By whom? By me?
By many of those who promote it, not you.
I've said that Litecoin has 4x faster block times than Bitcoin, and this can be preferable to many users in many cases. I don't think that's false.
I think it's not true that this is preferable in 'many cases'. In the vast majority of cases, either propagation confirmation is adequate (point of sale), or waiting 30-60 minutes for multiple block confirmations is not a hindrance because shipping takes longer than that anyway.
I've also said Litecoin using a different algorithm can be beneficial if Bitcoin's breaks or vice versa. I also believe that is true,
I think this is hype, for the reason that Bitcoin switching to a new hashing algorithm wouldn't take any longer - and I think would be much faster - than diverting all transaction activity to a new blockchain.
Scrypt is designed to raise the resource demands of the algorithm making the size and the cost of a hardware implementation much more expensive, and therefore limiting the amount of parallelism an attacker can use.
The resource demands of mining
will always trend towards the revenues of mining. Therefore, the only factor that determines the resource demands of mining is the value of coins generated by mining. The proof of work algorithm is completely irrelevant.
In other words, your claim is unfounded hype, and misunderstands the economics of mining.
Ultimately this means mining litecoins is done with a different efficiency for GPUs, FPGAs and ASICS than mining bitcoins.
The claims that I saw repeatedly made by scrypt supporters is that it makes a Bitcoin-alt GPU-proof. Those claims stopped being made when GPU mining became more efficient than CPU mining for scrypt-based Bitcoin-alts. After that, the most common claim was that scrypt was FPGA/ASIC-proof, meaning that there wouldn't be large enough gains in mining with FPGAs/ASIC to ever make GPU mining uncompetitive.
I think even litecoin miners are starting to acknowledge that this is not true, as discussions on how to design and develop scrypt FPGAs/ASICs are becoming more common.
2.5 minute block times have very little effect in real use-cases.
That is your statement. Is it a fact? I don't think so. In fact, I know it's not, because I personally have experienced the beneficial effect of having LTC confirmed quicker as compared to BTC when I transacted LTC. Are you saying I wasn't a real use case?
What I mean is that it's more useful in a very small percentage of use-cases. Claims suggesting otherwise are hype designed to pump the currency in my opinion, and are motivated by the fact is that litecoin has very little to differentiate it from Bitcoin (having 99.99% of its code based on Bitcoin's) so its promoters need to play up its differences.
It's because at any given time having access to money at one point can have a different value than having access to the same amount at some other point. For example BTC exchange rates fluctuate. Some cryptocurrency users trade coins daily trying to make a profit.
I agree that this is an advantage. I already said as much. My argument is that it makes up a very small minority of use-cases of BTC-based cryptocurrency.
They reduce the time it takes for transactions to reach the maximum level of network security, but reduce that maximum level by wasting more honest work on latency.
What do you mean "reduce the maximum level"? Are you suggesting there is some cap for the total computing resources Litecoin can use?
By wasting more honest work due to more latency, shorter block times reduce the hashrate needed to successfully execute a >50% attack.
It's a trade-off between securing transactions more quickly and making a blockchain more secure from >50% attacks.
No it's not. A block chain, any block chain, is
only as secure from 51% attacks as the amount of resources it takes on average to outperform the honest network.
Yes it is. Take some time to understand what I'm arguing instead of rushing to disagree with me.
Latency only affects honest miners. Someone attempting a >50% attack does not need to worry about latency, since they are building on their own blocks. With shorter block times, the ratio of propagation time to mining time increases, and the honest miners lose more of their work to orphan blocks, which increases the advantage of the attacker.
It's for this reason that a blockchain with 10 second block times would be very easy to >50% attack. The rest of the network would lose a huge amount of work to orphan blocks, while an attacker could secretly build its alternate chain with no work lost to orphans, and then release it on the network.
I personally think a shorter block time is in fact a slight protocol improvement, ...
Well which is it? Above you said 2.5 minute block times have very little effect in real use-cases.
What do you mean "which is it"? I just stated "very little effect", which doesn't contradict "slight protocol improvement". If it has a very slight positive effect, then it would be a slight protocol improvement.
