quickly invest in small gestures of goodwill.

EDIT (23 January).

Simoncoin is on hold for now. I’m trying to figure out the best way implement this idea. I believe the current way is probably not the best implementation.

In the future, everyone will have their own cryptocurrency.

Everyone in the next 10 - 20 years will have their own altcoin (or derivative of it). I’ll have a simoncoin.

In what sounds like an odd turn of events, recently launched dogecoin made me think deeply of how we ascribe value. Due to the ease of launching currencies (thanks to Bitcoin), it was inevitable that something like dogecoin would come along. However, looking at all the previous cryptocoins, all of them have been centered on some an idea: that is for the most part arbitrary. You have ‘feathercoin’, ‘worldcoin’, ‘litecoin’, ‘sexcoin’ etc. The strength of these coins as currency is its ability to kickstart and sustain a network effect (big or small). Having stronger concepts (and backing), allows it to sustain and continue to have value.

With Dogecoin however… there’s no lofty theme, or concept, other than doge: the meme. It’s currently very big on the net. Doge harnesses a strong existing network effect. Its usefulness as a currency is exactly that. It seems as if ‘money’ (or value) is a correlation to a network effect. Speaking to Bryce Weiner on twitter, he mentioned the idea of creating a cryptomarket based on celebrities.

And then the next step fell in place. What if Justin Bieber decides to back and launch his own altcoin? Buying and owning a part of Biebercoin is an investment in his network effect. There will be many teenagers wanting to pay and use Biebercoin as currency, and it will make sense for vendors to adopt and use it (in stores, in apps, etc). As investors, you’ll want to be a part of his success and thus own some of it. In other words, what if you saw Justin Bieber in his video ages ago, you could’ve bought some Biebercoin and took part in his success?

Jokingly, I told me friends about this, and they mentioned: imagine if there was there was a Mandelacoin right now?

And then it dawned on me…

Why not mint a cryptocurrency for each person? Mandelacoin and Biebercoin will be valuable by virtue of their achievements. But there are lesser (and other achievements) in life as well… and its value will be directly tied to the person’s ability to generate a network effect.

The beauty of this concept goes into another direction as well. We are continuously living in a world being eaten by software, where people are losing jobs left, right and center. Valuing the work being done, and getting paid for it is becoming a cock-up. If your net worth is simply tied to your network effect, you can become anything!

If you live a life of altruism, simply helping people in grand ways, you’ll generate a network effect and your net worth will grow as a result of it. You can be an artist. You can be a great mother in a community. You can contribute to open source software. All of the previously pure altruistic gestures will now generate wealth for an individual.

It also goes for the inverse. If you behave evil (what people perceive as evil), you will lose your net worth, as your money will be a direct vote on other people’s behaviour: a fluid ‘vote’ on people’s actions. In South Africa, our president Zuma, is squandering tax funds to build himself a massive home. The problem is: due to inefficiencies with how money and value flows, he’s locked up that net worth and power. Even if he behaves badly, ‘karma’ will take longer to decrease his power. It will have to lead to a breaking point, where the populace will get up and revolt. With this system, the populace can discreetly sell the Zumacoins they’ve accrued (when he was a more genuine leader), and let his wealth and power plummet.

So here’s an idea: create platforms, tools and suites to make it easy for people to launch their own coins. And then allow them easily exchange value between all the different coins. Make it float easily, so that I can pay with simoncoin at a store, even if they do not accept it explicitly. Or rather, fluidly spend the value of the coins I own of several people (ie spending Biebercoin for now, due it to having increased in value). Tipping and buying parts of other people could also be made extremely easy. Meet a kind stranger on the street one day, you can immediately then and there, discreetly buy some of their coins.

Value for now will probably be tied to its value in Bitcoin (as most altcoins are currently being valued) or the current reserve currency in the world: ie USD. However, into the future due the fluidity of the network of value, prices would probably be start being displayed specifically to you, perhaps as a percentage? ie, this beer will cost 0.0003% if your current net worth (whatever coins you hold).

Who’s in? Let’s do this!

For now, the going will be slow. We will start seeing (mostly tech) people slowly but surely minting their own coins (probably creating litecoin/scrypt forks), until a platform exists for anyone to easily create one, and allowing easier and quicker exchange between them.

