Bitcoin Ruby Whitepaper Abstract There is no doubt that Bitcoin is a technological improvement of Fiat currency. It involves blockchain technology, which enables transactions to be verified and prevents double-spending (broadly, fraudulent transactions). It’s decentralized and runs independently of any government or human-controlled system in theory. However, in practice, bitcoin transactions are typically very slow and are expensive. The idea behind the technology is revolutionary, but the execution does not play out how its creators intended. Bitcoin Issues Bitcoin, for all it’s strengths, is also a digital currency that contains various weaknesses. Bitcoin is slow, expensive and inefficient. Transactions can take hours—if not weeks—to complete. A single transaction can cost upwards of thirty dollars.1 Bitcoin isn’t truly decentralized. In actuality, they have some centralization in China and over 40% of Bitcoin is owned by under 1,000 people2. The vast majority of Bitcoin is mined in China and controlled by mining pools there3. “Bitcoin is now largely controlled by a small collection of interested parties who have heavily invested in securing the network. And ironically, greater acceptance of Bitcoin will likely come only with additional regulations.” PC Gamer 4 Bitcoin isn’t scalable and its issues there are immense. Visa can process thousands of transactions per second5. Western Union can process around 30 per second6. Bitcoin can only process a maximum of seven transactions per second7.
http://www.businessinsider.com/bitcoin-rising-transaction-costs-could-cause-a-crash-says-cme-group-2017-12 http://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market 3 https://spectrum.ieee.org/computing/networks/why-the-biggest-bitcoin-mines-are-in-china 4 http://www.pcgamer.com/how-bitcoin-and-cryptocurrencies-are-hurting-gamers/ 5 https://usa.visa.com/run-your-business/small-business-tools/retail.html 6 https://faisalkhan.com/2015/11/26/western-union-transactions-per-year/ 7 https://en.wikipedia.org/wiki/Bitcoin_scalability_problem 1 2
People are dropping Bitcoin as a go-to payment method because of its extreme volatility and abnormally large transaction fees. Mega-gaming corporation—Steam—recently stopped accepting Bitcoins for these very reasons 8. Lastly, Bitcoins have no intrinsic value, which means they are not based on anything. These issues with Bitcoin beg the question; Why Bitcoin Ruby? Bitcoin Ruby Tenants Bitcoin Ruby’s goal is to retain the innovative aspects of Bitcoin while addressing it’s main issues. Thus the tenants of Bitcoin Ruby are: 1. 2. 3. 4. 5. a.
Fast transaction times True decentralization Low volatility Flexibility Intrinsic Value
In order for cryptocurrency to be truly scalable, it will need to match or exceed current transaction processing rates consumers expect. Bitcoin Ruby has an 8MB adjustable block-size. This will generally allow for quick and inexpensive transactions. The original Bitcoin only had a 1MB limit. b.
Bitcoin Ruby requires Ruby Fuel to process a transaction. Ruby Fuel is a percentage of Rubies that are required to process a transaction. The fuel paid will go back into the main currency pool and lengthen the time before Bitcoin Ruby runs out when everything would normally be mined. This ensures miners continue to receive incentives and Bitcoin Ruby will remain decentralized. c.
Many people are hoarding Bitcoins, which shouldn’t be happening. The Federal Reserve raises or lowers interest rates to encourage and discourage spending 9. Bitcoin Ruby, in a similar nature, automatically lowers the Ruby fuel rate when trading volume is too low so people are encouraged to trade or spend their coins. This can help Bitcoin Ruby become a currency that is actually used instead of just hoarded. When trading volume decreases, the Ruby fuel rate drops.
Bitcoin is extremely volatile. The price of Bitcoin can move up or down by 10 percent in a single day. This price volatility makes loans based on the currency difficult, because people cannot reasonably expect to pay back an interest rate on a Bitcoin loan that fluctuates a significant amount. Bitcoin Ruby uses a mathematical formula to limit its own volatility automatically, without the need of human intervention. For additional information see the section titled “Volatility Prevention Mechanism”. d.
Bitcoin Ruby allows for Flexibility. This makes Bitcoin Ruby suitable for lending, storing, saving, spending, paying, and appreciating. Bitcoin Ruby is meant to be a non-volatile currency, which will make lending, saving and storing more reliable and profitable. The appreciation aspect is meant in the sense of literally appreciating Bitcoin Ruby Art. e.
Introducing Ruby-Art technology. Each Ruby purchaser will have a tangible piece of digital artwork that is generated with each and every transaction. Each type of art is unique and can be viewed in your Bitcoin Ruby wallet. As transactions get larger, the Ruby-Art gets more complex. For additional information and an example of a Ruby-Art image see the section titled “Ruby-Art”.
