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[geek-trader]

Given the improvements such as SC in the difficulty re-targeting algo, the encrypted wallet in the client and address checking among others. How will BTC remain relevant when MtGox and TH start exchanging SC to USD?

Serious question and would appreciate serious answers.

What the hell is "SC" ?

[Sukrim]

* Nearly no security from serious chainsplit attacks in SC (yet?) - too low difficulty
* Far too fast block timing - after all you still have to wait ~1 hour to be sure, no matter if it takes 6 10 minute blocks or 60 1 minute blocks, they are equivalent from a security point of view
* Most of the interface stuff can be anyways ported to the bitcoin client too (which also has a great QT interface in the pipeline)
* Fast difficulty re-targeting can cause huge spikes in difficulty and might lead to even more pump 'n' dump (or on-off mining like namecoin)

[jackjack]

Given the improvements such as SC in the difficulty re-targeting algo

Such algo is only needed if the global hashrate changes dramatically
Which will occur if many people leave the Bitcoin network
So if this algo becomes needed, people would be anyway mining another blockchain...
So this is useless

the encrypted wallet in the client

I love when you altchains supporters use that argument
Do you know this feature is copied from Bitcoin client?
Do you know why it isn't in the official client?
http://en.wikipedia.org/wiki/Software_release_life_cycle#Alpha

address checking among others.

Absolutely useless for Bitcoin (if someone really want to know why: because Bitcoin uses Bitcoin addresses........)

How will BTC remain relevant when MtGox and TH start exchanging SC to USD?

You are convinced it will not, so why even asking? https://bitcointalk.org/index.php?topic=38453.msg492142#msg492142

[wolftaur]

You are convinced it will not, so why even asking? https://bitcointalk.org/index.php?topic=38453.msg492142#msg492142

Thought I would get some facts and the above answers are pretty solid.  If you will notice I asked this question AFTER I posted the other. I have seen a lot of baseless attacks on other currencies and thought I would try to gather some facts about the issue.

That's why I asked. Too bad you screwed up what started out as an intelligent answer with basic retardation LOL...

BTC is going to remain relevant because it was first. SC has some differences but many similarities, however, a place that accepts Bitcoins doesn't just automatically accept SolidCoins too. Two different block chains entirely.

Even if SolidCoin is ten times better in every measurable sense, if Bitcoin is accepted at ten times as many places, Bitcoin will keep existing.

This is why Discover isn't dead.

[edit] Er, this is why Discover isn't COMPLETELY dead.

[gw4tt]

no store is really going to take SC/IX/I0 at this stage.

Volatility is even higher than bitcoin.

[Sukrim]

* Far too fast block timing - after all you still have to wait ~1 hour to be sure, no matter if it takes 6 10 minute blocks or 60 1 minute blocks, they are equivalent from a security point of view

Not exactly an accurate statement and a common misconception, while you may need some more transactions to be "fool proof" the real key here is with network propogation, and solidcoin does propogate transactions through the network faster than bitcoin, which does help it become more secure essentially giving the potential attacker less time to initiate a double spend that *MAY* be able to overtake the first.

Why would solidcoin block propagate faster if they are built the same as bitcoin blocks? With similar size they will even be a tiny bit slower, as there are more headers per hour... Generating 60 1-minute blocks is still as hard as generating 6 10-minute blocks. To be as secure as 6 Bitcoin confirmations you still need as many confirmations as the *scamcoin generates per hour on average.

With high block frequency you run into more forks, more scalability issues (propagation really is the key here - and already on Bitcoin with just a few thousand nodes it can take a few seconds until a block has propagated) and SC still doesn't solve the issue that transaction relaying is not rewarded/encouraged in any way.

[bansal]

* Far too fast block timing - after all you still have to wait ~1 hour to be sure, no matter if it takes 6 10 minute blocks or 60 1 minute blocks, they are equivalent from a security point of view

Not exactly an accurate statement and a common misconception, while you may need some more transactions to be "fool proof" the real key here is with network propogation, and solidcoin does propogate transactions through the network faster than bitcoin, which does help it become more secure essentially giving the potential attacker less time to initiate a double spend that *MAY* be able to overtake the first.

Why would solidcoin block propagate faster if they are built the same as bitcoin blocks? With similar size they will even be a tiny bit slower, as there are more headers per hour... Generating 60 1-minute blocks is still as hard as generating 6 10-minute blocks. To be as secure as 6 Bitcoin confirmations you still need as many confirmations as the *scamcoin generates per hour on average.

With high block frequency you run into more forks, more scalability issues (propagation really is the key here - and already on Bitcoin with just a few thousand nodes it can take a few seconds until a block has propagated) and SC still doesn't solve the issue that transaction relaying is not rewarded/encouraged in any way.

The amount of time is irrelevant, it is the amount of blocks you know have made it onto the block chain that gives you confidence.  Six confirmations is six confirmations, weather it took an hour or fifteen minutes.  After six confirmations there is very little risk that your transaction is going to end up on an orphan block, and as long as difficulty is in balance you are not going to have blocks solved every few seconds.

