Bitcoin Forum

Because it was started earlier and has had a greater opportunity to grow and attract users, Bitcoin has a market larger by a wide margin than all the markets of all the altcoins put together, and this makes it vastly more useful as a currency. To defeat Bitcoin, an altcoin would require not just superior technology, but such vastly superior technology as to be an advance over Bitcoin comparable to the advance Bitcoin represents over fiat currency. Furthermore, a truly great innovation would much better serve people by being incorporated into future versions of Bitcoin rather than by requiring them to switch to something else.

Nails it.

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

Wow, that article is the worst piece of bitcoin-bias I have yet seen I think.

The only way an alt-currency survives is if it has some new feature that is impossible to add to Bitcoin.

The only way an alt-currency survives is if it has some new feature that is impossible to add to Bitcoin.  That only happens in very rare instances, or in situations where Bitcoin is so large and stable that it isn't worth breaking.  There are also some situations possible where Bitcoin is superior for 95% of use cases, but inferior in 5%, and the niche currency will be able to hold that 5%.  The clones are nothing more than jealous haters who wish they were around during the Bitcoin boom.

First of all, Bitcoin already has competition. It competes with the dollar, with PayPal, and with the banking system as a whole. It has plenty of competition.

One point which they did not highlight enough is that because cryptocurrency is software it is much harder for altcoins to displace bitcoin, which is very different from competing manufactured products.

Consider supercoin which has some radically better features than Bitcoin. Because Bitcoin has over $1bn riding on its success there is a significant investment by all the people who use it, own it, mine it, and otherwise profit from the ecosystem. So there would be huge incentive for Bitcoin dev to clone the software changes which make supercoin so super, even if it means a hard fork. Such a hard fork would be tolerated as all bitcoiners want to protect their own interests. As soon as these features are released in a new bitcoin version, then supercoin becomes irrelevant.

This is not the place to refute the economic theory behind Freicoin, but essentially it is based on the idea that the interest rate is a purely monetary phenomenon rather than a result of time preference.

Thus, by design, Freicoin discourages hoarding and encourages spending. It is touted as a currency for the working class rather than the wealthy because it supposedly can’t be used for making loans. Actually, however, if Freicoin were used for real, loans would simply be given at interest rates that are higher by 5%.

Now, if something is created with the express intention of providing an incentive to get rid of it, then it stands to reason that they will all the more not want to buy it in the first place. Thus, Freicoin is actually made to discourage investment in itself, which is the very thing that gives a currency value in the first place.

Freicoin is an idea whose time will never come. Since it rebukes buyers, it resists ever having value. Freicoin is thus not so much a scam but more an abortion. Its ideals are so refined that they eschew the merest chance of affecting the real world. Perhaps it could be taken as some sort of absurdist parody, which would be brilliant. I hope that is true because otherwise it is just too sad.

I wouldn't say "impossible to add to Bitcoin" since that is basically never the case - you can add almost everything to Bitcoin.  But as you point out, it may not be practical.  I for instance consider Namecoin to be the most valuable "alt-coin" and of real use as opposed to most of the others, since it has some very real and great additions over Bitcoin.  But while it can in theory do everything that Bitcoin does and even more, I think it makes sense to not use them "also" as a Bitcoin-replacing payment system (or try to do so) but rather have different blockchains for different purposes (payments with Bitcoin, every kind of securing/freeing "information" with Namecoin).

Alt coins gave people who missed out on the bitcoin bubble 2013 another chance. LTC jumped from $0.66 to $5 in a matter of weeks.

every $, € (and so on) that is spent for any kind of altcoin cannot be spent for bitcoin. therefore it weakens the potential of bitcoin.

Here the author I think makes the rather simple error here of saying higher by 5% when it's quite obvious the rate is lowered by 5% (conversely the PPC coins ability to grow increases interest by the rate is grows at).  But this is really inconsequential if the rate is up or down, the point is that he admits that interest rates will be altered by the nature of money.  This is nothing less then the admission that interest is a monetary phenomenon as it is subject to change when the durability of money is changed.  Jow can interest arise from a universal human time preference but be dependent on the durability of money, a characteristic of the money itself?

Their is some truth here, Freicoin discourages the formation of speculative bubbles which have been the driving force in BTC.  But speculation is not the only thing that gives coins value, the earliest days of BTC were built on ideological interest and commitment.  Their is also the valuation that comes from the active circulation of a finite supply via the classic MV = PQ equation, in our opinion this can provide a valuation without speculation.  Lastly we have a charitable distribution plan for the bulk of the initial coin base which will bypass the need for most people to buy coins as we feel this is unnecessary and a huge contributor to speculation.

every $, € (and so on) that is spent for any kind of altcoin cannot be spent for bitcoin. therefore it weakens the potential of bitcoin.

I found this to be a biased and mean spirited article. Just take a look at the images and captions.

Also the author cherry picks alts to bash. Namecoin for example brings a lot of innovation to the table due to the innovative use of the generic name/value pair and namespaces of which a decentralized DNS is one of the implementations. (Namecoin emphasizes the value of an open blockchain for purposes other than just currency)

Sure the majority are scamcoins but please don't tar them all with the same brush.

there is obviously a very large market starting to form in altcoin realm. all bitcoin miners are ether selling their gpus or converting them to mine altcoins. the infrostructure is there and its a shame not to use it in their opinion. dont forget that some of us make free elecy happen.

This article can be summed up by:

The Problem With Altcoins is that they hurt my personal wealth, so they are bad.
The rest is just backward reasoning to justify that Bitcoin is superior to everything.

There is no point in reading an argumentation which is driven by it's agenda. I have to admit that I haven't carefully read thru the whole nonsense, but the fact there isn't even one positive thing about altcoins in it shows it's purpose. Greed is more visible to most bitcoiners when they look down at altcoins, but that is the very same greed that got most of them into bitcoins aswell.

Independet of the topic, it is alwasy a bad idea to read only stuff that supports your oppinion.

Oh wait, you didn't even read it because you got butthurt that it badmouthed your beautiful junkcoins.

LOL, did you even read the same article I did?  Oh wait, you didn't even read it because you got butthurt that it badmouthed your beautiful junkcoins.  Funny that you mention greed, that is the only thing backing up all the junk out there.

I have no problems with people having a different opinion than me. I know you won't convince me to sell my junk and I won't change your opinion either, but that article was junk. If it makes you happy I would have written the same thing on an article positive on altcoins.

The problem I have with people like you (srry for generalisation) is that you live in your own opinion bubble and just read stuff that support your ego and prejustice.

It is junk, yet you didn't even read it.

Bring on the arguments against it, I am not in a bubble.  I am willing to read opposing opinions.  It's how I learn from my mistakes.

Ok. As I said I still didn't read it carefully since I skipped the whole Freicoin part.

First of all it is bashing the altcoin community and very hateful towards anything exept bitcoins. If it were just about objective argumentation this wouldn't be in it. Conclusions are always to the max, either it's bitcoin or something else. The current form of coexisting (as it is in every free market today) is seen as an exeption from the norm.

This is due to overexaggerations of the network effect on magnitudes. From there it concludes too far on one sigle sideeffect. I'm not aware of even one free market where such dominance lasted for a longer period of time. On this argumentation everyone would drive the same car or at least brand of car, since networkeffects and the best engineers are working at that company.

It might be rightfull to criticite the greed/scam/intelligence of some members of the altcoin community but it is not fair to suggests everyone in altcoins it that way and generalize. Without even mentioning the greed in Bitcoin and the 2 bubbles it bursted it doesn't agrue anyting pro or con since it doesn't compare. The world ain't perfect either.

The free market and competition is seen as a bad thing or at least not good for it's own sake. It suggests a dominating bitcoin would be innovative without having any competition on the only area it is even able to innovate from it's current point. Bitcoin entrepreneurs aren't innovating only bitcoin in that sense since they are trading crypto currency aswell. That could be done in other coins aswell and will be copied. Innovation is risky and monopolists tend to avoid risk. I don't see why BTC would differ.

