rpietila Altcoin Observer

[btc-mike]

...

Anonymint explained how CN bloat CANNOT be solved.

...

Where did he say this? I haven't seen that argument before.

Look through his posts, there's a recent one (about 1-2 weeks old) where he talks mainly about Zerocash, but mentions CryptoNote towards the end. There's also an older discussion in the Monero thread.

For those interested, here is Anonymint's post

https://bitcointalk.org/index.php?topic=583449.msg6662938#msg6662938

[darkota]

...

Anonymint explained how CN bloat CANNOT be solved.

...

Where did he say this? I haven't seen that argument before.

Look through his posts, there's a recent one (about 1-2 weeks old) where he talks mainly about Zerocash, but mentions CryptoNote towards the end. There's also an older discussion in the Monero thread.

For those interested, here is Anonymint's post

https://bitcointalk.org/index.php?topic=583449.msg6662938#msg6662938

This is a positive aspect of CryptoNote that adds anonymity, but again it is not so effective without reliable IP obfuscation

Essentially Anonymint is declaring that coins that don't use I2P, don't support full anonymity., Also at the time he wrote about Cryptonote, he misinterprated the Cryptonote Whitepaper, see below

This is actually pretty easy to solve and CryptoNote already implements it: every transaction is broken up. There will always be outputs in the blockchain matching the broken-down components. Unlike CoinJoin, this is done without any participation from anyone else. The other matching amounts are not being spent at the same time; in fact they can be used as many times as needed as an ambiguity factor without actually being spent. This means the opportunity to use ring signatures isn't infrequent at all -- you can send any amount you want and it will be appropriately matched and mixed. (See section 4.5 in the white paper.)

[darkota]

Below is Anonymint's post on Zerocash, Cryptonote, and Darkcoin. He explicitly says he prefers Cryptonote over Zerocash, and his own words on Darkcoin are," Darkcoin (CoinJoin innovation) is really not at the level of the two above. You can review my comments in the Darkcoin thread to see why."

Zerocash will be announced soon (May 18 in Oakland? but open source may not be ready then?).

Here is a synopsis of the tradeoffs compared to CyptoNote:

1. Zerocash hides everything, even the money supply so if the master key was compromised or if the highly complex bleeding edge crypto is cracked, no one will know.

2. They will claim to generate the master key at a ceremony or devise a way to compute in parts, but nothing they can do will insure it isn't compromised. CPUs even have special firmware that allows the NSA to reprogram them remotely, and even computation can be intercepted wireless with RF signals. Whereas we have to place all trust in a single party with Zerocash, with CN the trusted parties are changing on each transaction. Compromising the master key doesn't compromise the anonymity, but does compromise the money supply which could be expanded invisibly. Cracking the highly complex bleeding edge crypto which has not been sufficiently vetted over years, could compromise the anonymity ex post facto (it is all on the block chain).

3. Both CN and Zerocash use a form of cryptography which is not immune to quantum computation attack, if that becomes a reality in the future.

4. Zerocash transactions add up to 3 minutes of additional transaction delay which is much worse than Zerocoin. Zerocash (full node computation and block chain) resource requirements are centralizing but much improved over Zerocoin.

5. Zerocash hides everything so it is not necessary to obscure your IP address.



Thus on balance I prefer CN, but I like to see it altered to use a quantum computer resistant algorithm. And then we need to add IP address obfuscation as well that is superior to Tor and I2P.

Darkcoin (CoinJoin innovation) is really not at the level of the two above. You can review my comments in the Darkcoin thread to see why.

Below is Gmaxwell's, the maker of coinjoin, post about Darkcoin. "More amusingly, what DarkCoin does is highly centralized because the software is closed"

Ozziecoin, Your pump and dump dance would probably be more effective if you were less transparently dishonest in your approach.  I'm normally happy to ignore the nonsense in the altcoin subform, but since you saw fit to go distrupt the coinjoin thread with some offtopic insult hurling I thought I'd bring the extensive response back here where its topical.

CoinJoin is trustless— which is orthogonal with centralized or decentralized, it could be implemented several ways (though trustlessness is usually a prerequisite to a decenteralized implementation). Post 5 in the CoinJoin thread writes in depth about implementing it in a decenteralized way, none of which appears to have been implemented by the darkcoin developers as far as I can tell— from what I've heard it seems that they're not even able to understand it. (This is a disappointment to me, since I was trying to describe these ideas clearly so others could understand them.)

