[Draft] BKS grant to bring protocol 4.0 votes above 90%

Continuing the discussion from [Mandatory Upgrade] All minters need to upgrade to B&C Exchange 4.0.1:


This draft is dealing with a BKS grant that aims at fixing a serious issue with client updating apathy.
The votes (=blocks minted with version 4 clients) for protocol 4.0 is far below 90%, which is required to initialize the protocol switch.
Without that protocol switch, trading on B&C Exchange can’t be enabled.

Other solutions

There’s a proposal from @JordanLee (https://discuss.nubits.com/t/proposal-to-speed-adoption-of-the-reputation-system/3785) that intends to lower the threshold for a protocol upgrade.
That might be able to get the protocol 4.0 activated.

There’s a proposal from @tomjoad (https://discuss.nubits.com/t/proposal-to-speed-adoption-of-the-reputation-system/3785/8) that requires minters to get in contact with the BKS executor to participate in a distribution of BKS. This is not as transparent as what I propose and it doesn’t provide an incentive to upgrade the client.

What if this is no apathy, but intention

I’m mainly speaking of apathetic minters, because I suppose this is the reason for what we see.
There’s an alternative explanation: people who intentionally mint on protocol 2.0, because they want to protect an alternative investment that might get harmed by a successful B&C Exchange.
They accept a financial setback of their BKS investment, because protecting something else is of superior value for them.
They’ll be called “evil minters” hereafter.

Why this proposal is superior to lowering the threshold for a protocol upgrade

With lowering the threshold the immediate goal of introducing protocol 4.0 can be achieved.
One problem remains: roughly 50 percent of minting BKS are in the hands of people who don’t follow the development or who don’t care.
(Remark: evil minters can’t be tackled with this proposal; they’ll start minting 4.0 blocks to participate in the distribution and keep their relative share of the BKS).

Apathetic minters continue to be a burden for the network if only the threshold for the protocol switch gets lowered.
I believe it’s more important to reduce the power of apathetic BKS minters by reducing their share of the network.
This is why I propose following a drastic measure: partially dispossess apathetic BKS holders, who risk the success of B&C Exchange with their behaviour.
One might say apathetic minters need protection from getting dispossessed.
I say: those who care for the success of B&C Exchange need protection for their investment as well.
Apathetic minters endanger B&C Exchange with their behaviour!

I believe, this draft will be perceived as vastly controversial.
The beauty of this proposal is that is has the potential of awaking apathetic minters.
If the sheer existance of this proposal or the passing of the grant is able to increase the protocol 4.0 votes, it’s likely that awakened apathetic minters are the reason for the increase.
If the minting for protocol 4.0 only starts to increase in the time frame that is taken do determine the minting BKS addresses, to which new BKS will be distributed, it’s more likely that evil minters start voting for protocol 4.0 to keep their share of the total BKS on the same level to keep able to hamsting B&C Exchange.


A more detailed schedule and more detailed numbers will follow.
The basic idea is this:
a big number of BKS gets created by a grant. Upon its passing the BKS are distributed to minters who run client version 4.
Their BKS address is gathered from the protocol 4.0 blocks they mint in a given time frame. A time frame of 10,000 blocks might be suitable, because ot allows UTXO to reach maximum minting probability, while preventing that they can be used twice in that time frame.

If a distribution of those BKS to a big number of BKS addresses (those that mint protocol 4.0 blocks) can be made from a multisig BKS address, it’s recommended to form a group that manages a multisig grant address.
This will be done in a preparatory motion.

If multisig is not suitable for that, a trusted executor (maybe @JordanLee) will be elected to distribute the BKS.
With a single executor, multiple grants and a distribution in several time frames reduces the risk for the network.

Either way the granted BKS are not allowed to be used for minting. This can be tracked on the block explorer.

From the discussion where I first proposed a quite detailed version of this idea:

say exactly 50.01% have updated their client and would vote for a BKS grant as well to distribute those BKS to 4.0 minters to increase the ratio of updated clients (precisely: clients minting with 90% of minting BKS) to above 90%.

That’d mean the total amount of BKS would roughly be increased by factor 41.
Without taking psychological effects into account (and just trying to deal with numbers), that’d reduce the value per BKS by factor 4.
The BKS would be distributed to BKS addresses that signed protocol 4.0 blocks in an announced time frame which needs to be big enough to give small holders a chance to mint.
Whether that is perceived as ruthless action and harms the BKS rate even more than by factor 4 or is considered a measure that shows how much BKS holders want the exchange to succeed no one can foresee.

