- 1 Background
- 2 General Information on Cryptocurrencies
- 3 FairCoin
- 4 History
- 5 Interview
- 6 FairCoin 2
- 6.1 Introduction
- 6.2 FairCoin V2 White Paper
- 6.3 Overview
- 6.4 Block generation
- 6.5 Certified validation nodes (CVN)
- 6.6 Node certification
- 6.7 Transaction fees
- 7 Discussion
The world of cryptocurrencies started with the enigmatic person or collective Satoshi Nakamoto. His origin or place of residence remains unknown. Everyone talks about him, but nobody really knows him.
In 2008 he published his white paper, introducing a disruptive technology thao
Satoshi not only launched the theory, but also designed it and put it into our hands. The following year he launched a free software application to create the first cryptocurrency, Bitcoin. Then the race began. Hundreds of coins have been developed from this initial one, each with its own peculiarities, but generally respecting basic features such as blockchains, encryption, pre-coined money supply, etc.
We are at a historic moment. Peer society alternatives have been growing fast, and cryptocurrencies provide us with just the tool that was missing to enable us to change the rules of the game. A revolution of economic, technological and social systems is taking off.
General Information on Cryptocurrencies
What is a cryptocurrency?
It is a digital currency, or virtual money based on a peer-to-peer, decentralized exchange network protected by cryptography.
This means that, in the first place, it isn’t a material currency, but rather that everything works virtually from our computers and the Internet. Second, it is protected by encryption, hence the name “cryptocurrency”. This is a way to secure the system and the transactions through mathematical algorithms which convert the information in an encrypted block, only readable with the correct key, with a level of encryption that’s impossible to decipher with today’s known technology.
Coins are not actually units as we may think, but pieces of information, specifically they’re exchanges of keys which are recorded on a public accounts book which everyone can see and check, and which is is almost impossible to fake. To put it simply, what actually happens when you give someone else a coin is that you sign a transaction with your private key, transferring a value (“coins”) to another person’s direction. These signatures make up chains that are verified and confirmed by an entire community of people who use their own computers to verify that the transactions are correct.
As complex as the system may seem, it is actually very simple, and enough technology has been developed to make a cryptocurrency payment as easy as paying with your code-protected credit card.
The innovation and main difference of cryptocurrencies as compared to central money is, in the first place, cryptocurrencies are neither saved nor controlled by any central bank or State. In this system, you own all your money, and the system is secure thanks to peer2peer technology. Secondly, counterfeiting is currently unfeasible.
Thus, cryptocurrencies give us immunity to interference and manipulation by central banks and return us our freedom of economic management
How are notes and balances secured?
Satoshi’s great contribution to humankind is the blockchain. It consists of a p2p program which collects all the transactions done in a period of time in a block and joins them together in “chains”, resulting in something resembling a ledger containing all transactions, which are then distributed and verified to avoid fraud.
In order for a block to be added in the chain, it must be submitted to automatized voting among all the computers connected to the net, so they can determine whether the block contains valid information or not. Once the node accepts a block as valid (which means that all transactions contained are true), other nodes confirm its validity by building the next blocks on the same chain. Therefore, each block maintains a mathematical relationship with the previous block and the future one. This whole process has its foundations laid in the mathematical algorithms specially designed for this purpose.
The blockchain provides the world’s first decentralized, incorruptible system for registering any financial or legal contract, so it’s already being used for multiple purposes, and new ones will gradually appear. Each computer which downloads the program acts as a notary, and all computers working simultaneously decide according to mathematical laws.
How are coins created?
The software released for Bitcoin was designed in such a way that only 21 million coins could be created. For Faircoin, there are 50 million coins plus those which are generated through the minting system explained below.
There are different ways to create these coins. The most common and widespread methods are POW and POS. Both are designed with a feedback system, ie, in order to get coins from the system, you must contribute to making the system work properly. Let’s take a closer look into the way this functions.
POW (Proof Of Work)
This is a validation system based on work, also called mining. It is dependent on computing power. Miners are those who participate in the network, contributing with their computer and the energy expenditure derived from mining.
Mining itself is performed on different nodes working in unison through the POW infrastructure. The more computing power supplied to the system, the more likely it is for a block to be completed.
