True Decentralization is in Diversity

[alt19]

The rise of Litecoin demonstrates pretty well that Bitcoin is not the only ruler or the only driver of crypto world.
How about other coins?

An year ago POS coins were popular. Now anonymous coins are trendy.
Devs are working hard to implement true anonymity features and to bring their coins to the mainstream.
Unfortunately both POS and true anonymity coins are less decentralized than POW.
About POS you probably know, but why anon coins are bad for decentralization?

When you buy online, you anyway leave your delivery information, thus it doesn't matter how anonymously you pay in this case.
In fact true anonymity is good for illegal things mostly (scams or violence).
Government will fight anon coins, and it will hurt other cryptocurrencies.
Anon coins will not get wide adoption because the masses don't like "spy games" and don't like to risk by being involved in something illegal or suspicious.
Even if government can not regulate or destroy anon coins, they still may tell people that these coins are both immoral and illegal.
If government tries to ban coins with transparent transactions, people don't approve that, but if government tries to ban anon coins, 90% of people will agree with government.
Government can say that anon coins are bad, but after all it is nonsense to say that coins with transparent transactions over long term can be used to trade illegal things or finance any violence.
Transparency is one of the most important features of decentralization.

Thus anon coins cannot be the decentralized solution: they never will get wide adoption, their capital will be concentrated a lot, investors will avoid them.
Transparency is a very important thing. Cryptocurrency doesn't mean anarchy or dissoluteness, cryptocurrency refers to a fairer world.
We have nothing to hide, we just know that cryptocurrency is fair and moral, let's keep this and people will never say that we stealthily want to do something bad with crypto.

Satoshi's POW idea is simple and ingenious. It will work over long term. Merged mining and mining contracts will help.

But you know that Bitcoin is not 100% decentralized.
Early adopters, some unfairness of distribution (who knew about BTC in 2009-2012? IT workers and almost nobody else) and concentration of capital.
BTC can be attacked: price manipulations, possible ban or very strict regulation for exchanges and other BTC businesses, hackers' attacks.
BTC reputation can be attacked also, and we see how it is being attacked now: ask people who know about BTC but don't buy it and 90% would say BTC is HYIP  (but we know that it is not true of course).
But the most sensitive targets are BTC related websites: Coinbase, Bitcoin.org, Blockchain.info, Bitcointalk, exchanges…

While BTC market cap is so high in comparison with other cryptos, while cryptocurrency means BTC, a successful attack against BTC can destroy people's trust.

How about limitations of technology? Be it issues with block size, with the speed of transactions, or with synchronizing a wallet?
Yes, there are lite versions and online wallets, and "0 confirmations", but all these solutions are less decentralized again.
It seems Satoshi Nakamoto didn't mean that Bitcoin would be the only one solution of decentralization in digital economy. He was speaking of "several years" of BTC leadership.

True decentralization is in diversity of cryptocurrency.

There is one problem.
You know how people are bashing altcoins now. Even Litecoin or Dogecoin with its large community are being called garbage, clones. To say nothing of other coins.

This way of thinking affects decentralization more than any government control or regulation.

Are crypto innovations are so important indeed?  Do traditional currencies differ so much due to technical features or they all are printed, protected against forgery, and have different names and logos?

One important thing about altcoin market that it is not similar to stock market. Coins are not stocks, coins are currencies. So there are no penny stocks, no bankruptcy, no dividends. Things that matter: inflation (deflation), price fluctuations, liquidity, a number of users who use and trust this currency, name, security, usability and what you can buy or sell with it. But if somebody tells you: we have BTC, we have LTC, why do we need DOGE or other coins, that is not correct. There are many traditional currencies, not only dollar and euro. There are precious metals and stones, not only gold and silver. Diversity. Many nations. Many ideas. A lot of people. We all have pretty similar DNA and consciousness but it doesn't mean we all are simple clones of each other. Currencies (coins) are quite similar, too, the same technology often, but the spirit of their community, name, fortune and history make them all different.

Let's say, improvement is always good. But does it mean that we need new and new coins to provide decentralization?

No, launching a new coin is not decentralization-friendly in fact. Why?
Just imagine there is a good talented dev (not scammer). He would want to launch a new and cool project.
He would need to run a website (thus not decentralized), he would need to promote, to create community, to run network (again not decentralized) and provide market liquidity.
Anyway first adopters will be his friends. It is not decentralized either.

Forget about new coins, there is another way, good and decentralized at the same time: devs can just choose one from 200-300 old abandoned coins with community (even small or inactive one), and to develop it, to revive, to fork, to swap coins to completely new blockchain, even to rename it, if community approves it.
Cryptsy doesn't delist old coins as they wait for somebody who will develop them. Many prefer Bittrex or Poloniex, but it looks like Cryptsy still has more users than Bittrex and Poloniex together.