Responding to your misinterpretations of my comments is getting tiresome.
... but I don't think an alternative network with this feature makes up for the advantage Bitcoin has in the size of its network of users/nodes, its hashrate and the amount of supporting services/software it has,...
I'm not sure if you're aware that amount of users/nodes, hashrate, and amount of supporting services/software for any block chain including Bitcoin can change.
That's irrelevant to my point which is that right now, using Bitcoin is much more convenient for almost any use than using any Bitcoin-alt, because it has a larger supporting economy, which more than makes up for any slight disadvantage that it has due to a longer block time.
... and claims suggesting otherwise are pure hype by miners looking to make money on their low-demand coins.
Here again you're saying a lot about claims made but linking to nothing. I'll be more inclined to think you have a legitimate gripe about hype if you can link to something.
You're denying that this hype (e.g. scrypt being ASIC proof) has been regularly promoted by Bitcoin-alt hypers? Do I really need to spend time digging up instances of it and quoting them for you? In any case, I'm not going to spend that much time to convince you. You can choose to believe me or not.
I also don't think it makes sense to start a new blockchain that resets everyone's currency holdings to zero every time a minor protocol improvement comes along. It's better to upgrade the Bitcoin protocol over time in my opinion.
I don't believe a reset of everyone's wealth to zero for protocol changes is wise or welcome either. I believe in upgrading Bitcoin's protocol when possible too.
Everyone's currency holdings in the new blockchain are reset to zero. To the extent that the new blockchain replaces the Bitcoin blockchain in certain niches, it reduces the value of the coins held by Bitcoin users.
I strongly disagree. Litecoin is near copy of Bitcoin, and is less useful than it in almost every use-case.
Is that a fact or your opinion? I mean the part about being less useful in almost every use case? I believe it's only your opinion.[/quote]
There's no way to prove something like this is a fact, so it's only my opinion.
You're defining the market as anything you and litecoin miners want.
No I'm not. I understand a market has differences of opinion. That's why I'm spending significant time in this written exchange with you.
Then please stop claiming that "this is what the market wants" and otherwise implying that being against Bitcoin-alts is opposing the market.
Since I, and others who don't want Bitcoin-based networks to fragment, are also part of the market, you can't accurately say that the market 'wishes' for MtGox to add litecoin and other Bitcoin-alts.
It's true I can't say that for the entire market, but I didn't.
You said "the market", which out any qualifiers, which implies "the entire market". You didn't say "much of the market" or "some of the market", just "the market".
I'm saying market pressure can be the reason Litecoin will be more of a success than it is already.
I understand. My view is that market pressure can lead to litecoin not becoming successful, and can lead to MtGox not supporting it.
You're dwelling on a technicality that is completely irrelevant to my point, which is that Bitcoin users and investors are hurt by the adoption of nearly identical networks that add new coins that can be used in similar roles as bitcoins.
Not if those investors also hold the other coins.
The other coins will continue to increase in number, so it's not an appealing investment. Inflation is a zero sum game. The only group that benefits is miners. With steadily increasing inflation, for the sake of miners, eventually investors could lose interest in all BTC-based cryptocurrencies. Much of the allure of Bitcoin is the prospect of 21 million bitcoins being used for a significant percentage of world commerce, but that goes away when there is nothing stopping Bitcoin 2, Bitcoin 3, ad infinitum, from being produced and taking market share from Bitcoin 1.
There's no denying that from an investor's point of view, an increasing number of blockchains gaining adoption reduces the allure of investing in coins.
A bitcoin is an arbitrary unit.
No it's not. If you think it is then sell me a bitcoin for $1.00.
Please stop misreading my comments. I know you can understand the point I'm trying to convey. What I'm trying to say is that the choice of a bitcoin as the standard unit of account in the Bitcoin economy is an arbitrary choice: it could be millicoins or Satoshis instead.
