First, I just want to say that I applaud Tacotime's acknowledgement of how a coin should be released especially with all these silly copycat alt coins that provide nothing novel being spammed almost daily now. Litecoin has shown the advantages of alternative hashing algorithms, but I also concur that a more in depth look at optimizing a coin for GPU mining above all else is key. If GPU mining is able to be protected as the best way to mine a coin then this provides the best decentralization as gamers will always be a huge distribution of hashing power whereas ASICs and FPGAs will always be skewed towards a relatively few individuals/groups with significant capital (not that GPU mining farms are impossible just that even a few thousand GPU farms will pale in comparison to the gaming community).
Now, while just optimizing the hashing algorithm provides a useful trait for a new coin, I suggest that we take this opportunity and add a few additional key traits to the new coin to provide utility to the community well beyond any current cryptocurrency. In order of importance I suggest the following additional key features:
Distributed Exchange Distributed exchange is perhaps the killer feature that everyone is talking about often with unrealistic expectations. Obviously we cannot solve the problem of converting fiat directly into cryptocurrency, but I believe we can provide a decentralized exchange mechanism that only relies on outside trusted parties for a final withdrawal or deposit of fiat. My suggestion has two main features. First, we incorporate the colored coins idea (
https://docs.google.com/document/d/1AnkP_cVZTCMLIzw4DvsW6M8Q2JC0lIzrTLuoWu2z1BE/edit?pli=1) to allow any outside party to create and sign particular coins as having some additional meaning (in the fiat use case that would be some amount of USD for instance). Second, we create a new type of transaction that posts an offer to the network to exchange some number of new(whatever our new currency is called)coins for a certain number of colored coins properly signed by an entity or set of entities or vice versa. Once the network sees offers that match, a transaction is recorded in the block chain that atomically transfers ownership to each party. (TODO optimize incentives for miners to match offers well through transaction fees etc.)
I would also like to see a way to exchange with other cryptocurrency directly, but this has many additional hurdles such as requiring all nodes or at least miners to keep other block chains in memory and possible denial of service attacks from people accepting offers and not sending the BTC or LTC agreed upon.
Built in P2Pool type mining option The P2Pool project epitomizes the distributed nature and serves as an important bulwark against a few popular pools from having a huge influence on block chains. I suggest we incorporate this option directly into the client. This also will give users a no hassle option to mine and receive coins out of the box without dealing with pool registration and the risk of them being hacked.
Built in GPU mining option I suggest we bundle and integrate a graphical interface such that novice users can easily mine with their GPU with just the normal official client. Combined with the above P2Pool suggestion this should further democratize mining making it as user friendly as possible to novice users.
Zerocoin anonymization http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdfWhile this may yet be too computationally and space intensive for now, I think we should at least consider the possibility of implementing this state of the art crypto work. It is going to be presented at the top academic conference in computer security this May. Read the paper for details, but the gist is that you can truly anonymize the coins such that no one can match the input and outputs of transactions. The main disadvantage it has for bitcoin is that the protocol would have to be accepted by all the users, but if we incorporate this by default in the client from the start we solve that problem. There is some concern about how heavyweight the crypto is so that will have to be considered.
0-confirmation double spend resistance The normal defense against a double spend is to wait for a number of confirmations such that an attacker will have to have close to or more than 51% of the hashing power of the network. This is a very strong guarantee and works well for transactions of any amount, but comes at the cost of waiting for at least 1 block. For asynchronous transactions such as online purchases where product is eventually shipped after some delay this is almost no cost at all, but in the scenario where a user wants to use bitcoin like cash for an in store purchase and walk out with merchandise, this wait time greatly exceeds that of a 1 second credit card processing wait.
This is as far as I know a novel idea that I came up with to partially address wait time. A transaction with zero confirmations can easily be double spent. I propose that if multiple transactions are floating in the network waiting to be confirmed into the next block and there are conflicts among them (double spends) that as long as each transaction by itself would be valid that instead of choosing one the network writes both into the block and destroys the coins involved. While the merchant would still lose the coins so would the attacker removing the incentive to double spend. Now of course for large transactions one would still be ill advised to accept 0 confirmations, this destroys the incentive for a casual theft of small amounts. I think this could be especially useful for payment processors like bitinstant when people use it on their phones to pay for food or beer as if they left immediately after, there is a significant delay before anyone would be aware of the zero confirmation double spend.
I am also available to contribute some time to design/programming. I think this should be a significant undertaking with as many people involved as possible to really create a significant contribution to the cryptocurrency community. Anything halfhearted or just an incremental improvement will not make much difference. I'd rather not have a slew of alternative currencies that slowly build on each other, but rather a significant leap forward with real testing and new features.
Let me know if anything is unclear. I'll try to answer any questions although most of these ideas are preliminary so lots of work in finalizing an actual working implementation is yet to be done. I do believe that all these suggestions are quite practical if we have enough programmers volunteer to create and test them.
Nathaniel
Show Posts
