Here is the weekly chart from Bitstamp where we are watching the rightmost candle which presently has the technical shape of a hammer. This candle is only 4 days old so it could end up with a different shape. Conventional TA wisdom regarding hammers is that they often indicate a trend reversal when following a significant downtrend, e.g. April 6. The time resolution is not important as candlestick TA is fractal in that sense. On the other hand, a hammer can also occur in the midst of a trend as happened September 29, 2013.

Because the price previously stabilized around $650, that would be a resistance zone if indeed the trend reverses to a rally.

An important aspect of TA is that traders and algorithmic bots look for these patterns and take action. So even if you think TA is unsound, it is an indicator of the possible actions of speculators and their trading bots.

That could happen, but I suggest that current holders will simply wait and see what happens to the price of forked coins. The price of a coin, I believe, depends mainly on the quantity of economic transactions its users are willing to make. Metcalfe's Law, as applied to coin prices, says that the price of the coin should be proportional to the square of the number of transactions. My goal therefore is not to get big investors to buy, or even to hold - rather my goal is to get payment processors to accept my forked coins because of their performance - namely immediate acceptance and 100x lower fees. I plan to also use a variety of marketing promotions, allocated from block rewards, to induce users to transact the forked coins.

The first market will be microtransactions, which should lead to high transaction quantity but little in the way of amount.


My interpretation of Satoshi's writings are different than yours. He had little to say about the unequal distribution of bitcoin wealth, which is important because he owns so much of it. Obviously, CPoS overturns Satoshi's brilliant solution to the problems of electronic cash, yet I attempt to maintain the Satoshi Social Contract to the greatest extent possible, e.g. no trusted third parties, create a new block every 10 minutes and have a maximum 21 million bitcoins ever.

If we agree that the semantics of trust are "confidence placed in an agent by making that agent the nominal owner of property to be held or used for the benefit of one or more others", then I entirely agree with AnonyMint that software agents can be trustless.

We do not need to have confidence that a software agent will do the right thing if we can inspect the source code and its peers can verify each other peer's correct behavior.

This is how Satoshi's Bitcoin operates, indeed that is how any enterprise financial system works. Years ago while working at a bank, my code was routinely checked by a data security officer. Daily runs of the bank's software had a staff of people in the Controls department that verified the accounting inputs and outputs of the system. The bank did not need to trust that I would perform my job correctly, rather others would verify my work before it entered production, and others would verify the results of the calculations.

Customers, on the other hand, trusted the bank because we were subject to audit by the board of directors, by the State government and by the Federal government. And if the bank failed despite the audits, then customer deposits were insured to a certain limit by Federal insurance.

Thanks!!

I have 5 280x GPU cards, which should get 450 h/sec each. According to an XMR mining calculator, that works out to .22 BTC per month. It would not pay my electric bill in Austin, Texas, but is very satisfactory as a noisy space heater that offsets my electric heating bill in my Colorado mountain home over the winter. An additional expense is maintaining the internet service when I am not there.

That.

Plus the current PoW coins are in a sort of unstable equilibrium, in which their operating situation is locally optimal, even though a hard fork to reallocate the mining reward would be greatly beneficial to the community. As Tim Swanson explains in his recent book, the core developers of Bitcoin do not have the staff nor the consensus to make a great change to how Bitcoin works. Disruption must occur from the outside and start with a market PoW cannot currently address - I will try microtransactions for example.

My CPoS scheme will directly test this hypothesis and will certainly fail if you are right. In contrast, perhaps cryptocurrencies are valuable solely because some people think they are valuable.

Industrial mining appears to be concentrating in locations with the least expensive power and passive cooling. Increasingly, ASIC manufacturers are vertically integrating with industrial miners. The fact that mining equipment rapidly becomes obsolete means that an ASIC space heater will offset electrical heating costs for one  season at most. Then the rig is simply not worth running at all, e.g. too noisy. I have three GPU mining rigs ready to heat my Colorado mountain home should GPU-algorithm coins ever again be profitable to mine, but I doubt that I will ever take them out of storage.

PoW secures a blockchain that only needs securing because anonymous, possibly malicious, peers compete. Conventional financial networks are secured at much less expense, and the block rewards of PoW coins should be better spent elsewhere.

Yes, andytoshi personally, and gmaxwell on IRC.

Before writing the whitepaper I met with andytoshi here in Austin, Texas and we discussed the issues of achieving consensus in a distributed system. He believed then that my ideas were not Bitcoin, as I sidestep distributed consensus by not having a Satoshi-style, join-and-leave at will, anonymous, volunteer peer-to-peer system. CPoS has paid-for, authenticated full nodes that are permanently operated by geographically dispersed, non-affiliated system administrators. CPoS is cooperative and achieves trustless behavior via transparent software agents that verify each other's actions. Gmaxwell, I believe, wants to see the working system.