[vapourminer]

Even if SolidCoin is ten times better in every measurable sense, if Bitcoin is accepted at ten times as many places, Bitcoin will keep existing.

true, this.

look what happened with betamax vs VHS. basically, betamax was better in every way yet VHS won out

[Pieter Wuille]

The amount of time is irrelevant, it is the amount of blocks you know have made it onto the block chain that gives you confidence.  Six confirmations is six confirmations, weather it took an hour or fifteen minutes.  After six confirmations there is very little risk that your transaction is going to end up on an orphan block, and as long as difficulty is in balance you are not going to have blocks solved every few seconds.

To revert a part of the block chain, you need to do as much work (in terms of hashing power) as was done to create the part of the block chain you're trying to revert. It does not matter whether this corresponds to one or to one million blocks. The frequency of blocks has nothing to do with security - it is only a trade-off between convenience and frequency of stale blocks (caused by network latency).

However, if you do not care about the security the block chain offers you (for example when you trust the sender not to try a double-spending attack), faster blocks are more useful.

[wolftaur]

Even if SolidCoin is ten times better in every measurable sense, if Bitcoin is accepted at ten times as many places, Bitcoin will keep existing.

true, this.

look what happened with betamax vs VHS. basically, betamax was better in every way yet VHS won out

The irony is back then, Sony was against copy protection...

[BitcoinPorn]

Well done SolidCoin advertisement

[jackjack]

ITT: people think mining 6 1-minute blocks in a row is as difficult as mining 6 10-hours blocks in a row

[ArtForz]

ITT: people think mining 6 1-minute blocks in a row is as difficult as mining 6 10-hours blocks in a row

Unless I missed something, then that's correct, but only if you interpret it in a certain way.
With the same relative hashpower vs. the rest of the network, over the same # of blocks, chances of finding X blocks in a row are the same, doesn't matter if avg. time/block is 10 seconds or 10 days.
But... wouldn't a theoretical attacker care more about how much time it takes to get a successful double-spend instead of how many blocks?

[skubeedooo]

Even if SolidCoin is ten times better in every measurable sense, if Bitcoin is accepted at ten times as many places, Bitcoin will keep existing.

true, this.

look what happened with betamax vs VHS. basically, betamax was better in every way yet VHS won out

Presumably you'll have multi-protocol clients developed that can support the various flavours and blockchains that exist.  So in that case a merchant who takes the time to incorporate btc into his site will just incorporate all the different flavours in one go at no extra cost.

IMHO the key is volatility.  Since transaction fees are all negligible and if we assume all the different versions are equally secure, the only thing a merchant would care about is the volatility of the different versions.  You're always going to want the one that is least likely to fluctuate w.r.t your outgoings.  e.g. if you are reselling cars that you bought with USD, you want to receive whatever will fluctuate least against USD.

[ThomasV]

Given the improvements such as SC in the difficulty re-targeting algo, the encrypted wallet in the client and address checking among others. How will BTC remain relevant when MtGox and TH start exchanging SC to USD?

Serious question and would appreciate serious answers.

thank you for this serious question.
did you receive the 25 SC bounty after posting it ?

(see http://solidcoin.info/bounties.php )

[bansal]

ITT: people think mining 6 1-minute blocks in a row is as difficult as mining 6 10-hours blocks in a row

Unless I missed something, then that's correct, but only if you interpret it in a certain way.
With the same relative hashpower vs. the rest of the network, over the same # of blocks, chances of finding X blocks in a row are the same, doesn't matter if avg. time/block is 10 seconds or 10 days.
But... wouldn't a theoretical attacker care more about how much time it takes to get a successful double-spend instead of how many blocks?

Either way you would have to put together 51% of the hashpower of the network to pull it off, I guess longer blocks could make the attack more inconvenient, but they would probably still do it if they had the capability.

Bottom line is this, ten minutes is too long.  If you want to just keep trading these things among yourselves fine, if you want these to actually be widely used in the real world this problem has to be solved.  And no I'm not letting anyone walk off with my stuff with zero confirmations, or even just one confirmation.  And my customer isn't going to sit there for an hour to wait to leave with the stuff he's trying to buy.  Bitcoin with 10 minute confirmations is a niche currency for certain internet transactions, at best.

[barbarousrelic]

Even if SolidCoin is ten times better in every measurable sense, if Bitcoin is accepted at ten times as many places, Bitcoin will keep existing.

true, this.

look what happened with betamax vs VHS. basically, betamax was better in every way yet VHS won out

Not every way, iirc, VHS could record longer on one tape than Betamax, which was a crucial reason that it won.

[barbarousrelic]

We should have an "Obvious attempts at false market rumors" subforum and move these posts there.

[Lupus_Yonderboy]

Perhaps maintaining the codebase on a network that performs $M of transactions per day is too much for a handful of unpaid volunteers? A common mantra around here is that "the market will take care of it." When needs are not being met, then a competitor will eventually emerge that attempts to satisfy those needs. What we should all be afraid of is a large international megacorporation (Google, Amazon, Citi, Apple) deciding they can fill those needs better with teams of highly paid programmers and unlimited funds.

