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Read this post by ArcticMine


If Fincen starts going after IPO/ICO/presaled coins, do you think the future of crypto is in Proof of Work?

Quite possibly.

IPO style coins and etc is basically the selling of unregistered securities and that's illegal. The same accusations can be said against premined and instamined coins as well, if the developers benefited financially through the sale of coins that they acquired unfairly ahead of everyone else through any work of their own such as premining coins ahead of launch, or instamining coins after launch through changing the coin's features, it probably counts as selling unregistered securities.

I believe as a currency, bitcoin is the only coin can success.
IPO/ICO style coin can't be a currency, they only could be a platform provide something bitcoin can't provide.

Nothing beyond where an actual work has to be done to earn value will ever be fair

POW is the only way

Sums it up pretty much. Plus, Ripple is a far different creature than BTC has ever been or will ever be.

IPO/ICO can not be sustained but Bitcoin will be succeed.

I am sorry I don't get what you are saying.
Premine and instamine are illegal because they count as selling unregistered securities?
How so?

FINCEN could just bunch them altogether with the same case as Ripple.

OK, not that I understand how they are going to do that exactly, but, FinCEN only has jurisdiction in the U.S. right?
So, they can only do that with coins/developers in the U.S. right?

Oh yeah.  It will also be a problem for them if the devs are anonymous.  It's a pity...  Some projects like Maidsafe or GetGems are really trying to make something.  But FINCEN will come knocking on their door soon.

Im begining to think that POW + anonymous dev + no instamine, premine, ninjamine, everything transparent and honest is the way to go in crypto it seems.

That is true.
I am guessing Satoshi does not need to worry about his mined Bitcoins  :P :P :P

FUD. Fincen will continue to eagerly do nothing next several years.


Exactly.

FUD?  It already happened.  FINCEN already went after Ripple Labs.  And to think Ripple was already going for compliance.

FINCEN may not have jurisdiction outside the US, but they would def come after the ones operating inside it.

They could simply go to another country can they?
What are they going to do to them if they operate from abroad?

well there aren't many good alternatives besides pow, pos is inferior, pob shares some of the same weakness of pos(https://bitcointalk.org/index.php?topic=131139.msg1404587#msg1404587), then you have a bunch of silly proof of x no-sense, that aren't even taken in consideration

i'm still with POW, because there isn't something really better

It's not about what FINCEN can do to crypto.  It's about crypto losing a big chunk of its market/users, and potential users.

I repeat...  Im begining to think that POW + anonymous dev + no instamine, premine, ninjamine, everything transparent and honest is the way to go in crypto it seems.

I don't know how they will ensure it's a fairly launched coin the fact that I've never seen one before having achieved that but I see the approach is still not to rely solely on pow but a combination of both pow and pos being applied together. Until somebody finds a better way we still have to rely on this two.

If this is the case then those operate outside of US may be safe and also that most developers are hiding behind TOR, it will be hard for FINCEN to track them down


This is actually funny because the coins that satoshi first mined were consider to be instamine as well isnt it? Good thing that satoshi's identity is unknown


Crypto will not be losing potential user because if it is not about bitcoin than people will actually dont care about it. I would say it is better if the dev is not anonimous since anyone who hide behind anonimous thing is considered to not be honest

^ No arguments there.  Makes a for a good point that POW is crypto's only true path even with the 'instamine'.

This will depend on how the POW coin is developed.

Bitcoin was the first of its kind, and most of its protocol was based on things that are no loner a factor of the equation. The founders did not factor in for GPU Mining much less ASICS, and this is right now the downfall of Bitcoin. Large farms are manipulating the bitcoin network, whether people want to admit it or not. the original design was based on basic computer computational power and did not factor in the use of much faster machines like ASICS. the 2016 block difficulty re-target is killing bitcoin right now, 35 minute to 2 hour confirms, this is because the network is being manipulated.  I mean look at the difficulty compared to reward right now, not lets move into the future a bit, and think where will that difficulty be when the block reward is 3 BTC per block found? how many machines will you need to successfully mine 3 whole BTC. with the continual downward movement in price this does not look so good for bitcoins future.

Everyone thinks, "oh it will be ok as people leave the mining scene the difficulty will go down. But think about this, let's say i have 20PHS of mining power and I point that hash at the BTC network on block 2000 of the 2016 re-target mark, Once the 2016th block has been processed and the difficulty re-target takes place I move that 20 PHS off the bitcoin network and mine other coins( or If I am a real asshole and am doing it just to hurt bitcoin I just turn the mine off) and I do this that way every time the block re-target some up? what happens to bitcoin difficulty then? if you think this is already not happening? your naive, why do you think it is we have 35 minute to 2 hour confirmation times, because the network does not have the hash to support the difficulty.

In addition to this the blind faith lovers of bitcoin will say, Oh when the reward goes down the demand will go up, why, because there is such a huge demand for bitcoin, what is that demand, silk road is gone, look at the price, hackers are stealing every coin they can get any way they can get it, unethical companies scamming people, unprofitable investment opportunities ran by the most greedy of people.  What is this imaginary demand you feel will take over? By the time the reward gets to 3 BTC per solved block there will be more BTC on the market than can be used. Hence why we have nothing but downward sideways movement at the present. There is no real demand for the coin, and what Bitcoin had for it (illegal or not) has died and will not come back, as it proved to be less anonymous than it advertised.

Now what this does for other POW coins is give a little leighway for new and emerging coins to prosper a bit faster, but at the same time hurt them, as a new coin comes out the difficulty skyrockets when any large miner or mining farm or even a multipool adds it to the list. It has no ability to gradually move into the difficulty, but the lowering block difficulty re-target really helps to stabilize this situation.

