While we all want to see cryptocurrencies succeed, many investment experts think that most cryptocurrencies will eventually be completely valueless. Unlike physical assets with intrinsic scarcity or shares of companies or fiat currency with enforced scarcity, anyone can take the source code of an existing cryptocurrency, make some improvements to it, and issue a new cryptocurrency without contributing any value back to the original cryptocurrency.
Of course, as an open-source project, anyone will be able to use the Nyzo source to create a new blockchain, and we think that is a wonderful thing. However, we also want for the Nyzo cryptocurrency to have long-term, sustainable value. While a particular cryptocurrency may not typically have an intrinsic value, the community and the technology surrounding the currency do have such value. We think it is only fair to tie the value of the original currency to the value of the community and the technology, and we think this is the best way to ensure that Nyzo will maintain its value in the long run.
Our proposal is simple: if technological advancements render the current Nyzo system or blockchain obsolete, and a new blockchain needs to be released, all the coins in that system should be derived from original Nyzo coins. There should be no mining and no generation of new coins that are not tied to original Nyzo coins. This does not mean that all future generations of Nyzo will have to have the same number of coins as the current generation. For instance, if the second generation has 200 million coins instead of 100 million, then each first-generation Nyzo coin that is traded in will be rewarded with two second-generation Nyzo coins.
The sustainability program will work as follows. Any coins transferred to address 0000000000000000-0000000000000000-0000000000000000-0000000000000001 are transfers to the next blockchain. The next blockchain will periodically inspect the previous blockchain for transfers to that address and will generate appropriate coins in the next blockchain corresponding to the source identifier and amount of the transaction on the previous blockchain. Democratic processes would govern all of these decisions, with the current cycle of each generation serving also as the Genesis cycle of the next generation when the next generation of the blockchain begins.
The sustainability address (0000000000000000-0000000000000000-0000000000000000-0000000000000001) is the only address that is not charged account maintenance fees. All coins transferred to this address are permanently removed from use in this blockchain.
While this method of transferring assets to the next-generation blockchain does impose an additional implementation complexity on the next-generation blockchain, such is a small price to pay for continuation of blockchain assets beyond obsolescence of the technology that originally created those assets. Applying this transitively, we can imagine a fifteenth generation of Nyzo enabling global commerce 200 years from now, with every last coin in that system having a lineage traceable back to the Genesis block of the original Nyzo blockchain.