For each block completed and added to the blockchain, the creator node is awarded a certain amount of coins, in the case of bitcoins, 25BTC.
This system values the work of the mining community in completing the blocks, and compensates it with coins. This is the system used for bitcoins and is known as MINING.
POS (Proof Of Stake)
In this case, the system validation is based on demonstrating that you own the coins by using “money age”. New coins are created once you prove that you have been saving a certain amount for a certain time, and through this savings, you also contribute to the network’s security. This method began with Peercoin and is also currently used in Faircoin. The process is known as MINTING.
Both methods are widely used by different cryptocurrencies, separately or as a hybrid. However, POS arose to overcome some disadvantages of POW: on the one hand, there is the problem of energy consumption. As the system has grown, along with the number of transactions, it is increasingly difficult to mine a block and it requires more and more computing power, therefore becoming an ecological and economic issue.
On the other hand, since transactions are validated by miners, if 51% of the computing power of mining nodes were to unite, they could seize control of transactions and therefore of the registered coins.This is known as a 51% attack.
In opposition to this, POS does not require large energy resources for minting. Anyone, with just a computer and an open purse, can mint (see specifications below), so it’s a much greener way to maintain the system. Also, the only way a monopoly could arise, as in the case of POW, would be if someone were to own more than 50% of minted coins — which would be meaningless in terms of economics, for the owner to prejudice their own capital.
In conclusion, POS encourages savings and thus helps generate sustained growth in currency value which will be gradually fed by all cooperative members.
How are cryptocurrencies used?
To use cryptocurrencies, you first need a virtual wallet. There are many models, each with its own peculiarities, and can be local, as in mobile or computer apps, or online through a server. Each has different features. You can download one for FairCoin here.
Wallets are good for keeping your coins safe and making transactions, both to receive and send money, by just entering a receiver address.
It is important to note that any transaction made is impossible to reverse, as it is recorded in the blockchain; therefore, users need to be careful! Here are some safety tips.
FairCoin is a currency created for the purpose of promoting equality and economic justice. 50,000,000 faircoins were created in March 2014, and between March 6 – 8, were distributed through a massive give-away called an “airdrop” at a rate of 1000FAC/hour to anyone who made a request.
FairCoin became the first currency which needed no initial mining but was distributed equitably in order to promote equality of financial possibilities. Still, obviously an airdrop on an Internet forum has a very limited scope, and therefore the initial distribution isn’t quite sufficient in its equity purpose.
Currently, FairCoin has been adopted by fair.coop's promoters as the cooperative’s currency for use as a means towards global economic justice.
The key purposes of the cooperative regarding FairCoin is using it to generate economic redistribution while it also increases the level of justice, supports the empowerment of grassroots groups, transformation of social and economic relations, and creation of commons (Fairfunds).
Technical features of FairCoin
- 99.99% POS: It is a hybrid POW / POS system but money creation is 99.99% POS. Thus, the majority of faircoins are minted, ie, the system works thanks to everyone’s savings.
- As for security, there is a POW block every 5 minutes, and a POS block every 10 minutes. These two methods are combined to provide the best of each in securing the system.
- The low remuneration for mining, 0.001FAC / block, prevents energy waste since using high consumption mining devices is just not worth it.
- Money Supply of 50,000,000 coins mined out in the first block and initially spread out to all who applied for it, so that not only those with capital or mining resources could have access.
- Savers, ie, people connected to the network and minting, will receive 6% of the coins during the first year, 3% the second and 1% from the 3rd year on.
Some of these features may be changed by consensus on the network in benefit of FairCoin, a topic on which Fair.Coop and its members have a lot to say.
In fact, since Fair.Coop is based on open political participation, we can say that Fair.Coop adds to FairCoin with an approval based on agreements between humans– which, to our knowledge, no other cryptocurrency does. We call it “human-based consensus”.
You can currently buy FairCoin in the main website . You can also buy FairCoin in other places on the Internet like exchanges for example.
You can participate as a FairCoin active node anytime by using the software on your computer, waiting for 21 days, and then start minting. Meanwhile, you can participate by mining (POW).
After 21 days, if your coins haven’t been moved from your wallet, you can begin contributing to the network with POS. At that moment your wallet will begin to have a % chance of minting which will be reflected in the official “minting view” tab on the faircoin wallet.
