The coins I would fork are currently the highest market capitalization Satoshi proof-of-work coins. Perhaps in a few more months, Dogecoin will fall out of that group. Or on the other hand, a rally in Bitcoin might lift most altcoins as happened November 2013.

I understand your points about the relative merits of coins. But, analogous to current industrial mining, I want to position the CPOS system as an agnostic platform that secures the network for a variety of branded coins without controlling their respective business communities, and thus isolated from their behavior. The CPOS system would drop a coin whose block rewards no longer pay for the storage of their blockchain.

CPOS will enable each supported coin to have lower transaction fees and immediate, certain acknowledgement that accepted transactions will be included in their respective blockchain. CPOS operators, as directed by the software, will contribute a significant portion of respective block rewards to the Litecoin and Dogecoin foundations for use as those communities see fit.

Furthermore, CPOS supported coins will not be subject to 51% attacks. Their transactions will be immutable and thus not subject to double spend attacks. All traffic between paid-for full nodes is TLS/SSL encrypted, and because each such full node is identified by a unique X.509 certificate, there will be no Sybil attacks.

To buoy coin prices and to encourage user migration to the CPOS fork, I would establish a CPOS system policy that allocates a modest portion of block rewards to post-fork unspent transaction outputs in the blockchain as a dividend.

Once the system is up and running, new coins can be enrolled in CPOS during the coin's development process by substituting CPOS for the otherwise required mining pool, on the condition that the developers clone Bitcoin Core, i.e. bitcoind, software. Aside from premining, promoters can pay themselves by owning the foundation that CPOS funds via block rewards, or by accepting payment directly from CPOS to add features - again via block rewards.

Planning to make another bitcoin purchase today, and maybe some litecoin too. Feels like a final capitulation in altcoins.

Here is the 6-hour resolution chart of the LTC/USD currency pair from the BTC-e exchange. Note the two down legs of the great capitulation of 2014. Prices fell 28% in two days from $6.865 down to $5. Then fell another 30% from $5 down to $3.5. From the November peak price at $48.48, litecoin prices have fallen 13.85x. This is a more dramatic bubble run-up and collapse than the great bitcoin bubble of June 2013.

These litecoin prices have fallen to approximately twice the pre-bubble valuation and thus are very tempting, insofar as the analogy to the great bitcoin bubble holds . . .

August 18, 2014 Status and Thoughts.

I have about half of the Texai cognitive architecture migrated to GitHub. The knowledge base repositories are larger than GitHub guidelines, so I need to find another more appropriate cloud data server, e.g. Dropbox for those. I configured three separate computers in my lab with the same development environment to ensure redundancy and to document the build recipe. The configuration for developers is . . .

• Ubuntu 14.04 LTS on bare metal
• Oracle Java 8 with JCE highest level security policy
• Netbeans 8.0 Java IDE
• Maven 3
• Docker

The Docker platform is currently used to host a Jenkins continuous integration server that I uploaded to the Docker container registry.

My GitHub page is https://github.com/StephenLReed?tab=repositories.

My Docker repository page is https://registry.hub.docker.com/u/stephenreed/jenkins-java8-maven-git/.

I would like to have bitcoind in an agent-controlled, non-verifying proxy by early October, 2014, for hallway demonstration at the Hashers United conference in Las Vegas. Consequently, I will upload broken aspects of Texai that have no relationship to Cooperative Proof-of-Stake, as the agents I need to write are dependent upon working code embedded in those otherwise broken dialog modules.

------------

Here are my latest thoughts about how CPOS will work.

I am considering hard-forking the popular Satoshi blockchains: Bitcoin, Litecoin, Dogecoin and Namecoin. They would operate on networks separate from the Satoshi originals and be branded respectively CPOS-B, CPOS-L, CPOS-D and CPOS-N. Users would be required to configure their respective client wallets, payment processors, mixing services, etc., to respective CPOS seed node addresses - that's all. There are no changes required to the client protocols I believe.

The forks could come much earlier than January 2016, depending upon the ambition of the network and the state of system testing.

I would use a portion of block rewards to pay geographically dispersed operators to run full nodes for these plus a Tor relay. Each operator would be required to provision a high-availability enterprise server in a datacenter having redundant high bandwidth Internet connections. Specifications for the server will include protection against DDoS attacks.

As operators will be relatively well compensated, I expect to add new servers only with increased market capitalization and transaction traffic. VisaNet runs the majority of the world's credit card transactions with only two datacenters, so less than ten geographically distributed servers with likewise separate ownership may be adequate to start. Supposing that CPOS grows to the same market capitalization that Bitcoin has currently, then 10,000 distributed paid servers could be justified.

