Why all centralized coins fail

[TPTB_need_war]

Sometimes we need to be reminded what top-down control does:

China’s Deserts Expanding

According to statistics released by the State Forestry Administration, China has 2.6 million square km of desert that accounts for 27 percent of the country’s total land area. The desert areas are scattered among 12 provincial-level regions in north China. There is a serious problem on the horizon for China. Following the creation of the People’s Republic of China (PRC) in 1949, the Communist State attempted to alter nature. China’s forests were cut down and used for fuel, lumber, and paper production for the billions of little red books that became rather notorious. This process increased during the 1960s and had the tendency to eliminate both forests and grasslands. This led to a sharp rise in the rate of desertification.

Realizing its mistake, the government saw the desert areas expanding and embarked on an effort to reverse the damage by trying to the create a reforestation effort in 1978. They actually planted 66 billion trees. This became known as the “Green Wall of China,” which was to be completed by 2050.

However, while the intentions were good, the bottom-line result has been devastating. The government introduced fast-growing pine and poplar trees that were not native to the region. These trees needed more water and sucked the region dry. The water table in the soil dropped nearly 10 fold and most of the trees died. Only about 15% of the trees planted since 1949 have survived. Their attempt to reverse the trend had the exact opposite impact. Instead of creating a forest, it expanded the desert. China now has the second largest desert in the world – the Taklimakan desert.

This presents a political risk for the future as China is squeezed by the expanding desert.

Other threads are noticing this effect:

What caused Bitshares to lose it's shine?

I've not heard much about that project lately?

Was very popular not long ago?

To everyone converting BTC to ETH

Read a little about history of NXT, while jumping ship to ETH as a store of value. Compare the following two graphs...

a. http://coinmarketcap.com/currencies/ethereum/#charts

b. http://coinmarketcap.com/currencies/nxt/#charts

Compare the following facts...

i. NXT was backed by a centralized organization, just like ETH.

ii. NXT was PoS, just like ETH will ultimately be.

iii. NXT offered asset exchange, while ETH offers smart contract. Both of these functionality, which they claim to make them unique, are actually possible on bitcoin blockchain, which is far more secure.

iv. With price rise, NXT backers sold their holding to increase liquidity in the market. With price rise, ETH backers are increasing ETH supply in the market to increase liquidity in the market.

p.s. Alt coin trading is a gambling. If u wanna test your luck on some coin under pump, its fine. But, make sure to come back to BTC, when u have made enough, otherwise u'll lose all and have to be a mute spectator while the next alt wave hits. GooD Luck

Re: Proof that Proof of Stake is either extremely vulnerable or totally centralised

max reorg depth in NXT is 720 blocks

[Proof-of-stake] Checkpoints are centralization.

For a centralized coin, then anything works, you don't even need PoS nor PoW (except to fool people with).

If we don't have decentralization, then the entire plot has been lost.

Do you need an example? Here you go (remember the Chinese mining cartel allegedly controls 65% of the Bitcoin hashrate):

https://www.reddit.com/r/btc/comments/48nnaw/the_truth_comes_out_core_devs_have_convinced/

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[TPTB_need_war]

An ongoing court case centering on encryption has thrown light upon the total incompetence
of those in power. And this is not just about the USA and its legal system, it calls into
question the fitness for purpose of every government currently in place.  

First, understand that without privacy, there can be no private property...

Now you understand why MA says we may descend into a 600 year Dark Age, if we don't find some way to overthrow the current political structure.

I don't mean to be rude but what would be a better political structure than the one we currently have? I know there are multiple forms that are better, but which ones specifically would be actually viable in a real-world scenario?

You could argue that anarchy, in the without rulers sense, would be good, but at the same time it would hold back technological progress.

The solution is to minimize the size of government, no matter what form politics takes.

