Bitcoin Forum

This is how I would solve the problem of the early speculators profiting disproportionately at the expense of newer comers.

1. Create a brand new Bitcoin client, and a second class of Bitcoins (I'll call them Bitcoin Plus or BCP).  This new Bitcoin client fully facilitates trade in BTC and BCP and is a hell of a whole lot more robust and user friendly than the current one.  For example, this new client displays all your COINS (transaction inputs) and allow you to maintain them separately, import them, export them, select specific coins as inputs to transactions, and a lot more things you ought to be able to do but can't with the current client.  It'll be a no-brainer to switch to this new client just for using BTC, even if you didn't care about BCP.

2. BCP is designed so mining works pretty much the same as BTC (fixed limit like 21 million, mining still brings 50 BTC...keeps things simple).  BCP addresses look like BTC addresses except they start with a 2 instead of a 1.  (however, a person running the client can receive either kind of coin, because their wallet in this new client really supports holding and transferring both kinds of coins, just like your physical wallet could hold both USD and EUR).

3. The client is designed so it allows a one way conversion of BTC to BCP, and to do this, it participates in the maintenance of BOTH block chains - the main Bitcoin one, and the BCP one.  The BCP one is merely an extension, still dependent on the BTC chain, which is never dumped.  BCP-aware clients exchange the full BTC+BCP transaction blockchain and P2P vocabulary with each other, but speak the current BTC protocol to current BTC-only clients.  Mining in either system will continue to be profitable.  Blocks in the BCP extension chain have a string identifier made of numbers with a prefix... the first BCP block is "2-1", the second is "2-2" ad infinitum, and blocks in the "2-" series can still use certain transactions from the BTC block chain as inputs, but BTC clients aren't aware of "2-" blocks.  The "2-" blockchain is only exchanged with BTC+BCP clients as the current BTC client won't understand or accept such blocks.  References which are identifiers consisting of digits only, e.g. "123661", are references to the existing block chain as we know it.

4. A conversion feature allows BTC to be permanently converted to BCP.  This feature works by DESTROYING the BTC from the BTC client's perspective - by sending them to a nonexistent BTC address that correlates to a specific BCP address, which the new client recognizes as a conversion.  But here is the rub - the amount of BCP you get in a conversion is directly correlated to the mining difficulty of the BTC you're trying to convert, as calculated by following the coins all the way back to their generation.  An algorithm deterministically decides the difficulty value of coins that were combined at any point in their history.  All of those BTC mined at difficulty 1 won't be worth squat if converted to BCP, so users may as well leave them as BTC.  (The client calculates how much your conversion would be worth and allows you the choice to convert only the coins that you think are worth converting... as the difficulty-weighted rate makes it only worth your while to transfer BTC that were generated while the difficulty was high).

5. This application would be great for both BTC and BCP, and users who thought BCP was ridiculous would still find this application a great improvement for trading good ole BTC.  BUt most importantly, the market decides the relative value of BTC versus BCP.  If and when the market values the BCP more, all difficult BTC will likely get converted to BCP, and if nothing else, users would be motivated to avoid accepting "difficulty 1" BTC from other people, the same way they'd prefer a copper penny over a zinc one given the choice.  If the majority of the Bitcoin community "gets" why it's not fair that self-entitled early adopters using the term "jonny come late" to describe their perceived entitlement to confiscate the wealth of later participants, they'd switch.  BCP would inherit the true value of the BTC, and the remaining original unconverted BTC would be dumped for what it is - easy undeserved money created by nothing for nothing - and would tank.  Problem solved!

there is no problem though

I'm so glad someone else said it.

That's what you think.  Wait until a client like this appears, and we'll all be listening to the volumes spoken by the market as a whole.  If nothing else, we'll all have a better client for BTC that just happens to have an unwanted feature.

well then i'll make my own after that new client

If you can take away the value that early investors have put into Bitcoin at the slightest whim, no one is ever going to bother with whatever currency replaces it because it will just happen again and again and again.

I agree, let the market decide. My coins would be worth much more than the early adopter's coins with your proposal, but I would never convert.

the more BTC get converted to BCP, the more valuable BCT will become.  Supply and demand work that way.

yes, and thus you see one problem with speculation or 'investment' in any particular block chain rather than in the bitcoin technology as a whole.

and to people who say there isn't a problem, what do you have to fear from alternatives? nobody's saying we can't run our present block chain and try to extract value from others with it. (i just wish that value extraction had been a bit more honest than it is in practice. i'm appalled at the way bitcoin is often presented to the public. 'get in now before it's too late', etc.)

in any event, exorbitant seigniorage is absolutely a problem for a currency, providing a barrier to adoption if adoption must (as in bitcoin's case) be voluntary. and the seigniorage here is odd because, as many have pointed out, it has nothing directly to do with services, risk, or reward. it would be like giving the designer of the $5 bill a royalty every time it's used. would you prefer to use that $5 bill or an alternative one that had all the same characteristics?

(without an intellectual-property enforcement regime, why would anyone use proprietary rather than generic drugs unless the proprietary drugs offered something the generic drugs never could? nothing stops alternative block chains from providing all the convenience and anonymity of bitcoins.)

the important feature of casascius's proposal is that it highlights that the market can allow people to decide between alternative block chains relatively easily, which is something i've emphasized before. there are any number of similar schemes that would work just as well, and i expect one or two of them to emerge eventually as mechanisms for intra-block-chain exchange.

this is all self-contradictory. who's the 'you' who's taking away value other than the market? what provides the 'value' in the first place other than the market?

it's like you're saying 'i won't support anything that reduces the speculative value of coins in the first block chain i encountered because i want that chain to be the unique store of value'. if you said that about gold rather than the current block chain, nobody would ever have adopted bitcoin. as i've said many times, there's a startling amount of cultural conservatism and epistemic closure in a group of people who want to see themselves as revolutionaries. it took six months for half the people on this forum to decide that the first alternative to existing currency that they encountered was perfect.

The "you" is the market! I'm saying do it! Please just do it!

Nothing! Please, do it. Oh, how I wish you would act instead of talk.

Nothing is perfect. Please, for the love of humanity, provide me with a better currency.

It'd probably be in the system's best interest to try and focus on making BTC viable than opening the door for a million speculative chains to develop which is what will happen

I'm also of the mindset that a lot of the early adopters are in BTC for the better currency it provides the world as opposed to the idea of being the "early adoptors ka-ching!" set.

If you buy $100 of BTC right now, you can purchase $100 worth of goods. If you buy $100 worth of BTC 2.0, you can purchase $100 worth of goods. Except BTC 2.0 has no infrastructure, zero brand recognition, no liquidity, and little hope for appreciation. Why would anyone want BTC 2.0 when the equivalent purchasing power of BTC 1.0 has all of these benefits and more. Can someone start up this blockchain and Inflatacoin already?

Tracing coins back to their coinbase isn't as simple as you make it sound.

Try it.  http://blockexplorer.com/address/1GD8Qh7ebmvdaB8Ampcq8qZqNPr78nzjSP (http://blockexplorer.com/address/1GD8Qh7ebmvdaB8Ampcq8qZqNPr78nzjSP)

Because BTC 1.0 can pop on a moment's notice.  The current valuation depends entirely on the fact that only a couple percent of the BTC in existence are actually participating in the market.  Around half the coins in existence haven't even been spent out of their generation blocks, they are in the hands of early miners who acquired them easily and who make no secret of their intention to use them to confiscate massive amounts of wealth from others at a later date (simply do a forum search for "retirement fund" and you'll see exactly what I mean).

Those who understand why this is a problem and why it threatens the stability of their BTC holdings will gladly adopt a solution to it.

You're right - which is why an algorithm (read above) shall deterministically decide this - This means diluting the weight across all the coins wherever the record shows they have been combined together.  Mix some old coins with some new coins, and the coins from the resulting transaction output will weigh somewhere in the middle.

Confiscate? Do you understand the definitions of the words you are using?

A group of massively wealthy, ideologically-driven visionaries seems like some positive externality in my view. But I also don't buy into the 'confiscation' argument when these are all voluntary trades.

I'll bet that in spite of your non-conversion, you'll end up preferring people to pay you with coins like yours rather than difficulty-1 coins, and you'll prefer to pay others with low-difficulty coins (since you'll be able to choose), on the off chance that market forces later tell you you have no choice but to convert.  Since this new client will clearly tell you how much every BTC you receive "weighs" in light of the prospective conversion value.

Um, yeah, it means what you thought was yours, just became mine.  Of course you know Ben Bernanke will never just break into your kitchen and make himself a sandwich on your dime.  The confiscation would be clear.  But instead he prints money, and you sit and wonder why prices just went up.  He confiscates half your sandwich next year by making it cost twice as much and then buying the other half on the free market and hopes you don't notice the difference.

I am the guy who made the YouTube videos who proudly declared that I bought $20k of BTC at 0.80 and now as a result, I am "entitled" to take $200k from other people as a result.  Where did the $180k come from?  Thin air?  No, it came from the backs of others.  While I think it's sweet that I can go buy a god damn Ferrari in exchange for absolutely no work, don't you see anything wrong with that?  The root of an economy is goods and services, not money, but as a result of this disparity, I have been enabled to take something from an economy without putting anything back.  That is the root of the problem others will seek to solve.

How much are you willing to bet on my preferences?

Prove it, take something from me.

Nothing, and that'll be the beauty of it.  In such a new system, the only person who will stand to gain or lose from your preferences is YOU, not the few of us who were here before you and bought up all the available coins before you realized you wanted some.

Have you ever bought BTC on MtGox since Feb?  If so, perhaps I already have!  (And yep, you're right... on your part it was voluntary)

Fantastic, can you please give me the option? This is what I've wanted from the start!

I said take. And sorry, no, I don't use MtGox.

So if I value 20,000 BTC more than the $200,000 in my bank account, the holder of the BTC is confiscating my wealth when we make this voluntary trade? You can't be serious.

He can not 'take' it from anyone as you say.  They have to freely accept his bitcoin or not.  It is their choice.  What you are trying to do is take away the guy who has the $200k's money.  

The only real solution would be a) fixed percentage inflation rate p.a. or b) central bank deciding inflation rate based on the economy. Your Bitcoin 2.0 would face the same "problem" soon enough.

If I would’ve put in 100k in gold when it was 1000$/oz and sold at 1500$, where would the 50k have come from? Absolutely no work required either.

You are entitled to take $200,000 because other people are willing to pay you that much for what you have. It's an exchange, and both sides benefit from it. If they didn't, then the exchange wouldn't happen. It's not at all like Bernanke who is able to maintain the dollar's value while inflating through the force of taxation and legal tender laws.

this is turning into an ideology argument, there's a subforum for this

The moment you buy your BTC is not when the confiscation happens.  If I have 1,000,000 BTC, and I toss it on the market, your 20,000 BTC suddenly is able to buy far less (in goods and services) than you expected.  I get a good proportion of the goods and services you anticipated receiving in exchange for negligible work, and you get much closer to nothing.