I could continue on disagreing his argumentation, but I'm tiered. As you might notice I didn't mention any argumentation pro altcoin. If I was about to write on a topic and spend most of the time on sideeffects without mentioning some of the fundamental effects (Ability to Change,PoS interest and Hedging) it is sure that I have an Agenda. You wouldn't learn anything about communism by reading their manifestos either so my conclusion: both it's political junk.

Do you care to address any of the criticism presented in the article, or just complain how you are upset about what it says?

I thought the main critisism of the article was that altcoins were useless/scammy/won't make it and that was argumented by network effect/market=bad/... You ment the technical aspects, right? Please give some examples what you mean.

I've the feeling we might be talking on different levels here. Some claims by the stupid/scammy part of the altcoin community are simply wrong. Busting wrong belives that some people might have about crypto is no form of critizism on the cryptos for themselves.

That's like saying Obama has a problem since he can't walk over water although some idiot had said that. That's no valid form of critisism if you then suggest that means Obama has a problem.

To make it short, altcoins ARE useless

The network effect makes it harder for altcoins to succeed, but not impossible.
There was a USD network before there was a bitcoin network.
The fact is that altcoins are good for all the reasons competition is good: The only way they will succeed is if they can accomplish major innovation relative to bitcoin.
While that chance is small, it exists and is good.

+1

Gresham's law paraphrased is ""Bad money drives out good". Innovation is a good thing, let's try everything and see what works. Scam coins will eventually go extinct. Those with any real value will survive, or will be absorbed. But they must be first created to do either.

I used to feel this way. I use to HATE litecoin, for all the reasons people have mentioned here. But then, while on reddit, I read a post that turned my thinking.

An altcoin could be used as a tool to arbitrate between exchanges. Consider the large difference in Bitcoin trading prices between the leading exchanges. People could use the altcoin to arbitrate, and thus wouldn't need to rely on moving slow and cumbersome fiat around. This would actually strengthen the Bitcoin market and promote price stability.

There is the fact though, that then you would need ANOTHER altcoin to arbitrate between the leading altcoin price, etc.. but at least there is a feasible niche.

and just as a fyi, I do not hold anything but bitcoins.

There is the fact though, that then you would need ANOTHER altcoin to arbitrate between the leading altcoin price, etc.. but at least there is a feasible niche.

Faster confirmations are very much needed in most forms of commerce. I don't want to wait an hour when I want to buy something.

You obviously don't have any experience with commerce.

Nails it.

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

one would expect the mining difficulty to go up to the point where
investment in mining technology produces similar returns to investment in
the rest of the economy. And, of course, as I mentioned above, it is false
that Scrypt-coins are immune to ASIC mining

This argument highlights the emphasis from altcoin adherents on mining
rather than on monetization. There is no logical reason why any ordinary
user of Bitcoin should want to become a miner in the first place.

Early on, it was profitable for casual Bitcoin users to be miners because very
few knew about Bitcoin. Mining now requires a capital investment, just
like everything else in the economy.

A transition to lower profitability and greater capital
 intensiveness is inevitable for any maturing industry.

This does not make it elitist; it simply means that the industry is
growing increasingly specialized.

One big hole in his (and Moldbug's) "there can only be one" theory, is that if a merchant only accepts BTC and I have only an altcoin, then assuming liquid exchange markets between the altcoin and BTC along with clever programming, I can pay with my altcoin at that merchant with one click. So there isn't any cost in terms of market mass to being not first in the market.

Just going to take a stab at this one thing here but, doesn't this imply that

1) someone has to use the resources to run such an exchange, when the alternative is to not waste those resourses and use Bitcoin
2) there must be enough other users to make the exchange liquid
3) one of you, probably you, has to go through the trouble of setting up an account on such an exchange, and software on your wallet, when it is easier to simply use Bitcoin

Essentially, while yes, the system can be patched to work, there is still the issue of fighting against the established system (using extra energy and resources) instead of simply capitulating to the lower energy-state system that doesn't have the extra friction.

As a Treasury official said some decade ago about the time he also said, "we will burn the fingers of the goldbugs up to their armpits", it has always been the plan to go after the millionaires and steal back all their gains to the elite (http://www.youtube.com/watch?v=P7bQ7wwGnQQ#t=2195) (skip to 36:35 min of the linked video) who run the fiat system. And Bitcoin is an amazingly great tracking tool to aid them in this coming global confiscation via taxation of the rich process. Note the elite super rich are always excluded from such gestapos.

Former IRS Commissioner and the man who wrote much of the law, said to Aaron Russo (producer of Bette Midler, The Rose, Trading Places, etc) in Jewish Yiddish language, "nothing will help you" (http://www.youtube.com/watch?v=P7bQ7wwGnQQ#t=2195). Skip to the 37 min point in the linked video.

The elite know exactly what they are doing by launching Bitcoin via the fictitious anonymous identity "Satoshi".

Nick Rothschild told Aaron Russo (http://www.youtube.com/watch?v=FuinaIm-kd4) what the goal is.

Anonymint

look at the Protoshares system right now -

https://bitcointalk.org/index.php?topic=325261.0

this could make for good analysis

this algorithm seems to be not only "memory hard"  

but in the equation and ratio it seems to bias memory "function" over pure process

I believe it is a fail. I'm awaiting confirmation. Perhaps I've misunderstood something:

https://bitcointalk.org/index.php?topic=325261.msg3499217#msg3499217

^ THIS. Absolutely my sentiments.

THIS++

GREAT article.

bitcoin will always be my main girl. sometimes i'll mess around with litecoin because she's younger and faster, but bitcoin will always be my first love.

However, once the dumb masses are in the main coin, it will become much more difficult to compete with that coin. Because the dumb masses don't care about decentralization, anonymity, and the benefit of mining on PCs can be offset with palm-scanning ATM machines for Bitcoin (the dumb masses will blissfully scan their palm). We are not yet there, but the window of opportunity is rapidly closing.

Consider supercoin which has some radically better features than Bitcoin. Because Bitcoin has over $1bn riding on its success there is a significant investment by all the people who use it, own it, mine it, and otherwise profit from the ecosystem. So there would be huge incentive for Bitcoin dev to clone the software changes which make supercoin so super, even if it means a hard fork. Such a hard fork would be tolerated as all bitcoiners want to protect their own interests. As soon as these features are released in a new bitcoin version, then supercoin becomes irrelevant.

Even if a new alt-coin emerged that was vastly superior to bitcoin in EVERY SINGLE ONE of its original goals, joe-public, investors and many service providers would probably feel no massive urge to switch.

I think if altcoins are to succeed (not necessarily match bitcoin, but run alongside as a significant alternative economy trading with bitcoin) then it will take one of four forms:

1. One or more of the current altcoins (or even brand new ones), instead of being minor twists on bitcoin, need to correlate several good ideas (and good developers) into ONE coin and aim to constantly innovate in ways that bitcoin (or at least the Foundation) are scared to, in order to attract enough "purists" over to make it viable.

If the altcoin has sufficient demand (not even any where near Bitcoin) to generate a liquid exchange, then the altcoin can be converted on the fly to pay those who accept only Bitcoin.

So an altcoin doesn't need ANYONE to switch from Bitcoin, it only needs to grab a small percent of the market of new users. Bitcoin only has 350,000 users. There is a long way to go to 7 billion.

The key though is the altcoin needs to present something truly useful that Bitcoin can't copy. So it has staying power.

This realization seems to indicate there can only be one coin that survives ....

I don't think this is the case. As a matter of fact, the open source character of crypto currencies, their similarity and the decentralisation and localisation aspects of multiple larger cryptos exactly fits the properties of this exiting new technology.

There will be more than one.

This realization seems to indicate there can only be one coin that survives, unless there is some reason to hold the coin other than its relative rate of appreciation.

Back in the early 90s, there were probably tens of thousands of individual bulletin board services. Most towns had several, and there were about half a dozen national ones in the US alone.

Each one was its own walled garden, with little to no communication between them.

In the late 90s as flat-rate ISPs began to enter the market, all the walled gardens got steamrollered by the Internet's network effect.

A tiny, statistically-insignificant minority of geeks prefer the walled gardens, while the rest of the population like having a single email address that works everywere.

It will be the same with cryptocurrencies. There will be one winner that achieves mainstream adoption, and a few toys currencies and that are kept alive by the few people who enjoy running them as a hobby and using them as testnets for new features.