That the world's foremost cryptocurrency cannot reliably encrypt its most important file is just...sad. Also, it seems that a couple months have gone by and *still* nobody has gotten their collective shit together to get defensive trademarks for Bitcoin, despite evidence that lawyers around the world are doing so. The inability of this project to adapt and change will eventually result in Bitcoin 1.0 in becoming a footnote in Wikipedia.

[ThomasV]

Solidcoin will never threaten Bitcoin.

I do own some bitcoins, and I am not saying this because I want to preserve their value.
When my money is at stake, I am very agnostic and practical; if I really thought that solidcoin had the slightest possibility of replacing bitcoin, I would certainly diversify and buy some.

However, I am not doing it (just as I did not buy ixcoin or i0coin). Here is why:

- Solidcoin would have a future if bitcoin did not exist. Unfortunately, guess what, Bitcoin was invented 2.5 years before, and strong network effects ensure that it will keep its dominant position. Bitcoin cannot be threatened by a clone. I order to suceed, an alternate blockchain needs to propose something really different.
- The differences between SC and BTC are not monetary differences, but instead technical differences of the protocol (difficulty retargetting, time interval between blocks), and modifications of the client, that are wrongly presented as differences of the currency (encryption, buttons). On the monetary side, BTC and SC are exactly the same thing, because they both offer a currency that has a limited supply. In other words, solidcoin is just another Bitcoin clone.
- If another blockchain posed a real threat to the value of Bitcoin, it would be possible to update Bitcoin, as the OP suggests. Such an update is technically trivial, but it needs to be accepted by a majority of miners. If the threat was real, I am sure that such a majority would be quickly found. At this point, however, I do not see this happening. The protocol differences implemented in SC do not provide a real advantage. Developers seem to agree that a 3-minutes interval between confirmations poses security problems, especially in a large network.
- Solidcoin's market cap is currently neglectible compared to Bitcoin. I do not think that this will ever change. Solidcoin's network might stay alive for some time, but that does not mean that its value will take any significance.
- There is no evidence for a real economy sustaining solidcoin's value. The merchants that have decided to "accept solidcoin" were bought with bounties. So much for their objectivity.
- Solidcoin's "early adopters" (I am talking of people who buy solidcoins) are speculators who might dream that solidcoin will experience the same value increase as bitcoin. This is the only thing that sustains solidcoin's value, because there's no economy there. Unfortunately, this will not happen. Again, it could happen only if bitcoin did not exist :-) History happens only once.

so, if you are planning to invest some money in solidcoin, think again. it is a zero-sum game. In order for you to win, someone has to lose.
OTOH, if you are a miner looking for profitability, just be rational and go for it, but do not hold your solidcoins too long or you will be burnt :-)

[Piper67]

About the only new block chain and cryptocurrency I can foresee any success for in the future, other than Bitcoin, will be an inflationary one backed by BTC. This will serve the dual purpose of having a decentralised currency with a predictable inflation rate - therefore putting to rest the "deflationary spiral" arguments - and a chance at becoming really popular because, being backed by Bitcoin, it won't be seen as competing against it.

[zebedee]

The amount of time is irrelevant, it is the amount of blocks you know have made it onto the block chain that gives you confidence.  Six confirmations is six confirmations, weather it took an hour or fifteen minutes.  After six confirmations there is very little risk that your transaction is going to end up on an orphan block, and as long as difficulty is in balance you are not going to have blocks solved every few seconds.

Yeah Bansal != Satoshi.

[bansal]

The amount of time is irrelevant, it is the amount of blocks you know have made it onto the block chain that gives you confidence.  Six confirmations is six confirmations, weather it took an hour or fifteen minutes.  After six confirmations there is very little risk that your transaction is going to end up on an orphan block, and as long as difficulty is in balance you are not going to have blocks solved every few seconds.

Yeah Bansal != Satoshi.

Hey this guy can code!  And how do you know?

[jav]

Bottom line is this, ten minutes is too long.  If you want to just keep trading these things among yourselves fine, if you want these to actually be widely used in the real world this problem has to be solved.  And no I'm not letting anyone walk off with my stuff with zero confirmations, or even just one confirmation.  And my customer isn't going to sit there for an hour to wait to leave with the stuff he's trying to buy.  Bitcoin with 10 minute confirmations is a niche currency for certain internet transactions, at best.

Are you just stating this as a general problem or are you suggesting that SolidCoin solves/helps with this problem? SolidCoin has 3 minutes between blocks, right? I don't see how that makes much of a difference. The thing is, you still need to take variance into account. Sure, on average you have a block every 3 minutes. But that means that for a 95 % chance of finding a block, you need to wait about 9 minutes (math here: http://www.wolframalpha.com/input/?i=-log%281-0.95%29%2F%281%2F3minutes%29 ). Which in turn means, that in 5 % of the cases you actually have to wait even longer than 9 minutes. So what have we really gained?