I would choose either CoreOS or Ubuntu LTS for the base operating system, and use Docker containers for the cryptocoin bitcoind software, where each coin gets its own container. Likewise the tor relay gets its own container. Each server would run the latest identical software and as the network grows in size, there are existing softwares to manage the worldwide deployment of Docker containers. Unpaid volunteers could download and run the CPOS agent software to record blockchains and verify peer agent behavior, but would not be permitted to operate agents that mint new blocks or that provide support services to other agents.

Governance of the CPOS network will be performed by the Texai cognitive architecture, in which simple transparent algorithms enforce policies decided at periodic meetings of the node operators. Each operator will be required to purchase a commercial membership in their local Bitcoin Foundation. A portion of the block rewards will fund developers tasked via the Texai cognitive architecture. Each paid person performing a task for the system will have at least two other non-affiliated paid persons check their work. A portion of the block rewards will fund development of the Texai architecture, Bitcoin Core, and relevant altcoin features. Supposing that CPOS coins grow to the current market capitalization of bitcoin, then 300+ developers could be supported. Paid human participants in the CPOS system, e.g. operators and human agents, could be anonymous but would be required to possess X.509 certificates for digital signatures and network authentication. Likewise they must provide verifiable contact information. All communications in the network are digitally signed, TLS/SSL encrypted, and logged. We want the network to be trustless in the sense that Satoshi's Bitcoin is trustless, but paid participants must be held responsible for their behavior via cyrptographic credentials and tamper-evident logs.

I expect the block rewards of the CPOS coins to greatly exceed the transaction revenue with respect to paying for the system. Consequently, I would set transaction fees to the lowest sensible values which I believe are 100x less than what bitcoin charges. Rather than $.05 fee at today's bitcoin price, I would set CPOS transaction fees at the equivalent of $.0005 which encourages the use of microtransactions.

As an example of "eating your own dog food", the Texai software agents will pay each other for services rendered using bitcoin microtransactions. This will encourage software developers to write skills for the system, as they will receive the net earnings of software skill they provide in accordance with a scheme to maximize innovation.

In accordance with the precedent set by Satoshi's Bitcoin, the CPOS network will not be a legal entity in any jurisdiction. The network, despite Tor anonymity capabilities, will not place servers in jurisdictions where their operation would be against the local law. The network will pass through all earnings, e.g. block rewards, transactions fees, and software agent income, to human participants who will pay taxes according to their local jurisdictions.

Ha! That was my handle back in the day of posting on the peak oil site - The Oil Drum, before technical innovation in the oil sector killed it.

My point in posting these charts is twofold, first to witness the dramatic altcoin speculative bubble collapse, and second to observe to what extent factors such as mining algorithm affect the degree of collapse.

I am working on a cooperative proof of stake mining method to hard-fork popular Satoshi-style proof-of-work cryptocurrencies. The respective forked blockchains would be continued on separate networks and not corrupt the original versions. My method secures a blockchain network using conventional financial data and network security enforced by a trustless multi-agent cognitive architecture, and paid for by the block rewards. Micro-transactions enabled by immediate, certain acceptance and extremely low transaction fees suggest the initial market.

I will be speaking in a modest role at the Hashers United conference in Las Vegas in October if anyone would like a meetup.

-Stephen Reed.

Here is the one-week resolution chart for peercoin as reported by the BTC-e change, priced in bitcoin. Note that the combination proof-of-work and proof-of-stake coin has collapsed slightly less than pure proof-of-work altcoins - down 6.68 from the November 2013 peak relative to bitcoin.

And here is the one-week resolution chart for litecoin, priced in Chinese RMB as reported by the very liquid OKCoin exchange. The bubble has steadily collapsed from the November 2013 peak, with a great capitulation beginning about 7 days ago. Perhaps industrial miners are selling their mined litecoins to buy ASICS in fiat. Hobbyist miners in contrast, often mine in order to acquire coins for long term holding - regardless of economics.

Here is the 3-day resolution chart of dogecoin priced in bitcoin. Note that bitcoin has dropped 2.4x from its November peak. Valued in bitcoin, the DOGE bubble has collapsed almost 13x from its corresponding peak.

Litecoin prices on BTC-e are now nibbling at the 23K wall at $4.00. Volume has been relatively high after $7.00 failed to hold.

Here is the 30 minute chart from BTC-e showing the wall...

