Ethereum Founding Team - Reddit AMA (Feb. 2014)

########### LAUNCH OF ETHEREUM ###########

When/where and what can we use to buy ether? When does the fundraiser begin?

A: A few weeks from now is the best guess.

A: Our official website fund.ethereum.org when we are ready alongside our partner wallets. Bitcoin only

A: You have the option to buy as much ether as you wish. The fundraiser will be open ended.

---------------

Pre-sale: Will it be relatively easy for a non expert to understand where to send my Bitcoin investment and how I will receive my Ether?

A: Our goal is to make the procedure frictionless using wallets such as KryptoKit and Hive wallet.

A: When the pre-sale is going live you will be able to purchase ether by sending Bitcoin to the generated address and providing an email address. The email address will allow you to recover the funds in case of a disastrous event with

your device as long as you can provide the password or the wallet file.

---------------

Any idea how much 1 ether will cost?

A: 1 BTC = 1000 ether, during the first week you will have a 2X multiplier (i.e. 1 BTC = 2000 ether). The purchase period is planned to last ~60 days.

A. 1 BTC will be valued at 1000 ether during the fundraiser.

A. Originally, we actually wanted the fundraiser to last 2 months, from Feb 1 to Mar 31. Because we're giving much more advance warning, we might cut this a bit shorter, but it'll certainly be longer than 1 week.


---------------

I read some info that early buyers can get 2000 ETH for 1 BTC if purchased early, is this a be awake at 4am thing or is this a buy at your leisure as long as its within the 60 days grace period?
In other words will panic buys in the opening hours affect price etc. and if so will we get fair warning / do we need to pre register interest now etc.

A: First week investors will realize 2x the product value.

---------------

Fundraiser question: Assuming that there will be a cap on the maximum Bitcoins that any given person may invest, how do you plan do deal with individuals creating multiple identities ( i.e. Email addresses) to get around the cap. If

there is no cap, what is to stop a Whale investor from snatching up the whole supply?

A: There will be no cap.

A: There are methods of using a cap with refund to ensure that everyone has some part of the distribution. We could also tune the economics a bit to allow for a much higher cap, but better ROI. There are three ways to get ether: mine it,

buy it off an exchange or participate in the presale. If you miss one window, then there are still two others. My hope is that we can come up with something that is as fair as possible, but sadly years of political fundraising have

taught us all that limiting investments by a single actor is really hard to do.
{Charles}



########### Comparisons to other projects/ideas ###########

How would you explain ethereum to someone who never heard of bitcoin?

A: Take a few steps back from "crypto" and think of the device you just used to type that message. At the physical level it's just a bunch of transistors, silicon and chips. What makes the hardware usable it's the operating system. Then

on top of that you have apps. All of this would have been impossible without programming language(s).

---------------

Will ethereum complement bitcoin or will ether be a competitor that will rival bitcoin?

A: Definitely compliment Bitcoin. We are all huge fans of the beast that is Bitcoin and it will be the king for a long long time.

---------------

Bitcoin = Cryptocurrency
Ethereum = Platform (that cryptocurries can be built upon)

Ether is the currency that is needed to run the contracts. Think of it as the oil that makes Etheruem run.

---------------

can you explain in more detail how you see Ethereum and the bitcoin network coexisting in the future?. isn't there a risk that Ethereum renders bitcoin obsolete?

A: Bitcoin = Gold Ether = Oil
different use cases and economic models. Our hope is that bitcoin becomes the long term preferred store of value and ether becomes the fuel of distributive trustless computation.
{Charles}

A: As Andreas states: Bitcoin will own a large percentage of the market for the foreseeable future. The remaining quality alternatives will duke it out for smaller part of the pie.

---------------

What kinds of uses for turing completeness do you imagine people will come up with?

This is more like asking the question: "What can I build on top of windows?" My job is to make the foundation awesome and the development experience insanely great. Your job is to build something cool.
Your Turn {Charles}

---------------

How is Ethereum different from Mastercoin? What advantages does it have over it?

A: They live on different levels. Mastercoin is an example of an application of our contract system and could quite easily be built on top of Ethereum. Mastercoin and colored coins are examples of why we feel the space needs Ethereum.

