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Real-time self-government in the cryptocurrency frontier: Not quite a government

By Daniel M. Ryan
web posted October 13, 2014

Cryptocurrency Citizens Come Together

As I documented in the prior part, I was taken twice by what appeared to be the same scammer. The first scam was Edgecoin, whose con artist showed a ‘professional' level of gall, and the second was NFD. The latter being adverted as a plain clone of Nxt, its announced innovation was in the distribution framework: one that was unusually complex for a new vapourware altcoin. And what was even more unusual about the NFD scam was the amount of bookkeeping work that the scammer had done, as evinced by his distribution list for his NFD that's still on the Web.

When I saw the sting, I waked outside in a bit of a daze and came in with the seed of a plan. Without me knowing it, a man who had been programming in Java since 1999 had gotten the same idea. His Bitcointalk name was MaWo, and he started a thread with the polite title "[ANN] NFDv2 No IPO" A thread quite anodyne for a task that would be, in its own low-level way, a cryptocurrency first. NFD was to be the first vapourware scamcoin that was developed and made real by a team composed entirely of people ripped off by the scammer.

There's now a solid trend in altcoin land called a "community takeover." What this involves is a team of stakeholders of an altcoin, whose dev either ticked off the community by pulling something deemed unethical or outright abandoning his post, who band together to develop and administer the coin themselves. In all cases I know of, the new all-community team does it for no pay and proceeds more-or-less in line with the community of stakeholders. It's a lot like a special-referendum recall of an egregious politician, but it's usually done on a very informal basis. Often, there's little more than "The dev is ----; we've had it!" to start off the takeover. It proceeds according to the new team's plans if there's no explicit objection, or if a poll or some other sounding-out shows that the objectors are in the minority. Often, since the only coins that are taken over have had their price wrecked, the new devs have more-or-less free rein. But from the ones I've watched, the new team does act cleanly in the spirit of Service. Often, they're large stakeholders – bagholders, really – and they're content with the future capital gains (reversal of capital losses) that come with a coin that's given a new lease on life.

In one sense a takeover is self-appointed, but in another sense it's democratic or even consensus-based. The blockchain ledger of any cryptocurrency is decentralized and distributed by design. To successfully add a block, and collect whatever reward is associated with verifying the transactions in the block, the fortunate person has to have a majority of other nodes – client wallets – sign off on his or her blockchain by using it as the legitimate one. This system is designed to prevent a collusion of cheaters wrecking the integrity of the ledger. It's not perfect, but it works and it's decentralized. In cryptocurrency jargon, there's no "single point of failure" in the system. Also, it squares well with our intuitive understanding of democracy.

So, even an entirely self-appointed community takeover team has to secure some kind of consent from the majority of the nodes. Their new version has to be used by that majority. This is particularly true when the takeover involves a "hard fork" of the wallet client that breaks backward compatibility. In this case, a majority of alt holders have to affirmatively signal their support by downloading the new version of the wallet and using it.

In the case of devs who haven't gone AWOL, the usual aggravator is a "pre-mine," or coins generated by the devs privately and allocated to a development fund or sometimes the devs' own pockets. Often, the trigger in this case is the dev (or one member of the dev team) shooting the pre-mine to an exchange and dumping it for Bitcoin. The other trigger is a dev who collect Bitcoin for a presale, states, implies or doesn't object to the convention that the Bitcoin collected is to be used to develop the coin, and runs off with the Bitcoin. Technically, they doing so is not fraud if they skip off after delivering the coin and a working network. But by convention, they're called scammers just the same because they broke an unwritten quasi-contract or general expectation from their buyers.

An example of both aggravators can be found in Québecoin, an alt that was started as the country- or nation-coin craze was on its way out. The original developer had set aside a 50% premine that he planned to distribute to all Québecois in five tranches over ten years. The rationale behind the tranches was the following: Auroracoin – the currency for Icelanders that kicked off the fad – had done the "airdrop" distribution to Icelanders thoughtlessly. Because the Auroracoin dev had distributed all of them at once, before a sustained campaign in Iceland that would have gotten many of them familiar with cryptocurrency, a large majority of Icelanders simply dumped their Auroracoin for Bitcoin. By starting the distribution in 2016, the Québecoin dev was hoping that enough Québécois would learn of, know, understand, approve of and use cryptocurrency to make Québecoin a long-term success.

