Innovation in the alt chains

[markm]

None of the alt chains have had a serious commitment to project management.  Perhaps Gavin should write an O'Reilly book "Encrypted P2P Transaction Systems" (and with a picture of a marsupial on the cover).

But the alpaca isn't a marsupial!

-MarkM-

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[maaku]

2013 will be the year that bitcoin goes mainstream, but not a way that you would currently recognize. 2012 will be a year of transformation, the impetus of which will not come from the Satoshi client (Gavin's great work notwithstanding).

Your beliefs are nice— but where is the evidence?

...

So, yea, speculate that the advancement will come from elsewhere if you want... but it's just speculation without some evidence to back it up.

That's because we're not public yet.

I'm CTO of a Mountain View-based startup that is working on a number of products using a bitcoin-derived protocol. Actually when we first started a little more than a year ago we trying to solve a problem in a completely unrelated field. The primary technical challenge and the key to monetizing the product basically boiled down to building a distributed, peer-to-peer time-stamping service for notarizing changes in ownership. Sound familiar? Unfortunately none of us heard about bitcoin until the bubble over the summer when bitcoin mania spilled into the mainstream media. Naturally it was refreshing to find a ready-made solution to our problem, with most of the kinks already worked out.

So why am I telling this long, uninteresting, and self-absorbed story, you might ask? Because once we we saw that bitcoin solved our problem we wondered what else it could do. And lo and behold, just about everywhere we look, in every industry (even--especially--outside of tech and finance) there are low hanging fruit ready to be optimized or made obsolete by the introduction of products based on bitcoin P2P technology. We've set aside for now our original project and are now working on a number of products that all much easier, and many of them much larger in potential impact (and revenue)*.

It took me a while to convert (not the least because bitcoin's economic underpinnings are populist bullcrap and it will never take hold as a viable currency--but please start a new thread if you want to debate me on this), but now I am convinced that without exaggeration bitcoin is the most disruptive technology to emerge since the World Wide Web. Just not for the reasons most on this forum probably think.

In the time the truth will show itself. Now if you excuse me it's Christmas day and my present to myself is a long block of uninterrupted coding

* You'll have to forgive me for being cagy, but I'm under NDA and of course all potential businesses we've identified are company secret until we launch or decide for sure not to ever pursue.

(Oh, and before anyone cynical wonders outloud why I'm posting this (and I've said the same thing as the OP before), it's because we could actually use some competition. The potential applications are diverse enough and it'd actually validate our business in the eyes of investors.)

[Maged]

So why am I telling this long, uninteresting, and self-absorbed story, you might ask? Because once we we saw that bitcoin solved our problem we wondered what else it could do. And lo and behold, just about everywhere we look, in every industry (even--especially--outside of tech and finance) there are low hanging fruit ready to be optimized or made obsolete by the introduction of products based on bitcoin P2P technology.
(...)
without exaggeration bitcoin is the most disruptive technology to emerge since the World Wide Web.

This really brings us back to the real issue, doesn't it? The reason why you aren't yet seeing real innovation in the alt chains is because everyone is just standing around in shock trying to comprehend this world-changing technology. Less than a hundred people in the world probably understand the intricacies of Bitcoin... and only one person understands it completely. For example, not even Gavin knew that it was possible to implement OP_EVAL in a backwards compatible way until quite (relatively) recently, and he's the lead developer! How can you expect alt-chain developers to fair any better than that?

The thing that you need to realize is that Bitcoin, in its current state, shouldn't have existed for at least 10 more years. Had ANYBODY else invented Bitcoin today, fairly major things like the scripting system would have simply not existed. THAT is something an alt-chain would have invented. However, Satoshi beat them to it.

When it comes to innovation in the alt-chains, instead of the phrase often used to describe plots in TV shows - "The Simpsons did it" - we have a case of "Satoshi did it".