More amusingly, what DarkCoin does is highly centralized because the software is closed— you can't get more centralized than closed source. What the actual behavior is, is anyone's guess— it's impossible to review due to it being closed— though "masternodes" does not sound like something decenteralized, it sounds like something that creates a small chokepoint which could be used to deanonymize its users.

As I've said before CoinJoin is interesting because it's inherently part of Bitcoin already— it just needed better tools (and now there are some, e.g. darkwallet) to make it available to people.  It's a privacy improvement over not having it, but it isn't perfect, but it also didn't require any changes to Bitcoin (much less a whole altcoin) to deploy it.  In an incompatible system much better is possible as is proposed by ZeroCash and much better is actually _realized_ by Bytecoin (and its forks... Monero, Fantomcoin, etc.), the later are actually working (if immature, due reinventing many wheels) implementations of much stronger privacy, decenteralized in their implementation, all released under a good open source license.

[Brilliantrocket]

Way to cite old posts that are not fully relevant, Darkota. In his newer one he clearly states that CN cannot scale. He also acknowledges that Darkcoin solved a fundamental problem of coinjoin by requiring collateral. The software is not 100% complete, so why would it be open sourced now? The plan is to finish, then open source.

[Brilliantrocket]

Btc Mike, that's not it. I'll link it when I get home.

[Este Nuno]

If CryptoNote has scaling issues with it's anon technology, is that a potential use case for FantomCoin? First use case I can really think of for a merge mined CN coin, but it sounds like it's plausible. It could take some pressure off XMR or BBL or whatever emerges as the main coin.

FantomCoin is just another CryptoNote coin. What do you mean here?

From what I understand it's not a standard CN coin but a merge mined coin like Namecoin is with Bitcoin. So if everyone is using Monero but there is some sort of issue with scaling as people are mentioning in this thread(I'm not familiar with the technical details here, so I'm taking this on face value) then FantomCoin can be added to everyones regular Monero mining routines and then used as a sort of overflow currency. Since it shares the same core technology.

I'm just throwing out ideas here since I can't think of another good use case for FantomCoin since it's been designed to be merge mined.

[btc-mike]

Btc Mike, that's not it. I'll link it when I get home.

Ok thanks. I am interested in reading.

I went digging through DRK thread. This is the post I referred to earlier. https://bitcointalk.org/index.php?topic=421615.msg6034036#msg6034036

[binaryFate]

I'm just throwing out ideas here since I can't think of another good use case for FantomCoin

Maybe because there aren't (m)any. 

[boxuser]

you should take a look at Credits CRD https://bitcointalk.org/index.php?topic=634403.0 http://vimeo.com/100148381

Hi, I am rpietila. Welcome to my first thread on altcoins. I have been a Bitcoin owner since 2011 but never owned any alts, until I bought some MRO after it hit the exchange last week.

The rules of this thread are very strict, as always in my threads:

- There is no freedom of speech. The topic is altcoins, but I also want that it stays in a level that is possible and interesting to read for a busy Bitcoin holder that does not care about alts. I know how it feels to be a busy Bitcoin holder, so I steer the discussion to the maximum benefit for me, and for my readers.

- Which alts can be discussed, is up to me. Mentioning an alt after that specific alt has been banned from a thread results in a ban for you. If you do not obey my ban from the thread, historically you have had 100% chance to be banned from the forum as a result. Don't try your luck.

- Posts may be deleted for whatever reason. Deletion does not necessarily mean that the post was offensive. It may also have been too long quote (in which case either the original, or the reply may be pruned), repetition of yours or somebody else's point, or anything else.

- Moderating actions are written in red. Others are not allowed to use red.


My take on altcoins

As my readers have noticed, I am not a big fan of altcoins. I have a distaste for the concept that enriches quacks and dumpers, I have never seen much long-term viability in them, and I have little time compared to money, and following the pump-and-dumps that all altcoins (as well as Bitcoin!) are prone to, would take far too much time compared to the meager gains achievable in the illiquid markets. I don't even trade Bitcoin except the major swings, and those only with a fraction of my holdings.

It has not gone unnoticed in the altcoin circles that I would be a great marketing asset, but I have declined all offers until now. The reason is that the coins have been bad, obvious pump and dumps, and even though I would have made some gains participating in them, my readers would have likely made a loss, and not only is that an unrighteous way to make money, I don't even need it, since I believe in the long-term success of crypto, and of Bitcoin, and have enough of them to take care of all my needs in the future.

