any innovations?
oh, forgive me, this is the last time i post this:
The Story of Viacoin
If there is something I have learned over the years, it’s that innovation is incremental and good ideas are usually built on the shoulders of existing, well tested and proven technologies. Bitcoin is a good example of this, weaving well seasoned public key cryptography and other mathematical genius with peer to peer protocols, stack based programming languages and proof-of-work.
What makes Bitcoin brilliant is how it unites existing technologies to make something completely revolutionary.
It is also interesting to note how it takes a few stepping stones to get technology right. HashCash was not the solution for digital money, but without it coming first, maybe the next step of Bitcoin would not have been thought of.
I began taking Bitcoin seriously in April 2013 and in July/August 2013 I read J.R. Willett’s Mastercoin proposals where he suggested using blockchain timestamping in Bitcoin to embed data according to a new protocol which could be used to effectively create a new coin within a coin. I found this intriguing but had some technical objections and I was quite vocal during the debates, examples here and here.
Without getting too technical, there is a concept called ‘blockchain bloat’ and it’s quite a political problem within the Bitcoin developer space (because the definition is open to interpretation), and there are continuous efforts to reduce it.
By October I decided I was going to address my objections by creating my own solution. However, I got pretty caught up in other things and then the Bitcoin bull-run took my attention and I became quite well known in trading circles. Then in January alone came Counterparty, another protocol designed to embed a new Mastercoin like protocol in the Bitcoin blockchain. This attempt was in my opinion much better and further inspired me to pursue my original solution, since this was a confirmation I was on the right track, but my attention was still taken up by trading and there was so much more excitement to come with the China and MtGox for the next few months.
I liked Counterparty and it was pretty much what I had envisioned myself and they have run with the technology and spent a lot of time building it out but they still didn’t address my main objections, they it’s further confirmation of the concepts.
So what were my main objections? Firstly, Bitcoin was not designed to be a carrier pigeon and although it’s possible to encode data within normal Bitcoin transactions, there are a lot of political objections to it. This matters a lot because the people who contribute to Bitcoin development can, and
has already done things that restrict the use of Bitcoin for these ‘non-standard’ purposes. There are arguably ways to encode data that cannot be blocked, but the real question is, how feasible is it to build a system like this on the back of Bitcoin when you have no idea if the next release of Bitcoin will outlaw your code.
Most recently for example, when Counterparty published their papers, they committed to using OP_RETURN based on 80 byte storage only to find Bitcoin 0.9.0 prevents relaying of transactions containing more than OP_RETURN of 40 bytes! Quite a nasty surprise!
So ask yourself, “is playing cat and mouse really a viable option for a smart protocol?” Bitcoin will definitely continue to play whack-a-mole against perceived blockchain abuse. Despite all the benefits of building on an existing, well established infrastructure, it’s simply not safe to do so when that infrastructure can outlaw you at any time.
My next objection was a matter of speed. Bitcoin is terribly slow to confirm blocks. The target of 10 minutes is already too slow, and add variance and it gets a whole lot worse. And, 0-confirmation transactions are not safe as has been demonstrated (as they can be double spent). Who hasn’t found themselves waiting an hour at least once, just to get a single confirmation? That kind of latency makes it pretty useless if you wanted to run a decentralized exchange on top of the protocol.
It was clear as day to me from the beginning, that any such endeavour requires a separate blockchain that was not only faster, but friendly to the data embedding methodology. Namecoin chose this path for example to build out a decentralised domain registration system. But unfortunately, it seems some people have an almost religious conviction that they must use the Bitcoin blockchain come what may.
When I saw the whole OP_RETURN debacle unfold I promised myself I would wait and watch to see what happened and if anyone would do the right thing or let their inflexibility hold them back. I waited, and since no-one filled the void, I decided I would take the plunge.
So here we are, Viacoin is my solution: it’s a currency and store of value in it’s own right (symbol VIA); and has fast blockchain, 25 times faster than Bitcoin and further speedups may be possible in the future by changing how the network synchronizes blocks. There are some interesting research paper on the matter.
The Viacoin blockchain is completely supportive of OP_RETURN data storage and will remain so. Since there is a already tried protocol, I have shelved mine and we will use Counterparty as our starting point for ClearingHouse. I believe this is the best way forward because we know it works already and will be very easy to get up and running. ClearingHouse will have it’s own internal currency, called XCH.
So the roadmap looks something like this:
Bootstrap Viacoin distribution by presale.
Launch the Viacoin network.
Build out viacoin services.
Launch ClearingHouse using proof based VIA to XCH conversion process.
Build out services
In summary, Viacoin and ClearingHouse have been a long time in the coming. I would like to have been first because, well that would have been a lot cooler. However, the fact other projects came along with similar concepts tells me it was a good idea. All ideas are incremental, so it’s not a matter “who thought of it first” because in the end, good technology and usable systems is what matters. I would particularly like to thank Namecoin developers who really started the ball rolling for alternative uses for blockchain storage, and to J.R. Willett and PhantomPhreak who really got the world thinking about the next steps after bitcoin.
ClearingHouse can go a lot further, to develop protocols for decentralized voting, identity and reputation management, setup and exchange of multisignature escrow, “blockchain notary” and a whole host of other applications.
As with all new things, this could all go wrong, but believe we are in a much better place than if we had been the pioneers because we know it’s possible, it’s just more a matter of the implementation details. Viacoin presale distribution has been designed to give an early adopter advantage similar to that of Bitcoin, with equal risk of failure. Ultimately the market will decide, but I think there has never been a more exciting time to be in crypto, than now.
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