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Author Topic: Altcoin - the alternative cryptocurrency?  (Read 10188 times)
bitv
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August 16, 2011, 07:26:16 AM
 #1

Along with the launch of other BitCoin forks, I'd like to present the following:

Altcoin - The alternative cryptocurrency?

- The currently will have constant inflation: there is no total limit for the maximum coins existing, rather, they're generated as long as there are people mining
-> this will encourage people to spend their coins rather than holding them back
-> there will be no significant advantages for early-adopters (although it will still be easier to mine coins in the beginning, due to lower difficulty)
-> the problem "do people still mine after they don't get any block rewards, but rather only tx fees" doesn't exist
-> the inflation rate will slowly decrease, as the proportion of the coins generated will become smaller and smaller compared to existing coins: as bitcoins will have more and more deflation on the time axis, altcoins will have less and less inflation...
-> I personally think that inflation > deflation.
-> coins lost (there will be lots of as the time goes by) will not be that significant problem as there is a constant supply of new ones

- Six AltCoins will be generated every six minutes, that is 60 Altcoins per hour or 1 440 per day or 43 200 per month or 518 400 each year.
-> block generation is faster than on Bitcoin, transactions will be processed faster

- Launch date will be set far in advance
-> 11.11.2011 or 11/11/11, pick your poison!
-> This will give enough time for advertising this fork, which makes more widespread adoption much more likely, than if it started as an inside-thingy with handful of people mining majority of the coins themselves

- Absolutely no coins will be mined before the official launch
-> Bounties will be paid via bitcoins / namecoins / altcoins / USD / euros donated to the project

This kind of an currency wouldn't have been existing if Bitcoin didn't exist. However, as cryptocurrencies have become more widespread, I feel this could succeed. I feel that miners can put up to that rewards aren't that good for early adopters on Altcoin, than on other bitcoin forks. And even if they don't, it's easier for them to hop on the bandwagon late than it's on other currently available cryptocurrencies.

This is only a proof of concept. All criticism is welcome. This topic is rather a showcase for my ideas than an actual project. However, if necessary, I do have enough resources to make something like this happen (and help is welcome too, just hit me up!).


A graph concerning the inflation rate
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qikaifu
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August 16, 2011, 07:27:29 AM
 #2

As there will be no early adopters, so there will be no adopters.

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bitv
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August 16, 2011, 07:34:41 AM
 #3

As there will be no early adopters, so there will be no adopters.

They do still have a slight advantage. And the less there are early adopters, the more profitable it is to be one (lower difficulty). I believe the supply and demand will match themselves here too.
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August 16, 2011, 09:14:41 AM
 #4

I just had an interesting thought. What if a new start-up started with 21 million coins and they are only released if you spend them. Peg a value to them and go. But only a certain amount is released at a time... I'm getting tired.     Steal this idea and run with it. But call it BrunoCoin. Nite all.
bitrebel
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August 16, 2011, 09:23:02 AM
 #5

How do you think Satoshi would feel to know your were forking his blockchain behind his back?

QUITE FORKING WITH THE BLOCKCHAIN!!!

Leave the forking blockchain alone already!!!

Why does Bitrebel have 65+ Ignores?
Because Bitrebel says things that some people do not want YOU to hear.
bitv
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August 16, 2011, 11:03:59 AM
 #6

How do you think Satoshi would feel to know your were forking his blockchain behind his back?

I can't speak for Satoshi of course (he could probably provide us an clarification), but as an open-source developer I would be quite proud myself that I've developed that's worth copying. If you had a business and someone did copy your business model, you would feel bad. Of course, it would probably mean less profits for you. But I'd like to think Satoshi didn't create Bitcoin to abuse it and gain profit from it. Instead he did something he felt could provide everyone something valuable. Why wouldn't he let someone to make derivates of his work, as long as he is properly credited (I'd like to mention Bitcoin's license does allow and does encourage to do this)? It's not like we're stealing from him, but rather developing his concept forward. With forks from Bitcoin of this kind, we as a community could create even something better than what Bitcoin is (it has it's flaws too).