The classical altcoins do not offer anything relative to Bitcoin, except maybe a different hashing algorithm. An important thing to remember is that there is no long-term market niche for two coins with the same algo. The hashing power of the larger coin is constantly threatening to destroy the smaller one. Even if that does not happen, there are network effects in play that favor the larger coin and suppress the smaller.

The 2.0 coins are in development and offer interesting new features. These coins tend to be fully premined, though. It would be more prudent to call them "shares". I have started many companies so that in the beginning I own all the shares, and I try to raise money and enlarge the ownership by offering them to the public. There is nothing wrong with that, but it is not a way to distribute these wide enough for them to ever function as a currency. It is akin to monetizing your ideas, generating value out of nothing, and I believe these coins are doomed to fail for this reason alone, not to mention that as startups, their failure rate is anyway 70-90%.

A new category that has just surfaced in 2014, are the privacy-enhanced coins. Although these are new, and much development is needed and is going on, the value proposal is appealing: unlike Bitcoin, which I believe is already well analyzed so that the enemies of privacy can attribute a name to most of the large addresses, these coins can offer true privacy and anonymous holdings and transactions. Not all of them, and not perhaps yet, but the potential is there. They are also seeing some price action.

Please consult the Cryptocurrency market cap when reading on. Note that I am comparing the prices relative to BTC only, so most of the coins may make gains in dollar terms even though I am bearish on them in BTC terms, once the next BTC bubble comes.

LTC
is the leading scrypt coin. On the one hand, the emergence of scrypt ASICs may provide a support to LTC's stagnating price (like SHA256 ASIC's did to Bitcoin in early 2013), on the other, it may be that they are just used to mine whatever is the most profitable coin to sell, and the proceeds are used to buy BTC. Typically LTC shoots up at the late stage of a BTC bubble. Therefore I am bearish on LTC just now, but it might be a buy when it hits 0.01, in anticipation of a leveraged rally with BTC.

DRK
This coin is centralized to be mined by masternodes. I have also heard that the developer of this coin is misrepresenting the truth concerning premine, and that he holds 2 million coins (out of 4.3M). This is a reason to be very cautious. Also DRK is in no way cheap, and there is not yet much use for it, so it is all marketing and speculation. I would not buy it now, as I did not when it was 10 times cheaper.

NXT
is 100% premined to a few executives in the beginning. It is a startup, and not a currency, and I don't believe it will ever be. Invest accordingly.

DOGE
is one of the 2 coins (other was AUR) where I saw some merit. This was when it had just come, at 35s. Now I believe it is in a terminal decline, since there are no markets for all-around coins except BTC. A further threat is that DOGE's inflation is quickly slowing, making its network very vulnerable. I advice to sell out on this one.

XRP
is pronounced crooked by a few of its developers, who have recently left the company. Even though there never was any reason to buy those, selling them is my advice if you have any.

MSC
100% premine. I have to admit that I don't know much that they are doing, but I have little belief that this coin can beat BTC in value appreciation, and there is a high risk that it will just fail. If you ever need MSC for any purpose, just buy it then.

BC
is designed a 100% premined pump&dump get-rich-quickly coin, which I did not touch when it was introduced to me in the early days of the first pump. Stay out (unless you like to be on the receiving end).

QRK
is also a secretly premined coin, which I believe is already in a terminal decline after the original pump was successful.

XPM
is surprisingly pricey still. Don't buy it.

AUR
Even though I was interested in this before the great pump in March (and would have made up to 100x gains if I had bought), now it is in a "following" mode after crashing back. If I moved to Iceland, I would probably start using it. Not an unconditional "sell" though.

MRO (Monero)
Okay, there was a reason why I wrote on alts. Cause I have just made my first altcoin investment ever! Monero has a trait which pretty much all other alts lack: slow and geometrically decreasing issuance. At present, only 5% of MRO is mined, and even after 4 years there will still be 20% left to be mined. There is no premine, and the community consists of several people Smiley Furthermore, it is at least currently a CPU coin, since the hashing algorithm is designed to make it difficult to implement for GPU let alone ASIC. These things make it "fair" so that there is no way to amass large stashes except by working for them in the competitive mining or buying in the open market.

The market for the coin is very active and extremely liquid. There was an OTC market in the beginning. MRO was listed in Poloniex 5 days ago and the reception has been good. It has been the most traded coin ever since despite having a market cap of only 1-3 M$! Up to 10% of the outstanding MRO changes hands daily in Poloniex, mitigating the extreme volatility that is plaguing many alts with concentrated ownership.