I already explained how this can be solved. If there is a liquid exchange between the altcoin and Bitcoin, then the altcoin is just as liquid and usable as Bitcoin in terms of transactions.

But the problem is if everyone wants to sell the altcoin, i.e. no reason to hold it, then there is no such liquid exchange.

It is possible that an altcoin could have strong anonymity that is very important to smaller percentage of the market, and that would be a reason to hold it.

There might be some other features that are important enough that some percentage of the market must hold the coin and can't hold Bitcoin.

Strong anonymity is something that if you need it, you need it, and not having it isn't acceptable.

Can you deny this logically?

Any other such features?

then the altcoin has to be appreciating faster than Bitcoin, else there will be a pernicious downward spiral.

Back in the early 90s, there were probably tens of thousands of individual bulletin board services. Most towns had several, and there were about half a dozen national ones in the US alone.

Each one was its own walled garden, with little to no communication between them.

In the late 90s as flat-rate ISPs began to enter the market, all the walled gardens got steamrollered by the Internet's network effect.

A tiny, statistically-insignificant minority of geeks prefer the walled gardens, while the rest of the population like having a single email address that works everywere.

It will be the same with cryptocurrencies. There will be one winner that achieves mainstream adoption, and a few toys currencies and that are kept alive by the few people who enjoy running them as a hobby and using them as testnets for new features.

Any feature that is so heavily demanded will be added to Bitcoin, because that is the most economically valuable solution.

Friction always imposes costs. No how matter how good you make your exchange, it will always be more expensive than not needing to make an exchange. A line is the shortest distance between two points.

Any feature that is so heavily demanded will be added to Bitcoin, because that is the most economically valuable solution.

That doesn't make sense at all ...

I don't see why something has to be rising in order to speculate in something. Actually I'd rather like to speculate in something that got far less worth than it used to be than in something that got far more worth than it used to be. My profits depend on the %increase and my investment size, not on the actual value on the price tag.

Bitcoin will never add strong anonymity. Disagree?

If it's something that an economic majority of users want, it will be added.

If the current core devs won't add it, then someone else will make a version that does include it and the user base will upgrade to their branch.

Wrong, but you just have black-white thinking there.

What about some people like strawberry and some like choco. There is no point in arguning that there will be just one flavour and with different flavours in crypto we won't eat >95% bitcoin.


I have the feeling we are turning in circles here. What are the poins you agree on?

Cryptos are based on voluntary systems. You cannot compare it with State imposed fiat just like that. Yes, it will be clumsy to have more coins. Yes, there were all kinds of different papers flying around from several banks when banking was still free. Its called freedom. I would compare it to the various Linux distro's rising and falling.

I was actually thinking I should buy my own altcoin if it got too weak, yet I wouldn't want to be the only person buying it.

That's the way I feel about Yacoin at the moment. I woud say one actual problem of altcoins is that you could burn your self hard on them. Especially if when I realize how much these btc could buy me now.


There hasn't been a real altcoin bubble yet, but if too many people lost too much on alts they might stick just to BTC. Bitcoin had a nice crash from 30$, but there wasn't many lives destryed back then and everyone sticking to the plan got out nicely.
Altcoins will be different on that one.

The golden rule is don't put too great a percent of your networth nor own a significant portion of the float in any one of these (unless you are very sure you know which one is going big).

Freedom is incongruent with 100% consensus. Duh! (on me not you) Well yeah. Thanks.

So the only way you end up with 100% consensus is by state decree and then printing digits out-of-thin-air to gain the power and trickery to make that unnatural 100% consensus stick (with some percent of that 100% under duress).

But my beautiful tulpes ...

The problem are not the fools that loose some money, they always have and always will. Banning stuff is goverments favourite pastime and an a altcoin bubble could be a good trigger for such. Crypto will survive, that's clear, but what about a gov regulating just btc for trades in crypto.

We a far away from such bubble in altcoins since even btc isn't known yet, but a altcoinbubble would be desatrous. That's at least a real problem on altcoins, although I'd love the money I will make on it.

Did the government force everybody to standardize on HTTP for web sites, or did users freely choose to standardize on the most widely-deployed protocol exactly because the network effect made HTTP more valuable than its alternatives?

Did the government force everybody to standardize on HTTP for web sites, or did users freely choose to standardize on the most widely-deployed protocol exactly because the network effect made HTTP more valuable than its alternatives?

Lock-in network effects are not a foregone conclusion in every market.

It varies depending on the natural inertia.
...

I disagree with your arguments, not the result.

Inertia doesn't effect this in the way you suggest. High inertia would fight the lock-in since people would rather stay at where they are than to move to the one central item.BluRay vs HD DVD was very euqual and its huge inertia would have prevented a system to win so fast. Think of the billions invested in it.

It is actually the same as potential energy. I can cite a reference if you don't believe.

I don't see altcoins as a direct threat to bitcoin. There's really not much incentive to move from bitcoin to another crypto and at this point I don't ever see there being an incentive to move unless something disastrous happens to bitcoin.

I think it's a bit silly to be majorly involved in another crypto as no alternative will ever catch up to BTC as long as BTC is still afloat. For those whining about it's obvious bias towards bitcoin; wasn't that the point of the article? I pretty much agree with the article although I disagree with the so called competition of alternate crypto currencies.

Inertia is the resistance of any physical object to any change in its motion while potential energy is the energy of an object or a system due to the position.

They are not the same, but I get what you want to say.

Inertia doesn't stop a ball to roll down a hill, and the potential energy is usually causing the acceleration, not preventing. A minimum in the potential funktion could be interpreted as "inertia", but that's not the first thing to come in mind talking about inertia and potential.

Don't conflate an individual's inertia (which is a decentralized effect, i.e. the inertias are diverse and not moving together in unison, thus they are small and move independently thus low NET inertia) with a centralized inertia. The latter is a much higher NET inertia.

Wikipedia degrees-of-freedom.

It is actually the same as potential energy. I can cite a reference if you don't believe.

Stored energy is created whenever a particle has been moved through a field it interacts with (requiring a force to do so), but the energy to accomplish this is stored as a new position of the particles in the field—a configuration that must be 'held' or fixed by a different type of force (otherwise, the new configuration would resolve itself by the field pushing or pulling the particle back toward its previous position). This type of energy 'stored' by force-fields and particles that have been forced into a new physical configuration in the field by doing work on them by another system, is referred to as potential energy. A simple example of potential energy is the work needed to lift an object in a gravity field, up to a support.

Fitness

Fitness is how well a particular configuration of a system fits the desired solution, e.g. how well a particular program fits the desired semantics.
For example, there would be gaps (i.e. errors in fitness) between a bicycle chain and a curved shape it is wrapped around, because the chain can only freely bend (i.e. without permanent bending) at the hinges where the links are joined. Each hinge is a degree-of-freedom, and the reciprocal of the distance between hinges is the degrees-of-freedom per unit length. Employing instead a solid, but flexible metal bar, the metal would remain fit to the curve only with a sustained force. The resisting force is a reduced degrees-of-freedom and an error in fitness. Permanent bending to eliminate the resisting force, reduces the degrees-of-freedom for future straightening some of the bend for wrapping to larger curves or straight shapes.

Higher-level semantics are analogous to adding more hinges. Cases in the higher-level semantics which don't compose, i.e. aren't unified, or where the high-level semantics don't fully express the desired semantics, are analogous to permanent bending.

Efficiency of Work

Efficiency of work is the ratio of the work output (i.e. performed) divided by the work input, i.e. the efficiency is 100% minus the work lost to friction.
The lower the friction, then less power is required to do the same work in a given period of time. For example, pushing a cart on wheels, requires much less power than to push it without wheels, or to push it uphill on wheels. The ground rubbing against the bottom of the cart, or gravity, are both forms of friction. The rubbing is analogous to the permanent bending of the metal bar in the Fitness section, because the top of the ground and the bottom of cart are permanently altered. The gravity is a form of friction known as potential energy.