They are difficult and costly to deploy on top of bitcoin and have some SPV related drawbacks.
{Charles}



########### Advantages of Ethereum ###########

What are the characteristics of applications that benefit significantly from Ethereum?

A:  While bitcoin is great for sending payments, Ethereum contracts will be able to tackle any other financial transaction.



########### Showcase / Demo / Future Apps ###########

How close is the android toolkit metaphor?

We are modeling the reference client after android and google chrome extensions. As it stands right now, our hope is to allow people to use javascript, HTML5 and CSS3 to deploy anything they desire in the catalog. This could include

gambling applications, full games like MMORPGS and even specialized web browsers. Apps make use of contracts, but don’t live on blockchain.

---------------

Have you seen any projects starting to be built with Ethereum yet?

http://bitcongress.org is the first one I know of that has absolutely no connection to our core team; it's just a group of people on the internet that decided to build on top of our platform. We also have people working on refining our

five-line-Namecoin implementation and making it more fully featured. There's also a group interested in using Ethereum to make a trust-free multisig wallet, using Ethereum contracts to provide bank-like consumer protection (withdrawal

limits, they have the power to freeze the account with your permission if your key gets stolen, etc) but in such a way that you're still 100% in control of your funds. And then there are projects that are going to be working heavily with

us, like Egora and OpenTransactions.

---------------


What applications or services is Ethereum planning on building itself, besides the protocol, clients, blockchain explorer, etc?

A: Stage 1 is to develop the protocol and refine the contract, fee and security model. Stage 2 is to build the reference client. Stage 3 is to develop the application ecosystem. I would love to see gambling, OT, Ripple, voting systems,

wall street contracts and trading system as well as DAOs living on our blockchain and in our app store at launch. I'd also love to see an online game using Ether as an ingame currency.
{Charles}

Q: Are you saying that Ethereum itself will build those applications (gambling, OT, Ripple, etc)? Or that you're hoping other people will build them?
Also, are you saying Ethereum itself will build an app store? What will that look like?

A: We are building the app store and it is inspired from the chrome and android stores. We would love to partner with the bittorrent guys on some things for that store. In terms of who builds the apps, some we make ourselves, some our

partners make and some organically come.

Q: Thanks. What advantages, if any, will apps created in-house or by partners have over apps created by other developers?

A: The (D)app store will be like a plugin module/function for the reference clients. Just think of clicking a button, and then looking through a selection of Dapps that can extend the functionality of your wallet to pretty much anything

from encrypted chat via Bitmessage to drag-n-drop decentralized file storage. Easy.

---------------

Any plans for micropayments? Will that be supported?

A: We've had several conversations with a few innovators in this space at Miami and over the web. Micropayments are not just possible with ethereum, but are also enabled with cryptocurrencies. This is where I see software like KryptoKit

and apps for our reference client coming into play. Micropayments has much more to do with user experience than technology can this point. Lot of money to be made for the person who gets it right....
{Charles}

Q: Will the tx-fee model make it possible? Or will the network costs for maintaining all be too high to make micropayments usable like normal payments?

A: Fees are something you figure out once you have test applications running. The goal is to get an idea what is profitable to run on blockchain and what has to be done offchain. In terms of microtransactions, I think we shouldn't have

any issues.

---------------

Did you study Zerocoin? As far as I understand, you make provable unspendable escrow transactions, which can then later be spent using zero-knowledge proof into a new coinbase transaction. Would that be compatible with Ethereum and if

the Zerocash proof-of-concept proves to be successful, would you consider implementing it given the regulatory consequences?

A: This can be done as a contract and a subcurrency. we reached out to Dr. Green and hopefully can collaborate on something in the future. Preserving fungibility and anonymity ought to be a priority for the infrastructure builders in

this space. It's always on my mind.
I think we also have an obligation to make more effective use of the keypairs everyone in the ecosystem has for all kinds of CINA applications. I think we are just a few years away from a really good blockchain based web of trust.
{Charles}

---------------

Could you elaborate about how a decentralized dropbox-esque service could be built on top of Ethereum?