Here is the descriptive chart post on my thread that refers to excellent work posted elsewhere on this forum.

Metcalfe's Law Explains 10x Price Growth Vs. 3.2x Transaction Quantity Growth

Note the strong growth of bitcoin transaction quantity in the past month below. Metcalfe's Law suggests that bitcoin price is proportional to the square of the transaction quantity. Perhaps the growth in transaction quantity predicts a price increase, or conversely transaction quantity will soon plummet to match its lows of early summer.

Here is the weekly chart of Litecoin vs. Bitcoin, from the BTC-e exchange. Litecoin has fallen further relative to bitcoin following the November 2013 peak. When bitcoin began its ascent last September, litecoin was was slow to follow. It may be that as bitcoin soared past its previous all time high set at the peak of the April, 2013 bubble, speculators began to believe that litecoin was undervalued with respect to bitcoin.

Therefore, litecoin may fall further even if bitcoin begins a new bubble, then sharply reverse as bitcoin passes its all time high. The grinding collapse of litecoin looks similar in shape to the collapse of the great bitcoin bubble of June 2013, in which bitcoin declined 10x from the peak. In USD terms, litecoin fell from a peak of $48.48 on BTC-e last November to $4.37695 right now.

Unlike Bitcoin, Litecoin continues to collapse according to the resistance trendline from the November peak, dropping to below $5 today on BTC-e ...

[reposted from the rpietila quality TA thread]

Here is an interesting chart comparison between the great bubble of June 2011 and the November 2013 bubble. The general shape is that of a dampened oscillation. Because 2013 was a year in which two bubbles occurred, perhaps the November 2013 bubble will have a longer period of collapse than the April 2013 bubble.

This is the weekly chart from Mt. Gox from the 2011 bubble . . .



And here is the current weekly chart from Bitstamp . . .

Here is an interesting chart comparison between the great bubble of June 2011 and the November 2013 bubble. The general shape is that of a dampened oscillation. Because 2013 was a year in which two bubbles occurred, perhaps the November 2013 bubble will have a longer period of collapse than the April 2013 bubble.

This is the weekly chart from Mt. Gox from the 2011 bubble . . .



And here is the current weekly chart from Bitstamp . . .

Here is a weekly chart of litecoin that clearly illustrates that unlike bitcoin, it has not broken the long term downtrend from the November 2013 bubble. This chart reminds me of the great bitcoin bubble of June 2011 and its aftermath - a drop of about 10x.

Hashers United Conference

I will be participating in a panel discussion at the Hashers United Conference to be held in Las Vegas, Nevada, USA on October 10-11. The panel topic concerns mining algorithms and my modest role will be to briefly describe Cooperative Proof of Stake for Bitcoin. Sharing the podium will be notable crypto coin designers.

This is a great chance to meet up. If you like, PM me.

http://hashersunited.com/

After returning from vacation I found that the disk drive on my server crashed. When rebuilding the system I decided to make it identical to my development desktop and use Docker to contain the Jenkins continuous integration application that I used to run on the server. Having a second development computer makes it easier to bring one along on vacation, and also a documented and scripted build for developers that this project will ultimately pay to enhance CPOS Bitcoin.

Docker is a Linux based technology that enables applications to run efficiently in secure containers. I created a Docker container for running Java continuous integration with Jenkins, Maven, Java 8, and Git. This is a generally useful contribution to the Java development community.

The repository for my container is https://registry.hub.docker.com/u/stephenreed/java8-jenkins-maven-git-nano/

And here is a screenshot . . .

Blockchain.info does not plainly show their data gathering algorithm for this series, so I suppose that the answer is from the title of the chart. I would iterate over the set of daily bitcoin transactions and count the number of unique addresses taken from the inputs and outputs. The seven day moving average is taken over the daily counts and can be displayed according to a charting option which I chose. Alternatively the raw data shows daily counts that clearly have a day-of-week component.

Here is a link to the chart with its default linear scale and daily data . . .

https://blockchain.info/charts/n-unique-addresses

Here is a two-year, 7-day moving average, log chart of the number of unique Bitcoin addresses used, which is provided by Blockchain.info. Note the growth in the most recent few weeks which confirms the growth in Bitcoin transaction quantity noted in a previous post. Metcalfe's Law would indicate higher bitcoin prices, unless this fundamental trend reverses. Metcalfe's Law, as interpreted by Peter R for Bitcoin, says that prices are related to the square of the number of participants, i.e. nodes in an economic network.