This way would be more moral,  launching a new coin always hurts crypto market because it dilutes market, other way round developing an old coin helps investors who probably earlier had invested even more that they could afford to lose in "new and cool" projects. They would be thankful to that talented dev who would bring a coin to life again. A dev could also buy a coin on exchange and get a good motivation to work.

Speaking of decentralization, the solution can be 200-300 developed old coins (similar to the number of traditional currencies in circulation) with merged mining and mining contracts (and long term derivatives) which would balance the market and mining profitability. That would be hard to attack them all, and people will be more free in selecting a coin. They could choose one with the name they like, with community they like, with other features to prefer.

True decentralization is in diversity, not in monopoly, nor in anarchy.

[1715239885]

1715239885

[1715239885]

1715239885

[1715239885]

1715239885

[1715239885]

1715239885

[1715239885]

1715239885

[alt19]

The Denationalization of Money (1976), a book written by Friedrich Hayek:

according to Hayek, instead of a national government issuing a specific currency, private businesses should be allowed to issue their own forms of money (deciding how to do so on their own) currencies that compete for acceptance.

In a 1977 review of the book, economist David H. Howard stated that Hayek's regime of competitive moneys may result in the establishment of a new monopoly similar to the existing system.

Austrian School economist Lawrence White was critical of Hayek's assumption that the most stable currencies would win market acceptance.

What do you think of it?

[g3rszpi]

I can tell you that btc is the only ruler of cryptos

[X68N]

@alt19
exactly what i think, its better to pick up some old (low value) existings coins with community than
to bring up a hole new coin.

[eamanj]

An important topic to discuss.
I come from economics and computational social science background. Recently, there has been increasing interest in characterizing diversity (social, economic, ideas, racial, ...) and its correlation with success metrics such as innovation or socioeconomic status. For example, look at this paper. . There has been growing evidence that creative people are found in loose networks of diverse backgrounds. Businesses are trying to create dissensus and diversity to gain the competitive edge in the rapidly changing economy.

"It is important to diversify by considering more than one strategy at a time, because as our environment changes, the old strategies stop working and new strategies take the lead. Therefore, it’s not the strategies that have been most successful that you want to follow; it’s the strategies that will be most successful that you have to find."

In economics, people think of diversity as how uniform the resources are distributed among possible options. Monopoly is the extreme opposite of diversity since it means all resources and attention are spent on a single option. There has been numerous studies showing that monopoly is useful for stability (only in short-term), but kills innovation.
In this context, I think cryptocurrencies are not diverse at all. The whole community has gathered around a single currency (i.e. bitcoin). All attention and resources are spent non-uniformly on a single idea (bitcoin). I think this might in fact be bad for cryptocurrencies since cryptocurrency as a concept is in its infancy and to get mass momentum it should adopt as many new idea as possible to evolve. To gain more popular support, the cryptocurrency community must be as diverse as possible so that it can find allies from all spectrums of economic policy. This means more altcoins, and more uniform distribution of attention among cryptocurrencies. Now I agree that there are many crappy altcoins out there or there are people who are abusing the idea of cryptos to make money. But I believe the market will collectively identify and purge these toxic coins. But it is crucial to leave the comfort zone, be open to new ideas and invest in new legit altcoins. In the long-term the ideas of all altcoins combined together (if given enough oppurtunity) will contribute to making the whole crypto ecosystem more popular.

If reviving old coins, instead of creating new ones, has a better chance of gaining attention thus diversifying ideas in the whole crypto community, then I am all for it.

[btcbug]

Just a comment about your points on anon-coins...

Transparency is a great thing, especially when it comes to government and corporate accountability. Anonymity is also a great thing and I think for most people, Bitcoin provides enough privacy in that it doesn't explicitly tell people what you purchased, but if necessary you can prove the flow of funds. In the case of government, which should be held to the highest level of accountability, it's great.

There seems to be a bit of a conflict for government however, because politicians typically operate with the "do as we say, not as we do" mindset. I can see them hating Bitcoin for it's transparency (of them) and simultaneously hating anon-coins for their anonymity (for individuals). For this reason one would think that all crypto-currencies would be targeted, although miraculously it hasn't been the case yet. IMO it's due to lack of a true understanding regarding the disruptive nature of crypto-currencies, but who knows.

Anon-coins may not be used by the mainstream, but I think when we have decentralized exchanges and better anonymity on the internet it might be next to impossible to ban these things. The risk of getting caught and punished could be as minimal as it is nowadays with downloading copyrighted music on bittorrent. For that reason maybe they will be highly valuable alongside Bitcoin.

