Crypto-currencies in 10 years

[Boris-The-Blade]

To the Moon Of course.

[cbeast]

How is bitcoin any more universal than bitshares or ethereum? Bitcoin in and of itself is a niche market. These other two projects are trying to take the technology into the mainstream. Bitcoin serves one functions, while these systems serve many. You are completely misinformed.

By universal I mean acceptance and liquidity.

[clout]

Neither bitshares nor ethereum have been launched yet so you can't really compare either of those aspects. Also bitcion has little acceptance and low liquidity compared to the many asset types out there. Your assertion is still unfounded. I dont mean to sound like an ass. I've just found that theres to much misinformation in the space given the level of potential innovation. We should be realistic about bitcoins technical and economic limitations and work to correct them, rather than just perpetuate fallacies about how its going to the moon even though there is very little evidence of that.

[Peter R]

Neo and Bee Bitcoin bank aimed to do what you mentioned but it was a centralized approach which lead to its demise.

I actually made a reddit post 2 weeks ago about if it was possible to create a decentralized banking system: http://www.reddit.com/r/Bitcoin/comments/240n26/decentralized_bitcoin_bank_possible/

But what if there is a run on the bank, lets say bitcoin went down to $100 from $500 and everyone wanted to withdraw their bitcoins at the same time, the bank wouldn't have the equity.

Just like the bitcoin network has a protocol for transactions this banking network would have a protocol for issuing the debt. You can set the required collateralization to the desired level for each respective network as easily as you change the block reward on a bitcoin fork. Bitshares is already creating a decentralized bank and exchange with 200% reserves. There is a lot more information at bitshares.org and bitsharestalk.org. 


I don't believe that this system is impervious to bank runs even though it does not use the fraudulent fractional reserve system.  If markets are not efficient and there is a run on the bank then ppl will lose money. But this is true of any banking system as we will soon see in the US when interest rates adjusts and banks default again.

Wow that is really amazing, i had no clue bitshares was developing a decentralized bank that would allow people to deposit bitcoin and remove the risk of volatility. That is truly a game changer once it finishes development.

If you are interested in decentralized exchanges, coins pegged to the USD, gold, or other assets, then check our colored coins (the video here is a pretty good summary): http://coloredcoins.org

The major advantage of colored coins is that they exist purely in bitcoin-space--there's no need to buy some foo-coin to create them.  

Colored coins are essentially small amounts of bitcoins that encode IOUs for various assets.  For example, Bitstamp could create BitstampUSD colored coins.  The value of a colored coin is thus the value of the underlying bitcoins + the market value of the IOU.  I could buy BitstampUSD from anyone, send them to Bitstamp, and then have Bitstamp honour the IOU by wiring money to my bank account.  

Colored coins open up exciting opportunities for the bitcoin network.  However, colored coins are not a threat to bitcoins themselves.  The reason they are not a threat is that all colored coins are IOUs; they are only worth something as long as the counterparty can honour them.  In other words, colored coins are not completely trustless.  There is only one asset in bitcoin-space that is not also someone else's liability: bitcoins themselves.  

I don't see what that advantage of colored coins is over any of the other decentralized exchanges that offer IOUs such as matercoin, counterparty, nxt, and ripple?

Am I the only one that thinks its absolutely ridiculous that so many ppl in this opensource space are creating different projects to do the same thing. Its an absolute waste of resources. These teams should be collaborating instead of competing.

What is great about colored coins is that they *aren't* an alt-coin.  By working on colored coin development, you are promoting the biggest, most accepted network: bitcoin.  Like you said, let's collaborate instead of competing, as we all win if we make cryptocurrency more useful.

The advantage of colored coins over the foo coins is that you don't need the foo coins!  For example, colored coins can represent IOUs like in Ripple but without the Ripple network or the need to buy XRP. 

The other advantage is that it should be possible to use coinjoin transactions to directly trade colored coins IOUs for bitcoins in a trustless manner.  With colored coins, your only risks are the colored coin's issuer and the bitcoin network itself.  With every other solution to do the same thing, there is added complexity, cost and risk. 

So like you said, "teams should be collaborating instead of competing."  Since the bitcoin network is the largest and most liquid, work applied to bitcoin (e.g., colored coins) will have the biggest return.

