Carboncoin: The Beaten Path

One last macro update before the release of the new Carboncoin network. This contains some significant changes to our previously entertained strategies.

As ever, the specific execution of our project has been able to develop freely in accordance with our mandate to use blockchain to address humanity’s impact on the planet “as pragmatically as possible”. It is adhering to that principal that has led to the changes we are pleased to present to you in the following article.

Smart Contract Headwinds

Having devised and specified, in detail, our elaborate, and compliant, smart-contract-based fundraising exercise — many times delayed due to the every changing, and tightening, regulatory landscape we found ourselves launching into — we fell at the final hurdle which was due to the specific language of the ethereum programming language rendering us unable to adhere to our specific terms.

Having done pretty much all of the required background work to launch these, this came as something of a blow. However, then we got to thinking about our contingency plans for raising the $10–25M funds required to kickstart the biodiverse forestry research facility and our payment technology company. The solution occurred almost immediately. Close one door, another opens — or something like that.

Reconfirming our Backing of CCE

When we decided firmly that the technology existed for us to develop a new protocol that was better at serving our use case and meeting our environmental objectives, our first move was to solve the problem of how we could carry forward our existing supporters, some who have been contributing to driving us forward since 2014, on our existing blockchain.

Some Ether and a bit of um
We decided that an ethereum token was an effective vehicle for placeholding existing users onto the new network. Our first step was to download the ethereum client and begin the task of writing the token that would do this. Some 5 days later after multiple attempts across multiple machines we had still not managed to make the recommended ethereum client fully synchronise to the network. While we were undoubtably doing something wrong, for us to ask our existing supporters to transfer all of their coins from a very fast, very energy efficient, very effective network, and one only taking up some 700MB of hard disk space, despite being well over 4 years old, and having at least 6x the transaction capacity of Bitcoin (breathe) to a system that well, frankly was not this — well to do that would not have been a sensible leadership decision.

HOWEVER, the reasons we were attracted to using the ethereum network still existed, and the development of the web based myetherwallet service was such that we had a way — just not one we could justify ‘putting all our eggs into’ so to speak.

The 50% Swap-Out

Very logically we decided that we would allow existing users to swap half of the coins they were able to evidence for our standard form fixed circulation ERC-20 tokens, and rather than abandoning what is still a front-running fork of the Bitcoin protocol in terms of core end user features, memory consumption and most importantly energy consumption.

We would release one fixed supply token for swapping, pertaining to 50% of the circulation of the original protocol. We called this token Carboncoin Ethereum (CCE). We were not issuing this as a security that we would look to have listed on an exchange, but rather a way to allocate future Carboncoin to our existing supporters before then embarking on an ICO (as we thought we would be doing back then, before we watched all those SEC subpoenas…)

Due to its energy efficiency, the cost of maintaining the existing Carboncoin system is low and, having succeeded in our first development objective of securing our blockchain at low hashrates, we were happy to commit to maintaining the existing Carboncoin blockchain into the future (“until we were presented with a major reason not to”). So it was that the future Carboncoin protocol would coexist with the original one, much as ETC does with ETH, only without ideological differences.

Having a live network with some game changing funding would enable us to release some of the plethora of services we have designed, started or otherwise attempted since we started and to launch them on our already active blockchain. We were committed to the success of both networks.

The next decision was how to approach the fundraising smart contracts. We decided that it would be an elegant statement if we released two contracts in tandem on the ethereum and ether classic networks, making the point that Carboncoin exists to solve a problem that affects everyone, independently of any historic disagreements. Thus the remaining half of the circulation of future Carboncoin would be divided amongst the direct contributors to those smart contracts, in accordance with our global policy of rewarding those who help us fairly.

Moon!
What happened next defied all our expectations — which admittedly were quite modest — due in part to the years of abuse endured on the Bitcointalk forum. We were asked to do an interview on our plans by a leading tech blog and people on youtube started to make videos on what we were trying to do. One such video caught a buzz and in days we were looking at a market capitalisation of $39M on the yobit.net exchange. Our network security was duly tested, and our would be attackers left empty handed as usual. We had shown we could be in the big leagues with the original network!

This happy happening caused a problem we genuinely did not anticipate — our CCE tokens for our existing holders were designed to reward our existing supporters i.e. enable them to get onto the new network at a discount to our forthcoming then-ICO. We had stated a bluesky fundraising target of $10M dollars for our forestry facility and to get our company to the point where it was growing organically paying for itself. Having a market cap of $39M meant that half of the network was worth nearly double our target, and therefore, our supporters, instead of being better off doing the swap would actually have got a worse deal. All we could do, in addition to fighting off the various attacks to the network, was to raise our funding target to $25M, rewrite the plans to allocate the extra, and sit tight hoping the world would calm down a bit.

Be careful what you wish for…

Whack!

It was around this time that our visionary sustained quite a nasty bump on the head due to someone acting with an appalling lack of care and attention. All the content that was due to come out had to be put on hold for a few weeks, despite considerable effort and much suffering at having to let his community down. The worry was not about the old network though because that is designed to keep on going. AxisMundi did not want to disclose that the delay was due to the injury he sustained, because he didn’t want Carboncoin to look like it was dependent on him. In reality the network isn’t, but quite a lot of the content is!

So the market fell back down to the long established price range to which it was accustomed and one by one the impatient members of the community renounced their belief in the project and vocally gave up. The liquidity problems, which are coincidentally resolved by CCE, of being priced between 1 and 2 satoshis, and by extension having a 30–50% spread were back and things went relatively quiet.

At the time we closed our Carboncoin to CCE swap out, some 38% of the 80M total circulation of CCE were out there (we wanted a good total number of tokens, so we made each CCE worth 100 CARBON), leaving 62% to be offered as fist-mover incentives to the fundraising smart contracts. Now having had to abandon the NCC and NCCh contracts on the Ether Classic and Ethereum smart contracts respectively what we’re going to do next feels like it could have something resembling some potential.

Looking after our supporters

Over the years we have had several supporters come to us having lost either their wallet file, their android phone, their backups or their password and each time they have had to be met with the same response which they were told about when they got them — namely, we don’t control the encryption, so we don’t hold the passwords, so we cannot re-grant access (“if you forget your password you will lose all of your (BIT)coins”), we do not have a repository of private keys, the network itself is the repository of private keys, so lost devices or wallet files still result in dead coins.

Much as Dan Larimer has innovated around the problem of lost access, we did so too in the real world. We facilitated everyone who lost their coins to claim their share of their CCE by signing a contract attesting that they would immediately make good on the outstanding balance of CARBON if at any point they regained access to their wallets in the future. Our supporters supported us, they are our network, they get cut some slack.

Recap:

You have just read some of the reasoning behind the decisions we have made this year, and where we are in terms of what we were planning to do.

You have read that we successfully placed 38% of the CCE tokens to existing holders. You have read that we were planning to have two networks and the reasons why. You have read about the things that happened that we could not have foreseen at the end of last year.

You have also read that the existing Carboncoin network has achieved its development objective of running securely at low hashrates, allowing us to run on some hundreds of watts only while having some 7x the transaction capacity of Bitcoin. You have read that the whole Carboncoin blockchain weighs 700MB after some 4.5 years.

You may have deduced that a 38% take-up of CCE means that 62% remain unclaimed. Coin swapping on our own network has yielded approximately 10% of the total circulation of existing Carboncoin (this gives an example of the extent of the dead coins in our active users).

What follows is our new plan, given the extent to which the world has changed since our last proposal, what we have, what we don’t and how we may have found a way to achieve our fundraising target anyway.

Check out Carboncoin: The Road Ahead to see what we’re about to do.