Altcoins and Scamcoins - Know the difference.

[ecliptic]

Let's brainstorm.

Litecoin added a legitimate feature and utility that bitcoin did not have -- a different proof of work, replacing SHA256 with Scrypt.  Allowing for defense against established hashing power in the SHA256 networks.

It also added faster block times, but there is no change to the fundamental security of the network by doing this.  Security and confirmation confidence is related only to the length of time since the transaction first was broadcast, and the amount of hashing power during said time.  Faster block times should not be considered a legitimate reason to use litecoin vs bitcoin.  It should also not be a legitimate reason to use a 'faster' coin over a slower one.

Since then, I have seen dozens, maybe even 100+ "altcoins" launched which have been absolutely embarassing and essentially transparent get rich quick schemes.


Things which are not new features and pretty much just certify that you're making a scamcoin to mine and get rich quick if these are the only things your coin changes

* Changing block time
* Changing difficulty
* Changing the # of blocks per retarget
* Changing reward
* Changing reward change [i.e. block rewarding halving/etc]
* Using Scrypt or SHA256
* Incentives for early adopters
* Not announcing your launch at least several days in advance
* Any mining before announcement
* Launching earlier than stated -- later is fine.
* Setting starting difficulty extremely low.  At this point there are way too many people with way too much has power ready to jump on every single new coin even if it's an obvious fucking scamcoin.  Set your difficulty so 10Mhash will take several hours to mine the genesis block


Some things which would be good to have in an alternate coin

* Replace ECDSA with a Lattice-based asymmetric algorithm.  All cyrptocoins currently are theoretically vulnerable to Quantum computers capable of implementing Shor's algorithm.  A lot of things are indeed broken by this, including systems used by governments, banks, everyone.  But only crytpocoins have direct ownership and control of the coins based ENTIRELY on the knowledge of the private key.  Using the hash of the public key for the address may offer some defense, but it is still a massive security breach.  It is generally believed that if these quantum computers exist, they are classified information in the hands of governments.

*Non-SHA256/Scrypt POW.  Scrypt was originally intended to be a CPU only POW, and it was. for a while.  Then someone figured out how to make cgminer work with it.  There was some controversy as to who did this first and if they abused it for a while to get a massive hash advantage.
Any new POW should either be fundamentally secure against this sort of thing (i.e. someone could figure out how to use GPU or FPGA/ASIC SHA256 hashers on it while everyone else is using CPUs) or several days/weeks prior to coin launch - release a cgminer so that everyone in the community can use GPUs.  However at this point, you might as well just use scrypt.  
On one hand, this may be hated because the vast majority of altcoiners are GPU miners who would howl if they couldn't use GPUs.  On the other hand -- you can use those idle CPUs on your GPU miners to mine said coin while your GPUs mine another coin. a _TRUE_ cpu-only POW would have great promise.

* Low reward at start to offset 'premining' and early hash power consolidation which leads to orphan-mania.  Based on how much hash power gets thrown at basically any coin when it launches, you probably cannot combat the orphan rate, but you can minimize the absurdity of how many coins  they can farm.  Also reduces problem of mining large numbers of coins early to bribe people with bounties unfairly.  Bounties should require honest work and hashrates to achieve, just like on a mature network like current BTC/LTC

* Replace the "retarget at X time" / "retarget at Y block" with a "retarget if average time between blocks for the last A blocks exceeds Z seconds".  This prevents a situation like FTC where the mining rate SKYROCKETS, difficulty lags slowly and then skyrockets, and then all that hashing power moves off, leaving a miniscule hashing rate to fight a massive difficulty and find noblocks.

* Different network paradigm.  One possible way might be to run the network by default, or even by requirement, on a network like Tor.  I believe some of this is built into bitcoin but i think it is only used to hide individual people by connecting through the network and using the exit nodes of tor.  A better method would be to do everything within the onion network, no exit nodes.

Generally Bad Items(tm) Which You Shouldn't Do

* Centralize and/or close source anything (Ripple).  Cyrptocurrency means P2P and open source

* Offering exchanges coin to put your coin on them.  Obviously this will be next to impossible to actually discover.  Exchange should pick up coins because said coins have become popular based on their own merit.  Hopefully merit based in technology, not because it's the flavor of the week.

* Jumping directly to the livenet.  There's a testnet for a reason.  Use it.  Completely skipping the testnet, or doing testnet things in secret, only makes you look like an incompetent scamcoin

--

I will add to this post as (if?) more ideas are proposed

With any luck, developers of new coins can use this as a reference or a guide to making a useful alternative cryptocurrency.