[cbeast]

Neither bitshares nor ethereum have been launched yet so you can't really compare either of those aspects. Also bitcion has little acceptance and low liquidity compared to the many asset types out there. Your assertion is still unfounded. I dont mean to sound like an ass. I've just found that theres to much misinformation in the space given the level of potential innovation. We should be realistic about bitcoins technical and economic limitations and work to correct them, rather than just perpetuate fallacies about how its going to the moon even though there is very little evidence of that.

I hear that Phlogistoneum is going to be infinitely better than Ethereum. It's a secret. Don't tell anyone. Just saying.

[Peter R]

Hahah bitshares is without a doubt better [than colored coins]. It doesn't use IOU's, it is a 'trustless' system in the same way that bitcoin is a 'trustless' system.

This is another reason that colored coins are superior: they are not disingenuous. 

There is no way to create coins that are pegged to the USD that don't have counter-party risk.  This means that any "coin" that trades "as dollars" is actually an IOU.  Colored coins makes this fact obvious.  The fact that you think there is a way to achieve this in a "trustless" manner without IOUs shows how much disinformation there is in the foo-coin world. 

You can trade IOUs (colored coins) for bitcoins in a trustless and decentralized way, but the IOUs themselves can never be trustless because they are representations of assets and not the assets themselves.  The only trustless way to trade USD is to physically exchange paper bills. 

[PeterReid]

Thoughts?

Strap in and Prepare the shuttle for launch!

[clout]

Hahah bitshares is without a doubt better [than colored coins]. It doesn't use IOU's, it is a 'trustless' system in the same way that bitcoin is a 'trustless' system.

This is another reason that colored coins are superior: they are not disingenuous. 

There is no way to create coins that are pegged to the USD that don't have counter-party risk.  This means that any "coin" that trades "as dollars" is actually an IOU.  Colored coins makes this fact obvious.  The fact that you think there is a way to achieve this in a "trustless" manner without IOUs shows how much disinformation there is in the foo-coin world. 

You can trade IOUs (colored coins) for bitcoins in a trustless and decentralized way, but the IOUs themselves can never be trustless because they are representations of assets and not the assets themselves.  The only trustless way to trade USD is to physically exchange paper bills. 

Have you researched bitshares? Its not disingenuous at all. It mitigates counterparty risk by collateralizing the banks debt with a market valued asset. The issuer of the coins is the p2p network itself not a single individual. You are not worried about the false promises of another person you are worried about the markets inaccurate valuation of the underlying asset. I'd rather have an IOU that is backed by distributed free market consensus than have an IOU backed by a central issuers promise to pay. You simply do not understand how bitshares works which is why you are lumping it together with projects that do not provide the same service. I once believed the same as you and then I looked into it.

[El Dude]

Only coins with actual dev teams will survive .

[Peter R]

Hahah bitshares is without a doubt better [than colored coins]. It doesn't use IOU's, it is a 'trustless' system in the same way that bitcoin is a 'trustless' system.

This is another reason that colored coins are superior: they are not disingenuous.  

There is no way to create coins that are pegged to the USD that don't have counter-party risk.  This means that any "coin" that trades "as dollars" is actually an IOU.  Colored coins makes this fact obvious.  The fact that you think there is a way to achieve this in a "trustless" manner without IOUs shows how much disinformation there is in the foo-coin world.  

You can trade IOUs (colored coins) for bitcoins in a trustless and decentralized way, but the IOUs themselves can never be trustless because they are representations of assets and not the assets themselves.  The only trustless way to trade USD is to physically exchange paper bills.  

Have you researched bitshares? Its not disingenuous at all. It mitigates counterparty risk by collateralizing the banks debt with a market valued asset. The issuer of the coins is the p2p network itself not a single individual. You are not worried about the false promises of another person you are worried about the markets inaccurate valuation of the underlying asset. I'd rather have an IOU that is backed by distributed free market consensus than have an IOU backed by a central issuers promise to pay. You simply do not understand how bitshares works which is why you are lumping it together with projects that do not provide the same service. I once believed the same as you and then I looked into it.