[BitcoinNational]

1. yes, anons are silly if you are including home address, plus the main trade houses are KYC, so what's the point ;.o

2.  True Decentralization is in Diversity ... there needs to be many independent coins/blockchains/tech.teams ... and you can just start to see the top200 getting established ... it may take 4 more years but there will be at least 300 solid coin communities.

3.  There will be a day in the near future when the value of the ALTs becomes greater than the value of BTC ... akin to the value of all Fortune500 companies is greater than the value of all u$d in circulation ... this will happen.

4.  Truth be told BTC 'gold' LTC 'silver' will likely not be challenged.  ETH could be the 'JPY' and XRP the 'u$d'.  But I doubt the list of 'QUIDS' ... high volume high cap ... will be more than 10-12 ... even by year 2025.  Most coins are 'stock' and don't need to trade in big numbers each and everyday.

5.  BTC will fork.  A large chuck of capital (say 15%) will be spun off into this fork.  

6.  Some where on the planet a city or university will run all accounts on a block chain ... Transparent ... for all eyes to see and that is a ticking clock for all public works ... government big and small to go full and completely audit-able on an open block chain.  De facto micro corps are already functioning at a beta run level on the chain. 

[alt19]

1. yes, anons are silly if you are including home address, plus the main trade houses are KYC, so what's the point ;.o

2.  True Decentralization is in Diversity ... there needs to be many independent coins/blockchains/tech.teams ... and you can just start to see the top200 getting established ... it may take 4 more years but there will be at least 300 solid coin communities.

3.  There will be a day in the near future when the value of the ALTs becomes greater than the value of BTC ... akin to the value of all Fortune500 companies is greater than the value of all u$d in circulation ... this will happen.

4.  Truth be told BTC 'gold' LTC 'silver' will likely not be challenged.  ETH could be the 'JPY' and XRP the 'u$d'.  But I doubt the list of 'QUIDS' ... high volume high cap ... will be more than 10-12 ... even by year 2025.  Most coins are 'stock' and don't need to trade in big numbers each and everyday.

5.  BTC will fork.  A large chuck of capital (say 15%) will be spun off into this fork.  

6.  Some where on the planet a city or university will run all accounts on a block chain ... Transparent ... for all eyes to see and that is a ticking clock for all public works ... government big and small to go full and completely audit-able on an open block chain.  De facto micro corps are already functioning at a beta run level on the chain.

Just a comment about your points on anon-coins...

Transparency is a great thing, especially when it comes to government and corporate accountability. Anonymity is also a great thing and I think for most people, Bitcoin provides enough privacy in that it doesn't explicitly tell people what you purchased, but if necessary you can prove the flow of funds. In the case of government, which should be held to the highest level of accountability, it's great.

There seems to be a bit of a conflict for government however, because politicians typically operate with the "do as we say, not as we do" mindset. I can see them hating Bitcoin for it's transparency (of them) and simultaneously hating anon-coins for their anonymity (for individuals). For this reason one would think that all crypto-currencies would be targeted, although miraculously it hasn't been the case yet. IMO it's due to lack of a true understanding regarding the disruptive nature of crypto-currencies, but who knows.

Anon-coins may not be used by the mainstream, but I think when we have decentralized exchanges and better anonymity on the internet it might be next to impossible to ban these things. The risk of getting caught and punished could be as minimal as it is nowadays with downloading copyrighted music on bittorrent. For that reason maybe they will be highly valuable alongside Bitcoin.

'Anons'-based world economy is unreal and bad.
I understand that many users support 'anons' because they believe there is no freedom without privacy. But if this freedom involves scams, drugs, violence, most people don't want such freedom.

Any economic system consists of the production, distribution or trade, and consumption of goods and services by different agents in a given geographical location.
Who are agents? Companies, corporations, governments. Most individuals are consumers.

Now imagine 'anons'-based economy. Individuals use decentralized exchanges and there are super anon transactions, but people buy goods and services from which agents? And what about delivery? And any consumer protection?

'Anons'based economy must involve: anon corporations, anon businesses, anon governments, anon transport companies, anon soft, anon OS, anon law firms etc. It's impossible.
Transport companies => roads => control. Corporations => depots => control. Soft, OS, licenses, there are many leaks.

In fact 'anons'-based economy can be only 'individuals to individuals' (where sellers would need to compete with eBay and buyers anyway would provide their delivery information), 'criminals to individuals', 'individuals to criminals' or 'criminals to criminals'.

Transparent transactions (BTC, LTC, DOGE, NXT...) are the compromise between privacy, freedom and law.
But if we have 1 or 4 digital currencies only, it is not stable and not decentralized system.

True decentralization is in diversity. There is no another solution.