The rise of alternative cryptocurrencies

[imperi]

This is a short thing I wrote up on Hacker News. But almost nobody cares there, haha.

Litecoin is becoming a very strong contender to Bitcoin [1]. It will soon be on Mtgox, according to their press reports. Feathercoin has also picked up steam, and it's interesting because it's brand new and already popular. Namecoin, which has been around since 2011, is still a strong contender with long term potential and value. The main difference between Litecoin and Bitcoin is the hashing algorithm used. Litecoin also has faster transaction confirmation times, since blocks are mined at a 4x rate. In my best opinion, Litecoin is better technology than Bitcoin.

Anyways it is a worthwhile thing to look into these before the mainstream gets to them. There are two main exchanges to trade alternative cryptocurrencies, here [2] and here [3].

[1] Litecoin is now accepted for donations on The Pirate Bay, the number one torrent site
[2] btc-e.com
[3] vircurex.com

edit:

I bet people here care even less, because they all know already.

[powdabam]

Bitcoin was the pioneer, every new industry has one.  There's nothing wrong with it.  People still like yahoo, myspace and mp3 players.  We are bound to have improvements in crypto technology.

[imperi]

Bitcoin was the pioneer, every new industry has one.  There's nothing wrong with it.  People still like yahoo, myspace and mp3 players.  We are bound to have improvements in crypto technology.

I agree. I see Bitcoin as analogous to the first web browser. Great technology, but ultimately it will become outdated by something newer and better.

[Walter Rothbard]

Litecoin also has faster transaction confirmation times, since blocks are mined at a 4x rate.

This isn't actually true.

[imperi]

Litecoin also has faster transaction confirmation times, since blocks are mined at a 4x rate.

This isn't actually true.

I thought transactions aren't truly confirmed until they are written into the block chain? I agree that the transaction speed is the same, though.

[amencon]

In my best opinion, Litecoin is better technology than Bitcoin.

I see this repeated a lot, and very rarely is it accompanied by any sort of convincing argument.  What do you base this opinion on?

Based on the few occasions I've seen this debated, it is my understanding that 4 Litecoins confirmations vs a single confirmation in BTC isn't that much more secure as the security is based on more than just the number of confirmations.  Also that one scenario where Litecoin improves on Bitcoin is where 0 confirmations is too little and 1 BTC confirmations is too much, but that this scenario is rarely necessary.  For these 2 limited improvements Litecoin suffers faster blockchain bloat.  

ASIC resistance is no advantage at all, in fact the greatest resistance to ASIC Litecoin possesses is not being worth the cost to develop ASIC for Litecoin rather than Scrypt itself.  If Litecoin overtakes Bitcoin without a diminished demand for cryptocurrencies in general it seems likely that ASICs would be developed for Litecoin as well.

So even ignoring the popularity of each coin I don't see a strong argument for Litecoin being hands-down technically superior to Bitcoin.  Not to mention that most of the value of either coin is based on it's popularity and even if Litecoin is in some small way determined to be slightly stronger technology than Bitcoin, it drowns in the added value Bitcoin gets from it's network effect.

Again this is going off of what I've heard from others, I haven't poured over and fully understood the source for both coins myself.  If I'm mistaken in the above please let me know with a description of why.  However I suspect most that claim Litecoin is superior do so without really fully understanding why they believe what they do.

[imperi]

In my best opinion, Litecoin is better technology than Bitcoin.

I see this repeated a lot, and very rarely is it accompanied by any sort of convincing argument.  What do you base this opinion on?

Based on the few occasions I've seen this debated, it is my understanding that 4 Litecoins confirmations vs a single confirmation in BTC isn't that much more secure as the security is mostly based on time rather than number of confirmations.  Also that one scenario where Litecoin improves on Bitcoin is where 0 confirmations is too little and 1 BTC confirmations is too much, but that this scenario is rarely necessary.  For these 2 limited improvements Litecoin suffers faster blockchain bloat.  

