It turns out that isn't a problem.

I don't know much about Ethereum, but I believe it is not currently planned to be PoS. Generally, about half the top-10 coins are PoS; isn't that success?

Bitcoin's distribution is far worse than, say, Nxt's. It makes no sense to adopt it for a new coin.

The advantage of an IPO is that the investors have a vested interest in using their initial stakes to develop the coin. It reduces bystander apathy. People don't value what they get for free. It's not the only viable way, but it works. There have been Nxt clones that had "better initial distribution" as their USP and main selling point. They sank without trace. Nxt is still going strong. Time has shown its founders are not scammers or in it for a quick profit.

It's been addressed loads of times. It's a chimera. It doesn't exist in real life. PoS has been running long enough, with high enough market cap, so demonstrate it 's secure.

I'd go for a combination of (1) and (4). Not so much a 51% attack as implicit agreements between dominant miners making transaction fees high as the block-reward halves. Meanwhile competitor PoS coins offer very low fees because they don't have to pay for monster hashing rigs. High fees discourage Bitcoin use and make users flee to other non-PoW coins. Fewer transactions further reduce the income to miners. Lack of demand reduces the BTC price. It's a downward spiral. Miners give up, the network hash power drops, and the network becomes less secure, making users even less want to trust it. Eventually someone mounts a proper 51% for laughs and to be able to say that they were the ones who destroyed Bitcoin. The end.

I'm not sure if what we are seeing now is the start of this. The block reward remains high, and fees are relatively low. However, the high block reward means that Bitcoin inflation is running at around 10%/year. That's part of what is depressing the price: all those miners selling. It makes Bitcoin a terrible store of value - you'd be better off holding dollars (2% inflation). Perhaps more importantly, the writing is on the wall. Despite being ridiculed, PoS have been running for a long time now with no core security issues, so they have proved themselves a viable alternative. Anyone doing due diligence into the state of crypto-currencies today will realise the above scenario is at least possible, if not likely. Perhaps that's why no-one is rescuing the BTC price.

The point is they are not so much attacking the currency as buying it. It's like instead of flying two 'planes into the World Trade Centre, the terrorists bought the towers and then shut them down so no-one could use them.

Bitcoin is more vulnerable to irrational attacks than PoS. They'd just have to kidnap the families of the controllers of the few largest mining pools. Or an ASIC manufacturer.

How will destroying trust in the currency increase their wealth, when that wealth is denominated in that currency?

You are being naive about how they need to acquire their equipment. Even if it is traced, so what? And once they'd used their ASICs to destroy one coin, they can sell it to other people to mine different coins (that use the same hashing algorithm).

Have you looked it the Bitcoin distribution? 0.71% of the accounts hold 55% of the coins. The real situation is probably worse, because each owner spreads their bitcoins over multiple addresses. For example, Satoshi rarely has more than 50 coins at a single address. We only know he owns millions of coins because he was the only miner for a while.

As for distribution of hashing power, that is also terrible, with pools sometimes going over 50% almost by accident.

Nope. That's pretty cool. More generally, it's good to see another coin's take on how to do things, especially when it makes different choices.

(I'm not sure how important this one is in practice, though.)

Agreed. Of course, we already knew that because Qora has voting and Nxt hasn't (yet).

Well, for me it's the other way about. Qora is just now getting an Asset Exchange (and it still isn't out yet) which Nxt has had for months. More importantly, the Nxt Asset Exchange has become a base for other features, like the multigateway exchange. Nxt also has a Digital Goods Store. There are other areas where Qora is ahead, such as voting: but it doesn't seem to have many users. Perhaps the AE is the feature which will bring Qora to public notice. If not, well, there's no point having features if no-one uses them. I'm concerned that Qora is leaving adoption too late.

The point remains, though. To retain the status quo, the product of transaction volume, fee per transaction, and value of BTC, needs to increase 300-fold. That's a big increase to be depending on.

That would decrease security, though. Efficiency benefits miners and attackers equally, so if miners take advantage of it to reduce their costs, attackers can mount a given attack more cheaply.

