rpietila Altcoin Observer

[AnonyMint]

Note that with mixing on the block chain, e.g. Cryptonote, Monero, Zerocoin, authorities can compel you to reveal your private keys and unwind the anonymity, e.g. you end up with some physical asset or fiat system asset which you can't be anonymous on. It shows you paid for it with mixed coins.

Also mixing that is off the block chain, e.g. CoinJoin, DarkCoin, Tor, I2P, authorities can compel you to reveal your inputs and outputs.

But what if there was a way where the authorities could compel you to release everything and they still couldn't break the anonymity.

Now that would truly be an anonymous coin.

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[AnonyMint]

Rpietila underestimates the geometric network effects of making the block chain programmable. Imagine if every website had to be a copy of the first one.

[darkota]

Cryptonite(XCN) most definitely has a private gpu miner. I tried mining with spot instances, even with different vps, hardly anything, not to mention the countless posts of guys using cpu farms and getting none-hardly any coins at all.

[coinsolidation]

Rpietila underestimates the geometric network effects of making the block chain programmable. Imagine if every website had to be a copy of the first one.

Which layer are you proposing a block chain should be? Data, Logic, or Presentation? You seem to be saying logic, when it's a distributed data layer.

[Este Nuno]

Rpietila underestimates the geometric network effects of making the block chain programmable. Imagine if every website had to be a copy of the first one.

I find it interesting that his suggested "W3" short form name didn't catch on and instead we all used "www" or just the "web".

[Este Nuno]

Cryptonite(XCN) most definitely has a private gpu miner. I tried mining with spot instances, even with different vps, hardly anything, not to mention the countless posts of guys using cpu farms and getting none-hardly any coins at all.

I think someone already posted a link to a public GPU miner already. And you can be almost certain that if a public one came out that fast there have been private ones going probably since launch or soon after.

[AnonyMint]

Note that with mixing on the block chain, e.g. Cryptonote, Monero, Zerocoin, authorities can compel you to reveal your private keys and unwind the anonymity, e.g. you end up with some physical asset or fiat system asset which you can't be anonymous on. It shows you paid for it with mixed coins.

How does that work, isnt the purpose of mixing creating enough plausible deniability so the transaction can't be traced back at you...

My point is ultimately if you spend the coin for some hard asset, e.g. land, car, electronic fiat (since paper is going away), then you are identified with some coins that you exchanged for the asset. That you mixed them with ring signatures or CoinJoin to hide the trail where they came from, doesn't stop the authorities from demanding you reveal your private keys to prove you have given them the trail as they may compel you to do.

If you are receiving Cryptonote coins in exchange for some anonymous good or service (often intangible although trading for gold can be anonymous if you wear a mask or use anonymous shipping methods), then due to one-time ring signatures you can't prove where the money came from even if you reveal your keys. And the sender hasn't received in return something that can trace to him either so he may not be identified.

However in many cases we are trading fiat or something tangible that can't be anonymous. So the best anonymity would be a technology that could break that chain of traceability so that even if all parties were forced to reveal their private keys, the anonymity would still not be broken. I know it seems like the authorities could still compel you, but there is a clever twist that I just stumbled onto.

I actually have an idea how to do this. It isn't absolute, but anonymity never is.

[AnonyMint]

Rpietila underestimates the geometric network effects of making the block chain programmable. Imagine if every website had to be a copy of the first one.

Which layer are you proposing a block chain should be? Data, Logic, or Presentation? You seem to be saying logic, when it's a distributed data layer.

One thing I learned when thinking about higher level semantic languages and modularity (for the Copute language I was working on before tossing it aside in 2013 on rpietila's urging that I look at Bitcoin, yeah you can blame it on him ) is that such boundaries don't exist. Leakage seeps across in ways you can't even fathom in such simplistic hierarchies.

[iCEBREAKER]

The efficiency advantages of the mini-blockchain relative to Bitcoin with pruning are quite small, certainly not order of magnitude. Given this I seriously doubt a mini-blockchain can defeat Bitcoin without other advantages.