Given the friction is constant, then the input power (and thus input energy) determines the rate at which work can be completed. If the type of friction is potential energy, then the more work that is performed, the greater the potential energy available to undo the work. This type of potential energy is due to the resistance forces encountered during the work to produce a particular configuration of the subject matter. For example, a compressed spring wants to push back and undo the work performed to compress it.

Since the goal is to get more configurations (i.e. programs) in the software development system with less work, then these resistance forces must be reduced, i.e. increase the degrees-of-freedom so that fitness is closer to 100%. Visualize an object held in the center of a large sphere with springs attached to the object in numerous directions to the inside wall of the sphere. These springs oppose movement of the object in numerous directions, and must be removed in order to lower the friction and increase the degrees-of-freedom. With increased degrees-of-freedom, less work is required to produce a diversity of configurations, thus less power to produce them faster. And the configuration of the subject matter which results from the work, thus decays (i.e. becomes unfit slower), because the resistance forces are smaller. Requiring less power (and work), to produce more of what is needed and faster, with a greater longevity, is thus more powerful (efficient) and explains the wisdom of a forgotten proverb.

Google can't even find a wise proverb, “if you use your power, then you lose it”. The equivalent form, “absolute power corrupts absolutely”, is probably popular because it is a common misperception that power is useful (i.e. to be idoled). The utility of power exists only because there are resistance forces, i.e. friction and inefficiency. This generative fact applies to everything. For example, the power vacuum (i.e. the need for more power to get work done) that gives rise to central authority is due to the (resisting forces caused by) vested interests, bickering, selfishness, and complacency (laziness) of the governed.

Knowledge

Knowledge is correlated to the degrees-of-freedom, because in every definition of knowledge one can think of, an increase in knowledge is an increase in degrees-of-freedom and vice versa.
Software is unique among the engineering disciplines in that it is applicable to all of them. Software is the process of increasing knowledge. Thus the most essential characteristic of software is that it does not want to be static, and that the larger the components, thus the fewer the degrees-of-freedom, and the less powerful (i.e. efficient) the software development process.

Communication redundance (i.e. amplitude) is a form of power, because its utility exists due to the friction of resistance to comprehension, i.e. due to noise mixed with the signal. The signal-to-noise ratio (SNR) depends on the degrees-of-freedom of both the sender and the receiver, because it determines the fitness (resonance) to mutual comprehension.

The difference between signal and noise, is the mutual comprehension (i.e. resonance) between the sender and the receiver, i.e. noise can become a signal or vice versa, depending on the fitness of the coupling. In physics, resonance is the lack of resistance to the change in a particular configuration of the subject matter, i.e. each resonator is a degree-of-freedom[1]. Degrees-of-freedom is the number of potential orthogonal (independent) configurations, i.e. the ability to obtain a configuration without impacting the ability to obtain another configuration. In short, degrees-of-freedom are the configurations that don't have dependencies on each other.

Thus increasing the number of independent configurations in any system, makes the system more powerful, requiring less work (and energy and power since speed is important), to obtain diversity within the system. The second law of thermodynamics says that the universe is trending to maximum entropy (a/k/a disorder), i.e. the maximum independent configurations. Entropy (disorder) is a measure of the relative number of independent possibilities, and not some negative image of violence or mayhem.

This universal trend towards maximum independent possibilities (i.e. degrees-of-freedom, independent individuals, and maximum free market) is why Coase's theorem holds that any cost barrier (i.e. resisting force or inefficiency) that obstructs the optimum fitness will eventually fail. This is why decentralized small phenomena grow faster, because they have less dependencies and can adapt faster with less energy. Whereas, large phenomena reduce the number of independent configurations and thus require exponentially more power to grow, and eventually stagnate, rot, collapse, die, and disappear. Centralized systems have the weakness that they try to fulfill many different objectives, thus they move monolithically and can fulfill none of the objectives, e.g. a divisive political bickering with a least common denominator of spend more and more debt[16].

Thus in terms of the future, small independent phenomena are exponentially more powerful than those which are large. Saplings grow fast into trees, but trees don't grow to moon (nor to end of the universe). The bell curve and power law distributions exist because the minority is exponentially more efficient (i.e. more degrees-of-freedom and knowledge), because a perfectly equal distribution would require infinite degrees-of-freedom, the end of the universe's trend to maximum disorder, and thus a finite universe with finite knowledge. It is the mathematical antithesis of seeking knowledge to have socialism (equalitarian) desires for absolute equality, absolute truth, or perfection in any field.

The organization of matter and natural systems (e.g. even political organization) follows the exponential probabilistic relationship of entropy and the Second Law of Thermodynamics, because a linear relationship would require the existence of perfection. If the same work was required to transition from 99% to 100% (perfection) as to transition from 98% to 99%, perfection would be possible. Perfection is never possible, thus each step closer to 100% gets asymptotically more costly, so that perfection can never be reached. This is also stated in the Shannon-Nyquist sampling theorem, wherein the true reality is never known until infinite samples have been performed (and this has nothing to do with a pre-filter!). The nonexistence of perfection is another way of stating that the universe is finite in order, and infinite in disorder, i.e. breaking those larger down to infinitely smaller independent phenomena.

Copute attempts to apply these concepts to software, by increasing the independence (orthogonality) of software components, so they can be composed into diverse configurations with less work. Independent programmers can leverage independent components with less communication and refactoring work, thus Copute is about increasing cooperation.

[1] http://en.wikipedia.org/w/index.php?title=Resonance&oldid=432632299#Resonators

A physical system can have as many resonant frequencies as it has degrees of freedom.

http://en.wikipedia.org/w/index.php?title=Resonance&oldid=432632299#Mechanical_and_acoustic_resonance

Mechanical resonance is the tendency of a mechanical system to absorb more energy [i.e. less resistance] when the frequency of its oscillations [i.e. change in configuration] matches the system's natural frequency of vibration [i.e. natural change in configuration] than it does at other frequencies.

LTC is just an imitation of BTC but PPC is a completely different cryptocurrency. I'm not promoting the coin but the idea of Proof of Stake (PoS) is just genius. Not only does it save energy that could've went to other meaningful and productive calculations but it also gives coin generation power to every coin holder ANYWHERE he/she may be in the world. Homeless people, uncivilized tribes, etc. would have a fair and equal coin generation capability.

I wanted to mine bitcoins before but my country is really far away from those ASIC manufacturers. I didn't want to risk my money to pre order hardware. I believe Satoshi Nakamoto created bitcoins to give anybody with a computer generate significant amounts of bitcoins. From what I am seeing today, that is no longer the case. Bitcoins are no longer completely decentralized. Eventually, the people who has the most mining power will rule it. Many may not share this view especially those people who have access to the new ASIC miners. I trully believe that PoS in coins is an innovative solution for the geographical problem. Mining will become the fundamental problem with bitcoin. It is unsustainable, wasteful, volatile, easily manipulated by strong enough players, geographically selective in terms of hardware availability and electricity rates.

My guess is because people fundamentally understand that getting something for doing nothing (i.e. redistributing the new coins based on share of the collective) is communism. But let me hear the logic of others, because I want to understand this better.

My guess is because people fundamentally understand that getting something for doing nothing (i.e. redistributing the new coins based on share of the collective) is communism.

Also PoS does nothing to help you get your initial coins without a fiat exchange. And you can't increase your share by being more proactive, innovative, and risking your capital on mining.

Without risk, no new knowledge is created. Ponder that.

If the altcoin has sufficient demand (not even any where near Bitcoin) to generate a liquid exchange, then the altcoin can be converted on the fly to pay those who accept only Bitcoin.

So an altcoin doesn't need ANYONE to switch from Bitcoin, it only needs to grab a small percent of the market of new users. Bitcoin only has 350,000 users. There is a long way to go to 7 billion.

The key though is the altcoin needs to present something truly useful that Bitcoin can't copy. So it has staying power.

Friction always imposes costs. No how matter how good you make your exchange, it will always be more expensive than not needing to make an exchange. A line is the shortest distance between two points.

then the altcoin has to be appreciating faster than Bitcoin, else there will be a pernicious downward spiral.

Any feature that is so heavily demanded will be added to Bitcoin, because that is the most economically valuable solution.

