The logic and reason for why Cinnamon Coin was created
2013 has been a year of cryptocurrency insanity in the eyes of some while others find it perfectly normal. Opinions range all over the place when you read about “how things should be done” there are almost endless viewpoints depending on who you are getting your information from. In this post I will first review how I see the current state of cryptocurrency before I discuss why I wanted to release yet another coin when so many are out in the wild now. This post is not intended for someone who is a novice. If you are taking the time to read this I assume you have a firm understanding of most of the items I shall discuss. There are a wealth of resources on the web if you are not up to speed on any of these items. I do not consider myself an expert however I have been researching bitcoin, litecoin, almost all other alternative cryptocurrencies and the pros and cons of each for a long time. In writing this I made every effort to avoid naming other cryptocurrencies by name since I am not trying to “take shots” at anyone elses work.
Let us begin with a discussion on bitcoin. The current state of bitcoin is one which I think is rather unexpected and in some ways pretty crazy. Bitcoin was created as an brilliant alternative to traditional money systems. Personally I got curious about bitcoin around two years ago but never considered it more than a passing fancy until the events of early 2013 including the price and technnology explosion that took place and is still taking place.
First bitcoin was mined with cpu’s , then gpu’s, fpga’s and now asic’s. Bitcoin is gaining more of a foothold almost every week being accepted for payment in more places for more things. As of the time of this writing as we approach October 2013 it is the ONLY cryptocurrency that is in widespread use to make purchases of ‘real life items’ with. There are a few things that can be purchased with some other alt currencies but bitcoin is by far king.
Bitcoin was in my eyes always created to be a currency “for the people” that could remain in the control “of the people”. When bitcoin could be mined by anyone this was certainly true. Even if you had to buy a fancy graphics card to be able to make a few bitcoins over time the technology, it’s cost and means to get the hardware was well within the reach of anyone motivated to do it. That has now changed. You can no longer mine bitcoin with a cpu or gpu and even fpga equipment is only going to earn pennies on what it would have earned you just a few months ago. So the currency ‘for the people’ is now almost being mined only by the few parties out there that control asic technology. If you want to purchase bitcoin mining equipment now you cannot even buy it. You have to preorder it, pay up front, and hope that you get it in time to still be able to make some bitcoin before the difficulty rises beyond the capability of your hardware. You also have to hope that you don’t get ripped off. You could order equipment that never gets delivered at all. You cannot go to an electronics store and buy the components take them home and mine bitcoin. You cannot build anything yourself with fancy parts that will mine bitcoin.
In short a few ‘elite’ have taken control of the ability to mine bitcoin. The difficulty of the network is moving up
so high and so fast if you ever told me where it is now a few years ago I would have had a good laugh. Maybe some of you saw this coming but I did not. So most ‘average’ people out there that want to aquire bitcoin now are mining alternative coins and turning around and selling them to convert them to bitcoin. Bitcoin purists and those who have asic technology make insulting remarks about all alternatives to bitcoin with a range of insults from A to Z. The mutation of the bitcoin difficulty I believe is one of the main causes of the explosion of so many clone coins being created. Greed is another factor. I can’t prove it but I honestly believe many alt coins were created just so the developers could make a couple dozen bitcoin from the project.
Lets move over to litecoin. Now we are using scrypt so the technology is in the hands of the people. I am not saying it is impossible to develop fpga mining for scrypt but with the current price of litecoin it will never be cost effective. The memory requirements make it unlikely asic technology to mine scrypt coins will ever be cost effective even if litecoin were to be worth one hundred times what it is worth as of this writing.
So bitcoin has the popularity of being used but it’s production is now in the hands of the elite and litecoin is in the hands of the people and likely to remain there but has not yet been able to ‘break through’ and get the breaks it needs to be accepted for payment of ‘real world items’.
Today there are well over 100 cryptocurrencies that exist. Some of them were made only as experiments, jokes or not made to last. We now have clone coins made to “honor” peoples favorite movies, purchase porn, for popular online games and a multitude of other things. So, why would I think it a good idea to add to this chaos by the release of Cinnamon Coin ?
Several reasons actually and I will discuss them all.
A majority of the altcoins that have been created have not had what I consider a ‘fair launch’. Many coins at the time of their release have premines. Some to just fatten the pockets of the developers and insiders and in other cases to pay ‘bounties’ for the first pool, first exchange ect… I feel that if a coin is premined , even if the premined coins are used to pay bounties this less than a fair launch. It allows a few people to get an unfair amount of the coins so I cannot support coins that are premined (at least as ‘fair for all’).
Many other coins including the alt coins with some of the largest market shares behind bitcoin and litecoin may not have been premined but were designed in such a way that a very large percentage of coins were mined in a short time.
I am sorry but if 85% of the coins were made in the first week of a coins release the people down the line are at an unfair advantage. The coin I am thinking of is just one example there are plenty of others. This is just another method for a few people to enrich themselves. I am not saying developers should not be compensated for thier work
but if a cryptocurrency is to be fair and for ‘the people’ these clever methods to me are just unfair.