And now comes the main point: The coin has a feature, which is not implementable in Bitcoin - privacy! It is called CryptoNote, and means that all transactions are mixed in a protocol level. This is imo the most advanced privacy that is currently found in crypto universe, although I am sure that some disagree and let them teach me how I am wrong Wink

The coin is probably circulating quite widely already. New mining is about 30kMRO per day (BTC180), which is about $100k (!) and the price is rising (despite that). This is not a pump and dump coin, because the inflation takes care that new coins are constantly coming to the market. A word of warning though - the market cap may seem lucratively small, but the total issuance of MRO is 20 times the current, which is a little less than that of BTC. Therefore it is easy to compare the relative valuations by just comparing the prices. At 0.006 BTC currently, MRO is not the cheapest coin around (1:166 of BTC). I would advice to not buy hastily, and not participate in bubbles (if any). Mining is also an option.

This is the first altcoin I bought, and I did it during the time when it had been listed in the exchange. My relative position is less than in BTC though, so if only one remains, I would still do better if it is BTC Smiley

ADD: Relative position means: (my holding)/(total issuance).

[Brilliantrocket]

Here is the post I referrenced earlier. It's quite a long post, but the part concerning CN is near the middle. And please don't bring up where he says Darkcoin is simple coinjoin (older post) , he acknowledges that it isn't further down.

https://bitcointalk.org/index.php?topic=557732.msg7513123#msg7513123

[Brilliantrocket]

"The anonymity of CryptoNote (i.e. ByteCoin, Monero, and clones) requires that all transaction amounts be broken into separate transactions for standardized fragments which causes massive blockchain bloat (for any reasonable level of anonymity) and the blockchain can never be pruned. There is already a problem with Bitcoin's blockchain being too large and it doesn't have this massive bloat. In short, CryptoNote (and Zerocoin) can't scale."

[darkota]

Here is the post I referrenced earlier. It's quite a long post, but the part concerning CN is near the middle. And please don't bring up where he says Darkcoin is simple coinjoin (older post) , he acknowledges that it isn't further down.

https://bitcointalk.org/index.php?topic=557732.msg7513123#msg7513123

CryptoNote doesn't hide the amount and the payer is mixed with a limited number of numerous other potential payers, so the IP correlation can be used to narrow the possibilities statistically and home in on identity, by observing patterns across all users. Thus the lack of IP address obfuscation in CryptoNote (assuming Tor is really a honey pots, and or most users fail to employ Tor) reduces the anonymity. -gmaxwell


While it may not be able to scale at Bitcoin levels, Monero's chain atm is twice Bitcoins, which is very reasonable considering it gives the highest level of anonymity there is for cryptocoins right now. He also doesn't say Anything about it being impossible to reduce, why you may ask? Because Crypto_Zoidber already reduced it for his own coin and reduced bloat by 50%-70%, and Monero also reduced the majority of the bloat, which was caused by dust transactions. Again, BrilliantRocket, it's either you greatly misinterpret information given to you, or you lie and try to manipulate others with selective wording

_______________________________________________________________________________ _____________________________________________

CoinJoin’s algorithm suffers from not being atomic and thus it can be repeatedly jammed by an adversary, i.e. denial-of-service. This is because first the inputs have to be collected, then the outputs have to blind signed with a group signature, and then finally all inputs have to signed. If any one of the participant senders fails to complete all the steps, the transaction is jammed and the process must start again. All proposals for throttling or blacklisting adversaries was argued to be ineffective and intractable. Darkcoin innovated CoinJoin by adding a collateral payment which is forfeited by participants who fail to complete all steps. This requires a random master node to break the unlinkability as it knows the matching output of each input. It is assumed that not all master nodes will be adversaries and thus sending multiple times through different master nodes will provide a probablistic level of unlinkability. The master nodes are purchased and it isn’t clear that a sufficiently powerful adversary couldn't sufficiently Sybil attack by acquiring a larger percentage of the master nodes. There is also concern this might also enable the adversary to steal collateral payments. Also the master nodes aren’t untraceable and thus could perhaps be held liable by governments for breaking AML and KYC laws. CoinJoin and Darkcoin suffer from the simultaneity timing problem that other spenders need to send spends of the same amount simultaneously. -gmaxwell

Gmaxwell also shows that while Darkcoin have "advanced" coinjoin, it still suffers from the same issues, not to mention the Masternode centralization problem.

Darkcoin's anonymity is simply put, Trivial and Inferior to Cryptonote anonymity.

[Globb0]

Right then liquidated a bit and I placed a monero order. Lets see.