My guess is because people fundamentally understand that getting something for doing nothing (i.e. redistributing the new coins based on share of the collective) is communism. But let me hear the logic of others, because I want to understand this better.

Communism isn't the right way to describe it. It could be seen very capitalistic, you get paid for helping the blockchain. Bitcoin isn't different since there the miners get paid to secure the chain. The only difference is that miners have to waste resources while POS is wasteless. I rather see someone getting rewards for free than to just to waste stuff.

There is no redistribution of wealth, so the rich stay rich and the poor stay poor. Everyone has all chances so it's the way capitalism should be. It's the redistribution that kills any eco system. We now have redistribution to the rich and it will destroy capitalism in the same way than communism got killed by redistribution in the other direction.

People actually do something to get new coins. As Sunny King has said if my understanding is correct, keeping coins to get coins is actually "saving". You lose the ability to spend your coins in exchange for having more coins in the future.

Well, if that is communism, then I'd rather have that than see unproductive capitalism. Imagine a third world country entrenched with capitalism spending resources on mining hardware and energy rather than agriculture, infrastructure, or whatever just because it is more profitable. It just doesn't make the world any better.

You could always trade physical goods get your initial coins. It brings REAL world innovation.

I think PoS coins haven't caught up yet because people aren't aware of it yet. I feel that the transition would be mainstream fiat currency to BTC then in the long run BTC to PoS coins but I may be mistaken.

Anonymity - this is likely to (and WILL) be a very attractive feature of some alt-coin (the only reason bitcoin would even dream of implementing it would be if not implementing it would cost them SIGNIFICANT market share and threaten its future dominace, which is unlikely due to the network effect and the fact that most bitcoin users nowadays don't feel the need for ABSOLUTE anonymity). Many services which rely on or prefer anonymity would accept this currency directly, and users only using crypto for those services would hold the currency directly rather than buying bitcoins. Liquid exchanges would be very likely - decentralised, anonymous exchanges would make users of the anonymous currency even more confident.

How does PoW waste resources? I actually believe it will increase resources! You see energy is abundant (probably practically limitless), yet finding it requires innovation. How do you spur innovation? You increase demand!

While this does make some sense theoretically, I think that the increase in demand for energy even by the entire bitcoin economy is insignificant compared to the increased demand for energy in general and therefore will contribute very little in-and-of-itself to spurring on innovation in that sector. The main way that I feel PoW wastes resources is in terms of individuals - the electricity, hardware, floor space, time etc. they have invested in bitcoin could be being used more innovatively with the same return were they using PoS instead of PoW.

How does PoW waste resources?

Securing the network with a technology that has to use lot's of electricity insead of POS that doesn't require any is a good example of wasting resources. It isn't innovative to use a expensive way to do it if you already knew a better one to do it for free.

Your argument is invalid, since it basically says it's impossible to waste resources at all.

Remember we are talking about securing the network, not distributing new coins to anyone willing to work for it. Once blockrewards decline POW won't do that anymore

and it's 100% wasteful while POS doesn't cost anything at all.

When looking at POS you seem to miss the point that there is no new wealth generation.

If we would add a zero to every dollar bill, bank account,wages, etc nothing would change. Noone would be richer or poorer, in fact nothing changes. Even a 10-fold wouldn't make a difference, so 1% per year isn't even worth mentioning in term of costs.

People sending funds loose fees and interrest, but it's these people that need a safe and non reverseable network. Someone holding a wallet doesn't need that once it's in the blockchain. Why should someone else or all pay for them the efford to do the work.

I think PoS isn't secure (explained upthread) and if I am correct, you have similar risks then.

Your points stand and my points stand. Thanks for the discussion. Any way, we can have both. That is the point of this thread. Let the market decide.

No.

Waste is where there is no return. Efficiency is output divided by input.

You could try to rewrite this last paragraph so I can understand your point.

I agree.

You might see security issued with PoS that I don't see, but you fail to see that there are security issues with PoW aswell.

It's pointless to discuss which one is better on it's own, but a combination beats them both.

That's something bitcoin will never be able to implement, even if there were no PoS rewards.

PoS is a way to get a decentralized "central authority" that validates a block chain. PoW will never be decentralized since only the strong have enough hashing power, on PoS everyone can participate and noone can be forced to stop doing it.

That's an akward definition of wasting.

If I have 2 ways to finish a job and one takes 1000 times the resources than the other it is wasteful to go with anything but the efficient method. We don't have unlimited energy so we have to use it efficiently.

Once my funds are in the blockchain burried after a few 100 blocks I don't care about the network beeing safe and non reversable. It's expensive to keep it that way so people loosing the PoS rewards pay for that. Fees alone aren't enough in a late state. People rather loose profits than money, altough it's the very same.

The issue I have with PoS is that a bank that has the most amount of money will have the biggest stake, and we already have that system, and examples of the results.

Why is anonymity being brought up as an argument against bitcoin? Anonymity is a feature, which can simply be built on top of the underlying bitcoin protocol.

We already have a few propozals, like zericoin and coinjoin. And if a "cryptocurrency" is built that implements anonymity, but the only use it has it to be used in conjunction with bitcoin to add anonymity, then I wouldn't even call it a separate currency, but simply a Bitcoin plug-in.

Someone also mentioned that there are many coins that are more secure than bitcoin. That is patently false, since to be more secure than bitcoin you have to have a bigger network that secures your system, and more higher-skilled developers that work in your code. There aren't any currencies that have either of those be better than what bitcoin has.

Problem is that if everyone is not doing IP anonymity correctly, then the mixers aka tumblrs or laundries (you mentioned a few) are useless, because the degree of uncertainty about who owns a coin that comes out the mixer is proportional to the number of coins that don't reveal their identity on any spend downstream.

Also mixers can be honeypotted, employ timing analysis, etc..

Mixers just don't really provide anonymity and amazing that so many people naively think they can rely on them.

The issue I have with PoS is that a bank that has the most amount of money will have the biggest stake, and we already have that system, and examples of the results.

Why is anonymity being brought up as an argument against bitcoin? Anonymity is a feature, which can simply be built on top of the underlying bitcoin protocol. We already have a few propozals, like zericoin and coinjoin. And if a "cryptocurrency" is built that implements anonymity, but the only use it has it to be used in conjunction with bitcoin to add anonymity, then I wouldn't even call it a separate currency, but simply a Bitcoin plug-in.

Someone also mentioned that there are many coins that are more secure than bitcoin. That is patently false, since to be more secure than bitcoin you have to have a bigger network that secures your system, and more higher-skilled developers that work in your code. There aren't any currencies that have either of those be better than what bitcoin has.

I think my concluding point was that if we create an altcoin that does allow for anonymity, it will just end up being used as a mixer for bitcoin.

The government will continue to pretend to be somewhat against it, well for one thing the underlings don't know it is intended to be the next one-world digital currency. The elite don't want us to wake up too soon and realize we've unknowingly handed them the 666 control they want. They are hoping for the "there can only be one" outcome. That is why this thread is so important to me.

I am most interested in using an altcoin, and none have IP anonymity.

They must spend on the altcoin to be safer.

Bitcoin will become known as the government's coin, due to the cartelization of mining and the lack of safe anonymity. It will be the government approved coin. The anonymous altcoin will be the freedom coin.

The question is if this is actually possible and worth waiting for.

Tor and I2P seem to be safe now, but that doesn't mean it hasn't been already compromised.

The Allies used to sent ships in certain death just to protect the secret that they can encrypt Enigma, so I'd really wonder if any of them would be safe if they really want to grab some coins.

Why is spending altcoins safer?

Freedom coin sounds so patriotic, how about terrorist coin or child molerster coin ...

I highly doubt the NSA hasn't been able to crack Tor given it is well documented that a global adversary can in theory crack every low-latency mix-net using timing analysis. And Tor only uses 3 hops.

I still don't get your view on this. Even if they somehow manage to have such a massive amount of control over Tor that they can determine where a packet of data originated on the tor network, it does not prove or even imply that the transaction belongs to the originating connection. That is a preposterous presumption to make of a distributed shared file. Hell, I could imagine that even if the NSA was watching every local connection for everyone, this would be easily defeated by pseudo/fake Tor peers that occasionally feed each other nonsense data. How are they going to prove it? "We control every single node and we know that that isn't one of them?" That could be foiled by occasionally sending real data among the nonsense data.

