Greetings. Since this is my first post and I am in newbie jail, I thought I would attempt to contribute some discussion with meat rather than a token "hello world".
I have had a passing interest in Bitcoin for a number of years, mostly as an appreciation for the genius of the concept, but have not done much more than install the client. Personally, I don't have much interest in joining the arms race of mining and I see Bitcoin as version 1.0 of the crypto-currency idea so I don't see the reason to invest my own money into it either.
I have read the original whitepaper and have a good understanding of the technical details and mathematical basis of Bitcoin. The concept itself has sparked some ideas in my own mind and lead me to some in-depth study of related material. I read the Zerocoin paper a few months ago and that has spun me into a number of papers on "zero-information proofs of knowledge." My favorite paper on the topic is "Elliptic Curve Based Zero Knowledge Proofs and Their Applicability on Resource Constrained Devices" (
http://arxiv.org/pdf/1107.1626v1.pdf)
Looking through the alt-coins on this site I'm a little surprised by what I see as a lack of true innovation. 95% of the alt-coins out there are small tweaks on the original: speed of block creation, number of coins issued per block, inflation/deflation rate, hash algorithm. Did I miss anything? The only coin I see that offered something truly new was the proof-of-stake concept in PPCoin.
Why is it that there is not much realized innovation? Was Satoshi simply a genius? Or did he have some security background that the community at large just does not generally possess?
What are the innovations that would need to be done to have crypto-currency 2.0? What are the problems with Bitcoin's technical capabilities and algorithms that most need addressing?
Here are a few of my own thoughts:
- Lack of true anonymity. While you can generate a new address for each transaction, the source and destination addresses are public knowledge. I think it will be very difficult to eliminate a chain of some sort, to ensure coin validity, but the source and destination addresses should be hidden from public view. Even stronger, the payer should have deniability ("forgetfulness") built into the protocol as to who the payee was.
- Wasteful "proof-of-work" mining. I believe PPCoin is onto something with their proof-of-stake. Economically speaking, proof-of-work is proof-of-stake. Instead of buying into the system (internal proof-of-stake) miners are buying computation power (external proof-of-stake). I believe that from a security point of view they can be equivalent. The difficulty of coming up with a good proof-of-stake system is in the game theory of either preventing a group of stakeholders from gaining more than 50% of the stake or making it a losing proposition for them to have succeeded.
- Fast transaction assurance. The answer to this in the alt-coins tends to be to increase the block rate. Is that sufficient? The issue this causes is just orphan blocks from network propagation delays? If we eliminate "proof-of-work" does this also eliminate any disadvantage of orphan blocks?
I'd be interested in continuing this discussion here or in private if someone wants to bounce ideas back and forth. I do have some proposals for solutions for reach of these issues that I've raised.
- Viltareo
