Can Ethereum be implemented with a different currency than Ether?

Does an implementation of Ethereum have to use the Ether currency? For instance, if one created an autonomous organization would is have to be tied to Ether or could that AO be run on its own currency and not linked to a potential volatile Ether? Are there technical reasons the use of Ether is required and if so, what are they?

Thanks.

Comments

  • creatinglakecreatinglake Member Posts: 8
    40% inflation a year seems fine at the beginning but freaks me out in the long-run--the currency will eventually become useless, no?
  • ddink7ddink7 Member Posts: 49
    As has been said a thousand times before, it's not 40% per year inflation. Reread the whitepaper.
  • creatinglakecreatinglake Member Posts: 8
    okay, i'll check it out. That does not answer my initial question though, about implementing Ethereum using a different currency.
  • ddink7ddink7 Member Posts: 49
    My assumption would be no, since no other cryptocurrency is native to the Ethereum blockchain. Ursium has a nice graphic on the inflation model posted somewhere.
  • austonstaustonst Member Posts: 1
    I can see a few ways to run an Ethereum-based DAO off of a currency other than eth. You can certainly use any currency built as an Ethereum contract just by interfacing with it. These currencies may be built on top of Ethereum, but they aren't necessarily tied to the value of eth.

    I'm sure there will also be "colored coin" contracts, which would track ownership of some category of fungible goods (gold, USD, whatever). That would make it easy to base the organization off of any real world currency, so long as you can trust the operator to redeem your credits for the actual good.
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    edited February 2014
    Actually what @creatinglake mentions might very well turn out to be possible. We're looking into the possibility of coloring ether through contracts setting Ether data flags, with scenarios where you could be rewarded with 'red' Ether if you say, folded protein.

    This would work because once a data flag has been selected it would stay unique to the initial issuing contract.

    We haven't sorted out all the details of its implementation but it's certainly an interesting idea to add an arbitrary incentive layer for those who require it.
  • Miles_CowanMiles_Cowan Member Posts: 5
    Sorry to post in an old thread; but has this idea been pursued further?
  • chris613chris613 Member Posts: 93 ✭✭
    Since Miles bumped this topic, let me take a crack at answering the initial questions:

    > Does an implementation of Ethereum have to use the Ether currency?

    You could fork the code and start your own blockchain with a different genesis block to create your own "implementation". All functionality would be intact, but your system would be entirely separate from what other people call Ether.

    >For instance, if one created an autonomous organization would is have to >be tied to Ether or could that AO be run on its own currency and not >linked to a potential volatile Ether?

    The AO could deal in its own currency primarily, but the setup, execution, and interactions with the contract will all consume some ether. In the last case it could be as low as the transaction fee provided the contract has some other income or savings to fund its execution.

    >Are there technical reasons the use of Ether is required and if so, what are >they?

    All instructions in the ethereum scripting language (after the first 16 steps, IIRC) cost ether to get executed by miners. The only technical reason is that the code says so, and not saying so presumably would lead to rapid overconsumption of CPU resources.

    TLDR; Depends on what you mean by "implementation", No, Sorta.
  • Miles_CowanMiles_Cowan Member Posts: 5
    Combining some of the observations above, why must must we be limited to a single currency (ether in this case) to pay for execution of contacts and other interaction with the ledger?

    Let's say an AO has its own currency--assuming a miner viewed that currency as valuable, shouldn't he be able if he wants to accept such a currency as payment for his computer time to execute the contract? Or if I wanted to send a transaction and had control of another currency (or more arbitrary asset), why shouldn't I be able to offer a fee denominated in this other currency?

    Clearly a miner could refuse to process my transaction (or a contract's execution) if I offered what he viewed as an inadequate fee, but presumably market forces would determine which assets (and in what amounts) were enticing enough to incentivize miners.
  • chris613chris613 Member Posts: 93 ✭✭
    @Miles_Cowan?, when you talk about miners behaving differently with respect to balances, instead of with respect to which transactions to include in a block, then you are talking about a hard fork. Even if you have a side deal with a powerful mining pool that will run your contract without altering the ether balance it holds, no one else on the network will validate the results it since it doesn't follow the protocol that generally forms consensus. To get the network to certify your block, contracts must have consumed ether to fund their execution. Period.

    But all is not lost! Forget about the miners. You can form a contract with anyone at all that stipulates that they provide the necessary ether to your contract so that it can run and the results will be validated by the network. You can send them your DAO currency, and in exchange they would send ether to your DAO contract to fund its execution. The catch, though, is that all of those transactions (sending DAO currency to your partner, sending ether to the DAO to fund execution, and finally sending a transaction to the DAO to trigger its execution) all require ether if they are running on the ethereum blockchain.
  • Miles_CowanMiles_Cowan Member Posts: 5
    @chris613?, thanks for this. Perhaps I should have made clear that I realize that neither Ethereum nor any other blockchain protocol of which I'm aware currently does this, so my inquiry was principally "what if..."

    That said, and to your question, my goal is to have miners behave differently ONLY with respect to which transactions to include in a block.

    Basically, I am proposing a blockchain protocol without a native currency and in which transaction fees are the only reward for mining (rather than new units of a blockchain's native currency). As people create subcurrencies (or other assets/colored coins or whatever exactly is living on a particular blockchain), transaction fees are offered to be paid in such subcurrencies or other assets. Miners are free to program their nodes to specify which assets and in which amounts they are willing to accept as a fee to include a particular transaction in their blocks.

    Maybe the initial subsidy of an inflationary tax on existing currency holders (i.e., issuing newly created currency as blocks are mined) is necessary to adequately bootstrap the network, but given an established network, I don't see the value in artificially interfering with the pricing of network access by forcing miners to accept fees in only one currency (at the threat of causing a hard fork if they want to).

    We definitely need to pay miners (both to prevent spam and to entice the greatest possible number of people to mine), but flexibility in denominating those fees would be very powerful.
  • chris613chris613 Member Posts: 93 ✭✭
    This sounds entirely possible. I can see some trouble determining the optimal way to bootstrap it, but it doesn't seem insurmountable. One downside is that the more decentralized the network, the more likely it is that you'll have to wait a very long time for your transactions to get into a block. Unless your payment method is already very popular, or there are just a few large mining pool to deal with, transaction times would be really long.
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