Ethereum: 2nd gen cryptocurrency with contract programming, "dagger" hashing

[Lloydie]

To me, POW is such a waste of resources, we are spending millions on resources to mine BTC, it doesn't seem like the direction we should continue heading as the world struggles with limited resources.  The amount of power wasted mining BTC is absolutely atrocious.  Regarding your concerns with POS, read up on Transparent Forging.  POW is completely susceptible to corporate control, look at the mining pools, you are close to 51% with Ghash.io alone.  Meanwhile I'm forging Nxt right now on my RasPi.

Power line wastage is even more atrocious. Payment servers of credit card companies also use atrocious amounts of energy. Any reliable decentralised payments system will need power to function. POS seems like a step backwards in terms of centralisation.

[Lloydie]

Pretty messed up seeing people discussing Ethereum on here from the point of view of "coin and profit," instead of "platform and possibilities." I guess it's mostly the same newbies that still see Bitcoin as just a coin/commodity to invest in, and not a financial platform to develop on top of. Personally, I would invest 20BTC in things like BitMessage and OpenTransactions, despite their "coins" themselves not having any value, just because the possibilities they offer as platforms are enormous! I will be investing in this as well. Not because of the possible return on the coins (though I suspect that will still be substantial), and not even because of the initially proposed technology (which, as someone pointed out, is similar to some other coins out there), but because of the team involved. Ask any top VC out there. They don't invest in ideas, they invest in people. It's also why Bitcoin will always be top coin, despite other altcoins constantly coming out with little fixes here and there. The quality, and quantity, of people working on it is way superior to any other alternatives.

To ignore coin and profit is to deny reality. Communism is a failed experiment. We laud your generosity to invest on possibilities and your wherewithal to invest 20 Btc on visionary projects. Thank you. However, your noble actions are somewhat diluted by your criticism of others. Do I see Bill Gates moaning about how others are so short sighted? No, I see him going out there putting up a good fight because he is wealthy. If Ethereum finds few investors, we will not be wondering why. We know the economic foundations were not calibrated to reward early investors. That is a fact. Discussing it does not make one greedy, immoral or otherwise. It is an open admission of financial reality. I wish Ethereum all success.

[msin]

To me, POW is such a waste of resources, we are spending millions on resources to mine BTC, it doesn't seem like the direction we should continue heading as the world struggles with limited resources.  The amount of power wasted mining BTC is absolutely atrocious.  Regarding your concerns with POS, read up on Transparent Forging.  POW is completely susceptible to corporate control, look at the mining pools, you are close to 51% with Ghash.io alone.  Meanwhile I'm forging Nxt right now on my RasPi.

Power line wastage is even more atrocious. Payment servers of credit card companies also use atrocious amounts of energy. Any reliable decentralised payments system will need power to function. POS seems like a step backwards in terms of centralisation.

Yes, that is the point, we don't like centralization at Nxt.

[Lloydie]

Ethereum Thoughts and Questions
Rassah, I agree with you that the people behind ethereum are the reason I have spent a few days looking at this very hard.  I will be at the Miami conference, and I will consider investing if my questions have reasonable answers.  Illegal contracts are particularly concerning to me.

NECESSITY OF A NEW BLOCKCHAIN
The whitepaper states that colored coins inherit the same limitations as the bitcoin protocol.  Metacoins do not, but they cannot be truly secure without having a copy of the blockchain.  How big of a problem is this?  Hasn't the Electrum model worked for Bitcoin?  Is there a big issue with just querying a bunch of supernodes to see if they all give the same result?  Is it necessary to have absolute security with every contract, or only very high value transactions?  Is it correct that metacoin clients won't need the first 14gb of the blockchain?

BITCOIN BLOCKCHAIN SIZE
Bitcoin Magazine's analysis showed that since storage capacity and internet bandwidth follow Moore's law, the blockchain size will not be a problem to store on phones.  How many years from now should we predict that the blockchain size will become irrelevant?  If the blockchain size were irrelevant, would that remove the need for ethereum?  How much demand is there for blockchain contracts at this time, and how fast should we expect demand to accelerate?

ETHEREUM BLOCKCHAIN
How fast should we estimate the ethereum blockchain size will grow?  What will be the effects of ethereum blockchain size growth several orders of magnitude greater than Bitcoin?  Will this lead to more mining centralisation?
TURING COMPLETENESS
Is it reasonable to think the client can be sandboxed?  What will be the effects of these, since the protocol is Turing complete:  viruses, malware, adware, keyloggers, scam contracts, wallet stealers

ILLEGAL CONTRACTS
What will be the effects of illegal contracts? An assassination market, for example?  Will the Silk Road be able to run on ethereum?  Will a database of child porn be able to be stored?  If there is child porn stored on the blockchain that is easily accessible, will it be legal to store the blockchain in any country?  What will be the effects of running all the clients over Tor by default?  Can a 60s block time with huge blocks work over Tor?