Also, you of course have the right to criticise this project as much as you want. I would like to see your opinions. This is a proposal for the community. I'm not profiting from this myself obviously (some could say Satoshi profited from Bitcoin, Nasakioto profited from IXCoin etc.). Yes, they kinda have the right to do whatever they want with their own projects, but I can assure that's not my objective with Altcoin.
Man From The Future
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August 16, 2011, 11:06:05 AM
 #7

You know you've done something right when people start copying your work. Smiley
piuk
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August 16, 2011, 11:25:05 AM
 #8

Nobody is going to buy a currency with that kind of inflation rate. Your looking at 20 years until inflation reaches an except-able level of ~5% (518400 / (518400 * 20) * 100 = 5.

d'aniel
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August 16, 2011, 11:30:53 AM
 #9

Maybe I'm just stupid, but it seems to me that it might be a bad thing to attempt to divide the cryptocurrency user base among many different block chains in these early stages when a much greater market depth in one single one is so necessary to smooth out volatility, and make it usable.

Not to mention if people actually get on board with these, the collective cryptocurrency inflation rate will skyrocket, since they will be drawing primarily from users that would otherwise be using Bitcoin.

It's funny - dumping a whole bunch of very similar block chains onto the market was a potential attack I thought about a few months ago.  Just never thought people would take them seriously.

Perhaps this attack could be defended against by flooding the market with so many similar alternatives that people are overwhelmed, and just ignore them.  So... keep em coming?
bitv
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August 16, 2011, 11:32:57 AM
 #10

Nobody is going to buy a currency with that kind of inflation rate. Your looking at 20 years until inflation reaches a except-able level of ~5% (518400 / (518400 * 20) * 100 = 5. Are you really willing to keep AltCoin operational for 20 years with little to no use?

I'd like to think that the inflation rate wouldn't have that major effect in Altcoin than it has on the traditional currencies, because it is predictable and known to everyone. You do know that there will be X% more coins the next year and your coins will probably lose Y% of their value. It makes things a bit harder for those willing to make investments, but doesn't really prevent the adoption of the currency for the normal everyday online shopping where it doesn't matter there the coins are a year from now. In fact, Bitcoin is rather unpredictable in this matter too. The fluctuations are very big, sometimes for no visible reason. And no-one will know how it will behave after it reaches maturity. As I said, Altcoin would stabilize over time, Bitcoin could become more unstable over time...

And if you look at Bitcoin, it has so far had the same inflation rate as Altcoin would have. The second phase where block rewards will be split half will not be reached until next year or so.
ableorange
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August 16, 2011, 11:33:36 AM
 #11

I'm not sure about this inflation thing.
payb.tc
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August 16, 2011, 11:37:24 AM
 #12

-> the problem "do people still mine after they don't get any block rewards, but rather only tx fees" doesn't exist
-> the inflation rate will slowly decrease, as the proportion of the coins generated will become smaller and smaller compared to existing coins

these appear to cancel one another out.

if the proportion of coins given for blocks decreases, then the real purchasing power of the block rewards decreases too, eventually this is the same as earning $0.00000000001 to mine a block, effectively zero.
NetTecture
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August 16, 2011, 11:37:39 AM
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Nobody is going to buy a currency with that kind of inflation rate. Your looking at 20 years until inflation reaches a except-able level of ~5% (518400 / (518400 * 20) * 100 = 5. Are you really willing to keep AltCoin operational for 20 years with little to no use?

I'd like to think that the inflation rate wouldn't have that major effect in Altcoin than it has on the traditional currencies, because it is predictable and known to everyone. You do know that there will be X% more coins the next year and your coins will probably lose Y% of their value. It makes things a bit harder for those willing to make investments, but doesn't really prevent the adoption of the currency for the normal everyday online shopping where it doesn't matter there the coins are a year from now. In fact, Bitcoin is rather unpredictable in this matter too. The fluctuations are very big, sometimes for no visible reason. And no-one will know how it will behave after it reaches maturity. As I said, Altcoin would stabilize over time, Bitcoin could become more unstable over time...

Not only, also infaltion here will one day stop.

Remember, inflation is not more coins, iti s coins less valuable. As prouctivity increases, more coins can be handled by the same number of people. In 100 years, new coin are 1% per year.

Now, this is far in the future, but there will bea poin where the new coins are a low inflation rate below the raise of produtivity.

ALSO: coins ARE lost. More coins in existence, more will be lost - I would expect an equilibruim here to come around, too. Far in the future.