"Bitcoin with pruning" does not yet, and may not ever, exist in a politically viable form other than XCN/XCN-forks.

It's not fair or valid to compare a successfully researched/designed/launched coin like XCN with vaporware.

The point of mini-blockchain is not to "defeat" Bitcoin.  They are complementary projects sharing different parts of a rapidly growing crypto-economic pie, not fighting to the death in some kind of 'Two Coins Enter One Coin Leaves' zero-sum Thunderdome.

Besides, XCN features several other (arguably more important for retail user) innovations on top of mini-chains:

Could you quickly give our readers some insight into the nature of unmalleable transactions, withdrawal limits and 0-confirmations?

Bitfreak – Well withdrawal limits basically help to prevent double spending because they limit how many coins can be withdrawn from an address in one block. So if the withdrawal limit is much smaller than the balance of the address it takes many blocks to empty out the address, which makes double spending extremely difficult because the address cannot be emptied quickly. The withdrawal limit can be changed by the owner of the address but the change is delayed. A merchant could check the withdrawal limit on a buyers address and have much more confidence in any transactions sent to them from that address if the balance is much higher than the withdrawal limit. It even makes quite secure 0-confirmation transactions possible.

Look at the trade-offs as a variant of Zooko's triangle.  You can have your cryptocoin be established/secure (BTC), anonymous/private (XMR), or scalable/instant (XCN).  All three of these niches need to be filled by distinctly specialized technology, until we can square the triangle...

On Planet Libertopia in the year 2099 we will buy lattes with XCN, real estate with BTC, and party supplies with XMR.   

[Este Nuno]

XCN

Are you planning on holding your XCN long term? Personally I'd be pretty scared about a major sell off coming at some point and would be seriously considering getting out. Even if only temporarily if I truly believed the currency had a positive long term outlook.

You have to admit that the hype and the amount of money poured in thus far has been astronomical.

[TooDumbForBitcoin]

On Planet Libertopia in the year 2099 we will buy lattes with XCN, real estate with BTC, and party supplies with XMR.   Cool

What happened to the island?  Did the seas rise?

[smooth]

The efficiency advantages of the mini-blockchain relative to Bitcoin with pruning are quite small, certainly not order of magnitude. Given this I seriously doubt a mini-blockchain can defeat Bitcoin without other advantages.

"Bitcoin with pruning" does not yet, and may not ever, exist in a politically viable form other than XCN/XCN-forks.

It's not fair or valid to compare a successfully researched/designed/launched coin like XCN with vaporware.

You are right, it probably isn't fair, but it is my opinion. Conversely you could say that it isn't fair to compare an unused coin with one that already has a lot of adoption.

The point of mini-blockchain is not to "defeat" Bitcoin.  They are complementary projects sharing different parts of a rapidly growing crypto-economic pie, not fighting to the death in some kind of 'Two Coins Enter One Coin Leaves' zero-sum Thunderdome.

That requires that the indeed effective address different parts of the economic pie, and that each do so in a sufficiently better way a to overcome the natural network effect advantages of one coin instead of two.

Look at the trade-offs as a variant of Zooko's triangle.  You can have your cryptocoin be established/secure (BTC), anonymous/private (XMR), or scalable/instant (XCN).  All three of these niches need to be filled by distinctly specialized technology, until we can square the triangle...

That would be all well and good if I believed that Bitcoin wasn't as scalable as XCN, but I don't.

I do agree that other features of XCN may be more valuable, but their value at this point is quite speculative.

I still consider it overvalued, but getting closer to speculatively attractive.

[iCEBREAKER]

Are you planning on holding your XCN long term? Personally I'd be pretty scared about a major sell off coming at some point and would be seriously considering getting out. Even if only temporarily if I truly believed the currency had a positive long term outlook.

You have to admit that the hype and the amount of money poured in thus far has been astronomical.

I will not "admit that the hype and the amount of money poured in thus far has been astronomical."  Your statement applies to Bitcoin, not XCN.  Mom and Grandma ask about Bitcoin these days, but their heads still might explode if anyone tried to tell them about Cryptonite!   

