The Starpot Concept

A possibly new approach combining Proof of Work, Stake, and Brain.

Published in

Coinmonks

6 min readApr 10, 2018

I’ve been rolling around ideas for months on how I could create a practical blockchain application from the ground up as a way to test incentive models and different chain implementations. Eventually I came up with a mobile only application called Stars. The idea was simple, within my office it would be awesome if employees could send “Stars” to each other for doing something awesome. You help me with a hard question, I send you some Stars; currency exchange at it’s most simple.

Knowing that I wanted to develop the application onto of a blockchain persistence model I had to figure out ways to handle the double spend. Bitcoin does this using Proof of Work, Ethereum is moving to Proof of Stake, etc. I decided that I wanted to use Proof of Work but doing some crazy computational problem wouldn’t work on mobile. Then I figured that instead of having the cpu (or gpu) act as the transformer of work to value lets have people do it.

I later came across some forum post of people abstractly talking about Proof of Brain which this seems to fall under although I did not work with them on the naming convention.

The idea is that when one employee wants to send Stars to another employee a “puzzle” is created and must be completed before the transaction is marked as valid and it’s added to the chain. Now this works well in this situation because fast transaction times are not as important as with fiat currency blockchain counterparts.

The puzzle needed to be something that is slightly difficult to solve, too difficult and people wouldn’t do it. It also has to be easily verifiable, i.e. less work has to be done to verify the solution than has to be done to find the solution itself. In this case my options have been 4x4 sudoku squares, some type of photo square puzzle (where a photo is cut into a grid and scrambled then it’s up to the solver to move the tiles to create the original image). I’m leaning as of now to 4x4 Sudoku puzzles but am open to other options.

So now we have transaction model. Now I needed to come up with an incentive model. Why would anyone solve the puzzles unless they got something for their work? In Bitcoin these people are called miners and they get rewarded with newly minted Bitcoins. In my application these “solvers” would be rewarded with Stars. This is where I started to play around with some new things. Here is wanted I wanted to do, the ideas are slightly scattered so I’ll put them as bullet points.

With each new block minted in Bitcoin there are new Bitcoin created. What’s important here is that new coins are created. Which means that every transaction results in new currency in the economy. I didn’t want to do this. I want a way to control the amount of currency in the economy and be able to adjust depending on inflation/deflation.
Ethereum requires that you pay a transaction cost. This also to me wasn’t very appealing, how could we create a system that wouldn’t turn into fluctuating transaction cost based on network load.
How do we incentive people to make transactions rather than just hold onto their currency as a value asset rather than a transactional asset.

So how do we solve these three problems. Thus the Starpot Concept was born. The core feature of the Starpot Concept is that there is a general pool of Stars that lives and acts as value balancer for the whole economy. If there are Stars in the pot then the economy is unhealthy and when transactions are made the cost is paid out of the pot. When the economy is healthy there are small transactions cost. When users are inactive or do not perform a certain number of transactions in a given timeframe, a penalty is accrued and they have to pay Stars to the pot. Similar to account fees in traditional banks. So while we I wasn’t able to completely do away with transaction fees they are now only there some of the time.

Now is where my current solution needs work and I’m actively working on a remedy. To make anyone want to partake in this the Stars themselves have to have some type of exchange rate to the physical world. My first thought was at the end of each quarter, you could exchange Stars for some type of prize or outright fiat currency. While this solution would work, it’s just kicking the can down the road and not actually innovating on blockchain. My other thought was that based on Stars you could be given priority for PTO or perhaps given first bid at vacation time. While my current employer doesn’t operate in either of the aforementioned fashion it’s moot for my current case (we don’t have bidding for PTO or vacation time). My thoughts are now wandering to how could this be created into a platfrom so that the exchange out from Stars to XXX is variable. If this is done though, creating some standard valuation of Stars is tough.

A very basic app design example of how this would all look is as follows.

Sending Stars

The above is what most users would see as they are sending Stars to and from one another. There is a lot of refinement that needs to be done but get get the general feel of the user flow.

The following is in my opinion the most interesting screen, our “Proof of Brain” if you will. This where puzzles would be solved in order to push transactions onto the chain.

Puzzle View

I’m still working to refine the economics model of this system but as a note here are some topics that I’m keeping in mind as I do this:

Artificial Scarcity:

If we give an upper bound to the number of Stars that you can send in a month, this incentives users to send Stars much more responsibility. Idea is that if you can only send 5 Stars a month, you will be much more critical on what merit rewards a star. Muriel Neederle of Stanford and Dan Ariely or Duke came up with concept if you want o research more. Wikipedia

The Conditional Price Offer:

Another interesting concept that I’ve been working with is to combine Proof of Stake and this Proof of “Brain”. The idea being that you can put some stake in the economy to get the opportunity to solve a puzzle before others. If you do not solve this puzzle before it’s released to the entire population, you lost your entire stake or perhaps a percentage of it. Jay Walker has done some really interesting work on this topic. Jay’s patent

Winner’s Curse:

This would support or augment the including of the Conditional Price Offer, the idea is that the second highest bid is the most optimal. Google currently uses this to determine the best price for ad space. William Vickrey has a mathematical proof showing how this is true. Wikipedia

Practical Proof of Work:

I’ve thought about other ways to build a more practical Proof of Work system, so that the jobs done actually accomplish a needed task. Although the problem is how to make this flexible enough that a task can be deemed “completed” by the network in an efficient manner. I toiled with somehow leveraging Amazons’ Mechanical Turk platfrom.

As you can see by the number of ideas that I still have to try and integrate into the Starpot Concept is that’s still in development. If you have comments or would like to collaborate please feel free to reach out.