Ideally, people would start minting their coins when they are born. At that stage, family would most likely be mining it for the first few years: allowing the child to eventually own their wealth when they come of age. If there is sign of genius, others could start buying some of the coin. But for now, we’ll have to go from here. Hopefully I get the most of my own coins. ;)

For established people, this process might be a bit more difficult. If Bieber releases his Biebercoin, he will have to contend with miners coming in and usurping his coin. But having a strong network effect could mean, he could either pre-mine some of it (to a reasonable degree), or simply through the wealth that he has buy it up as it comes into circulation.

There are some flaws to having millions of small coins: mainly security of the chains. Perhaps this idea will take some other form, in colored coins on the Bitcoin blockchain (best security) or through Open Transactions.

All I know is. It’s going to be a very interesting road ahead. And thus, I’m announcing Simoncoin. Launching in January 2014.

EDIT:

@gvrooyen, the director of the MIH Media Lab where I was at for the past 3 years, added a follow-up post: Cryptocurrencies as public shareholding, which is also worth a read.

Thoughts about Dogecoin (and altcoins).

On the 8th of December, Dogecoin was released. wow.

It’s market cap is already at $1 million USD and it’s the 4th largest scrypt altcoin in terms of hashing power.

Looking at the altcoin market there’s already 45 of them (if not more). A lot of them are turning into complete copy-cat coins, with no discerning difference: the long-tail of competing virtual currencies.

I recently read a response from Erik Voorhees (creator of satoshi-dice and prominent early adopter of Bitcoin) on Litecoin (and altcoins).

Here’s a quote with which I disagree with:

Speculating on altcoins, in general, is pure greater fool theory in action, because there is no significant fundamental utility, no “improvement delta” over Bitcoin itself.

If you think about the technical benefits, then yes, this holds true. Litecoin’s improvements aren’t that much more beneficial over Bitcoin. If you look at other altcoins, they might provide other technical experimentations such as Peercoin’s use of proof-of-stake algorithm which will end up being much more energy efficient into the future.

BUT.

A feature of money is its network effect: being a medium of exchange. IF an altcoin is just being speculated, it kickstarts its network effect, improving its “improvement delta” beyond its technical merits. Once it reaches escape velocity (people coming on board due to a lot people already being on board, like Litecoin), it’s in the clear. Being in the right place at the right time is often enough. A great example in another realm is Javascript’s lunge into the spotlight. It’s not of one the best languages around, but due to it being well-placed (being a client-side browser language), it became unexpectedly popular due to the proliferation of apps built into browsers: even becoming the backbone of server-side frameworks such as the popular Node.js.

Looking at Dogecoin, a clear jokecoin (or memecoin), it’s added social features is the backing of a massive meme, AND the fact that people see it as a joke/lighthearted… which might be enough to kickstart its network effect into escape velocity.

I won’t be surprised if dogecoin becomes a top 10 coin (> $10 million market cap).

It also brings about an interesting question. Due to cryptocurrencies making it so very easy to launch money, does it unbundle value to simply being a network effect?

If you liked this post, do drop me some dogecoins: DFVzezccAsdq1LQwrPTDe1nMXKrL7aEUWY. wow.

How regions can create their own altcoin: incentivizing community-based altcoins.

I found Allahcoin the other day. It’s essentially a Litecoin clone, but with one interesting distinction: 10% of each block goes to the Muslim Brotherhood.

I’ve always wondered if it was possible to in some way design community-based altcoins (either, governmental, regional (like a city), or whatever delineation you want). The problem however: it’s purely digital. Creating a Bosch-coin (for Stellenbosch), for example, means anyone in the world can mine it, and still use it, kind of defeating the purpose of delineating it to a region.

Seeing how Allahcoin donates 10% of each block to a central authority is the clue here. I’m not going to bother with Allahcoin, because I don’t want to mine something where 10% of it gets donated to a religious organization I don’t support. But I’ll be more likely to mine and contribute to a coin which donates part of the money to an organization or entity that supports a goal I align with.

And this means you can easily see regional (or community) coins start popping up. “Boschcoin” could have 10% of the proceeds of each block donated to the municipality (of Stellenbosch). This is a public address, and then you can see where they spend the money.

Other (of the top of my mind) options:

- “Gamecoin”: where 10% of each block goes to Child’s Play.

- “Govcoin”: 10% of each block is the ‘tax’ imposed on the nation.

- “Bankcoin”: There’s no fees. The bank makes it money by getting 10% of each block. And anyone wanting to deposit money with them, has to use “bankcoin”.

