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Author Topic: Competing Bitcoin like virtual currencies  (Read 2526 times)
bg99
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February 15, 2011, 05:09:12 AM
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I don't know if this has been discussed but what about competing virtual currencies modeled after Bitcoin or almost exactly like bitcoin. Couldn't some tech savvy company like google or facebook start their own bitcoin like currency. Wouldn't that dilute Bitcoin itself. I heard it was open source so can't anybody with enough know how re-create their own version. Your thoughts.
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February 15, 2011, 05:38:30 AM
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I don't know if this has been discussed but what about competing virtual currencies modeled after Bitcoin or almost exactly like bitcoin. Couldn't some tech savvy company like google or facebook start their own bitcoin like currency. Wouldn't that dilute Bitcoin itself. I heard it was open source so can't anybody with enough know how re-create their own version. Your thoughts.

I hear a lot of people suggesting that a company would want to start a new chain. I don't get it, if they like the idea they can use Bitcoin, if they want a special back door then it isn't like Bitcoin at all it is just another inflotbux currency.

Without doing more promoting than has been done for Bitcoin there is no advantage to using something that has all the same properties but less wide use.
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February 15, 2011, 06:43:30 AM
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See the Ruthenium vs. Gold thread:
  http://bitcointalk.org/index.php?topic=494.msg4437#msg4437

Also, consider this: Bitcoin may very well have been a one-shot deal ... i.e., it benefited from being able to grow through a vulnerable stage without getting thumped by an attacker due to some coincidental timing as well as from being the first to market.

One of Bitcoin's weaknesses is that it was (and still possible could be) vulnerable if the attacker has a lot of computing power:
  http://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power

But at this stage, it appears that Bitcoin has weathered through its most vulnerable stages.

When Bitcoin was first "slashdotted" in June, 2010, mining was performed nearly entirely on CPUs using the classic Bitcoin client.   Software for mining with GPUs had not yet been released and thus the network's hashing strength was relatively evenly distributed among nodes.

Coincidentally, once versions of the GPU-based miners did come out, the best-performing GPUs were low in availability and, as a result, were very high in cost.  Thus even though there may have been chances for profit by attacking bitcoin with brute computing force, Bitcoin's path allowed it to pass through that part of its lifecycle unscathed.  With each day going forward, Bitcoin's network gets even stronger and becomes less and less vulnerable over time.

A new competing currency following Bitcoin's model doesn't have the benefit of being protected by Bitcoin's current 245 Ghash/second hashing network.  A new competing currency would likely not be able to follow Bitcoin's path through the early organic growth phase where it is especially vulnerable.

Looking farther down the road, the most likely scenario for launching a competing currency would be after some technology developments occur and some big money funding -- either government or corporate, has been amassed.  

The funding might allow a network to be protected using the effort's direct investment in massive amounts of specialized hashing hardware using designs that have not yet left the drawing board but use components whose supply is not constrained.   Such a competing currency would however be lacking the primary element that carried Bitcoin through its early days -- an enthusiastic community consisting of miners, developers, consumers and speculators.

tl;dr / summary:
Don't underestimate what has already happened that has allowed Bitcoin to become what it currently is.   It will not likely be repeatable soon by a Bitcoin version 2.  At a minimum, when there is a competing currency (such as version 2) that comes around, we will likely know well in advance.

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February 15, 2011, 07:50:49 AM
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Well the network is vulnerable to DOS using many many small payments. But that's only a temporary thing and can be taken care of by users adding transaction costs. I think  Undecided

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February 15, 2011, 06:36:01 PM
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Is the network vulnerable to an botnet attack? What if a whole botnet network start to accept a false transaction?

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February 15, 2011, 07:20:36 PM
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Is the network vulnerable to an botnet attack? What if a whole botnet network start to accept a false transaction?
From the point of view of the network, a transaction is false only if it already happened once before. The computing power of the botnet would have to be comparable to the honest portion of the network to have a chance at getting a multi-spend into the block chain, but to what end? Couldn't a botnet do more profitable things, like generating bitcoins even?

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February 16, 2011, 12:26:52 AM
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Would there be interest in a network based on a GPU-resistant problem, instead of SHA-256? Then everyone could be a miner again.

(I know what you're thinking: like what problem, exactly? Well I don't know GPU architecture, but I imagine such problems exist. Maybe some of the memory based problems in http://en.m.wikipedia.org/wiki/Proof-of-work_system)

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February 16, 2011, 03:45:35 AM
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Would there be interest in a network based on a GPU-resistant problem, instead of SHA-256? Then everyone could be a miner again.

(I know what you're thinking: like what problem, exactly? Well I don't know GPU architecture, but I imagine such problems exist. Maybe some of the memory based problems in http://en.m.wikipedia.org/wiki/Proof-of-work_system)

It would still have to be resistant to custom hardware as well. People are already getting the materials together to build custom hashing hardware that is even faster than stock GPUs.
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February 16, 2011, 04:04:13 AM
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I heard it was open source so can't anybody with enough know how re-create their own version.

If someone made an incompatible service using Bitcoin's code, they wouldn't have a chance competing with the existing community. If someone made a compatible service using Bitcoin's code, they would just be contributing to the project.

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February 16, 2011, 04:11:06 AM
 #10

Re: custom hardware ... reviving interest in commodity integer performance machines maybe bitcoins biggest legacy.

One of the best and biggest (unclassified) machines on integer performance was the Cray X-1, circa 2005. http://en.wikipedia.org/wiki/Cray_X1
"Liquid-cooled systems scale to a theoretical maximum of 4096 processors" and the processors themselves were custom designed with an eye towards integer performance, the last of its kind non-commodity unclassified that is.

If you could pick one of these up on the cheap as some are headed for the scrap heap by now, you'd be doing some serious mining right away. (PS: I can get the code ported to it if you can dig up the hardware).

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February 17, 2011, 06:18:12 PM
 #11

Would there be interest in a network based on a GPU-resistant problem, instead of SHA-256?

No way, there are Knights around the corner.
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