Actually, the total amount he had allocated for his airdrop was slightly less than 50%. 0.5% of the total float was allocated to a pre-sale. The rest would be created over time as rewards for miners. He also revealed that a small percentage would be reserved for targeted giveaways to people he hoped would make good early adopters and evangelists for the coin.

Since the country-coin fad had left a sour taste in a lot of mouths, particularly since Auroracoin's bear market had been especially grinding due to it attracting a lot of excitement and punters' hype, he was quickly challenged about the premine by some scam-sniffers, Some jokers noted that his announcement thread was created by him on April 1st. There were a few Québec-bashers, but only one persisted.

To allay the concerns of the scam-sniffers, he promised to send the set-aside coins to five different wallets – one for each tranche – and put each wallet file in a safety-deposit box in a Canadian bank. He did not promise to hand the wallet files over to a trusted third party, even though one stakeholder wanted him to; he said that putting them in a safe-deposit box was enough. Until April 10th, that is, when he agreed to make access joint with a more established Bitcointalk member who lived in Montréal like he.  

Although he had his share of skeptics and scoffers, he also attracted a crew of supporters and fans. More than most, he added the personal touch by promising to send cans of Québec maple syrup to the first five investors and any subsequent high rollers who sent in one full Bitcoin or more.

He had hoped to raise more than 100 Bitcoins and live off them so he could code full time for Québecoin for a long while. The real total fell short of his hopes: the total proceeds were exactly 20.40554675  BTC. He did show a promising vigorousness. He not only responded frequently to questions and comments, but he also changed Québecoin's source code to get rid of vulnerabilities that he had found out about on Bitcointalk. And he did generate a fair bit of buzz: on launch day, April 18th, he had to delay the launch because of the media requests that he had to field. Most of them were local Montréal outlets, but he did get an encouraging amount of exposure.

Unfortunately, as I found out to my sorrow with a later pre-sale coin called JuggaloCoin, even mentions in online mainstream media organs are no guarantee of success. The dev for this coin, meant to cater to the fan base of the Insane Clown Posse band, was not only capable and responsive but also showed a kind and generous heart. The trouble for JuggaloCoin was that it was caught on a vise that squeezed it into altcoin Hades. One jaw was the typical Bitcointalker's disdain for Juggalos. This side assured that JuggaloCoin's opening trading price when it was listed on Poloniex was well below the pre-sale price. The other jaw was the fact that the typical Juggalo considered all cryptocurrency to be one big scam.

In the rough-and-ready cryptocurrency frontier, devs who fail are quickly branded scammers. Thanks to his generous side, this dev didn't get the usual label for devs of alts that founder. Only one person called him a scammer at the end and was countered by another who said that he was honest enough but kinda dumb.

Québecoin proved to be far less off-putting at first, although the dev's stated goal of a smooth launch was not to be. In addition to fielding those media requests, he had to delay the launch because he couldn't compile a Windows wallet fast enough. Later, some English users had trouble getting their wallets up and running because of the "é" in the original Québecoin configuration file. Again, that was changed. The former, more serious bobble got more than one person yelling "Scam!"; it didn't end until someone else compiled the Windows version for the dev. May 19th was a rough day for both Québecoin and its dev.

But that didn't affect the interest in the coin all that much. Sloppy launches happen all the time; they're usually forgiven once the mistakes are corrected and the chaotic phase passes. As long as the dev is there and responds with action, that's enough for the sloppiness to become digital water under the Bitcointalk bridge. The Québecoin dev was caught short a few times, but he did go without sleep to fix what he could. So the chaos was forgiven by the next day, Québecoin's first day of trading on a major altcoin exchange.

The excitement drummed up in the altcoin world was strong enough for its opening price when it first traded at Bittrex to click at about five times the pre-sale price. That price soon slid as the excitement was met with the inevitable dumpers. Since the distribution of the pre-sale coins was deliberately delayed until two days after it started trading, the pre-buyers were not among the dumpers. The lucky miners were, especially the lucky miners who signed up with a mining pool which was not one of the two that had serious bugs. (These two pools, as is typical for all mining pools, were independent of the dev.) This dumping pattern is typical because most miners are more-or-less businesslike now; they dump for Bitcoin quickly to recoup their operating expenses and hopefully secure a profit. 

