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Author Topic: 2013-08-22: Mises Circle: The Problem With Altcoins: Why None Can Succeed  (Read 3726 times)
justusranvier
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August 24, 2013, 04:47:46 PM
 #21

This thread would be a lot more interesting if the posters who don't like the conclusions of this author could actually form a coherent rebuttal to any of his arguments.
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August 24, 2013, 07:05:15 PM
 #22

Seems like there are some people on here who are hell-bent on slamming alt-coins.

I'd be more optimistic about alt-coins if they actually had something interesting to offer, beyond twiddling the existing Bitcoin magic numbers and calling it "new" and in some misguided cases, "better".

Satoshi wasn't an idiot, and clearly thought a long time about the implications of setting confirms faster/slower, etc -- but no, the source code is out there and some muppet thinks that they've suddenly rediscovered the magic way to make Bitcoin II - The Betterer Bestest Version.

And don't get me started on potential cancerous pustules like Mastercoin, which can't be bothered to maintain their own blockchain, because hey, that takes effort -- so lets just stuff a funnel down the already bloated body of the Bitcoin blockchain and push torrents of greasy Mastercoin ravioli down its throat -- you know, because they can.

And furthermore, when someone has the audacity to even suggest that their brainchild isn't "the one" or perhaps it is exploiting a resource best left to its own devices, then they get severe backlash from their muppet followers who have already invested in the idea, and can't afford anyone to say anything contrary.

So yeah, that is my problem with the "community" of idiots who think they've got it all solved, and in some cases - actually manage to magnify the blockchain bloat problem via their shortsighted greed.

Clear enough for you?

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alp
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August 24, 2013, 09:51:26 PM
 #23

This thread would be a lot more interesting if the posters who don't like the conclusions of this author could actually form a coherent rebuttal to any of his arguments.

If they were capable of forming coherent arguments, they would be capable of avoiding junkcoins.

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August 24, 2013, 11:37:41 PM
 #24

Seems like there are some people on here who are hell-bent on slamming alt-coins.

I'd be more optimistic about alt-coins if they actually had something interesting to offer, beyond twiddling the existing Bitcoin magic numbers and calling it "new" and in some misguided cases, "better".

Clear enough for you?


There's no "magic" in bitcoin numbers. What I like better about litecoin is the faster transaction times - that's a clear advantage.

I don't see a future with only one cryptocoin. That's very old-world-type thinking <insert all seeing eye here>.

I'm grumpy!!
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August 25, 2013, 12:38:31 AM
 #25

Bitcoin will evolve just like lightbulbs.

They will eventually be "phased out" and a different product will be pushed on us?

Governments around the world have passed measures to phase out incandescent light bulbs for general lighting in favor of more energy-efficient lighting alternatives. Phase-out regulations effectively ban the manufacture, importation or sale of current incandescent light bulbs for general lighting. The regulations would allow sale of future versions of incandescent bulbs if they are sufficiently energy efficient.

While this is true, this action is largely unnecessary as the cost of newer bulbs is dropping fast and the benefits are great even if you just look at financial reasons.  I have switched a lot my lights over not at the end of a gun but because it made sense.  It didn't make sense until recently ($60 bulb vs. $10 bulb that I never have to change for my entire life).

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August 25, 2013, 12:39:05 AM
 #26

Seems like there are some people on here who are hell-bent on slamming alt-coins.

I'd be more optimistic about alt-coins if they actually had something interesting to offer, beyond twiddling the existing Bitcoin magic numbers and calling it "new" and in some misguided cases, "better".

Clear enough for you?


There's no "magic" in bitcoin numbers. What I like better about litecoin is the faster transaction times - that's a clear advantage.

I don't see a future with only one cryptocoin. That's very old-world-type thinking <insert all seeing eye here>.
What about having faster confirmation times is actually an advantage?  Do you just like seeing numbers going up? Or do you actually think its somehow more secure?

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August 25, 2013, 04:45:56 PM
 #27

There's no "magic" in bitcoin numbers. What I like better about litecoin is the faster transaction times - that's a clear advantage.