An announcement of this measure alone could wake up BKS holders.

Even if it were taken, it could be done in more than just one round.
There’s a lot that needs to be defined before.
Distributing the BKS would be a pain.
I don’t know whether that can be done from multisig addresses.
I suppose we discuss the details once it’s become clear that such a measure can’t be avoided.

I just wanted to explain why not all is lost :wink:

for the sake of simplicity say 100 BKS exist.
50 are on protocol 2.0, 50 are on protocol 4.0.
To bring protocol 4.0 at 90%, you need 400 BKS and distribute them to those addresses that vote for 4.0.
A grant to create 400 BKS passes.
After the 400 BKS are distributed, 450 BKS are on 4.0, 50 BKS are on 2.0.
Mission accomplished.


I will repost my comment from yesterday, as it is in alignment with MoD’s proposal.

Before we consider something drastic like this though, we need to be made aware whether or not BlockShareholders have been contacted through Bitmessage and email using the contact list. If not, we need to message these people first and give them some more time to upgrade. We will also need the OS X client to be released. If none of that helps, then maybe it’s time to consider this. That doesn’t mean we can’t discuss details now though.

Evil minters could also be owners of centralized exchanges trying to block competition from a successful decentralized exchange.

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There is nothing controversial about this proposal to me and I’m glad you are presenting it for discussion. Anyone voting for version 2.0 or 3.0 is actively impeding progress on B&C Exchange and they should be punished. As an active shareholder, I welcome the chance to significantly increase my equity stake in B&C Exchange at the expense of the disengaged and/or “evil” minters as you’ve described.

Upgrade notices have been distributed for the past month. This is not a project that can succeed with passive investors who are not paying attention, and their influence should be minimized to ensure the long-term success of B&C Exchange.

Other options should be considered first, but it is reassuring we have strong measures to rely on should those fail.

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Your proposal has an advantage over mine because “active but evil” minters must upgrade to 4.0 to receive new BKS. My idea would only address apathetic minters. I like that your proposal forces evil minters to support the new protocol at least temporarily, increasing the odds of the 90% threshold being reached.

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I don’t concur.
I perceive it as a duty of shareholders to stay informed and gather information.
It’s not the duty of BCE to educate them.

we don’t even talk about low minting participation caused by people who buy and hold BKS and treat it as passive investment.
We talk about BKS holders who mint, but don’t follow the request to update (because of apathy or evil intentions)!

This pretty much expresses my point of view:

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I can agree with that point of view. The burden should be on shareholders and not the organization itself. But at the very least OS X needs to be released so that they can upgrade before something like this were to happen.

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You don’t want to suppose that a holder of a massive amount of BKS (I’m not speaking of single digit numbers BKS here) can’t afford a single RaspberryPi to run 4.0.1?

That’s an investment of $50.

…which is only necessary if compiling the daemon on OSX is as complicated as compiling the GUI client, no other suitable computer is available and Parallels isn’t installed (do you really know OSX users who don’t have Parallels installed?)

So no, not having a client for OSX is no obstacle for this proposal to move power from those who don’t care to those who care (even evil minters care in some way, although their interests are somewhat different from those of “regular” BKS holders).

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For many the cost is learning all the geek skills. If a plug and play B&Cbox is available it would be different. But many don’t have uninterrupted internet access.

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Having a bce-box created after nu-box (the grant for the development needs to gain some more traction), which gets automatically updated during system maintenance (sudo apt-get update && sudo apt-get upgrade or alike) would be very nice.
We aren’t there yet.

But installing Raspbian on a RaspberryPi and compiling bcexchanged following this guide: http://docs.nubits.com/nu-raspberry-minting/ is no rocket science nor does it require (advanced) geek skills.

Those who don’t have uninterrupted internet acces can’t mint protocol 2.0 blocks without interruption - they are the lesser evil :wink:

Looking at the slump in 4.0 blocks that happened after a temporary increase:

I think it’s necessary to further this discussion.

Not minting at all with a version 4 client or minting with a non-version 4 client in the current situation is irresponsible.
It endangers the operation of BCE before it even started being an operational exchange.
It hamstrings the decision making now and in the future, if those BKS holders don’t wake up - or get relieved from a part of the burden they bear.

If BKS holders shy away from waking both the non-minting or “version 3 minting” BKS holders, they will need to compensate the trouble originating from that for good.

I bet a round of BKS from a grant, which get distributed to BKS addresses that mint 4.0 blocks can do wonders.
I’m not even saying we should start to go all the way to distribute BKS to minters to increase their relative power to 90%, but I say we should make the first steps.
Such a grant requires only a simple majority, which could be reached.

