rpietila Altcoin Observer

[Brilliantrocket]

And the bloat in CoinJoin-esque "anonymity" solutions like DRK is much worse, because a tx gets divided in hundreds of sub-tx. Stop ignoring this fact

Actually the recent drk developments have drastically reduced the bloat - there is no need to divide every tx.

Darkcoin is constantly evolving and improving.

On the average a drk send tx gets divided mroe than 3 times, which is worse than mixin 3, the most used mixin, which offers clearly a higher anonymity than drk

Mixing itself causes no bloat. Change causes a very small amount of bloat. Far, far less than CN.

[parker928]

Ok, I gotta say...

Reading this thread has significantly changed my perspective on altcoins in general. I will admit I stupidly hold bitcoin to altcoins in a 1:5 ratio, and crypto to fiat in a 3:1 ratio. Some say this is illogical, but I guess I really just want to make sure I don't miss the next big thing.  I have both darkcoin and monero, and some blackcoins as well. Lots of blackcoins actually. I am debating on what to do with the blackcoins. Some input from senior or hero members on this thread would be well appreciated. Please, if any of you should decide to take the time to offer some well needed advice on what I should do with my bc...please incorporate the fact that all my bc was mined into your response. I never bought any.

As far as the darkcoins...I want to say one thing. Brilliantrocket's words have singlehandedly made me realize I should sell them and put the money into xmr. I have been holding them for a long time...I bought them forever ago, when drk was a dollar, before I ever heard of monero...

Anyway, to elaborate more on why Brilliantrocket's blind faith in darkcoin has made me decide to dump: It seems to me that he has no logical argument for choosing to hold darkcoin instead of monero. Neither do any of the supporters on the DRK forum. Neither coin is perfect, but the inadequacies surrounding DRK as a currency seem to far outweigh the potential benefits. I see you guys throwing loads of good points at him and all of them are either ignored, brushed under the rug, or just flat out blasted with illogical arguments which could even be loosely considered borderline FUD. There seems to be a stubborn cult of DRK holders, who may be falling victim to fake promises and illusions of grandeur, as I have with blackcoin, and even THEY can not logically defend their coin against educated xmr users and holders. My grandfather would refer to this as "blind optimism."

Don't mean to ramble...I guess I just wanted to show a bit of appreciation for the new light which I now see crypto in as a result of rpteila's words and this thread in particular.  I also wanted to say that Brilliantrocket's words did not serve him well, I mean no offense to you, Brilliantrocket, but I think you should re-think your strategy when it comes to forming arguments because you effectively just convinced me of the exact opposite of what you intended to convince me of. Sorry man.

Anyway, my one question is still on the table...about the blackcoins. Blackcoin in my opinion is the most innovative altcoin in the crypto scene right now. In my opinion, there is no logical reason why it is not atleast 100k satoshi...which leads me to believe that the shitty distribution has taken more of a toll on the coin that I thought it would. Some thoughts on this from older and wiser man would be much appreciated.

[smooth]

Anyway, my one question is still on the table...about the blackcoins. Blackcoin in my opinion is the most innovative altcoin in the crypto scene right now.

I'm not familiar with blackcoin, so please explain to me how it is more innovative than XMR and how these innovations result in valued added to the end user.

Here's your chance to do a better job than brilliantrocket in forming and presenting persuasive arguments.

[parker928]

Anyway, my one question is still on the table...about the blackcoins. Blackcoin in my opinion is the most innovative altcoin in the crypto scene right now.

I'm not familiar with blackcoin, so please explain to me how it is more innovative than XMR and how these innovations result in valued added to the end user.

Here's your chance to do a better job than brilliantrocket in forming and presenting persuasive arguments.

Well, I was really ASKING moreso than TELLING, and when I said more innovative than all alts I wasn't really thinking about monero. I don't consider monero an altcoin, but I should have been more clear about that. Monero is a better currency than blackcoin in my opinion but it's like apples and oranges because monero has the privacy deal where blackcoin seeks to be more transparent, they fill 2 completely different niches. Also, I am more heavily invested in monero than I am in blackcoin in terms of current dollar amount, probably should have mentioned that haha. Anyway, here it goes:

Since blackcoin to monero is apples and oranges, I would like to use bitcoin as my proverbial reference point when speaking about blackcoin. I understand you guys want monero and bitcoin to run side by side, but I envision a world where monero and blackcoin run side by side. Blackcoin, to my knowledge, is the first PURE proof of stake, other than nxt of course, but as I understand it there are problems with nxt aside from the distribution that were effectively solved by blackcoins implementation of proof of stake system. The exact mechanics of it I do not know. The proof of stake deal effectively cuts out wasteful mining, which I initially did not see as a problem until I began to think long term...

