[ANALYSIS] Altcoin Investing

[klee]

NXT - Protoshares switched in panic from PoW to PoS when they saw it.
But you prefer not to mention it right? Go figure...

[Zzzack]

NXT - Protoshares switched in panic from PoW to PoS when they saw it.
But you prefer not to mention it right? Go figure...

Isn't NXT a centralized scam though?

[digitalindustry]

NXT - Protoshares switched in panic from PoW to PoS when they saw it.
But you prefer not to mention it right? Go figure...

Isn't NXT a centralized scam though?

from an economic stand point PoS is a very touchy issue, I'm not sure I'd be brave enough to say i could design it correctly .

the EQ reward from Quark ensures that new issuance has a chance to always go to new people = new distribution .

[r3wt]

digital industry talking out his b-hole again 

[Entengro]

Here is an argument I found against Protoshares, which has a unsupported method of a prediction market.  


BitShares is not a prediction market, nor could it support one, as it has numerous practical and theoretical problems.

BitShares is a possible future cryptocurrency which allows users to create collateralized debt- instruments called BitAssets. These BitAssets are automatically re-priced (and even liquidated via margin call) based on their mark-to-market value, as determined solely by the price implied by the most-recent BitAsset-creation. The author claims that arbitrageurs will take advantage of differences between the BitPrice and the True Price and therefore price the asset correctly, and supports this claim by arguing that users are trading in a prediction market, and prediction markets are accurate sources of prices.
The claim that users are trading in a prediction market is false, as is the claim that there are ‘arbitrageurs’ at all. In an ‘index prediction market’, shares are repurchased at the price of an index, for example one share of “Hillary2016ElectoralCollege” may be ultimately repurchased for $255/share, if Hillary Clinton managed 255 Electoral College votes in the 2016 election. The magic of prediction markets is that the Future Payout = Future Repurchase – Today’s Market Price, meaning that traders who perceive a positive expected future payout (ie an incorrect price) can profit by trading on and revealing that information (changing the price). In contrast, on November 9th, 2016, after the votes are counted, the world of BitShares will experience no change in state, no payout at all (!) and the “Hillary2016ElectoralCollege” shares will lack even speculative value. They may go up, down, or sideways without bound.
In fact, although the author claims to be a “self-taught Austrian Economist”, the entire microeconomic foundation of BitShares is incorrect. Fundamentally, BitShares assumes that prices are driven by arbitrageurs, when in fact they are driven by users. Arbitrageurs merely perform the simple service of aggregating and cancelling different price offerings, which prevents users from being ripped off. Speculators absorb and transfer risk, brokers call in the order, and janitors cleans the trading floor to prevent slippage. It is not the employees, but the users, who set prices by expressing supply and demand preferences (While short episodes of speculator-control exist, they are defined by their terminal insanity and a subsequent correction to the user-controlled price level). If the market offers a price which is “too low”, such as a car for $5, people will
buy them to use: to drive, to enjoy the latest car tech, to avoid breakdowns, for their children, or simply because $5 is less than gasoline or oil changes. The homeless could even live in a $5 car. If the market set the price of cars to $5,000,000, people would sell them to use that money to buy other things to use. In BitShares, there is no use, only speculation, and so prices can move without bound.
Even if the BitShares idea were partially valid, the scourge of risk, and well-known effects of Asymmetric Information would iteratively drag the price of all BitAssets to zero, in a phenomenon called ‘The Market for Lemons’. The margin call system only increases the fragility of this mysterious experiment, such that the richest or craziest agents could create and profit from immensely volatile price swings.

[juju]

Thanks for sharing your advice

[FandangledGizmo]

Despite being disturbed about some of the pre-mine issues MemoryCoin had, only because it makes it hard to market to friends and others.
Ultimately though it's still far more fair than the way Quark/Next were distributed.

The commitment it makes to decentralised mining and the ability to vote off compromised developers at a later stage are great, 2 definite's the Bitcoin Beating coin will have. So I did actually buy some yesterday

My question is what is the average transaction time? For a transaction that you can be sure is fully confirmed.

[bytemaster]

Here is an argument I found against Protoshares, which has a unsupported method of a prediction market.  


BitShares is not a prediction market, nor could it support one, as it has numerous practical and theoretical problems.

