Just made a new currency.To get us rich by mining!~~NO!!~~Proper currency making

[Minsc]

Guys, we are not supposed to make new cryptocurrencies with the purpose of making money on them by mining.  This is all you ever think of!

To make a proper currency, it needs to fix all the problems with bitcoins, or as much as possible.

Here's main ones for people adopting it:
1)
Forget the wallet websites which get hacked and aren't the purpose of bitcoin.  Download the software and start it up.  Well, despite that bitcoin has been around about a year and a half and hardly has been used, it takes minimum 60 hours on a high speed cable modem to finally download all that stuff from peers.  And then it stores that stuff not neatly in a bitcoin directly, but it hides it in some windows directory.  I don't know why it takes so long since it's only about 750 megabytes and that takes me under ten minutes to download that off a torrent.

But imagine ten years from now with bitcoins actually being used a whole bunch and then a newbie tries to start bitcoins and they have to download 100 gigs of stuff.  And the peers go slow so it'll be very long, maybe a month of running the client.

When I've transferred my wallet.dat, I have the same thing of having to download all the transactions again.  This is really bad.



2)
Despite all this CPU power devoted to mining, they can't use it to make transactions not take hours to complete.

In http://solidcoin.info/faq.php it mentions, "A pump-n-dump is when a large mining operating (known as a pool) decides for some reason to mine another chain than Bitcoin, usually for profit purposes but in some cases for malicious/childish reasons. They mine and mine, until the difficulty is so high it's no longer profitable, they then jump ship, leaving the difficulty so high it sometimes takes months to fix."  I don't understand how this works, but mining should do two things (a) generate new coins when the currency is stagnant, (b) if there's lots of activity then it should not generate any new coins but simply process transactions and take transaction fees, something fixed at like 0.01 coin.

Yes, about part b, I am serious.  We have enough bitcoins so mining ideally would stop generating coins.  This needs to be based not just on transactions but on the general money flow and it needs to be done in a way so people hoarding coins and sending it back and forth between their wallets can't cheat this.  I posted in https://bitcointalk.org/index.php?topic=111.msg927#msg927 "Will occasional losses of bitcoin wallets limit available maximum bitcoins?" and even Satoshi chimed in.  But well with this idea, if there's not enough coins in circulation, then it'll make more but when there's plenty in circulation, then miners are paid transaction fees instead.  And so it's not 100 coins a block, then 50, then 25, then none but let's say it's 50 coins a block minus transaction fees.  So if there's 40 coins worth of transaction fees, then miners get 50 coins but only 10 new ones are made.  And if there's over 9000 coins in transaction fees, then miners make a lot in transaction fees.  This way, miners are paid to process transactions.

Also solidcoin made its blocks at 3 minutes.  Thinking ahead, these should be 30 seconds maximum.  Since miners either join pools or have fast hardware, this won't be an issue.  I personally think 5 seconds would be ideal and then basically 5 seconds and then a fraction of a coin.


......


Okay well if you guys think of more, let me know.


Now once an alternative is done, that's not it.  The creators need to mine it harder than the founder of ixcoin mined coins.  They need a couple million coins sitting in a trust.  These are not to be sold, but to be used should bitcoin or some previous cryptocurrency completely turn obsolete.  Then people with the bitcoins will be given some value for their coins based on the honor of the founders of this system.  This way people have faith in bitcoins and this new system too.  This is extremely important once something replaces bitcoins.  Founders mine lots of coins, then hold them to support the previous cryptocurrency.

Obviously the people starting it need to be honorable.  If you make it just to make money mining, you are doomed.  When bitcoins began, it was an awesome idea and coins were worthless and wasn't about mining to get you rich, but a long term investment in a fixing internet commerce.

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[grndzero]

Guys, we are not supposed to make new cryptocurrencies with the purpose of making money on them by mining.  This is all you ever think of!

There *might* be ideological ideals involved with launching an alternative block chain but anyone thinking that people weren't going to try to make a quick buck off it is deluded. Sure it's fun for some of the late comers to become early adopters, but the experience isn't the same when people have multi-GH rigs jumping in at low difficulty.

To make a proper currency, it needs to fix all the problems with bitcoins, or as much as possible.