[digicoin]

DRK supporter/dev lies as usual  

[darlidada]

I don't know what it's worth but I've found some interesting stuff analyzing XMR latest 2 months of trading on poloniex. It seems that the trend we are in corresponds to the trend we were in 1 month ago:

6 June : high 2,58 / low 1,75
7 july  : high 3,9 / Low 3

Then we go up ~ 0,1 mbtc per day like in june. I advise you to compare the data for yourself as I'm too tired to copy everything.  The "big reversal" happened the 10th of June (high 3,5; low 2,1 ; close 2,6) so if XMR is really on a monthly cycle, history could repeat itself on 11th of July. Place your orders accordingly.



tl;dr: we hit bottom 3mbtc and buying at 3 was like buying at 1,75 one month ago.

edit: edited numbers typo (0,1 mbtc per day not 1 mbtc)

[binaryFate]

My hypothesis on the decline of darkcoin is the following.  (Not that I care much, but I'll watch it attentively for the fun).

The hype is already partly over, and will keep declining, this is inherent to the life cycle of "hype" alts. Add to this the better cryptonote technology, recently instantiated in a fair-launch coin with monero, whose high-quality community keeps growing and will quickly attract part of the darkcoin one.
So the decline seems unavoidable, but noting unusual at this stage.

But, unlike other alts, darkcoin is relying on master nodes that require at least 1000 coins. Running a masternode earns the owner some interest. What I think will happen is that once the first masternode owners realize they will make better profit by selling their +1000 coins now rather than earning interest on a coin which is loosing value, well they will sell! This will be a catalyst to lowering even more the price, making more masternode owners realize that they'd better do the same as soon as possible, etc.
So the decline might be faster than "usual", due to this domino effect, waiting to trigger.

[darkota]

My hypothesis on the decline of darkcoin is the following.  (Not that I care much, but I'll watch it attentively for the fun).

The hype is already partly over, and will keep declining, this is inherent to the life cycle of "hype" alts. Add to this the better cryptonote technology, recently instantiated in a fair-launch coin with monero, whose high-quality community keeps growing and will quickly attract part of the darkcoin one.
So the decline seems unavoidable, but noting unusual at this stage.

But, unlike other alts, darkcoin is relying on master nodes that require at least 1000 coins. Running a masternode earns the owner some interest. What I think will happen is that once the first masternode owners realize they will make better profit by selling their +1000 coins now rather than earning interest on a coin which is loosing value, well they will sell! This will be a catalyst to lowering even more the price, making more masternode owners realize that they'd better do the same as soon as possible, etc.
So the decline might be faster than "usual", due to this domino effect, waiting to trigger.

Your hypothesis is many other's hypothesis as well. In the beginning, any sort of announcement from the drk dark, evan, would create rapid hype and  a usual increase in price. However, his recent announcements have hardly budged the price positively at all. I think it also has to deal with the continuous failed RC3 launches(twice so far) and how Darkcoin's anonymity is trivial compared to others like Monero. Darkcoin could be getting ready to have a mega dump soon enough, once the whales supporting( I suspect a mighty few already stopped supporting drk) it sell off and move on.

[saddambitcoin]

I don't know what it's worth but I've found some interesting stuff analyzing XMR latest 2 months of trading on poloniex. It seems that the trend we are in corresponds to the trend we were in 1 month ago:

6 June : high 2,58 / low 1,75
7 july  : high 3,9 / Low 3

Then we go up ~ 1 mbtc per day like in june. I advise you to compare the data for yourself as I'm too tired to copy everything.  The "big reversal" happened the 10th of June (high 3,5; low 2,1 ; close 2,6) so if XMR is really on a monthly cycle, history could repeat itself on 11th of July. Place your orders accordingly.



tl;dr: we hit bottom 3mbtc and buying at 3 was like buying at 1,75 one month ago.

edit: edited numbers typo

the other day i was daydreaming about a Monero that bubbled on a regular basis but always settled at a higher low...

[darlidada]

the other day i was daydreaming about a Monero that bubbled on a regular basis but always settled at a higher low...

here are the lows that i've personally marked :

0,8 mbtc when we were only at cryptonote.exchange.to
1,75 mbtc one month ago at poloniex
3 mbtc a few days ago at poloniex

the 3 mbtc low happened at a diff more than 3 times higher than the diff of the 1,75 mbtc low - we'll see if it holds:) and now all we need is an excuse to go into bubble mode.

[Brilliantrocket]

Are you being disingenuous or do you just suck at math? If you have twice the blockchain growth with just a tiny fraction of the transactions, what do you think will happen if you were at real volumes?