[maaku]

While I generally agree with your sentiment, I take issue with a few of the details. Satoshi is an interesting case in that he clearly thought out many of the advanced use cases of bitcoin, and took baby steps toward implementing/enabling them before releasing the client into the wild. As an example, all of the contracts/scripting code was not necessary for bitcoin to do what bitcoin did at launch, and indeed some features were clearly untested as they did not work as advertised. However Satoshi was either very rushed or not a very competent programmer by industry standards, and that shows up in his code. Much of the work Gavin and others have done is just in cleaning up that mess. Also, Satoshi demonstrates an ignorance about the state of the art in academic computer science, unnecessarily cutting off valuable future enhancements. Finally, while Satoshi had the foresight to imagine complex use cases in the future, he lacked the imagination to think up many applications outside of tech and finance, which the current implementation unnecessarily hinders.

I have the utmost respect for Satoshi. He single-handedly took anonymous crypto-cash, which we've been talking about since the 90's, from concept to practicum. Beyond my respect as a fellow engineer, my company hopes to profit greatly from that. But... deification doesn't help anybody. It only obscures existing flaws and potential for future improvements.

The other aspect is that the economic underpinnings of bitcoin are fringe and esoteric, and the in practice application of it as a currency is clunky and, well, not very practical (I'm being honest and stating my informed opinion--not trying to start a flamewar!). Don't underestimate how much of a turn-off that is for the vast majority of developers and business people, who probably have real-world experience using e-payment solutions like Braintree, WePay, Stripe, or Square, or were trained in Keynesian economics. To these people (I count myself among them), the bitcoin project is seen as a combination of childish optimism and inexcusable ignorance. From that standpoint, the people bitcoin attracts are either 1) the fringe intellectuals (Austrian-school economists, extremist libertarians, etc.), 2) engineers who recognize the significance and disruptive nature of this technology, 3) those with something to hide (tax evasion, drugs, money laundering, general profiteering), and 4) the ignorant and/or naïve. While I of course count all the good sirs I have conversed with here in the first two categories, unfortunately bitcoin has attracted predominantly #3's and #4's, and in this subforum that is more true than others.

[cbeast]

The other aspect is that the economic underpinnings of bitcoin are fringe and esoteric, and the in practice application of it as a currency is clunky and, well, not very practical (I'm being honest and stating my informed opinion--not trying to start a flamewar!). Don't underestimate how much of a turn-off that is for the vast majority of developers and business people, who probably have real-world experience using e-payment solutions like Braintree, WePay, Stripe, or Square, or were trained in Keynesian economics.

You are accusing Satoshi of not having your 20/20 hindsight? So it seems like your basic criticism is that Satoshi is not a Keynesian. Check out the the genesis block that contains:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

Time will tell if Satoshi was right. The disruptive part of the technology is not that it is Austrian-based, it really is not. Bitcoin has emergent properties unlike any of your aforementioned examples or anything previously tried. Sure there are alternative experiments and I hope they succeed, but they won't take anything away from Bitcoin's simplicity. Besides, Bitcoin has a ways to go until v1.0.

[finway]

That's because we're not public yet.
I'm CTO of a Mountain View-based startup that is working on a number of products using a bitcoin-derived protocol. Actually when we first started a little more than a year ago we trying to solve a problem in a completely unrelated field. The primary technical challenge and the key to monetizing the product basically boiled down to building a distributed, peer-to-peer time-stamping service for notarizing changes in ownership. Sound familiar? Unfortunately none of us heard about bitcoin until the bubble over the summer when bitcoin mania spilled into the mainstream media. Naturally it was refreshing to find a ready-made solution to our problem, with most of the kinks already worked out.

Can't wait to see your products.

[BitcoinPorn]

maaku, is the start up you mentioned back in the day here https://bitcointalk.org/index.php?topic=20292.msg499698#msg499698 still in the works or has your focus turned to this new project?  Or, are they one in the same?

