Transitioning abandoned altocoin to a Counterparty Asset through Proof of Burn and Crowd Sale

Many altcoins die. I am part of a community that has experienced this. We are discussing the CP platform and how we should transition to CP.


The overall plan is set for 2 phases:
1. The burn phase for the holders on the original blockchain.
2. The crowd sale phase to raise Bitcoin for development of the new CP Asset.

Burn Phase
I have read a little about Scotcoin transitioning to CP and at first I thought they transitioned their entire blockchain to CP. But after reading I’m under the impression that they “burned” Scotcoins to a Scotcoin address. Is this a true unspendable address like CP did with XCP? What do they mean by the “burn” address will expire? Is that how it becomes unspendable and is that possible with all alt blockchain addresses?

http://scotcoin.org/scotcoin-2-0-migration-information-to-counterparty-io/

In our case the devs abandoned the coin. Granted, if you wanted to 51% the blockchain and take it over before a move you could. But honestly, I do not see the point of that. As long as the coins we burn do not have the opportunity to be spent if someone were to overtake the original blockchain then in theory they are still transferring what little value was there. 

Another question is since the alt blockchain is abandoned by devs and is now delisted from all the exchanges it was on how does burning give any value? One idea is to require a BTC fee that is burned along with the original coins from the alt blockchain. If burning BTC gives XCP value, will requiring burned BTC along with burning the alt give the CP asset value as well? Any thoughts on this is appreciated.

We are not quite sure on how we should plan and execute this but I am researching and looking for ideas.

Crowd Sale Phase
I do not believe that simply transferring an abandoned coin can give it value. At this point the blockchain is abandoned along with all projects that we are aware of. The explorers are down. We were delisted from Bittrex after sitting idle for months. While there was talk of different devs stepping in, nobody really took the initiative. Most of the bag holders really did not want to fund devs to come in and take over the blockchain without definite plans to give the coin value. We were not in the business of transferring bags to future holders. 

I think in order to give the coin value coming from an alt that the BTC burn along with the alt coin burn at least helps since BTC currently has value. Some would argue that in our case it’s a waste of BTC and that the BTC could be used to fund projects and apps that make the new CP asset useful. We could also hold a crowd sale for such purposes and raise BTC.

Options List
1. Only burn the altcoin from the original blockchain.
2. Burn both the altcoin and BTC as a fee.
3. Burn the altcoin and BTC and hold a crowd sale for BTC.
4. Burn the altcoin and only hold a crowd sale for BTC. 

Any ideas or feedback is appreciated! I look forward to hearing your ideas and criticisms.

That burn address is not unspendable. Saying that it will expire is weird because there is no such thing.  I can’t say anything else about this coin but that much looks a bit weird.

Well maybe unspendable is the wrong description.


So if it doesn’t expire and it’s not unspendalbe then what qualifies it as burning?

Either way, I emailed Vennd and they told me it was a doable project as far as burning. I know Scotcoin did the same somewhat but it appears they may have moved most of the blockchain. 

The alt coin I am speaking of may not have everyone join this project and burn their coins but many will. I don’t think that alone gives the coin strong value as they never completed any projects and were delisted from all the exchanges that carried them. We were left high and dry, which is fine, that’s the risk we took. However, it is a great community that still wants to do something positive and hopefully recoup some of their losses. Why take over a blockchain when you can create an asset. If we also charge a fee in Bitcoin to do this and the alt coin holders are willing to pay it, then it should help raise some capital for Vennd to help with burning the old coin and creating a crowd sale.

The burning would create the initial number of coins depending on how many people make the jump. I also have one large holder who has offered to burn 250,000 coins alone to donate to the devs so that they have a vested interest in making the asset valuable. That along with a crowd sale that would lay out our plans for a few projects should help raise Bitcoin for the devs and at least garner interest and give it some value.

I don’t know exactly what the marketcap would end up at but I would like to keep it low like XCP. That will depend on how many burn and how many people may purchase during the crowd sale though.

I know this. If we don’t truly burn the coins and some other dev picks up the old blockchain to continue forward then there’s tons of coins still left in that ecosystem. We don’t want to leave it like that where all of our wallets are full or we just send them to a random wallet and destroy the keys. There would always be that question of did I really destroy/delete the keys? I can’t have doubt that I’m trying to have a large group of people send me all of their coin from that blockchain.

This is still early stages and I am trying to figure it all out. But eventually we will hold the burn and announce which coin it was, what the new asset is and what the projects surrounding the asset will be.