A: Suppose that you have a 1 GB file, with 225 blocks of 32 bytes each. The first step is to construct a Merkle tree out of the file. Then, you create a contract which, every 100 blocks, randomly picks a branch of the merkle tree based

on the parent block hash, and gives X ether to the first node that provides that branch. Here’s the exact contract in E-CLL:
if tx.value < block.basefee * 400:
    stop
merkle_branch = block.parenthash
h = tx.data[0]
i = 1
while i < 26:
    if merkle_branch % 2 == 0:
        h = sha3(h + tx.data[i])
    else:
        h = sha3(tx.data[i] + h)
    merkle_branch = merkle_branch / 2
    i += 1
if h == [INSERT MERKLE TREE ROOT HASH HERE]:
    if contract.storage[1] < block.number:
        contract.storage[1] = block.number + 100
        send(tx.sender,10^15,0)
This contract basically incentivizes nodes to hold on to your file. When you actually want to download the file again, you can use some kind of micropayment channel-based per-packet approach. And that's basically it, at least for the

simple version.

---------------

If I use Ethereum to create my own cryptocurrency, do the transaction fees in that new cryptocurrency have to be paid in ether? Or can they be paid in the new currency? Is the new currency made of fractional pieces of ether (like colored

coins, in a sense)?

You can set up the currency contract (say, for Microsoft shares) so that you pay the transaction fee in ether, but then the contract takes a transaction fee in Microsoft shares, auctions the shares off to get ether, and then sends you

your ether back (likely the contract will keep a running balance so you get your ether back immediately). Thus, you would need an initial deposit of something like 0.1 ether to "activate" your account, but once it's activated you only

really need to worry about Microsoft shares.

---------------

What are the things you are most excited about Ethereum being able to accomplish? Best case scenario in 5 years what is it being used for?

The examples in the whitepaper (section 4) are a good starting point; if we can have people trading financial contracts on shares of decentralized autonomous organizations in decentralized blockchain-based markets mediated by a

decentralized reputation system and using decentralized Dropbox to store their data I think it would be quite exciting all by itself. But for me personally the most exciting part of being in the Ethereum project is seeing people come up

with new ideas of what they want to run on top of it that I hadn't even thought up of. It's like Javascript; Brandon Eich did not envision anyone writing Gmail or Facebook or Bitcoin wallets on top of his language, and yet here we are.


#### User Adoption ####

Ethereum is a difficult concept to grasp for a technical individual, yet for an untechnical person, we might as well be talking about advanced theoretical astrophysics. What real-world ideas and issues have been mentioned by the team to

better relate how the system works and how it will benefit the average person? Personally, I can see it being used in a variety of applications if the fees are reasonable, and in some cases, a one time fee rather than recurring. I guess

I'm curious what you all think will primarily make the platform a mainstream option vs. status quo?

A: Two things makes technology mainstream, a unified platform to develop on and an incentive to deliver great user experience. We are building the platform and also driving the UX where it needs to be. Not just for Ethereum but for all

cryptocurrencies including Bitcoin. Our hope is that the best bitcoin wallet and miner both live in the Ethereum App Catalog and run on the ethereum reference client
{Charles}

---------------

Team, I'm extremely excited about Ethereum and I want to get involved in a volunteer capacity. I understand you are all quite busy right now, but when do you expect to have a "framework" in place to coordinate volunteer efforts?

A: Once HR is fully operational, we will have a process for every volunteer to get onboarded and put into productive roles. We also have partnered with KryptoKit to make this process easier. I would highly recommend downloading it.
{Charles}

A: Love your enthusiasm. Start a meetup in your local area. Best way to get involved and contribute.

---------------

I think it would be incredibly wise to have a very user-friendly wallet, especially since you guys are calling it the first 2.0 protocol. Do you have an idea of how it will look and function?

There will be 4 wallets available from the git-go. kryptokit, Hive, The client and a python command wallet.