You don't understand that all low-latency networks are vulnerable to timing attacks if the attacker can see the traffic between each peer on the network. They don't need to decrypt the traffic, they just need to see the timing. This is well proven in research papers that have analyzed Tor. Tor even admits this.

Also some people has thought the Tor relays are honeypots. How can you prove they are not! You can't. Who is paying to give away all those free servers and bandwidth?

Don't you see the media pushing Bitcoin? This doesn't happen without the permission of the ruling elite. It is my speculation, "they" (rockefeller/rothschilds/kissinger) created Bitcoin. Not the underlings such a Obama and Geithner. Compartmentalization of the underlings.

The government will continue to pretend to be somewhat against it, well for one thing the underlings don't know it is intended to be the next one-world digital currency. The elite don't want us to wake up too soon and realize we've unknowingly handed them the 666 control they want. They are hoping for the "there can only be one" outcome. That is why this thread is so important to me.

My apologies, I did not realize that you were a crazy person. Cary on.

And this is completely irrelevant in the case of a distributed shared file. No one is trying to hide anything except for a tiny little portion that they do not want attributed to them. They DO need to be able to decrypt the traffic if they want to know what transaction originated from where.

Tor is perfectly acceptable for anonymizing transactions. Why you don't see this is beyond me. And the trade-off for high latency is an unusable network for commerce, at least of the face to face variety. In that case, only criminals are likely to use such a system making the target much juicier.

SO WHAT? The relays do not know what the data is!

The data goes on a public ledger. It is decrypted.

And the gigantic point that you miss is that the originator of the transaction is lost in the noise. With basic protocol encryption, the NSA would have to not only be watching your connection, but they would have to BE every peer you are connected to on the "clear net" so that they can isolate the incoming tx that you see and retransmit, then they would have to control a vast majority of every bridge or relay in the tor network to ensure that they control each hop you use (which is astronomically unlikely if the client acts as a tor bridge--unless the NSA is the only one using it, you're fairly safe).

What in the ever loving fuck are they going to do? Control every bit of data, crunch all the numbers and put it in a tidy box for the IRS to examine and send a tax bill?

What happens if people start opening up their wireless connections for transactions?

The NSA does not have the ability to suppress this or do whatever it is you've gotten into your mind that they can do. Not without destroying the internet, the tool they have fallen so deeply in love with.

It should be noted that if for some reason bitcoin fails, we would need an alt currency to take its place.  Bitcoin 2.0 or something which corrects the flaws created by the currency and brings the cryptocurrency to a whole new level.  Of course I would never want bitcoin to fail, but just as the most secure systems in the world are eventually cracked, bitcoin may fall as well.

Incorrect. For a timing attack, they only need to see the traffic passing between each node in the Tor network.

Hmmm. Etlase2 why are you are arguing against improvement of the anonymity?

You do not have a grasp on the situation here. I'll leave it at that.

Hmmm. AnonyMint, why are you so scared? May I imply that you are a criminal in various ways?

PS - For crying out loud, stop editing your posts.

Why are you accusing me of being a criminal?!!! Damn it that almost deserves reporting you to the moderator!

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow (i.e. me as his financier)! Because that is not going to be easy in every case.

Also because of the Admiralty laws, governments can confiscate all money that was involved with a crime, even if you prove you were not involved.

Proving that your cash is connected to a crime is surprisingly easy to demonstrate. That's because 97% or more of cash circulating today contains tiny concentrations of narcotics residues—primarily cocaine. All police need to do is to bring in a drug-sniffing dog to inspect the cash.  If the dog alerts, police seize the cash. And, under civil forfeiture rules, it's up to you to prove that the cash has a legitimate origin.

Consider the case of Emiliano Gomez Gonzolez. During a traffic stop, Nebraska state troopers asked Gonzolez for permission to search his vehicle. During the search, the troopers found bundles of currency totaling $124,700. Based on a dog sniff, police seized all the money.

Gonzolez contested the forfeiture in court. Prosecutors neither convicted nor accused Gomez or any of the other owners of the seized cash of any crime. Nor did police find any drugs, drug paraphernalia, or drug records connected to the cash. Despite these facts, a federal appeals court upheld the confiscation of every dollar found in the vehicle.

In thousands of cases across the United States each year, police follow the same pattern. In a search of someone's home or vehicle, they discover a significant quantity of cash. They then bring in a dog to sniff the cash for the presence of drug residues. The dog alerts virtually 100% of the time. This supposedly gives police probable cause to seize the cash under state or federal civil forfeiture laws.

Owners of property subject to civil forfeiture find themselves in an Alice-in-Wonderland legal landscape where the property seized is accused of a crime, rather than the owner. The owners must follow obscure rules that originate in Admiralty law, with which most attorneys aren't familiar. Under these rules, the seized property is presumed guilty, and it's up to its owner to demonstrate that the property is innocent. (Yes, it's bizarre, but it's the law!) Since obtaining legal representation in a civil forfeiture case typically requires a legal retainer of $10,000 or more, most victims of this vicious procedure never contest the seizure.

In an era of across-the-board cutbacks in public spending, civil forfeitures are a lucrative funding source for cash-strapped agencies and states. Last year, the federal government seized more than $4 billion under civil forfeiture laws, more than twice the take in 2011.

That is not acceptable in technical debate. Refute with technical argument.

Did you fail to read what I wrote upthread? That I don't want to have to prove that some criminal who used my coin before or after I held it, was not me or not involved with me somehow

You mean like "well bruce schneier sez!!!"?

Sorry, but this fails the smell test. It is a manufactured argument for pushing an agenda.

Crypto accounts can't be frozen, and they are difficult and sometimes impossible to confiscate (lol let's raid EVERYBODY!!), let alone prove that you are in possession of them.

The timing attacks research has been done by numerous different researchers from numerous prestigious universities and numerous confirmations. It is all peer reviewed. Go read the research papers so you are not ignorant on this.

Even if you don't believe there is much risk, why not protect yourself and be sure?

A P2P transaction network interfacing with tor is *not* the same as your typical (lol what?) tor user scenario. No, I'm not going to hold your hand until you understand the implications of this.

... it doesn't matter what gidget you come up with to anonymize the network, shit is going to hit the mother f***ing fan. There is no winning here.

If you sacrifice liberty for security... (do I need to finish this sentence or is the ellipsis enough?) Liberty being very loosely defined as the utility and accessibility of the network.

Cheap, fast, scalable are properties that are of paramount importance to anonymity. And IF you can find a way to increase anonymity via increasing difficulty/cost with little affect on those who do not want it or need it, then you allow a happy medium between both needs and, imo, have the best chance of achieving what I think is roughly the same goal between us.

I already explained the lack of anonymity with Tor against a global entity.

Some other use cases of Tor are not threatened by such a global entity. Our use case is.

Defeatist. I would prefer to defend myself against the coming SHTF.

The key to achieving this is not use a general purpose web browsing anonymizer like Tor, and instead build-in a special purpose design for the coin.

Agreed. So I don't know why you are against improving the anonymity. I guess you assume it will be slow, expensive, and not scalable.

If done correctly, it is precisely the opposite. The common man Tor use case will make it magnitudes more effective.

Rationalize all you want, hose beats crypto. So does surveillance.

Tor is not a web browsing anonymizer. Belittling it in such a way means that either your understanding of it is poor, or it is an attempt to manufacture a reason for your case, again. Neither choice leaves me impressed.

I am against you wasting your time on pursuits that are not that useful.

The real problem with altcoins is they can go up really fast and they can died all of sudden. Its risk vs reward...

I guess you want us to read your mind.

I think I know what you are thinking, and you are incorrect in your assessment.

Is Bitmessage a waste of time?

Character assassination is what losers revert too when they can't present a cogent argument. Your prior comment was weak logic which I refuted, so then come back and character assassinate to get revenge.

You decided not to quote where I wrote "Speculation follows". Speculation is not a statement of fact.

You clearly are biased for Bitcoin and will say anything to protect Bitcoin, while ignoring reality.

