Mastercoin, Microtransactions, COIN_DUST

[bluemeanie1]

 

 There were many discussions on the BitcoinX mailing list regarding the issue of Microtransactions and COIN_DUST and their impact on the viability of Color Coins.

 Seems that Mastercoin also has these problems.  From one of their publications:  

All transactions and operations involving MasterCoins are encoded into the block chain using tiny bitcoin transactions.

 So generally, Mastercoin has the same issues as Color Coins, that being increasing total number of Bitcoin transactions exponentially.  Will these tiny bitcoin transactions exceed the COIN_DUST limit?  There is an entire constellation of issues surrounding the use of the Block Chain for alternative purposes 1) transaction latency 2) block chain bloat 3) mining economics.

 Most of what is indicated in this so called '2nd Bitcoin Whitepaper' is an investment scheme, not a technical specification(which greatly adds to it's general distaste).  The entire thing from top to bottom appears to be made completely of hype.  They seem to be piling on the feature claims at an incredible rate.

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

 It also seems to greatly resemble the Ripple model, where there is some kind of commodity currency that is required to run the system(Mastercoins).  Ripple used this as a fundraising scheme and also used it as social device, it has a way of rapidly recruiting advocates(anyone holding a Mastercoin).

 -bm

[bluemeanie1]

Is there any reason why a new round of Mastercoins cannot be issued?

if so, then Mastercoins shouldn't have much value.

We traversed these discussions with Ripple.  The claims were: If Ripple is Open Source, why can't I just issue a new set of Ripples?  At that point we discovered that Ripple wasn't actually open source.

[markm]

If bitcoin is open source, why can't I issue a new set of bitcoins?

-MarkM-

[bluemeanie1]

If bitcoin is open source, why can't I issue a new set of bitcoins?

-MarkM-

you can, they're called alt-chains.

[markm]

So what is the problem, then?

We can make mistresscoins, monstercoins, whatever we want. I don't see how that is any more of a problem than altcoins in general?

They might even increase the determination of some folk to make it very expensive for such things to use the bitcoin blockchain.

Maybe at some point someone will decide using the most expensive blockchain in the world for their new toy currency might not be the most economical platform to choose...

-MarkM-

[bluemeanie1]

So what is the problem, then?

We can make mistresscoins, monstercoins, whatever we want. I don't see how that is any more of a problem than altcoins in general?

They might even increase the determination of some folk to make it very expensive for such things to use the bitcoin blockchain.

Maybe at some point someone will decide using the most expensive blockchain in the world for their new toy currency might not be the most economical platform to choose...

-MarkM-

why on earth would I use bitcoin if the transactions were expensive?

[markm]

Why do you? There are other coins with lower transaction fees...

-MarkM-

[bluemeanie1]

Why do you? There are other coins with lower transaction fees...

-MarkM-

you realize that your stance is only applicable for the hobbyist/hacker crowd?  Most people aren't interested in using Bitcoin simply because it's a cryptocurrency.  They want to buy milk & eggs, etc.  The moment you've raised the legal barriers and raised the cost sufficiently, it's just another payments network.

transaction fees are going up: https://blockchain.info/charts/transaction-fees?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

now why would the average user want to use Bitcoin if it costs the same exact price to use Paypal, with ZERO legal issues and no questions as to reliability?

[markm]

That sounds like a good reason to have more cryptocurrencies than just bitcoin, so some can go for being cheap and good for low value transactions, others go for being good for massive transfers of significant wealth with high security even though maybe taking longer to confirm, etc.

-MarkM-

[bluemeanie1]

That sounds like a good reason to have more cryptocurrencies than just bitcoin, so some can go for being cheap and good for low value transactions, others go for being good for massive transfers of significant wealth with high security even though maybe taking longer to confirm, etc.

-MarkM-

I dont really view PoW as being high security.  Theoretical problems, social attack vectors, computational attack vectors, prohibitive expenses, environmental issues are just a few of collateral costs of using Bitcoin.  Fixing and managing the problems associated with PoW is also a large part of the code complexity.  We can actually remove Proof of Work completely and still have distributed transactions.

The designers of Bitcoin did not anticipate mining pools and ASIC miners, it just wasnt part of the plan.  Unfortunately these industries are now in the drivers seat of the cryptocurrency world.