One of the design goals of KryptoKit was ease of use. The core idea is to make bitcoin easy and secure for everyday people and then to build an ecosystem that lives in your browser. This is why they enabled PGP which can be used as a

foundation for secure communication. There are going to be a lot of amazing features coming over this year. Definitely download a copy and check it out.
{Charles}

---------------

Clearly Ethereum is targeted towards highly-capable developers and those with significant knowledge of finance IT (not your average crypto enthusiast). If it ends up the banking industry and regulatory climate have animus to

cryptocurrencies in general, who do you see as the target users for this Crypto in the future? Will it take a changing of the guard on Wall Street for Ethereum to go mainstream?

A: No just a demonstration that people can make money using ether. Wall street is pretty savvy with these things. Just look at the HFT shops.

---------------

Are there any plans for a fee model which gives incentive for running a full node (not only incentive for miners)?

A: http://www.reddit.com/r/IAmA/comments/1xb5rj/hi_were_the_ethereum_founding_team_ask_us_anything/cf9s5l8



########### TECH QUESTIONS ###########


Does Ethereum run on a seperate blockchain, and if so, how are miners incentivized to participate?

It's on a different blockchain with an entirely complete turing language. Ether can be mined just like other cryptocurrencies. Mining is essential to secure the network and reward the miners.

---------------

If Ethereum is going to be Turing complete, Is it possible to be 100% certain that there wont be exploits uncovered in the code since its so robust.

A: Just like an exploit in Bitcoin is not 100% certain. The same will apply for Ethereum. Bitcoin was the initial experiment, the "0" on the crypto axis of innovation. Almost nothing in this world is 100% certain, we're merely continuing

the experiment started by Satoshi hoping to inspire people joining us in this crypto adventure.

---------------

Do you have any plans in the works to coordinate personnel and resources to integrate open transactions into ethereum and other features built off the blockchain? If so, what are they (apart from namecoin)?

Absolutely, we have a very close relationship with the entire OT team and even will be sharing some office space at some point with Johann and Herbert. We are planning on making a joint announcement in the near future about our

partnership.
In terms of other features, we have many in mind as applications or reference contracts. We also would like to deeply involve the community in this process and will launch a specialized website specifically to find and fund great app

ideas after the beta has been publicly released sometime in Q2 or so.
{Charles}

---------------

great work with Kryptokit! Are there any plans in the works to integrate it with Ethereum? If so, how?

A: Yes Kryptokit will be integrated to support ether and will be a means to purchase Ether during the fundraiser. Hive wallet will be used as well.

---------------

What is the most common misconception/myth about the ethereum project that you've seen so far?

1. Ethereum is not your personal decentralized Amazon EC2 instance. You will not be able to run anything on top of Ethereum that you cannot run on a smartphone from 1999.
2. The inflation rate is 0.4x the amount released in the presale per year, not 40% per year. That is, we'll have 1.5x after 0 years, 1.9x after 1 year, 2.3x after 2 years ... 401.5x after 1000 years, 401.9x after 1001 years, etc.

---------------

The inflation in the product seems too high at 0.4X. Are there any plans to reduce this.

A: It depends upon other factors as well including what is done with fees, the fee structure, how people use ether, etc. We are building a lot of models, but I know that we are going to change the inflation weight.
{Charles}

---------------


in the white paper it says, "0.4X ether will be mined per year forever after that point". Won't this create a massively inflating currency after the currency adoption peaks? Assuming Ether is widely used globally at some point and growth

in adoption of ether is far less than 40%, won't a 40% annual currency volume increase be a problem?

A: .4X of the initial fundraiser. It will be increased by the same fixed number of eth each year, which will be a lower % of total eth in circulation each year.

A: Here's a handy graph - http://i.imgur.com/of1zoPC.png?1

---------------

To what extent are the complexities and challenges of developing a decentralized trading platform mitigated in the Ethereum world?
or will central and offchain hybrid exchanges continue to plague the ecosystem for the foreseeable future.

A: A hybrid offchain exchange is likely best. OpenTransactions is good for this, since OT servers are designed to be auditable so the Ethereum contracts can be doing the auditing.

---------------

How does Ethereum confront the problem of collusion of mining pools. To avoid an aggregation as the Bitcoin ecosystem. Can there will be deployed a ethereum contract for the setup to use a p2pool and POS to vote in the future of that

cooperative of miners?
What are your thoughts?