Wallets with the most faircoins are likely to find a block faster. Another factor affecting the chances of finding blocks is the concept of “age”, which makes minting probability grow each day after day 21, up to day 90.
Notice that once you discover a new transaction block, its minting status is set back to 0 and the process starts over. We could go on explaining, but the best way to learn is to download the wallet and start experimenting with your faircoins.
FairCoin Development Team:
- "6 of march one anonymous guy created the coin
- About april 23th, the anonymous developer leave the coin
- About may 6th the community take over the coin, and I was one of the people involved that done this takeover.
All of this is documented in the whole bitcointalk thread:
see specially this note: https://bitcointalk.org/index.php?topic=702675.0
Note from the FairCoin Development Team:
Faircoin begun in march with this First ANN
FairCoin was abandoned at the end of April 2014 by its original developer; but not after promising huge projects, private investors, and much more. The FairCoin community was left to sit with unfulfilled promises, high hopes diminished, and a moral completely drained. A few leaders in the remaining community organized a new development team, consisting of some of the most devoted members.
This was the context of our second ANN
From the initial community take over, a team of three committed individuals, was who really give continuity to the dev team: smartaction, drakandar and thokon00
Because the creator of the second ANN was not really involved and this was inefficient to have a good communication, we decided to close the second ANN at the same time of the First hard fork, and we created this third ANN really accessible by the current FairCoin Development Team."
Enric Duran and Stacco Troncoso, interviewed by Cat Johnson on the cryptocurrency of Fair Coop:
Shareable: What's the importance of having a cryptocurrency focused on alleviating economic injustice and promoting social good?
Duran and Troncoso: Up until now, cryptocurrencies have held great potential, but it hasn't always coincided with a practicality that would alleviate [social] ills. Certain elements such as bypassing the need for central banks are steps along the way, but there was something missing. A holistic social and economic system is urgently needed to address the inequalities inherent in the current system.
How is Faircoin different from other cryptocurrencies?
For one thing, Faircoin is technically different in the currency generation protocol used. Faircoin uses Proof of Stake (POS), instead of Proof of Work (POW). The use of POS prevents any unfair advantage which could be afforded to those who can access and invest in the environmentally destructive means of mining (destructive for its consumption of energy and resources needed for the servers). What really makes Faircoin different is its specific use as a tool for Fair.Coop, as a cryptocurrency designed to act as a store of value for Fair.Coop and its redistribution of capital to socially and environmentally coherent projects.
What's the relationship between Fair.Coop and Faircoin? How will they intersect and/or interact?
Our intention is to be “Fair in name, fair in practice.” Fair.Coop uses Faircoin as its social capital and store of value. Fair.Coop is Faircoin's conscience—it's a cryptocurrency attached to commons-oriented responsibility.
Fair.Coop already holds 20 percent of all Faircoins in existence, which guarantees that the growth of the currency's value will go to the common good. This is guaranteed by Fair.Coop's democratic accountability system.
Do you see Fair.Coop and Faircoin working on a global scale? What could that look like?
In fact, Fair.Coop can't be anything but global; it's been specifically designed to be global; for this reason, we call it the Earth Cooperative. It's not a scaled-up local project. One of Fair.Coop's key objectives is to facilitate a global body of knowledge, capable of generating concrete impact locally.
At any rate, we could make a working distinction between two sets of mechanisms that'd be produced by Fair.Coop: global and local. At the local level we'd be seeing local, specialized mechanisms and knowledge which, in turn, would feed into a global open knowledge economy comprised of, among other things, valuable data and monetary and economic tools. This will be a bidirectional relationship, as both parts will nourish one another for the benefit of the whole."
Who will the funds raised with Faircoin go to? Do you already have organizations or projects in mind? If so, where are the organizations located?
Who the funds will go to isn't something that's decided by the promoting team. Identifying who the potential benefactors are and following through is an ongoing democratic process of the whole coop, as it's coming together right now where each of the different Funds is co-managed by a council that works in conjunction with the other Funds, as well as with the entire community built around Fair.Coop.
The type of organizations we want to work with will be those who could potentially generate peer production in the material plane, as well as benefit from the shared knowledge accrued by the coop. We also want to focus on projects that lack the necessary means to activate this type of peer production.