[steelhouse]

1) Use the existing bitcoin chain for a new coin. Despite it all bitcoin is the fairest of the chains.  Millions of dollars worth of coins have been bought, sold, and used in commerce.  One thing solidcoin did do is before the release of SC2 is compress the chain to very small size.  It would be nice if this could be automatically be done somehow like on the 1st of the year.  It might be good to eliminate all addresses with less than 1 btc.
2) 2% transaction fee.  1% deleted, 1% to miners.  Thus a sale of 300 DC would result in 3 DC Being deleted with 3 DC going to miners.  The sales tax in California about 9%, and a 2% fee will help the miners and the savers of coin and should not hurt economy.  I would really like to test this with a 10% transaction fee with most deleted to see what would happen (possibly moving most transactions to exchanges and wallets).
3) minimum fee 0.01, auto-adjusting  There has to be a minimum fee to prevent chain bloat attacks.  However it would be nice never to have to worry about deciding this but have it change automatically.
4)1 mining reward. Although mining rewards would end a small block reward would be added to prevent number of coins going to zero.  This should be less than 1% annual inflation.  Using the existing bitcoin chain will result in about 1% inflation.

[caston]

Fractional reserve banking also destroys money in a similar method to how it creates it. That is just as creating $1000 in a new loan will end up creating more $1000 loans then destroying $1000 end up with more lots of $1000 being destroyed  If we go through a period of rapid deflation it would be interesting to see how alternate currencies play out. Coins with inflation may in some ways be desirable. Alternately we may need coins with even faster deflation than fiat is being deflated at. The race may be on to make a coin with very fast deflation that is still attractive to both miners and investors.

[maaku]

@BP, yes it's the same company, but that post is not representative of our current projects.

[markm]

None of the alt chains have had a serious commitment to project management.  Perhaps Gavin should write an O'Reilly book "Encrypted P2P Transaction Systems" (and with a picture of a marsupial on the cover).

I haven't any complaints so far about Unthinkingbit's management of the DeVCoin project.

Maybe a get rich quick mentality tends to drive a lot of altcoins into rush rush rush, I rather like the more relaxed / sedate pace that DeVCoin has been progressing at, and wonder if the lack of hype might be part of why it has been sailing along so smoothly so far.

-MarkM-

[caston]

None of the alt chains have had a serious commitment to project management.  Perhaps Gavin should write an O'Reilly book "Encrypted P2P Transaction Systems" (and with a picture of a marsupial on the cover).

I haven't any complaints so far about Unthinkingbit's management of the DeVCoin project.

Maybe a get rich quick mentality tends to drive a lot of altcoins into rush rush rush, I rather like the more relaxed / sedate pace that DeVCoin has been progressing at, and wonder if the lack of hype might be part of why it has been sailing along so smoothly so far.

-MarkM-

Well if you end up with 1 billion DVC and their worth 0.1 cents each then theoretically you have a million bucks.

[kjlimo]

None of the alt chains have had a serious commitment to project management.  Perhaps Gavin should write an O'Reilly book "Encrypted P2P Transaction Systems" (and with a picture of a marsupial on the cover).

I haven't any complaints so far about Unthinkingbit's management of the DeVCoin project.

Maybe a get rich quick mentality tends to drive a lot of altcoins into rush rush rush, I rather like the more relaxed / sedate pace that DeVCoin has been progressing at, and wonder if the lack of hype might be part of why it has been sailing along so smoothly so far.

-MarkM-

Well if you end up with 1 billion DVC and their worth 0.1 cents each then theoretically you have a million bucks.

if...

[kjlimo]

1) Use existing bitcoin chain for a new coin and stop the block rewards. Despite it all bitcoin is the fairest of the chains.  $100,000 of coins have been bought and sold, $10,000s have been used in commerce.  One thing solidcoin did do is before the release of SC2 is compress the chain to very small size.  It would be nice if this could be automatically be done somehow like on the 1st of the year.  It might be good to eliminate all addresses with less than 1 btc and square root the number of coins.
2) 2% transaction fee.  1% deleted, 1% to miners.  Thus a sale of 300 DC would result in 3 DC Being deleted with 3 DC going to miners.  The sales tax in California about 9%, and a 2% fee will help the miners and the savers/owners of coin and should not hurt economy.  I would really like to test this with a 10% transaction fee with most deleted to see what would happen (possibly moving most transactions to exchanges and wallets).
3) minimum fee 0.01, auto-adjusting  There has to be a minimum fee to prevent chain bloat attacks.  However it would be nice never to have to worry about deciding this but have it change automatically.
4) merged mining or consensus to protect from 51% attacks.
5) 1 mining reward. Although mining rewards would end a small block reward would be added to prevent number of coins going to zero.  This should be less than 1% annual inflation.