Here's main ones for people adopting it:
1)
Forget the wallet websites which get hacked and aren't the purpose of bitcoin.  Download the software and start it up.  Well, despite that bitcoin has been around about a year and a half and hardly has been used, it takes minimum 60 hours on a high speed cable modem to finally download all that stuff from peers.  And then it stores that stuff not neatly in a bitcoin directly, but it hides it in some windows directory.  I don't know why it takes so long since it's only about 750 megabytes and that takes me under ten minutes to download that off a torrent.

But imagine ten years from now with bitcoins actually being used a whole bunch and then a newbie tries to start bitcoins and they have to download 100 gigs of stuff.  And the peers go slow so it'll be very long, maybe a month of running the client.

When I've transferred my wallet.dat, I have the same thing of having to download all the transactions again.  This is really bad.

This was theorized a long time ago. Alternative block chains will have the same problem. https://en.bitcoin.it/wiki/Scalability

2)
Despite all this CPU power devoted to mining, they can't use it to make transactions not take hours to complete.

In http://solidcoin.info/faq.php it mentions, "A pump-n-dump is when a large mining operating (known as a pool) decides for some reason to mine another chain than Bitcoin, usually for profit purposes but in some cases for malicious/childish reasons. They mine and mine, until the difficulty is so high it's no longer profitable, they then jump ship, leaving the difficulty so high it sometimes takes months to fix."  I don't understand how this works, but mining should do two things (a) generate new coins when the currency is stagnant, (b) if there's lots of activity then it should not generate any new coins but simply process transactions and take transaction fees, something fixed at like 0.01 coin.

You should really get your definitions from an independent source, try Wikipedia;

"Pump and dump" is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme "dump" their overvalued shares, the price falls and investors lose their money. Stocks that are the subject of pump-and-dump schemes are sometimes called "chop stocks". [1]

"Pump and Dump" doesn't have anything to do with mining pools in regards to block chains. Pools are a cooperative effort of users. The forums and IRC pump up the value and most miners dump them because they believe that they will be worthless eventually. Again, anyone thinking that people weren't going to try to make a quick buck off it is deluded.

Yes, about part b, I am serious.  We have enough bitcoins so mining ideally would stop generating coins.  This needs to be based not just on transactions but on the general money flow and it needs to be done in a way so people hoarding coins and sending it back and forth between their wallets can't cheat this.  I posted in https://bitcointalk.org/index.php?topic=111.msg927#msg927 "Will occasional losses of bitcoin wallets limit available maximum bitcoins?" and even Satoshi chimed in.  But well with this idea, if there's not enough coins in circulation, then it'll make more but when there's plenty in circulation, then miners are paid transaction fees instead.  And so it's not 100 coins a block, then 50, then 25, then none but let's say it's 50 coins a block minus transaction fees.  So if there's 40 coins worth of transaction fees, then miners get 50 coins but only 10 new ones are made.  And if there's over 9000 coins in transaction fees, then miners make a lot in transaction fees.  This way, miners are paid to process transactions.

Also solidcoin made its blocks at 3 minutes.  Thinking ahead, these should be 30 seconds maximum.  Since miners either join pools or have fast hardware, this won't be an issue.  I personally think 5 seconds would be ideal and then basically 5 seconds and then a fraction of a coin.

If there are too many coins in circulation then the price will fall. If people just hold coins and don't spend them then the price will fall. It's simple economics both ways. Satoshi actually did a lot of calculations, economics models, and behavioral predictions. Bitcoin's behavior is based on those and so far it has been pretty accurate despite turning into a monster (GPU mining) that he didn't predict. It might not be perfect but Bitcoin is the first of it's kind and will take a while to prove the theories involved. Alternative block chains haven't done a fraction of the research that Satoshi did when devising Bitcoin.

Now once an alternative is done, that's not it. The creators need to mine it harder than the founder of ixcoin mined coins.  They need a couple million coins sitting in a trust.  These are not to be sold, but to be used should bitcoin or some previous cryptocurrency completely turn obsolete.  Then people with the bitcoins will be given some value for their coins based on the honor of the founders of this system.  This way people have faith in bitcoins and this new system too.  This is extremely important once something replaces bitcoins.  Founders mine lots of coins, then hold them to support the previous cryptocurrency.