A: Yes, you theoretically definitely can do a P2Pool contract on the Ethereum blockchain, where the P2Pool mines directly into a contract which distributes the funds to members based on share rates. So there are lots of solutions.

---------------

If I use Ethereum to create my own cryptocurrency, do the transaction fees in that new cryptocurrency have to be paid in ether? Or can they be paid in the new currency? Is the new currency made of fractional pieces of ether (like colored

coins, in a sense)?

A: You can set up the currency contract (say, for Microsoft shares) so that you pay the transaction fee in ether, but then the contract takes a transaction fee in Microsoft shares, auctions the shares off to get ether, and then sends you

your ether back (likely the contract will keep a running balance so you get your ether back immediately). Thus, you would need an initial deposit of something like 0.1 ether to "activate" your account, but once it's activated you only

really need to worry about Microsoft shares.

---------------

In the face of fluctuating execution fees, is it possible to create a contract that provably provide certain services for as long as Ethereum is alive? (i.e., if fees could unpredictably rise in the future, the contract can't seem to

guarantee that it will be able to execute in the future)

A: Two points:
There is a "BASEFEE" opcode that lets a contract see what the fee is, so it can demand a higher charge from users if the fee goes up.
In cases where the fees for specific operations change drastically, we're thinking of making that one-way, so multipliers can only go down not up, at least after some trial period.

---------------

Recently I decided to get into the gpu mining side. I understand peoples concerns about centralization with asics, but gpu mining seems so archaic with the large carbon foot print. Is there a focus within the team about a way to handle

network distribution without such a waste of resources. GPU mining just doesn't seem sustainable or future driven to me

A: We're looking at hybrid PoW/PoS options, and Dagger (our PoW) algorithm will be GPU/ASIC/FPGA resistant.

---------------

Have you determined Ethereum's proof of work algorithm, and is it possible to describe in laymans terms? :)

A: We are planning on holding a contest in the style of NIST's AES contest for both the academic and open source communities to participate in. Our goal is to offer a large bounty for the first team to produce a PoW/PoS hybrid that meets

certain parameters and goals we set. We feel that the best way to get things done well is through incentivized competition and I’d love to see MIT competing with Caltech on this one.
Details will be announced about this contest sometime in April.

A: Just to clarify: that's "contest in the style of NIST's AES contest", not "NIST contest in the style of the AES contest".
We are not affiliated with NIST in any way.

A: We have not yet determined it completely. However, our latest line of thought is a memory-hard proof of work based the blockchain data itself. The precise algo would be:
H[i] = SHA3(block header ++ nonce)[12:] for i in [0...7]
A[i] = first address in blockchain state tree after H[i]
B[i] = balance(A[i])
H = SHA3(block header ++ nonce ++ A[0] ++ B[0] ++ ... ++ A[7] ++ B[7])
SUCCESS = 1 if H < 2^256 / difficulty else 0
This has the following advantages:
Extremely memory hard to compute; makes Dagger look like a child toy
Extremely easy to verify (ie. constant space / constant time)
Incentivizes miners to act as full nodes storing the entire blockchain
ASIC-unfriendly
If ASICs do succeed, then we just have a bunch of very powerful full nodes, so our scalability problems are gone
Gets rid of the need for centralized mining pools, since if you're a full node you might as well just use p2pool.
The general principle is Gregory Maxwell and Andrew Miller-approved, so this might actually pretty much be what we end up using, although we are also looking into proof of stake.