Nobody outside of our little uber-power-geek bubble has heard of XCN, and even many inside the bubble missed the launch because alt-world is such a noisy place.  So the hype has been minimal, and Official Marketing Efforts have not even started.

As for money, XCN's market cap is extremely tiny in proportion to the amount of innovation and blue-sky potential it bears.  XCN isn't even on any major non-Chinese exchanges yet.  Compared to other less-exotic coins' massive hype/market caps, obscure young XCN is nothing and I will accumulate as many as possible while the market cap is less than $100k.  A $65,000 market cap for XCN is a joke; nom nom nom cheap coins!!! 

I have been distracted by the tech-wow factor of mini-blockchains, but the real impact for retail users is XCN enabling zero-confirmation transactions via withdrawal limits.  That is just fucking huge (another Holy Grail) and a totally unreported story previous to BitFreak's recent interview.

And yes, I do plan to hlod XCN long-term.  When it gets to $1/XCN I can retire!   

[smooth]

Hashes are 32 bytes each. Transactions average very roughly 500 bytes...

There are other optimizations possible within Bitcoin. For example, it isn't necessary to store input scripts once the transaction is "fully" confirmed...

You are apparently incorrectly assuming the MBC coin doesn't perform some optimization to store only the outputs address (over the long-term that exceeds the window of retention of full transaction history), and thus the relative overhead of the hashes in the tree (compared to the retained transaction size for only the outputs) is much more significant than your computation of "2.5".

No I wasn't assuming that, I was merely stating that I don't see huge (and certainly not super-linear) improvements beyond what is readily implementable in Bitcoin as the need to scale presses. As with SPV clients, for example. A few years ago they didn't exist, now they are common. Pruning will likely follow a similar trajectory if needed, though may not actually be needed due to other obstacles both technical and to economic scaling.

Bitcoin would have to fork to achieve similar levels of efficiency. Actually I am not even sure they could. The historical block hash would have to change in order to discard part of a transaction's data. I suppose there might be some clever way to finagle it. Why not just implement the MBC instead.

Because there is already an installed base of maybe a million or so users, an increasing number of merchants accepting it, reasonably high quality hardware and software wallets, and countless other reasons that a strong network effect not only already favors Bitcoin itself, but also favors approaches that break the fewest parts of that machine. A new technology with small advantages won't overcome that either within Bitcoin as a reimplementation or as a competitor replacing it. It will take very large advantages for that to happen.

The bigger issues I see with Bitcoin have nothing to do with scaling of storage and everything to do with centralization. Mini-blockchain itself does not solve that, although I woudln't rule out that it could possibly enable some complementary approach that might. Cryptonite certainly doesn't though, at this point.

[smooth]

As for money, XCN's market cap is extremely tiny in proportion to the amount of innovation and blue-sky potential it bears.  XCN isn't even on any major non-Chinese exchanges yet.  Compared to other less-exotic coins' massive hype/market caps, obscure young XCN is nothing and I will accumulate as many as possible while the market cap is less than $100k.  A $65,000 market cap for XCN is a joke; nom nom nom cheap coins!!! 

Current market cap is irrelevant given the emission that won't significantly decrease for several years. If you think the current price (or even worse the price a few days ago) is sustainable then you are betting on a market cap in the relatively near term of many millions of dollars.

[smooth]

My point is ultimately if you spend the coin for some hard asset, e.g. land, car, electronic fiat (since paper is going away), then you are identified with some coins that you exchanged for the asset. That you mixed them with ring signatures or CoinJoin to hide the trail where they came from, doesn't stop the authorities from demanding you reveal your private keys to prove you have given them the trail as they may compel you to do.

This is false. Yes, you are personally identified once you buy the land, car, etc. This would be true even if you paid with magical pixie dust coins that are fully anonymous in every sense of the word. This identifies where the seller got the coins from.

However even if you are forced to reveal your private keys, this doesn't unmask where you got the coins from, at least not in the cryptonote design with ring signatures.

