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Cryptocurrency Foundation
Going to be completely honest. The current state of altcoins is a total fucking joke. We have most new coins released under these types of categories:
- Pointless non-innovative clones of another coin which simply have a different name
- Coins that contain malicious code
- Coins that claim to have innovation simply form a change in some part of the hashing
The coin "devs" that release coins in category 1 are best case scenario just incompetent morons who don't know what they are doing and released a coin simply because they could. But more often than not, those who create category 1 coins do it for the pump&dump scheme: they claim no pre-mine when they obviously do, then hype the coin in order to dump it for something of actual value like BTC. Soon enough its just another failed shitcoin. The pools, exchanges, and miners do nothing to help the situation. They buy right into the schemes and help facilitate this situation.
When category 2 coins are released, miners, pools, and sometimes even exchanges are quick to join the bandwagon and plenty of damage is done in the process.
Some examples of these types of coins include coins that simply change the hashing algo, such as: litecoin, blakecoin, maxcoin, quarkcoin, darkcoin, vertcoin, qubitcoin, etc. I don't feel qualified to declare that these coins have or have not done real innovation that will give them long term value to either replace or exist alongside bitcoin. However, from what I can tell, these coins are simply a way for people to be able to use their CPU/GPU mining setups in order to obtain bitcoin rather than having to buy an ASIC. The problem is these coins don't seem to provide any value past their ability to be used for getting btc out of a GPU/CPU. If the market were to realize this then when someone mined some maxcoin (for example) in order to sell it for btc - no one accept their buy offer and the miner would be stuck with useless maxcoin which provides no real innovation over bitcoin.
The fraudulent activities taking place isn't the main concern here - the real concern is the state and future of cryptocurrency. To outsiders it obvious why altcoins seem like a total fucking joke - because they are right. To fix this problem we need a proper, transparent, non-profit Cryptocurrency Foundation. I can build the infrastructure for this foundation and after that gather important people in the cryptocurrency community - such as developers, companies that accept/deal with cryptocurrency, exchanges, perhaps large and trustworthy pools, community leaders, etc. With the help of these people and the community we can form a board of people who can oversee and direct the operations that this foundation would be responsible for.
Responsibilities of the Foundation
The main responsibilities would to be to accept applications for new cryptocurrencies and either approve or disapprove of the currency. Here is the process the coin would go through:
- Submission of the coin to the foundation
- A dev would submit his coins source code along with a description of coin's purpose/innovation
- The source code would be inspected to ensure no malicious code
- The coin can not simply be a direct clone of another coin with only a different name
- The coin would require a unique innovative feature that gives the coin a purpose
- Innovation is non black and white; its a hard thing to measure. It would be up to the discretion of the board members (with input from community) on whether a coin is deemed to be innovative. And if a coin was on the fence with votes but got rejected - the developer could always improve upon his innovations and resubmit.
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Once the board has approved a coin, it would go into preparation stage. During this stage the appropriate software required for new type of coin would have to be developed. Such as support in a stratum pool and mining apps. These two things would require the collaboration of the board and coin dev in order to create.
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Once the software was ready the foundation would release the pool server and mining apps then create a release date for the coin source / binaries so everyone has a fair shot at grabbing the coin.
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To prevent the threat of an approved coin being pre-mined by either the dev or corrupted foundation members, automated software setup to trigger on the coin release date would randomly generate the coin magic bytes in the source code then immediately compile the binaries then push source and binaries to github.
Along with a coin's "stamp of approval" on the foundation's website, the foundation could also also run a non-profit multi-pool (a pool that has multiple coins available to mine, not a profit-switching pool) with fees just high enough to cover server costs. All board members and devs involved would be contributing to the project on their own time such as the case for most open source contributions. The pool may attract many miners due the low non-profit level fees so it would have a built in check to cease accepting new miners if a pool reached, for example, 30% of the network hashrate.
Everything (to the extent that is practical) will be completely transparent. The system would be designed to be as trust-less as possible. And it should not be difficult to detect corruption in the parts that do rely on the trustworthiness of board member.
Once the foundation acquires respect and trust from the community, pool, operators, exchanges, miners, and cryptocurrency related companies - the typical shitcoin may try to get approved but won't (or they can ignore the foundation's approval process entirely), and if they still decide to publish their shitcoin then no one will take them seriously and the coin will be dead-on-arrival, and most would eventually cease releasing their shitcoins all together.
I believe its is possible for a cryptocurrency to be created that is truly innovative to the point where it either replaces bitcoin or at least has room to exist along side bitcoin. There have been good attempts doing so: such as Litecoin with its egalitarian motive for changing the hasing algorithm to scrypt, or Peercoin with its proof-of-stake system, or more recently Dogecoin which its innovation being the exploitation of the human psychology of large numbers. I don't feel qualified to make a judgement call on whether those coins have succeeded in truly innovating and will hold long term value. But I do know that creating this Foundation is a huge step in the right direction for cryptocurrency in facilitating true innovation in cryptocurrency while also thwarting the fraud and silliness of this flood of shitcoins.