Is it time for Bitcoin to bite back against clonecoins and scamcoins?

[Birdy]

This looks strangely like the beginnings of centralisation to me.

People who have a lot invested in Bitcoins are concerned that other coins will damage the market, and as such wish to take action against it. Whether that is through "educating" the public on the "risks" of altcoins, or through 51 % attacks or destabilising through pump and dump schemes, this is an example of people clubbing together in order to act to protect their interests in the market place (Oh, Hello proto-state, when did you get here?!).

If you believe in the free market, or libertarianism, or "anarcho-capitalism", then surely you'd accept the market will select the best coin and run with it, be it bitcoin, litecoin, whatevercoin.

You just witness the natural conglomeration of power that will always happen in a free market until it's not that free anymore.
A lot of people invested in Bitcoin->they want to protect it->they will do stuff against competition

[anti-scam]

This is hardly the democratic system that drew me to Bitcoin

The free market is not democratic.

in fact I really would like you to explain how scrypt is a waste of computational resources

You said yourself that it requires more resources. That's its claim to "security".

If you believe in the free market, or libertarianism, or "anarcho-capitalism", then surely you'd accept the market will select the best coin and run with it, be it bitcoin, litecoin, whatevercoin.

So you want a free market where anybody is free to create a crappy Bitcoin clone but nobody is free to tell the public that it's not the latest and greatest thing?

[TomHartburg]

Personally, no, I think free markets are bullshit, precisely because of the consolidation of wealth and power that capitalism produces. The top 10 bitcoin addresses, as of 06/20/2012, controlled 4% of ALL (as in all 21million) bitcoins, according to forbes.

http://www.forbes.com/sites/jonmatonis/2012/06/22/the-bitcoin-richest-accumulating-large-balances/

[lucasjkr]

Personally, no, I think free markets are bullshit, precisely because of the consolidation of wealth and power that capitalism produces. The top 10 bitcoin addresses, as of 06/20/2012, controlled 4% of ALL (as in all 21million) bitcoins, according to forbes.

http://www.forbes.com/sites/jonmatonis/2012/06/22/the-bitcoin-richest-accumulating-large-balances/

Interesting fact, but that alone isn't alarming. Afterall, lets say the marketcap of Bitcoin is $1.5 billion (I know, i could go look it up, but I'm lazy!).

4% of that (the amount that's controlled by the top 10 addresses is $60 million. 10% of that (each addresses share, supposing that they're equally distributed, which they aren't) is $6 million. That's interesting, but that's all it is. Afterall, they could be owned by early adopters, people who bought their way in (ie, the Winklevosses), etc.

But I fully agree with the free markets being crap. This recent financial crisis was the result of "free markets" (ie, less regulation letting banks screw things up). If not for government intervening in the free market, we'd likely have a couple monopolies to choose from, and that'd be it.

Free markets would mean that we'd buy our gas and oil from Standard Oil, we'd buy our computers from IBM, and we'd go online through AT&T phone lines connected to AOL (afterall, the free market didn't create the internet, public spending did) and we'd probably bank at JP Morgan. The government has actually done great things in regards to breaking up the results of a free market letting the market be a platform for new competitors to blossom.

Bitcoin is the ultimate "free market" experiment. Like I said, I was originally excited about it. But more and more, I'm feeling that it anything, it's just going to provide a blueprint for a future cryptocurrencies of some good ideas and some poor ideas.

To get back to the topic at hand though, that's what most of the alt-coins are, in my mind, and they deserve just as much chance to get a foothold as Bitcoin did. 51% attacks are childish and reek of doing just the same thing that the Bitcoin community abhores when the government does it.

So, yes, use your freedom of speech to explain the virtues of Bitcoin, both on its own and against other challengers. But don't use it to simply advocate attacking other altcoins in the name of Bitcoin. Afterall, a few years ago, any argument that people currently use against Alt-Coins was just as applicable to Bitcoins.

