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Development Fund
Bitmark has swapped to a Foundation, where donations will be taken for long term development.
Taxation seemed reasonable, however it breaks compatibility with existing cryptographic currency software.
Bitmark now provides a novel Investor Public Mining (IPM) Pool, this enables Investors to fairly acquire BTM at a price close to production cost, strengthens the network, and provides a small stream of BTM to the Bitmark Foundation. The benefits are far ranging and we encourage those reviewing Bitmark or creating alternative currencies to consider this model.
To incentivize long term active development on the Bitmark Project, a small 0.250% tax (to be confirmed, may decrease, will not increase) on each block generated will be used to fund development and pay for resources.
In addition a 50% transaction fee tax which halves every time the block reward changes is added to encourage development which focuses on getting more people using Bitmark.
Upon successful mining of a new block:
- The mining entity will receive 20 Bitmark.
- The development fund (df) will receive: 0.05 Bitmark (0.250%).
- The total new coins minted will be 20.05 Bitmark.
This equates to 1.8 blocks (36 Bitmarks) per day to the development fund. Out of a total of 14,400 new Bitmarkcreated each day.
You mine 10 blocks in a day. you will receive (20*10) 200 BTM. The developers will receive 0.5 BTM. The total coins minted per block will be 20.05 BTM.
Traditional transaction fees apply, calculated on the size of the transaction as with Bitcoin et al. During the first 18 months 50% of the fee is given to the development fund, 50% to the miners. Every 18 months the developer tax % halves, and the miner fee increases correspondingly.
- First 18 months: 50% of fees to miners, 50% to df.
- After 18 months: 75% of fees to miners, 25% to df.
- After 3 years: 87.5% of fees to miners, 12.5% to df.
- After 4.5 years: 93.75% of fees to miners, 6.25% to df.
- After 6 years: 100% of fees to miners.
This fee is to encourage the developers to focus on user adoption, the sooner they get it right, the more money they make (even though it's a marginal amount).
Note: The Transaction Tax halves twice as quickly as the Block Reward (18 months as opposed to 3 years).
- Bob sends 120 BTM to Mary, the applicable transaction fee is 0.004 BTM.
- Bob will send 120.004 BTM as expected.
- The miner will claim 0.002 BTM from the fee.
- The development fund will claim 0.002 BTM from the fee.
- Mary will receive 120 BTM.
note: The taxation rate of 0.004 for 120 BTM is an example, the true rate will depend on the size of the transaction in bytes.
If we put a milestone target of $ parity on the value of the 1 BTM, and assume no coins are touched, then after a year the development fund will have ~$6500-$13000 worth of coin from block rewards.
Assuming a 100 hour per month commitment to the project, that equates to an hourly rate of $5.5-$11 per hour of work.
It's fair to presume we are hoping the coin achieves a bit higher than $ parity over time, the incentive is there. If $9 is achieved by ethical growth of the user base then this project becomes a successful full time job, or a small organization with paid staff.
Community Question: This seems really low to me. But I'd like to hear what other people think?
If the value of each Bitmark increases highly, and the development fund has earned $250k worth of Bitmatk, without transaction fees taken in to account, and with the knowledge that the development team has surely mined or bought a few blocks themselves over the year. Then people may feel the taxation rate is high.
The Bitmark Project would like to avoid being in a position where people feel those working on the project are excessively remunerated, complaints of "not enough" are far nicer to deal with than complaints of "too much!".
Developer Death? If the lead developer should meet an untimely death, then the taxation can be sent to a new address by community agreement, or removed altogether.
What if Bitmark becomes extremely valuable? The community will be consulted and the Bitmark Project will react positively. Taxation will either decrease or be removed entirely. It will never increase.