Oh, but you'll say nobody with 1M BTC would be crazy and dump it on the market like that... they'd do it slowly, right?  What difference does it make?  It is still taking goods and services from an economy without putting anything back in.  Taking something slowly in a manner that is less obvious to everyone is still taking!

By the way, I might have somewhere near 20,000 BTC I'm willing to sell near around mtgoxask.  Got somewhere near $200k?  Maybe let's trade.

By that logic, all pyramid schemes are legal and ethical because each person parts with their money voluntarily.

The $50k would ultimately come from other investors in gold, in the form of a very small devaluation in everyone else's gold.  TANSTAAFL, money does not come from nowhere.  Although gold may be trading at $1500 an ounce, the market simply will not pay $1500 for every ounce of gold in existence if offered for sale.  Each successful attempt to sell off gold results in a small decrease in the market value of everyone else's gold.

The difference between gold and Bitcoin is that many of us know that early miners hold over 2M BTC that haven't been spent out of their generation blocks, and that were acquired very trivially.  It represents the right to confiscate a vast proportion of the entire Bitcoin economy on a whim... if BTC becomes a $100 billion economy, it's a license to take $billions in goods and services from the rest of us in exchange for absolutely nothing.  Just who is that fair to?

Please explain why your "antidote" would turn out any different in two years. The mining scheme internally stays the same in your proposal.

What you want is inflatacoin or freicoin imo.

I don’t understand the fundamental difference between Bitcoin and Gold in this regard. The only difference is a large and mature market.

thanks, casascius. there's far too little sensitivity to this sort of concern in the forum generally.

people who opine on the importance of voluntariness with only a surface-level understanding of both contract law and economics may benefit from reading more broadly. a good contract-law casebook, coupled with some reading on the notion of externalities (including what are called 'pecuniary externalities') may be enlightening. we don't get to live in ideal systems just because we dream of them; pragmatic arguments about policy need to be evaluated in the real world.

and rezin, i have to add: talking is a form of doing. i'm not sure what 'do it already' adds to the conversation. we are providing ideas and considering their merit. to say that isn't 'action' of some sort is counterproductive. i've already said i'd be happy to contribute code but will be a little too busy to do it personally until about a month from now. (in any event, the needed coding isn't very difficulty, and i expect it to be done before the end of the summer anyway.)

Pyramid schemes are unethical because there will necessarily be more loser than winners. An asset that provides economic value to the vast majority of people who buy it, like a useful digital currency, or Google shares, or Facebook shares, doesn't fit this description. It isn't unethical just because those who found it early and risked investing in it subsequently profit more than others.

It essentially voids the purchasing power of all the easily mined coins so that those coming into Bitcoin now do not have to plan on having their purchasing power vastly cut when those old coins come out of their generation blocks and onto the market.


How so?  This proposal does not call for a change to the mining rewards, so inflation would be exactly the same.  And what's "freicoin"?  German for "freecoin"?  Nothing would be given for free, so I don't get it.  What I want is a system where ten early adopters with a combined BTC balance of 3M BTC or more, who are 100% silent in the face of "who's the richest here", don't have an undeserved claim to a third or a half of my purchasing power.  Is that too much to ask?



That, and 10 people aren't sitting on 1/3 to 1/2 of the world's gold supply having acquired it trivially, waiting to "retire" with it.

GREAT!  So I should feel good that I can now buy a Ferrari for nothing thanks to Bitcoin, right?

Let me say what you just said, but instead, substitute Federal Reserve notes:


If the asset can lose value on somebody else's whim, is it as squeaky clean as you say it is?  The USD is scorned because Bernanke can turn on the printing press and steal a little bit from every holder of dollars out there.  If that weren't so, running the press would be good not bad!  I scorn BTC because the holders of those 2M+ virgin coins can move them at any time.  The outcome (hyperinflation) will be identical.  If the Federal Reserve suddenly pumps $30B into the economy and says, "We didn't just print these, honest!  We printed them years ago and have just been saving them for a rainy day and just didn't tell you all we were sitting on them"... will it make a single iota of difference in the hyperinflation outcome? NO

That’s correct, but the situation will essentially be the same later on. People will call for the same thing when it’s 200k Bitcoin users instead of 20k. Should it really be done this way?

No, it was meant as a version of Freigeld with demurrage. And I don’t see why it would be undeserved for 10, but for 100 or 1000 it would be? So it really boils down to the "problem" of having a fixed money supply.

I don’t know about the distribution of gold. But in the end, it should turn out to be the same with Bitcoin, when those Bitcoin colossuses spend their riches, right?

Yes, you should. The example of your success is beneficial for society, as it creates an incentive for others to try to develop the next big thing. What do you think motivated the Mark Zuckerbergs and Sergey Brins of the world? Mark Zuckerberg was motivated specifically by the success of the Napster p2p network.


You're taking this out of the context of my overall argument.

As I noted earlier, the Federal Reserve note gets its value through mandates, not purely through voluntarily exchange.


If an asset can lose value in the short run through a sell-off by a big holder, then that makes it inherently less valuable, and this uncertainty will be priced into the market price for the asset.


They can move it exactly one time. After they've spent it they will have no control over subsequent transactions.


The difference is you KNOW how much bitcoins could possibly flood the market at any given time. There will never be more than 21 million, so the worse case scenario is that many are suddenly sold off. It can never be more than that. The Fed can print trillions of dollars and expand the money supply many fold over a course of decades. The inflation of dollars never ends, and through the force of government mandates, you have to use them over alternatives.

you don't have to hold them long-term and experience inflation.

casascius's analogy is apt. as i've pointed out many times before (though it is apparently a difficult point to get people to understand), nobody is required to hold federal reserve notes long-term and thus experience the long-term inflation that is so often critiqued here. in other words, all the 'inflation' that everyone's railing against is completely 'voluntary' in exactly the same way that people are claiming bitcoin is. it would be nice if people's criticisms and arguments were at least consistent; e.g., if you assume every bitcoin sale is fully 'voluntary' and that no pyramid scheme is possible with bitcoins, you should at least assume that anyone holding federal reserve notes long-term is doing so voluntarily. merely needing them to pay taxes means you stand to benefit from inflation at the point in the future at which you need to convert whatever you're holding instead into your fixed dollar-tax liability.

How is my example beneficial?  In profiting from BTC, I have given nothing to society.  I have only taken.  Zuckerberg and Brin got rich in the process of giving mankind something of useful value.  I gave nothing.  I didn't invent Bitcoin, I didn't do anything other than perhaps share my opinion that cryptocurrency (as a concept) is sound, something I'd have offered for free.  And yet I was able to receive goods and services in exchange for nothing.  What is that an example of?  Promoting the idea that others too can receive goods and services in exchange for nothing?  Unsustainable, and the basis of a pyramid scheme.

Avoiding long-term holding of the main currency of trade to avoid inflation is an inconvenience. The point is the decision to use or not use a fiat currency does not come about through absolute freedom of contract. Your choices are limited and constrained by mandates.


You are creating an incentive to try to find and invest in companies/products/assets that have fast appreciation rates. This results in more value and innovation in the long run.


You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services.

as i said, the point is apparently difficult to understand, but it is not a 'fiat' that forces you to use dollars to trade with others. it's your choice and other people's choices - exactly the same kinds of 'choices' that may affect the price of coins in the current chain and that will likely turn that chain functionally into a pyramid scheme, even though the bitcoin technology has the potential to be so much more.

(also, as an aside, it's just not true practically that it's inconvenient to avoid holding dollars or other fiat currencies. i can't imagine anyone with significant enough holdings to care about long-term inflation saying that. the costs are low and the effort is trivial. i do it routinely without a second thought.)

in any event, my point is that if you don't like using dollars in daily transactions, then by your own critique you should blame the 'private' parties that are asking you to pay in them, not the government. in america, there are only two required uses of dollars: to accept debt payments and to pay taxes. that is insufficient on its own to lead to the sort of 'convenience' factors that you're describing. it's fundamentally people's 'voluntary choices' that are making your life inconvenient.

There is?  Can it be true?  How I've longed for a "Hello, I'm new to Bitcoin, and I have some really bad ideas to fix things that I think are broken because I don't understand them" subforum.  Oh, happy day!

what about me? i've never bought or sold a bitcoin, but i mined about 12000 of them early on. what did i provide that's of any value? presumably your answer is more than 'securing the block chain', which was at best of hypothetical value and, more realistically, was in fact of no value to anyone.

It does?  How did me taking money from others help innovation?  It would be different if those others gave me money to help me create something.  That is not the case, I created nothing.


Zuckerberg and Brin created useful tools with practical daily applications.  My funding did nothing to help create the currency or the concept or the software.  It simply paid off earlier participants (who likely created nothing) and put me in a position to be paid off by later ones, while I meanwhile created nothing.  That's exactly how a pyramid scheme works, and yet we know those are detrimental to society.  In a pyramid scheme, some take, and many others get taken from... all voluntarily... all while nothing, or nearly nothing, of intrinsic worth, is created.  How exactly is this good for society?

And if me exploiting this community this much with just 25,000 BTC was this lucrative, just imagine how lucrative it is for whoever is holding those 2,000,000 BTC in their original generation blocks.

Yes it is. Fiat forces me to pay taxes in dollars, and fiat punishes me with capital gains taxes if I use a non-inflating currency in trade. I have a choice, but that choice is between facing coercive action and using the fiat currency.


You have to pay a significant transaction expense every time you trade in and out of a store of value and a fiat currency.


There are mandates that punish private parties who do not use fiat currencies.


Securing the block chain was essential in it becoming more widely accepted. The benefit you will accrue is a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted.


I've already answered this:




Your funding gave the currency market value which made it more attractive to merchants. You helped its adoption along. Your funding also provided for hashing power to secure the currency.


Pyramid schemes provide nothing for society. A secure currency provides a medium of exchange that facilitates trade. For a currency to get a large enough user-base and attain a high enough value to become useful in large-scale commerce, it needs early adopters/investors that will use/invest-in it.


It's not exploitation since you provided value in making an early investment.

absolutely nothing guarantees that. there's an arbitrary relationship between the two, unless you adopt an extremely strong and untenable view of voluntariness (which you've already refused to apply to people's choice to use dollars).

Nothing guarantees what? That the block chain becoming more secure was essential in its reaching its present level of adoption, or that the benefit you accrue will be a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted?

I think you are confused.  Men with guns force you to pay taxes in dollars.

well, either, but i meant the latter.

it's amazing how those without imagination persist in attempting to define a problem in those who have that quality...

to quote james coburn in the magnificent seven:  "no - you lost."

deal with it.

Food for thought.  Snack on this.

http://img11.imageshack.us/img11/4215/bcpbeta1.jpg
http://img851.imageshack.us/img851/343/bcpbeta2.jpg

This new bitcoin client should have a difficulty level based on predicted computing increases in accordance to Moore's law.

You do realise that your Bitcoin2 will also have a "speculator's reward"?  Except that this reward won't go to the early adopters but to City boys at Morgan Stanley and Goldman Sachs.  Any major commodity that is freely floating and experiences price fluctuations, will attract speculators.  

