Coinbase account - Revision history

Admin: added address of coinbase account

2014-08-05T15:11:26Z

added address of coinbase account

Admin: added small clarification

2014-07-29T07:01:34Z

added small clarification

Admin: updated coin distribution info

2014-07-25T04:22:03Z

updated coin distribution info

Admin: updated info about block rewards

2014-07-21T21:02:51Z

updated info about block rewards

Admin: added table of contents

2014-07-18T15:36:24Z

added table of contents

Admin: Added page to wiki

2014-07-16T06:19:03Z

Added page to wiki

New page

The coinbase account is a concept new to the [[mini-blockchain scheme]] and first used by [[Cryptonite]]. The coinbase account actually acts as the input for coinbase transactions, meaning coins are subtracted from the coinbase account in order to fund block rewards. The starting balance of the coinbase account dictates the total possible coin supply. One interesting consequence of this approach is that it's easy to check the balance of the coinbase account and find out approximately how many coins are left to mine.

When the balance of the coinbase account reaches 0 the block reward will be 0, however it is possible to provably destroy coins by sending them to the coinbase account. Another possible mechanism for injecting coins back into the coinbase account without inflating the money supply is to implement [[account tree pruning]] and feed the "maintenance fees" back into the coinbase account, which is helpful not only because it helps subsidize miners but also because it clears out dust in the account tree at the same time.

==64 bits of Granularity==

Bitcoin makes use of 2.1 quadrillion units where each coin is made up of 100 million units, resulting in a total of 21 million coins which are divisible by 8 decimal places. However, internally Bitcoin uses 64bit integers, and it could handle a much larger number of coins, so 21 million may sound like a rather arbitrary number, but in fact it is not. Many applications make extensive use of double precisions floats but doubles can only store integers up to 2^53, and that is ultimately why Bitcoin only has 2^50.9 units.

However it is possible to use extended precision floats to exploit the full range of the 64bit integer. This gives the coin supply a much higher level of granularity and is based on a natural upper limit. A coin supply with 64 bits of granularity is made up of approximately 184.4 billions coins, each of which are divisible by 8 decimal places. We have used extended precision floats in Cryptonite so that we're no longer held back by the limits of the double precision float, enabling an extremely large coin supply.

==Smart Coin Distribution==

There are many ways coin distribution can be done, with Cryptonite it will take 10 years for half of the coin supply the be mined, with a repeating half life of 10 years, but the block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. Cryptonite also updates the difficulty every block for similar reasons.

@@ Line 3: / Line 3: @@
 The coinbase account is a concept new to the [[mini-blockchain scheme]] and first used by [[Cryptonite]]. The coinbase account is the first [[account]] in the [[account tree]] and acts as the input for coinbase transactions, meaning coins are subtracted from the coinbase account in order to fund block rewards. The starting balance of the coinbase account dictates the total possible coin supply. One interesting consequence of this approach is that it's easy to check the balance of the coinbase account and find out approximately how many coins are left to mine.
 When the balance of the coinbase account reaches 0 the block reward will be 0, however it is possible to provably destroy coins by sending them to the coinbase account. Another possible mechanism for injecting coins back into the coinbase account without inflating the money supply is to implement [[account tree pruning]] and feed the "maintenance fees" back into the coinbase account, which is helpful not only because it helps subsidize miners but also because it clears out dust in the account tree at the same time.
 ==64 bits of Granularity==
@@ Line 15: / Line 18: @@
 There are many ways coin distribution can be done, since Cryptonite has such a large coin supply it has a rather long mining period to ensure a fair distribution. It will take 10 years before half of the coin supply has been mined, with a repeating half life of 10 years. The block reward decreases in parallel with the coin supply, meaning it will take 10 years for the block reward to halve and it will take 10 years before half of all the coins have been mined.
-The block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. By adjusting the the block reward every block the network has time to adapt to changes gradually instead of suddenly. Cryptonite also updates the difficulty every block for similar reasons.
+The block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. By adjusting the the block reward every block the network has time to adapt to changes gradually. Cryptonite also updates the difficulty every block for similar reasons (eg to prevent instamines).

