FREQUENTLY ASKED QUESTIONS
Merit has a lottery system for rewarding people for growing and using the network.
A score is calculated per address by using the coin age of your address and your network’s. Coins that are 30 days old are fully mature and coins that are 7 days old are 50% mature. Your score increases as you acquire more Merit, grow your network, or both.
When you receive Merit, you are entered into the lottery pool if your score is high enough multiplied by some random weight. The lottery pool has a maximum of ten thousand spots.
Twenty winners are selected each block from the lottery pool at random where the chance of winning depends on your score. The winners get a share proportional to their score.
Your score determines the probability of winning.
The root address in the genesis block does not receive Growth Rewards.
An address can be booted out of the lottery pool if an address not in the pool gets a better score x random weight.
A Ponzi scheme (/ˈpɒnzi/; also a Ponzi game) is a form of fraud in which a purported businessman lures investors and pays profits to earlier investors using funds obtained from newer investors. Investors may be lead to believe that the profits are coming from product sales, stock growth, or other means. A Ponzi scheme is able to maintain the illusion of a sustainable business as long as most of the investors do not demand full repayment and are willing to believe in the non-existent assets that they are purported to own, and there continue to be new investors willing to contribute new funds.
So, let’s discuss how Merit is not at all a Ponzi scheme by examining this from a couple angles:
Merit is a cryptocurrency that is open-source, and has a defined mining interval (and having interval). It is clear to the world, and mathematically provable, how much Merit will be in existence over time. (100m) (You can find our code-base here)
The relevance of the above cannot be understated. There is no “magic MRT” being created by bringing more people to the community. The amount MRT to-be-mined has already been established, and the halving-interval is clearly defined. (In code and publicly-stated.)
A Ponzi-Scheme is centered around this notion of never-ending or unsustainable investment returns. In other words, investors are promised returns by some central party (a fraudster.) And those returns come from the new “suckers” who are duped by the scheme.
Merit, like most cryptocurrencies, is created through the process of mining. None of your MRT comes directly from anyone else. (Aka, you DO NOT get a % of the MRT that someone else buys. Or some kind of fake dividend based on the growth of the community.) No magic numbers here.
Merit prides itself on launching in a decentralized way. We didn’t do an ICO, and the Merit Foundation has sold no Merit. We have done quite the opposite of promise anyone returns of any kind. Instead, we launched working software and have allowed the community to set the price. I hope the above is helpful and useful. But I don’t want to stop there.
Some people are talking about MLM (multi-level marketing) when they use the Ponzi term. So let’s further expand this notion of a scheme to address that too.
With Merit, no one is selling anything to anyone else. In other words, people are only sharing the idea of Merit with friends and family. But this is very different than actually selling them cosmetics, tupperware, or a newfangled vitamin. In the beginning, everyone in the community is mining, and strengthening the community. We are all giving.. not taking.
With Merit, invite tokens are limited. This is quite the opposite of the ethos you’ll find in MLM (or, I daresay, any kind of scheme). We did this to incentivize people to be thoughtful stewards of the network. Also, to keep the quality of the network high and to discourage spammy behavior.
Proof-of-growth is a lottery system, where folks who share earn multiple “Lottery Tickets” in a block. But this is not a traditional ‘pyramid system’ where only the people on the top can win. We designed our proof-of-growth algorithm to explicitly combat this. We look at things like recent activity of your network, and we reward direct invites more than ‘the invites of invites.’
Merit’s Ambassador rewards are not just about incentives, but about accessibility to the community. The supermajority of the world doesn’t actually have access to a PC. As far as we are aware, Merit is the only currency in the world that you can mine without a personal computer. And, let’s not forget, growing the Merit community actually benefits everyone using it. Yet, we do not compromise security.
To expand on the above, in a scheme (or any kind of fraud), the goal is to trick people with incentives that couldn’t possibly come true. In the end, everyone loses. With Merit, the behavior we are incentivizing actually strengthens the network and adds value. (More hashpower, more users, more demand for the currency.) In other words, even if you do not choose to be a Growth Miner, you will benefit from Growth Mining.
Building on accessibility, there is something important here about Wealth Dynamics. We believe that Merit is also more accessibility from a socioeconomic perspective. And much more fair. Bitcoin and the all the other “hash-focused” PoW coins essentially reward millionaires with their own data centers. Proof-of-Stake is, I daresay, worse in this sense. The rich only get richer with these dynamics.