Once again, when presented with a quick profit and the opportunity, some participants in the pre-sale decided that they'd rather have a bird in the hand and joined the miner-dumpers. Those who did dump on the day they got their coins did exit with a nice profit over the pre-sale price. The ones who had greater hopes for Québecoin soon faced the usual bear-market pattern, which inflicts virtually all post-newbie alts, grinding its price down to less than a hundredth of its début.

In the later middle of that grind, the dev choked. He had tried to code an Android wallet himself, but he couldn't do it. While he was trying, he hardly posted at all on his own announcement thread. That was a bad move, as informational vacuums in altcoin land tend to be filled with suspicion and accusation. He finally said that he'd get a friend to make the Android wallet. But before he did, he gave up and vanished from Bitcointalk. By he vanishing, he was – almost inevitably in the altcoin jungle – branded a scammer.

More than a month after he last logged in, at least under his original username, a small team of stakeholders got together and decided to take over Québecoin. The team was led by the same blogeuse who got a bounty for being the first person to publicize the coin in any media. A new wallet was coded, a new blockchain ledger was generated, the old airdrop idea was discarded, the premine was invalidated except for the small portion that was pre-sold, and a the new wallets were unveiled with the advisory that it was a hard fork. In essence, the team rewound the entire history of the coin and made sure that the premine was wiped away. By this time, the hotness and excitement in the entire altcoin jungle had cooled down considerably. People who had arrived near the beginning of the year, like me, were confronted with their first altcoin general bear market. The takeover-team's leader had bought a lot of Québecoin at about a fiftieth of the pre-sale price; presumably the rest of her team had bought at depressed prices too. As I explained in my second look at altcoin socialism, a dev with no skin in the game has no disincentive save honour to stick around. So the fact that the takeover head is also a whale can be seen as reassuring. Based on my own disappointments, I suggest that it should be seen as such.

Unfortunately, the overall bear market - combined with the overall bad taste left in most altcoineers' mouths about an alt that ends up needing a community takeover in the first place - had a depressing effect on the price; moreso, the volume. There are exceptions, but they are few and questionable because exchanges' APIs make it straightforward to code a trading bot that can generate artificial volume.

Right now, Québecoin is more-or-less at the bottom of its huge bear market. Its trading volume is so low, Bittrex delisted it for "lack of community interest."  Before the delisting, the team itself had to sometimes step in to keep it listed, in part by buying or selling some themselves to keep the volume up. They only gave up after one member listed it on a minor exchange he himself set up.

The community around Québecoin is enthusiastic and – even better – is dominated by Québec Francophones. But at the time of writing, it's only microscopic in size. The community takeover was a success, but it's a toss-up whether Québecoin is a long-term hold or a permanent also-ran. The polite way of expressing this in punter talk is "pure speculation."

As I was to find out, a shadow and pall over a taken-over coin is not unique to Québecoin. Even with the community takeover acting as a catalyst, prior fads in altcoins are about as popular as prior fads in clothing.

To get back to NFD, you can look at its revival as a kind of community takeover. But this job had to be far more comprehensive, because there was nothing to take over but vapourware, the name and a distribution list. With the exception of the last, the new team had to fully develop NFD from scratch.

Thankfully, there was no shortage of volunteers.

The NFD Rescue Team Assembles

After I was more-or-less accepted as ‘dictator' for NFD, I actually did very little for the NFD community while NFDCoin was running his scam. The day before the sting, the bulk of my posts promoted Sharex – which proved to be another scam later. You can gauge my dictatorial style from the fact that the only work I did for the "original" NFD was putting up a poll. MaWo had registered domain names for nfdcoin. and nfd-coin., and I had registered the suite for nfdcrypto. The poll asked the stakeholders which name they preferred for NFD's official Website.

The close of NFD's pre-sale was scheduled for midnight, Greenwich Mean Time, May 11th 2014. For someone in my time zone, that meant the evening of the 10th. Almost forty minutes earlier, moonriver – the same person who had exposed NFDCoin's attempt to fraudulently divert Bitcoin meant for escrow into one of his own accounts – posted a warning in the Announcements sub-board. He was the only one posting on the thread for the first three replies so as to bump it to the top. His second reply was, "He also deleted my post just now….Sorry for your loss, guys."