Every time you fill up your car at the petrol station you are paying a "speculator's reward" to oil traders, because they were smart enough to bet on rising oil prices and you weren't.

Worrying about the supposed injustice of the Bitcoin "speculator's award" is silly. Specualtion is inevitable in a free market. You may as well worry about the weather.  

By the way, anyone who buys 1 BTC for 8 USD and sells it again for 8 USD (or buys products worth 8 USD), has given nothing to speculators.  The only time you pay a "tax" to speculators, early or otherwise, is when the exchange rate happens to drop between the time you buy BTC and spend BTC.  Bitcoin can, in theory, experience price deflation forever without collapsing like a Ponzi scheme. This price deflation would eventually reflect general economic growth.  Younger people would pay a "speculator's reward" to older people.  But once they get old, they would be receiving an even higher "speculator's reward" from the next generation, and so on.  This can go on indefinitely as long as the world economy keeps growing.

I don't care if people speculate, that's not what I'm concerned about.  I am concerned that millions of BTC at difficulty 1 are out there and stand to have the same effect on the Bitcoin economy as Bernanke's printing press.

Say a new client were released around difficulty 1 million, and that 1 million mark were used as a benchmark for convertibility of BTC to BCP - at least, all BTC created before difficulty 1 million had diminished convertibility to BCP.  So 1 BTC created at difficulty 433000 would be worth 0.433 BCP.  1 BTC created at difficulty 1 would be worth a micro-BCP if the holder actually cared to convert it (they may as well not bother).  And mining either on BTC or BCP would essentially pay 50 of that currency, all of which would be convertible to BCP at face value as long as the BTC difficulty were at least 1000000.

We'll still have lots of fluctuations, but people worried about those millions of BTC out there can switch to BCP and extinguish them by essentially refusing to accept them, or rather, simply accepting them for how hard they were to create relative to mining difficulty 1000000.  Those who want to stick with BTC can keep using BTC, the market can freely decide what currency it wants to accept, not me.

I still don’t understand why this is a problem. The market prices this possibility in imo, and I would love if Satoshi or some other ancient miner decided to dump a few hundred k. It would just mean incredibly cheap coins for us, and I would gladly jump at the opportunity. They can’t unload forever/infinite amounts.

This is interesting. What happens if I have 50 fresh high difficulty coins and Satoshi sends me some of his early ones to that address. Will I still get full credit if I send you 50?

I confirm with many previous posters: its a no-problem.

There is no inherent value of BTC or any "realistic" exchange rate to some other currency, its all about the market. And to my impression it is a tight market. I wonder what happens if someone wants to change his BTCs against a Ferrari. If someone places 20000 BTC in the market, the price will drop immediately. How far? Probably the dream of a Ferrari is a kind of bubble.

Just my 0.05 BTC

If you're simply sending BTC to someone willing to accept all BTC as being alike, then sure.

Even if you have received coins multiple times at the same address, you essentially have different transactions in your wallet.  The only thing in common is their controlling address.  If you can choose which coins you're spending or converting versus depending on the system to do it for you, the coins aren't being "combined".  Combining coins is something that only happens when party A sends X to party B, and X is greater than the largest coin transaction in A's wallet and so the transaction must have more than one input.

I'm continually amused by the bitterness concern shown by people new to bitcoin that it is somehow unfair that others found out before them, and gosh darn it have more bitcoins than they do!

Surely this should be remedied as in similar situations. Clearly all the shares of facebook are ready to be distributed by some sort of lottery to anyone interested? Perhaps real estate will have a similar redistribution, this will be my chance to own disneyland! How dare someone else have such a claim.

I guess we should be happy that they're content to whine post those concerns here on forum looking for a solution rather than actually putting all that effort into the real solution: create your own blockchain with whatever random distribution rules you want. Clearly it will be popular and become larger than the original bitcoin, as so much thought has been put into it. If you are not happy with Bitcoin, create your own LotteryCoin ! But I guess that is harder than begging on the forums to change the original Bitcoin to suit their wants, which will not happen. 

How hard would it be to market a new blockchain? Would it be as hard as competing with ICAAN and starting up a new separate internet using a different protocol?

no, it would be more like setting up a blog that competes with an existing blog that has a readership of about 10,000.

it's a little harder than that because some bitcoin services, like exchanges, are hard to set up. thus, in practical terms, you'd eventually need buy-in from mt gox or the ability to start a new exchange. that said, the lack of transparency for, and competition with, mt gox is a significant problem for the current block chain anyway.

if a company like dwolla wanted to set up an alternative block chain, they could do it very easily and have a good chance of gaining more adoption than the current block chain has done. the current block chain needn't stand up particularly well to anyone with even a modest marketing budget. (i just hope that person or company wants to use the bitcoin technology rather than something else.)

So if Google (who once toyed with the idea of building their own internet) wanted to set up gcoin or PayPal for obvious reasons wanted to give birth to paycoin, (gee trademarking these wouldn't be a bad idea.) they could possibly outstrip bitcoin adoption rates. I once heard an ICANN rep say nobody would bother competing with them because of its adoption by world commerce. Bitcoin needs a fast adoption rate (like really fast) to survive as the standard. Even then corporations can start generating their own currency for gift vouchers, reward point etc.

Sounds like sour grapes. Should we confiscate the money people who invested early in Apple have made in the time since then? People that were mining back when bitcoin started could have ended up with a bunch of worthless coins or a bunch of highly valuable coins depending on if bitcoin took off. Their early support of the project has been rewarded but even if someone has 100,000 coins there is no way they could sell them all without the price plummeting. Plus this whole thing could collapse in 5 years. Who knows? I can't see the future and neither can you. Bitcoins are a high risk right now so the reward should be equally as high. Also why would you want to sell them all when you can just buy stuff using bitcoins directly? Coins from mining are a reward for supporting the network. The point of the network is an easy way of sending value to someone else without a central point of failure or control. Stop thinking oh I could have made $1,000,000 already. You have a certain amount of bitcoins which means you have a certain amount of value. If you want more bitcoins buy some or do something worth people paying you in bitcoins and quit trying to figure out how to start the game over again. You were late. Deal with it.

I have no sour grapes about anything. I am just wondering how far bitcoin needs to be entrenched in world adoption before similar competing systems start changing the game. As for early adopters with a horde of bitcoins now and then sharp (scary) slumps in value will filter down from the top. What i'm talking about is bitcoin needs to be overwhelmingly adopted as a medium of exchange, not only as a store of value if it is to work. Otherwise some CEO with a distaste for open source could easily adopt the concept.

It needs about 127,809 blocks worth of entrenchment.

Ah, crap.  Too late, but so close.

Yea, and in 2 years all present users will be "early adopters" and noobs will make another Bitcoin plus plus? LoL 
And what about early adopters IRL? Do you plan to redistribute all lands around the world, because people in the past discovered them and got them for free?  ::)

You have not profited until you sell your coins. At that point, you are providing coins to individuals who wish to purchase them at that price.

Is this really a difficult concept?

Your mockups look bad and you should feel bad.

people keep saying this as if it's a criticism of the notion of alternative block chains. the right response is 'yes, exactly, and that's fine. it shows a lack of barrier to entry into new block chains and is thus a reason that people should not speculate on the value of coins in any particular block chain'.

after a while, most companies face competitors. so will bitcoin. so did gold and dollars, from bitcoin itself. that's reason alone to stop propagating the idea that people will have 'retirement funds' based on coins in the current block chain.

Clever proposal!  I love the idea of improving the client as a vehicle to promote BCP.  Of course, barring some kind of non-free license, the current maintainers could just cherry pick and merge their favorite features into the original client.  Would you propose to try to prevent that?

How would you reconcile

with

given BTC's rising difficulty?  Lower the conversion rate for future mined BTC, perhaps to zero?  Looks like some devil-in-the-details, but I look forward to your thoughts.

p.s., Your mockup is beautiful, and you should feel proud.  Eye of the beholder thing.   :)

All this amounts to is increasing the block reward with hashing power. And you get to determine when the block reward stops inflating.

Low difficulty coins are worth less (50 BTC mined at the start are 1 BTP now)
High difficulty coins are worth more (50 BTC mined now are 50 BTP)

Low difficulty reward 1 BTP
High difficulty reward 50 BTP

Low difficulty = Less hashing power
High difficulty = More hashing power

So you are attempting to retroactively change the rules that bootstrapped the current BTC economy.

It's a bit sneakier than starting a new block chain and and increasing the block reward with the difficulty (which is massive inflation).

It will be interesting to see how it works out. I wonder how many miners you will get when they realize you can simply introduce Bitcoin Plus Plus in two years and turn their efforts to dust.  After all, it will be unfair to the people joining in two years that we are able to mine so easily now.

I wonder if any BTC will get destroyed in the process. Such a risk to take when it will increase the value of all other BTC in existence.

Here I'll give you guys a hand. This guy will work on your project with you. http://forum.bitcoin.org/index.php?topic=9487.0 (http://forum.bitcoin.org/index.php?topic=9487.0)

Someone please do this. I don't think I'll be willing to buy these new coins, but I'd like to see competition. There are several uncertainties in Bitcoin's future, one of them being how other distributed Internet currencies might affect the Bitcoin economy. Implement this idea and we'll get some data on that.

Anyway, I don't see the point of talking about fairness. The only thing that matters is what you can get people to buy. Perceptions of fairness may play a part in that, but mostly people care about expected profits for themselves, not what profits others might have made.

For me, the "fairest" currency would be one I minted myself and no-one else had any of, but obviously that's not going to have much value.

Yeah, because that's what entrepreneurs need, the knowledge that early adopters will get screwed for taking a chance.

Your fundamental assumption that you did nothing of value by buying $20k worth of BTC at 80 cents is flawed.

- You raised the price of bitcoin by your transaction (even if not perceptibly). Those coins which were for sale at 80 cents, were no longer for sale at 80 cents because you desired to hold them.  This action increased the value of everyone else's BTC holdings.

- Additionally, by becoming a believer in bitcoin and deciding to hold/accept bitcoin as something valuable, you increased the value of the network proportionally to the size of the existing network. The value of a currency is in its marketability -- how many people are willing to accept it in exchange for goods and services. By joining the "network" you increased its value for everyone. By Metcalfe's law, each new person who believes in Bitcoin is MORE valuable than each previous person who joined.

You took serious risk by putting $20k in an extremely unproven currency. You won (for now). It would be more appropriate to celebrate, and perhaps recover your $20k initial investment by selling 10% of your holdings rather than moan that you can buy a Ferrari for no work. It would be quite unseemly for some engineer who didn't really do much of value, but got rich anyway at Microsoft, Google, etc. to complain that they were rewarded with millions from the market for not doing anything valuable.

I was not late.  I managed to buy 25,000 BTC at about 80 cents.  I have made a fucking fortune on Bitcoin, don't feel I even deserve to have, and am most certainly not complaining that "I was late".  Go look at the candlestick for the huge jump in price on Feb 4 (IIRC), that's all me.  If anything, I should be more credible in my shoes, as I am voluntarily making statements that have a potential to injure the marketability of the remainder of that chunk I am still holding.