Sure, there might be situations where "wait for a little while" (SolidCoin) is acceptable, whereas "wait for quite some time" (Bitcoin) would not be. But I can't think of that many situations to see this as much of an advantage.

[JohnDoe]

I believe both Bitcoin and its clones will fail to reach mainstream acceptance because they have a serious economic flaw, which is that deflation severely hurts investment and borrowing. I think a deflationary currency with demurrage will have better luck at stimulating economic growth.

[bansal]

Bottom line is this, ten minutes is too long.  If you want to just keep trading these things among yourselves fine, if you want these to actually be widely used in the real world this problem has to be solved.  And no I'm not letting anyone walk off with my stuff with zero confirmations, or even just one confirmation.  And my customer isn't going to sit there for an hour to wait to leave with the stuff he's trying to buy.  Bitcoin with 10 minute confirmations is a niche currency for certain internet transactions, at best.

Are you just stating this as a general problem or are you suggesting that SolidCoin solves/helps with this problem? SolidCoin has 3 minutes between blocks, right? I don't see how that makes much of a difference. The thing is, you still need to take variance into account. Sure, on average you have a block every 3 minutes. But that means that for a 95 % chance of finding a block, you need to wait about 9 minutes (math here: http://www.wolframalpha.com/input/?i=-log%281-0.95%29%2F%281%2F3minutes%29 ). Which in turn means, that in 5 % of the cases you actually have to wait even longer than 9 minutes. So what have we really gained?

Sure, there might be situations where "wait for a little while" (SolidCoin) is acceptable whereas "wait for quite some time" (Bitcoin) would not be. But I can't think of that many situations to see this as much of an advantage.

It's a general problem.  I give credit to CoinHunter for trying to solve the problem at least, but I'm not sure it's the right/best solution.  It's just something the community needs to think about.  I would love to see this solved in Bitcoin rather than a fork, but if it takes a fork then so be it.  At the very least the forks are sparking some debate and possibly leading to improvements.

If you're walking into a store you're going to expect verification in less than a minute, that's what you get with credit cards or cash.  Ten minutes plus isn't going to work.  If I take an order over the phone, pretty much same deal.  The only situation it would work is where I take an order over the internet and ship it the next day.  I have even taken orders over the internet late in the day and quickly packed an order and dropped it off at UPS to try to provide good service, that would even be tough to do.

[hugolp]

I believe both Bitcoin and its clones will fail to reach mainstream acceptance because they have a serious economic flaw, which is that deflation severely hurts investment and borrowing. I think a deflationary currency with demurrage will have better luck at stimulating economic growth.

Yes! Housing bubbles for the win!

[JohnDoe]

Yes! Housing bubbles for the win!

I didn't expect such a stupid knee-jerk reaction from you. How do you propose such a bubble would occur in a currency with finite money supply and demurrage?

[bansal]

I believe both Bitcoin and its clones will fail to reach mainstream acceptance because they have a serious economic flaw, which is that deflation severely hurts investment and borrowing. I think a deflationary currency with demurrage will have better luck at stimulating economic growth.

There is no such thing as a deflationary crypto-currency, anyone can create more of them.  I don't see people going for a currency with demurrage realistically, I can see the deer in the headlights look already trying to explain that to the average person.

[Maged]

If you're walking into a store you're going to expect verification in less than a minute, that's what you get with credit cards or cash.

While you are correct with cash, you are not with credit cards. Credit cards take at least a day to actually confirm. The "instant" verification that credit cards do is no different from a 0/unconfirmed Bitcoin transaction.

[bansal]

If you're walking into a store you're going to expect verification in less than a minute, that's what you get with credit cards or cash.

While you are correct with cash, you are not with credit cards. Credit cards take at least a day to actually confirm. The "instant" verification that credit cards do is no different from a 0/unconfirmed Bitcoin transaction.

No it's not.  An authorization confirms that you have held the funds on the card.  After an authorization you do a capture to actually have the funds transferred, and then they will use ACH to transfer funds to your account, which takes a few days but that's just the time an ACH takes.  The settlement of all your transactions happens at the end of the day, but an authorization guarantees the funds are good.

[wndrbr3d]

I think what makes the alt currencies silly is their transparency in that they only exist because people are trying to get in "early" on something like bitcoin in an effort to make the same money that BTC early adopters did. Thus far, none of these alt currencies offer anything that bitcoin can't in the near future.

So basically you have a bunch of people who are driven by greed. I mean, might as well start investing in Testnet too, right? What's the conversion rate there? 

[Maged]

If you're walking into a store you're going to expect verification in less than a minute, that's what you get with credit cards or cash.

While you are correct with cash, you are not with credit cards. Credit cards take at least a day to actually confirm. The "instant" verification that credit cards do is no different from a 0/unconfirmed Bitcoin transaction.

No it's not.  An authorization confirms that you have held the funds on the card.  After an authorization you do a capture to actually have the funds transferred, and then they will use ACH to transfer funds to your account, which takes a few days but that's just the time an ACH takes.  The settlement of all your transactions happens at the end of the day, but an authorization guarantees the funds are good.