[jackjack]

Afterall, a few years ago, any argument that people currently use against Alt-Coins was just as applicable to Bitcoins.

Really? So Bitcoin is the exact copy of a previous software/concept except 3 modified lines?

[doom309]

Why don't you let the free market decide?

+1

[smoothie]

Bitcoin is not bigger than the free-market.

If the free-market chooses to use another coin besides Bitcoin, then so be it.

That is my view on it.

[doom309]

free market capitalism will decide all coin successes and failures, if a coin is a scam the market will eventually expose it as such, if a coin has qualities which outvalue bitcoin then the market will find them, and bitcoin will lose its crown

centralisation and monopoly are what we're trying to oppose, arent we

sure, anyone invested in bitcoin (as i am) want to protect the value of their investment, but there are limited options here - first, you stand by your decision to be in bitcoin, and praise it and give it the good publicity it deserves, or second, if youre concerned about the whole thing collapsing, or about another coin overrunning bitcoin, then GET AN EXIT STRATEGY, stick to it, and take your fiat and invest it in something else, eg fiat investments, gold, silver, gems, or another crypto coin if you want

investors are not children, finance is for grown ups, of course its dog eat dog, its called competition, and only competition ensures current market leaders, like bitcoin and litecoin, continue to strive for excellence, what competition also does is provide opportunity for others to have a shot at achieving their dreams of a successful investment, and developing a great product

dont knock the alt coins, damn it, go mine them all, let them flood into your wallets for next to nothing or dirt cheap, if they amount to nothing so what? nothing ventured nothing gained, but you'll be laughing if one or two of them eventually make you a millionaire, and really who knows what the market will do, ANY coin could become the "big thing" especially once more and more people on the planet (thats 6-7 billion people folks) start discovering bitcoin, and its army of little friends

who knows what coins will appeal to whom, let the market decide, and if the journalists are too dopey to understand this then EDUCATE them, bitcoin foundation - does it/did it, have a PR dept, press releases, etc , if so, bitcoin should not be getting a bad name

[Birdy]

If you are talking about PPCoin and such, fine.
But scams or scamcoins don't provide any healthy competition, they just screw up new users, which isn't helpful in any way.

[crazynoggin]

If Bitcoin goes down, well then, that is the nature of the game, some win, some loose. 

[warpio]

Theoritically, Litecoin mining with scrypt/GPUs is more secure than Bitcoin mining with ASICs. Simply because more people have access to GPUs and would be willing to invest in one for the purpose of mining... as opposed to ASICs, where only people with a lot of money, who are very serious about investing in mining would ever have one. For now, LTC can have a higher number of people securing the network at the cost of higher difficulty.

[lucasjkr]

Afterall, a few years ago, any argument that people currently use against Alt-Coins was just as applicable to Bitcoins.

Really? So Bitcoin is the exact copy of a previous software/concept except 3 modified lines?

No, Bitcoin brought new ideas to the world, for certain.

The arguments commonly trotted out arguments against Litecoin (let alone the other Alt Coins) center around:

A) They were created to enrich the early adopters
B) They're no good because there's no where to spend them

Both of which were used (and are still used, to lesser extents) against Bitcoin. Which makes it funny that Bitcoiners shrug off those arguments against their favorite cryptocurrency, yet launch them at any others.

Many of us do think that many alt coins provide interest twists on Bitcoin's precepts that do bear investigating, rather than simply being blown out of the water by a 51% attack.

For instance:

Litecoin has both faster confirmations (much more suitable for retail/in-person transactions), and an algorithm that SHOULD be more resistant to ASIC miners becoming such dominant forces in the ecosystem. I've seen many posts saying that Scrypt could be targetted by ASIC's, and if that's the case, maybe Scrypt isn't the end-all solution. But that doesn't mean that there aren't memory-hard algorithms that bear investigating, if enough people think that ASICMiner will represent potential point of failure/target of attack once they've succeeded in vanquishing GPU miners from the network entirely.