The bitcoin network uses approximately 15 million dollars worth of electricity per day to secure the network. Let's ignore the toll that takes on the environment, and concentrate on the downward price pressure that causes. Since you can not pay for electricity with bitcoin directly, I believe it leads to inevitable dumping of bitcoin by miners in order to cover costs. Also, asic manufacturers are raping people, and causing a lot of people to need to dump back to fiat to get ROI on their asics, which will likely never happen due to the fact that the manufacturer is always one step ahead of the consumer, but I digress. What would happen to the price of bitcoin if 15 million dollars worth of bitcoin was NOT being dumped every day to cover the cost required to secure the network? Or if asic miners were NOT dumping bitcoin and moving value back to fiat in order to recoup their original investment? I believe it would eliminate most of the downward pressure, and raise the price of a bitcoin, effectively adding more value to the network. Let me rephrase that - it would not ADD value, but it would stop the forces that are taking value away from it. I guess in short, what I am saying is that proof of work, whatever algorithm, is a proverbial handicap on the value a currency. By contrast one might argue that proof of stake is no good because since there is effectively less at stake, it would require fewer resources in order to perform an attack the network, a problem which is currently being worked on by the blackcoin developer, rat4, he calls it proof of stake 2.0. His github account has over 3000 commits. I am sure you are fairly well educated on the merits of proof of stake so excuse me if I am telling you shit you already know.

Also, I do not know if you heard about the whole bithalo/blackhalo thing, but basically a well educated blackcoin holder named david zimbeck developed a platform for decentralized exchanges. That is a huge innovation in my opinion, one which is tied directly to blackcoin. So I guess I see a ton of potential for blackcoin as a usable currency once the security issues with proof of stake are fixed, and it just seems so undervalued to me right now, it would be so painful to let them go only to see the value rocket to where it should be. Also, one can't ignore the transaction times for blackcoin...with a block time of one minute, average time to first confirm is 30 seconds, compared to bitcoins ten minute block time. I should definitely know the block time for monero off the top of my head, but I don't. I would assume it is under 2 minutes.

Anyway, to answer your first question directly: I do not believe blackcoin is more innovative than monero, but it fills a seperate niche, and I believe it is more innovative than anything that is based on bitcoin protocol, and part of me thinks bitcoin protocol is here to stay.

To answer your other question, how does this add value to the consumer: You kind of stumped me with that. I guess, technically, it doesn't really add value to the consumer, other than eliminating the need for a payment processing service in order to avoid waiting around at the merchants store for your transaction to confirm so he is comfortable letting you leave, but that problem would technically be solved by monero too, wouldn't it?

EDIT: After typing all that, I realize it was kind of a struggle to answer your questions, and that in itsself sort of answered MY question haha. Good think I was asking, not telling =)

another EDIT: I do think the names have an effect on people's perception of the currency too. Monero is perfect because it sounds like money, just said in a more sophisticated way, or a different language or something. It is esperanta, correct? Bitcoin's name is perfect too, bit-coin. A coin made up of bits. It's perfect. I like the name blackcoin, it sounds classy and badass, but it doesn't sound like something that you might be prompted to pay with. Neither does boolberry haha.

[Melbustus]

Ok, I gotta say...

Reading this thread has significantly changed my perspective on altcoins in general.

Good. It should be somewhat clear that 99% of existing alts will lose 99% of their value over the next few years. Most alt "innovations" either aren't innovations (like tweaking blocktime or supply), don't work, don't scale, or don't matter. Furthermore, ninja-mining, pre-mining, ugly emission curves, 51%s, NaS attacks, etc, can all kill coins even if there *were* actual innovation. And further still, it's probably the case that if any meaningful, viable innovation ever gets done in the alt-space, bitcoin could eventually incorporate it, making the separate chain irrelevant.

You have to understand that bitcoin's innovation was 30yrs in the making. Solving distributed global consensus was a breakthrough in computer science. There has not been a single innovation in the alt space that even sorta compares to that. Not one. Which is why bitcoin is highly likely to remain dominant.

Furthermore, it's been well understood for the past 20-30yrs that if you could solve distributed global consensus, you could do digital cash, and it would be a big deal. It's just that no one had figured out how to solve double-spending (global consensus) prior to Satoshi. There is no similar known problem being attacked in the alt-space for which a solution would be a breakthrough of similar magnitude. So an alt would have to luckbox into some completely unforeseen yet incredible innovation.