People who invested in Apple are different because that money is being used to help produce jobs, goods, and services.  Those who buy BTC are not "investing" in the creation of the Bitcoin software, they are merely investing in the Bitcoin blockchain which has no useful intrinsic value of its own, it is merely an aggregation of data that is just tallying where all the money is moving.

Bitcoin is a damn great idea, don't get me wrong.  But I submit that the blockchain merits legitimate criticism that others are hearing and (as I've been preaching for months) might motivate a sufficiently large crowd to start and use a new blockchain.  All I have done here is propose a way that that second blockchain be an offshoot of the first, rather than a replacement, so nobody is "forced" into using it except perhaps by market pressure if enough of the market decides I'm right.

If you haven't sold a lot of coins, you haven't made a fortune. It's not profit until you use the coins for something. The exchange rates might crash tomorrow.

Anyway, as I said, all this talk about who deserves what is tedious. I'm wondering if this system you propose is even possible. As you've noticed, you have to have a mechanism for destroying BTC converted into BCP. Your solution is to send the BTC into an invalid address. Can this be done? The default client won't do it, so you'd have to use a modified one. Would "vanilla" miners accept such transactions into the block chain? If not, you can't prevent double-spending. If yes, then the vanilla Bitcoin client could be modified to not accept such transfers, if enough people wanted to make life difficult for your new currency.

There would be a small increase in the total reward, because there would be the potential for 21M BTC as well as 21M BCP, which could arguably be called "42M coins" even though they're not the same.

Because conversion of BTC to BCP is unpredictable,  I would set BCP so it would halve based on total circulation rather than block count.  Conversion would also result in the permanent destruction of some BTC so the 42M would never be truly achievable unless absolutely nobody ever did a conversion.

The rules for BTC would remain unchanged.  The new rules would only apply to the BCP, which is a completely incompatible coin, other than that the client would recognize certain BTC-destroying transactions as legitimate creations of new BCP.

Please spend your fortune and implement this as BCPCoin - then we'll see how many people want to use your system. Or just donate your coins and be done with it. But the incessant whining is just too much.

Miners seem determined anyway to improve the chance of early adopters of any new blockchain being able to make coins with trivial ease. They accomplish this simply by not mining new blockchains and by verbiage aimed at discouraging other miners from mining new block chains.

Kind of strange really, shouldn't they be saying oh gosh yes go mine other chains, the less competition in the mining of this chain the more profitable it will be for me to take up the slack and even increase the difficulty of the current chain (as if it is me increasing the difficulty the increase is actually good for me though not so good for my competitors...)

One of the *problems* in starting new blockchains is precisely the problem of getting enough miners onto it that they don't seem like some tiny cabal of early adopters benefiting unfairly from an initially low difficulty.

-MarkM-

Yeah, I'm sure you (casascius) will have no problem providing proof that you've converted all 25,000 of your coins into BCP, right? I mean, you're not providing any benefit by investing in that system before anyone else, right?

If I convert some BTC into BTP, how do I know somebody won't come along again and declare my "early" BTP coins to be worth less than "later more difficult to mine" coins and suggest I convert the BTP into BTQ?

Every coin in the system should have the same value, otherwise it's impossible to compare prices to one another. We'd go back to bartering.

I'm selling coins all the time, though sticking mainly to rally periods.  If it starts to slump, I simply don't offer any for sale, which I figure protects the market as well as me.  I have an open offer on the OTC book for 500 BTC.


Yes, it can be done.  By "invalid address", what I mean is an address whose private key is unknown and unknowable.  Since an address is made by taking a 160-bit hash of the public key, if I simply dictate that some of those 160 bits must instead be a constant value and the rest of those 160 bits were to identify the recipient BCP address, you would never be able to find a keypair whose hash collided with that value.  The address would look "valid" to the BTC client, but no one could spend those BTC with the client anymore.  The BCP client accepts that as assurance that the BTC have been destroyed and accepts that transaction as an input to the BCP address that is a partial match of the remaining bits that were dedicated to identifying the address.

If coins are not fungible that is probably not a good thing, so this different values for different coins of the same blockchain doesn't sound like a good idea.

-MarkM-

Who knows - I don't know the "difficulty factor" of my 25,000 BTC.  Presumably they're all less than whatever the difficulty was in February, so they wouldn't be worth much converted to BCP, which is exactly the point of the rules, to let newcomers keep more of the buying power of their money instead of letting fuckheads like me take it as profit.

Yes, under my new rules I'd be foregoing the majority of my "fucking fortune" to the extent I haven't cashed out.  But it's not a fortune I deserved in the first place.... Why should I receive the annual economic output of 5 families on my own street in exchange for nothing just because I had the foresight to see that the opportunity was ripe for the picking?  I am saying IT'S NOT FAIR, while sitting on the advantaged ("more-than-fair") side of the equation, and that matters because the whole attraction to Bitcoin is the notion that it's supposedly more fair than the USD, which I feel is a lie at best under the current block chain.

So then give your coins away. What the fuck?

Once again, you have not profited until you sell the coins. When you sell them, you are providing them to someone else at a price they are happy to pay. That is the service you are providing.

Understand?

Additionally, the BTC -> BCP conversion will not only affect those who mined coins early, but those who have already paid market value for those coins. So those poor people who got into Bitcoin later than others and bought the early coins will have their savings destroyed as well. Is that fair to you?

Of course, I realize this.

"So you are attempting to retroactively change the rules that bootstrapped the current BTC economy."

Attempting means you are going to promote switching to a new chain that for all practical purposes had massive inflation during the bootstrapping process. But you are skipping the bootstrapping process, piggybacking off Bitcoin's bootstrapping success with it's rule set, and hoping people will switch.

It's a bit different then just starting a new chain with massive inflation during the bootstrapping.

Who said that? The main attraction for Bitcoin is that it's not controlled by a central authority, is easily transferred and can be highly anonymous.

How much hashing power can you contribute to a new block chain?

Lets not worry about trying to "fix" this particular purported "problem" of the original blockchain, even if it were a ponzi scheme so what consenting adults should be allowed to play those anyway if no fraud is involved, just like the clearly labelled ponzi/pyramid someone is already running that accepts bitcoins.

People can accept or not accept bitcoins for some new blockchain's coins and can accept or not accept bitcoins for other things that could in principle then be traded for some new blockchain's coins. So what, some people playing some gold-game somewhere might buy some of the new coins, are you to "fix" that too by somehow changing the value based on where they got the coins?

Are you going to accept blood diamonds for new coins? Why worry about preventing old bitcoins coming into the new system if you cannot even prevent blood money entering?

Lets just make some new blockchains with the various features various complainers purport to support so we can tell future similar complainers "put your money where your mouth is, here is a blockchain with the features you claim to want, how much money you gonna put in?"

Chances are most are just hot air and won't put any money where their mouth is.

Lets use some of the fortune you don't think you deserve to make some alternatives?

-MarkM- (People will just sell their old coins elswhere instead of using your "conversion" algorithm probably...)

Having foresight is a perfectly reasonable attribute that is marketable.  You should feel good for yourself about being able to recognize a good opportunity. If you cashed out right now I would not begrudge you your 6-figure payout (over time due to market size) 

Which is why I suspect that if a new, better, BTC+BCP client suddenly appeared on the market, that instantly reminded you of the BTC-to-BCP "convertibility value" of every coin in your wallet without actually doing a conversion, even the staunchest BTC purists would not be able to deny that BTC suddenly lost a shade of their fungibility, which would make BCP more attractive.

In fact, my very mention that I perceive that some BTC are better than others has already slightly diminished the fungibility of BTC in and of itself (including my coins, all of which are easy-to-medium difficulty ones)

I will willingly take all of your bitcoins and in exchange you will be absolved for the early speculation of the bitcoin economy.

If my foresight is of value, then listen to this: Newcomers don't like it when others profit at their expense without giving value in return.  They are going to leap from putting new funds into the BTC block chain at the first solid safe opportunity.

Don't get stuck on the notion that "nobody is getting taken, they are buying valuable BTC voluntarily".  The value of BTC is only what someone else will give for it, which is always less when I and others are slowly tossing BTC at the market to the highest bidder.

If I value federal reserve notes printed in my state over all others, are federal reserve notes magically no longer as fungible?

You know considering the difficulty lay people have with the technology already this is not going to help things if you are interested in seeing bitcoin succeed as a currency.  The WTF factor will keep going up exponentially at which point you'd not only be fucking over the early adopters but the retarded.

Your foresight only has value if you are right. So why don't you provide proof that you destroyed all the rest of your BTC and deposited them into BCP?

How about a more relevant argument: if I value copper pennies over zinc ones, are zinc ones less fungible?

I never will... I would be a fool to, because the difficulty (i.e. how easily I acquired my coins) would make them a poor conversion.  Nobody will want to convert BTC unless they were recently mined and would yield a comparable sum of BCP.  I however would throw all my mining at BCP as well as all recently mined coins.  BCP of course doesn't "exist" yet until a client is released for it.

Haha. No. Your delusions about some coins being better than others are your own. Nobody is going to modify the core client for this BCP scheme. Simply build your own pure BCP chain, with whatever distribution flavor you like, and if it has merit people will join you. Or just give your coins away and absolve your guilt.

Ah, so OP gained reasonable potential wealth by adopting an early experimental system, believing in it, investing in it, and so far it has 'paid off'...

Nothing wrong there, if you feel so bad about it, please tip me.

I really don't see why a certain group has so much problems with early adopters gaining wealth, they could have been there too if only they did more research or dared to invest or whatever.
It's an argument out of pure jealousy i'd say. (in your case im just completely missing the point...)

The features will come over time, remember bitcoin is still young and in development.

So how much would a newly minted Bitcoin be worth to you, in older Bitcoin?

use some of your coins to purchase items from the stores that actually accept them, that way you are distributing wealth and reinforcing their use as a currency, everyone wins!

I totally am.  I sell, I buy things, I all of the above.

I've also helped people mine from the get-go, which I believe also strengthens the currency (by puttting it in more people's hands)

My landlord used to run around from bank to bank trading in all his CAD just to keep getting different bills he had not seen before, because some ranges of serial numbers, maybe with different pictures by different artists or whatever, sell for different above-face-value amounts on e-bay.

So Canadian notes are already not fungible I suppose, its just that only a few collectors and enthusiasts and maybe Archie comics' Jughead Jones bother to go to the trouble of cashing on in the deviation in value. (Jughead did it with small change.)

Don't bother with a new client, any good features can go in the normal client anyway and this using the old blockchain concept is silly pointless complexity to no good purpose.

Just start a new blockchain with massive hashing power thrown at it right from the start so no-one can complain that it started off ridiculously easy. Heck you could even make it so difficult that it takes on average much longer than ten minutes to make a block, aiming to move toward ten minutes only after quite some time has gone by to allow anyone to get aboard who wants to get aboard.

It would be nice to make several chains each addressing different complaints, since complainers seem mostly to be chronically unwilling to do so themselves.