The benefits:

In a cryptocurrency world, tax is a thorny issue. If you think ‘tax’ is a good thing, this is a much better way to impose it. It’s built into the money protocol. The city doesn’t have to forcefully extract tax from its citizens. It’s saying: “Here’s how you transact in our area. Go crazy, it’s already been ‘taxed’.” vs saying: “Do what you want with money, but please pay us tax, otherwise we will come get it.” It’s push vs pull.

The value of the coin is also directly correlated to adoption. If “Boschcoin” wants to succeed, the city will have to visibly show how well it is doing. Its proceeds (ie tax) is correlated to its success. It’s like holding stock in the city.

Transparency: if a city decides that it wants its citizens to use the currency, it will have to use the coins donated to it, in a similar fashion. The good thing about this: it’s a public address, and it can be mandated that each transaction that the municipality spends has to be labeled and visible in the blockchain.

The disadvantages:

Centralization. However, this is not ‘such’ a big deal. If the central authority dicks around, then faith in the coin will be lost, and its value will decrease. But it’s still an added vulnerability.

Not as secure as Bitcoin. Bitcoin’s security comes from it’s big infrastructure. A regional coin will always be less secure, and is more prone to attacks. The only way I see this can be improved is through Mastercoin or Colored Coins, where the regional coin is minted on the Bitcoin blockchain, but then I’m not sure how to impose the 10% fee to the central institution. Another way protect against this is to used centralized checkpointing (already being employed in newer altcoins to keep it secure until the infrastructure improves).

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Is this something that is needed (or wanted)? Not sure yet. The only benefit I see is that it can increase transparency to a region (such as a city), decrease some of the inefficiencies related dealing with the current financial system and add the idea of a ‘stock’ to a region (ie owning “Boschcoin” is an investment in the city of Stellenbosch). Otherwise, just using another coin will do a similar job.

Thoughts? Advantages? Disadvantages?

Stellenbosch Bitcoin Meetup

So, after Switchless acquired BitX, the Stellenbosch Bitcoin community came out of the woodworks, and it was determined that a meetup should happen.

So it did.

image

Quite a turnout. We had to move to a larger venue to accommodate all the people. People from Cape Town were also in attendance, as well as some others from the international community that were around.

A crowdsourced beer fund was set up, totalling R760 worth of beer: https://blockchain.info/address/1NbVeKEByNDocze7Nf99B3G38rhuU8r4Ph. Fun.

First up was Timothy, from BitX.

He spoke about how it started, and how it turned into what it is today. They’ve done more than R1 million worth of trades. The first trade on BitX was for R490. The current price now is R10000+. They also recently switched to a system where you have to deposit before-hand to keep the market more liquid and moving.

Next up was Marcus, from Switchless.

image

(photo by caravdv)

He spoke about what benefits Bitcoin can bring to existing financial institutions, and that they are working on tools and software to make it easier for these institutions.

Also relevant was the turnout. He’s been to other meetups in places like Palo Alto and Hong Kong and he mentioned how great it is to see the turnout here in Stellenbosch.

Then, I spoke about low-trust protocols, micropayment channels and Bitcoin’s ability to facilitate autonomous agents.

image

(photo by frederickjlutz)

I’ve spoken about this on my blog. I also demo-ed PayFile, which I’ve been busy working on with Mike Hearn, adding bug fixes and features: learning how the code and nitty gritty works. I’m planning to upload a web version of the talk when I get back from holiday.

Finally, GJ van Rooyen from Custos Tech.

(I can’t find a photo from his talk).

He demo-ed their very innovate new DRM system built on top of the Bitcoin, which uses clever social engineering incentives to keep media from being shared irresponsibly. Not sure how much of it is supposed to be fully public, yet. You’ll have to e-mail him. ;)

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All in all. Very eventful. Met awesome people, had beers and pizza afterwards. Bitcoin’s future looks bright, even just looking at such a portion of people willing to come together in Stellenbosch.

My average daily internet usage statistics.

So, I recently installed an extension that tracks how long I browse certain sites. Each day, it resets. It ticks along if that tab is the focused one.

Here are the stats. Considering I’m “funemployed”, I do still spend considerable time on the internet.

Average:

The top 4 are surprisingly equal. Reddit (mostly r/Bitcoin, r/worldnews, r/askreddit), Twitter, Facebook and GMail. I spend 5 - 6 hours a day on the Internet.

Total stats (past 44 days):

In total I’ve spent a quarter of my time online. If you take away sleep, it’s almost %40.

It feels okay… Don’t quite know what to feel. I think a better metric would be how much time I spent in front of my laptop (+ coding + making music).

Anyway. It’s interesting either way. Thought I’d share.