So when you claim that bitcoins are very 'scarce', because there are 21 million, you're assuming something that is completely arbitrary (the choice of bitcoin as the standard unit of account) is a fundamental physical quality of Bitcoin, as opposed to an accounting convention.
Fundamentally, the amount of bitcoin is not 'extremely scarce', because bitcoins can be divided to 8 decimal places.
In any case, what's important is that the adoption of near copies of Bitcoin leads to a rapid rate of inflation in the Bitcoin-based cryptocurrency money supply. I think that's bad.
Creation of alt-coins doesn't automatically mean adoption of them. Have you any idea how many alt-coins there are now? More than you can count on two hands.
I didn't say 'creation'. I said 'adoption'. I'm trying to discourage adoption of near copycats of Bitcoin.
I think either Bitcoin will remain the dominant cryptocurrency, or we will see increasing fragmentation and inflation of BTC-based cryptocurrency.
I had similar thinking at first. I didn't always support Litecoin. When it was announced I probably felt a bit like you do now towards it, as an unnecessary entrant to the scene. I later came to believe an ecosystem with
only Bitcoin is the real danger. There is too much that can go wrong. Everything would have to go perfectly, and history has shown that usually isn't the case when it comes to Bitcoin.[/quote]
Even if there are no major competitors to Bitcoin, there will always be many smaller ones, and those can provide all of the backup we need.
Bitcoin itself can also always be forked if it runs into major problems. I just don't see the need to risk serious fragmentation and loss of investor confidence in BTC to create a major, nearly identical, parallel network as a backup.
If it was extremely distinct from BTC that would be one thing, but all of the Bitcoin-alts will very likely have any weakness that BTC has, since their code is almost exclusively derived from BTC. Therefore, I see the benefit, in terms of providing a backup, as minimal, and not even close to making up for the risk it poses to investor confidence.
I don't think it's likely that Bitcoin will only have one competing parallel network, and no more after that. In other words, it's either a universal money protocol known as BTC or it's a steadily increasing number of incompatible protocols.
Again, there is
already far more than Bitcoin on the scene. What you don't seem to appreciate is that the majority of them
don't have traction. Can't you see things
appear to be progressing more closely to what I predict than you do?
We can agree to disagree.
I think they will probably continue to not have traction, but I also believe though that if one of them does gain traction, then the likelihood of more following increases significantly. I see it as a serious risk, and worth trying to avoid.
I disagree with your assessment of this being the best way to plan against the corruption of Bitcoin. I explained my opinion on what is a much better way to create a Bitcoin-alt:
fork the blockchain with all of the transaction data that exists up to some point in time, so the new blockchain doesn't dilute the currency holdings of all Bitcoin users.
How in the world do you decide which point in time is the right one to invalidate transactions? You're saying a much better way to create a Bitcoin alternative is an intentionally disastrous hard economic fork?[/quote]
You pre-announce a new fork, giving people time to decide whether they want to upgrade to use the new network before it's created. It's pretty straightforward, and less disastrous for Bitcoin users than a competing blockchain being created in which they have zero BTC.
Even if they choose to not adopt the new Bitcoin-alt, at least in the event that it succeeds, they would still see their coins gain in value, since they hold some in the alt.
This way, if you had 50 BTC in the original network, you would have 50 BTC in the new network too.
Not if you received those 50 BTC for a payment
after the fork cut off for valid transactions.
That's easy to solve. You include a minor change to the transaction format in the Bitcoin-alt, so that valid transactions in the Alt blockchain are invalid in the original blockchain, and vice versa.
That can happen too. In fact I said the market was bigger than myself and my detractors in the thread where I first proposed supporting Litecoin as a solution to the Bitcoin foundation disagreement.
Thank you for conceding that there is no way to know what the market will do or wants.
I didn't say the code wasn't 'Bitcoin technology'. I said all code doesn't belong only to something called Bitcoin. If you think it does you need to become familiar with what open source means.
I never said it 'belongs to Bitcoin', in the sense of being its property. Describing something as the 'Bitcoin market' or 'Bitcoin technology' doesn't mean I believe that the source code is not free to be modified and used to create parallel networks.
