![GRCHorizontal_Purple&Purple_Solid.png](https://steemitimages.com/DQmajWZo7M3uWN5ku1jJsF3RndzTfzZwpYKiTpXQFuVCwxA/GRCHorizontal_Purple%26Purple_Solid.png) Hello! Since I began actively contributing to the open source development of Gridcoin last spring, there have been two moments which have increased my confidence in the Gridcoin development path and community by magnitudes. First was our response to Martin Grothe's security audit which found some flaws in the code (all major flaws have been patched). There is documentation and even a YouTube video detailing his results if you are inclined to do your own research. Having seen many communities subjected to similar levels of scrutiny, I was impressed with the professionalism in the responses and actions of the Gridcoin developers and community. ~~Apparently, so was Martin Grothe: he now helps with Gridcoin development.~~ **Edit, Strikethrough: I may have misinterpreted some slack conversations =). Martin Grothe does not help with development.** The second event happened just recently during a hangout. Respected developers and community leaders all agreed that an ideal scenario for Gridcoin is one in which GRC is rewarded only for research done on BOINC. This is antithetical to many PoS communities both living and long dead which have sought to maximize the wealth disparity presented by the PoS protocol. To be honest, and with my experiences from the early days as influence, I did not expect this mentality. This second event is directly related to several current proposed developments in the Gridcoin 4.0-2018 roadmap discussion. We want to increase the network weight of the Gridcoin blockchain, make it easier for users to receive their earned research rewards without being forced into a pool, and to develop an economy that focuses on research. At the same time, we cannot ignore the necessity of and value in securing the Gridcoin blockchain. I intend to present a path which gives us the opportunity to achieve all three of these goals over a 6-24 month period while possibly transitioning away from PoS altogether.

Beacon Mint into CBR

I am under the impression that the primary goal of Gridcoin is to develop a Proof of Research protocol -- a protocol which secures a blockchain based on research done and not balance owned. This is not an easy task, as past attempts have shown. The secondary goal of Gridcoin is to develop an incentive structure which rewards users with relation to the IPP they offer to distributed computing endeavors, currently through the BOINC infrastructure. **The short of the proposal:** - Develop and implement Beacon Minting. - Develop a CBR protocol which rewards Beacon Minted Blocks (Proof of Research) and PoS blocks while determining a sliding value for both. - Continue development of Beacon Minting and other PoR potentials while phasing out PoS altogether. Creating a block for a blockchain, also known as Securing a Blockchain, is the critical process of Gridcoin. The Gridcoin blockchain is the technology which allows trustless algorithmically defined rewards for research. As such, we want people to help create blocks for the Gridcoin blockchain. The question is not "how much" is rewarded for creating a block, but "how" is a block created, and by "whom?" Then we ask "how much". Currently, the Gridcoin blockchain is secured through PoS, a protocol in which blocks are produced by users with large balances. This is not unique to Gridcoin, but is the definition of Proof of Stake. Beacon Mint is a proposal which would secure the blockchain based on the research rewards owed to a specific beacon, instead of by a user's online balance. As a beacon researches, its chance of staking a block is increased. If proven secure, Beacon Mint could become the sole production protocol of Gridcoin blocks -- Beacon Mint could be the PoR solution we are looking for. If that becomes reality, blocks will be created solely by researchers and investment will become non-dividend investment: pure.

The Proposal

**Assumptions:** - A researcher wants to receive their Earned Research Rewards. - If a researcher receives their Earned Research Rewards by staking a BM block, they are likely to keep their clients open to stake these blocks. - An investor will do the minimum work required for maximum gain. This is why most of them don't keep their coins online under the current guaranteed interest mechanism. - Beacon Minting is developed and implemented in a way to allow this proposal. Let us implement the Beacon Mint mechanism. Let us then develop a CBR protocol which rewards X GRC for a PoS minted block and Y GRC for a BM block. Over time, let us reduce the GRC rewarded for PoS blocks while increasing the reward for BM blocks. As the Gridcoin blockchain shifts from incentivizing balance owned to research rewards owed for its security, the number of PoS blocks will decrease while the number of BM blocks increases. Over time, investors will not be incentivized to secure the blockchain. Instead, researchers will be incentivized to stake blocks with their research rewards owed. This will make Gridcoin a pure research blockchain which rewards GRC only to those who actively research.