[iCEBREAKER]

As for money, XCN's market cap is extremely tiny in proportion to the amount of innovation and blue-sky potential it bears.  XCN isn't even on any major non-Chinese exchanges yet.  Compared to other less-exotic coins' massive hype/market caps, obscure young XCN is nothing and I will accumulate as many as possible while the market cap is less than $100k.  A $65,000 market cap for XCN is a joke; nom nom nom cheap coins!!! 

Current market cap is irrelevant given the emission that won't significantly decrease for several years. If you think the current price (or even worse the price a few days ago) is sustainable then you are betting on a market cap in the relatively near term of many millions of dollars.

I don't think the current price is sustainable, because it's too low.   

Current low prices are the result of minimal public awareness, vanishingly small volume, high initial block rewards, low initial difficulty, and unequal distribution of mining resources (AWS/botnets/private miners/lack of pools). 

In a few months there will be more/better open-source miners/pools, higher difficulty/volume/awareness, and lower block rewards.  Not to mention an actual economy of goods/services!

Given how much the market loves HypeCloneScamCoins like CLOAK, expecting a valuation in the "many millions" for a truly disruptive project like XCN is fairly reasonable.  At the very least, it should be in the Top 100!

[smooth]

Given how much the market loves HypeCloneScamCoins like CLOAK, expecting a valuation in the "many millions" for a truly disruptive project like XCN is fairly reasonable.  At the very least, it should be in the Top 100!

You're missing the point. The price doesn't need to go up AT ALL for the market cap to reach into the millions and easily break the top 100, and even (in a few years at least) the top 10. The new coins will increase the market cap automatically.

The coin a week or so old. In 10 weeks it will have 10x the market cap with no change in the price at all. In two years it will have 100x the market cap, again with no change in price.

I'm not suggesting by the way the the price can't go up. I agree with you that there is potential for increased awareness, hype, maturity, etc. But it is very hard for a large bubble to develop from current prices given the high rate of new coins that needs to find a home every single minute.

I have said that when the price drops to what I consider to be a sustainable price given the constant emission, I will consider buying it, for largely the same reasons you state. It is actually fairly close now, certainly much closer than it was at 5k-10k satoshis when I first started saying this.

[iCEBREAKER]

Given how much the market loves HypeCloneScamCoins like CLOAK, expecting a valuation in the "many millions" for a truly disruptive project like XCN is fairly reasonable.  At the very least, it should be in the Top 100!

You're missing the point. The price doesn't need to go up AT ALL for the market cap to reach into the millions and easily break the top 100, and even (in a few years at least) the top 10. The new coins will increase the market cap automatically.

The coin a week or so old. In 10 weeks it will have 10x the market cap with no change in the price at all. In two years it will have 100x the market cap, again with no change in price.

I'm not suggesting by the way the the price can't go up. I agree with you that there is potential for increased awareness, hype, maturity, etc. But it is very hard for a large bubble to develop from current prices given the high rate of new coins that needs to find a home every single minute.

I have said that when the price drops to what I consider to be a sustainable price given the constant emission, I will consider buying it, for largely the same reasons you state. It is actually fairly close now, certainly much closer than it was at 5k-10k satoshis when I first started saying this.

I take your point about emission dominating demand in determination of market cap.  But I am betting on the fact that awareness/volume/hype/maturity/etc. can only go up due to exponential network effects (and at even faster rates than linear emission dilutes those effects on price). 

XCN is barely a week old, let's give it a couple of months before writing an obituary.     The high and long emission rate is there in part to prevent or at least regulate harmful bubbles; that's a feature, not a bug!   

Part of me is curious how much it costs for a botnet or EC2 running Wolf's latest to mine a block, but another part of me doesn't care and only looks at the bid/ask price spread.

[smooth]

XCN is barely a week old, let's give it a couple of months before writing an obituary.    The high and long emission rate is there in part to prevent or at least regulate harmful bubbles; that's a feature, not a bug!  

I never wrote an obituary, I said I would consider buying it! But only after the price goes down. Since I first said this, the price has gone down. A lot. It has more to go.