My ideal cryptocurrency

[hazek]

There is no question Bitcoin is an ingenious innovative technology but there also is no question that despite it's brilliant design it still has issues that can be improved upon. What I want to do with this thread is to make an appeal to savvy developers who would like to make a name for themselves to take the Bitcoin code and improve upon it and come up with a serious Bitcoin competitor. I would try to do this on my own but I'm not a dev so this is the best that I can do right now.

First my ideal cryptocurrency is built upon the same principles as Bitcoin. Don't change anything aside maybe a few parameters (max coins, coins per block, blocks per min..), but never the rules. It needs a limited supply issued at a predictable rate and it needs to be as decentralized.

Second it needs to solve or at the very least significantly improve the 51% vulnerability while keeping the proof of work mechanism. I know it can be done, someone clever enough just needs to figure it out.

Third it needs to solve the scalability issue with a prunable yet just as secure blockchain.

Fourth it needs to set a fixed relationship between fees and the block size making sure there will be enough collected to serve as an incentive to secure the network before increasing the capacity.

Fifth.. call it something without the word coin in it. 


That's it. If you can develop that it I will certainly switch to it and advocate for it just as hard as I'm advocating for Bitcoin right now.

[iddo]

Second it needs to solve or at the very least significantly improve the 51% vulnerability while keeping the proof of work mechanism. I know it can be done, someone clever enough just needs to figure it out.

After lengthy discussions between coblee, cunicula, killerstorm, Meni, myself, and a few others, so far the best protocol that we have come up with and that we plan to implement is: https://bitcointalk.org/index.php?topic=102355.msg1437768#msg1437768
I'm trying to solicit more peer reviews to this PoA protocol. If you or anyone else have useful comments then please let us know, either here or in that PoA thread.

[Come-from-Beyond]

Second it needs to solve or at the very least significantly improve the 51% vulnerability while keeping the proof of work mechanism. I know it can be done, someone clever enough just needs to figure it out.

How do u know it?

[bitcool]

Fifth.. call it something without the word coin in it. 

This going to be the most difficult one, so many good names have been tried and taken: ecash, egold, bitgold, mintchip.... 

[Walter Rothbard]

Fifth.. call it something without the word coin in it. 

This going to be the most difficult one, so many good names have been tried and taken: ecash, egold, bitgold, mintchip.... 

Latinum.

A hundred years from now, I hope society transacts business in Bitcoin-pressed Latinum.

[drawingthesun]

If you want a alternative crypto currency to have a chance you have to decided on a data maybe a year in the future to activate the network, to prepare the system and do this:

The genesis block of any serious competitor should be the Bitcoin blockchain on that date that you set, then people can use their Bitcoins in the new network and it would allow much faster adoption. You could even set this blockchain snapshot up in such a way the first action would be to send coins to a new address on the new network. This way your not undercutting the entire Bitcoin community.

[misterbigg]

Latinum.

A hundred years from now, I hope society transacts business in Bitcoin-pressed Latinum.

LOL I prefer the 'useless gold' that encases the Latinum

[maxcarjuzaa]

Second it needs to solve or at the very least significantly improve the 51% vulnerability while keeping the proof of work mechanism. I know it can be done, someone clever enough just needs to figure it out.

If you solve 51% vulnerability you end up  with docens of forks, everyone will clone the coin diluting value. The 51% vulnerability force us to focus in one or two chains (ASIC and GPU). No merchant will accept a coin from a fork that can be easely atacked.

The 51% vulnerability is what guarantee BTC and LTC succees and even if you solve the problem you will end up with a coin with no value (forks will create inflation).

[Zangelbert Bingledack]

It seems to me that a PoW task that can only be performed by humans could prevent against a 51% attack. Something like a CAPTCHA whose solution is obvious once found but still takes time to solve and can't be done by computer, yet is totally objective. Generally only math problems seem to have the right characteristics, except that a computer wins on those.

[paultramarine]

I'm glad you started this thread, Hazek, I've been thinking about this too.  Bitcoin is a great start but it is not the best cryptocurrency that there will ever be - maybe it's the model-T of cryptocurrencies, solid, reliable, widely-adopted but with some clear drawbacks that can be improved upon.