@@ Line 9: / Line 9: @@
 Bitcoin makes use of 2.1 quadrillion units where each coin is made up of 100 million units, resulting in a total of 21 million coins which are divisible by 8 decimal places. However, internally Bitcoin uses 64bit integers, and it could handle a much larger number of coins, so 21 million may sound like a rather arbitrary number, but in fact it is not. Many applications make extensive use of double precisions floats but doubles can only store integers up to 2^53, and that is ultimately why Bitcoin only has 2^50.9 units.
-However it is possible to use extended precision floats to exploit the full range of the 64bit integer. This gives the coin supply a much higher level of granularity and is based on a natural upper limit. A coin supply with 64 bits of granularity is made up of approximately 184.4 billions coins, each of which are divisible by 8 decimal places. We have used extended precision floats in Cryptonite so that we're no longer held back by the limits of the double precision float, enabling an extremely large coin supply.
+However it is possible to use extended precision floats to exploit the full range of the 64bit integer. This gives the coin supply a much higher level of granularity and is based on a natural upper limit. A coin supply with 64 bits of granularity is made up of approximately 1.84 billion coins, assuming each coin is divisible by 10 decimal places. We have used extended precision floats in Cryptonite so that we're no longer held back by the limits of the double precision float, enabling a much larger coin supply.
 ==Smart Coin Distribution==
-There are many ways coin distribution can be done, since Cryptonite has such a huge coin supply it has an extremely long mining period. It will take 100 years before even half of the coin supply has been mined, with a repeating half life of 100 years. It mimics the same type of coin scarcity we would get simply by lowering the total coin supply but at the same time it ensures a very fair distribution of coins over a very long period of time.
+There are many ways coin distribution can be done, since Cryptonite has such a large coin supply it has a rather long mining period to ensure a fair distribution. It will take 10 years before half of the coin supply has been mined, with a repeating half life of 10 years. The block reward decreases in parallel with the coin supply, meaning it will take 10 years for the block reward to halve and it will take 10 years before half of all the coins have been mined.
 The block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. By adjusting the the block reward every block the network has time to adapt to changes gradually instead of suddenly. Cryptonite also updates the difficulty every block for similar reasons.

← Older revision		Revision as of 21:02, 21 July 2014
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	==Smart Coin Distribution==		==Smart Coin Distribution==

−	There are many ways coin distribution can be done, ~~with~~ Cryptonite it will take 10 years ~~for~~ half of the coin supply ~~the be~~ mined, with a repeating half life of 10 years, but the block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. Cryptonite also updates the difficulty every block for similar reasons.	+	There are many ways coin distribution can be done, since Cryptonite has such a huge coin supply it has an extremely long mining period. It will take 100 years before even half of the coin supply has been mined, with a repeating half life of 100 years. It mimics the same type of coin scarcity we would get simply by lowering the total coin supply but at the same time it ensures a very fair distribution of coins over a very long period of time.
		+
		+	The block reward is adjusted every block so that it changes gradually over time. Sudden large changes in the block reward are not healthy for the network, and it's not clear why Bitcoin was designed to have such long intervals of time between changes in the block reward. By adjusting the the block reward every block the network has time to adapt to changes gradually instead of suddenly. Cryptonite also updates the difficulty every block for similar reasons.

← Older revision		Revision as of 15:36, 18 July 2014
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		+	__TOC__
		+
	The coinbase account is a concept new to the [[mini-blockchain scheme]] and first used by [[Cryptonite]]. The coinbase account actually acts as the input for coinbase transactions, meaning coins are subtracted from the coinbase account in order to fund block rewards. The starting balance of the coinbase account dictates the total possible coin supply. One interesting consequence of this approach is that it's easy to check the balance of the coinbase account and find out approximately how many coins are left to mine.		The coinbase account is a concept new to the [[mini-blockchain scheme]] and first used by [[Cryptonite]]. The coinbase account actually acts as the input for coinbase transactions, meaning coins are subtracted from the coinbase account in order to fund block rewards. The starting balance of the coinbase account dictates the total possible coin supply. One interesting consequence of this approach is that it's easy to check the balance of the coinbase account and find out approximately how many coins are left to mine.