Ruby-Art Every transaction generates a digital artwork. This allows a tangible product to be received by the user with every transaction. The user will be able to view the art in their Bitcoin Ruby wallet. Every piece of art is unique, tied to their internal Bitcoin Ruby Wallet transaction code, acting as a receipt for the transaction. There is a complexity variable which increases as the number of Bitcoin Rubies in the transaction increases. This increases the complexity of the artwork, so a higher value Bitcoin Ruby transaction will generate a piece of art with more shapes, colors, and lines. Figure 1 is an example of artwork that could be generated. The starburst pattern ties directly to the transaction code. The other elements of the art are combinations of aspects of the transaction code and random components. For security, the transaction code is hashed using the SHA-256 algorithm prior to generating the art.
Volatility Prevention Mechanism Short-term price volatility can be an impediment to the wide adoption of cryptocurrency. Bitcoin Ruby discourages volatility via a dynamic fee. The goal of the dynamic fee is to allow for a transparent way to discourage short-term volatility while still allowing for a natural appreciation and depreciation of value in the long-term. Any fees levied will be returned to the initial Ruby supply, lengthening the time until all coins are mined. This helps ensure miners will continue to receive incentives and Bitcoin Ruby remains decentralized in the long-term. a.â€‹
The dynamic fee is only implemented when the exchange price becomes greater than or less than predetermined thresholds. The fee is imposed as a percentage of total Bitcoin Rubies exchanged. The fee will either be excised on the sale of Ruby or the purchase of Ruby, depending on which threshold the price crossed. If the price rises too rapidly then it will cross the upper threshold and a fee will be imposed on the purchases of Bitcoin Ruby. This will discourage buying and stabilize the price. If the price drops too rapidly then it will cross the lower threshold and a fee will be imposed on the sale of Bitcoin Ruby. This will discourage selling and stabilize the price. The larger the degree of difference between the price and the thresholds, the larger the fee imposed will be. b. Thresholds
The thresholds are volatility-based envelopes set above and below an exponential moving average of past Bitcoin Ruby exchange prices. The formula is based on Keltner Channels. These channels are based on the average true range rather than standard deviation, so large amounts of volatility will not delay the detection of a change in trend. Keltner Channels are based on the exponential moving average of the price added to a multiple of the average true range of the price. The period of the of the exponential moving average will be 168 in our implementation of the formula. We consider a period to be one hour. This means that the thresholds are based on the price over the last 7 days, with more recent periods given more weight. The average true range of the price is also computed as a exponential moving average but with a period of 72. This means that the volatility in the price is being measured over a three-day period. Changes in trends will be detected rapidly due to the exponential components in the formula. Below is the full formulation of the buying and selling fees during a period i:
To illustrate, see Figure 2 below. The jagged blue line represents a sampling of Bitcoin prices. The exponential moving average (EMA) is plotted as the solid red line and the upper bands (U) and lower bands (L) are the dotted red lines plotted above and below the EMA, respectively. Any period
falling below the lower band will incur a selling fee and any period falling above the lower band will incur a buying fee. In this example, 72.8% of time periods will trigger a fee. However, in practice the fee will discourage the continued volatility and thus we expect a smaller % periods with fee than this example displays. The highest buying fee assessed is 4.26% during period 1220. The highest selling fee assessed is 5.54% during period 450. The mean width of the channel (U-L) is 130.25 and the median width is 131.6. This suggests that the value during the period will be allowed to vary in a ~$130 range without incurring any fee. The average fee incurred is 0.75%. The median fee incurred is 0.0%. Figure 2
Timeline Bitcoin Ruby development will be split into 3 stages, which are described in the table below. Stage 1
Description Participation Round
Goal Collect 100 Bitcoins or the equivalent amount of Litecoins. Issue Bitcoin Ruby certificates with Ruby-Art
Timeline January 2017 through May 2017.
technology to early supporters. 2
Finish platform development and UX testing.
June 2017 through July 2017.
Launch on various exchanges.
July 2017 through August 2017.
Summary Bitcoin Ruby is one of the first currencies that encourages one to save (high Ruby fuel rate for transactions) and spend (low Ruby fuel rate for transactions). It has a self-regulating mechanism based on Keltner channels to help support a stable and reliable currency. It has intrinsic value with Ruby-Art technology and a bigger block size than the original Bitcoin. Reward Legitimacy. Reward Efficiency. Reward Simplicity. --Bitcoin Ruby
-------------------------------------------------------------------------------------------------------------------------------1) https://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people -who-own-40-percent-of-the-market 2) https://rationalwiki.org/wiki/Bitcoin 3) https://usa.visa.com/run-your-business/small-business-tools/retail.html 4) https://faisalkhan.com/2015/11/26/western-union-transactions-per-year/ 5) http://www.bbc.com/news/technology-42264622 7) â€‹How Interest Rates Affect The U.S. Markets - Investopedia