ASIC resistance is no advantage at all, in fact the greatest resistance to ASIC Litecoin possesses is not being worth the cost to develop ASIC for Litecoin rather than Scrypt itself.  If Litecoin overtakes Bitcoin without a diminished demand for cryptocurrencies in general it seems likely that ASICs would be developed for Litecoin as well.

So even ignoring the popularity of each coin I don't see a strong argument for Litecoin being hands-down technically superior to Bitcoin.  Not to mention that most of the value of either coin is based on it's popularity and even if Litecoin is in some small way determined to be slightly stronger technology than Bitcoin, it drowns in the added value Bitcoin gets from it's network effect.

Again this is going off of what I've heard from others, I haven't poured over and fully understood the source for both coins myself.  If I'm mistaken in the above please let me know with a description of why.  However I suspect most that claim Litecoin is superior do so without really fully understanding why they believe what they do.

To be honest, I think Litecoin is maybe 1-5% technologically superior (if it is possible to give a percentage rating to superiority). But I agree technologically they are both nearly identical in usefulness.

edit:

Thank you for the intelligent response, I really appreciate it.

[amencon]

In my best opinion, Litecoin is better technology than Bitcoin.

I see this repeated a lot, and very rarely is it accompanied by any sort of convincing argument.  What do you base this opinion on?

Based on the few occasions I've seen this debated, it is my understanding that 4 Litecoins confirmations vs a single confirmation in BTC isn't that much more secure as the security is mostly based on time rather than number of confirmations.  Also that one scenario where Litecoin improves on Bitcoin is where 0 confirmations is too little and 1 BTC confirmations is too much, but that this scenario is rarely necessary.  For these 2 limited improvements Litecoin suffers faster blockchain bloat. 

ASIC resistance is no advantage at all, in fact the greatest resistance to ASIC Litecoin possesses is not being worth the cost to develop ASIC for Litecoin rather than Scrypt itself.  If Litecoin overtakes Bitcoin without a diminished demand for cryptocurrencies in general it seems likely that ASICs would be developed for Litecoin as well.

So even ignoring the popularity of each coin I don't see a strong argument for Litecoin being hands-down technically superior to Bitcoin.  Not to mention that most of the value of either coin is based on it's popularity and even if Litecoin is in some small way determined to be slightly stronger technology than Bitcoin, it drowns in the added value Bitcoin gets from it's network effect.

Again this is going off of what I've heard from others, I haven't poured over and fully understood the source for both coins myself.  If I'm mistaken in the above please let me know with a description of why.  However I suspect most that claim Litecoin is superior do so without really fully understanding why they believe what they do.

a) Security is NOT based on time. Say it with me: Not. Based. On. Time.

b) ASIC resistance IS an advantage, because it helps stop mining power from centralizing. Also, Litecoin makes it RIDICULOUSLY expensive to develop an ASIC for it, so even if it were at Bitcoin's level, it wouldn't be worth it.

I invited anyone to tell me I'm wrong so no reason to be a douche about it, I'll edit my post for accuracy so as not to spread FUD.  Security is not based on time, got it thanks.  I'll research it more but from what I remember reading while perhaps security is not based on time, it is also not correct to assume that the security 1 Litecoin confirmation gives is equivalent to the security 1 BTC confirmation gives.  Any idea how much more security 4 Litecoin confirmations gives in relation to 1 BTC confirmation?

I think in the long run if either Bitcoin or Litecoin becomes a truly popular mainstream virtual currency there will be incentive to create ASIC eventually for either one.  In this case isn't Litecoin just delaying the inevitable?  If the trajectory is that mining tech improves and centralizes somewhat won't it happen in both cases but just on a different timelines?

Personally I think any coin that doesn't use the most efficient mining technology is at greater risk, as long as Litecoins don't have ASIC products there looms the risk of someone developing the tech for their own uses, once it's developed and sold to the masses it removes that avenue as potential security threat to trivially take over the network.  For bitcoins I don't think we are there yet, the threat still looms but as more manufacturers come into the market and create competitive ASIC products for consumers this threat diminishes.