Core developers will likely closely scrutinize the nomadic central mint that enables all CPoS advantages. As I plan to use bitcoind as is, I actually do not need core developer acceptance of a pull request for changes to the Bitcoin Core software. Rather my code encapsulates a slave bitcoind instance and proxies its connections to the secure network CPoS manages.

I plan to explore microtransactions as a route to more general acceptance, as CPoS has benefits for this up-to-now unserved market, namely 100x less transaction fees and immediate acknowledgement  for inclusion in the next block.

Should CPoS prove successful in its forks of the popular PoW coins, then I expect the system to use a portion of the block rewards to hire a relatively large number of developers to join those already working on Bitcoin Core.

I am dropping the idea of paying dividends to existing coin holders, as the system stake is provided by the paid-for full node operators. The block rewards are better spent to improve the coins, and encourage their use in transactions.

I too hope that candle is a hammer, or more generally ends the week at its highest level.

Correct in that I am not a crypto-currency expert yet, but my whitepaper has been received well enough to credential me for a modest speaking role at the Hashers United Conference to be held in  Las Vegas this October. There is little new in the way of crypto that I bring to this community.

I am however a programmer with decades of Cobol and database experience in networked enterprise financial systems up to 1998. Subsequently I worked as a Lisp and Java programmer and project manager for Cycorp, a DARPA contractor performing artificial intelligence research. Now 8 years early retired from a salary job, I have drawn on both experiences, bringing a fresh approach to solving the problems Tim Swanson best describes in his recent book about Bitcoin.

Regarding the political and economic aspects of bitcoin, I am naively optimistic and defer to you on those issues.

Here is the one-week resolution chart of LTC vs CNY from the liquid OKCoin exchange. The rightmost green candle could be a long-awaited trend reversal for litecoin prices, given the relatively high volume . . .

Here is the one-week resolution chart from Bitstamp. The rightmost green candle is not yet a week old but it appears that the downtrend has reversed . . .

The CPoS system is not yet deployed so we do not know its vulnerabilies, but it's design is very unlike existing PoS systems and so AnonyMint's criticisms of PoS would not apply. His other criticisms of how far incumbent special interests would go to stop the replacement of fiat would hold however.

When I first discussed proof-of-stake ideas with Bitcoin core developers, they said that solving the distributed consensus problem was the main issue. I thought about it and sidestepped that problem by starting with a conventional financial transaction network design and altering it to maximally preserve the Satoshi Social Contract and protocol compatibility with the existing Bitcoin network.  I designed geographic dispersion and non-affiliated node ownership to achieve resistance to government shutdown. I used a cognitive architecture to enable trust-free software agents to transparently operate the system. I achieve all the technical and performance advantages of a central mint, but avoid a single point of failure or trust by using a nomadic software agent to create new blocks.

There can be no 51% percent attack unless an attacker successfully impersonates a majority of the paid-for full nodes. CPoS makes this hard in the same way that VisaNet safeguards credit card transactions. CPoS full nodes are authenticated by X.509 certificates issued from the Texai certificate authority. All traffic between nodes is encrypted with TLS/SSL. Each CPoS full node does not use DNS to navigate the network, rather static IP addresses are securely transmitted offline. Private keys will be secured by hardware. A paid-for set of network operations centers will actively manage the network with regard to intrusion detection and mitigation.

In CPoS there is one canonical copy of the non-forking blockchain that paid-for full nodes will replicate. Volunteers may download CPoS software to replicate and verify the blockchain too. In CPoS there is no competition of miners to create the longest chain, rather the single nomadic mint agent creates new blocks for the whole network without competition, and at no effort. Bitcoind already has this no-effort PoW ability for regression testing.

There can be no Finney attacks because CPoS transactions are immutable once they enter the network. An issued transaction is routed directly to the nomadic mint agent's current full node along redundant paths. An acknowledgement of the accepted transaction is immediately broadcast into the network so that users know their transaction will be contained in the next block. This method also prevents lost or ignored transactions. Unlike the Satoshi Bitcoin network and its altcoin clones having best-effort volunteer full nodes, CPoS paid-for full nodes are high availability, high bandwidth, and rationally connected for maximum performance and redundancy.

There can be no double spends in the CPoS network because there is one canonical blockchain and issued transactions are routed to the nomadic mint along the fastest path. The CPoS is not peer-to-peer allowing full nodes to join and leave at will - rather it is a permanent network of peers with an optimal topology.

I am keeping proof-of-stake in the project title but my thinking is evolving away from using block rewards to pay dividends to existing coin holders. Users can migrate from PoW to CPoS forks because of features and transparent investment of the block rewards directly into making the Bitcoin Core and other infrastructure better.