Fixed it for you:

"No it's not.  A Bitcoin transaction confirms that you have held the funds in your wallet.  After a Bitcoin transaction you wait for a block to include the transaction to actually have the funds transferred, and then it will start accruing confirmations, which takes a few hours but that's just the time a Bitcoin transaction takes.  The settlement of all your transactions happens when a block includes them, but a Bitcoin transaction guarantees the funds are good."

[bansal]

I think what makes the alt currencies silly is their transparency in that they only exist because people are trying to get in "early" on something like bitcoin in an effort to make the same money that BTC early adopters did. Thus far, none of these alt currencies offer anything that bitcoin can't in the near future.

So basically you have a bunch of people who are driven by greed. I mean, might as well start investing in Testnet too, right? What's the conversion rate there? 

Everyone is driven by greed, this argument gets a little tiresome.  All these forks tried something different to implement what they felt was an improvement over Bitcoin.  I agree that is many cases this wasn't much improvement at all, but if you are angry that someone is making money, who cares?  Let them make money, how is that hurting you?  If you think an alternate currency is no good tell us why, not just that you don't like the fact that someone besides you is making money.

[Syke]

ITT: people think mining 6 1-minute blocks in a row is as difficult as mining 6 10-hours blocks in a row

Unless I missed something, then that's correct, but only if you interpret it in a certain way.
With the same relative hashpower vs. the rest of the network, over the same # of blocks, chances of finding X blocks in a row are the same, doesn't matter if avg. time/block is 10 seconds or 10 days.
But... wouldn't a theoretical attacker care more about how much time it takes to get a successful double-spend instead of how many blocks?

Yup. Faster blocks mean more attempts can be made, and thus the less secure the chain is.

Either way you would have to put together 51% of the hashpower of the network to pull it off, I guess longer blocks could make the attack more inconvenient, but they would probably still do it if they had the capability.

51% just gives you a high probability of succeeding. 50% can succeed. As can 49%, 40%, 20%, etc., they just have lower chances of succeeding. If someone is intent on double-spending, they will attempt it more than once. Again, the faster the chain, the less secure.

[JohnDoe]

I believe both Bitcoin and its clones will fail to reach mainstream acceptance because they have a serious economic flaw, which is that deflation severely hurts investment and borrowing. I think a deflationary currency with demurrage will have better luck at stimulating economic growth.

There is no such thing as a deflationary crypto-currency, anyone can create more of them.  I don't see people going for a currency with demurrage realistically, I can see the deer in the headlights look already trying to explain that to the average person.

Creating clones of a currency doesn't make the original non-deflationary as they are not part of the same network.

The effect of demurrage on people's purchasing power is basically the same as inflation so I don't see why they wouldn't be able to accept it. Currencies with demurrage have already been successfully introduced by the way.

[bansal]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

[bansal]

Creating clones of a currency doesn't make the original non-deflationary as they are not part of the same network.

The effect of demurrage on people's purchasing power is basically the same as inflation so I don't see why they wouldn't be able to accept it. Currencies with demurrage have already been successfully introduced by the way.

People can start using the other network, and once supply of the original currency gets low there will be powerful incentive to do so.  We are starting to see that already to a certain extent with Bitcoin.  Nobody has studied the long term effects of demurrage.  Savings and loaning out savings are an important part of economic growth, demurrage provides a disincentive for this.  Also again the problem of the average person understanding this, and then wanting to pay just to hold on to their money.  I wish you guys luck, but I just don't see it happening.

[Lupus_Yonderboy]

My, such a strong opinion from an account 12 days old...which early adopter are you the sock puppet for, I wonder?

Awww you are plumming one of them fallacy devices, thats almost clever... I've followed Bitcoin for about a year including lurking on forums and IRCs, but I didn't get into it until recently. Instead of attacking the "sock puppet" try attacking the facts of my message  The OP is pimping SC and debasing BTC, he made a post that belongs with all the rest of the refuse in the Bitcoin Forum > Other > Alternate cryptocurrencies. Thats all.

I didn't see many facts. I did, however see a lot of hateful ranting in your post. The ones who have been most virulently attacking SC have more often than not been 'senior' and 'hero' members. Suddenly we have a new account with the same level of hate. Here I thought competing currencies was a good thing. Everybody seems to point to that when comparing BTC to USD. I am not sure why people cannot accept multiple cryptocurrencies existing together. Fear of a superior product, perhaps? If the alternate chains are so horrid, the market will take care of them and they will die off on their own, without ranting from others about how everyone using them is either an idiot or scammer.

Oh, and since you can only purchase SC with BTC or by mining, I do not follow how it dilutes the value of Bitcoin. If anything it would create a temporary demand for it as people would be exchanging their $ to BTC and then to SC.

I do agree OP could have been a bit more...tactful in his post, but he did ask about the future of Bitcoin.

[JohnDoe]

People can start using the other network, and once supply of the original currency gets low there will be powerful incentive to do so.  We are starting to see that already to a certain extent with Bitcoin. 

In this currency the available supply will always be close to 100% of the base because demurrage is taken from every address and given back to miners as part of the block reward. So money that got locked up due to lost private keys will slowly get back in circulation.