After getting one other person replying, he posted two more bump-to-the-top replies on his thread. But then, he got a very eyebrow-raising reply:

That was a really ----ty thing to do.



Din was the Bitcointalk name chosen by the Edgecoin scammer. But, the account he posted from was none other than NFDCoin – the exact same nick of the NFD scammer.  

There are two possibilities. The first is that "Din" and the NFD scammer were different people, and the latter posted the message above to use a fellow scammer as a kind of human shield. The second, of course, is much simpler: in the heat of his getaway, NFDCoin forgot to log out of his current account and re-log in with his old account. In other words, when under pressure, he bobbled his sockpuppets. I think I'll brook little controversy by saying that the overwhelmingly probable possibility is the second.

As the emergency edit of my earlier official-website poll shows, I started off confused – so confused, I had forgotten that Anon136 had agreed to escrow the NFD pre-sale. It was the more organized and quicker-to-wise up MaWo who started the NFDv2 revival thread. Twenty minutes before he announced it in the NFD-is-a-scam thread, I saw that above-quoted tip-the-hand reply from NFDCoin and naively asked, "Din? The Edgecoin fellow? Is that you?" Which got me a fittingly sarcastic reply from someone else. (Had I publicly posted the private message I had sent NFDCoin shortly before I had asked that question, I would have gotten more ribbing.) The above should show you how lightly I had taken the ‘dictator' designation. When the news sunk in, I distracted myself for a while by looking at other threads I had posted on. Although I didn't know it, moonriver's thread had turned to discussing what to do in the aftermath. Just before I asked my naïve question, Conurtrol asked: "Can we do a real ipo and use the spreadsheet and other records to give everyone the coins they were supposed to get? We would need a developer or two."

After the hurly-burly ended, at about the time I was thinking the same thing, Conutrol had gotten several victims concurring with his idea and discussing how to do it. Fifteen minutes after he had made his suggestion, he posted: "Can we get the records? I noticed the spreadsheet is gone." That got me into a panic as I headed to the distribution-list Webpage. Relieved to find it was still there, I downloaded it because I was sure it would have been deleted shortly. ( It wasn't.) Within a half an hour after the announced closing of the scammer's pre-sale, a quick but solid consensus had coalesced around the then-unprecedented idea that a team of the ripped-off should do all the work that the scammer should have done. Not as an act of justice, but as a simple rescue of the people who were bilked. Until then, every scamcoin – vapourware or no – had simply been abandoned. The difference that made the difference in NFD's case was that what had been promised was a plain-vanilla clone. Unlike the typical scamcoin, a rescue effort for NFD was feasible.

The original version of MaWo's announcement, which I preserved through a full quote, was brief and to-the-point:

NFDCoin is a scammer, so all bitcoins are gone and we do not get a software for our bitcoins.

The NFD idea is great and it formed a big community.

That's why I decide to announce NFDv2 based on NFD IPO.

I just downloaded the spreadsheet and will give NFD Coins as promised from NFDCoin Scam IPO for free.

I hope it's not… so much to do, to get nfd startetd. ;-) I have a full time job and a 8 week old daughter.

So If someone can help me, I would be much appreciate.

Software: pure NXT fork

Release date: TBC

The first volunteer was that same Conutrol, who proved to be the first of quite a few. I was next, volunteering to "reconstruct the original distribution from that spreadsheet." Several others appeared quickly. Although there was still a little confusion in the NFD-is-a-scam thread, by this time a solid consensus had emerged for, "Let's do it!"

At 12;30 AM GMT,  kennyP summed up the quickly-emerging consensus:

As long as we have the bitcoin & NXT addresses NFDcoin used for his IPO we can see all the payments sent on the blockchains of Bitcoin & NXT. It would take some work, and people would need to re-send their password hash & prove they were the original sender, but it is definitely possible to do.

Just need to find a developer and maybe a few people to try and re-create the IPO data.

PhoenxtCoin - that name works!!

Eight minutes later, MaWo volunteered to do the development work and soon afterwards made the same promise on the announcement thread he had started. That got a grateful victim replying, "You are a hero MaWo."