Certainly all the Proof-of-Work altcoins have the same problem. The "work" part costs money, and that ultimately must come from either high inflation or high fees. (That is, either savers or spenders.)

In the long run, Proof-of-Work can't compete with Proof-of-Stake.

That's not strictly true. Nxt does dividend payments through Nxt Services. You tell it the asset and the total to pay and it creates the transactions for you. It's not manual.

Nxt does dividend payments through Nxt Services. In other words, it's not in the core yet, but it's not manual, either.

In future I think Nxt will do dividends in the core by way of a simple Smart Contract, and if that isn't good enough it will be added directly. Mostly in the Nxt community the solutions available and coming mean they don't see it as a big deal.

Will Qora's update next week include dividend payments? They aren't mentioned in Qora's #9017 post, and the paper linked in #9037 is in the early planning stages (eg, undecided about how general they will be).

Miners revenue would be fees only. That wouldn't be enough to pay the electricity bills at the current hash rate. Either the fees would increase, or the hash rate would drop, or both.

Either effect could destroy Bitcoin, in my view. Lower hash rate reduces the coin's security; if it gets too low, the coin can't be trusted. High fees discourage users; if they get to high, users will switch to PoS coins or even back to credit cards.

If mining stopped "tomorrow", it would be an existential crisis for Bitcoin. However, it won't. Mining is set to gradually decrease over decades. If the value of Bitcoin doubles, on average, every 4 years, then that will offset the block reward halving.

It's been a bad last few months for Nxt. The price initially went low apparently due to whales selling off. It stayed low for so long I think some non-whales started panic-selling. Then there was the Bter hack. Then the devs released an update that wasn't backwards compatible; Nxt is big enough now that such changes need to be managed.

On the positive side, most of these problems are transient and getting fixed. Enough of the money stolen from Bter was ransomed back, so that it's become Bter's problem only, and Bter's Nxt customers haven't lost anything. The devs now realise they need more care over backwards compatibility.

However, there are some crucial code changes in the pipeline. The first of these is adding an internal database, which will help make the coin more scalable. There is also a voting system coming, which can be used by the community to make community decisions (*). For example, most of the community feel that Nxt transaction fees are too high, but the devs really want (a) to have the database in place before risking lowering them; and (b) to have a community vote on what the fees should be, rather than make the choice themselves.

So it's going to take time. I'd guess a month or two. And of course there are outside influences. BTSX and Ethereum seem to have sucked up a lot of crypto cash. (In my view, they are also transient.)

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(*) Of course the voting system is not just for the Nxt community. Voting by asset makes it very general.

"Rational Bitcoin Attackers want to see Bitcoin succeed": this is dodgy. Insofar as Bitcoin becomes a significant part of western infrastructure, it will become a target for those who want to harm the west. Think of the attack that brought down the World Trade Centre. Claiming such people are irrational isn't helpful.

"crank up average transaction fees on the entire network by deciding not to verify a transaction if a certain amount isn’t sent in fees": personally I think this is the most likely in practice, to the point of being almost inevitable. Expect it after a block-reward halving. The fees will still be significantly lower than credit card fees, so the network won't be destroyed.

It doesn't take a single entity having 51%, 100% of the time, to enforce. If enough miners agree to reject transactions with low fees, and further agree to reject blocks by other miners that include low fees, then miners that disagree with the policy will feel obliged to go along with it to prevent their blocks being occasionally orphaned. The usual argument is that if a miner rejects a transaction with a low (but non-zero) fee, another miner will pick it up and the first miner loses out. Hence the claim is that competition between miners limits fees. However, with 51% and/or enough solidarity between miners, that no longer applies.

We may not need to see many blocks actually rejected. Knowing a cabal has the power and declared intent will be enough to get most other miners on board. Especially as they all stand to benefit from higher fees in the long run. Few miners are altruists mining for the good of Bitcoin. They can say they are merely making up for income lost due to the block reward halving. Network security has to be paid for somehow. They'll talk themselves into it.