---------------

-how do you unit test / step debug contracts?
We'll release tools to make this easier. We already have an alpha compiler open at http://multisig.info:3000 ; we'll also have a sort of built-in single-node local testnet in our clients later on so you can test contracts -and send

transactions to them.
how do you update buggy code in the blockchain?
You can't, unless you build the contract in such a way that there's a mechanism to modify it.
what about malicious updates?
See above.
-how do you pull in external data? (eg. weather, EURUSD cross, etc.)
The data feed source needs to release a signed data feed, and then the contracts will verify the signature with the data feed's public key in script code.
-how will you protect against malicious code/data - eg. buffer overflows?
Have very good researchers/pentesters and make the language as simple as possible.
-what about RNG? How do you create betting contracts without revealing the PRNG seed?
Previous block hashes are the PRNG.
-how do you fire actions to the outside world?
Centralized gateways.
A very recent interesting possibility is to use code obfuscation (see http://www.wired.com/wiredscience/2014/02/cryptography-breakthrough/ ) to build contracts, so contracts can contain private keys / passwords internally and then

contracts would be able to produce and interpret HTTPS packets and even carry out entire sessions with entities like VPSes and banks. Obviously some computer would need to act as an intermediary, but no trust is required.

---------------

How do you keep the blockchain from getting too fat, to fit through the tubes?

A: Blockchains do need to be put on a diet and this is a frankly a universal concern for everyone in the space. We have some plans for how to systematically address this but it does require R&D and collaboration. I mentioned the

cryptocurrency research group at the mastercoin, invictus ethereum debate. We'll release something soon about how we plan on using that hub to resolve these types of problems alongside making the mobile experience better for

cryptocurrencies.

---------------

At the Turing Complete vs No turing complete thread on Bitcointalk, Mike Hearn talked about SNARKS.
Does this technology can be incorporate in the future of Ethereum?

A: Yes, SCIP/SNARKs are potentially a very promising technology. The scalability is not quite up to where it needs to be at this point to include them in a cryptocurrency, but give it a year and we'll be able to do things like having

miners verify contracts and then simply provide a proof of computation instead of requiring every node to run the contracts again. I'm very excited.

---------------

How will you be testing the GHOST protocol to see how well it scales? Is it already implemented in the current alpha version?

A: I believe the code to make the GHOST validations is in the testnet theoretically, although we're not actually trying to include uncles in the blocks at this point. The testnet will pretty much be our main tool for figuring this stuff

out.



########### Developer Relations ###########

I'd like to learn more about your future incubation of Ethereum projects. I have 3 project ideas waiting to hear more before sharing.

A: So our plan is to set-up hubs for Ethereum development around the world. One is already being created at my space Bitcoin Decentral in Toronto. Our accelerator program is being developed as we speak. Stay tuned for more info coming

soon.

Q: Will the Hubs likely be fueled by open source bounties, crowd funded/equity or Ethereum.org foundation donations..? A: Yes {Charles}

---------------

What types of future decentralized apps, on Etherium, can be developed in conjunction with your open source project? Or must other dev teams wait until the final release (later in the year?) to think along those lines?

A: Yes, you can even start development now based on our whitepaper. We'll have a fully-featured testnet with contract support out soon, which you'll be able to use as a testing ground.

---------------

@Ursium Great work building the ethereum community! Can you tell us a little bit about your path to the Ethereum project?

A: I read about Ethereum while browsing a thread about DACs and the parallels with the book 'Daemon' by Daniel Suarez, someone mentioned Ethereum and the rest is history :) I'll actually will have to trace that person, because I'm

grateful to be involved in the project. At the moment I'm having a blast getting developers in touch with other developers and entrepreneurs, in order to form our first Holons.



########### Fear, uncertainty and doubt ###########

What will you be using the BTC acquired from the fundraiser for?

A: V and I have been drafting a business plan that so far discusses 9 areas where we plan on allocating funds. My goal is to have this released by the end of February and to produce some video content explaining each area of interest.

The unspent funds will initially be stored in a holding entity and eventually moved to the blockchain for a DAO. Our hope is that they are sufficient with the endowment to cover the costs of developing and maintaining Ethereum for over a

decade.
{Charles}

---------------

How are y'all currently funded? Are there some investors already backing the project and if so can you comment on what arrangements you have?

A: Self funded at this point. We all strongly believe in this project and see in it as one of the biggest opportunities for innovation since the invention of the Internet. {MihaiAlisie}

A: The early stakeholders have been investing their own funds and time into the project. I'm personally putting 50 percent of my net wealth into Ethereum.
{Charles}


---------------

Have you settled on a fair initial distribution yet?

A: Working on it. Everything is a balance in this space. I hope you guys like what we come up with.