Cinnamon Coin takes advantage of proof of stake. In my opinion most coins using proof of stake have a formula to reward too many coins for proof of stake blocks as the network ages. Some of them are set to produce 100% “interest” a year. The concept of proof of stake is brilliant but letting someone who is bag holding a large amount of coins double thier holdings in a year is just not necessary. Cinnamon Coin’s proof of stake is 1%. By keeping this low the idea behind proof of stake is preserved since the proof of stake blocks produced as the network ages and eventually fails to produce any new coins will be generated to process transactions but there is no ‘bonanza’ of wealth produced.
The speed of a coins network, i.e. how fast blocks are produced is a topic that is always debated. Slower block times allow for a more stable network but make the processing of payments slower. Coins that produce fast blocks like one per minute or faster are just not stable enough for the network to grow large in the long term. If you have a coin that has several blocks produced inside of a minute (all the time) the number of orphan blocks produced is just too high. If the coins have low monetary value I guess no one cares if they get a lot of rejects however I am thinking long term. Imagine the value of bitcoin now and how upset you would be if the network was producing 10% or more orphan blocks. This is just chaos waiting to happen and other problems can result from rapid blocks also. Cinnamon Coin has 5 minute block spacing which is twice the speed of bitcoin and 2.5 times slower than litecoin. I figured I would target it right in the middle of the two most successful long term coins.
The difficulty of Cinnamon Coin changes with each block to keep this five minute block target time as close to five minutes as possible. I will say this is the largest weakness in Cinnamon Coin. Coins that quickly retarget difficulty are able to be attacked. I have seen examples of this type of attack twice with Terracoin and Starcoin. Terracoin being sha 256 can be mined with the same ‘super fast’ asic technology that mines bitcoin and a few months ago someone torqued the hash rate up super high then let off the gas. As soon as the difficulty retargeted to very easy they floored it again producing a huge number of blocks. With StarCoin which is scrypt I am uncertain how the attack was done but the difficulty landed one day at 26 million as I turned it on when it was running on average 100 thousand. Obviously a few people got together and ran large gpu farms at it with the hope of putting it out of comission. Cinnamon Coin could be vulnerable to a similar attack but I felt that over the long term the danger of an attack
like this is a necessary risk to keep block spacing as even as possible and keep the coin production fair for all.
The final reason I wanted to launch this coin is because there are so many people new to the world of cryptocurrency.
They were not around in the early days of bitcoin or litecoin and never had a chance to get in ‘at the ground floor’.
I am not saying Cinnamon Coin is the only alternative for people new to the scene to get an early piece of the action.
There have been other coins with fair launches that do not suffer from some of what I see as flaws I pointed out earlier. I think that some of the newer cpu only coins that make use of multiple algorithms offer great promise however the technology may eventually progress to allow them to be gpu mined and they would then be in the same boat that the scrypt and scrypt jane coins are now. In a few short months we have seen these cpu only coins go from being only mined with the stand alone client to being pool mined with optimized cpu specific builds. Another issue I have with cpu only coins is the use of virtual machines by just a few insiders to mine a lions share of the coins. The best results when all is said and done for the scene will be found on the most level playing field. Cinnamon Coin is designed for those with gpu mining capability who are tired of making fewer and fewer litecoins or feathercoins every week than they did last week as the difficulty continues to rise.
I have always liked math and found a nice symmetry in the powers of two. 2^6 is 64 coins per block for two years.
Then the network will have two years each at 32,16,8,4,2 and 1 coin per block. My opinion on the coins that have been released that offer random ‘super blocks’ of large bounties of coins are fun I am by nature a serious person. If you want to win a lottery buy a lottery ticket or play a slot machine. To me awarding a few random miners large amounts of extra coins is really a bit unfair and most of these coins and clones with this feature have been studied and you can fairly well ‘know’ when such a “Monty Hall” block will be coming so it now becomes not exactly a random award but another item open to be exploited.
Since Cinnamon Coin is a longshot you can mine some now fairly easily. If you mine Cinnamon Coin you are taking a chance of wasting your hash power on a coin that may just ‘go nowhere’. This I cannot deny. I will not promise at this time that I have planed services for Cinnamon Coin or that I am going to be able to market the coin to anyone to be used to purchase ‘real world’ items like bitcoin is uesd today. That would be a lie. This is still in it’s early stages. Litecoin has been around a few years and has yet to do this.
As time goes on and Cinnamon Coin purrs along I will look into some of these things.
It is only a matter of time before severl alternatives to bitcoin become used for ‘real world’ things. The alternatives that will succeed in the future need to be available to everyone to mine with standard electronics, built to last,be stable but fast enough to get payments confirmed quickly while maintaining that stability and have a realistic model for block production to award miners and the number of coins produced. The successful coins of the future will use proof of stake since designing a network that needs more natural resources to sustain itself as time goes on is kind of crazy and unnecessary. Finally the successful alt coins of the future must be fair and not tilted to benefit a few insiders who either got in early or have access to special mining gear. Even detailed studies of the early transactions of bitcoins blockchain point to large transactions and many bitcoins produced in the early days lie hidden still.
If you made it to the end of this long post you at least know all my answers to “Why Another Coin ?”
Without naming or bad mouthing other coins I feel Cinnamon Coin has just the right blend of everything it needs to be a long term success. Almost every other alt coin out there has one or more of the things I pointed out as unfair or unwise for long term stability. If you agree I wish you the best of luck in solving the next block of Cinnamon Coin.
orig. blog post
http://cinnamoncoin.org/wp/?p=18
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