Obviously the people starting it need to be honorable.  If you make it just to make money mining, you are doomed.  When bitcoins began, it was an awesome idea and coins were worthless and wasn't about mining to get you rich, but a long term investment in a fixing internet commerce.

A "couple million" coins "sitting in a trust" is first of all hard to prove and accept, and second of all not productive to the currency. I think these forums have proven that most people on here will not trust someone no matter how much proof they are given. There is a culture of disbelief and conspiracy on these forums and it's very sad.

I don't really like that the founder of Ixcoin pre-mined 500,000 coins, but from a business perspective it makes sense to offer incentives to lure capacity and talent from Bitcoin. It's no different than a competing business coming into a sector with only 1 big company there already, and since they can't offer a lower price on a competing product they have to offer some kind of incentive.

[smoothie]

Waaah! Cry more! 

[Bobnova]

Gotta say, the only reason my computer is putting out uncomfortable levels of heat and sucking in expensive amounts of power is that I'm making money.
The moment it stops being profitable I, and many others, are out.

Might want to reconsider your views on profits, profits are the only reason bitcoin is >$1 and actually growing, after all.

[Minsc]

This was theorized a long time ago. Alternative block chains will have the same problem. https://en.bitcoin.it/wiki/Scalability

What will need to be done is some way to simplify and clean out transactions over a year old.

If there are too many coins in circulation then the price will fall. If people just hold coins and don't spend them then the price will fall. It's simple economics both ways. Satoshi actually did a lot of calculations, economics models, and behavioral predictions. Bitcoin's behavior is based on those and so far it has been pretty accurate despite turning into a monster (GPU mining) that he didn't predict. It might not be perfect but Bitcoin is the first of it's kind and will take a while to prove the theories involved. Alternative block chains haven't done a fraction of the research that Satoshi did when devising Bitcoin.

So then my idea makes sense.  Take like 0.01 transaction fees and then miners get so many coins (e.g. 50) and subtracted the transaction fees from the coins generated.

Transaction fees appear to be added to bitcoin later on.  Did Satoshi plan on this at all?

A "couple million" coins "sitting in a trust" is first of all hard to prove and accept, and second of all not productive to the currency. I think these forums have proven that most people on here will not trust someone no matter how much proof they are given. There is a culture of disbelief and conspiracy on these forums and it's very sad.

I don't really like that the founder of Ixcoin pre-mined 500,000 coins, but from a business perspective it makes sense to offer incentives to lure capacity and talent from Bitcoin. It's no different than a competing business coming into a sector with only 1 big company there already, and since they can't offer a lower price on a competing product they have to offer some kind of incentive.

Well we'd need people honorable.  Like American CEOs when they mess up, they get a huge bonus, then flee the corporation.  But Japanese CEOs take pay cuts.  http://www.escapistmagazine.com/news/view/111963-Nintendo-CEO-Takes-50-Pay-Cut  or I suppose one eventually may commit seppuku.

Maybe it can be built into the software where there is some kind of innate transferability with bitcoin.  Something will eventually replace bitcoins, but it could be maybe not for 10 years.  But when it happens, it needs some built in system to guarantee some way to pay some token value to bitcoins so they don't crash to worthless, but just crash to low level.

[JohnDoe]

- Solve Bitcoin's economic flaw of harshly punishing investment and lending by adding demurrage.
- Make coin generation follow a linear decay block by block instead of a geometric progression to reduce the advantage of early adopters and make the reward reduction more smooth.

A currency with these properties is being discussed here: http://www.freicoin.org/

[Minsc]

Would it be possible for a cryptocurrency to have this...?

Transactions older than one year are purged from the history?  And would there be a way for the wallet itself even if history is gone and no transactions now to simply state that it has X amount of coins without transaction history?

This would help scalability a lot.

[betam4x]

I totally disagree with OP.  There is nothing wrong with people creating alternate currencies for the sole purpose of profiting.  There is money to be made, as with anything, it's a gamble.  As long as investors are willing to invest and miners are willing to mine, there will be demand for it. 

[Minsc]

All these alternate cryptocurrencies are propped up solely by the success of bitcoin.  Making a whole bunch of them purely as a get rich scheme instead of as a way to solve internet money hurts bitcoin.