BitShares is a possible future cryptocurrency which allows users to create collateralized debt- instruments called BitAssets. These BitAssets are automatically re-priced (and even liquidated via margin call) based on their mark-to-market value, as determined solely by the price implied by the most-recent BitAsset-creation. The author claims that arbitrageurs will take advantage of differences between the BitPrice and the True Price and therefore price the asset correctly, and supports this claim by arguing that users are trading in a prediction market, and prediction markets are accurate sources of prices.
The claim that users are trading in a prediction market is false, as is the claim that there are ‘arbitrageurs’ at all. In an ‘index prediction market’, shares are repurchased at the price of an index, for example one share of “Hillary2016ElectoralCollege” may be ultimately repurchased for $255/share, if Hillary Clinton managed 255 Electoral College votes in the 2016 election. The magic of prediction markets is that the Future Payout = Future Repurchase – Today’s Market Price, meaning that traders who perceive a positive expected future payout (ie an incorrect price) can profit by trading on and revealing that information (changing the price). In contrast, on November 9th, 2016, after the votes are counted, the world of BitShares will experience no change in state, no payout at all (!) and the “Hillary2016ElectoralCollege” shares will lack even speculative value. They may go up, down, or sideways without bound.
In fact, although the author claims to be a “self-taught Austrian Economist”, the entire microeconomic foundation of BitShares is incorrect. Fundamentally, BitShares assumes that prices are driven by arbitrageurs, when in fact they are driven by users. Arbitrageurs merely perform the simple service of aggregating and cancelling different price offerings, which prevents users from being ripped off. Speculators absorb and transfer risk, brokers call in the order, and janitors cleans the trading floor to prevent slippage. It is not the employees, but the users, who set prices by expressing supply and demand preferences (While short episodes of speculator-control exist, they are defined by their terminal insanity and a subsequent correction to the user-controlled price level). If the market offers a price which is “too low”, such as a car for $5, people will
buy them to use: to drive, to enjoy the latest car tech, to avoid breakdowns, for their children, or simply because $5 is less than gasoline or oil changes. The homeless could even live in a $5 car. If the market set the price of cars to $5,000,000, people would sell them to use that money to buy other things to use. In BitShares, there is no use, only speculation, and so prices can move without bound.
Even if the BitShares idea were partially valid, the scourge of risk, and well-known effects of Asymmetric Information would iteratively drag the price of all BitAssets to zero, in a phenomenon called ‘The Market for Lemons’. The margin call system only increases the fragility of this mysterious experiment, such that the richest or craziest agents could create and profit from immensely volatile price swings.

Aside from attacking a straw man interpretation of my explanation this critique sounds very familiar to ones which I have debunked many times before.

Lets assume for a second that the prediction market was for an event 5 days in the future most people agree the price would track.  Make it 5 months and the price during that 5 month period would track clear up until the day it closes.   Make it 5 years and the price will track until the day it closes.  Make it 50 years?   Forever?    At what point does the LENGTH of maturity of a prediction market affect present day pricing?  The fact remains that you can only enter or exit positions through voluntary trades and all voluntary trades are based upon a prediction on what future trades are likely to be possible.  In effect, you buy or sell based upon your future prediction of what the market for a particular BitAsset will be.   If his theory that BitUSD will go to 0 is in fact correct then he should short BitUSD.   Unfortunately for him he will have to unwind his position in the future which means buying BitUSD which means a non-0 price.  In fact, the holders of BitUSD would demand as much as they can get away with because they are earning 5% for holding the note.  This reality means BitUSD cannot head toward 0.  

The asymmetric information argument is entirely bogus in this case.  How does someone who holds BTS or BitUSD have more information about what the exchange rate will be in the future than anyone else?    BitAssets cannot move toward 0 because they are all collateralized by 2x their initial value and the short position is paying 5% to avoid covering.   This means that the long position can hold out until the short position agrees to a reasonable valuation.  

At the risk of making an appeal to authority I will point out that BitShares X has been reviewed by Dr. Charles Evans  (http://www.pecuniology.com/who.php) who maintains that my economic model is solid.  I only make this appeal to authority to counter the claims that I have no 'authority' because I am "self-taught".   So lets ignore the appeal to authority or lack of.  

Lets assume we were to create a prediction market for an event that is 100% certain.   Would the price ever deviate?  Any attempts of pushing the price away would be seen as a profit opportunity by all participants.  This is the case with prediction markets based upon HISTORICAL outcomes.   You don't need a judge to make the payout, players will voluntarily settle even when the lose because they have 2x collateral that is tied up.   So they will accept their losses (50%) to avoid 100% loss of their collateral.