Nobody has studied the long term effects of demurrage.

This is true but it is also true for a currency like Bitcoin (before anyone says anything, no, the gold standard was never deflationary during its lifespan). It doesn't make the reasoning behind them any less meaningful.

  Savings and loaning out savings are an important part of economic growth, demurrage provides a disincentive for this.

What? Loaning out your savings is certainly encouraged by demurraged. If you just leave your money sitting in your wallet then you'll slowly lose it.

[bansal]

In this currency the available supply will always be close to 100% of the base because demurrage is taken from every address and given back to miners as part of the block reward. So money that got locked up due to lost private keys will slowly get back in circulation.

But someone will still create a new currency at some point to compete with it once your coins become valuable enough or too hard to mine, I wasn't really talking about lost coins.  The supply of coins from the new network would diminish the value of your coins.

  Savings and loaning out savings are an important part of economic growth, demurrage provides a disincentive for this.

What? Loaning out your savings is certainly encouraged by demurraged. If you just leave your money sitting in your wallet then you'll slowly lose it.

I should say savings is discouraged, which in turn would diminish lending since money to lend comes from savings.  Of course a bank would pay enough interest to cover fees on the savings, but I guess it would also raise interest rates.  Of course I doubt there would be any banks for your new currency for a good long while, if ever.  Basically holding your money is heavily discouraged, I'm not sure if this is always a desirable result.  Maybe you're right in that there is a benefit to it, but this hasn't been proven.  It all comes down to again convincing people to jump on board, which is hard enough to do with crypto-currency without having the added complexity of demurrage.

[wndrbr3d]

Everyone is driven by greed, this argument gets a little tiresome.  All these forks tried something different to implement what they felt was an improvement over Bitcoin.  I agree that is many cases this wasn't much improvement at all, but if you are angry that someone is making money, who cares?  Let them make money, how is that hurting you?  If you think an alternate currency is no good tell us why, not just that you don't like the fact that someone besides you is making money.

I never said there was anything wrong with their being greedy, but let's call a spade a spade and not try and hide it under the guise that these new block chains are breaking new technical ground.

That's the part that bothers me is that these technical "enhancements" spread indirect misinformation about Bitcoin itself.

Honestly, these new block chains could easily be likened to a typical pyramid scheme. Where people who get in early are in a good position to make money, but only if they can get more people to buy into the idea. Bitcoin is the same way, but at least it has an actual 1st tier market behind it. These other block chains are only trading against BTC, which to me shows there's little interest in true investment from people sitting on fiat.

[Syke]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

[jackjack]

ITT: people think mining 6 1-minute blocks in a row is as difficult as mining 6 10-hours blocks in a row

Unless I missed something, then that's correct, but only if you interpret it in a certain way.
With the same relative hashpower vs. the rest of the network, over the same # of blocks, chances of finding X blocks in a row are the same, doesn't matter if avg. time/block is 10 seconds or 10 days.
But... wouldn't a theoretical attacker care more about how much time it takes to get a successful double-spend instead of how many blocks?

Yup. Faster blocks mean more attempts can be made, and thus the less secure the chain is.

That exactly what I meant

[bansal]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

[jackjack]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

[bansal]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

Yeah real useful response thanks.

[JohnDoe]

But someone will still create a new currency at some point to compete with it once your coins become valuable enough or too hard to mine, I wasn't really talking about lost coins.  The supply of coins from the new network would diminish the value of your coins.

Well sure, that can and will happen, but the new competing currency must first be superior to devalue the old currency, as the failures of Ixcoin and I0coin have demostrated. The primary purpose of this currency is as a means of exchange rather than a store of value anyway so a new superior currency would be embraced, not fought.

I should say savings is discouraged, which in turn would diminish lending since money to lend comes from savings.  

Saving as in "holding your money on your wallet" is discouraged, saving as in "trying to maintain your purchasing power somehow" is not. The only thing that changes is the way to save; instead of just holding it you buy assets like stocks, bonds, ETFs, commodities, etc.

@jackjack: Unable to refute like a man huh?

[dree12]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

*facepalm*

Unfortunately, it's correct that varience has nothing to do with it. In fact, varience is lower with shorter blocks because of the lower difficulty.

[wolftaur]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

Yeah real useful response thanks.

Here's a more useful one:

Variance means that even with less than 51% of the hashing power you have a chance, albeit a smaller one, to disrupt the chain. For example, a bunch of people freaked out some weeks ago because the Bitcoin chain managed to get... I think it was like 3 blocks in a 10 second period? People also often freak if there's the occasional hour between blocks, but this has happened MANY times without a drop in hashing power.

Think of it this way: Take, say, a d12 for roll playing, and assume you and several players are sitting at a table, and to "win" the game you have to roll a 1. The average chance of you rolling a 1 is going to be 1 in 12, but...

You could roll that 1 result twice in a row, or, you could get 24 rolls in a row... that come up with a different number. In a large enough sample set, with a truly balanced die to roll, it'll just about always be "even" among the different numbers, but if you're looking at just a few rolls in a row...