Although I didn't second it, I was certainly in a frame of mind to. As I admitted a little earlier, "I hope it's not me: I don't know how to generate a genesis block for a Nxt clone, I haven't even read the source code for Nxt, and my Java is amateur-rudimentary….But if all else fails, I'll give it a try." Had I been obliged to, I could only have done it by a monkey-see-monkey-do approach: comparing the Nxt source code to any Nxt clones I could find which were also open source, and taking it from there. Almost certainly, I would have botched the job without a lot of outside help. So I was certainly in accord with the underlying sentiment.

And I showed it when that same Conurtrol nominated me to head up the project. When I had time to reply to his post, I had this to say:

Thanks a lot, but it looks like most are looking to MaWo - for good reason. But rest assured: I am going to be around and active for all this. Come hell, high water or the reappearance of you-know-who, NFD is going to launch.

This demurral was very far from the politician's usual modesty dance. What immediately occurred to me when I saw that was, I would be responsible for it all – including the cloning work. As my earlier admission showed, I was in no way fit for the tech side of things except as a kind of apprentice. When Conutrol modified his original nomination to suggest MaWo and me as co-heads: he would oversee the tech end of things, and I would look after the "organization and distribution." This nomination, I was more than glad to concur with.

Essentially, that is how NFD was developed. I interpreted "organization" to mean keeping a constant presence on the rebirth thread, answering questions, fielding doubts, and keeping everyone's spirits up. Ironically, MaWo proved to be a better team leader than I. He not only did a lot of the Java coding, but he also kept an eye on the entire tech team while the rescue operation was going. When the rescue team finally settled down into six, with a few others pitching in by working on some badly-needed spot jobs, five were on the tech side and all five were needed there. MaWo oversaw all of them, all the while juggling his own contributions with a straight job and family responsibilities. In fact, everyone except me had both responsibilities to see to – and I was by far the least technically capable of the entire six. This in mind, I looked after the reconstruction of the distribution list on my own. Make of this what you will, but my reasoning was that I had the lowest opportunity cost of doing so; everyone else's technical expertise was needed on MaWo's side of things, including his.

In the abstract, what was taking place on the night of May 10th (Eastern time) was a real-time example of spontaneous self-organization: spontaneous order. A group of people, all united by being ripped off, all but one (me) with real jobs and family duties, came together in a team that would get a vapourware scamcoin off the ground as a fully real clone of Nxt.

Of course, this analysis was the farthest thing from my mind. There was a coin to get off the ground; who was to be called what was almost forgettably irrelevant. What mattered was getting the rescue operation over and done with, as best we could given the constraints we all faced. A formal organization chart sketched out in advance – which no-one did - would have been completely laughable, and almost certainly chucked out along the way. The organizational list you'll find in the most current version of the rescue operation's original post just identifies the métier of each volunteer long after the team had coalesced. This is the cryptocurrency frontier: who had what position or fancy title was a very distant second to who could do what.

Consequently, the most reflective I ever got that hurried but bracing night was as follows. After tintumon had concurred with Conurtrol's second nomination for co-leadership between MaWo and myself, he ended his support with this observation: "Any community needs leaders to make decisions or else it would be a disaster." My not-quite-reflective reply:

Don't worry, that's how the pieces are falling into place. I'm ready to start working on the distribution part tomorrow by checking the list, letting everyone know what happened and telling them what we plan to do about it.

Tonight, I might as well get drunk and collapse into bed...

Murphy's Law Moves In And Moves Me Between Scylla and Charybdis

While I was asleep, the "NFD Is A Scam" thread had turned into the usual cursings of the thief, the cryptocurrency frontier's rough-hewn answer to sage advice to be prudent, and some hopes that the miscreant could be found and brought to justice. As I found out later from MaWo, nailing the scammer would be impossible: NFDCoin had used Tor. For a time, I had hopes that the scammer would pop in when he saw his abandoned project take off, but he proved not to be the stupid kind of criminal.

Even in the hurly-burly that followed, I occasionally ruminated over what I would do if the scammer popped in. Needless to say, those ruminations all revolved around "how best to flesh out his real identity and nail him."

While I was asleep, a volunteer named richwang put together a three-step list of how to clone Nxt. It turns out that he was a Java whiz too, albeit one who was also constrained by straight job and family duties. As MaWo's tech partner, he's been crucial to the entire development process of NFD from initial cloning to getting it listed on Bter. He's still part of the NFD core team even to this day.