PPCoin has a completely different reward mechanism altogether, which doesn't depend nearly as much on consuming electricity.

Friecoin's demurage feature is a mechanism for encouraging those with coins to spend them through the economy rather than holding them in anticipation of rewards for simply doing that. It, in effect, encourages Friecoin to be treated as a currency rather than a commodity.

Lastly, no coins have tried this yet, but a coin without a cap on number of coins issued would be an interesting twist as well. People talk about the "benefits" of Bitcoin's having a fixed limit of coins to issue, but the fact is, we can't call that a benefit as yet, because we have yet to get to a time where there are no new coins being issued. If the transaction fees inside each block aren't enough to incentive miners, the end of new coin issuance might be the end for Bitcoin.

(Funny, to realize that this huge reply is in follow up to a one sentence barb! Oh well...)

[AliceWonder]

My main complaints with the alt-coins is that most of them don't really bring anything new of value to the table, nor do they really have the developer support needed to do so.

Sure some have done some interesting things like scrypt but what does that really do for the currency? How does it make it better?

It's just copypasta coding playing with a few parameters and then pump and dump.

Maybe they aren't all like that but it sure seems most of them are.

[amincd]

Us debunking BTC-alt hype IS the free market. We are the free market too. The free market doesn't mean one doesn't act, and lets the false marketing claims of smaller copycat competitors go unchallenged. As long as we don't use force to compel them to stop using their product, anything we do is just as much a part of the free market as the promotion of BTC-alts.

Personally, no, I think free markets are bullshit, precisely because of the consolidation of wealth and power that capitalism produces. The top 10 bitcoin addresses, as of 06/20/2012, controlled 4% of ALL (as in all 21million) bitcoins, according to forbes.

http://www.forbes.com/sites/jonmatonis/2012/06/22/the-bitcoin-richest-accumulating-large-balances/

Interesting fact, but that alone isn't alarming. Afterall, lets say the marketcap of Bitcoin is $1.5 billion (I know, i could go look it up, but I'm lazy!).

4% of that (the amount that's controlled by the top 10 addresses is $60 million. 10% of that (each addresses share, supposing that they're equally distributed, which they aren't) is $6 million. That's interesting, but that's all it is. Afterall, they could be owned by early adopters, people who bought their way in (ie, the Winklevosses), etc.

But I fully agree with the free markets being crap. This recent financial crisis was the result of "free markets" (ie, less regulation letting banks screw things up). If not for government intervening in the free market, we'd likely have a couple monopolies to choose from, and that'd be it.

Congratulations, you're making the same arguments those who want to ban Bitcoin are making.

The only reason those with a lot of bitcoin are rich is that others are CHOOSING to use a payment network in which they hold a large stake. How do you suggest we remedy that? Make it illegal to own a cryptocurrency in which a small group happen to own a large amount? If people want to use a currency that rewards early adopters or big investors, that's their choice. To say "free markets are crap" suggests you don't want people to have the freedom to choose.

No, Bitcoin brought new ideas to the world, for certain.

The arguments commonly trotted out arguments against Litecoin (let alone the other Alt Coins) center around:

A) They were created to enrich the early adopters
B) They're no good because there's no where to spend them

Both of which were used (and are still used, to lesser extents) against Bitcoin. Which makes it funny that Bitcoiners shrug off those arguments against their favorite cryptocurrency, yet launch them at any others.

The arguments against BTC-copycats are that:

1) They're not, as it's claimed, 'ASIC proof'.
2) Being 'ASIC proof' is not an advantage anyway, since without ASICs, there will still be a way to develop specialized hardware/facilities to perform a particular algorithm much more efficiently than what a casual miner could access.
3) The small changes made to Bitcoin's code to create them do not come close to making up for the disadvantage they have in being smaller networks of users/merchants/exchanges. While BTC was also negligible in terms of supporting economy when it came out, it had huge technical differences from fiat.

Many of us do think that many alt coins provide interest twists on Bitcoin's precepts that do bear investigating, rather than simply being blown out of the water by a 51% attack.