[ecliptic]

Coins which have actually tried something fundamentally new and novel, for better or worse.  In order of their introduction.


Novel Proof-of-work:
Bitcoin -- 1/3/09 -- SHA2-256 originator and novel in nearly every regard.  Gold standard
Tenebrix -- 9/26/11 -- Scrypt originator. Was premined and thus died off.
Fairbrix -- 10/2/11 -- Scrypt.  Initial launch crippled by bad config.  Second launch attacked.  These problems led to its demise.
Litecoin -- 10/9/11 -- Scrypt  Current Gold standard for scrypt and altcoins.  Avoided problems of Tenebrix and Fairbrix
PPCoin -- 8/19/12 -- Hybrid proof-of-work/proof-of-stake
YAC -- 5/5/13 -- SHA3-512 instead of SHA2-256.  Cacha replaces Salsa.  scrypt(N,1,1), N increases over time.

Distributed P2P DNS
Namecoin -- Apr/2011

Coin redistribution to open source projects and developers
Devcoin -- 8/5/11 -- Redistributes 90% of block rewards to open source projects chosen by the developers of Devcoin(?)
Freicoin -- Dec/2012 -- 4.89% fee on any coins held per year to developers. 80% of block rewards to developers over 3 years.


Infinite Coin supply
Devcoin -- 8/5/11 -- Constant block reward.  Until this point all coins had a geometrically decreasing block reward with a finite ultimate sum
There may have been another coin prior to devcoin that did this, i will update if informed of one

Random block rewards
Junkcoin -- 5/4/13 -- Small % Chance to get 3x or 20x regular block reward

Ascending rewards to mitigate premining/early mining of the network:
Nibble -- 5/18/13
Digicoin -- 5/18/13


Multiple coins launched with a feature nearly concurrently are listed with their approximate dates

Bitcoin wiki list of altcoins
PPCoin's History of cyrptocurrencies on github

[sonihr]

Great post!

[ecliptic]

Namecoin actually implemented a P2P domain system, another innovative and possibly useful design

[Yurizhai]

Come on, there hasn't been 100+ alt coins.. yet. Give it another 2 weeks.

Also you're really not going to mention PPC?  What about Namecoin? I don't even understand what it does but I know it's cool. That's innovation worthy of being up there for sure.

[ecliptic]

There have been a handful of coins which attempted either an inflationary or an unlimited currency supply, i do not recall these offhand.  they were not met with success [well, none except BTC and LTC have thus far].

I suspect inflationary or unlimited currency coins will never succeed in the cyrptocoin world, the community generally hates these things.

[ecliptic]

Come on, there hasn't been 100+ alt coins.. yet. Give it another 2 weeks.

Also you're really not going to mention PPC?  What about Namecoin? I don't even understand what it does but I know it's cool. That's innovation worthy of being up there for sure.

I made the thread as a spur of the moment thing, frankly i am adding the other coins as I think of them, i will edit and add them to OP and 2nd post.

I count at least 42 coins listed on the OP of https://bitcointalk.org/index.php?topic=134179.0 - and I dont know how many awful scamcoins were skipped.

[1Peter]

I like this!

Nibble passed me by but I have seen the effect of low initial rewards with Digicoin and there has been a marked absence of the usual pre-mine accusations, flaming ..etc.

[ecliptic]

I think non-ECDSA and non-SHA256/Scrypt POW are by far the best 2 features.

Are there any coins that use a different POW?

[BrainShutdown]

Coins which have actually tried something fundamentally new, for better or worse.  In order of their introduction.


Coins which use a novel POW:

Bitcoin - SHA256 originator
Litecoin - Scrypt originator
PPCoin - Proof of Stake

Distributed p2p domain system:

Namecoin

Coins which have used ascending rewards to mitigate premining/early mining of the network:

Nibble
Digicoin

+1

Great thread 

[fenican]

Junkcoin introduced the concept of "random" (albeit still deterministic) bonus blocks for miners.  I think it deserves an honorable mention for that

[Balthazar]

Litecoin - Scrypt originator

TBX is scrypt originator, LTC is just a copy.

[Praxis]

Litecoin - Scrypt originator

False.

Tenebrix is the Scrypt originator. See thread here: https://bitcointalk.org/index.php?topic=45667.0 (ArtForz is apparently the programmer behind it)

[ecliptic]

Litecoin - Scrypt originator

TBX is scrypt originator, LTC is just a copy.