I believe the key to doing that lies in a technological solution that will empower the Knowledge Age. The government can't muck with taxing microtransactions, for then they would tax everyone, not just the middle class. The current political structure is sustained by stealing from the middle class to subsidize the unproductive class, and pile on debt since real estate is the primary driver of the economy (and incomes). We need to make high tech work the primary driver of the economy and end the fixed capital investment Industrial Age. The person who invents this technology will be a $100 billionaire and eclipse Bill Gates et al.

Read my latest posts in the Economic Devastation thread.

Click the link and read my posts, all my replies were already written for you.

You'll find last my month my posts criticizing the designs of decentralized file storage systems such as MaidSafe, Storj, Sia, etc.. and my proposal of how to fix them so they respect intellectual property rights.

Stealing from each other is what Socialism taught us.

[SydorFunk]

Ethereum's IPO was not well distributed, according to Vitalik's blog and I imagine the current PoW is even more concentrated.  Where all these centralized coins start failing is when a few whales dump.

[TPTB_need_war]

Seems quite plausible that Bitcoin will implode this coming March 13/14 or shortly thereafter, and when Bitcoin gets a flu, the altcoins go no bid and collapse.

Still, the digital currency experienced sharp gyrations this week amid news that the network was exceeding its capacity for transactions, a development that resulted in users paying sometimes substantially higher fees.

Bear in mind this revelation (click the link in the quote below) which I had predicted as well was the motivation for 51% attack of the Chinese mining cartel which blocked any block size increase:

If we don't have decentralization, then the entire plot has been lost.

Do you need an example? Here you go (remember the Chinese mining cartel allegedly controls 65% of the Bitcoin hashrate):

https://www.reddit.com/r/btc/comments/48nnaw/the_truth_comes_out_core_devs_have_convinced/

[cryptohunter]

Ethereum's IPO was not well distributed, according to Vitalik's blog and I imagine the current PoW is even more concentrated.  Where all these centralized coins start failing is when a few whales dump.

If you think etherium IPO was not well distributed you should look at some of the others that have been done on here recently. I'd be shocked if more than 100 people bought into some of them.

I don't like ipo or ico. These are so easily gamed. I mean look at nxt and even worse nas.

It's very hard to stop people gaming ico indeed. Especially ones where it's hardly mentioned only on their little sub thread, and that's if you're lucky and not ripped off and there is no intention of creating anything. 

With POW especially if it follows a fair launch protocol then everyone can have a chance. I mean you can make the POW take years if you like.

If it is announced ahead of time and anti-instamine measures are taken then you can to a certain degree ensure it's a better or wider distribution.

Funding that's tricky. If they have faith in their creation they should have an premine pot but with a full transparent ledger with the funds held in multi sig accounts and all possible precautions taken to ensure they don't just take the premine dump it and run.

The problem is if they do like a dev pot of btc to use to get it going. Therefore they did what etherium did. Mining and ICO. I don't like it and they don't have any kind of transparent ledger. Then again if they are working flat out I know coders of this level do earn fortunes so perhaps they are eating into the funds as they say. I would still have liked to see a transparent full accounting done but what can you do.

It's a shame nobody has thought of a way to stop pow mining eventually always being taken away from the small miner by the larger mining corps.
I guess it's because it's not possible to do that else they would have. .

[Spoetnik]

@OP
Interesting.. your comparison with NXT i think has some merit.

@CryptoHunter
I created a topic called "ETH = Scam" as it launched watching it unfold.

I will bet every coin i have there was less than 10 people who invested in that IPO called ETH
..not 100 hahhaha
AND that handful were responsible for buying up over 1 million dollars worth on launch minute 1.
Far faaaaaar BEFORE they launched they advertising campaign here on Bitcointalk and on Coindesk with stories.
It was crystal clear it's a setup and it HAS been pumped & dumped since ..fulfilling predictions.

Only ETH question i have now is..
Will they pull a Monero and try and push the "Legit coin" angle ?
What is that ?
Coercing the scene into thinking it's legit if they support it loudly long term.
This method is surprisingly effective and lures in a lot of idiots in our Altcoin scene..
SO yeah i have a hunch ETH will follow this Monero angle.