Other examples would include strategic projects that can add more value to the global commons. Projects which, on their own, maybe wouldn't have the ability to network at this scale to share their knowledge. The projects would also benefit from the moral and material support of a global community if and when attacked by hostile interests. All in all, Fair.Coop will increase the resilience of these projects.
More than naming specific organizations, we are very open to being approached so that everyone can participate in Fair.Coop's co-creation and ongoing development. We are also very interested in empowering the Global South to increase its resiliency. When we say Global South, while there's an undeniable geographical truth to this, we also mean the 99%, independent of where we may reside." (http://www.shareable.net/blog/faircoop-using-cryptocurrency-to-bring-economic-justice-to-the-world)
FairCoin is the monetary base system for FairCoop. We constantly drive development of the FairCoop/FairCoin ecosystem further and shape the individual components to fit our vision: building tools to enable everyone to participate in a fair economy on a global scale.
We decided to create a new version of FairCoin which corrects issues we encountered. The current version of FairCoin relies on PoS (proof-of-stake) which cannot be considered fair, because it confer an advantage on the already rich. Therefore we needed to come up with a new way to secure the network. We call it PoC (proof-of-cooperation). This innovation will finally make FairCoin fair, secure, and sustainable.
The draft we present here is meant to start a discussion on what the new version would look like. Many hours of voluntary work have already been put into building the basic concept and the white paper. The focus of the draft paper is mainly on the technical and implementation side of the FairCoin2 project. Many more aspects besides the technical have to be taken into account and elaborated on.
So, here it is the first draft of the FairCoin V2.0 white paper. Enter the fair dimension of cryptocurrency and download the PDF file now.
FairCoin V2 White Paper
- Document version 1.0
- Thomas König, May 2015
- [email protected]
- To comment on this draft paper, please visit FairCoop's FairCoin 2 Forum
FairCoin is the monetary base system for FairCoop The Earth Cooperative for a Fair Economy (see https://fair.coop). In FairCoop we develop tools and transfer knowledge that enable everybody to participate in a fair global economy. The existing version of the FairCoin wallet relies on mining and minting technology to secure the block chain. The problem is that neither mining nor minting can truly be considered fair, because both confer an advantage on the already rich. Therefore we decided to create a new version of FairCoin which corrects these issues.
With FairCoin2 (in short FC2) we can create block chain-based software that is fair, secure and power-saving. It is based on cooperation and not on competition.
It is built on the code-base of a recent version of the Bitcoin core client. This enables us to benefit from the latest developments made by the dedicated Bitcoin developers. Also the comprehensive infrastructure that already exists around Bitcoin can be adopted for FairCoin with minimal effort.
This document describes the design concepts we have implemented in FairCoin2. Some knowledge about how Bitcoin works is required to fully understand the contents of this document. The first paragraphs provide a rather high-level view of the FC2 concept and the further you read the more technical and detailed it becomes.
In contrast to other cryptocurrencies FC2 does not implement any mining or minting (aka. staking)functionality, which are both competitive systems. Block generation is instead performed by so-called certified validation nodes (in short CVN). These nodes cooperate to secure the network. To run a CVN one needs to complete a certification procedure which is called node certification procedure (in short NCP) that is operated by FairCoop (https://fair.coop/node-certification-procedure/). The requirements to operate such a node are described in chapter 3.1. Please note that definition of the NCP is out of the scope of this document and will be defined in a separate document. In the long run the NCP should be powered by a reputation system.
There is no reward for block creation (no coinbase/stake transaction). Therefore the money supply does not change over time and is fixed at the time we migrate to FC2. Nevertheless, the transaction fees go to the respective block creators to compensate their efforts for running a CVN.
Certain chain parameters, e.g. the transaction fee will be dynamically adjustable (without the need of releasing a new wallet version) by democratic community consensus. The FairCoin team needs the approval (digital signatures) of a high percentage of all the active CVN.
Block generation takes place in a collaborative way. All CVN work together to bundle pending transactions into transaction blocks. These blocks can only be created by CVN every 3 minutes. Which CVN will generate the next block is determined by its time-weight. The time-weight describes how much time has passed since a CVN created its last block. If for example CVN A created a block 50 blocks ago and CVN B created it 55 blocks ago CVN B will be chosen to create the next block in the network. There can always only be exactly one CVN with the highest time-weight. If a new CVN joins the network for the first time it will be elected to create the next block. Between two locks only one new CVN can join in.