Right, so the Bitshares' digital representations of real assets are IOUs just like for colored coins.  The value of a colored-coin IOU is:

   Value of colored coin = value of underlying bitcoins + market value of IOU

The market value of the IOU can deviate from its par value.  For example, the market value of USD IOUs issued by a bitcoin exchange would deviate from par value should the market lose trust in the issuer (the exchange).  If MtGox and BitStamp were using colored coins throughout 2013, we'd have seen MtGoxUSD trade at a discount to BitStampUSD through the fall of 2013, before collapsing in February.

  

[Sutters Mill]

Im not so confident. I think theres a definite shelf life. Apple will kill it all with imoney and that will be that.

[tinus42]

why do you think dogecoin and litecoin will still be relevant in 10 years, that sounds crazy to me.

Dogecoin is relatively stable and has been rising in value against USD over the past 3 months whereas Bitcoin has been decreasing in the same timeframe. Compare:


http://coinplorer.com/Charts/USD/DOGE


http://www.coindesk.com/price/

Also Doge is more friendly to newbs (also because the value is low and newbs can own many Dogecoins while most of them can only buy a fraction of a Bitcoin) and the community does things like sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure. Such as this

https://www.youtube.com/watch?v=KV8IAJug7cI

They talked about Dogecoin for a minute and a half on a sports program that has nearly 7 million viewers, all of the time showing the car in Dogecoin livery. When did Bitcoin have that kind of exposure on a mainstream sports program?

Dogecoin may well survive the Doge meme for many moons.

[Peter R]

Also Doge is more friendly to newbs (also because the value is low and newbs can own many Dogecoins while most of them can only buy a fraction of a Bitcoin) and the community does things like sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Dogecoin may well survive the Doge meme for many moons.

While I actually do have a soft spot for Dogecoin, the argument that dogecoins are cheap is spurious.  Right now each doge costs 1.02 bits.  You can get 2257 bits for 1 USD, or 2213 doge for the same amount.  So I could use the same spurious argument to say that people should invest in Bitcoin because you get more bits for your dollar than you with doges.  

[Ed4252]

why do you think dogecoin and litecoin will still be relevant in 10 years, that sounds crazy to me.

Dogecoin is relatively stable and has been rising in value against USD over the past 3 months whereas Bitcoin has been decreasing in the same timeframe. Compare:


http://coinplorer.com/Charts/USD/DOGE


http://www.coindesk.com/price/

Also Doge is more friendly to newbs (also because the value is low and newbs can own many Dogecoins while most of them can only buy a fraction of a Bitcoin) and the community does things like sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Dogecoin may well survive the Doge meme for many moons.

https://coinplorer.com/Charts?fromCurrency=DOGE&toCurrency=USD

[cbeast]

sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Who paid for those and why? Mastercard has five lobbyists for Bitcoin (well against actually) which cost a lot more than those sporting events.

[clout]

Hahah bitshares is without a doubt better [than colored coins]. It doesn't use IOU's, it is a 'trustless' system in the same way that bitcoin is a 'trustless' system.

This is another reason that colored coins are superior: they are not disingenuous.  

There is no way to create coins that are pegged to the USD that don't have counter-party risk.  This means that any "coin" that trades "as dollars" is actually an IOU.  Colored coins makes this fact obvious.  The fact that you think there is a way to achieve this in a "trustless" manner without IOUs shows how much disinformation there is in the foo-coin world.  

You can trade IOUs (colored coins) for bitcoins in a trustless and decentralized way, but the IOUs themselves can never be trustless because they are representations of assets and not the assets themselves.  The only trustless way to trade USD is to physically exchange paper bills.  

Have you researched bitshares? Its not disingenuous at all. It mitigates counterparty risk by collateralizing the banks debt with a market valued asset. The issuer of the coins is the p2p network itself not a single individual. You are not worried about the false promises of another person you are worried about the markets inaccurate valuation of the underlying asset. I'd rather have an IOU that is backed by distributed free market consensus than have an IOU backed by a central issuers promise to pay. You simply do not understand how bitshares works which is why you are lumping it together with projects that do not provide the same service. I once believed the same as you and then I looked into it.