If you play many games with dice, cards, etc, it only takes a moment of pondering that before you can realize that if you were to roll that die 12 times, it's quite possible for you to _NOT_ get each number exactly one time.

Now imagine the block chain lottery as rolling a die with 115792089237316195423570985008687907853269984665640564039457584007913129639936 sides... (Someone correct me if I'm remembering wrong and it's not a 256 bit hash in use, please.)

[dree12]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

*facepalm*

Yeah real useful response thanks.

Here's a more useful one:

Variance means that even with less than 51% of the hashing power you have a chance, albeit a smaller one, to disrupt the chain. For example, a bunch of people freaked out some weeks ago because the Bitcoin chain managed to get... I think it was like 3 blocks in a 10 second period? People also often freak if there's the occasional hour between blocks, but this has happened MANY times without a drop in hashing power.

Think of it this way: Take, say, a d12 for roll playing, and assume you and several players are sitting at a table, and to "win" the game you have to roll a 1. The average chance of you rolling a 1 is going to be 1 in 12, but...

You could roll that 1 result twice in a row, or, you could get 24 rolls in a row... that come up with a different number. In a large enough sample set, with a truly balanced die to roll, it'll just about always be "even" among the different numbers, but if you're looking at just a few rolls in a row...

If you play many games with dice, cards, etc, it only takes a moment of pondering that before you can realize that if you were to roll that die 12 times, it's quite possible for you to _NOT_ get each number exactly one time.

Now imagine the block chain lottery as rolling a die with 115792089237316195423570985008687907853269984665640564039457584007913129639936 sides... (Someone correct me if I'm remembering wrong and it's not a 256 bit hash in use, please.)

You might be correct that varience has a near-zero effect for lower-confirmation transactions, but still remember that shorter block times give less varience. So someone with 49% has a near-zero, close enough to zero, chance. The actual probability of getting 7 blocks in a row is less than 0.6% for a 49% holder. The actual probability is smaller, because you aren't rolling an infinite amount of dies.

[wolftaur]

You might be correct that varience has a near-zero effect for lower-confirmation transactions, but still remember that shorter block times give less varience. So someone with 49% has a near-zero, close enough to zero, chance. The actual probability of getting 7 blocks in a row is less than 0.6% for a 49% holder. The actual probability is smaller, because you aren't rolling an infinite amount of dies.

Someone computed what the actual odds were. Even for a 60% holder it was a small fraction of a percent. But it wasn't zero for below-51%.

So it isn't that you can't create a longer chain, it's that it's extremely unlikely any attempt to do so would succeed, and even if you have 75% of the power the variance is much higher than I think you're assuming: look at the luck charts of large pools if you want proof of that.

[dree12]

You might be correct that varience has a near-zero effect for lower-confirmation transactions, but still remember that shorter block times give less varience. So someone with 49% has a near-zero, close enough to zero, chance. The actual probability of getting 7 blocks in a row is less than 0.6% for a 49% holder. The actual probability is smaller, because you aren't rolling an infinite amount of dies.

Someone computed what the actual odds were. Even for a 60% holder it was a small fraction of a percent. But it wasn't zero for below-51%.

So it isn't that you can't create a longer chain, it's that it's extremely unlikely any attempt to do so would succeed, and even if you have 75% of the power the variance is much higher than I think you're assuming: look at the luck charts of large pools if you want proof of that.

A 60% holder can, however, use a stronger attack - simply fork the entire blockchain. A 49% holder, trying to do that, will not be able to sustain it for long. Varience is higher when difficulty is higher, however, so this is hardly an argument FOR bitcoin.

[bansal]

As can 49%, 40%, 20%, etc., they just have zero chance of succeeding.

Fixed it for ya

You seem to misunderstand now cryptocurrencies work. Read over http://en.wikipedia.org/wiki/Variance and come back when you understand it.

Variance has nothing to do with it.  You can't create the longest chain if you have less hashing power than the rest of the network.  It's one of the most basic concepts of the current design of crypto-currencies actually.

childish attempt at humor removed

Yeah real useful response thanks.

Here's a more useful one:

Variance means that even with less than 51% of the hashing power you have a chance, albeit a smaller one, to disrupt the chain. For example, a bunch of people freaked out some weeks ago because the Bitcoin chain managed to get... I think it was like 3 blocks in a 10 second period? People also often freak if there's the occasional hour between blocks, but this has happened MANY times without a drop in hashing power.

Think of it this way: Take, say, a d12 for roll playing, and assume you and several players are sitting at a table, and to "win" the game you have to roll a 1. The average chance of you rolling a 1 is going to be 1 in 12, but...

You could roll that 1 result twice in a row, or, you could get 24 rolls in a row... that come up with a different number. In a large enough sample set, with a truly balanced die to roll, it'll just about always be "even" among the different numbers, but if you're looking at just a few rolls in a row...

If you play many games with dice, cards, etc, it only takes a moment of pondering that before you can realize that if you were to roll that die 12 times, it's quite possible for you to _NOT_ get each number exactly one time.