I don't see a future with only one cryptocoin. That's very old-world-type thinking <insert all seeing eye here>.

So, you like it because you like it - great circular reasoning. You also collectively ignored everything else I said, good job.

I do see a future with other coins that have something to contribute, not these dial-twiddling crap-coins. But you would've realized that if you had read my fucking post.

fortitudinem multis - catenum regit omnia
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August 25, 2013, 10:46:27 PM
 #28

There's no "magic" in bitcoin numbers. What I like better about litecoin is the faster transaction times - that's a clear advantage.

I don't see a future with only one cryptocoin. That's very old-world-type thinking <insert all seeing eye here>.

So, you like it because you like it - great circular reasoning. You also collectively ignored everything else I said, good job.

I do see a future with other coins that have something to contribute, not these dial-twiddling crap-coins. But you would've realized that if you had read my fucking post.

Nooo..I like it because of faster confirmation times. How hard is that to understand?

I'm grumpy!!
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August 25, 2013, 11:09:24 PM
 #29

How fast are those faster confirmation times if you have to start from square one with those who have no knowledge of cryptocoins at all (those who will come across more bitcoin results on Google), or square 2, on convincing people/shops who have already gone to the trouble of being able to accept BTC? Minutes turn into hours, days, weeks, months, never?, judging from first contact to time of acceptance, according to all the wannabe BTC customers' stories I've read.

Saying that you don't trust someone because of their behavior is completely valid.
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August 26, 2013, 09:47:20 PM
 #30

There's no "magic" in bitcoin numbers. What I like better about litecoin is the faster transaction times - that's a clear advantage.

I don't see a future with only one cryptocoin. That's very old-world-type thinking <insert all seeing eye here>.

So, you like it because you like it - great circular reasoning. You also collectively ignored everything else I said, good job.

I do see a future with other coins that have something to contribute, not these dial-twiddling crap-coins. But you would've realized that if you had read my fucking post.

Nooo..I like it because of faster confirmation times. How hard is that to understand?

Why do you like faster confirmation times?

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alp
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August 27, 2013, 04:29:56 PM
 #31

How fast are those faster confirmation times if you have to start from square one with those who have no knowledge of cryptocoins at all (those who will come across more bitcoin results on Google), or square 2, on convincing people/shops who have already gone to the trouble of being able to accept BTC? Minutes turn into hours, days, weeks, months, never?, judging from first contact to time of acceptance, according to all the wannabe BTC customers' stories I've read.

Faster confirmation times are more likely to appeal to noobs with no technical understanding than those who actually know what they are doing. If anything, it's the opposite, noobs love fast confirmation times because OOOOH FAST! without understanding it isn't even helpful.

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August 28, 2013, 01:01:42 PM
 #32

The Bitcoin system was definitely thought out carefully, but the settings were made for maximum security reasons. Starting out something new and knowing that there could be a slight chance of it screwing up on the network side of things definitely demands caution, better settings for alt-coins could be implemented to enhance proven features. A sub 10 minute confirmation time is acceptably secure, most forks in the system never go beyond two blocks before being abandoned... so at what point do the forks start to get bigger with smaller confirmation times?


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August 29, 2013, 10:16:07 AM
 #33

To think that Bitcoin can be the only successful & viable crypto currency is flawed. That is equivalent to saying that competition will never exist.

In any market there is always going to have competition emerge. Even fiat currencies have competition, hence: USD, JPY, EUR, GBP etc.

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August 29, 2013, 10:21:39 AM
 #34

To think that Bitcoin can be the only successful & viable crypto currency is flawed. That is equivalent to saying that competition will never exist.

In any market there is always going to have competition emerge. Even fiat currencies have competition, hence: USD, JPY, EUR, GBP etc.

