Truthcoin as a spacechain

To be clear, the term “spacechain” here refers only to the general concept of blindly merge-mined (BMM) chains without a native money-token, not including the “spacecoins”.

The basic idea is that for Truthcoin/Hivemind to work we need

  1. Balances of Votecoin tokens, i.e. a way to keep track of who owns how much of the oracle corporation;
  2. Bitcoin tokens to be used for buying and selling prediction market shares, i.e. money to gamble;
  3. A blockchain, i.e. some timestamping service that emits blocks ordered with transactions and can keep track of internal state and change the state – including the balances of the Votecoin tokens and of the Bitcoin tokens that are assigned to individual prediction markets according to predefined rules;

A spacechain, i.e. a blindly merge-mined chain, gives us 1 and 3. We can just write any logic for that and that should be very easy. It doesn’t give us 2, and it also has the problem of how the spacechain users can pay the spacechain miners (which is why the spacecoins were envisioned in the first place, but we don’t have spacecoins here).

But remember we have votecoins already. Votecoins (VTC) should represent a share in the oracle corporation, which means they entitle their holders to some revenue – even though they also burden their holders with the duty to vote in event outcomes (at the risk of losing part of their own votecoin balance) –, and they can be exchanged, so we can assume they will have some value.

So we could in theory use these valuable tokens to pay the spacechain miners. That wouldn’t be great because it pervert their original purpose and wouldn’t solve the problem 2 from above – unless we also used the votecoins to bet in which case they wouldn’t be just another shitcoin in the planet with no network effect competing against Bitcoin and would just cause harm to humanity.

What we can do instead is to create a native mechanism for issuing virtual Bitcoin tokens (vBTC) in this chain, collaterized by votecoins, then we can use these vBTC to both gamble (solve problem 2) and pay miners (fix the hole in the spacechain BMM design).

For example, considering the VTC to be worth 0.001 BTC, any VTC holder could put 0.005 VTC and get 0.001 vBTC, then use to gamble or sell to others who want to gamble. The VTC holder still technically owns the VTC and can and must still participate in the oracle decisions. They just have to pay the BTC back before they can claim their VTC back if they want to send it elsewhere.

They stand to gain by selling vBTC if there is a premium for vBTC over BTC (i.e. people want to gamble) and then rebuying vBTC back once that premium goes away or reverts itself.

For this scheme to work the chain must know the exchange rate between VTC and BTC, which can be provided by the oracle corporation itself.