Block generation is performed in 3 phases. New transactions are accepted during all these phases.
Transaction accumulation phase
In this phase all nodes relay transactions they receive from other nodes to any node they are currently connected to. This phase lasts at least 170 sec. If there are no pending transactions in the network it takes as long as the next transaction hits the network. In other words, this phase only ends when there is at least 1 pending transaction in the network.
Time-weight announcement phase
In this phase each CVN determines its own time-weight based on the local block chain information and announces it to all other connected nodes. Announcement messages are relayed by all nodes just like transactions. The higher the nodes time-weight the sooner the announce message is sent to the network according to the following simple formula:
delay is the time in seconds to wait before a CVN sends its own time-weight otw is the CVN calculated own time-weight tn is the total number of active nodes 10 is the constant of ten seconds, which is the duration of this phase
This will greatly reduce the amount of announcement packets sent over the network because if a CVN receives and correctly validates a time-weight announcement message from an other node with a higher time-weight it will not send its weight to the network.
Every CVN verifies that each time-weight announcement it receive is correct using the local block chain data (bogus announcements are discarded and a DoS ban score of 50 is proposed).
Time-weight announcements are used to determine the node with the highest time weight that is currently connected to the network.
This phase starts 10 sec. before the actual block target time.
Block creator election phase
This phase starts right after the Time-weight announcement phase. Every CVN determines the CVN with the greatest time-weight according to the announcements it received. It then signs and sends their candidate vote message to the network, which is relayed by every node just like transactions.
This phase has no defined length. It stops once the elected CVN has received enough vote messages for its own id from over 90% of all active nodes. This is the point in time when the collaboratively-elected CVN finally creates the next block in the chain containing all pending transactions from the so called “rawmempool”. Also parts of the signed vote messages are incorporated into the block to prove that optimally 100% but at least 90% of all active connected nodes agreed on the elected CVN.
Certified validation nodes (CVN)
The aim of the CVNs is to secure the network by validating all the transactions that had been sent to the network and put them into a transaction block chain. Blocks are created each 3 minutes (180 sec.). Transactions are confirmed after they have been added to a block. If there are no pending transactions no further blocks are created, which will not happen anymore after FairCoin has been widely adopted.
A CVN is a standard FairCoin core client configured with additional information namely certification data issued by FairCoop which “upgrades” it to a CVN. Every node will be assigned a unique id.
Requirements for running a CVN:
Every entity running a CVN must agree upon the following technical requirements and must carry the responsibility to full fill these rules.
- The system must be connected to the Internet all the time (24/7) and the TCP port 46392 must be reachable by all remote nodes from the Internet
- The system must use a public NTP server to synchronize its system time to, preferably pool.ntp.org to ensure that the system time is always correct
- The entity must have an account at the FairCoop web site
- The wallet software must be configured with certification data issued by FairCoop
Further requirements might be defined after public discussion. But this will be subject to the NCP document.
But why would we need certification at all? A decent certification procedure ensures that a high percentage of all CVNs are honest creator nodes. At the moment the author sees no easy way of ensuring that each node has only one identity without a well established reputation system. If every node was a creator node a skilled attacker could modify the client software in such a way to create thousands of different identities and could then perform numerous different attacks against the network.
The transaction fees go to the node which created the block. Transaction fees exist to avoid block chain spam and give block creators a small reward for taking the effort to leave their node running and pass through the certification procedure.Fees should be dynamically adjustable to satisfy any change in the value of FairCoin
FairCoop's plan with the FairCoin distribution
" FairCoins was distributed before the idea of FairCoop even existed. Someone created this cryptocoin as well as the 50M Faircoins and spread it to all person that find it out in a airdrop… So all faircoins were distributed equally between cryptocurrency aficionados or people that find it out somehow…
After that, when the idea of FairCoop started to born, the initiators and other related people started to buy this faircoins by the rules of cryptomarket… So we started to collect all this coins with the objective to put it after in common projects…
The 20% you mentioned is in the fairFunds… This funds objective its to be re-distributed among all projects for the commons that needs financial aid… Also other 20% its between ppl and collectives compromised with the faircoop principles that also had bought faircoins to support the project and is committed with the cause, therefore in an autonomous way it will be also funding for projects related to the commons.