Not the same. The different governments want their cut.
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August 29, 2013, 10:45:09 AM
 #35

remember namecoin? I think merged mining is a very quick way to establish equal security. add that plus truly innovative features and a great distribution system and presto you have a succesful alt-coin. It is simply finding the correct values, ideologies etc that really resonate not just with it's users but with ecosystem around it(it does great things for the internet and society)

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August 29, 2013, 11:03:16 AM
Last edit: August 29, 2013, 12:11:22 PM by Rarrikins
 #36

Though the article is correct with the obvious point that everyone can't create an alt-coin and strike it rich, the problem with that part of the article is that network effects empirically don't ensure that one currency dominates others. Even if you ignore the non-US currencies doing rather well because you think fiat currencies aren't relevant to the discussion, the 'competition' between gold and silver didn't have a victor either. Even fully-electronic payment systems have big competitors like Visa and Mastercard. That's not to say that network effects won't possibly make one currency dominant or eliminate a huge number of contenders. It's just to say that there's probably going to be room for Litecoin and some others.

The flawed reasoning comes because he wants to support a certain flawed conclusion:
Quote from: Daniel
In short, the altcoin phenomenon is the product of greed and bounded rationality. They deserve nothing but scorn, and anyone who wishes cryptocurrencies to improve the world should avoid them entirely.
This leads to him saying such things as:
Quote from: Daniel
One thing to be said for PPCoin, however, is that altcoins are a product of the proof-of-work system. Proof-of-stake would not have led to them. If Bitcoin had transitioned to a proof-of-stake system before it was valuable enough for ASIC mining to develop, perhaps there would be no altcoins.
Since the conclusion puts people into collectives, the reasoning will as well. That flaw appears throughout the article:
Quote from: Daniel
New ideas attract not only visionaries and pioneers but also charlatans and fools. The former group understands the nature and potential of the new idea and attempts to extend it in new ways. The latter observes the success of the former and expects similar results through blind imitation and empty hope, rather like the Melanesian cargo cults which arose after World War II when the American military abandoned its airports there.

This analogy is absolutely appropriate to characterize the many alternative cryptocurrencies modeled on Bitcoin, which are collectively referred to as altcoins.
This isn't just a semantic point. He repeatedly implies that he divines the unified motives of entire collectives:
Quote from: Daniel
Primecoin is a wuzzle. It tries to do two unrelated things at once, which, generally speaking, is the opposite of a good design. Its prime-based proof-of-work is nothing but another gimmick to make people forget that altcoins are a waste of time.
Quote from: Daniel
Altcoins can only be explained if we believe the purpose of cryptocurrencies is to make money rather than to become money. If you can trick people into investing in your new altcoin, then you can make a profit trading it or mining and selling it. All the arguments of the altcoin promoters serve as misdirection from that basic purpose. They have developed a series of fallacies capable of fooling newcomers into joining them, but they are all disingenuous.
Quote from: Daniel
It is a fact that the market makes stupid choices all the time, and there is nothing wrong with me saying so. This is because the “market” is just a collection of people all making decisions that are as foolish as the kinds of decisions that we know people actually make all the time.
Since the conclusion of the article is that the nonbelievers have sinned so badly that we should punish them to the extent that we literally scorn and shun them, apparently the market leads to really, really bad and horribly immoral things. You know, like supporting alt-coins.
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August 29, 2013, 01:39:10 PM
 #37

Even if you ignore the non-US currencies doing rather well because you think fiat currencies aren't relevant to the discussion ...
Transaction costs (logistics + regulation + accounting laws + tax laws + ...).

... the 'competition' between gold and silver didn't have a victor either.
Transaction costs.

Even fully-electronic payment systems have big competitors like Visa and Mastercard.
Both Visa and Mastercard are merely payment systems built on top of currencies, which somewhat diminishes the network effect. Furthermore, they are not an open protocol, and using them requires contractual relationship with service providers (probably several: bank, credit card company, payment processor if you're a merchant). This creates, surprise, transaction costs.

With cryptocurrencies, these transaction costs are dramatically lower and this increases the proportion of the network effect on demand. It is more likely that the market composition will be a single dominant one and a bunch of smaller ones.
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