All in all, this here has some merit, and whether or not a limited number of coins is beneficial is a matter of discussion.
bitv
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August 16, 2011, 11:42:06 AM
 #14

-> the problem "do people still mine after they don't get any block rewards, but rather only tx fees" doesn't exist
-> the inflation rate will slowly decrease, as the proportion of the coins generated will become smaller and smaller compared to existing coins

these appear to cancel one another out.

if the proportion of coins given for blocks decreases, then the real purchasing power of the block rewards decreases too, eventually this is the same as earning $0.00000000001 to mine a block, effectively zero.


Yes, that is true (if we don't account for either the lost coins or growing userbase, at least). Transaction fees could still be necessary at some point. That point will be pretty far away though.
piuk
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August 16, 2011, 12:05:39 PM
 #15

If your open to suggestions might be better have a fixed inflation rate and adjust block rewards accordingly. Say you wanted to fix inflation at 2%.

((Number of coins in existence / 100) * 2) / (60 * 24 * N. days this year) /  (N. Blocks mined last minute) = Block Reward

So if you launch with 100,000 Altcoins (possibly put them in a none profit AltCoin foundation or something). The first block reward would be:

(((100000 / 100) * 2) / 525600 / 6 = 0.00063419584 Alt per block

You could also either hard code or create a formula to keep the inflation rate high the first few years (to increase coin circulation faster) and then fix itself.

year 1 inflation 20%
year 2 inflation 15%
year 3 inflation 10%
year 4 inflation 5%
year 5+ inflation 2%

bitv
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August 16, 2011, 01:14:00 PM
 #16

If your open to suggestions

I definitely am. If people are interested in this, I would like to make this more of a community project where everyone could voice their suggestions or even actual code / implementation / web pages / foundations, than just me arguing against the rest of the bitcoin community Smiley

Your idea about the fixed inflation rate sounds very interesting. In that case, the block reward will become bigger instead of being fixed. Although, the value of the block reward will stay fixed, so that probably would really be a better idea. Would eliminate the need for transaction fees.

Something that needs polishing is how the coins are put into circulation though. I'm not exactly fond of the idea of a Altcoin foundation, because I want the launch of this blockchain to be as transparent as possible. Even more transparent than Bitcoin's was. And compared to Bitcoin's, the coins would be more even spread. I'm not saying that the early adopters don't deserve those benefits they got with Bitcoin, but more even coin spread would make the currency more stable (at the beginning). Also, the project founder's should not mint any coins themselves before the launch of the project (IXCoin being the worst example).

Faster maturity (until the fixed inflation% phase) would be generally better, but also has it's cons.
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August 16, 2011, 01:18:25 PM
 #17

Is becoming fashionable invent cryptocurrency.  Undecided
finnthecelt
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August 16, 2011, 02:47:52 PM
 #18

I'm not sure about this inflation thing.

The government will love it. OP is probably a shill. Selling inflation. Socialist.
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August 16, 2011, 03:04:07 PM
 #19

We are having this same discussion over here: https://bitcointalk.org/index.php?topic=36450.0

You might draw some design ideas from there.

Btw, are you actually launching for real on 11.11.11 or is this only a proposal?
bitv
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August 16, 2011, 03:16:55 PM
 #20

We are having this same discussion over here: https://bitcointalk.org/index.php?topic=36450.0

You might draw some design ideas from there.

Btw, are you actually launching for real on 11.11.11 or is this only a proposal?

It's only a proposal. You might draw some design ideas from here too. It's not my goal to create a new cryptocurrency whatever it is. If you (or probably, we as a community) can pull off a good enough implementation, there's really no reason for me to create my own. I'm just trying to initiate the discussion and development here, not to do all of it myself.

And to add something concerning the launch date, it needs to be set far away enough so that the project can gain as much publicity as it can. Although it would be more profitable for us miners when we could get a headstart, in order to the currency to succeed, we must get as much early adopters as possible. Bitcoin helps a lot in that, because there have been lots of people that have become familiar with the cryptocurrency concept and if we get a new blockchain rolling now, there will be much larger userbase ("wanna-be-rich-early-adopters") than there was when Bitcoin was launched. We definitely don't want majority of the coints to be held by minority of the users.
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