Dominant Assurance Contracts

[dominictarr]

feed open source is an iterative assurance contract. @joshmh informed of a variant, the Dominant Assurance Contract http://en.wikipedia.org/wiki/Assurance_contract#Dominant_Assurance_Contracts

It adds extra incentive to participate. This could also be used to fund a salesperson/hustler/promoter to bring eyeballs to the project.

[NHQ]

Neat. I think I get it: if I am the entrepreneur, I give somebody 1/10 btc to pledge 2 btc to the project. If I get 10 bitcoins total pledged, that persons contributes the two btc, and you (the project keeper) pay me 1.5 btc for my work. If I fail to get enough pledges, the others keep the 1/10 btc I gave them.

I wonder if this works equally if the entrepreneur risks they own money, or if the project-people finance the incentive.

[dominictarr]

I'd expect that usually, the entrepreneur and the project is the same person. Usually, there is certainly a hard problem that the project has to select that person, because it's a very different set of skills to programming.

[bluntworks]

Bitcoin also allows for this though not sure if anyone has put it into practice https://en.bitcoin.it/wiki/Contracts#Example_3:_Assurance_contracts

[dominictarr]

yes, I plan to use that, but that will require adding support in a bitcoin wallet app, and unfortunately, none have support for that yet. At the scale of the prototype stage, the honor system is sufficient.