SATOSHI'S ARGUMENTS
In 2010, satoshi succesfully argued against including Namecoin into bitcoin, suggesting merge-mining instead.

     "Piling every proof-of-work quorum system in the world into one dataset doesn't scale.
     Bitcoin and BitDNS can be used separately.  Users shouldn't have to download all of both to use one or the other.  BitDNS users may not want to download everything the next several unrelated networks decide to pile in either.
     The networks need to have separate fates.  BitDNS users might be completely liberal about adding any large data features since relatively few domain registrars are needed, while Bitcoin users might get increasingly tyrannical about limiting the size of the chain so it's easy for lots of users and small devices."  -- Satoshi

You can view the rest of his arguments in the thread here:
https://bitcointalk.org/index.php?topic=1790.0;all

DEVELOPER COMMENTS
I have not seen any core bitcoin developers comment on ethereum.   Is there somewhere besides the reddit and the thread on bitcointalk about it?
I am not very technical, so sorry if some of my questions are invalid or stated incorrectly.  I also posted this on reddit.com/r/ethereum since it seems like Vitalik responds there more often.

Illegal contracts and illegal activities will require political intervention because society itself defines those limits. This implies some kind of voting system is required.

The fact that Satoshi was reluctant to build something relatively straightforward like namecoin/bitdns into bitcoin likely means Ethereum will face some very challenging scaling obstacles in the short term because Ethereum is trying to potentially run all protocols at the same time. I hope I'm wrong but Satoshi is very wise.

[porqupine]

Hey all, Vitalik Buterin, founder here.

Second, and more importantly, while I do understand the sentiment that cryptocurrency algorithms should be neutral and privilege no specific parties I would like to contest the claim that the concept of neutrality in the context of issuance is both (1) possible and (2) desirable. When you're putting BTC into the Ethereum fundraiser, you're financially empowering and incentivizing an organization that has produced substantial real results already, and is pledged to developing the Ethereum protocol. When you're putting BTC into a proof of burn, through the deflation effect you're effectively donating your money to large BTC early adopters.

It is true that the side-effect of ProofofBurn is to increase the value of BTC, but on the scale on which ProofofBurn occurs the change in BTC value is nearly marginal: for example 1000-10000 bitcoins out of 12,000,000+ in circulation represents a .000083% - .00083% increase in value per coin. I think rather the point behind it is as a barrier from easy entry, and while it is true that someone may burn a very large sum, unlike with fund-raisers there is no guarantee on the return of that money and thus generally serves as a barrier from monopolistic capitalization.

With regard to the "founders get some for free" factor, what people need to understand is that every currency, including BTC, QRK, MSC and Ripple, so far has privileged its founders in some fashion. The only difference is that in some cases the privilege is more subtle than in others. With Bitcoin, Satoshi got his 0.25X by mining it for a year when nobody else had heard about Bitcoin yet. With MSC, JR got his by running a fundraiser relatively quietly on Bitcointalk and then targeting media attention only after it was over. We are not seeking any avantage through obscurity; we will be targeting the limelight from before the first day that the fundraiser launches.

The comparison to Satoshi is unfair, since the obscurity was at least mostly unintentional and though he may have held certain notions as to the Bitcoins future value, there was no real way to know that there would be such value (main-stream adaptation) to Bitcoin and not some other protocol.

Now, to clarify some facts:

* The founders will not be getting any BTC from the pool. We may get some not particularly high wages to live on, but our financial interest in the project is heavily concentrated in the value of our premine share.
* The founders are not getting 25%. The founders are getting 12.5% after one year when those funds actually become accessible, and the percentage will rapidly dwindle due to supply expansion, becoming 6.25% after 5 years. I'm sure that there exist five people today who together own 6.25% of all bitcoins, and Satoshi alone likely has that much. In Mastercoin, three people have 25%.

According to the numbers specified on your website - founders get .25x of x fundraised funds, and the foundation gets .25x of fundraised funds. Which would make the premine supply 1.5X and thus gives .5xXor 33% premine to the founders - plus the equivalent of all fund raised funds in btc.
Suppose the developers participate in the fund raiser, they donate some P % of X total btc. They therefore get P + .5P in funds, and all of their BTC back from the foundation. It makes exploitation very clearly possible.
And since 33% of initial premine + The entire amount of btc is already a such a sum that can only be explained as Greed - I don't see on what grounds you can convince anyone that you aren't going to exploit the system further.

If ethereum came to even 10% of BTC market cap, just 2-4% should be more than plenty for all developmental and foundational purposes.

[ThePatient]

http://www.reddit.com/r/ethereum/comments/1vw0tx/ethereum_fundraiser_terms_updated_3_years_founder/

[JMG]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

[Seth Otterstad]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

The fact that people like this are investing in anything at all blows my mind.  It makes no difference how many ether you get for your bitcoin.  What matters is your share of the initial investment pool.

[lophie]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

what ipo ended already? where?

[gbomb944]

Love the raspberry pi thing. Going to make one myself.