What a good replacement needs is some built in way for when bitcoin loses its value that bitcoins can be traded in for this new currency at some similar value.  If a founder can't be trusted to do it manually, then maybe something can be coded in.

[joulesbeef]

I do wonder about people with mobile clients and data caps to their internet, it would suck to plow through your cap just downloading the block chain.. plus I'm thinking i shouldnt have made my windows partition so small, stupid coins going to make me expand the partition.. you know how long that takes? gahhh

[betam4x]

It's not necessarily a get rich quick scheme.  In fact, most alternative currencies trade back to BTC.  It just shows that the Bitcoin difficulty level is far too high and doesn't change to react to market conditions quick enough.  I dare say that alternative currencies HELP Bitcoin because they encourage the trading of Bitcoins, both for the alternative currencies, USD, as well as other products/services.  An example would be the Euro vs the USD.  The euro doesn't hurt the USD, it exists along side it.

None of the created crypto currencies have died yet.  They aren't being propped up by Bitcoin either.  There is obviously demand for them (look at the exchanges) just as there is demand for Euros,Dollars, etc.

[wolftaur]

I do wonder about people with mobile clients and data caps to their internet, it would suck to plow through your cap just downloading the block chain.. plus I'm thinking i shouldnt have made my windows partition so small, stupid coins going to make me expand the partition.. you know how long that takes? gahhh

30 seconds with logical volume management, actually. If you need to grow your partition look into that approach.

[Minsc]

There is obviously demand for them (look at the exchanges) just as there is demand for Euros,Dollars, etc.

Bitcoin is falling and falling steadily.

[Minsc]

After seeing this http://www.libertariannews.org/2011/08/30/bitcoin-fbi-admits-to-engaging-in-infiltration-disruption-and-dismantling-of-competing-currencies/

Is it possible for all that mining power and difficulty be traded for better encryption?

[Vladimir]

Starting a new currency with a fighting chance to dislodge Bitcoin, presently is not viable without 30-100 million$ budget.

Don't you think it was not my first idea to fork bitcoin and get my own currency going the minute I learned about bitcoin in late 2010?

I did my DD though, it is not viable.

One is are much better off setting up some kind of bitcoin related business now and than growing together with Bitcoin. It is a nobrainer, really.

Better think where you can have first mover advantage, something new and original, online notary service, contract signing service, votes management service, something using shared mining possibilities to put all this huge hashing power to good use.

I admit one thing, pump and dump on some new shitcoin fork is much easier than that.

[smoothie]

Starting a new currency with a fighting chance to dislodge Bitcoin, presently is not viable without 30-100 million$ budget.

Don't you think it was not my first idea to fork bitcoin and get my own currency going the minute I learned about bitcoin in late 2010?

I did my DD though, it is not viable.

One is are much better off setting up some kind of bitcoin related business now and than growing together with Bitcoin. It is a nobrainer, really.

Better think where you can have first mover advantage, something new and original, online notary service, contract signing service, votes management service, something using shared mining possibilities to put all this huge hashing power to good use.

I admit one thing, pump and dump on some new shitcoin fork is much easier than that.

+1 I concur. Next shitcoin fork to come out is gonna get raped. LOL

[Minsc]

Vladimir, that's why I made this thread.  People create forks without serious investments in how to create an improvement to bitcoin.  We really need to spend a year at least working on making an improved bitcoin and then it is crucial that the founders set aside a bunch of coins so if bitcoins crash because their new currency replaces it, they can give them the new kind of coins in exchange for bitconis.  Without this later thing, you devalue bitcoins and thus ruin your new currency.

smoothie, ironic that you criticize forks when you give a namecoin address for donations.

[smoothie]

Vladimir, that's why I made this thread.  People create forks without serious investments in how to create an improvement to bitcoin.  We really need to spend a year at least working on making an improved bitcoin and then it is crucial that the founders set aside a bunch of coins so if bitcoins crash because their new currency replaces it, they can give them the new kind of coins in exchange for bitconis.  Without this later thing, you devalue bitcoins and thus ruin your new currency.

smoothie, ironic that you criticize forks when you give a namecoin address for donations.

Is it illegal to accept donations?

[Minsc]

smoothie??  He criticized forks and then supported them in his signature.

[smoothie]

smoothie??  He criticized forks and then supported them in his signature.

When did I criticize namecoin? LOL evidence?