This article describes the main design goals and features of Ercoin.
- Low entry barrier.
- Energy efficiency.
- Fair distribution, no privileged entities.
- Easy integration.
- Fast confirmations.
- Sound economic model.
- Companion software built around the blockchain, not on the blockchain.
Proof of stake
Treating money as a scarce resource, which gives the privilege of creating blocks, contributes to low costs of maintaining the network (hence low transaction fees) and low CO₂ emission.
Based on Tendermint
Ercoin is based on Tendermint. Thanks to that:
- there are no chain forks, hence confirmations are final;
- confirmations are fast;
- an ordinary user is not burdened with maintaining the network;
- flexible block time will be possible; see issue 1909 in Tendermint for details.
Money is assigned to paid accounts. Contrary to Bitcoin and its descendants, there doesn’t exist a concept of unspent transaction outputs and there is no scripting language needed to perform transactions.
When sending (or destroying) money, arbitrary data can be attached to a transaction. This can serve both as an ordinary, manually written transfer descriptions and as data generated by the companion software, allowing to place the payment function provided by Ercoin in a bigger ecosystem.
Fair distribution — IBO
Initial amount of ercoins is planned to be distributed proportionally to the amount of blackcoins destroyed in a specific time window. Sometimes called Initial Burn Offering (IBO), this is similar in concept to Bitcoin’s distribution, but instead of destroying real, physical resources (electricity), virtual money will be destroyed. The distribution will be therefore non-wasteful and eco-friendly. No entity will be privileged, in contrast to common ICO schemes.
Fees decided by consensus of validators
Fee amounts will be decided (in general, not per transaction) by the consensus of validators. The main factor limiting the amount of transactions processed will be fees, not the block size. Therefore block size should neither be an issue for an ordinary user nor a subject of debate.
Paying for transfers and for storing accounts on the blockchain will eliminate bloat.
Validators will be elected by long-term investors (locked accounts) which will have an incentive to care about long-term value of Ercoin.
Locked accounts will be able to choose other addresses as intended validators. This means that compromising a validator’s key won’t necessarily mean loss of stakeholder’s funds. While it results in a lower incentive to protect validators’ keys, it also results in a lower incentive to crack validators (as there will be little funds to steal). Locked accounts will still have an incentive to make validators secure, as compromised validators can lower the currency value.
This also means that stakeholders will be able to easily delegate the duty of running a validator to an other entity, which opens a possibility of commercializing the service of running validators.