So bitcoin likely remains the primary crypto-coin. That said, there *are* potential niches to be filled by alt-coins. The only one I can clearly identify is anonymity. It's clear that bitcoin does not offer meaningful anonymity unless the user is technically skilled enough and motivated enough to obfuscate their transaction chains sufficiently. Furthermore, bitcoin is becoming a global asset class, fit for corporate balance sheets and HNW portfolios. It's also obviously seeing high-profile merchant adoption, and tacit acceptance/approval by various governments and regulatory bodies. If bitcoin offered technically pure anonymity that required zero user effort, governments would probably be a lot more directly hostile towards it. Thus, it seems unlikely that the bitcoin community would embrace full-anon tech in bitcoin core; lest governments react harshly and reduce existing ecosystem investment value dramatically.

So that leaves the anonymity niche open to an alt. As I've previously noted, ever since Zerocoin was published, I thought that when it came out as a functional implementation, it'd be the first actually interesting alt-coin. Well, it looks like these CryptoNote coins have beaten it to the punch of functional anonymity. Which CN coin will win is a different matter. XMR seems out in front, but the waters are muddy still.

I don't see any other obvious niches for alts. Turing completeness is interesting in theory, but I wouldn't trust the security of such a chain for a quite a while, and much of the benefits may be possible in bitcoin anyway. Other than that.... ?

Now that's not to say you couldn't make a killing if you play the alt market perfectly, and jump from coin to coin as they fall in and out of favor. But good luck not losing your shirt.



tl;dr: Alts suck, with very few even theoretical exceptions.

[Peter R]

Ok, I gotta say...

Reading this thread has significantly changed my perspective on altcoins in general.

Then this thread is working.  I second everything Melbustus just said.  

Regarding how you should allocate your crypto portfolio, the first thing is to understand what the neutral crypto portfolio allocation is.  According to Coinmarketcap.com:

   bitcoin market cap         = $8.033 billion
   total crypto market cap  =  $8.571 billion

Bitcoin represents 94% of the crypto market cap.  So, if you think bitcoin will appreciate at a faster rate on average than alt-coins in aggregate, then you should allocate less than 6% of your crypto portfolio to the alts.  If you think alt-coins will eat into bitcoin's % market share, then you should allocate more than 6%.  If you think you can pick a winning coin, then of the % you have decided to allocate to alts, you should invest more heavily in those you think will be "winners."

Consider Crypto Investor X.  He thinks bitcoin will tend to grow faster than alt-coins due to the network effect, but he also thinks there may be a small niche market for a crytpo coin with strong privacy protection that might displace Litecoin.  Because he believes in the importance of the bitcoin network effect, he should probably invest less than 6% in alts (let's say he chooses 3%).  He would then allocate this 3% between the alt-coins showing promise in the area he is interested in (strong privacy), trying to invest more heavily in those he believes to be the most legitimate.  

[digicoin]

 He would then allocate this 3% between the alt-coins showing promise in the area he is interested in (strong privacy), trying to invest more heavily in those he believes to be the most legitimate.  

Bytecoin (BCN) devs (and supporters) should read this. 80% premined is not a way to make it look legitimate

[smooth]

You have to understand that bitcoin's innovation was 30yrs in the making. Solving distributed global consensus was a breakthrough in computer science. There has not been a single innovation in the alt space that even sorta compares to that. Not one. Which is why bitcoin is highly likely to remain dominant.

Furthermore, it's been well understood for the past 20-30yrs that if you could solve distributed global consensus, you could do digital cash, and it would be a big deal. It's just that no one had figured out how to solve double-spending (global consensus) prior to Satoshi. There is no similar known problem being attacked in the alt-space for which a solution would be a breakthrough of similar magnitude. So an alt would have to luckbox into some completely unforeseen yet incredible innovation.

I sort of agree.

However, the question I would ask is whether distributed global consensus has actually been "solved." Bitcoin has significant issues with centralization (i.e. not necessarily distributed in practice) and also significant longer term issues with how to support distributed mining (if that even still exists at all) once block rewards go away (or drop to insignificance). Finally, true digital "cash" is probably less traceable than bitcoin.

Further, it is not clear that even today mining (costing several hundred million dollars, i.e. a large percentage of total capitalization) provides a robust and persistently useful trade off between cost and security.

It seems possible that in 20 years there will be a better solution that was 50 years in the making, with bitcoin as one piece that fell into place just as others fell into place over the last 30.

[smooth]

   bitcoin market cap         = $8.033 billion
   total crypto market cap  =  $8.571 billion

Bitcoin represents 94% of the crypto market cap.  So, if you think bitcoin will appreciate at a faster rate on average than alt-coins in aggregate, then you should allocate less than 6% of your crypto portfolio to the alts.  If you think alt-coins will eat into bitcoin's % market share, then you should allocate more than 6%.  If you think you can pick a winning coin, then of the % you have decided to allocate to alts, you should invest more heavily in those you think will be "winners."

By this logic a "neutral" allocation would be 99.9% in fiat (denominated assets). By choosing bitcoin at much more than 0.1% of your assets you are already actively managing. A lot.

