actually, i don't care what the market decides on how much an aether will be valued at by the open market.  no need to distinguish.

if it decides ether is the best use case, fine, i won't have anything invested to lose from my aether going to zero.  the market will have spoken.  but if Peter's economic assumptions are correct and i get even richer from aether going to the moon, while ether crashes to zero, i'm fine with that too.

my bet is the latter scenario plays out.

For the people here who are questioning the "fairness" of this proposal, I ask you to reconsider your assumptions after analyzing the economic incentives at play here:  

Let's say you truly believe that a proof-of-stake (PoS) system is better than a proof-of-work system and the market would be wise to adopt this if only given a chance.  When the PoS spin-off launches, many bitcoin holders will dump their "free coins" at say a valuation equal to 0.01% of the bitcoin market cap.  This means that for an investment of X BTC, you could amplify your wealth by a factor of 10,000X if you are correct and PoS becomes dominant.  You would be rewarded for your insight by natural market mechanisms.  You know most bitcoin users will remain impartial (they will be holders by default) so your PoS coin will naturally have a wide user base if it is in fact useful.  

Spin-offs also benefit the community as a whole:

-Bitcoin users that remain impartial to the experiment should appreciate spin-offs because they automatically get piggybacked to the new network with little effort on their part and without risk to their cryptocurrency wealth.    

-Alt-coins doubters should appreciate spin-offs because they represent free money that they can immediately dump on the open market.  

Spin-offs are now real and are forcing members of our community to re-shape their view of reality.  The sooner people move to "acceptance" the more wealth they will preserve and the more productive our economy will become.  Spin-offs help to direct aggregate investment away from speculative alt-coins and into productive endeavours that strengthen bitcoin and its community. 



Remember, there is still money to be made by innovating with the spin-off method, should you come up with something genuinely useful. 

Just one logistical question: how do you reach Bitcoiners? Pseudonymity is great, but it does put a real logistical crimp on your plan.

I can see hacks based upon vanity addresses: remember "Enjoy" and "Sochi" in the address part of the dust bin? It might be worthwhile to set up a vanity that signals an announcement - something, maybe with "New" "Side" and "Chain" for a triplet of dust mites 

http://en.wikipedia.org/wiki/Coase_theorem

If you believe the conditions of the Coase theorem apply, then the conclusion is that the initial distribution with the least costs is best. Using bitcoin as a distribution mechanism makes sense because it is secure. That wouldn't be true if you try to do a "per person" airdrop, because then you need to verify IDs and people will try to cheat, both of which are costly. A zero-premine also might make sense, although the race to be the first to mine might be wasteful.

This is why it will work market driven innovation is the counter balance to unfair distribution (and cryptography is the security that prevents the preservation of initial power distribution structure.)


I was toying with the idea of motivating miners and future growth and preventing a dumping collapse for my ideal alt.

Here is one way i thought to align incentives, so low balance holders or new proponents would secure the network while minimizing money velocity to the growth of the alt economy. The spin-off alt would have a transaction fee in a reverse relationship to difficulty. Say miners get a 10% transaction fee while mining difficult is very low (independent of block creation) the early dumpers incentives mining not just investment speculation.  As proponents grow mining grows and fees reduce to end at say a 0.1% of the total alt economy.

The result is mining is incentivised to take advantage of the flood of liquidity in the alt once birthed.

Exactly, this makes as much sense as saying that the alts are stealing from bitcoin pioneers. Anyone involved with bitcoin should recognize the risks and rewards associated with open-source development and make decisions based on that knowledge.

Time will tell.  

What is interesting is that in the case where very few people knew about the spin-off, then there would be very few buyers and very few sellers.  If the price grew due to demand, more people would discover that they hold the keys to additional supply, and liquidity would grow.  If no one at all wants to buy the coin at any price, then the spin-off would die.  

I think the promotion of the spin-off's "launch" matters to a certain extent (obviously the spin-off needs miners in order to function), but I'm not sure how much it matters yet.  

My comment concerning the initial distribution was addressing the perceived unfairness of the distribution; why should we award nakamotos and other btc moguls with mountains of altcoins?

So I tried to say that wouldn't matter since that initlal distribution would quickly be replaced by another distribution that would reflect the value of the altcoin, as indifferent holders would dump their coins and interested parties would pick them up again dirt cheap. The price would then adjust to the demand.

Actually I believe that is the core meaning of Coase's theorem: valuable assets will end up being owned by savvy folks and the only thing separating them are the transaction costs.