Ambassadors only earn part of each block’s rewards. Security miners are still earning Merit too. We think this drives the best of both worlds in terms of incentives.
When you share your invite code with friends (which is your alias), they can use it to create a pending wallet.
You will receive an invite request from all users that use your invite code (alias) to create a wallet.
You can choose to send invite tokens (aka, invites) to whoever you want to. You have your own personal wait list for Merit. You can send them as you receive them.
You can send an invite token to someone who has NOT used your invite code.
The invite code used determines the person who gets the credit for growing the community, irrespective of who sent the invite token.
Check out some awesome resources made by the Merit Comunity:
The BlockStats page made by the wonderful @disifi
The Network Visualization of the Merit Community made by the awesome @Norm
This is the latest invite map showing who invited who. To see the full network increase the number of nodes top left to 3,638. If you click on a node you can see who invited them (blue line) and who they have invited (orange line).
Short version: You are trying to send too many MRT at once. Send smaller amounts of MRT.
This error occurs when your wallet balance is made up of too many small transactions. It’s like having a bag full of change instead of larger bills. When you try and send a large amount of MRT that’s made up of too much change, it clogs the transaction. This is very common, especially if you’re pool mining.
The solution is to “clean” your wallet balance. Send smaller amounts of MRT to yourself until you’re able to aggregate all your transactions into a few larger ones. For example, if you tried to send 100 MRT and you get this error, try to send 50, if it still appears try 25, and so on. In general, you can “clean” your wallet every day by sending your entire wallet balance to yourself. This way you will be ready to send even bigger amounts of merit at once, which you will need to do if you want to sell MRT on the Market, for example. . Don’t be confused by the non-specific “Internal server error”, it’s usually indicative of the same “TX_MAX_SIZE_EXCEEDED” error described here.
The Merit Market is our first exchange. =] We have not talked to any third-party exchanges yet, but we plan to reach out to them soon. We followed this strategy for many reasons.
The short version is that Merit has been successful so far in onboarding many new users who have never used crypto before. We are extraordinarily proud of this. And most exchanges are “Expert Mode” with 100s of currency pairs and very complex “daytrader” interfaces.
We wanted to be sure that we provided a remarkably simple and easy way for new users to Merit (and crypto in general) to get their hands on Merit.
Additionally, because Merit is invite only, exchanges will have to do a little extra work in order to list MRT. We have several ways to facilitate this process, but in the short term we will continue to support the Market.
The maximum number of Merit to be in distribution is 100 million MRT.
The genesis block of Merit is 20m MRT. It is held in the foundation’s secure multi-sig cold storage account and has not been spent. (Except for a 1MRT test transaction.)
Blocks are issued every minute, on average.
20 MRT is issued in each block as of now. 50% goes to the winning security miner. (10 MRT). 50% is split among top ambassadors. (10 MRT)
Currently, 20 ambassadors are selected in each block to receive the distribution.
The Merit Genesis block is forever excluded from all Ambassador reward selections.
The Merit Foundation plans to slowly sell the genesis block at a predictable rate to fund operations. We do not have any formal announcements here yet, but we are considering a public model with a 3rd-party audit.
Ambassador mining never provides a “share” or a “percentage” of what anyone you have invited does.
Merit invented proof-of-growth, which is a totally new category of mining. I suspect others will use it in the future. We believe it to have major advantages over PoS or PoW. (We employ PoW also.)
With proof-of-growth, the protocol looks at the total community size and activity of each wallet. It is robust in that it works to be fair and ensure that bad actors are not rewarded for fake behavior.
Proof-of-Growth is lottery, just like PoW. Top ambassadors have a higher probability of winning ambassador rewards every period. So the more you grow the network, the higher your probability of winning a reward is. (And the rewards are proportional, so they get larger too.)
Community-size includes all the people you have invited, and all of the people they have invited, and so on. There is no depth-limit, though their affect on your total Ambassador Score is halved at each level. This was done to ensure that the earliest members of the community do not have an unfair advantage. And to ensure that people are rewarded for their own behavior more than anything else.
Again, it’s worth stressing that this is not just a “flat” count of how many people you’ve invited. That would be an easy metric to exploit. (Eg, make fake wallets.) In Merit, doing that would do you no good.
More information can be found here. The WhitePaper explains more theory, and the BluePaper explains the algorithm (and the other new Merit technology) in depth.
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