I do not think the Future of the coins rest in POW, i think it rests in POS coins, this is the system that was meant to support POW coins like bitcoin, thier estimations were based on many computers adding their processing power to support the network, not huge mining farms with tons of ASICs.

If there was a POW phase in a POS coin, then yeah.  The whole point is avoiding an IPO/ICO/Presale where FINCEN can then knock on your door because of it.

POW OR POS is the future, op you forget pos coin, or pos/pow hybrid coin like ppc.

Ico, ipo, presale is illegal in US, they(those coin devs) will be put into jail in the future. SEC hates them, including crowedfunding.

if you're going to do a PoS coin then you would need proof of burn or else you'd be in the same situation
as someone selling securities, basically.

Proof of Work done in a fair way was always going to be the future.
Selling thin air has no future.

Everything can be falsified. IPO, premine, instamine. The fact is there is very little fairness at all; even PoW is not fair anymore...as there are basically leveraged buyouts of all forms of mining farms...monopolies on mining, allow even "fair" PoW released coins are totally lopsided.

Just accept the fact that every coin is a scam.

So take your pick.


Nothing is fair. I just get behind coins that I like, that I feel have good people behind them...if you get a feel for the type of people in a coin's community, you can tell if they are pure or wicked scammers. That's about it. :)

Fiat is a scam, cryptocoins are a scam, so what's next? Ditching money altogether?

The future of crypto is in both Pow and Pos.Pos is must thing to attract the investors and to convince them to hold their investments/coins for long term.Pos can bring them nice profit on permanent basis instead of selling their assets once and finish.

I don't think he did convince himself.  Didn't ethereum end up with PoW?

Yes, but only as a short term measure(ASIC resistant Dagger Hashimoto PoW) with few tricks to force over to some variation of TaPoS in the near future.

Yeah that could happen in a 100 years or so or perhaps a type of smarter money which can auto trade most of your wants/needs inline within your means.  Maybe bitcoin who knows.

My thesis:

POW is fairly safe and relatively efficient in an adversarial environment where an attacker _could_ muster a large majority of work _if_ there is a plausible fall-back to consensus (or some other related construct.)  This thesis is based on the conjuncture that an attacker would not expend the effort to gain a POW advantage in the first place if his efforts may well be for naught.

A related thesis:

From my first involvement in Bitcoin I took interest in the concept that Bitcoin's strength is exactly that it CAN AND WOULD FAIL under a successful attack (and likely be replace by something even worse.)  A fork with an appropriate fix is fairly trivial technically.  This 'feature' makes for a very thorny adversary in Bitcoin.  I anticipated that a competent attacker would be fully aware of this and thus I would look for threats to be very labyrinthine.  It is this which makes me wary of the simplistic scaling push, IBLT developments, etc.

POS is a dead end, because of the non-monopole nature of cryptocurrency, people will pay nothing for a coin that cost nothing to make

For POW coins, it seems there is only one issue in the current design: The reward changing is too dramatic and too far away

Once every four year, the daily coin generation will be cut by half, this will make one huge bubble every 4 years, which makes the currency value forever unstable. Imagine that the reward reduces every year by 10% , it would still achieve the same result but much smoother

With cryptonote coins there is no dramatic reward change. It smoothly goes down automatically.

i think there is a good reason behind that 4 years period, satoshi wanted to give enough time to the miners, so the technology can advance, if the block reward was changed to something like every year(even by a small amount), the small miners would be taken out of the game earlys and the big one would also have stumbled in profit problems

Unfortunately, the fours year period doesnt do any good because the difficulty is keep on rising each day. Even now, the small miners has been out of the game because they cant compete with the big farm which has better electricity cost. Cutting the block reward into smaller each year could get a better result as it will slow down the distribution

yeah but, with let's say an halving every year, it would have been even worse for casual miners, because of the smaller profit + the continued increase in difficulty, which is not really true, right now the diff is not increasing too much for exampele..., this is what i mean

The halving purpose could be to slow down the distribution, which mean if there is less bitcoin in the market then the price could go higher but there is no guarantee about this things . Anyway we can only rely on the ASIC manufacturer and hope that they could get a better miner will less power consumption

Exactly. The concept of letting the largest stakeholders make the most money (without doing any significant work) is pretty close to how the central banks of the world currently operate. Do people really want that from a cryptocurrency?

As a coin, pos may dead, but as a platform , they may live, Some pos coin as nxt is not just a coin , but a platform, they can provide lots of feature which bitcoin can't provide.

That's true and that's one of the main reasons I'm against using PoS in a cryptocurrency.

I just don't like a system where everything is set and done at the begining where some people control big ass stakes and make money out of controlling said stakes. PoW is way more dynamic. If big miners get tired, other people will come and self adjust.
Even tho I believe Bitcoin will end up using an improved new system that isnt PoW as we know it.

As long as new coin has a production cost due to healthy competition, the coin generation scheme can even increase at a small and constant percentage each year, like Milton Friedman described

Although the speed of money supply increase might looks the same, it is very different than the way that fiat money supply grows today, since the growth of later is based on debt, and the growth of bitcoin is based on work already done

And later when economy is running out of steam (nothing grows forever), the bitcoin's value will not be impacted by a total debt meltdown like fiat money (this has not happened yet, but is developing quickly)

Currently everyone thinks that total coin supply should be capped, but maybe one day if bitcoin gained mass adoption, people will start to realize that capped total supply will make the value of bitcoin unstable forever, one bubble every 4 years, makes it a speculation heaven, not suitable as a currency. In fact even today, majority of the people treat bitcoin as a long term speculation instrument