SCP on Peercoin

PeerAssets
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Call this a thought experiment.

The concept of the ‘SCP Foundation’ contains a numerical reference to paranormal stories/entities. This feels like it could easily be tokenized using crypto, but to what end? Are we just basically talking NFT-like trading cards? Let’s see what properties we have available on blockchains.

In order to keep the user interface extremely simple, we want to avoid using any custom OP_RETURN code. This is appropriate for a goofy, just-for-fun kind of project like this. This means we want to use either PeerAssets-like functionality, or just use the bare transaction to signal what we want.

#PeerAssets
With deck creation under PeerAssets, you have a lot of room for innovation. You can use a central server to issue SCP tokens when any desired user behavior is achieved. Or you can codify it into a new issuance mode. But let’s try to do it permissionlessly without creating new modes. Well, anyone can create a PeerAsset, it’s only validation (i.e. a sense of authority) that requires the central validation server. Again, this is very NFT-like.

#Bare Transaction
A transaction (no OP_RETURN) has a few pieces of data that can be used for games like this.

  1. Input Addresses
  2. Input Amounts
  3. Output Addresses
  4. Output Amounts

Note that the fee can be calculated from 2 and 4. Each of these values is an array, with the first two and the last two being the same size. We want to avoid demanding anything too stringent, like there must be only 1 input address or the number of outputs must match the inputs, otherwise it’s confusing to the user.

P2TH with a publicly known private-key makes for an underused and still extremely valuable method of hijacking the functions of the standard client for data processing. So one of the outputs goes to a P2TH address, cool. One of the inputs must be a personal address with some coin on it to pay the fee. Leave the rest of the txn open to interpretation, then say that any fee paid over the minimum fee required will generate SCP. But at what address, and how?

One of the complicated bits here is that we are trying to use the output for two things simultaneously. Ideally, it would both trigger an action as well as name the target of that action. We cannot assume anything about ordering or amount of inputs without loss of generality, so we are focused on the outputs. We could use two outputs, but that costs more fee. As such, it seems that OP_RETURN is our only good option.

#Back to PeerAssets
So what if instead of a central entity issuing tokens, we have the individual users issue tokens via PeerAssets, but state that it only ‘counts’ if more than the minimum fee was burned in the txn. In fact, we don’t even have to make a statement of amount in the issuance, as it can be calculated from the bare portions of the txn.

This is, of course, a perversion of PeerAssets and would require some doing. However, the result would be the ability to self-issue a token. The power of an issuance mode like that is intriguing.

#Self-issuance
Any individual broadcasts a spawn txn for a deck type of self-issuance. From then on, anyone may create an issuance transaction without an amount. The amount is calculated using the excess fee of the txn. This can be combined with other limitations, such as ‘once’ or an amount cap to create some interesting paradigms.

The end situation:
The SCP Foundation (or individuals roleplaying as such) spawn decks with variable amounts of rarity. Individuals who want that playing card sacrifice Peercoin to issue themselves the tokens. Eventually, some entities will be bought out and some will not. This could be tied back via user-written stories or rules for a trading card game or what have you.

This type of issuance mode would make fully decentralized PeerAssets issuance possible.

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Are you suggesting that burning extra than the necessary fee for the spawn transaction determines a value for the token being issued? Mainly because something of value was sacrificed to create it? Cool concept if so.

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The valuation of these trading cards is of course supply and demand. Supply is determined by the rarity, which is the deflationary supply cap. Just like with Bitcoin, we can assume that tokens will be lost with time. If the cap is infinite, you may get something akin to what you are talking about, assuming some constant demand. If the supply is limited, a constant demand generates price increase beyond the buy-in point, such that the tokens could be worth more than the coins used to create them.

The trick is that the ‘constant demand’ assumption is flawed.

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Hmm, I think I’m following. I was thinking about it in terms of defining inherit value of a spawn. I think we could consider replacing the P2TH requirement of 0.01 PPC in VOUT 0 with an excess fee burn.
Here’s another though,
I start the process of creating my new 100 Texas Tokens
I want to issue this to myself so I create a deck spawn transaction and burn an extra 100 PPC + TX Fee during the creation. I just defined the value 1 Texas Token == 1 PPC by expending a ~limited resource.

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But what’s the difference between that and just separately burning money in addition to spawning a token? There is no real connection between the token and the burn because there was no auction. The public auction is necessary to define value.

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How is the public auction necessary to define value? You can do so without an auction. The difference is that it’s coupled in the same transaction and explicitly defines a type of swap equivalency.

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Just because you stab yourself as you write a note that says ‘this note is worth 1 stabbing’ does not make it so. If you say ‘the first person to stab themselves gets this note’ then you generate competition. The general paradigm is that the seller does not determine value, the buyer does. It doesn’t matter how sentimental it is to the seller, the GameStop employee will still only give you tree fiddy. However, if a prospective buyer sees that their options are to either a) buy it on the open market or b) stab themselves, then they may buy it. The option to stab yourself does not create a price floor, rather it creates a price ceiling. The demand must create the floor.

There is definitely something to be said for intrinsic value through suffering. However, I think the real power comes from the spectacle of the auction, which theoretically can generate a seller (the winner of the auction) and a buyer (the loser of the auction). The buyers generated from this first-come-first-serve fixed-price auction would certainly be interesting as they may have more money than the winner but we’re merely slower to react.

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Imagine living in a bizzaro world where 1 stabbing had market value and was being traded every day for goods and services. If I could definitively prove that this note represents exact 1:1 equivalency to that value then why not? There is not a seller trying to determine value. It’s a declaration of equivalency that is provable and static.

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For the unlimited version, I tend to agree with you. However, only in so far as the consumed item has no intrinsic worth. I do think you can transfer effemeral value this way (of which, all speculation above the fundamentals is effemeral value), but the fact that you cannot consume these tokens to, e.g. pay the transaction fee for a Peercoin transaction, makes it inherently less valuable than what was consumed to make it. Still, you can transfer speculative value this way, sure.

However, I still think the limited supply version is where the use case shines. Instead of a fixed amount, imagine that we say ‘each block increases the supply cap of this by 1 token’ and then explicitly define the first come first serve policy so that there is a standing waiting list to receive tokens. You can see here how someone might pay exorbitant prices to avoid having to wait in line. All without a central body that forms the wait list.

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