Think of it this way guys why pump and dump & abandon a coin when you can keep luring in more users
or REPEAT users ?
Once the kids get scared many will dump for a loss.
Later then will jump back in again lured in by Pump prices.
Round & round.

Whale pumpers play all these Altcoin scene idiots like a violin.
The fallacy is they think they will get in & out with a meager profit.
But like a gambler they will play the game again.. and Whales now damn well..
Put a dollar in their hand it's far easier to steal all of their money later.
And THEY DO !
The shrinking Crypto user bases is because of this vicious cycle.
It creates losers who have no choice but to quit and leave.. broke (sooner or later)

[cryptohunter]

Etheriums IPO was announced for quite some time I'm not sure how many invested but I would guess a few. Then the price was on the market for months for 3 x ico only. So people had some time. I left it it went up and down a bit... anywheay I don't like ico's at all but still most could have got some for a decent price. I bought a few when it had already risen quite away but that's how it goes.


HOWEVER - wait for the next one IOTA  [I Own Tons Assholes] - same bunch from NXT

What?? didn't learn their lesson at all at giving it all out to a small amount of people??

I didn't see that ICO and would guess not many did. You would think after next they would have made an effort to distribute the tokens.

Ask to buy some before it hits exchange. how about 3x the ico price? nah ... okay 5x....

Yeah okay 20-30x ICO??? and still trying to hype it higher. That's like etherium's gains after the point it's at now? they want that before anyone has heard of it or seen it in action.

Somehow it's all gone wrong and there is no gui. So can't go to exchange yet on the open market. Better hype this sh1t out of it first to 100X ico.

ICO unregulated and tiny = shady as hell.

Sure you'll get the few who got some crumbs eager to defend for 20x ico. But if someone was to launch a poll here how many bought the ICO it would be tiny.

POW is the only way without in depth investigation/regulation regarding distribution.

Should introduce protocols to be followed for ICO and POW else you'll always get poor distributions and pump and dumps.

[TPTB_need_war]

Bitshare's Daniel's father Stan:

We just dropped transfer and market fees to negligible and shareholders will soon get free transactions proportional to their stake.

So "we" are in control and not the market. Centralization always leads to failure.

[Fuserleer]

Isn't your question a bit oxymoronic (is that even a word ), as they fail because they are centralized.  No why about it  

I don't really care for cryptos that have centralized/semi-centralized properties from day one, or even ones that adopt consensus technologies that are quite obviously prone to centralization over the medium term (POW, POS), bad initial distribution, huge insta-mines etc.  They are doomed to ultimately fail from the start, and can only be propped up for so long.  The only one that holds my interest in anyway at all is Bitcoin, and more in a curious sense than anything else, after all without it I wouldn't be here.

The bigger question is of course, can a decentralized system ever be so expensive in terms of resource (effort, logistics, expense) that it doesn't centralize, even though in theory centralization is possible?  Which takes us back to one of your other threads earlier.

One of the key components (among many others) to achieve that is to push and focus on mass market, which no one seems to be doing other than myself.  You have also hinted having some focus there too.  

Until someone truly cracks that market, and solves a number of other issues relating to the subject of centralization over time, pretty much everything out there right now is centralization waiting to happen.

[TPTB_need_war]

Fuserleer, I think the key "why" is because top-down control (even when intentions are good) is not omniscient and can't anneal to fitness as well as diversified (many decentralized actors) trial-and-error, which is evidenced by the example in the OP of how China's leaders are not as smart as nature and the horrific mess that has been created for their arable land.

Enabling the market to act decentralized to find optimum fitness, also increases the rate of network effects and thus adoption and value. The generative essence reason that all centralized coins fail is because an exclusive club does not make a network effects movement. These centralized altcoins are circle-jerk echo chambers.