Earlier I suggested "second generation".

To me that suggests they are based on the Bitcoin source code. Most of them aren't. If they aren't, then they shouldn't mention Bitcoin at all, in my view. I tend to call them "coins" or "crypto-currencies". Most of them include something like a currency even if they aren't focussed on being money.

I'm not a lover of Ethereum. A look at my signature will give you a clue where my interests lie. Both the 2.0 coins in it have developed lots.

I used to think that, too. They could be, but they won't be. Bitcoin will never adopt Proof of Stake, for example: I'll probably get mocked here for even suggesting it. If I were to write a Bitcoin node that supported multiple transaction types, nobody but me would run it. It'd be stuck on a lonely fork. In practice, only the core Bitcoin devs can make changes like that, and they aren't interested. They've not even fixed transaction mutability, despite it being a known problem (with known fixes) for months, if not years. All the interesting work with Bitcoin is being done on top of it, with wallets and the like, not with changes to the core.

Expecting to be able to do that on the day a new currency is launched is unrealistic. Adoption takes time. It goes in stages. Even Bitcoin is still in the early stages, after 5 years.

I'm a fan of Nxt. I think the biggest single thing they could do to help adoption is reduce the fees. They can't do it, because the technology isn't there. So they are working on the technology, and they'll probably have it done by Christmas. It's a race, not a sprint.

When I first found out about Bitcoin, I was struck by a quote to the effect that "money is merely the first application of Bitcoin". The block-chain concept can do far more. There are more areas that can benefit from de-centralised, trust-free consensus. I had hoped Bitcoin would evolve to address them.

It hasn't. It won't. The Bitcoin community are too conservative, and its development has become moribund. Hence the torch passes to new coins that are designed with a more flexible architecture to address more areas.

That Bitcoin has bumped against 51% three times is a cause for concern, not celebration. It means the currency survived because the pool chose to do the right thing. It means people using Bitcoin have to trust the pool will continue to do the right thing in future. That kind of trust ought to be anathema to crypto-currency fans.

That the first three times passed without incident does not mean the fourth will. I don't mean the pools will suddenly go crazy and kill Bitcoin. I do think they will act in their own interests. The time to worry will be when the block-reward halves, or halves again, and the miners start worrying about the return they need for the investments they've made. Then we'll start to see Bitcoin fees rising. A pool with 51% has a lot of negotiating power in that scenario. They don't have to reject blocks that accept low fees. The mere knowledge that they could, will influence the other miners.

Not really. I don't know other coins, but the revenue in Nxt from holding coins is already very low, and will be lower in future. It's not a reason not to spend your coins on something you need.

(Just to be clear, the stake used in forging isn't locked up at all. If you have 1000 NXT and are forging with it, you can spend 10 NXT any time you want, and then you'll be forging with 990 NXT. The revenue from forging will be about 0.3 NXT/year.)

I gather one of the problems is lack of a repeating subscription feature. They want to sign you up and then you pay 20 NXT a month automatically until you cancel. No crypto-currency supports that yet. I hope it will be one of the things covered by Smart Contracts, or Automated Transactions, or whatever. It's a basic banking facility that would also be useful for paying mortgages etc.

It's cause them a lot of pain. They've now made loans from Nxt whales to cover it.

Did he hack BTC? I thought the only BTC he got was that paid by Bter as ransom for NXT.

You can create as many Nxt accounts as you want. Use a separate account for your porn.

That's what they are doing. There is some attention paid to Pow/PoS because that's what the security is founded upon, and it matters, but far more attention is paid to user-visible features.

You only mentioned one: anonymity. Well, anonymity and privacy are important, especially for coins that re-use addresses. Features like Nxt's asset exchange, digital goods store, arbitrary messaging: these are all new ways to use the coin, so they are exactly what Peter was asking for.

Except they aren't in Bitcoin, because Bitcoin development is moribund. Second generation coins like Nxt are designed to be extensible, to have new user-visible features added. That's another way in which core architecture matters.