The remaining % is unknown where it is, however thanks to the http://coopfunding.net we aim to facilitate everyone to contribute in buying more of this coins and grow the FairCoop funds.
From the promoter team we encourage everyone to take part of the faircoop project by either giving a donation to the funds or if they have already some ideas for common projects to buy themselves faircoins.
We can not expropriate all dollars or euros or bitcoins.. But what we can do is to buy as peers as much as we can of this faircoins, and then participate in growing its value, increasing its market cap, and RE-distributing it between all projects for the commons
Thus, the plan is that: we are not gona distribute an “alter coin” we are gona take a coin, grow its value and re-distribute wealth iequitable in the real world.." (https://fair.coop/groups/faircoop-community/ask-us-anything/forum/topic/equitable-distribution-of-fair-coins-what-is-the-plan-to-achieve-this/#post-1857)
FairCoop project: why buy an existing cryptocurrency?
"Why choose to take advantage of an existing cryptocurrency such as Faircoin?
For a cryptocurrency to be accepted in cryptocurrency markets and be able to be bought and sold–exchanging it, for example, for Bitcoins–it must have a clean launch, which is to say, it must have been previously published so that all can participate. Another much-valued aspect is that the initiators of the cryptocurrency do not retain a significant portion of the cryptocurrency, or else it would be considered a scam.
If we were to distribute the cryptocurrency from the outset among the collectives that filled out a form and met certain criteria, it might seem quite fair outside the cryptocurrency community,, but inside we could easily find ourselves up against boycotts and complaints for having distributed it among our colleaguesusing political criteria , etc.
If, to avoid this situation, we were to allow a large percentage to be distributed by conventional criteria (mining it for several days, with a random list anyone can sign up for, etc.), we’d end up with minorities from the North making personal profits from our project, in a framework of speculation (because of the project we would be presenting). This could increase more quickly the value of what we defend, leading to drops in price which would create confusion, etc.
In contrast, if we take advantage of a cryptocurrency that has already been created and has already been through this initial speculative phase, is currently devalued, and on its way to being abandoned (right now, Faircoin is ranked at number 200, with a total value of 50,000 dollars; that is, with 500 dollars, we can buy 1% of all coins), it will be very easy for us to obtain an important share by means that are completely accepted by the cryptocommunity: buying it on the market for next to nothing. This way, we will be able to create a very advantageous situation for our project without having to assume the delicate responsibility of creating and distributing the cryptocurrency from the beginning.
Besides, it shouldn’t be difficult to ensure that once the dissemination of the project has begun and it is generating the ability to purchase and accumulate the currency, we can bring about a general trend toward a rising value of Faircoin, boosting the credibility of the project."
Critical Evaluation of FairCoin as a cooperative currency
"FairCoin is one of the more ethically minded alternative currencies, which aims to “implement fair value exchange on a global level” using a unique “proof-of-cooperation mechanism”. Again, this is a blockchain based system but one which uses “collaboratively validated nodes” (CVNs) to secure the network. It’s a clever system but one which is still prone to speculation which undoubtedly undermines their proud claim that “FairCoin now is the the most ecological and resilient cryptocurrency”! Since their “air drop” (basically, dumping a load of coins around the internet to be picked up by whoever gets there first, with some limitations on claims per person) the “value” of a Faircoin has increased hugely and the community “claims” one Faircon is now worth €1.2. These claims about Faircoins’ value must be decided at a General Assembly via “consensus reached through an open, participatory process of discussion. Not the invisible hands of the market…” and the other Fair ventures like the marketplace and their growing community of local nodes do make this a valid and vibrant economy. But since everyone involved in Faircoin obviously has a vested interest in its increasing valuation and since Faircoin can be traded on at least two exchanges it is just as prone to speculation as gold, or Bitcoin. In fact, their page on “value” includes a slightly humorous request for speculators to leave Faricoin alone: “If you just want to get rich soon and intend to “pump and bump” – please consider other AltCoins to speculate on.” Not the most robust means of securing a stable, inflation and speculation proof system!" (https://open.coop/2018/01/25/co-op-coin-ico-look-like/)