Really?  I wonder why TBX has died off and LTC has taken its place.  Perhaps the faster block time motivated people to use it (not that it is actually inherently better, but people like it.)

Litecoin - Scrypt originator

False.

Tenebrix is the Scrypt originator. See thread here: https://bitcointalk.org/index.php?topic=45667.0 (ArtForz is apparently the programmer behind it)

ArtForz.. did he have something to do with cgminer getting --scrypt?  the name sounds familar

i'll edit my post to add TBX and a disclaimer to LTC

[Praxis]

Coins which have actually tried something fundamentally new, for better or worse.  In order of their introduction.


Coins which use a novel POW:

Bitcoin - SHA256 originator
Litecoin - Scrypt originator
PPCoin - Proof of Stake

Distributed p2p domain system:

Namecoin

Coins which have used ascending rewards to mitigate premining/early mining of the network:

Nibble
Digicoin

Devcoin & Freicoin both tried something fundamentally new. Those two should be in your list, while Litecoin shouldn't be there.

[ecliptic]

Coins which have actually tried something fundamentally new, for better or worse.  In order of their introduction.


Coins which use a novel POW:

Bitcoin - SHA256 originator
Litecoin - Scrypt originator
PPCoin - Proof of Stake

Distributed p2p domain system:

Namecoin

Coins which have used ascending rewards to mitigate premining/early mining of the network:

Nibble
Digicoin

Devcoin & Freicoin both tried something fundamentally new. Those two should be in your list, while Litecoin shouldn't be there.

Devcoin redistributes 90% of block rewards to open source developers which are earmarked by the devcoin developers themselves, right?

Freicoin.. what do they do again, take coins from people with them and redistribute?

I added tenebrix and a disclaimer to litecoin.  also dates & thread links, but i used the OP of their threads, genesis block would be more accurate.  if anyone has those i will add.

[wachtwoord]

Really?  I wonder why TBX has died off and LTC has taken its place.  Perhaps the faster block time motivated people to use it (not that it is actually inherently better, but people like it.)

Wasn't TBX premined?

[ecliptic]

Really?  I wonder why TBX has died off and LTC has taken its place.  Perhaps the faster block time motivated people to use it (not that it is actually inherently better, but people like it.)

Wasn't TBX premined?

OP of litecoin thread indicates that.

I will also add a list of premined coins

[Hibero]

Coins which have actually tried something fundamentally new, for better or worse.  In order of their introduction.


Coins which use a novel POW:

Bitcoin - SHA256 originator
Litecoin - Scrypt originator
PPCoin - Proof of Stake

Distributed p2p domain system:

Namecoin

Coins which have used ascending rewards to mitigate premining/early mining of the network:

Nibble
Digicoin

Devcoin & Freicoin both tried something fundamentally new. Those two should be in your list, while Litecoin shouldn't be there.

I do not agree. Devcoins and Freicoins are novel but i feel they were going the wrong way. With Devcoins you were pretty much mining for 10% profitability. I would say that Devs deserve some payment for their work but 90%? With Freicoins I feel that the economic philosophy is quite worthless (as the coin) when you need buy something to keep its value. In the beginning there would be virtually nothing to buy and there is no easy way to save money.

[ecliptic]

Coins which have actually tried something fundamentally new, for better or worse.  In order of their introduction.


Coins which use a novel POW:

Bitcoin - SHA256 originator
Litecoin - Scrypt originator
PPCoin - Proof of Stake

Distributed p2p domain system:

Namecoin

Coins which have used ascending rewards to mitigate premining/early mining of the network:

Nibble
Digicoin

Devcoin & Freicoin both tried something fundamentally new. Those two should be in your list, while Litecoin shouldn't be there.

I do not agree. Devcoins and Freicoins are novel but i feel they were going the wrong way. With Devcoins you were pretty much mining for 10% profitability. I would say that Devs deserve some payment for their work but 90%? With Freicoins I feel that the economic philosophy is quite worthless (as the coin) when you need buy something to keep its value. In the beginning there would be virtually nothing to buy and there is no easy way to save money.

For the list in the second post, I want to only list coins either with a novel invention, or a coin which used that novel invention and is the popular version of it (like litecoin and scrypt, because TBX was premined for 7.7M coins by Lolcust

Feel free to discuss/debate if the novel invention is actually a good,great,bad,awful idea, but i'd like to organize them at least