Also, I'm not sure whether the better measure is the eventual supply or the current circulation. That doesn't change the picture for bitcoin much (somewhat over 50% of eventual supply is already released), but definitely changes the relative position of many alts (in both directions).

[Peter R]

   bitcoin market cap         = $8.033 billion
   total crypto market cap  =  $8.571 billion

Bitcoin represents 94% of the crypto market cap.  So, if you think bitcoin will appreciate at a faster rate on average than alt-coins in aggregate, then you should allocate less than 6% of your crypto portfolio to the alts.  If you think alt-coins will eat into bitcoin's % market share, then you should allocate more than 6%.  If you think you can pick a winning coin, then of the % you have decided to allocate to alts, you should invest more heavily in those you think will be "winners."

By this logic a "neutral" allocation would be 99.9% in fiat (denominated assets). By choosing bitcoin at much more than 0.1% of your assets you are already actively managing. A lot.

Correct.  So if an individual doesn't have at least 0.1% of their investment portfolio in crypto, then they are underweight.  Which means most people are underweight.  And this is why I think the Winklevoss ETF will have a large impact.  Why not risk at least 0.1% if the pay off is potentially 100X +?

By my own definition, probably everyone here is vastly overweight in crypto vs fiat.  I agree.  I think bitcoin will appreciate faster than fiat-denominated investments (in aggregate), so it makes sense to be overweight in bitcoin.  It's a bet I am willing to take, and one I think is in my favour based on the asymmetry of my knowledge.  That being said, I am much more confident in crypto in general than any particular alt coin.  

[rpietila]

By this logic a "neutral" allocation would be 99.9% in fiat (denominated assets). By choosing bitcoin at much more than 0.1% of your assets you are already actively managing. A lot.

Correct.  So if an individual doesn't have at least 0.1% of their investment portfolio in crypto, then they are underweight.  Which means most people are underweight.  And this is why I think the Winklevoss ETF will have a large impact.  Why not risk at least 0.1% if the pay off is potentially 100X +?

In round numbers:

Crypto = 10, 000,000,000 USD
World Total assets 1,000,000, 000,000,000 USD.

Crypto = 1/100,000 = 0.001% of all assets.

So actually for a median person with $100k in total assets, the neutral allocation would be to buy BTC0.002 for $1.

It is very difficult to convince anyone to do so, they typically insist on going way overweight with the overweight leverage coefficient of 1,000 to 10,000. And then have agony over minuscule price movements that only matter to them because they first decided to go 10000 times more long than is necessary 

TL;DR: If you are reading this and don't have bitcoins, BUY THEM. No matter how little. And don't sell until they are more than 50% of your total assets.

[ejinte]

rpietila shitcoin observer.
Have a look at maidsafecoin, they offer something truly unique. 

[Quanttek]

rpietila shitcoin observer.
Have a look at maidsafecoin, they offer something truly unique.  

I don't want to judge about their development skills (thought they were before completely unknown), but their selling methods are kinda scammy ^{[1] [2]}

[ejinte]

rpietila shitcoin observer.
Have a look at maidsafecoin, they offer something truly unique.  

I don't want to judge about their development skills (thought they were before completely unknown), but their selling methods are kinda scammy ^{[1] [2]}

To call it a scam is wrong.

David Irvines respons:
http://metaquestions.me/2014/05/01/surviving-a-crowd-sale/

Mastercoin retrospective:
https://docs.google.com/document/d/1Oo8bYKRarkG7S0YUJgP_-8Izkks9EZ1j_0bQ8dz6ahM/edit

Though right now it doesn't matter really. Crowd sale is over longtime ago.

[nakaone]

rpietila shitcoin observer.
Have a look at maidsafecoin, they offer something truly unique.  

I don't want to judge about their development skills (thought they were before completely unknown), but their selling methods are kinda scammy ^{[1] [2]}

To call it a scam is wrong.

David Irvines respons:
http://metaquestions.me/2014/05/01/surviving-a-crowd-sale/

Mastercoin retrospective:
https://docs.google.com/document/d/1Oo8bYKRarkG7S0YUJgP_-8Izkks9EZ1j_0bQ8dz6ahM/edit

Though right now it doesn't matter really. Crowd sale is over longtime ago.

maybe it is legitimate to ask why they need a currency different from bitcoin?

[rpietila]

rpietila shitcoin observer.

Let's make a poll:

First 10 people to answer get the chance to nominate 2 coins each, to be the discussion topic of the thread. Any other coins are banned, until I say so.

[rpietila]

XMR, BTC

[equipoise]

XMR, BTC

[JustBetweenUs]

NXT, FLT (that one's a longshot )

[BitcoinForumator]

XMR, NXT