Also, notsoshifty – who you met in the prior part – stopped in the thread and had this to say:

Well, this looks like a good community effort to recover from a bad situation.

The fact that the original IPO organiser ran off with the funds shouldn't significantly affect whether the coin succeeds or not. Nxt's greatest criticism from the general crypto community is the perceived distribution issues. NAS suffered much worse initial distribution, and despite enthusiastic publicity efforts from a few core team members hasn't taken off. NHZ is mostly centralised distribution-wise and so isn't interesting to 99% of people (maybe this changes in a few months). If NFDv2 launches with a reasonably fair distribution and a supportive community that puts in the hard work then it stands a good chance.

My opinion on the "bounty fund" is that it should be maximum 5%. I don't say this because I'm selfish and don't want to give up any of my funds. But instead that the coin will be much better accepted if it sticks to its "fair distribution" mantra. Apart from Nxt which is a special case, how many coins with 10% premine are considered "fair" and have survived because of / despite it? Yes it's good to see some people step up and offer to help launch the coin, but the reward shouldn't be at the expense of NFD's greatest potential asset, its fair distribution. I would rather see the core dev team getting 100% of the escrowed BTC, whatever that is; and the bounty fund going down to 5%, covering all bounty topics, and spent slowly.

His suggestion to cut the then-suggested 10% bounty fund in half was one I concurred with, as 10% seemed too much. Some was spent on a stylish Website, and some were spent in a unique and creative idea to get people interested in securing the network. In the Nxt system, blocks are added to the blockchain by a method called "forging." According to the Nxt FAQs, forging works like this:

…your Nxt software will begin to contribute to the block generation process and can earn coins for you as long as your account is "unlocked".  The amount of NXT you can earn is dependent upon the number of NXT you hold in your effective balance, the total number of NXT "active" on the network, and the transaction fees included in blocks on the blockchain….  Think of your chance of generating a block a little bit like entering a prize draw. When a block is being created and your account is unlocked, it is like you have one prize draw ticket in your hand for every NXT coin you own. Everybody else who has NXT coins also has prize draw tickets for all of their coins. Someone is going to win the prize draw, so your chance of winning depends entirely on how many tickets you have, versus the total number of tickets entered in the draw.

The script MaWo had coded made frequent micro-transactions on a random schedule with big fees attached. Since the lucky contestant selected to forge (verify) a block gets the fees in the block, MaWo made forging more lucrative than it otherwise would have been. So, he incentivized NFD holders willing to keep their client wallets open and help secure the network by forging. In essence, he used the bounty fund to sweeten the prize pot for the forging "lottery."

When I woke up the next morning, and caught up with the 24-7 that I had missed while getting plotzed and sleeping it off, it was to work. After surveying the BTC records, I made the discovery that the scammer had been a rather sloppy bookkeeper. I also said that I would poke around the source code in my "spare time." Famous last words…

As MaWo, richwang, I and the rest of the tech team were to discover, we had essentially taken over a huge responsibility that would be difficult and tricky to execute. And, our inheritance included a special bequest from Murphy's Law.

The Never-Ending Inbox

As I was going to find out, NFDCoin's neat-appearing spreadsheet included a lot of shoddy mistakes. My blitheness about nailing it down soon melted into the ominous realization that I would have to do a full-scale comprehensive reconstructive audit. I was about to plunge into the rabbit hole of checking, cross-checking, transaction-verifying, reconstructing, and fielding a flood of PMs I got with questions or details. I actually had to use my private-message service on Bitcointalk as a kind of inbox-outbox. In order to cope with the flood, I used the automated notification that said I replied to a message. Any unreplied-to message was part of the inbox. If I had replied, it was part of the outbox. This procedure did mean that I sometimes replied several times to the same person, which probably got someone on the other end of the message chain wondering where my head was. In truth, my head was consumed with what was turning into a monumental task.

But before I did so, I had to come up with and announce my mission statement for the distribution. The plan I presented to the community was this: the revived "NFDv2" was essentially a rescue effort. Its goal was to compensate the victims of the scam by delivering their fair share of coins: the coins that they successfully applied for and/or paid for. That, to me, was "Fair Distribution:" fulfilling the terms of the now-abandoned contract in lieu of the person who should have fulfilled it.