-Stephen Reed

Yes, these will be four premined altcoins, in which users will find their coins present if acquired before the date of the fork. The fork simply copies the original blockchain at a certain announced moment in time, then creates new blocks without effort according to the coin's specifications, e.g. Bitcoin - every 10 minutes. In CPoS, geographically dispersed, redundant full nodes take turns creating new blocks as a certain nomadic software agent periodically migrates from node to node. Non-generating nodes replicate and verify the canonical blockchain. The core code for each altcoin, e.g. bitcoind for Bitcoin, is run as a slave by CPoS which provides the encrypted and authenticated network (TLS/SSL) between nodes.

My goal is to ultimately persuade users to migrate from the original coin networks to the respective CPoS networks by virtue of customer service, improved performance, e.g. effectively immediate confirmations, and 100x lower fees. Wallet and service owners should be able to reconfigure their seed node addresses to join the CPoS network.

By design, CPoS does not have the well known vulnerabilities of Satoshi's Bitcoin, e.g. 51% attack, Sybil attack, Finney attack, lost transactions, miner-ignored transactions, selfish mining, partitioned network, etc. Rather CPoS has a set of new to-be-found vulnerabilities because the Texai code base has never been used in production. DDoS attacks will be mitigated by paid-for DDoS traffic filtering at each full node. Best-effort volunteers operate the existing PoW networks, whereas CPoS operators will be paid professionals.

I expect CPoS altcoin prices to be very low at first, growing in proportion to the square of their respective transaction quantities. As the the CPoS altcoins grow in value, the system be able to keep pace with transaction growth by adding more paid-for full nodes. I would vet the first operators, prioritizing system administrator and data security skills. I suppose monthly payments of $5000 in coin should suffice to attract the talent CPoS needs to provision the specified hardware and bandwidth. As block rewards grow with price increase, the CPoS system would pay C++ developers to join the Bitcoin Core team. I believe, for example, that blockchain spent transaction pruning as proposed by Satoshi would be a valuable contribution by CPoS to the cryptocurrency community.

The Texai cognitive architecture should become a compelling platform for third-party application development, as the various Java software agents will pay each other with bitcoin microtransactions for micro-services rendered, and will pay each local operator for the agent's fair share of the infrastructure.

https://bitcointalk.org/index.php?topic=584719.0

Just curious, do you have any data on proof-of-work coins versus those which cannot be mined, e.g. pure proof-of-stake coins?

Here is the one-day resolution price chart for dogecoin vs Chinese Yuan from the Bter exchange. The last green candle suggests the beginning of a trend reversal but it is not as convincing yet as the equivalent litecoin chart.

Here is the 1-day resolution chart of Litecoin from BTC-e. Ignore the June 30 candle whose price action was not present on the more liquid Chinese exchanges that day. I believe that litecoin is possibly reversing trend and could test resistance near $7, especially if bitcoin prices have reversed trend and rally for some days. On the other hand, if litecoin does not rally towards $7, a dampened oscillation pattern suggest prices converging in a few days at $5,50.

Here is the three-day resolution bitcoin chart from Bitstamp. Prices have rebounded strongly from the support line around $450. Given the increasing quantity of transactions this month, perhaps this is a price trend reversal that will push prices towards $600 again. If that happens, the next resistance would be around $660.

I shared a conference call with Daniel Larimer, listening to progress on DPOS and explaining my own work. I commend Dan and his team. My greatest interest in DPOS is not how they secure the blockchain but rather the Distributed Autonomous Corporation, which I believe can be implemented in my Texai cognitive architecture.

As I consider the design of my own work, I see less reliance on proof-of-stake as a method to secure the blockchain, and much more emphasis on traditional financial software techniques. CPOS will have a single mint agent that migrates over a network of paid full nodes, creating new blocks without effort, and whose results are verified by other agents that replicate and verify the canonical blockchain. My approach is much less complicated than reinventing Satoshi's design from scratch. I merely encapsulate bitcoind and control what nodes it connects with, and give one of them at a time permission to generate the block.

I plan to fork the most popular PoW coins Bitcoin, Litecoin, Dogecoin and Namecoin on separate networks with separate branding - CPOS-B, CPOS-L, CPOS-D and CPOS-N respectively. To buoy prices, I would allocate a modest portion of the block rewards as dividend payments proportional to unspent transaction outputs. The remainder of the block reward finances generous support of full nodes and developers. The extreme low costs of CPOS with regard to PoW - which consumes the entire block reward, allows CPOS to offer 100x lower transaction fees. That feature, together with modest dividends and immediate acknowledgement of accepted transactions, should entice users to migrate over to CPOS from the PoW networks. All they need to do is configure new seed node addresses on their wallets and services. Their pre-fork coins will be present for spending.

According to Coinmarketcap.com, 8 of the top 20 coins by market cap cannot be mined. I would say that Proof-of-Work has substantial competition from other proven mechanisms to secure the shared transaction ledger.