Network Effects

- **Short Term:** Investors will bring balances online to earn CBR rewards, thereby increasing the net weight of the Gridcoin blockchain. - **Short Term:** Researchers will bring balances online to earn CBR rewards, BM rewards, and their Earned Research Rewards, thereby increasing the net weight of the Gridcoin blockchain. - **Mid Term:** As PoS reward decreases and BM reward increases, researchers will begin to control the creation of Gridcoin blocks. More people will be encouraged to research as that will be the process by which they receive the most rewards -- rewards earned for creating BM blocks while also receiving their Earned Research Rewards every time they stake a block. - **Mid Term:** Investors will begin to take coins offline. The resulting drop in PoS network weight will be offset by the mentioned increase in rewards owed to researchers network weight, along with the increase in number of researchers creating blocks through PoS. - **Mid Term:** As more researchers join the Gridcoin network, the amount of research owed to beacons will increase, thereby increasing the number of BM blocks and increasing the network weight of the Gridcoin blockchain. Additionally, more researchers means more visibility, and greater adoption of the Gridcoin blockchain which results in a shared increase of value which in turn creates a natural cycle of growth. The number of PoS created blocks will decrease as BM blocks increase. - **Long Term:** Gridcoin becomes a pure PoR blockchain with a network weight based on the amount of research rewards owed and GRC rewarded only to active researchers.

Economic Effects

- **Short Term:** Investors will bring balances online to receive their CBR rewards, thereby bringing security and stability to the Gridcoin network which will in turn increase visibility and trust in the Gridcoin economy. - **Short Term:** Investors and researchers will purchase GRC to stake more often and earn CBR rewards. If we define a time period for the transition, this period of increased buying pressure can be controlled. - **Mid Term:** Investors will sell their GRC or move their GRC to cold wallets, thereby increasing liquidity and scarcity respectfully. - **Long Term:** Investors will lose their dividends and either exit the GRC economy (unlikely to occur in large volumes) or operate under standard investment procedures -- like non-dividend stocks. We could implement a different dividend structure to encourage further investment, but keep in mind that dividends in general are very awkward (and legally challenging) tools. - **Long Term:** Gridcoin will become closer to a certificate of origin like economy. In other words, each GRC minted will come closer to representing an amount of processing power directed at a distributed computing infrastructure. The secondary origin of GRC will be the security of the blockchain, which will also be based on research done.

Proposed Development Timeline

1. First we implement Beacon Minting. This helps new users receive their Earned Research Rewards and will help lay the foundation for the removal of the team requirement. Additionally, we will be able to see the practical effects Beacon Mint has on the creation of blocks. 1. Next we implement CBR with X and Y values based on the data collected from the implementation of Beacon Mint. The likely relationship will be X>Y or X=Y. 1. Present a schedule that will bring X to 0 while increasing Y. This could be a process that occurs over the course of a week, a month, or more likely, a year or years. The schedule will be based on the data collected from steps 1 and 2. After 1 and 2 are implemented, we begin development and implementation of DWP and either CMSSA or BRODSSA. After their implementations are vetted, and upon completion of or during step 3, we remove the team requirement. TCD can be implemented at any time during these updates.

Conclusion

I propose transitioning to a blockchain based on the amount of owed research rewards in the "Neural Network". This will bring Gridcoin closer to its goal of creating an economy based on an open and accessible distributed computing network. The process involves the timed and specific implementation of already proposed developments found in the further reading section below. Thanks for taking the time =). Now please, I beg of you, tear this to shreds. -j **Further Reading** [Gridcoin Research 4.0 Proposals and Preliminary Polls](https://steemit.com/gridcoin/@jringo/gridcoin-research-4-0-proposals-and-preliminary-polls). **Credits** Beacon Mint is a protocol developed by @brod -- [Further Reading](https://github.com/gridcoin/Gridcoin-Research/wiki/DPoR-Payments#beacon-minting) **Notes** I am not a developer. This is a preliminary proposal and many aspects of Beacon Mint itself need to be worked out. I hope this helps flesh out a vision for the future of Gridcoin which we can unify behind and work toward, whether in these specifics or through other processes and protocols. If anyone would like to get together and work on math regarding specifics of this proposal or anything else, please reach out. jringo303@gmail.com