One thing that I’ve learned the very hard way is:
You need to provide people with incentives, if you want them to do what’s good, if doing the right thing isn’t enough!

The incentive to upgrade the client to version 4 and mint with it to make BCE operational seems to be insufficient. Making BCE operational isn’t enough.
We need to increase the incentive for them to do the right thing, which is to mint with version 4 clients.
That’s both true for those who don’t mint at the moment and for those who mint with client version 3.


B&C v4.0 was released exactly 6 weeks ago today. That’s a whole month and a half. We cannot operate a business with people who are this disconnected. While I understand there is the opinion that shareholders shouldn’t be required to be constantly involved with daily operations and that default data feeds will help the business run as it should, as @masterOfDisaster mentioned in the other thread, “Not upgrading a client version can’t be fixed with automatically registered data feeds!”

We should not have to stoop to their level and lower to 55%. Just think what would happen if a severe bug was discovered in the protocol while we were managing people’s funds and it took our lazy shareholders over a month and a half to realize they needed to upgrade. Our reputation would be severely damaged. I agree with MoD and I say it’s better to cut these people out of the organization now so they don’t have a chance to bring us down in the future. Some of the benefits of such an action are listed below…

  • A larger share of the network for those who are already active and participate regularly.
  • The negative influence of lazy shareholders and non-minters will be greatly reduced.
  • Currently minting shares will skyrocket, making the network a lot more secure.

It’s entirely possible that moving forward with this and starting voting will wake up these shareholders. If not then they have no one to blame but themselves. I will support such a motion or grant if it is drafted up. What do data feed providers think? @Cybnate, @cryptog, @Nagalim, @crypto_coiner?

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I don’t want to cut anybody out.
I don’t like pushing this proposal.
It leaves a bad taste in my mouth to discuss a measure, which is nothing else, but partially dispossessing people.
Alas, I don’t see viable alternatives.

@Sentinelrv hit the nail on the head:

Not only the reputation would be damaged. BCE could tumble and fall because of such apathy.

At the moment BCE is in the convenient situation that nothing else but the start of the business is at stake (which in my opinion is just enough to think about wake-up calls).
Gladly it’s not customers’ funds that are at risk.

The decentralized and distributed nature of BCE can’t prevent users from having funds stuck at BCE multisignature addresses if a sever bug hinders them from withdrawing them,
…registering a data feed is not enough…

I won’t support this yet. I’m not convinced that the distribution method is sufficiently elegant. I worry about the marketing angles. I also don’t think 1.5 months is too long, it took me a while to upgrade to v4.0. Some people will wait a good bit of time to make sure the upgrade is stable before switching to it.

What’s the alternative?
Sit and wait?
Let other decentralized exchanges start with their business?
Struggle with apathetic BKS holders each time a decision needs support?

I bet you are aware that BCE isn’t operational just because the protocol switch (that still takes 2 weeks after 90% are on version 4) was initiated…

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Neither do I, but I fear the possible failure of BCE a lot more than angering shareholders who could get partially dispossessed.

Even if this proposal would find support.
Even if a BKS grant to distribute BKS to 4.0 minters would pass.
Even if the distribution would be planned (by extracting BKS addresses from 4.0 blocks in a given window).
Even if all that would happen…
…all a shareholder who doesn’t want to fall victim to the dispossession has to do is: mint with a version 4 client!

I can’t believe that’s too much, but if it is, well…

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I’m not saying we nees an alternative. I am saying I’m scared of one-time dilutions that cause abrupt discontinuities in share valuation.

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I understand BlockShare prices would be impacted negatively by a dilution like this, but how many people are really paying attention at this point to notice a devaluation? We have only one exchange with low volume and every time I look at Coinmarketcap I don’t see BlockShares in the list. It’s almost as if we don’t exist yet. If we were Ethereum and in the top 2 with all eyes on us, then everyone would see the devaluation happen. If we had to do it, then this would probably be the best time to reduce the impact. That’s only my opinion though.


I think I’ll be ready to support this motion after hearing what Jordan and the data feed providers have to say.

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I don’t plan on creating only a motion.
I hope that what I have in mind is possible with a multisig BKS address:

  1. make a motion to outline the plan and elect multisig custodians
  2. grant BKS to a multisig address
  3. distribute BKS from the multisig address to BKS addresses that mint 4.0 blocks
  4. repeat step 3. until enough minting power is in the hands of people who mint with 4.0 clients (very well possible by waking up shareholders!)