I personally am not suggesting a >50% attack. It could risk dividing the Bitcoin community, could prevent a future BTC-alt that is truly innovative (as opposed to the hyped up copycats on the market now), and could eliminate what could be a valuable source of experimental data.

For instance:

Litecoin has both faster confirmations (much more suitable for retail/in-person transactions), and an algorithm that SHOULD be more resistant to ASIC miners becoming such dominant forces in the ecosystem.

2.5 minutes is no where suitable for retail. Retail will always require either zero-conf txs or trusted 3rd party verification. Those claiming otherwise have big stakes in the useless coins.

Being resistant to ASIC miners doesn't mean being immune to them. If specialized hardware is difficult to produce for a particular hashing algorithm, the result will likely be that when one is eventually developed, its manufacturer will be the sole maker of the hardware for a long time, before a competitor finally emerges with enough resources to create a competing product. This is a force for centralization of mining, not decentralization.

[acoindr]

For these clones to gain any attention at all due to the hard work and revolutionary ideas of Satoshi Nakamura is offensive.

Why? How do you know Satoshi wouldn't be on the alt-coin supporter side?

Satoshi left "Bitcoin" for whatever reasons. I think it's because he had put as much as he could into it in terms of core design. The rest he simply didn't know. He may have had ideas, but ones which could be debated with a broader development audience. I think Satoshi felt Bitcoin's fundamental design was strong enough to be released into the free market, which could then prove the model successful, in need of change, inherently flawed, or whatever the case would be. An example is the block size issue. There is still no solid consensus on it, and Satoshi didn't give specification. The 1MB limit was only included because Satoshi couldn't think of anything better at the time (to prevent flooding), although his writings show he didn't intend this to be permanent.

One thing people who take a solid position, whether it be for or against alt-coins, have to admit is they simply don't know whether they are right. They arrive at some conclusion based on their assessment of things, but no one can say definitively what the "correct course" for Bitcoin is, because Bitcoin is a completely novel world experiment.

It makes no sense to say there is "one true Bitcoin" because that isn't defined anywhere. All we have is a protocol released by an anonymous, brilliant mind (assuming Satoshi is one person). A protocol is a way of doing things, like dancing.

I believe Bitcoin is a product of the free market, which came about because the Internet (a rare free market) enabled the market to produce something to compete with the current inefficient money system. How well Bitcoin, this way of doing things, does depends on how things develop in the free market. So far the free market has produced Bitcoin alternatives, which I don't think is an accident.

For them to be hailed as superior for making minor, unproven adjustments is ridiculous.  ...

If an adjustment (like using a stronger hash algorithm) is superior, it doesn't matter if it's a minor one. I'm not saying whether any alt-coin now demonstrates this. I'm only pointing out "minor, unproven" adjustments can be considered superior and not be ridiculous.

It is clear that your average journalist is not properly educated enough to inform the public about the "importance" of these alt-coins ...

I agree with this.

... (which is almost none).

How do you presume to be qualified to make that statement? It's only your opinion.

... Remind them that any innovations they pioneer can easily be ported back to Bitcoin.

I disagree. Differing opinions (which will never change) is the reason I believe alt-coins have a critical role to play. Protocol changes are hard because you have to gain consensus or risk economic, confidence damaging hard forks. Take the block size issue. There isn't consensus on it, and there is still fork risk because some still have very different opinions on how to change it (or not change it). Say changing the hashing algorithm is proposed. Which algorithm do you change to? Suppose SHA-3 is ready and one group wants that, but another some Scrypt derivative? What if you want to change Bitcoin's block time away from 10 minutes? Some people may want 5 minutes (for block size & latency), and some 2 minutes, and some say no change. Every opinion can be deeply held and immovable, where forcing any particular route risks forking.

Technical changes are easy to propose, but not at all easy to implement. The few protocol changes we have had met resistance, and none were fundamental to design, and the participating group size was quite small. This only gets harder as more opinions come on board, and the type of change more significant.