Lastly his straw man argument that I see a difference between "users" and "arbitrageurs" is entirely off base.  All individuals are motivated by profit opportunities and thus perform the arbitrage function when profitable to do so.  

So based upon the number of factual errors and misrepresentations I cannot take his economic analysis seriously.

[Majormax]

Quark is a scamcoin.

Great analysis. Well presented argument as usual. Mod , you can delete mine with this message if you wish.

I am delighted to find this thread, and will contribute as and when I have something useful to add.

[FandangledGizmo]

Could you mark the thread with  a or something so when I scroll down the Alt currency topics it's easy to identify. There's so much noise in this forum I find it hard to identify all the threads I want to read.

[bitcool]

All 3 factors are part of the technical aspect, the other half is the moral, fairness issues, which is very important to the user community of any viable currency.

Premining is very serious issue in the altcoin world. Bad handling of this will cast a shadow on the currency forever.

Litecoin earns 10/10 in that category IMO.

[Majormax]

Here is an argument I found against Protoshares, which has a unsupported method of a prediction market.  


BitShares is not a prediction market, nor could it support one, as it has numerous practical and theoretical problems.

Aside from attacking a straw man interpretation of my explanation this critique sounds very familiar to ones which I have debunked many times before.

Lets assume for a second that the prediction market was for an event 5 days in the future most people agree the price would track.  Make it 5 months and the price during that 5 month period would track clear up until the day it closes.   Make it 5 years and the price will track until the day it closes.  Make it 50 years?   Forever?    At what point does the LENGTH of maturity of a prediction market affect present day pricing?  The fact remains that you can only enter or exit positions through voluntary trades and all voluntary trades are based upon a prediction on what future trades are likely to be possible.  In effect, you buy or sell based upon your future prediction of what the market for a particular BitAsset will be.   If his theory that BitUSD will go to 0 is in fact correct then he should short BitUSD.   Unfortunately for him he will have to unwind his position in the future which means buying BitUSD which means a non-0 price.  In fact, the holders of BitUSD would demand as much as they can get away with because they are earning 5% for holding the note.  This reality means BitUSD cannot head toward 0.  

The asymmetric information argument is entirely bogus in this case.  How does someone who holds BTS or BitUSD have more information about what the exchange rate will be in the future than anyone else?    BitAssets cannot move toward 0 because they are all collateralized by 2x their initial value and the short position is paying 5% to avoid covering.   This means that the long position can hold out until the short position agrees to a reasonable valuation.  

At the risk of making an appeal to authority I will point out that BitShares X has been reviewed by Dr. Charles Evans  (http://www.pecuniology.com/who.php) who maintains that my economic model is solid.  I only make this appeal to authority to counter the claims that I have no 'authority' because I am "self-taught".   So lets ignore the appeal to authority or lack of.  

Lets assume we were to create a prediction market for an event that is 100% certain.   Would the price ever deviate?  Any attempts of pushing the price away would be seen as a profit opportunity by all participants.  This is the case with prediction markets based upon HISTORICAL outcomes.   You don't need a judge to make the payout, players will voluntarily settle even when the lose because they have 2x collateral that is tied up.   So they will accept their losses (50%) to avoid 100% loss of their collateral.

Lastly his straw man argument that I see a difference between "users" and "arbitrageurs" is entirely off base.  All individuals are motivated by profit opportunities and thus perform the arbitrage function when profitable to do so.  

So based upon the number of factual errors and misrepresentations I cannot take his economic analysis seriously.

The prediction market in these instances would inevitably come to behave like Futures Exchange prices, in that their present-day value is heavily dependent on factors such as risk-free interest rate, and perceived volatility of the market price (and interest rate), as well as default risk..... all these because there can be a hold-to-maturity projection for the longest time frames.
The shorter time frames depend more heavily on implied speculative trends.

[FandangledGizmo]

I've discovered a fatal technical flaw with MemoryCoin.

Mathematical Proof

1. Elephants never forget. Fact! - So elephant's don't need Memorycoin!

2. The biggest land animal in the world is an elephant. Fact!




Therefore the biggest market in the world won't use memorycoin! 

[Majormax]

Freetrade would be cool if you can say something about worldcoin / earthcoin / netcoin / betacoin  too because i hold alot of them...

There must be a hundred coins that I haven't even heard of yet. Ill be adding more to the list soon, but I'm interested if anyone can point to any that address any of the three questions.