Now imagine the block chain lottery as rolling a die with 115792089237316195423570985008687907853269984665640564039457584007913129639936 sides... (Someone correct me if I'm remembering wrong and it's not a 256 bit hash in use, please.)

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

[wolftaur]

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

I should have really trimmed out that quote chain...

I'm not claiming 20% is a potential attack, that was someone else. I just wanted to provide a USEFUL response to your statement instead of the X-Files face palm someone else gave.

[Syke]

You might be correct that varience has a near-zero effect for lower-confirmation transactions, but still remember that shorter block times give less varience.

Shorter block times means the attacker can make more attempts.

So someone with 49% has a near-zero, close enough to zero, chance. The actual probability of getting 7 blocks in a row is less than 0.6% for a 49% holder. The actual probability is smaller, because you aren't rolling an infinite amount of dies.

Think it can't happen? I had to search long and hard to find a real example. I had to go all the way back to...today.

Bitcoin network right now: 12.224 Thash/s
Deepbit network right now: 5282 Gh/s

How many block can deepbit get in a row with 43% hashpower? Blocks 143334 - 143341 are deepbit blocks. Deepbit just solved 8 blocks in a row with only 43% hashpower. I'm sure if someone analyzed the blockchain we'd find even longer runs of deepbit-only blocks.

Variance = someone with <51% can successfully attack the blockchain.
Faster block target speeds = more chances to attack = weaker security.

[bansal]

Well sure, that can and will happen, but the new competing currency must first be superior to devalue the old currency, as the failures of Ixcoin and I0coin have demostrated. The primary purpose of this currency is as a means of exchange rather than a store of value anyway so a new superior currency would be embraced, not fought.

Well the point is that there is no security in the fact that your original currency is "limited".  If a new superior currency comes along, your original coins will be worthless, that's pretty deflationary.

Saving as in "holding your money on your wallet" is discouraged, saving as in "trying to maintain your purchasing power somehow" is not. The only thing that changes is the way to save; instead of just holding it you buy assets like stocks, bonds, ETFs, commodities, etc.

True, and if you guys are able to have stocks, bonds, etc. available when you launch I'll be impressed and buy some coins  .  The general concept is interesting, I just feel this works better in the short term weak economy environment, it would definitely help our current economic situation.  The question is would it work long term, and what effect would all that spending have in a good economy?  What are the long term consequences.  I don't know.

[bansal]

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

I should have really trimmed out that quote chain...

I'm not claiming 20% is a potential attack, that was someone else. I just wanted to provide a USEFUL response to your statement instead of the X-Files face palm someone else gave.

Sorry my bad I was responding to you as if your were the facepalm guy.

[Syke]

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

Not useful? How about you post the first 13 digits of your 16 digit credit card number. That means I'd have a 1 in 1000 chance (.1%) to guess your credit card number. Care to try me?

[bansal]

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

Not useful? How about you post the first 13 digits of your 16 digit credit card number. That means I'd have a 1 in 1000 chance (.1%) to guess your credit card number. Care to try me?

Sorry I don't use credit cards only bitcoins...  Why don't you go ahead and attack the chain with whatever GPUs you have, you got a shot after all...

[wolftaur]

Ok I shouldn't say it's zero, but negligible, not much higher than zero.  I especially objected to you using 20%, etc.  You're talking a fraction of a percent, so it's actually not all that useful to talk about.  Nice try though.

Not useful? How about you post the first 13 digits of your 16 digit credit card number. That means I'd have a 1 in 1000 chance (.1%) to guess your credit card number. Care to try me?
[/quote]

4120 1337 8008!

[dree12]

You might be correct that varience has a near-zero effect for lower-confirmation transactions, but still remember that shorter block times give less varience.

Shorter block times means the attacker can make more attempts.

So someone with 49% has a near-zero, close enough to zero, chance. The actual probability of getting 7 blocks in a row is less than 0.6% for a 49% holder. The actual probability is smaller, because you aren't rolling an infinite amount of dies.

Think it can't happen? I had to search long and hard to find a real example. I had to go all the way back to...today.

Bitcoin network right now: 12.224 Thash/s
Deepbit network right now: 5282 Gh/s

How many block can deepbit get in a row with 43% hashpower? Blocks 143334 - 143341 are deepbit blocks. Deepbit just solved 8 blocks in a row with only 43% hashpower. I'm sure if someone analyzed the blockchain we'd find even longer runs of deepbit-only blocks.

Variance = someone with <51% can successfully attack the blockchain.
Faster block target speeds = more chances to attack = weaker security.

And? This means deepbit must be CONSTANTLY trying to double-spend. It would be wasting a lot of money doing that! Faster block target speeds = less varience, and more oppertunities also means more money lost for the attacker. It's a waste of time faking blocks - better just fork the blockchain (which is a problem for faster-time blocks, since more natural forks for the attacker to "cancer node" exploit are possible.)

[MajorMiner]

We should have an "Obvious attempts at false market rumors" subforum and move these posts there.

Mod +1 Insightful