Ethiocoin White Paper

Introduction

Ethiocoin is the result of some of us who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. Ethiocoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Ethiocoin is an open source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. Ethiocoin features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. With substantial industry support, trade volume and liquidity, Ethiocoin is a proven medium of commerce complementary to Bitcoin.

Blockchain

The Ethiocoin blockchain is capable of handling higher transaction volume than its counterpart - Bitcoin. Due to more frequent block generation, the network supports more transactions without a need to modify the software in the future. As a result, merchants get faster confirmation times, while still having ability to wait for more confirmations when selling bigger ticket items.

Wallet Encryption

Wallet encryption allows you to secure your wallet, so that you can view transactions and your account balance, but are required to enter your password before spending ethiocoins. This provides protection from wallet- stealing viruses and trojans as well as a sanity check before sending payments.

Mining Reward

Miners are currently awarded with 50 new ethiocoins per block, an amount which gets halved roughly every 4 years (every 1,000,000 blocks). The Ethiocoin network is therefore scheduled to produce 100 million ethiocoins

Open Source Software

Ethiocoin is an open source software project gives you the power to run, modify, and copy the software and to distribute, at your option, modified copies of the software. The software is released in a transparent process that allows for independent verification of binaries and their corresponding source code.

Proof of Work

Scrypt proof of work. Using Scrypt proof of work allows to mine Ethiocoin.

Premines

Ethiocoin will come with 50 premined coins: just the genesis block and the first blocks to confirm the genesis is valid. We believe a coin needs to be released in a fair manner. Having one person (or a group) control a large amount of coins that can be used as they see fit is against the decentralized vision of Bitcoin. Yes, it is true that without a stash of premined coins, we will not be able to afford to pay for bounties, but we believe people will see the virtue of this coin, invest in it as early adopters, and will be willing to spend time creating services to make this coin better.

Fast transactions

We were impressed by the convenience of SolidCoin's fast transactions. Although we know that fast confirmations are not necessarily as secure as Bitcoin's slower confirmations, they are very convenient for small merchants who don't need transactions to be super secure. The average Ethiocoin block takes 2.0 minutes, one fifth of Bitcoin's 10 minutes. So if merchants wanted to be as safe as Bitcoin, they can wait for 5 times the number of Ethiocoin confirmations as compared to Bitcoin. But most merchants can readily accept 1-confirmed transactions for small amounts of ethiocoins.

Difficulty retarget

We will keep the retarget block the same as Bitcoin's, but because blocks are found 5 times faster, difficulty will retarget about every 3.0 days. The combination of fast retarget times and Scrypt proof of work (Ethiocoin will not compete with Bitcoin for miners) means we expect to not see the sort of problem Namecoin encountered; hashing power that leaves more suddenly than it came, causing a high difficulty slog for everyone who stayed.

Coin generation

Miners will generate 50 coins per block. In light of our faster blocks, to properly mimic Bitcoin's generation trajectory, we needed to change the blocks at which coin generation is halved. Bitcoin generation is halved every 210,000 blocks. Ethiocoin generation will be halved every 1,000,000 blocks. For those of you doing the math, Ethiocoin is scheduled to produce roughly 5 times as many coins as Bitcoin, about 100 million Ethiocoins.