My bad, I mistook that line to refer to the prior paragraph. But it was some deep crazy you were speculatively wading in. We have a lot of members here who are in that part of the pool, and it's easy to get lost in that crowd. Besides, your speculation was presented as your opinion of how things are. Not my fault it sounded crazy.

I am quite a realist (just ask the people in the religious threads  ;D) I'm not biased for Bitcoin, I just don't see anything that can challenge it in any way, yet.

Over and over and over and over and over again. If you would stop for one second and drop the megalomania, we could possibly go somewhere. But nothing ever works for you but you. I try to pry you open, but you shut tighter, so there is no point and I am just wasting my time yet again. I guess I don't learn either.

Isnt this how bitcoin started? or am I wrong..

What are readers thoughts on this and are there any required features I have failed to mention? Feel free to disagree with me of course. This isn't my thread. Apologies for so many posts.

The only way for private property to survive against the crazy devolution of society that always occurs with widespread economic failure and defaults, is for the private property to be mobile and well private.

Even in a normally functioning society, taint is a very big problem if the money carries your identity or traces of crime in a decentralized system like cash or bitcoin, at least for gold it can't even carry a drug residue like paper cash can. Issues range from the ones I already wrote about upthread, to even identity theft. Even with a credit card, you run some risk of your identity being stolen and used for nefarious activities.

But this is wrong. Private property isn't going to survive a crazy devolution of society. That's why it's a crazy devolution of society. If the establishment kicks and screams so hard to stop it, there is nothing to be done for western society.

As I mentioned previously to you in a PM, it becomes time for the "3rd world" economies to take the reign where the governments have much less power.

They can't go after everybody, so anything that is a hindrance to adoption by everybody slows down the possibility of a quick and hopefully less painful switch.

Coin taint is only an issue with a transaction ledger--less so with the "mini-blockchain" but still there. Rather than square pegging the round hole, the universally better design of the account ledger solves it natively.

Additionally, in lieu of "sending coins", one can simply send accounts by changing keys.

Following this principle, it is impossible to follow more than one hop in an account's life without rubber hosing each person down the line. If done correctly, it is impossible to know how much was even sent.

As far as IP anonymity, the NSA cannot be everyone.

Timing attacks on tor cannot isolate individual transactions from the noise.

With a healthy mix of clear net and tor nodes, very good IP anonymity is possible with very little effort

And, if they do catch something, all they have is the tiniest window of information that is stopped in its tracks at the next account change.

Coin taint is no problem in the ledger if your IP address is never known and you never otherwise reveal your identity on any spend. Thus the ledger alone is not the problem.

You mean EXchanging (transferring) the private key.

Disastrously incorrect. Anyone in the line of coin taint who is caught can leave trails to prior coin holders.

No, for fuck's sake, I don't.

I have spent a lot of time thinking and researching on that. If you truly had something important to say, you would explain it clearly.

Nails it.

http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/

I hereby initiate a list of things that are broken in Bitcoin, which an altcoin can fix, and label which ones Bitcoin is unlikely to fix because of the mining vested interests (Tragedy of the Commons (http://www.catb.org/esr/writings/magic-cauldron/magic-cauldron-5.html)) which control Bitcoin. Please comment on and help improve this list.

Bitcoin is much less vulnerable to competition than eBay is.

Ah fuck it, I'll take a stab at this

1) Problem was really "discovered" apparently three years ago, and is not actually a problem.

The people who wrote that recent paper made some glaring mistakes and assumptions regarding mining and the bitcoin economy, not the least of which is that the network doesn't care when you mined a block, just when it was broadcast. Being selfish and holding a block while mining the next one has a huge risk that someone else will mine a block and push it out to the network before you push your own out, making your block worthless. In short, #1 is not an issue.

2) Similar to #1, since this attack is costly to perform, ...

...and is extremely risky.

Plus 0.9 may address it in part, since it will be the merchant that will be receiving, checking, and broadcasting transactions.

3) Its not the same as being owned by the government, because miners will still not have control over the currency. Only over transactions.

And as long as two pools are competing for fees and mining revenue, they will continue to process as many transactions as they can.

Also, the world is large. Instead of one government, you Han have many mining corps all around the world. Even the wealthiest corporation in the world, Exxon, still has tons of competition.

As for the ballooning blockchain, that will get pruned long before that becomes a problem.

4) Then I guess there is no fix, until bitcoin comes out with a fix.

5) Money is not valuable because you can print it at home, money is valuable because it is useful for transaction and commerce.

Apt coins are mostly a waste of time and resources. Just because lots of people mine them will not automatically mean that they will be used in trade.

During the MtGox hack in the summer of 2011, it was revealed that there were over 65,000 MtGox users. That number very likely doubled or tripled by the summer of 2012. By January of 2013, MtGox was adding 25,000 new users every month, and my March/April that number was 50,000 every month.Services like instawallet boasted of having over 1.5 million accounts, and Blockchain alone recently said they had over 300,000 (which I found surprisingly low). And now we also have China, which surpassed even MtGox, and may have possibly doubled the number of bitcoin users around the world (though I suspect it may account for 1\3 of new users). Either way, your 350,000 number is extremely wrong, and was likely surpassed over a year ago, before we had Cyprus, Silk Road news, and China. (My personal guess on total number of bitcoin users is 2mil to 3mil users)

Bitcoin is much less vulnerable to competition than eBay is.

Alas, Bitcoin has become so riven with speculators, zealots and fanatics that the implications of this will be ignored, in fact more than that they will flame the messenger.

1.) I don't see any new problems with that at all.

1.+2.) Who expected that mining will allways be cooperative.

4.) Can be seen as advantage aswell. It's better to have the option than be forced to use anonymity. Gov rather not fight crypto if it's trackable.

3.)You really spend some thinking on that ...
The problem with that are the extreme low incentives to keep a multitrillion dollar network safe. Fees can be avoided, so it would need a sort of central authority to be safe. Nobody would like that, but that seems to be not a choice by then.

If most of all honest* miners agree to stay on one chain and fight (illegal) forks no matter the cost it wouldn't need any changes. Just the announcement would be enough.

6.) Goverments are stupid, but not the kind of stupid most people think of. Once BTC gets significant it will be overregulated. These regulations will be (as usual) useless, stupid and probably harmful for crypto in general, but alts might be able to adapt to them.

Since this thread is about the problems of altcoins I want to bring in the following real problems. The article in the OP and it's conclusion is biased and not plausible. Please don't argue that most of his busted myths on altcoins aren't actually true. I know that.

1.) Confilicting Requirements
It would have to be innovative and very lucrative for early adopters to reach a critical size to be even noticed. For later adoption it mustn't favour early adopters too much and be conservative.

2.) It's unlikely that bitcoin is flawed
in a way that it will have to be replaced within the next few years. Most flaws won't be noticeable by most people within this decade.

3.) Time and gamechanging innovations are running out.
The timewindow for establishing a new crypto is closing and the most basic features bitcoin lackes are already used by other alts or in development. It will be harder and harder to establish a new crypto in the future.

4.) Regulation
Whem gov finished regulation on bitcoin they will be against anything new that isn't regulated yet.

4.) Regulation
Anonymity could be a requirement by the community and also a reason to outlaw that crypto.

5.) Bubbles and Risk
Noone ever invested in bitcoin lost money if he just had the patients to stick to it.

Price bubles and risk in general are higher on altcoins.  A serious altcoin bubble could do enourmous damage and won't recover like btc.

6.) You will get super rich, no risk or skill involved
Scamcoins won't always be so primitive and easy to spot. Madoff had stolen billions and a premine isn't the only way to grab some fool's btcs. A succesful scamcoin could keep serious players away from alternative coins.

Incorrect, read the rebuttal from the author of the paper:

http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/#comment-1110209017

http://hackingdistributed.com/2013/11/09/no-you-dint/

Also the most prominent Bitcoin developer Gavin Andresen is concerned and put out a threat (http://sourceforge.net/mailarchive/message.php?msg_id=31609209) to anyone who attempts the attack.

See my prior reply to Rassah.

It must be "incentive-compatible" (http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/#comment-1112150461), else it will fail (http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/#comment-1109502728).