-MarkM-

The comparative value would be pegged directly to the difficulty number in the block header where the original coinbase transaction is found (averaged where multiple coinbase transactions are combined).  A logarithm factor would ensure that new coins weren't worth 433,000 times as much as older ones (that's not fair either), but they'd still be worth quite a bit more.  And they should be - they were hundreds of times harder to create.

Yes they can. The computing power necessary to secure the blockchain will always increase, thus at some arbitrary point in the future, the difficulty of currently generated coins will be "too low".

So what about the people who just entered into the Bitcoin economy and could only afford say, 1 BTC. It just so happens that they bought that bitcoin from someone who mined it early on. The difficulty for their coin is very low, and it will be worth much less in the BCP system. Is that what you consider fair?

They can continue to use it as a BTC with no preconditions, even with BTC+BCP client, as long as there are plenty of people who will accept it as a BTC which clearly many people vow there will be.

Since you aren't a newcomer, can you point to some of these people?

If the reward (50BTC) were not an arbitrary constant, but pegged logarithmically to the difficulty, that would even this disparity out some even more...a proposal I have suggested in the past and seemed relatively palatable (at least compared to the strong sentiment against "don't mess with our block chain")

The reward (per miner) is pegged linearly to the difficulty right now.  Why would logarithmically be better?

Do a forum search for "ponzi", or a Google search for "bitcoin scam"

Pretty much everyone criticizing Bitcoin as a ponzi scheme or some sort of scam is, in a roundabout way, referencing this very problem.

Most people criticizing Bitcoin's block chain will have either voluntarily steered clear of buying any, or at least they certainly aren't going to publicly announce they are holding some.  I am a notable exception, in that I am criticizing Bitcoins while holding them, clearly detrimental to my future Bitcoin-related profits.

I don't really care, with all deference to the taboo of announcing one's wealth, I am fairly successful without $200k in Bitcoin profits, if tossing $20k at BTC's didn't make that obvious, the "kitchen" my miners are seen running in on YouTube is kitchen #2, and I wouldn't be bothered to profit less if it helped Bitcoin's fundamentals be more strong, because I truly believe in the concept of cryptocurrency and its power to change the world for better.  The big difference between the profit I made with Bitcoin versus everything else, is with Bitcoin I received LOTS of money in exchange for N-O-T-H-I-N-G, where as in every other case, somebody gets something of real intrinsic value in exchange for everything I am paid, a net contribution to the economy.

The fact that I'm facing a firestorm of people disagreeing with me is just further evidence that I will make take more profit as a result of my involvement with Bitcoin than I ever expected, and not surprisingly, are fueling this wonderful rally that's making holding this BTC admittedly exciting... God bless anyone way down the road who ever loses money with Bitcoin if it ever "pops".

The only profit you've made is the difference in price between the bitcoins you've bought and those you've sold.

Since you appear to not have sold all of your coins, saying you've made $200k profit is false.

Once you sell your coins, you are providing a valuable service to the people who want to buy them.

It is the exact same as the people who sold you bitcoins at $0.80, making a profit up from $0.06 (or whatever). Why don't you considering that they profited unfairly from that voluntary exchange of moneys?

I hear you... it's just that this logic also sells pyramid schemes.  What's the difference between me selling BTC versus a 32-dollar bottle of wongo juice whose intrinsic value is maybe 50 cents?  (I live in Utah which has got to be the "wongo juice scam" capital of the world).

Sure, health and vitality are valuable.  What do you say to the guy who just filled his basement full of wongo juice the week before the world population decides it's acquired all the wongo juice it needs?  That at least he will be full of rejuvenation and health through the expiration date printed on the bottle?  As we saw in the recent slip from $9 to $6, when newcomers stop throwing money on the table, the value of BTC starts to lose steam relatively fast.

???

What is this intrinsic value you speak of?

Is this such a bad thing?

No, the people at the bottom of pyramid schemes are always losers. When nobody else wants to buy bitcoin in exchange for fiat currency, everyone who has bitcoin is still trading them. That is their value.


How do you know the intrinsic value of bitcoin? It is used as a money, like gold.



That's the risk of speculation. What casascius isn't getting is that his $20k could have just as easily been the next wongo juice.



What are you talking about? A drop in the exchange rate only means that people are willing to sell now rather than wait for the exchange rate to rise.

By the way, casascius, when I asked what new Bitcoin would be worth to you, I meant now. After all, you said you're already starting to value new coins more than old ones. I have a few new-ish coins mined in the last couple of months. Care to buy them, I'm sure we can come up with an exchange rate to suit us both.

Or would you then be taking unfair advantage of your realization that BCP is the future? Or just taking a risk (big IMO) that you deserve to be rewarded for if there turns out to be a profit to be made?

Tell you what, just for fun, maybe I will.  Would you accept a 2% premium?  (I give you 51 BTC for your 50 BTC if you can spend it to me as a single transaction that gives me the entire output of a virgin block).

If you haven't spent them out of their generation blocks, they are inherently more valuable when people realize that Bitcoins are only anonymous under certain perfect conditions.  Some people already realize this now, but it will take a big privacy scandal to make everyone realize it, just how some lazy local governments won't fix the traffic lights at a problem intersection everyone knows is a problem until enough people die.

Mined bitcoins that have never been spent out of their generation blocks will eventually command a premium to someone wanting to buy them for anonymous transactions.  And an enhanced BTC+BCP client with a wallet interface like I showed in the screenshots - that allows the user to checkbox the specific coins they want to spend - will help future Bitcoin users who grow to value premium anonymity.

Perhaps that you can drink it... once all the marketing hype has been peeled off and the juice poured out of the fancy bottle, it's still perfectly drinkable fruit juice with similar nutritional and refreshment qualities as most any other juice, and valuable anywhere from 50 cents to $3 based on its temperature, freshness, and location relative to thirsty people.

So, it gets intrinsic value because people want it?  I don't think you are using the word intrinsic correctly.

I mean that the value of the juice is in the juice, in other words, it is valuable because it is still juice and can be consumed as such (as opposed to it being something whose sole value is what you can trade it for).  I'm no economist... what does intrinsic mean to you?

The BTC are from pooled mining, so I can't give you an entire block. If you're still interested, I'll get back to you after I check how much I actually have in that wallet. I hope you have some way of verifying the age of the whole amount.

edit: Just so you know, it's not much. Max 6 BTC or so, but I don't recall if I transferred some of those to my main wallet already. I'll have to check.

+1

Wow, 7 pages of replies on a thread that started just today...(tl,dr...so apologies if I'm stating something already stated)...I love the irony in this proposal...the irony is that in order for it to take off, it would very likely have to offer even greater reward for the early speculators than bitcoin (because of the current awareness of bitcoin and the very marginal improvement on bitcoin that it offers).  You would actually need to rapidly issue new currency at the very beginning and ramp down the payout and inflation more quickly than bitcoin.  The early speculator would have an even more "unfair" advantage, but that is what it would take for this to even have a chance at succeeding.  LOL

They're not getting screwed... I'm an early adopter, a relatively late one at that, who was "only" able to grasp 0.5% of the economy at the time... how is getting 6 figures of free money being screwed?  What Bitcoin needs is people to have well-placed faith in it, that won't be exposed to a systemic risk of being screwed just by buying BTC.  Those poor other early adopters for whom a six-figure gain isn't enough, they need a 9-figure gain to not be "screwed" for the CPU time they spent running a free mining program in their spare time.

do you have any idea how ridiculous you make your position out to be?

on one hand, you bemoan your fate of terrible wealth in almost shakespearean high-dudgeon - the unfairness of your foresight, how valueless risk-taking is to the strength of the network and the success of Bitcoin...

...whilst on the other you do everything possible to secure your wealth and to increase it.

is this some kind of monumental internet performance art lead-up to a particularly grisly suicide, broadcast on youtube?

bah.  done with this thread.

Fucking hell you are dense. How many times do I have to say this?

If you are still holding your bitcoin, you have not yet profited.

When you do sell and do profit, you are providing a valuable service (selling bitcoins) at a price other people are willing to pay. How is this "free money" or "not providing anything valuable"?

The longer you hold your bitcoins, the more risk there is that the value drops to zero and you lose your entire investment. (Not that I think that is likely).

Because it's not free money.

Your proposal is what screws early adopters here. You didn't get free money. You spent $20k on things that later turned out to be much more valuable. No one knew, when you put 20k in, that this was going to be big enough for that 20k to have a 1000% return. Especially when you put it in, you were more likely to end up with 20 cents than 200k.

You risked a large quantity of capital in this currency and there is a commensurate reward for that. The less "proof" that you needed, i.e. the lower the price of BTC was when you bought in, the more reward you received; by the same token, the less "proof" that you had, the higher the risk was that your investment would be worthless. Further, your investment constituted a "vote" of sorts - a 20K USD buy on a public market would be a contributing factor to another potential investor looking for "proof" that this is a good investment. If that investor then buys BTC and pushes the price up more, did you get money for nothing? No, you provided an investor with some information, and he paid you for that information.

You also haven't really explained what is going to make BCP somehow a solution to this problem. In the beginning, BCP will not have a high difficulty. There will be a few miners who switch over, just like Namecoin, but for the most part, the BCP blockchain difficulty will be a pale shadow of the BTC difficulty. In this period, people will mine blocks and receive BCP at some arbitrary rate. Perhaps they will sell those BCP to other people for another currency; later on, if BCP catches on, those BCP will be worth more. The only difference will be, instead of the question being "Can a blockchain-based decentralized P2P currency catch on?" it'll be "Will this blockchain-based decentralized P2P currency that competes with Bitcoin catch on?"

And people who predict the answer to that question correctly stand to profit. Just like Bitcoin.

In any case all of this arguing is pointless. I am with the others who say, if you want to create a better bitcoin,

Fucking do it already and stop talking about how the current bitcoin is worse than the unicorn in your head.

It's like listening to people talk about how unannounced or unreleased tablets are going to be better than the currently shipping iPad. Maybe they will. But no one knows until it comes out. Similarly, if you think that this is going to be the Wave of the Future, then just fucking do it and stop talking on forums about it.

Yep... I probably sound about as ridiculous to you as I would trying to preach evolution to creationists at a church.  Doesn't make me wrong.


You mean like criticize Bitcoin in forums, which can't possibly increase the value of my BTC?  Are you suggesting that I need to void my BTC to have merit?  Kind of like how people who criticize the Federal Reserve should be burning their dollars if they want to be taken seriously?  (To the recent poster who thinks I am suggesting early adopters destroy their BTC, my suggestion is actually quite the opposite - early adopters should keep their BTC as BTC so if it turns out to be a train wreck, it goes down with it).


No, but maybe it's eery that I just saw Les Miserables this weekend, just made me think of that dude Javert...nevermind.  WTF would I want to kill myself?  Is it untenable that someone could possibly put the idea of a successful Bitcoin ahead of an advantage to profit at someone else's expense?  Jeez, I'd return your wallet if I found it at the airport too... that doesn't make me crazy.