When it came to escrowed investors, it would be unfair to leave on the list the escrowees who had gotten refunds from the escrower. To get their coins, over and above qualified giveaway stakes, they'd have to re-up by sending their original spends back to the escrower. I also said that they didn't have to. If they decided not to be part of the new NFD, no worries: I'd just take them off the list. I also pledged to use the BTC collected, once the escrower released them to the team, to make NFD a better coin than a mere clone. I ended my statement about escrowees with these three sentences: "I have no problem at all with an escrow arrangement. I don't want access to a single satoshi because I'm doing this for free. Yep, I'm that ticked off." 

Although I ended my announcement with a smiley to lighten it, I meant what I said. I didn't pretend to be or pose as some kind of a saint, because I wasn't and I'm not. I was doing this job for free, as was the entire team, because I was mad at being cheated once again. Given that the scammer would be impossible to find, the best revenge under the circumstances was to put him to shame by making his scam into a real, thriving altcoin. By doing what he should have done, I hoped, he would feel some regret at yielding to his greed instead of living up to his promises. Naïve, probably, but it was the best approximation to justice under the circumstances. It also proved to be a great rallying point.

Just afterwards, a Bitcointalk member called lordoliver made his first comment on the thread. He would later volunteer to design the browser part of the NFD client.

Thankfully, dasource had been one of the first volunteers. He would be crucial with setting up nodes to make NFD's first network robust. notsoshifty also joined as a kind of loyal critic of the Java source code. By this time, the entire team of six were participating in the revival thread. And I fell into my old habit of ‘dictator' by setting up a poll for the community to pick a name for the new NFD. Although I had affection for the phoenix, ‘NFD" won hands-down. So, NFD it was.  

I also made a decision that's the easiest one to make when conducting a rescue operation like this on the frontier. Unfortunately, it's since become a standard policy that's haunted the taxpayers of every First World nation. I decided to go easy on dubious cases. My rationale was that it was better to dilute the distribution a bit rather than making someone angry after becoming convinced that he had been cheated twice. Truth be told, there was more than sentiment behind that in-the-heat decision. I was very seriously worried about the kind of "trollstorm" that I saw erupt over the lost development fund for Community Coin. Trolls generally come up dry unless they have a real issue they can sink their teeth into. Someone yelling that he'd been cheated by the rescue team would have given more than enough troll food to imperil the entire operation by wrecking the repute of the new NFD.

As a policy, it was not only intuitively the right thing to do but it also was the best one for avoiding a public-relations nightmare. The most aggressive trolls on Bitcointalk think of themselves as Ralph Nader types. They have instant and powerful credibility to the ordinary more-or-less-naïve bloke who wants to be on the side of good and hates scammers. Giving those trolls real grist by getting tough in iffy cases or through simple laxness was too much of a PR-nightmare risk.

Given my experience, I'm sure that similar reasons were used when Western governments slowly decided over the course of the last century to go easy on people in need. Later, this same policy was applied to people who were deemed to be part of disadvantaged groups. Other than sentiment, I'm sure that the fear of a similar PR nightmare was at the back of the minds of the earlier politicians and bureaucrats who had decided that a go-easy policy was humane. These decisions, now hardened into both standard procedure and real legal precedents, are a large part of the reason why First World governments' budgets are all nightmares in the making.

We humans, equipped with the standard suite of human weaknesses as well as strengths, would much rather face a nightmare from beyond the horizon than a nightmare in front of us. Let's face it: a normal human being would much rather prefer to roll the dice and gamble with a problem thirty or so years down the road than to face an angry crowd calling him "heartless" and "cruel" next week. As I'm sure you know, a do-gooder type of troll has instant and powerful credibility in the wide wide world of politics too. Adding to the above the fact that the woes of such an angry group – thanks to the ordinary bloke naïvely identifying with someone who appears to be victimized – is an irresistible evergreen item for the mainstream media. Even in an alternate universe where journalism were dominated by Conservatives, they'd more-or-less have to run those stories as ratings boosters.

This is the real reason why the budgets of Western governments are swirling down a whirlpool of unpayable debt. Who, reasonably, can expect our elected representatives to be kamikazes?