[amencon]

In my best opinion, Litecoin is better technology than Bitcoin.

I see this repeated a lot, and very rarely is it accompanied by any sort of convincing argument.  What do you base this opinion on?

Based on the few occasions I've seen this debated, it is my understanding that 4 Litecoins confirmations vs a single confirmation in BTC isn't that much more secure as the security is mostly based on time rather than number of confirmations.  Also that one scenario where Litecoin improves on Bitcoin is where 0 confirmations is too little and 1 BTC confirmations is too much, but that this scenario is rarely necessary.  For these 2 limited improvements Litecoin suffers faster blockchain bloat.  

ASIC resistance is no advantage at all, in fact the greatest resistance to ASIC Litecoin possesses is not being worth the cost to develop ASIC for Litecoin rather than Scrypt itself.  If Litecoin overtakes Bitcoin without a diminished demand for cryptocurrencies in general it seems likely that ASICs would be developed for Litecoin as well.

So even ignoring the popularity of each coin I don't see a strong argument for Litecoin being hands-down technically superior to Bitcoin.  Not to mention that most of the value of either coin is based on it's popularity and even if Litecoin is in some small way determined to be slightly stronger technology than Bitcoin, it drowns in the added value Bitcoin gets from it's network effect.

Again this is going off of what I've heard from others, I haven't poured over and fully understood the source for both coins myself.  If I'm mistaken in the above please let me know with a description of why.  However I suspect most that claim Litecoin is superior do so without really fully understanding why they believe what they do.

To be honest, I think Litecoin is maybe 1-5% technologically superior (if it is possible to give a percentage rating to superiority). But I agree technologically they are both nearly identical in usefulness.

edit:

Thank you for the intelligent response, I really appreciate it.

Sounds fair enough.

Thanks for not taking my post as some kind of an attack.  I don't understand things as well as I could so I was hoping my post would prompt responses similar to the one wolf0 gave.  I'd rather discuss the merits between the 2 coins than just have people make assertive statements with few people understanding the differences and their ramifications.  I've edited my previous post to remove the claim that a time component is relevant when determining transaction security.

[markm]

b) ASIC resistance IS an advantage, because it helps stop mining power from centralizing. Also, Litecoin makes it RIDICULOUSLY expensive to develop an ASIC for it, so even if it were at Bitcoin's level, it wouldn't be worth it.

Ridiculously expensive might translate into easier for huge centralised / centralising corporations/groups to accomplish than for grass roots cottage industry to accomplish.

A 23 year old chinese chap was able to pull off creating an ASIC for bitcoin, would such grass roots level players be able to do the same s easily for litecoin?

What you are citing as an advantage sounds like it actually could be a disadvantage.

-MarkM-

[Walter Rothbard]

it is also not correct to assume that the security 1 Litecoin confirmation gives is equivalent to the security 1 BTC confirmation gives.

Correct!  Almost nobody in the altcoin world seems to be aware of this.

(And that's a good way to state the problem.)

[mokahless]

Correct!  Almost nobody in the altcoin world seems to be aware of this.

(And that's a good way to state the problem.)

I see this all the time. People assuming that Litecoin's confirmations are somehow way more secure. And I see people claiming LTC should be used for POS, when clearly there is low risk in taking BTC with 0 confirmations at POS. I even think the risks of doing so are greatly exaggerated.

But at the same time, I always see this response "it takes 4 ltc confirmations to equal 1 BTC confirmation." The reasons behind this statement are obvious and true. Here is my question though, that no one ever answers and oddly, no one even brings up:

Isn't one LTC confirmation still better than 0 BTC confirmations? If not, why?


And I really wish people would stop going on about LTC confirmations and POS. I have the same issues with waiting 2 minutes at a cash register as I do 10 minutes at a cash register. No one is going to wait for confirmations. They will take the (very) minor risk of accepting 0 confirmation transactions or they are going to have a 3rd party take the risk.