[ZS] Prestige Bitcoin

Michael Hrenka metahorse at googlemail.com
Mon May 7 02:50:52 PDT 2012

At the AGM we discussed combining my reputation system with the
official Bitcoin currency. I wanted to give you an update on my
thoughts on that topic:

First of all, it's a good idea to focus our economics projects in that
way, because we can put everything into an integrated system.

When I tried to develop a reputation based economy I finally realized
that it's a bad idea not to integrate some kind of money currency into
the system. Money is very useful, after all. My first idea how to
combine both concepts (reputation and money) was to make some kind of
"pot" which is then paid out to all users of that system - in
proportion to their Prestige index. But to make that system a reality
you really need such a pot in the first place.

So, I've come up with the idea of creating a new currency that is
coupled with the reputation system directly, the Fluido. That would
have eliminated the problem of getting a pot of external money. But
many people prefer using already existing currencies, for obvious

Yesterday I had the idea that users of a Prestige Bitcoin system could
pay Bitcoin into a general fund. They wouldn't get a direct
gratification for that, but if they decide to make their donation not
anonymously, they might get some reputation from other users for their
generosity. Every user with at least some Prestige would get regular
payments out of that general fund. Let's say every week 5-10% of the
fund are distributed to those users.

Then there's also the problem that people need to mine blocks if this
new hybrid system is supposed to work on a decentralized basis just
like Bitcoin. My idea regarding that problem is to grant users who
mine blocks a fixed number of Prestige points. This creates different
ways for getting Prestige points, so it would not be very clear
whether those points represent public approval or mining rewards. By
displaying the mining rewards explicitly and contrasting them with the
pure "public appreciation" Prestige people would still get a clear
information what a certain Prestige score actually reveals. Still,
both types of Prestige are equivalent in the sense that they are used
by the system in exactly the same way.

Apart from those considerations I think the project can be split up
into different phases of development:
Phase 1: Develop the core Prestige system with a centralized
architecture, because that's the easiest thing which can be
implemented in a reasonable time frame. In any case, already this
relatively simple system would be quite useful for many small groups
like ours as internal economic tool.
Phase 2: Make a pure Prestige system that's decentralized, based on
the ideas of the Bitcoin technology. This system would already have
the potential to go global and become a widely used tool for
representing reputation.
Phase 3: Create the Prestige Bitcoin General Fund which couples the
decentralized Prestige system with the official Bitcoin currency. It
would be simply a kind of add-on to the Prestige system.

In a similar fashion it would also be possible to design the Fluido as
another add-on to the Prestige system. Users of the Prestige system
would be able to decide which add-ons they use. Eventually, third
parties could even create their own add-ons.

What do you think about those ideas?

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