Am I supposed to respond to this?  It isn't even a question.  How do you know if I am or am not holding my bitcoin?  And what difference does it make?  If Bitcoin flops before I sell out then yeah, I guess I get it...no ferrari.  It should be pretty clear by now that I understand this, but hey... apparently people think my eyesight is bad too cause this thread gone past bold and on to big fonts now.

How about the next part, which refutes your constant claim that you are getting "free money" without "providing anything of value"?

When you do sell and do profit, you are providing a valuable service (selling bitcoins) at a price other people are willing to pay. How is this "free money" or "not providing anything valuable"?

Is this hard to understand, or do you have some argument that counters this point?

I think a little perspective is in order...first, if someone does have 20% of all bitcoins, the notional value of those coins is around $10 million.  However, were they to sell all those coins on any short time scale, they wouldn't get anywhere near that amount and they would crash the market.  But, let's assume they could bleed out $5 million over the span of 3 months (but I think that's still far above what the market could support today).  That's peanuts compared with the wealthiest people on this planet and I'd bet that the contribution these bitcoin pioneers have made is far greater than the vast majority of those extremely wealthy individuals (and yes, even for those that did little more than buy or mine bitcoin...because, after all, without them, there would be no "us").  If the price of bitcoin continues to appreciate, these early adopters will have increasing pressure and incentive to either lock in those gains or to invest it in some capacity (quite likely in businesses involving bitcoins).  Continuing to hold such a large hoard will make less and less sense as time passes.  

Because when I think of providing something of value, I am thinking of the creation of goods and services, which are the true backbone of any economy, not money.  When I buy BTC at 0.80 and sell them for 8.00, I feel more like a troll on a bridge.  The troll isn't doing anything useful, unlike say a toll that goes to the people who built the bridge, which motivated them to build a quality bridge and which probably helps maintain the bridge.

Yes, I agree I am providing a valuable service (in the sense that my service is probably valued by someone), but I am not actually adding any goods and services to the economy.

Compare that to what I do for work - I make software - people pay me for that - the software satisfies a need of theirs - it's a two way win.  Put a bunch of software engineers on an island, and from that island will come products innovation and automation.

Put a bunch of farmers on an island, and from that island will come fruits and vegetables.  Put a bunch of singers and dancers on an island, and from that island will come rehearsed entertainment.

But put a bunch of bankers or trolls or traders on an island without anyone that produces goods or services, and from that island will come nothing, because their activities produce nothing and benefit nobody.  They will nickel and dime each other all day for each other's nickels and dimes, but without others who produce, none of them can so much as whip up a bowl of macaroni and cheese.  And when I resell BTC at a profit, that's how I feel, that I have only converted someone else's resources to my personal benefit while giving nothing useful in return (other than, of course, the resource I'm holding, which I didn't create).

Bitcoin came from the software engineer island, not the banker and trader island.

Hmm.  What if your investment in BTC raises the price enough to attract commerce.  Is that not indirectly providing jobs?

Your proposal misses a big sore point.  If it passes, then the value of *your* bitcoins will seriously diminish.  The guy who mined already got his profit, so the loser would be *you*, and all the other people who are buying old coins now.  You might not worry so much, but I expect that just about anybody who has invested in bitcoins will not cooperate with your proposal, i.e. everyone on this forum.  Therefore, you'd be much better off taking your proposal elsewhere and begin a whole different project, based on bitcoin, with just the btc convertability you suggest, but appealing to a whole new audience, not to those who have already invested in btc.

Another point, what about bitcoin mixers?  If I send 100 bitcoins to a mixer, then eventually I get 100 bitcoins back, but they could be newer, older, or a mix of newer and older coins.  There'd be no way to tell who got what.  The 'penalty' to early adopters would be completely random.

In the long run, I'd say you'd be simply better off starting a new block-chain, in which old bitcoinsPlus, in every transaction, are converted to new bitcoinsPlus, in proportion to the difficulty now and the difficulty when generated.  Of course, then there'd be no incentive to mine now, since you get the same reward if you mine tomorrow, or next year, so I'm not entirely certain that it would take off.  Perhaps it would be more popular amongst socialist idealists.

As for the crux of the problem, perhaps we can hope that, eventually, older bitcoins will gradually enter the market as the early adopters spend/retire.  Not unlike the gold rush of the 1800s I suppose - fortunes were made there too, and all they mined was a useless soft yellow metal.

It sounds like you don't think Bitcoin is a valuable invention. Yet it seems you're very interested in it.

What does the price of BTC have to do with jobs?  Jobs are created by matching labor with market needs.  If I start a useful BTC-related business and hire people to help me run it, then I have created jobs.  But simply driving up the price through speculation doesn't accomplish that.


I agree with you - I could be diminishing my own BTC.  But the way I see it, I have already sold enough to recover well more than my initial investment, and if somehow my forum postings were to tank away my opportunity to make take more money from people, then oh well.  It's not money that was ever my God-given right to take in the first place, no different than if I find your wallet and beat myself up over the chance I missed to take your money before I gave it back.


Yep you're right, but the idea isn't to punish early adopters, it is to remove the collective leverage they have over the wealth of future participants.  Besides, the reward is already pretty random as it is.  I could sell 100 BTC on June 10th, and I have no clue whether I will get $1 or $50 per coin.  So I'm not really shaking anyone's fate far from their expectations to begin with.


That's essentially what I have proposed - while maintaining full compatibility with BTC so as to make it attractive to those who are currently stuck with a relatively buggy and very non-intuitive client.  I am essentially proposing riding the coattails and exploiting the fact that development on the client is at a snail's pace and is lacking numerous important features.

In your Bitcoin folder, there are numerous files.

The ones with an extension of .cpp, .h, and such, are where the true gold is, the part that has really caught my interest.

The ones with an extension of .dat are where my criticism is pointed.

I'm running out of things to say here. I think the issue of distribution will sort itself out. The exchange rate is fluctuating wildly. Bitcoin has been, is, and will continue to be a risky investment. Sooner or later some of the bigger hoarders will start to chicken out and sell their Bitcoin. They may cause the exchange rates to drop a lot, or maybe they'll be sly about it and sell over time. Either way, the coins get redistributed.

If some of them do not sell and instead hold on to their coins, even at, say, USD10/BTC, or USD 100/BTC, they're taking big risks. No-one knows the outcome. No-one knows how the exchange rates would recover from a crash back to pre-dollar-parity days. It's entirely possible for a panic to decimate the exchange rates. Anyone with a few hundred thousand BTC has to have balls of steel not to think about unloading significant amounts of those sooner or later, unless they're already loaded, of course.

this. over time as bitcoin climbs in value it makes little sense to sit on large hordes when cashing out a portion can catapult you into a higher living standard (not working).

We'll see medium hordes get dumped on the market at various psychologically significant price levels (I'm assuming a short term price ceiling of $10 due to this actually).

http://www.forexfreeway.net/trading-online/forex-trading-the-importance-of-round-numbers

Mixers need a float to work with, the big oldsters could send their coins through mixers constantly, or even run mixers of their own keeping newer coins and dumping old ones on other people.

Its stupid.

-MarkM-

1) OP have 25000 BTC.
2) OP wants to destroy some part of BTC mined.
3) OP won't destroy his BTC.
4) The less total BTC we have, the more they are valuable.

Conclusion? :)

1) OP have 25000 BTC.
2) OP wants to create a second block chain, but to offer a way to transfer BTC from one block chain to the other (which involves creating a transaction that looks like a "destroy" to the original client)
3) OP won't convert his BTC, and also expects that nobody would convert BTC mined with an easy difficulty because it would yield so little.  Only recently mined BTC during high difficulty would make sense to transfer because the yield is directly related to the difficulty.
4) The BCP will become more valued than the BTC because there aren't millions of easily-acquired BCP out there waiting to pop the market.

Since we are speculating.

It's more likely that people will ignore "Plus" because it was never bootstrapped, and probably wouldn't have bootstrapped at all because of the massive amount of inflation that would have had to occur to make the early Bitcoins worth less, and is only attempting to ride on the coattails of Bitcoin while pretending that bootstrapping a new currency is not worth anything.

But you should really make it anyway. 

What I'd like to know, casascius, is where you get the authority to determine what is fair?
And where do you get the authority to determine what is valuable work and what is parasitism?
And what makes you think you know the exact rate at which old btc should be converted to your BCP?
Anyway, why should later adopters be rewarded either?  Maybe some central authority should simply distribute all btc equally over the planet.

You say you've done well outside of bitcoin, presumably in your software business.  You haven't indicated that you feel you've been over-compensated in that realm, but how do you know you haven't?  Just because you've provided a 'valuable service'?  But maybe that 'valuable service' could have been obtained more cheaply from somewhere else or someone else.  Have you therefore stolen some portion of what you have, even though it was given to you voluntarily?

You feel bitcoin approximates a pyramid scheme.  But at the end of the bitcoin pyramid scheme everyone will still have their bitcoin.  The problem is you have greater faith in the USD than in BTC.  You think that a few years down the road the USD will be worth more in BTC terms than it is now, and that it will be that way by design.  I'm afraid that most people here believe that BTC>USD in a few years, and if it isn't, it won't be because Satoshi designed it that way.

The real danger here isn't that some early adopters will profit (in USD terms).  The danger here is that even after a 70 year experiment with the Soviet Union, even after a 40 year side-by-side comparison between East Germany and West Germany, even after the fantastic demonstration of the power of the free market in China over the last 2 decades we still have people who think they know better than everybody else.  People who feel they can plan things for the rest of us so it turns out more 'fair', 'equitable', sunshine & rainbows.  That type of thinking, given free reign, always ends in utter disaster and usually a great many deaths.  That type of thinking is the very antithesis of the bitcoin project.

You may have good intentions, but there is a reason that is the pavement on the road to hell.

casascius isn't claiming any kind of authority, nor is he proposing any kind of centralisation. i wish people criticising him would read more carefully and think more sensitively about subjects they expound on, rather than staying in the realm of idealised theory and apparently assuming that anyone who proposes something new must be a communist.

he's made what's at heart the same point many others have made: the seigniorage of bitcoin is arbitrary, is probably not priced into the value of coins in the current block chain because of informational asymmetries, ultimately serves no productive function, and has contributed to what is likely a functional pyramid scheme from the public's perspective. this is not a crazy or extreme point; it's consistent with almost all economic literature on productive rather than unproductive investment.

I have no problem with others creating alternate block chains with whatever rules they want. It is my opinion that competition is always good and I applaud anyone that expends the effort to do so. Even if I didn't want there to be alternate chains, there's nothing I or anyone else could do about it.

However, to claim that early adopters did nothing to deserve their easily mined bitcoins is fucking preposterous. If they had not invested time and resources into the bitcoin community, you would not be here now in order to complain.

So go and create your own chain, or use your considerable amount of unearned exploited wealth to pay someone to do it for you. Put your money where your mouth is, so to speak. The constant complaining about the unfairness of the rules of the main chain just makes it sound like you're bitter that you didn't get in earlier and you want to punish the early adopters for taking a risk. Come back when you have something of substance, I'm sure you will be more warmly welcomed.