Consequently, we will not get out of our governments' debt-whirlpools through "leadership." Even the real Kamikazes were not trained for leadership qualities because there was no need for them to be trained that way. Their jobs were not to lead, but to die.

The only way out of this dilemma is the tried-and-reliable bottom-up solution. Despite my tough talk just above, I know very well why the tell-the-people method is probably the steepest uphill climb for Conservatives. Fact is, I'm far from the only one who takes real pleasure in seeing victims made whole – even if by third-party means. After all, in my own little way, I lived this ethos and lived it hard. This natural attitude is very easy to extend towards people who at least seem to be victims of life itself.

The hard truth is, there are legions of taxpayers who get real pleasure from the thought of their tax dollars going towards what they consider to be either sweet charity or indirect restoration for hard knocks that the recipients should not have suffered. Many of them are practical-minded, too; that's why they're unimpressed by arguments that true charity is voluntary or that charity is best left to followers of God. At a minimum, practical-minded liberals brush these arguments off as inappropriately principled fussbudgeting. What counts for them is "the poor are fed," writ large. That's their version of results-oriented thinking, the thinking that gently escorts principled people to the room designated for fussbudgets. Real people of action, liberal-style, only care that "the poor are fed."

Inevitably, as is always the case of a results-oriented culture even in the business world, a bit of groupthink settles in. I'm sure you know that even constructive critics in this kind of environment have to walk a fine and sometimes subtle line between responsible dissent and being pegged as a defeatist (or worse.) Since liberal-style results-oriented thinking is predominant in disbursing the taxpayer-supplied spoils, the same groupthink prevails – especially amongst liberal and moderate sorts who have no real reason to fear becoming anything other than taxpayers before retiring.   

Many of them are more-or-less resigned to their fates as taxpayers under current rates. That's why one of the liberals' standard tropes is, "better the money go to feed the hungry than to build bombs." This argument is inarguable if you see taxes and their rates as ordained by Fate. And of course, as anyone on the receiving end of an audit knows quite well, there are very solid practical reasons for being fatalistic. Of course, many liberals try to pretty the process up by casting taxes as some kind of voluntary contribution. I suspect that they pretty it up primarily for themselves. They too have to see some of their money go to the government, so soothing themselves by calling taxes "voluntary" does help them psychologically. In a very real sense, that trope is self-medication.

But of course, it's aught more than a "narrative." After all: have you, dear reader, ever been thanked even once for being a taxpayer? I don't know about you, but I've been thanked lots of times for my patronage at a store. And I have this wee little suspicion that, were I to politely suggest to a tax-enforcement officer that he or she should thank the taxpayers like I used to thank customers when I was a cash-register jockey, he or she would either scoff or laugh right in my face.

Of course, there are high-tax liberals who do not have to be resigned to their fate. Typically überliberal, they do have the clout to get politicians to see things their way every now and then. Among their goals, of course, is not to lighten the load on the tax-payer community – including they themselves – because they like the idea of being a patron of the poor and disadvantaged. Granted that many of them are wise to certain loopholes and tricks, but there's more to their support for high taxes than keeping up appearances and quietly working the tax-code angles. As long as that psychic lock of "I pay taxes = I help the needy" is in place, that uphill climb for economic Conservatives will be just as craggy as it's been for decades.         

Ordinary people – the average blokes – have to get the idea that the squads of victims and disadvantaged are infected with system-gamers who rather enjoy putting one over the ordinary taxpayer. As with all bottom-up solutions, it's much harder and longer to implement than a simple stroke of a Leader's pen. Unfortunately, given the standard weaknesses of we humans and the current consensus, that stroke of Leadership is little more than an imaginary magic wand. But it does seem to get around the craggy shoal of expecting a Leader to be the political answer to a suicide bomber.

In the microscopic world of the NFD rescue operation, this consideration not only got me internalizing a soft-hearted policy but also a real temporary neurosis. Fear of a resultant trollstorm not only made me work really hard on the distribution list to scotch out any inaccuracies, but also made me obsessive-compulsive. Not completely, though. As you'll find out in the final part, there was a hidden method to my madness… ESR

Daniel M. Ryan is a long-time contributor to Enter Stage Right and has returned to the fold. © 2014 Daniel M. Ryan.






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