I have researched about one hundred alts. as they appeared over the past 9 months. I will certainly look at your questions in relation to the genetics of coins, and comment in due course: however those questions only address the technical structure at the outset.

As we know, the success of a tech project hinges not just on its excellence, but also on esoterics such as marketing/adoption as well as intangibles which appeal (without reference to logic) to the ultimate users : Hence the stellar rise of Dogecoin.

It is important to remember that digital currencies can evolve and change: the larger the community, the greater the resources available for additions redesigns, marketing and so on. Therefore I respectfully suggest that Mass Market Appeal :the speed of growth in the adopting community, will be a dominant factor to gauge, as that will not be apparent at the genesis block.

[Majormax]

Question 1. Inflation.

A number of coins have what I would call 'Accelerated reduction in the Mining Subsidy' (related to Bitcoin). 

The rates of reduction in the block reward vary widely .. Some examples:

 Cryptogenic Bullion CGB was 90% mined in 6 months (similar to Quark)...although CGB has no annual inflation from continued mining, but has a PoS of around 1.5%

Tigercoin TGC. Reward halves every 3 months, so it will take a couple of years to mine. There is a small inflation after that.

QuickQuickCoin QQC.  This one is 50% mined in just 24 days.

Proof of Stake coins address the inflation issue as well.  Of the highly inflationary, PHS has 50% pa, HBN has 100% pa. Most others are below 3%.

Exactly as with life forms (DNA) the success or otherwise of currencies depends on a complex interaction between genetics and environment.

The rapid mining of the bulk of coins is one such variation, which may or may not have been intended to enrich early miners . However it has some benefits, which include an increased stability of supply in the medium term, in which sales of freshly mined coins (that will always happen as miners defray their current costs) have a lesser effect on price. The inflation after that is another variable, and PoS a third.


IMO predicting the future of these currencies is well nigh impossible. The cryptocurrency project is one of the most inclusive democratic global events that has ever been seen, with network effects that are surprising.

The degree to which the differences benefit individual coins will only be apparent in the longer run, added to which , the larger communities have the means to change some quite significant aspects, as I mentioned in an earlier post here.

FWIW, I will highlight each currency here, with my own thoughts over the next few weeks.

[r3wt]

Quark is a scamcoin.

Great analysis. Well presented argument as usual. Mod , you can delete mine with this message if you wish.

I am delighted to find this thread, and will contribute as and when I have something useful to add.

No argument, only fact. Quarkcoin is a pump and dump scheme, the most egregious ever attempted.

[coinspeed]

Hey guys, just found this thread about Protoshares. OP, could you comment on it?
https://bitsharestalk.org/index.php?topic=2362.30
Topic: Why is ypool destroying PTS?

[Majormax]

Quark is a scamcoin.

Great analysis. Well presented argument as usual. Mod , you can delete mine with this message if you wish.

I am delighted to find this thread, and will contribute as and when I have something useful to add.

No argument, only fact. Quarkcoin is a pump and dump scheme, the most egregious ever attempted.

Proof please, supporting arguments. This is off topic anyway.

[cryptohunter]

Quark is a scamcoin.

Great analysis. Well presented argument as usual. Mod , you can delete mine with this message if you wish.

I am delighted to find this thread, and will contribute as and when I have something useful to add.

No argument, only fact. Quarkcoin is a pump and dump scheme, the most egregious ever attempted.

Don't agree with that, many coins have risen x100 or more in value. Qrk is one of those that happens to have a huge community to go along with it's rise in value. It is now a coin that can only go forward.  We should review in 1 year and see who is correct everything else is just guessing and speculation. Nobody knows for sure what will happen. I personally am holding the QRK i have and picked up more in the 7000 range.

[r3wt]

Quark is a scamcoin.

Great analysis. Well presented argument as usual. Mod , you can delete mine with this message if you wish.

I am delighted to find this thread, and will contribute as and when I have something useful to add.

No argument, only fact. Quarkcoin is a pump and dump scheme, the most egregious ever attempted.

Don't agree with that, many coins have risen x100 or more in value. Qrk is one of those that happens to have a huge community to go along with it's rise in value. It is now a coin that can only go forward.  We should review in 1 year and see who is correct everything else is just guessing and speculation. Nobody knows for sure what will happen. I personally am holding the QRK i have and picked up more in the 7000 range.

the anti thesis to your argument is, what will happen when all the coins are mined?