Let's see if I can recast this in Ayn Rand terms...

1) OP can afford a Ferrari.
2) OP wants a Lear jet (go OP!)
3) OP is insightful, daring, and innovative (my hero!)
4) The cloud of seigniorage threatens the market value of OP's portfolio.
5) OP wants to create and profit from something of greater value than all the world's BTC.

Does that look better?

Getting back to the "antidote" that this post is about, I really don't see the need to support BTC destruction as a way to create BCP.  It is complicated and probably controversial, as it seems to attack BTC in an unfriendly, not to say unfair way.  A little patience with minting the new currency would, in my opinion, pay off better in the long run.  A BTC<->BC2 exchange would be very straightforward to set up (technically, not to say legally) and would be the way to distribute the new currency to non-miners.

I also no longer feel the need to "poll" miners prior to working on a genesis block as I outlined in another thread.  The initial difficulty should be on the order of 10,000 to 100,000 (or 2-20% of BTC difficulty at the time).  And the project (and supporting software) should be widely advertised among Bitcoiners, so anyone who might be interested can make a conscious decision whether to join at the outset.  Apart from that, we do not have to regulate the generation speed of the first blocks.

In a few years' time, assuming ASIC mining or quantum mining overtakes GPU mining, there may arise a perception that yet another startup currency would hold more value than BC2.  And that would be fine.

casascius's proposition is exploiting what is, in my opinion, a weakness in bitcoin as a currency, that they are not truly fungible. (And it is related to the fact that they haven't got true anonymity either.)

His proposal is to selectively value bitcoins generated from different difficulty eras at different rates for conversion to the new system. If bitcoins were truly fungible each would be indistinguishable from the other and this process would not be possible. There would be no question about devaluing the early adopters gold because gold would just be gold, wherever and whenever it was found. After it is all melted down in a big pot there is no new gold and old gold.

As a currency, quasi-fungibility is a weakness and he is proposing an exploit, what are we going to do about it?

Fungibility does not require that the units be indistinguishable, just that they can be seen as such. Notes have serial numbers and coins have mint dates, some people discriminate based on this but they are a minority.

Ignore him.

Dollar bills have dates and serial numbers on them.  In theory some kook could start a movement to reject old bills.

Coin mixing services will be more popular if anyone other than crazy people start taking this 'treat some coins differently that others' seriously.

It's not a weakness as it's a ridiculous idea.

Gold is highly fungible, down to the atom. Bitcoin is not, neither are cash notes.

What if there is a way to make digital cash have higher fungiblilty from the outset? The "early coin devalue" attack would not have even been proposed, and others thwarted too. Higher quality money has higher fungibility.

Might be worth considering, but I agree there are bigger problems right now ... like the chaotic state of the mining network.

It's not an attack.

If someone wants to value certain coins over others, that's their choice.

Gold in raw form is not widely used as currency, and you could discriminate based on a shape instead of minting date or design.

It really doesn't even matter at all. As Cusipzzz said, if this became widespread, coin mixing services could become more widely used.

Dollars are legal tender, which means if you are already indebted to somebody, they have to accept the dollars at at least face value, although they can accept older notes at above face value if they really want to. ::) (And it's the same for other currencies in other countries)

If you want to look at this as an attack or a vulnerability, the real attack vector (if it can be called that) is how non intuitive, user unfriendly, and buggy the client is and how it is being improved so incrementally slowly.  I have had to redownload the block chain a dozen times because there are so many ways for the database files to lose sync with the wallet it is outrageous. I certainly don't want to poo on the whole cryptocurrency concept, which I believe is truly novel, but the app is proof-of-concept quality at best. Many serious problems exist (scalability an elephant size one) that haven't even begun to be addressed.

The fact is, the first person to show up with a vastly improved client gets a ripe opportunity to dictate how it is going to work, especially if it remains backward compatible with the classic ruleset/blockchain and becomes a worthy upgrade even for those with no interest in the changed rules.

If you want to do something about it, work on the UI and fix the bugs before someone with an agenda does it for you.

Works fine for me, but there are other clients in the works as well.

If it's so fucking easy to fix, why don't you do it? Alternatively, you could pay Gavin to quit his job and develop the client full time. I mean, you've got all that money sitting around that you didn't actually earn, you owe it to the community to give back.

LOL @ the "someone with an agenda fixing bugs". It's open source software. PLEASE make a better client "with an agenda". As long as I or someone I trust can audit the code, nothing will make me happier.

Btw, has anyone stopped to consider that those early adopters might need a substantial amount of wealth to be successful in lobbying the politicians to prevent bitcoin from being banned and chased into the shadows for years to come?

If someone with an "agenda" is fixing bugs in the public client, their fixes will be inspected. If their "fixes" also include major changes to how Bitcoin or the client function, then those fixes will either be rejected ("Break this into individual patches") or put to the community for a consensus.

It isn't like developers are wizards who can magically subvert software in which their code is used.

yes.

that was gates' mistake, wasn't it?

Somehow I suspect Gavin has more BTC than me and is unlikely to need my contribution.  I am willing to bet his most limited resource is time.

Exactly.  They could offer a premium.  No difference.

Gavins' time is a deflationary asset?!

Can we trade it somewhere?

Announcing a new block chain: GavinCoin, now available to trade on MtGavinGox!

it does no good to sell off all your coins when the market is only so deep and at the end you'd be giving away coins for free eventually. Right now if that guy with 370,000 coins sold he would only be able to sell 9500 of them for about 185,000 bucks (not including dark pool orders that may exist)

the best thing for everyone including early adopters is to slowly sell their coins, maybe a few hundred at a time, so that more people can get involved while at the same time allowing for maximum "value" to be obtained.

Then again as has been mentioned before a lot of early adopters are involved with this project to see it come to fruition as a currency.  There is not a whole lot in it for them to "crash" the system. Then again if they did sell off everything and prices plummeted back to near nothing I am sure there are plenty of people with offers on mtgox for like 10,000 coins at 10 cents per just waiting to get back into it/reinvest

How is this a problem? Early speculators are those who take the more risks. Big profit is their justified reward



*if only i bought btc when they were worth 1 usd*

You lost me at

in my opinion this system can yoyo from near zero to where it is now multiple times and it would still be a solid long-term investment if it becomes an accepted means of exchange.  It's not going anywhere, it just needs to be utilized.  The system will be resilient, resiliency has been built-in.

edit: Of course this is assuming this is the client that catches on

why wouldn't you be able to convert it into cash?  Better yet why would you?

If enough people are in possession of BTCs, they will just start trading in BTC even if exchanges go down

there are plenty of people just getting started with this stuff that would LOVE a collapse like that to happen so they can get more coins.  It's going to be bumpy for sure until it's realized exactly what we have here with this client.  And there have been plenty of 6-figure deals made in this market thus far with the market maintaining each time. 

also the coins can be split down to many magnitudes smaller than 1BTC, so deflation shouldn't be a problem.  What will happen is instead of thinking of 1BTC as being a dollar you might think of 0.0001BTC as a "dollar" in this environment.

I am convinced that the way early adopters sell (because this is what I'm doing for my relatively early buy) is to do it slowly while people are buying, and not to bother selling while the market is taking a hit.

That's mutually beneficial - sellers get the going rate and buyers, at worst, see the rise in the exchange rate subdued.

I am fairly willing to bet that none of the early adopters holding lots of coin would dare toss a chunk at the market to crash it, especially while the spread of the news is still in its infancy.  It would totally ruin the value of the remainder of their holdings at a time when it could be expected to have decent future value.  It would be taking complete carnage on one's body to get a good price for their nose.

exactly

so some people get 100,000X return and others only 10X

You don't seem to be making any points that haven't been dissected to death already on these forums.  Nobody is changing anyone's mind, just look throughout this thread.

I am betting...cautiously.  Of course, I have already recovered more than my original investment by selling BTC, so my risk of losing it at this point is zilch.  Maybe I too will become a Bitcoin millionaire from the unsold proportion due to the vast appreciation going on right now.  And yes, as the OP, obviously I think it would be better for the system as a whole if weren't the case that few had so much control.  Inevitably, somebody has to be paying for people to become millionaires and billionaires.

Right now, with a market cap in the hundred million range, I don't think anyone will blink an eye about the earliest adopters getting millions tens of millions of dollars as a reward.  If any of these early adopters happen to be selling to the market, I think they should publish that, which would increase market confidence.  Myself, I have sold through about half of what I acquired.

In terms of what reward the earliest adopters deserve, hundreds of millions might be pushing it.  Getting into billions and beyond, definitely.  Enough people raise this issue that it's going to come up again eventually and possibly more fiercely than now.  Or, then again, somebody (or some well-funded institution) may solve it with a competing and compelling blockchain alternative and the answer will present itself unexpectedly one day.  Only time will tell.

So I take it from these sentiments here that you would like to buy in ... or you'll never buy in, it is not clear. On the one hand you are saying they are worth an enormous amount of money (too much power for people who's motives you are impugning), yet at the same time they risk crashing to zero. Seems like a paradoxical position.

Neither.  I bought in to the tune of $20,000 when BTC was 80 cents.  So I am clearly bought in and doing well.

That's your opinion. Other people think the price is fair, and they buy.


Bitcoin is as useful for licit trade as it is for illicit ones.


Who are "they"? For what reason would they want to "destroy the bitcoin economy"? How would they do so?


Your opinion that it is a novelty does not make it so. Obviously lots of people have an opinion to the contrary.


Again... who are they, what can they do, and why do they want to do it?


Unless your catastrophe involves threatening violence against bitcoin users, it's usefulness will be the same for licit and illicit goods alike.


Ah, the early adopters. You want them to crash the market by dumping their saved bitcoin. Do you understand how markets or rational actors work?

So our definitions of "early adopter" and huge must differ because this doesn't make any sense.

I suppose except for Satoshi everybody has an earlier adopter. So by that logic everybody should be worried about all the other people who adopted bitcoin before them?

I understand the technical details of how the currency works.  I will try to answer what can be done.  First, you must grasp the distinction between:

• Bitcoin, the technology properly called Nakamoto proof-of-work chains,
• bitcoin, lowercase, the currency ("BTC") based on a particular proof-of-work chain started in 2009,
• the block acceptance rules (monetary policy) implemented in the software used to extend a given chain, and
• the network of computing resources ("mining" or "hashing" community) working on extending a given chain and, in the process, protecting its transactions.

The technology can be trivially used to start new chains (even for non-financial applications as detailed (https://en.bitcoin.it/wiki/Alternative_Chains) in the wiki).  I have written in favour of starting a new chain with a policy similar to BTC's except for a much higher minimum difficulty.  ("Minimum difficulty" is a parameter of Bitcoin monetary policy.)  The new chain would result in a currency (herein called "BC2") functionally equivalent to BTC and competing with it but lacking the overhang of early wealth that concerns you.