---------------


I was wondering whether you could elaborate a bit on the fundraiser situation.

A: We basically have to listen to the community and continue to make adjustments that address the community's concerns. We've already done that with a reduction in the premine and an extension of the vesting period, and will continue to

make further changes. Once the blockchain is live, blockchains seem to have too large a network effect in practice for a runner-up to take over without very substantial new innovations.

---------------

Why are you doing the partial premine model? Someone just will fork your project on more perceived fair rules.

A: Forks can happen at any time with a simple click of a button. Forks don't matter; people do. Like all cryptocurrencies, the community has to choose to migrate. If we do a bad job running the project, then migration can and should

happen. If we do a good job, then people will stay on the chain that has the highest long term potential. You should have this freedom.

---------------

How did you guys come up with the specific ratios for the premine? Is there a particular model you are working with or are they somewhat arbitrary? E.g. why .4X/year and not .5X or some other number?

A: Several members of our team have a great deal of experience in both finance and economics. We've assembled a workgroup that has been building some models to study various parameters in the ecosystem from inflation, the idea of either

re-allocating or burning transactions and the fee structure. The originally inflation weight was chosen with specific divestment goals in mind for the early stakeholders; however, we are examining more complex structures now.
I will make sure our model repos become public in a few weeks so you can examine our thought process and hopefully help us refine it.
{Charles}

---------------

I'm fascinated by ethereum, but a bit disconcerted by some of the talk of modeling, "enlightened self-interest", and a seeming reluctance to rely on organic market-based solutions. I don't have high hopes for a centrally-planned crypto-

ecosystem. I wonder if the founding team is familiar with the writings of Rand, Rothbard, Von Mises or others of the Austrian school?

A: (Vitalik) I personally have read Atlas Shrugged, Ethics of Liberty / For a New Liberty, Human Action and others; they were quite insightful and interesting in many places. However, you also need to understand that there are flaws in

many of their arguments; the best source for that is actually David Friedman, who would be more closely aligned with the Chicago school. The short 1h introduction is his speech "Problems with Libertarianism" from 1982:
http://www.youtube.com/watch?v=GuYt6X2g0cY
Note that Friedman is an anarcho-capitalist, and when you hear someone criticizing their own ideology that's generally a very good sign that you should listen. He expounds on his ideas, including his theory of why central planning is bad

if the standard Misean arguments are flawed, in Machinery of Freedom, which I do highly recommend (although, once again, with caveats).
Organic market-based solutions are nice; the problem is that sometimes things just aren't that simple, and just because there's a market in the system somewhere that doesn't mean that the output must necessarily be anything but noise.

See my blog post on the fee question specifically for a more detailed analysis:
http://blog.ethereum.org/2014/02/01/on-transaction-fees-market-based-solutions/

Q: I'm happy to look at the Friedman video, thank you, but my concerns are not about libertarianism per se. Mostly I'm worried about any attempts at central planning, modeling human behavior, and pushing anything other than free

interactions between ethereum actors. I want ethereum to work and I wish you the best of luck.

A: (Vitalik) We are not restricting any kinds of interactions; that's what the "non-discrimination" plank in our whitepaper is specifically there fore. The planning/modeling comes in terms of questions like fees and currency issuance,

where there is simply no way to get around making some kind of decision for the platform. I'm not talking about libertarianism per se so much either; I'm simply criticizing what I think are fallacious Austrian-esque arguments, which tend

to be made by people who are also libertarians, which try to basically claim that if you just insert a market mechanism into everything then everything will turn out optimally.

---------------

What is the most common misconception/myth about the ethereum project that you've seen so far?

A: We are not affiliated with Goldman Sachs, or any other particularly nefarious organization. We just have 2 members on our team (not the core team) who used to work for GS. Ethereum is 100% certified NWO-free (although I suppose once

the pre-sale starts NWO will be free to buy in just like everyone else).

A: Tx fees being distributed to the developers as tax, a connection to goldman sachs and us lifting code/ideas from protoshares.
{Charles}



########### Future Plans and Outlook ###########

Our first newsletter will be out at the end of the month and every month thereafter. We also have plans for a news aggregation site specifically built for everything about the ethereum ecosystem. Bookmark it and you'll always be up to

date.