Competition is not necessarily a good thing if it's all crap. Have you ever heard of the video game crash of the 80s?

Can you elaborate on this? I'm not familiar with the video game crash of the 80's.

[AliceWonder]

I believe Bitcoin is a product of the free market, which came about because the Internet (a rare free market) enabled the market to produce something to compete with the current inefficient money system.

I believe bitcoin came about because the NSA and/or other clandestine government agencies needed a way they could move assets about without oversight or tracking. But I like conspiracy theories.

[deadweasel]

I believe Bitcoin is a product of the free market, which came about because the Internet (a rare free market) enabled the market to produce something to compete with the current inefficient money system.

I believe bitcoin came about because the NSA and/or other clandestine government agencies needed a way they could move assets about without oversight or tracking. But I like conspiracy theories.

I believe.......   [redacted because my beliefs are of miniscule consequence to reality]

bitcoin is.  
litcoin is.
a few others might be.

[Brunic]

Can you elaborate on this? I'm not familiar with the video game crash of the 80's.

Tons of bullcrap businesses were flooding the market with bad games. Quality of product was horrible and the customers lost faith. The market cleaned itself from the crap by bankrupting businesses and gave a lot of place for Nintendo to come by, transform the video game market and revive it like no other before.

To give you an idea how video games reputation was completely at the bottom, when Nintendo came in the USA to sell their console, they bundled it with a toy robot (named R.O.B) so they could convince distributors that their console was a toy, not a video game and that they were a toy making business, not a video game business.

http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983

Crashes can be good. It helped Nintendo become one of the most profitable business per employee in the world and become this absolute beast of a company that is still dominant today in a market where tons of competitors failed in the last 30 years.

[Vivisector999]

What I find funny is people that continue to make the comments that LTC is worthless because there are limited places you can spend them.  BTC was in the same boat not long ago, and I am pretty sure no matter how many sites BTC is accepted, anyone would be a fool not to think that exponentially more places accept fiat.  Should we be saying BTC is worthless because according to the marketplace only a small number of places accept BTC?

A bad argument to try pushing upon people, especially ones that are on your side.  It's funny, it's very common to see Bitcoin users constantly call for all alts to be destroyed, yet when you go to other forums, never once have I seen people wanting to overthrow Bitcoin and take over as the king of the cryptocurrencies.  Makes it seem like you're scared of losing that title.  

Instead of spending all this time trying to push down other cryptocurrencies, why not spend that time and energy trying to recruit some places to actually accept your coin.  That would benefit BTC alot more then trying to rally a 51% attack on all alts would.  Plus the last thing BTC needs right now is more negative press.  Serious businesses won't venture into a currency that looks more like the wild west then a functioning business platform.  

[acoindr]

Can you elaborate on this? I'm not familiar with the video game crash of the 80's.

Tons of bullcrap businesses were flooding the market with bad games. Quality of product was horrible and the customers lost faith. The market cleaned itself from the crap by bankrupting businesses and gave a lot of place for Nintendo to come by, transform the video game market and revive it like no other before.

To give you an idea how video games reputation was completely at the bottom, when Nintendo came in the USA to sell their console, they bundled it with a toy robot (named R.O.B) so they could convince distributors that their console was a toy, not a video game and that they were a toy making business, not a video game business.

http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983

Crashes can be good. It helped Nintendo become one of the most profitable business per employee in the world and become this absolute beast of a company that is still dominant today in a market where tons of competitors failed in the last 30 years.

Thanks for the info and link.

I'm old enough to remember that era, but I wouldn't have been aware of any market forces. I also remember R.O.B.!  That thing may still be in my parent's attic. Very cool introduction by Nintendo. Duck Hunt and R.O.B were the days, some serious fun.

I totally agree crashes can be good. I don't see the problem there. The market got flooded, bankrupted those that produced crap, and what emerged was something with superior value/quality, as evidenced by Nintendo's success.