BC2 would face several hurdles to acceptance similar to what BTC has overcome versus older national and digital currencies.  However, it would be based on a more proven technology than Bitcoin was in 2009, and the technical barriers to its adoption as a BTC alternative would be slight.  For example, once critical infrastructure supports BC2 (Block Explorer and MtGox, or something like them, come to mind), merchants, miners, and pool operators would have only to repeat the steps they took to support BTC.

It is hard to discuss this proposal in the forum, because most users oppose the idea, and many put it down to "jealousy".  I do not presume to know the motivation of any particular BC2 opponent or opponents in general, but one reason may be that they have a lot of BTC, want to profit from the continuing rise of the BTC price, and fear that a competitor could derail this plan.  Or perhaps they worry that a second currency will confuse the public and threaten the technology's acceptance.  Some may scorn the idea as a plan to punish the Bitcoin pioneers.  I consider objections on these lines baseless.  As I see it, a currency like BC2 would make an attractive product in comparison to BTC, and the potential value of all BTC (in a rational market, if such a thing exists) is inherently limited in a way that would not apply to BC2.  (Look up Forum user unk's posting history (http://forum.bitcoin.org/index.php?action=profile;u=12472;sa=showPosts) for some eloquence along these lines.)

I doubt that most Bitcoin users are aware of the situation, let alone how it came to be.  (BC2's chance of success would benefit from spreading this knowledge.)  Please look at Sipa's graph of difficulty and network hash rate over BTC's entire history: http://bitcoin.sipa.be/speed-ever.png (http://bitcoin.sipa.be/speed-ever.png).  Difficulty was at the minimum (because few computing resources went to mining) through nearly all of 2009 and didn't really take off until July 2010 (with the advent of GPU mining).  During those first 18 months, when the project could at best have been described as experimental, 65000 blocks were mined.  The "work" expressed in those blocks' hashes would get you perhaps about one block at today's difficulty.

This would be no big deal, but for certain of Satoshi's monetary policy choices, which the early user(s) supported by running his software.  Namely, the 50BTC reward for each block (constant over the period in question).  This fact of policy translates into 3.25 million BTC earned by whoever mined those 65000 blocks.

Satoshi could have chosen another formula for bitcoin creation (without having to abandon the deflationist principle or the 21 million bitcoin limit).  He could have chosen a formula that would have slowed money creation to a trickle while difficulty (more precisely, network resource growth) stagnated.

Some people may look at this and conclude that Satoshi designed it this way to obtain a lot of bitcoins for himself and his friends.  I don't see it that way at all.  Taking Satoshi at face value, I think he expected the climb in network hash rate to occur 12-18 months earlier than it did.  I think he did his best to promote both the technology and the currency before and after he started the chain, and it is really a matter of chance that it caught on when it did and not earlier.  Going out on a limb and giving Satoshi the benefit of the doubt, I think he is disappointed that it took so long, even though an earlier widespread adoption would have left him with far fewer BTC.  In other words, I think he and his fans wanted most of all to establish the technology for the benefit of humankind, and that amassing great wealth was, at best, a secondary motive.

With all due respect to the amazing thing Satoshi and the team have created, they have not been backed by a large budget (at least until recently) and have left several loose ends to be addressed by stakeholders once the system grows.  For example, ambitious scalability improvements have been proposed (https://en.bitcoin.it/wiki/Scalability) but not implemented, not even in a proof-of-concept.  The simplicity of the total BTC curve (https://en.bitcoin.it/wiki/File:Total_bitcoins_over_time_graph.png) has more to do with Satoshi's time constraints than elegance or popular appeal.  To the list of loose ends, I think we can add the need to create a stronger block chain.

How best to do that is a question I've worked on and discussed a little in the forum, but I will leave it for another post.

@John Tobey:

+1, very well summarized.

As someone who is anything but an early adopter and with hardly any Bitcoin at all, allow me to say, first, why I think your idea is neither fair nor good and second why I think it has actually already been done in a better way.

As those of us who have launched a new product know, it doesn't matter what the product is if you can't get the word out. Marketing is hard even when you have great selling points. While you might look around and think good products just burst into fame over night, you will often find that it's a 5-10 year process in reality. Facebook? Launched in 2004. Google? Incorporated 1998. The early work is thankless toiling in obscurity for the faint glimmer of hope of being able to reap what has been sown in the future.

For Bitcoin, the carrot has been proportional to the risk and amount of work required. Early on much more marketing effort was required for something so unlikely to succeed that people even deleted their wallets and moved on once the novelty wore off. As the early adopters continued to pour marketing resources and fiat cash into the system, the balance slowly shifted and Bitcoin became more established and gained a trading record which, while looking extremely risky, implies much less risk than no record at all.

Cleverly, as people continued to invest into getting others to adopt the currency, and as the risk went down, the difficulty has been adjusting automatically to account for this. This is fair since the later adopters have less work to do and less risk.

I believe that your essential argument is that it's more 'fair' to start a new block chain now that more people know about it. But even if you disagree with my debunking of the fairness argument above, there is a second fatal flaw to your scheme.

It will also have early adopters.

Let's call your proposal 'Populist coin' and imagine what happens after one year. To continue with your fairness doctrine you would, naturally, be called upon to create 'Populist coin 2' at this point so as to prevent early adopters of 'Populist coin 1' from benefitting unfairly. 'Populist coin 2' would be exactly like 'Populist coin 1' but with a fresh chain and higher difficulty - and oh, the technical hurdles would be so much smaller!

This would continue to occur not only whenever the number of late adopters exceeded the number of early adopters, which if nothing else would happen naturally due to increasing fame, death and birth, but also whenever the number of people who spent all their coins exceeded those who still held coins. It doesn't matter if you were an early adopter since when you have spent all your coin, 'Populist coin 3' starts to look really tempting.

You might not see a problem with an infinite chain of 'Populist coin X' but if your premise is based only on 'there shouldn't be a reward for early adopters', you must now recognise you will never eradicate its pesky presence.

Now, a rational observer might say that it is true that there is no additional fairness in 'Populist coin', but that it's not a matter of fair or unfair. Why would any late adopter not want to create 'populist coin X'? It's "FREE COINS!", isn't it? If you have no coins today, you will want to go for the coins of tomorrow, every time.

Except for one thing. The coins of tomorrow have all the risk of Bitcoin on day one, but none of the novelty benefits, none of the established track record. And to top it all off it's likely to be replaced by another generation of coins in short order.

To convince people to use your new fragile coin despite it's bleak prospects you must yourself bring to the table all that the early adopters did for Bitcoin and then more. What incentives will you provide to users to weather years of obscurity with a worse risk/reward prospect than the established coin?

If, forgive my parody, your marketing message is essentially, "Be an early adopter in a Bitcoin replacement scheme with none of the established channels, success or fame but with higher difficulty and run by someone who hates early adopters!", I think you might find the external financing requirements for advertising quite formidable.

Now for the goods news. Someone already started an alternative block chain and even gave it a small amount of intrinsic value. It's called Namecoin and is strictly speaking for registering *.bit domain names in a non centrally controlled fashion. But if you just ignore the domain name bit, it is in fact exactly what you describe. A new block chain with higher difficulty and (as of yet) no established early adopters.

So if this is what you truly desire, it's there, and it's something even Bitcoin proponents might care about since it has additional value.

The benefit early adopters gain is seriously overblown because people assume that the early adopters had absolute, unwavering faith in Bitcoin's future.  If they hadn't, then they would have cashed out at any one of the numerous price jumps in Bitcoin's history.

If you have a lot of Bitcoins, but believe Bitcoin is doomed to fail, why not reduce your risk by converting to a less risky (from your perspective) investment?

@stillfire

Despite the unfortunate name of this thread, the interest in a second Bitcoin currency in no way depends on notions of fairness or what the early adopter reward should be.  Those questions may lead one to an interest in a BC2, but the currency will stand or fall on its market value, if anyone bothers to implement it.  The questions of interest to me are: How much effort will it be to start BC2 (or BC3 etc.)?  How well will it compete against BTC?  And, what monetary policy will produce the best result?

I have read a little about Namecoin and found it uninteresting.  Certainly, it does not compete with BTC or address the weakness of BTC's early blocks.  If your point is that Namecoin is failing, and so therefore BC2 will fail, then apples to oranges.

Not at all. I was giving you a hopefully constructive suggestion of where you can already find what you seek. In your previous posting you described your idea as Bitcoin with "a policy similar to BTC's except for a much higher minimum difficulty". If that's what you want, Namecoin is quite an apple indeed since it is just that with some additional optional features on top. If you like it, use it today.

If you have other changes in mind you are free to outline them but I doubt they will stand up to the 'populist coin' argument of insufficient investment I presented above.

https://exchange.bitparking.com/main

Now you know exactly how bitcoin was off the radar for so long. Are you even able to get the client sending and receiving without a GUI? For most it is technologically inaccessible. Namecoin is not going anywhere. It can stay stable for months and the tokens will still have tradeable value.

As it becomes more accessible it may become more desirable.

@stillfire @mother_of_another,

Okay, NC is more interesting than I thought.  Thanks for the food for thought.

Just FYI, I read more about Namecoin, downloaded it, did a source comparison to bitcoin, installed it, ran it, bought some NMC, liked it.

I am coming to regard work sharing as an essential feature in a BTC competitor.  Someone (perhaps I) has to code support for accepting blocks with an associated hash that only indirectly hashes the block.  Mike has kindly described this process in some detail here: https://en.bitcoin.it/wiki/Alternative_Chains

With this change, the barrier to entry for mining new chains would be practically gone.  With a bit of setup, rigs would begin mining BTC, NMC, BC2, etc., using the same calculations!  New chain promoters could pay miners a small fee (related to setup and bandwidth) to include the chain in a Merkle tree of block headers tucked into the Bitcoin coinbase script.

The next question will be monetary policy details, but it doesn't really matter.  Just put up a site where people can post their favourite policies, promotional material, and instructions to mine currencies governed by them.  The market will choose among them.

For example, I imagine a bitcoin whose money supply goes as the log of total difficulty.  It would be a simple matter to code it up, given a "hook" interface like what VinceD created for Namecoin.  I'd distribute the code as a plugin to a modified Bitcoin client, pay the going rate (low thanks to Mike block trees) to get a lot of miners hashing on a chain, and start promoting the new currency.

If I see this come about in the next few months, I'll be happy and stop worrying about early BTC speculators.  I may still curse the market for overvaluing BTC, but against bubbles, yea, even the gods themselves contend in vain.

Hi, I've made a list of proposed block chain currencies here (https://forum.bitcoin.org/index.php?topic=7500).
I think that sharing work between chains is very important for any alternative bitcoin-like currency to succeed and not debilitate bitcoin in the process. I think new currencies are desirable (although don't make much sense if they're too similar to bitcoin) and inevitable.

By the way, I've not read the whole thread, but I remember someone proposed a "steadycoin" that is just like bitcoin with a different generation curve. Can anyone link me to the post where it was explained?

Anyway, my proposal (freicoin) is not accepted (just one person told me he likes the idea), so I wouldn't try to implement it right now even if the software for sharing work between chains was developed already.