2 - I've wondered if using a protocol/alogrithm that makes mining very accessible (e.g. 1-10kH CPU is worth running) could help avoid 51% attacks.  I'm not a dev guy either, but if there is a way to design it in a way that prevents ASICs or any high-powered mining from occurring then mining would be incredibly distributed and a 51% attack would be virtually impossible.
3 - This seems very doable, right?  If all coin (or _not_ "coins", as per #5) locations were logged in an archive part of the chain than only enough transactions need to be in the ongoing active chain to confirm that there are no double spends.
4 - Would it be acceptable to have an inconsequential amount of fee be hardcoded for every transaction?  It could start at, say, 0.00001 then become smaller and smaller as network power or difficulty increased so that as the usage increased the cost of transaction remained minimal.

[jubalix]

there should be a rolling block chain where the size f(hashrequiredtocrack) = a^x*n, x is some large number n is moores law.

also look to folding at home for some ideas as to proof of stake etc

[mintymark]

It has always struck me that one "problem" with Bitcoin (and hey, you know what do I know?)  is the deflation rate.

So far as I can see Satoshi tried to match the new coin introduction rate in the early days with the user adoption rate in some sense, so that the market was not flooded with 21M coins at start and this also fitted in with other aspects of the design as we know.

Given that the coin generation rate is higher at the start, even this gives rise to many more coins at the start, than latter on. Now this is all well and good early on, it gives early adopters a good chance at a profit. But it seems to me once you have a lot of people using the currency is problematic. Lets assume 100 users. A neglible part of the world population by any standards. In a year each introduces 9 new people. In a years time there are 1000 people using Bitcoin, all wanting a new currency. These figures are illustrative rather than actual. Since we still have a completely neglible part of the population using Bitcoin, this goes on and on for several more years, and by this time we have 10^7 people using the system and the demand for coins is massivly outstripping the slowly diminishing supply available from mining, which is gradully over time becoming zero. This guarantees a massive shortage of coins as time goes on, especially in the middle phase of Bitcoin adoption, a phase I would suggest we are entering now. You could argue this is the way way that late adopters are rewarded and so this is only right. But I would argue that exponential growth of demand, along with supply reduction is a particularly violent equation that does not spell good things for bitcoin adoption.

If the supply of coins remained linear or proportional to the square root of the number of users, we would still see a very healthy (for late adopters) rise in value of each bitcoin.

Its highly unlikely that this can be changed now because late adopters who have figured this out have their jaws tight round this like a doberman locked on to a piece of meat. But the truth is that there would still be massive growth during this phase if the coin supply was unbounded and there is a much lesser chance of something going wrong due to instability of demand.

How long does "this phase" last? It lasts untill most of the people who want or might want Bitcoin have it. It last until the proposition that most people dont know about it is no longer true. It lasts until Bitcoin is getting to be Mastercard in size. At this stage the groth rate at least in users must contract since the market is saturated, and its at this stage that the number of coins in existance ought to be come capped.

So the TL;DR; summary is that the supply curve for Bitcoins needs to be optimised in a new coin I suggest to keep price more stable during the mid-adoption phase.

[misterbigg]

TL;DR; summary is that the supply curve for Bitcoins needs to be optimised in a new coin I suggest to keep price more stable during the mid-adoption phase.

I disagree. Stable nominal prices are not what drives adoption, it is the availability of desirable goods and services and new markets.

For example, Bitcoin is totally an enabler of provably fair online gambling in a way that routes around government-granted monopolies. Do players at SatoshiDice care about a stable exchange rate? No.

[mintymark]

Satoshi Dice users need to hold Bitcoin. If the price is very unstable they will care because sometime it will go up and sometimes down as they hold. They also may decide not to spend today if it seems like a sure fire win to hold instead. SD would NOT like that much I suspect.

[paultramarine]

Satoshi Dice users need to hold Bitcoin. If the price is very unstable they will care because sometime it will go up and sometimes down as they hold. They also may decide not to spend today if it seems like a sure fire win to hold instead. SD would NOT like that much I suspect.

I think misterbigg's point is just that 'legit' online gambling is a large new market that is helping drive adoption of btc because it is illegal with fiat (at least USD).  While a highly volatile price can reduce adoption because concern that even brief incidental periods of holding btc (1-10 days) may cause loss of value I don't think a steadily increasing price (due to supply>demand) is going to prevent adoption as much as lack of market does.  Most americans didn't even notice when USD is a lot cheaper in terms of EUR and they certainly didn't go out a buy a lot of EUR - that's because they are used to buying everything in USD, it's easy and accessible.