And yes the whales need to manipulate the prices (volume, and market cap) buying from themselves to motivate the jealous greater fools to enable the whales to sell and get out, before the shit collapses and withers on the vine. Then perhaps they try for round 2 and revive the carcass with another merry-go-round the centralization trough.

Remember piss from where you drink, so you don't get bored drinking from the same shit that you leave behind for everyone else. This is another "meritocracy" Socialism taught us.

[TPTB_need_war]

It's a shame nobody has thought of a way to stop pow mining eventually always being taken away from the small miner by the larger mining corps.
I guess it's because it's not possible to do that else they would have. .

I think I know how to do that. I have explained it, so I won't repeat myself.

[Spoetnik]

Bitshare's Daniel's father Stan:

We just dropped transfer and market fees to negligible and shareholders will soon get free transactions proportional to their stake.

So "we" are in control and not the market. Centralization always leads to failure.

Hmmm what is linked to them ?

What i have characterized as the grandest scam in all of crypto is directly tied to those guys..

This topic can not exist nor discuss Bitshares with out.. the scammiest coin ever posted here at Bitcointalk !

drum roll please..



ready ?




MEMORY COIN

[monsterer]

It's a shame nobody has thought of a way to stop pow mining eventually always being taken away from the small miner by the larger mining corps.
I guess it's because it's not possible to do that else they would have. .

If you pay miners, the best miners always have an advantage and that tends to compound over time. If you don't pay miners, there is no incentive to behave in favour of the network instead of just trying to double spend each other and fork the chain to oblivion.

[hv_]

It's a shame nobody has thought of a way to stop pow mining eventually always being taken away from the small miner by the larger mining corps.
I guess it's because it's not possible to do that else they would have. .

If you pay miners, the best miners always have an advantage and that tends to compound over time. If you don't pay miners, there is no incentive to behave in favour of the network instead of just trying to double spend each other and fork the chain to oblivion.

New Casper concept contains an artificial incentive cap and a wait time ( not seen that yet ). Wonder if that helps...

[monsterer]

New Casper concept contains an artificial incentive cap and a wait time ( not seen that yet ). Wonder if that helps...

Casper cannot work as designed - you can't use transactions to create a consensus when those very transactions rely on consensus in the first place due to double spends.

[TPTB_need_war]

If you don't pay miners, there is no incentive to behave in favour of the network instead of just trying to double spend each other and fork the chain to oblivion.

You don't have to pay them money in order to pay them.  

Haven't you ever heard of barter trade which is non-fungible with money.

[hv_]

New Casper concept contains an artificial incentive cap and a wait time ( not seen that yet ). Wonder if that helps...

Casper cannot work as designed - you can't use transactions to create a consensus when those very transactions rely on consensus in the first place due to double spends.

That s another issue. I was thinking about better sharing incentives between miners and I saw that new stuff in Casper. I wonder if there are better models to share like lottery / randomizing....

[hv_]

If you don't pay miners, there is no incentive to behave in favour of the network instead of just trying to double spend each other and fork the chain to oblivion.

You don't have to pay them money in order to pay them.  

Haven't you ever heard of barter trade which is non-fungible with money.

Fun, Love, Respect?

[TPTB_need_war]

If you don't pay miners, there is no incentive to behave in favour of the network instead of just trying to double spend each other and fork the chain to oblivion.

You don't have to pay them money in order to pay them.  

Haven't you ever heard of barter trade which is non-fungible with money.

Fun, Love, Respect?

Transacting.

[monsterer]

That s another issue. I was thinking about better sharing incentives between miners and I saw that new stuff in Casper. I wonder if there are better models to share like lottery / randomizing....

There is a dichotomy at hand in consensus design, which is the nash equilibrium. On the one hand, nodes must behave in favour of the network as a whole for the network to work, but on the other hand, it is always cheaper for them to behave rationally.

This means there must be some incentive which is greater in value than their rational behavior costs, and this incentive must be paid by the network to the nodes such that the cheapest behaviour for the nodes to adopt is in favour of the network as a whole.