[hyunsookmom]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

What are you talking about, source?

[shoichikun808]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

What are you talking about, source?

think he feels that ether is the old term of "ether"

but according to the reddit

"It's not a price increase. It's a redenomination. We are renaming the ether the wookiedoo, we are saying it's 20000 wookiedoo for 1 BTC, and we are introducing a new unit called an "ether" where 1 ether = 10 wookiedoo. Everyone gets 10x less "ether", INCLUDING the premine."

ether is now called the wookiedoo... 

[marcoslopez]

Pretty messed up seeing people discussing Ethereum on here from the point of view of "coin and profit," instead of "platform and possibilities." I guess it's mostly the same newbies that still see Bitcoin as just a coin/commodity to invest in, and not a financial platform to develop on top of. Personally, I would invest 20BTC in things like BitMessage and OpenTransactions, despite their "coins" themselves not having any value, just because the possibilities they offer as platforms are enormous! I will be investing in this as well. Not because of the possible return on the coins (though I suspect that will still be substantial), and not even because of the initially proposed technology (which, as someone pointed out, is similar to some other coins out there), but because of the team involved. Ask any top VC out there. They don't invest in ideas, they invest in people. It's also why Bitcoin will always be top coin, despite other altcoins constantly coming out with little fixes here and there. The quality, and quantity, of people working on it is way superior to any other alternatives.

<rant>
As for PoS, I really hope Ethereum doesn't take that route. PoW "decentralizes" the act of securing the currency from the currency itself. With PoW, I have a choice to either invest in the currency itself by buying it directly, OR invest in securing the currency by using it to buy mining hardware. There is also absolutely nothing to prevent a new miner from entering and competing with others, regardless of how many coins others hold. As a wealthy coin holder, I can't prevent a PoW miner from coming in and continuing to enforce rules on how I can spend my coins. The most I can do is spend some of my coins to buy some hardware and join him.
PoW I think you meant POS, on the other hand, incentivises, and in fact directs, the flow of money to one or few people, since you invest in "mining" by holding the coins themselves, and continue to increase your wealth by having those same coins collect even more coins. Threat of 51% in PoW is quickly resolved by having miners switch pools and redistribute themselves. Threat of a 51% in PoS can't be fixed by having mining wealth redistributed. Worst case end-game scenario in PoS is wealthy PoS miners continuing to accumulate wealth until they get a majority of the stake, while allowing users to become more and more dependent on their PoS coins, then the wealthy few pool their resources together, create a single, completely controling PoS stake, and change the coin to do whatever they want, including causing it to inflate. If you think PoS owners will be incentivized not to inflate away their wealth, think again. Central Banks around the world are PoS systems, and they do just that, printing more and more to buy up more and more assets, while letting those they sell their inflating money to pay for the inflation.
</rant>

To me, POW is such a waste of resources, we are spending millions on resources to mine BTC, it doesn't seem like the direction we should continue heading as the world struggles with limited resources.  The amount of power wasted mining BTC is absolutely atrocious.  Regarding your concerns with POS, read up on Transparent Forging.  POW is completely susceptible to corporate control, look at the mining pools, you are close to 51% with Ghash.io alone.  Meanwhile I'm forging Nxt right now on my RasPi.

+10

[canth]

The price of ether just shot up to 10x?  

it was 10000 ether per BTC but now 1000 ether per BTC...

what ipo ended already? where?

1) The IPO hasn't even begun yet.
2) The initial price isn't important since the number of Ether issued to founders, investors and miners is all a proportional distribution.

[dewdeded]

Re.......d.

[langkeming]

I am interested and curious.
also feel it some mysterious.
hope to be surprised.

[hyunsookmom]

I don't know why POS has such a bad reputation. I think founders hsould only recieve a small percentage like 5-10% and investors should be given the chance to invest on a pre determined scale like 1-10BTC have the IPO for at least 1 month so anyone interested can be involved and then let the chips fall where they will. I don't see anything unfair about it...How they have been done have been unfair, ie ending an IPO too quickly or founders getting too much percentage. If you keep it open then its actually completely fair and so early investors take the risk that their earlier entry might be diluted by the masses or not. You don't need to set an early price, just break up the genesis block from the investors.

Make Etherium a pure POS and do it properly then who can complain? Its a win win for everyone. Mining is stupid...We mine minerals from the ground cause we have to, not by choice....

[Brilliantrocket]

I'm thinking about investing into Wookiedoo, but I have to wonder, would putting my money into mining hardware be more effective? Or would the best strategy be to split the investment between IPO and hardware? Also, to confirm, this revaluation of the IPO means than 10x less ether ( than under the old IPO value) will ever be created?

[TruckStyling]

tl;dr

How do I mine this bitch?

[swartzfeger]

tl;dr

How do I mine this bitch?

http://www.ursium.com/install-ethereum-osx-mining/

Windows instructions are in the comments.

I installed it on my Mac (10.9), and it works, albeit it's a test and not really mining anything.