I tried to distill the information content of that but ended up with the empty set.

Cartels are not stupid. They control and own the government now. The government is run as a Commons and the cartels let it suffer from Tragedy of the Commons, while they privatize profits and socialize losses.

But they have a problem. How do they write a law to differentiate cryptocurrencies by feature? We can easily design and program circles around their legislation.

So I don't think so. They will continue with adding regulation which will apply to all altcoins too.

In the future fees won't be able to cover the cost required to run enough miners to keep bitcoin safe using todays rules.
A mayority of miners can decide on an other method to find the right chain, currently it's lengh of blocks, but it doesn't have to be that way. The new method will have to be accepted and used by the rest of miners, regardless if the like or hate it.

If they whish that could be a central authority that has to approve every new block and so punish illegal (=what they do not allow) behavour. Free transactions would probably be one of them

,but my statement was simply that fees will be very high and recivers could require many confirmations.

On chain transactions will be a rare event so this doesn't upset many.

My new thoughts on this topic:
Paybacks on fees would probably be considers illegal and wouldn't end well for that miner.

If a cartel hasn't 51% already all other miner would be totally against free txt.

This forces everyone that hasn't the ability to mine to use the miners off chain transactions. Connection between miner networks could be done from each miner using his own blocks. It's free for them althought they still have to pay a huge fee.*

*)Interresting method to launder btc's, isn't it?

I don't know what your definition on cartel is, but these miner would still be compeating against each other. A 1% attack can be prevented be forcing a timestamp after each block. Even deposits and withdraws would be free, but you won't send to other people accounts. Rules on the miners off chains would have to following the laws of the miners nation so they can't fusion.

I propose a solution to this selfish-mine attack. There should be a new kind of peer which is responsible for relaying block solutions to the network, it should be paid per share (regardless of whether a block solution is found) and the oblivious share fix[1] should be employed in the blockchain and by this new type of peer.

Thus this new type of peer has no incentive to be selfish. And the rest of the network can't know which shares are block solutions, until this new type of announces the block solution.

[1] https://bitcoil.co.il/pool_analysis.pdf#page=29

I have no idea why you wrote that or what the context is.

3. Bitcoin stops giving coin rewards to miners in 2040, but the rate of debasement drops below 1% by 2033 and gets relatively low by 2020s compared to today's 11% and the recent past of several times that rate. Everyone thinks transaction fees are a solution, but they haven't even really considered this deeply. Transaction fees could be 0% (or refunded if mandatory) by large corporations, e.g. Amazon.com. This would drive most transactions to them, and they might withhold sending these out to other miners. Thus all mining WILL be owned by cartels and banks in the future. This is the same as owned by the government, since in fascism (that we have now in the world), corporations and governments cooperate (just review the NSA scandals with large internet companies revealed by Snowden if you doubt that you already live in a fledgling fascism). Btw, this takeover of mining by corporations was predicted by Satoshi and is supported by the core Bitcoin devs. You can find the relevant post somewhere on this site, I had the link to the post once before.

Note the ballooning multi-GB (eventually to be TBs) blockchain (which the Mini-blockchain design proposes to fix) also leads to either pools or large corporations doing the mining. And not fixing #2 above, means pools can be attacked later. Thus another factor that will drive Bitcoin mining to cartels in the future.

3.)You really spend some thinking on that ...
The problem with that are the extreme low incentives for an old bitcoin to keep a multitrillion dollar network safe. Fees can be avoided, so it would need a sort of central authority to be safe. Nobody would like that, but that is nothing we can avoid by then.
If most of all miners agree to stay on one chain and fight (illegal) forks no matter the cost it wouldn't need any changes. Just the announcement would be enough. When most transactions are off chain anyways confirations required could take weeks,d'be damm expensive and must be approved by CA anyways.

A CA wouldn't have the powes todays govs have so I don't see many people protesting. Current bitcoiners excludet, but who are 350.000 people to the world anyways ...

That is not PoW. That is not a decentralized currency.

This is another reason I think Bitcoin was designed to be the one-world digital currency controlled from Brussels. I think Bitcoin was planted by the elite, and not some fictional person "Satoshi".

Yes the masses will accept the cartels and government takeover converting Bitcoin to a fiat, as long as the masses get their goods and services.

It's actually beneficial to use more than one crypto

How so? To me using altcoins only adds more friction.

Don't you think this a really long shot?

Strange that we agree with that much although our conclutions are 100% different.

A "crypto" run by goverments could replace bitcoin since most people (including me) don't have such an extreme worldview like you.

I don't expect fiat to be replaced by bitcoin or any other system unless it fails catastrophically. This would require more than just EUR,USD to loose all of it's value. I find it even more unlikely that goverments will try (or even succeed) to change bitcoin to fiat like crypto. Not going to happen.

On the other hand would it possible (and more favourable for gov) to lauch a pseudo crypto as alternative. A 1:1 fixing with that nations fiat system could be acepted by most people. Will be interresting to see how much anonymity people will be willing to sacrifice, but I expect that to be enourmous. Like todays currencies it will be a legal tender so you will be forced to accept it by law.

Such fiat crypto would be a serious thread for bitcoin and her sisters ...

I wouldn't trust them. Not reporting your stuff to the authorities and not being anonymous means jail time and bankruptcy in this coming G20 crackdown as the sovereigns go into sovereign debt crisis spiral.
...
There is no viability for freedom with Bitcoin. It is going to kill all freedom long-term, even though it provides the illusion of increasing freedom short-term while the incriminating evidence mounts in the public ledger.

I think it is insane to use a non-anonymous coin like Bitcoin.

I don't want to say that you are too pessimistic, AnonyMint, but let's say what works for you, is not feasible for the majority.

Wise people such as Julian Assange (https://bitcointalk.org/index.php?topic=174620.msg1896852#msg1896852) know the actual dynamics.

It is not so black-and-white, even the vilest administrations need to take into account the public opinion. Governments have lots of resources because we feed them, but they have very much red tape, and the divisions that do actual, harmful, things to people, are understaffed. In the age of Internet you cannot so easily plan atrocities, because maintaining secrecy is so difficult.

What the majority should in my opinion do, is to fulfill Bitcoin's adoption curve (buy bitcoins), and not fear guillotine or supermax.

If your liberty is based not on what you feel is right, but rather what you believe you can do in secret, it is not much of a liberty anymore.

Bitcoin is a huge chance to make the world more free, especially as it looks like that it will hit its maximum value (not maximum adoption) already about 2016, which will be a huge shift in resource allocation.

We need to redeem the time to network with other bitcoin powercenters and show the world that we bring peace and prosperity.

Not fearing for our imagined anonymity and unwilling to spend. United we are strong,

spreading FUD like the quoted part does not bring any good. (Yes, government does kill intellectuals without due process, but you and I are both alive, proving that it does not happen so often that a general warning is necessary).

This is a good "dystopia" read (http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future). I am sure we can make the future better than that, though.

I own a few bitcoins, and I intend to keep them until I find a more attractive investment (that is, I want to invest in whatever replaces bitcoin or builds on top of it).

If you are involved in Bitcoin now, you should prepare to be almost universally hated someday.

For our first thought experiment, let’s imagine a world where distributed currencies like bitcoin have become wildly successful due to technological advances which make them easy to use and completely stable. In this world government-issued money is as good as dead. It may take a few years for everyone to realize it, but there will come a point when the ever-increasing outflows of money from fiat money into untaxable, unseizable decentralized currency will reach a tipping point, and we’ll have a financial panic like the world has never seen. Frightened lawmakers and banks will try to stop people from cashing out, but that will just increase the panic. Those who don’t get out before the door closes will be in dire straits indeed. This is the ultimate bank run — the run on the world’s central banks, and who could possibly step in and restore order?

Bitcoin was clearly designed to fail around 2033 or so when ...

Btw, if you see a new altcoin that is being attacked with words by those who have a lot invested in Bitcoin, that should be an indication that the new altcoin is very good and a serious threat to Bitcoin. They won't bother to attack it otherwise. They will find all sorts of things to make you afraid to adopt it, such as how immature the implementation is, etc.. And everyone who doesn't adopt it, will be kicking themselves later.