Right, so the Bitshares' digital representations of real assets are IOUs just like for colored coins.  The value of a colored-coin IOU is:

   Value of colored coin = value of underlying bitcoins + market value of IOU

The market value of the IOU can deviate from its par value.  For example, the market value of USD IOUs issued by a bitcoin exchange would deviate from par value should the market lose trust in the issuer (the exchange).  If MtGox and BitStamp were using colored coins throughout 2013, we'd have seen MtGoxUSD trade at a discount to BitStampUSD through the fall of 2013, before collapsing in February.

Yes but they do not have central point of failure and all the iou's are adequately collateralized... colored coins don't add any value over existing systems. Ripple, nxt and bitshares me (which is the bitshares version of personally issued IOU's - this is different than the bank) will always be faster. For that matter why wouldn't I use mastercoin and counterparty instead of colored coins. Theres just nothing different about your systems in terms of the services they provide. At least bitshares, nxt, ethereum, ripple are doing something different. At least they are not trying to build on top of a network that comes to consensus slowly, is not scalable and is wasteful. I just don't really see the case you are trying to make. If you're not going to be better than your competitors at least be different.

[tinus42]

sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Who paid for those and why?

The /r/Dogecoin community on Reddit. Lots of people gave small amounts, they raised 67 million Dogecoin in total, worth $55,000 for the NASCAR car and about $30,000 for the Jamaican bobsled team. In case of the NASCAR car they worked with the /r/NASCAR community for the sponsorship campaign (both subreddits were actually promoted on the side of the car). Many NASCAR fans on Reddit learned what cryptocurrency is for the first time because of the sponsorship. Even if you don't like Dogecoin you should appreciate that.

This is the original NASCAR sponsorship thread:

http://www.reddit.com/r/dogecoin/comments/20mwde/guys_lets_do_it_doge_nascar_style/

[cbeast]

sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Who paid for those and why?

The /r/Dogecoin community on Reddit. Lots of people gave small amounts, they raised 67 million Dogecoin in total, worth $55,000 for the NASCAR car and about $30,000 for the Jamaican bobsled team. In case of the NASCAR car they worked with the /r/NASCAR community for the sponsorship campaign (both subreddits were actually promoted on the side of the car). Many NASCAR fans on Reddit learned what cryptocurrency is for the first time because of the sponsorship. Even if you don't like Dogecoin you should appreciate that.

All Bitcoin has is the Bitcoin 100 and other various charity works. Certainly nothing that would interest the NASCAR crowd.

[tinus42]

sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Who paid for those and why?

The /r/Dogecoin community on Reddit. Lots of people gave small amounts, they raised 67 million Dogecoin in total, worth $55,000 for the NASCAR car and about $30,000 for the Jamaican bobsled team. In case of the NASCAR car they worked with the /r/NASCAR community for the sponsorship campaign (both subreddits were actually promoted on the side of the car). Many NASCAR fans on Reddit learned what cryptocurrency is for the first time because of the sponsorship. Even if you don't like Dogecoin you should appreciate that.

All Bitcoin has is the Bitcoin 100 and other various charity works. Certainly nothing that would interest the NASCAR crowd.

Dogecoin also has charities (see: http://www.ibtimes.co.uk/dogecoin-community-raising-30000-children-charity-1435131). The NASCAR sponsorship was about getting media exposure for Dogecoin and that worked rather well. Obviously a racing team is not a charity.

[cbeast]

sponsoring Olympic athletes and a NASCAR racer which gives them lots of mainstream media exposure.

Who paid for those and why?

The /r/Dogecoin community on Reddit. Lots of people gave small amounts, they raised 67 million Dogecoin in total, worth $55,000 for the NASCAR car and about $30,000 for the Jamaican bobsled team. In case of the NASCAR car they worked with the /r/NASCAR community for the sponsorship campaign (both subreddits were actually promoted on the side of the car). Many NASCAR fans on Reddit learned what cryptocurrency is for the first time because of the sponsorship. Even if you don't like Dogecoin you should appreciate that.

All Bitcoin has is the Bitcoin 100 and other various charity works. Certainly nothing that would interest the NASCAR crowd.

Dogecoin also has charities (see: http://www.ibtimes.co.uk/dogecoin-community-raising-30000-children-charity-1435131). The NASCAR sponsorship was about getting media exposure for Dogecoin and that worked rather well. Obviously a racing team is not a charity.

Good for you, kiddo! Keep working hard and maybe Mastercard will attack you someday.