Thanks for your feedback!

I think, and this probably won’t not be the most qualified response you can get here, that a lot depends on how your coin was created and with what purpose. 


Related to the latter, the purpose should be transferable too, otherwise assuming everything else goes well, what is the coin going to be used for? Because on the Counterparty platform there’s no mining and blockchain is a Bitcoin blockchain, so for your explorer devs, miners, and probably many others the move probably wouldn’t be interesting.

If the original purpose can be transferred as well (e.g. some app-specific coin) or implemented on Counterparty in some novel way (e.g. using Counterparty Smart Contacts, currently available on testnet), then it may make sense to migrate (as the new coin could be valuable). 

In that case maybe a group of owners of the old coin could create a burn address on the old blockchain and, if it’s possible to append bitcoin addresses as messages to transactions, users could burn their old coin and “register” their Counterwallet address where they would get the same address from the newly issued coin. There would be no funding involved (although you could add that as well). 
I don’t know how doable that would be but it’s fairly easy to setup counterpartyd and try things on testnet (there’s also testnet.counterwallet.io to test Counterwallet on testnet).

something,


Thanks for your response. 

I agree. An asset on CP really is only as valuable as it’s use. We are discussing different applications and projects so we know that depending on what people’s opinions of those and how well they are executed will determine the value.

But from what we have seen from most CP assets it appears that the platform is great for creating assets that retain value. Swarm, Storj, XCP and GEMZ all have decent value. 

Since I am not a developer and do not want to rely on trusting  a dev to run a separate blockchain this is perfect for me. The members on BTCtalk were talking about donating BTC to a dev to revive the blockchain and keep the original coin moving. I just see that as risky and as a quick fix to maybe transfer the bag holding to other people. I don’t agree with that nor like that idea. I have no interest in someone taking the bag on the risk I originally took. So here I am. I like that I don’t have to have the developer skills to create the asset. It is cheap to create, easy to distribute and as long as we come up with a decent use, it may even turn into something valuable.

Now there will still be some risk as far as development. I have to choose the right people to implement the projects I have in mind but I have a plan for that to be revealed closer to launch time. For now this is all exploratory conversation in case people have ideas and criticisms that I have not considered.

You know, I thought about creating a wallet and using a random old address as the burn address. The thing is, then I’d have to prove beyond a shadow of a doubt that I actually destroyed/deleted the private keys to that old blockchain burn address. If I do not and another dev comes along to revive that blockchain I will be dealing with FUD for eternity. People may suspect that I have secretly kept the private keys, duped people into sending me all of their coins, then somehow got the original blockchain back into action so I can mega dump for zillions in profit. 

Haha. The  chances of that are slim. I don’t see anybody ever taking over that old coin or blockchain. But I cannot risk that. It has to be a true burn. The good thing is one of the guys at vennd.io said it is possilbe and they were just waiting for someone to come along wanting to do that. So, maybe I’ll luck out and get to be a first!

The other part is deciding how to issue to the burners? I mean we could do  a straight up 1:1 trade from old blockchain to new asset. But I also had the thought of charging them a fee in BTC to trade out in order to pay vennd.io for doing the burn. In that case they may feel that by paying BTC they deserve more than a 1:1. Maybe a 1:1.5 or 1:2 trade would be the right answer. I doubt everyone on the old coin will even participate in jumping to the asset but I think participation should also help determine what the trade is. If a very low number of people participate it may even allow as high as 1:3 per coin. But I do thing it has to be reasonably low because if we hold a crowd sale to allow others to purchase the asset they won’t want the risk of a huge amount of holders waiting to dump. So I think whatever the original burners get, that crowd sale buyers must get close to the same amount to negate the risk of one group having more than another.

I know there’s probably a way to do this without vennd or any other party helping burn but I think from a professional and fair standpoint that having the other party involved helps stop speculations that this is a scam. It will give it some validation by having involvement from others in the CP community kind of overseeing what we are doing. I also think that if when it comes to a crowd sale that it’s good to have vennd, koinify or swarm. It would help validate that this is a legit crowd sale. Not to mention, having them involved would probably help get eyeballs on the project. Any of those three companies garner newsworthy attention and if my ideas are good enough that they would help us then I think it does nothing but help in these areas.

When it comes to getting a dev that is familiar with integrating Counterwallet into a website we will post here and use funds from the crowd sale to hire a dev that hopefully has some clout in the community already. 

More to come soon. Thanks for your input.