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Charles, Will it be possible to steer donation/bounties towards a special area of interest.
Ethereum has the potential to serve at least 2 use cases in my healthcare cost containment business. My partners and I have thrown 6 figure project and 1000s of man hours at non crypto conventional solutions with limited success.
I could see us opting instead to fund wired bounties that serve our business reqs and jointly benefit the Ethereum community.

A: Yes and we are building structures right now to take ethereum in a more community determined direction. This falls in line with our plans to move ethereum's management to a DAO. Once this is place, if you can convince the community,

then it will be done
{Charles}

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Can you talk a bit about the plans of the Ethereum NGO? What are the plans with the money raised? I heard that it will go to bounties, project developments, security research, local initiatives, community,... Would be great to hear a few

details of your plans about that.

A: We have some very bright minds in our skype threads and on our forums from Susanne Tempelhof to Johann and Chris Odom from Open Transactions. We believe this technology can really change the world for the 4 billion people living in

areas without strong rule of law and enable fair credit for billions more.
We'll make an announcement about some of our socials plans when we release details about the Holon project.

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An ethereum identity system that has one entry per human seems desirable for things like democratic voting (as opposed to economic voting). Do you have any thoughts on how such a person ledger might be established?

A: Sybil attacks come to mind. Generally speaking consensus systems over the internet are difficult to design well and fairly easy to mess with. Assuming you can properly identify the voting population (WoT, some generic assignment,

etc), then ethereum actually makes voting very easy. You simply allocate addresses to the possible choices and then issue a subcurrency to each person allowed to vote. People can send their tokens to the addresses in any amounts (imagine

being about to half vote for a president) and then whichever address has the most currency wins.
The matter of properly counting the votes is resolved in a trustless way. The matter of who gets to vote is still very hard to deal with. I hope that a blockchain based WoT will evolve out of Ethereum and this can be used to identify

voters properly.
{Charles}

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At one point, one of the Ethereum founders mentioned that political parties might one day be replaceable with DACs. I completely fail to imagine how this might be possible. How can DACs replace humans? What did you mean by that?


The concept of Decentralized Autonomous Organizations will have effects on every area of our society and go far further than just political parties. Think of how people can have for example DAOs managing the local funds to rebuild

schools, repair the roads, and growing the community - everything transparent and at the same time interconnected with other local DAOs in a world wide network.
An example on how DAOs can replace humans - think for example how instead of having an accountant and a person processing payments how a DAO can automatically approve the monthly salaries based on your identity and your previous payment

requests (i.e. if you already asked the salary for this month it will automatically decline the payment)
The implications are so big that not even ourselves can imagine every possible application of this amazing concept - that’s why we invite everyone to join us in building this awesome project.

Just think of this, behind every censored website there is a human or group of humans that have chosen to shut down the server in order to live their lives or avoid jail time.
The decentralized aspect, transparency and the fact that you do not have to trust a 3rd party with the money raised for the good of the community are all very important things in this case. States do not like competition.

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It seems with Ethereum we'll be able to develop contracts that reward truly valuable "Proof of WorK" where rewards are split between the miner and a beneficial act tied to a trusted data metric.
Example (curecoin, solarcoin, etc..)
Is the intent to push potential functionality of this type up to high level user code or is it possible to paramitize / abstract this in the core mining algorithms level, allowing flexible mining schemes?

A: I'd love to see this happen and I have some ideas for refined ether that I'm exploring, but it would be nice to see higher incentive layers implemented with the contracts to offer rewards for distributed computation.
The issue with many algorithms that are socially beneficial like protein folding for example is that they are as expensive to verify as they are to solve. Generally speaking, you want it hard to do, cheap to verify.
I'm going to meet with the Stanford guys at some point about folding@home in particular and see how we can use the testnet for this task.
{Charles}

A: It's definitely possible, but we don't want to experiment with too much at once, so I would prefer that such things be implemented as contracts on top of Ethereum, or perhaps even alt-etherea if the use case demands it.