This is why local, robust bitcoin communities may be the key to wide adoption.  If half the businesses in your town accepted bitcoin wouldn't we all use btc for pretty much all of our transactions?  And then everyone in the town would be willing to take btc because they would know they could use it for needs like food, gas, rent.  Adoption could spread spatially from a town like that.  The nominal exchange rate doesn't matter as long as it's not highly volatile, it's the size of markets for real goods.

[paultramarine]

That said, it makes sense to reevaluate the time distribution of coin rewards in a new coin.  Bitcoin and other recent coins needed to heavily reward early adopters just to encourage adoptions of the new, weird thing that may or may not become useful and valuable, but needs a robust network to simply exist.  Now that cryptocurrency practicality and functionality have been proven with bitcoin a new, well-designed coin would not need nearly such a large reward for early adoption.  It would be adopted purely because miners and users would know the design of it would make it successful and worth adopting.

[ribuck]

Fifth.. call it something without the word coin in it. 

That's the easy bit. Just call it the hazek.

I think a new currency is a bad idea. It's fiddling around, tweaking the peripheral things, while missing the big picture.

Bitcoin won't succeed or fail depending on whether the block target is 10 minutes or 30 seconds, nor on whether its rate of monetary inflation reaches zero in 15 years or 500 years.

Nor does the risk of 51% attack really matter that much. Over the next decades, there are going to be hundreds of types of attacks on Bitcoin, of which the 51% attack is only one type (and it's by no means certain that a 51% attack will occur). There's no point worrying about about a 51% attack, except as part of a general general commitment to make Bitcoin as robust as possible.

It's much more important to have a wise, experienced, and diverse set of developers who can respond quickly to any threat that is brewing, just as Satoshi did when a hard fork was needed due to exploitation of the overflow bug. I say a "diverse" team, because a hostile takeover of the dev team is probably a much higher risk than a 51% attack.

The success of Bitcoin won't depend on its technical characteristics. These are mostly "good enough" already, and the rest are capable of improvement within what we know as Bitcoin.

Instead, the success of Bitcoin will depend on legal challenges, the global political environment, whether Bitcoin's future crises (and there will be many) are handled in a way that maintains credibility and minimises damage, whether any Google/Amazon-type organization adopts Bitcoin or whether they introduce their own altcoin, whether Oprah Winfrey endorses it, etc.

Something that already works and is "plenty good enough" will always win out over something that might (or might not) provide a small incremental improvement in the future.

[haightst]

It has always struck me that one "problem" with Bitcoin (and hey, you know what do I know?)  is the deflation rate.

So far as I can see Satoshi tried to match the new coin introduction rate in the early days with the user adoption rate in some sense, so that the market was not flooded with 21M coins at start and this also fitted in with other aspects of the design as we know.

Given that the coin generation rate is higher at the start, even this gives rise to many more coins at the start, than latter on. Now this is all well and good early on, it gives early adopters a good chance at a profit. But it seems to me once you have a lot of people using the currency is problematic. Lets assume 100 users. A neglible part of the world population by any standards. In a year each introduces 9 new people. In a years time there are 1000 people using Bitcoin, all wanting a new currency. These figures are illustrative rather than actual. Since we still have a completely neglible part of the population using Bitcoin, this goes on and on for several more years, and by this time we have 10^7 people using the system and the demand for coins is massivly outstripping the slowly diminishing supply available from mining, which is gradully over time becoming zero. This guarantees a massive shortage of coins as time goes on, especially in the middle phase of Bitcoin adoption, a phase I would suggest we are entering now. You could argue this is the way way that late adopters are rewarded and so this is only right. But I would argue that exponential growth of demand, along with supply reduction is a particularly violent equation that does not spell good things for bitcoin adoption.

If the supply of coins remained linear or proportional to the square root of the number of users, we would still see a very healthy (for late adopters) rise in value of each bitcoin.

Its highly unlikely that this can be changed now because late adopters who have figured this out have their jaws tight round this like a doberman locked on to a piece of meat. But the truth is that there would still be massive growth during this phase if the coin supply was unbounded and there is a much lesser chance of something going wrong due to instability of demand.

How long does "this phase" last? It lasts untill most of the people who want or might want Bitcoin have it. It last until the proposition that most people dont know about it is no longer true. It lasts until Bitcoin is getting to be Mastercard in size. At this stage the groth rate at least in users must contract since the market is saturated, and its at this stage that the number of coins in existance ought to be come capped.

So the TL;DR; summary is that the supply curve for Bitcoins needs to be optimised in a new coin I suggest to keep price more stable during the mid-adoption phase.

i came up with satoshi bucks ! =)))))