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Pyramis, a pyramide scheme
1. Root node is the address of the Ethereum foundation.
2. Every node has two legs where you can attach
3. The first two donors sends a fixed amount of x Ether to the contract
4. The contract adds their address to the pyramid bottom
5. Repeat (2)-(4) for each new transaction
....a) as soon as a donor sends a transaction, it is money is split between all his parents
....b) were the first parent gets 1/2, the second 1/4, 3th 1/8, 1/16 following the series of 2^(-n-1)
.........(better formula???)
....c) the money is send to the addresses in the pyramid according to (a)
The ROI for each node should converge to 3x ETHER
http://www.wolframalpha.com/input/?i=sum+(n^2+*+2^(-n-1)+*+x)
Q&A:
Is there enough contract store to hold all pyramid addresses?
Certainly not, maybe I need to create a selfcopying federation of contracts representing each a single node. Exciting challenge!
What happens at saturation point when nobody invests with more?
Nothing the wealth is redistributed and 2/3 of the players lost to a 1/3 of the players
What happens if something goes wrong?
Principle of do no evil, funds are returned to the player
2. Every node has two legs where you can attach
3. The first two donors sends a fixed amount of x Ether to the contract
4. The contract adds their address to the pyramid bottom
5. Repeat (2)-(4) for each new transaction
....a) as soon as a donor sends a transaction, it is money is split between all his parents
....b) were the first parent gets 1/2, the second 1/4, 3th 1/8, 1/16 following the series of 2^(-n-1)
.........(better formula???)
....c) the money is send to the addresses in the pyramid according to (a)
The ROI for each node should converge to 3x ETHER
http://www.wolframalpha.com/input/?i=sum+(n^2+*+2^(-n-1)+*+x)
Q&A:
Is there enough contract store to hold all pyramid addresses?
Certainly not, maybe I need to create a selfcopying federation of contracts representing each a single node. Exciting challenge!
What happens at saturation point when nobody invests with more?
Nothing the wealth is redistributed and 2/3 of the players lost to a 1/3 of the players
What happens if something goes wrong?
Principle of do no evil, funds are returned to the player
Comments
Nice work!
Then you look at something like Facebook - it is also a pyramid scheme of a different order. All of the new participants in the scheme receive absolutely nothing but a virtual abstract of their social life, in exchange for their time and attention. The FB execs at the top captured most of this value, with some value trickling down to the shareholders in the form of dividends, and the scheme perpetuates as long as there are willing participants. When corporations go bankrupt, you can think of it in terms of their pyramid scheme having failed, when not enough new participants (consumers) entered from the bottom of the pyramid to sustain the participants farther up the chain (employees, managers, execs). When the real estate bubble burst in the US in 2007 it was a clear example of a pyramid scheme going bust.
Decentralization attempts to flatten the pyramid structure throughout the value chain and distribute risk more broadly across the system, which is the greatest characteristic of crypto currency in my opinion. Ideally though, a pyramid scheme could be used to effectuate good (wealth redistribution), particularly if most of the early participants are of the 99% and the last participants belong to the 1%. Ethereum would certainly provide the kind of automated transaction backbone to implement such a scheme to a very large scale.
The risk to any pyramid scheme is always shouldered by the last group of people to buy in - but these are risks we face every day in the real world - just ask the last guy to buy an 8 track player, or the last buyer of shares of any corp that went bankrupt.
So the question is not if pyramid schemes are right or wrong, the question is how to do one that improves the world for the largest number of people - one in which the rewards overshadow the risks. Decentralized finance seems to offer that hope, and I think that's the biggest reason why most of us are here on this forum.
The problem is that the bigger the pyramid or federation of contracts grows, the more expensive it becomes to pay the fees. Or maybe I'm wrong - if you find any solution or explanations , please share
Still, we might want to try avoid transactions regarding values <10*fee, in the donation scheme we talked about that could be done with payouts working in a particular way, always jumping up from zero. 'Lotery ticket' -bits of signed data that can be fed to a contract- payment is an idea, losing tickets never have to touch the blockchain. But random values are not entirely as easy as you'd want, it itself might cause a bit of overhead. (though probably not nearly enough to defeat the concept)
Man I wish I had more time for Ethereum in these days, hope at least to see you at Bitcoin 2014 in Amsterdam, @Stephan_Tual? and everybody!