How much longer are you going to keep suggesting these ideas with no action on them?  Go  make your own coin and stop flooding the forums with the same ideas...

[DeathAndTaxes]

How much longer are you going to keep suggesting these ideas with no action on them?  Go  make your own coin and stop flooding the forums with the same ideas...

The worst part is he has never responded to analysis the first dozen times posted.

Like
a) how do you have a fee based as a % when the network has no idea the transaction size?

b) how do you encourage mining if that mining is a negligibly amount of money?

c) what does sales tax have to do w/ a rational on the fee cost?  US Income tax is up to 38% so is a 38% fee a good idea too?

d) why would anyone want to use a blockchain w/ a 2% fee?  Paypal isn't much more.

[caston]

So are people more comfortable with the idea of alt-chains now?

I remember when namecoin first came out some people (probably just those that held a lot of bitcoin) were protesting about that. IXcoin created an obvious shitstorm then Solidcoin even more so.
By the time LTC had come out people were mostly pretty chilled. Now we have a lot of different coins. I guess they all need to find their niche markets.

[DeathAndTaxes]

So are people more comfortable with the idea of alt-chains now?

I remember when namecoin first came out some people (probably just those that held a lot of bitcoin) were protesting about that. IXcoin created an obvious shitstorm then Solidcoin even more so.
By the time LTC had come out people were mostly pretty chilled. Now we have a lot of different coins. I guess they all need to find their niche markets.

I think it just has become obvious this alt-coins aren't going to fragment Bitcoin.  None have gotten more than 1% of the support Bitcoin has (not just hashing power but exchange volume, developer support, alternate clients, mechant acceptance, 3rd party services, etc).

Personally I think any coin which is "based" on
a) shorter blocks
b) you can't use a GPU (until someone eventually makes a GPU w/ enough cach rendering the GPU hostility futile)

has any niche to fill.  Other than namecoin none have done anything else. 

There is this belief that a silver is needed to Bitcoin's gold.  The reality is Bitcoin is Bitcoin's silver.  Silver (and Copper) was used in coinage because discrete units of gold smaller than a gram are very cumbersome.  Small units of Bitcoin aren't cumbersome.  Transactions in bit pennies work just as well as transaction in thousands of Bitcoins.

[caston]

Problem with faster blocks though is that you end up with a very high inflation rate. Remember what it was like when TBX/FBX/LTC first came out and you were getting blocks every half minute? Well when BTC first came out it took an hour or so on a standard PC to find a block. The problem is the amount of coins minted is so fast that you can't find investors to buy them all. SC2 dealt with this by cutting the miner subsidy which was a gamble but it appears to have paid off. The other coins that still have the same subsidy have been going down in value. Unless they can find a niche that causes people to buy them up they will just become worth less and less over time. The other problem is of course botnets. Botnet owners don't pay for electricity and just dump the coins.

[DeathAndTaxes]

Problem with faster blocks though is that you end up with a very high inflation rate. Remember what it was like when TBX/FBX/LTC first came out and you were getting blocks every half minute? Well when BTC first came out it took an hour or so on a standard PC to find a block. The problem is the amount of coins minted is so fast that you can't find investors to buy them all. SC2 dealt with this by cutting the miner subsidy which was a gamble but it appears to have paid off. The other coins that still have the same subsidy have been going down in value. Unless they can find a niche that causes people to buy them up they will just become worth less and less over time. The other problem is of course botnets. Botnet owners don't pay for electricity and just dump the coins.

Block time has nothing to do w/ inflation.

[Mousepotato]

2) 2% transaction fee.  1% deleted, 1% to miners.  Thus a sale of 300 DC would result in 3 DC Being deleted with 3 DC going to miners.  The sales tax in California about 9%, and a 2% fee will help the miners and the savers/owners of coin and should not hurt economy.  I would really like to test this with a 10% transaction fee with most deleted to see what would happen (possibly moving most transactions to exchanges and wallets)

With only 8 decimal places, wouldn't this eventually lead to 100% eradication of all coins operating under this fee system?