rpietila Altcoin Observer

[kbm]

kbm
What buys guns? What buys governments? There may be a point of critical mass where the populations of the world become enlightened enough to choose what their medium of exchange will be, or there may not be. Don't read more into my statements than what they state. If dedicated mining hardware is seized, will the network fail or will it consolidate the efforts of the populace against the misanthropes that performed this act of violence? What of the coins that already exists, will they be seized? There are too many unpredictable variables to adopt a complete pessimism but I wouldn't put all my eggs into a crypto-basket either. Currently, crypto-coin is a warning to the central banks. The future will tell us more.

But what makes my money valuable? I'm not ruling out that people will choose their medium of exchange in the future (and I think we both clearly hope that the choice will be cryptocurrency?). I'm saying that that choice will be from a plethora of cryptocurrencies that either exist or are created at the time of choice.

Dedicated mining hardware is hard to seize if it's decentralized and is spread out over many different physical locations mining anything that can be of value that is a cryptocurrency, regardless of which cryptocurrency it is. The first seizure of a centralized mining outfit will be when this is proven .. because again crypto has no guns .. so it's a bad idea to centralize one of the main things that gives it security and value, while at the same time has extreme value.

Look what happened to Gox. Would the impact be nearly as devastating if, instead these little tokens of value were spread out into multiple cryptocurrencies? I wouldn't think so. What's exploding in the last year since then? Alternate cryptocurrencies are exploding. I'm not talking about the scam ones - everyone hates those. I'm talking about cryptonite, monero, darkcoin (shudder), counterparty, maidsafe, blackcoin. Some are crap, but the reality is that It's not a leap to say that their innovation has been hastened by the realization that these things become incredibly centralized very quickly. With little to protect the value that's at hand, and the only legitimate way of protecting such value being currently to spread it out amongst many other alternatives so that when that hand comes to scoop .. there's less to grab up .. what other solution can be had?

[aminorex]

OK so it's not the coins themselves that can be traced, but the people:

http://www.coindesk.com/bitcoin-fungibility-essential/
http://www.coindesk.com/government-sale-bitcoin-establishes-fungibility-precedent/

These articles may be misleading.  The body of court practice and precedent is large and complex, but fairly clear.  How it will be applied to crypto is less clear, but the natural and direct application can be quite disruptive.

[kbm]

OK so it's not the coins themselves that can be traced, but the people:

http://www.coindesk.com/bitcoin-fungibility-essential/
http://www.coindesk.com/government-sale-bitcoin-establishes-fungibility-precedent/

These articles may be misleading.  The body of court practice and precedent is large and complex, but fairly clear.  How it will be applied to crypto is less clear, but the natural and direct application can be quite disruptive.

Hm, yeah it would be strange to disqualify anything based on grounds of potential future regulations that may or may not exist on technical variables of something that may or may not change. If those types of regulations pop up and do prove to be detrimental .. that would be a different story. Until they show me they can enforce those regulations (that may or may not even happen), I guess I can't really take the articles for what they're worth. Good catch, I almost just accepted something without question that I read on the internet!

[r0ach]

If/When they raise the 1MB limit for blocks it gets potentially more serious. But I still tend to agree with what the XMR devs have argued in this thread before, that a 1TB+ blockchain isn't going to cripple a currency.

I don't think you've paid attention over the years if this is in doubt.  Gavin has planned on a mega centralized BTC all along, (no, I am not shilling for Peercoin):

https://www.youtube.com/watch?v=EIIkHfU2o8Y

[lebing]

If/When they raise the 1MB limit for blocks it gets potentially more serious. But I still tend to agree with what the XMR devs have argued in this thread before, that a 1TB+ blockchain isn't going to cripple a currency.

I don't think you've paid attention over the years if this is in doubt.  Gavin has planned on a mega centralized BTC all along, (no, I am not shilling for Peercoin):

https://www.youtube.com/watch?v=EIIkHfU2o8Y

its this kind of ridiculous embellishment that destroys potentially helpful, enlightening dialogue.

[binaryFate]

If/When they raise the 1MB limit for blocks it gets potentially more serious. But I still tend to agree with what the XMR devs have argued in this thread before, that a 1TB+ blockchain isn't going to cripple a currency.

I don't think you've paid attention over the years if this is in doubt.  Gavin has planned on a mega centralized BTC all along, (no, I am not shilling for Peercoin):

https://www.youtube.com/watch?v=EIIkHfU2o8Y

its this kind of ridiculous embellishment that destroys potentially helpful, enlightening dialogue.

+1, Gavin is just talking of the technical requirements to run a full node on a bitcoin network with orders of magniture more transactions than in 2011. It's just purely facts, it has nothing to do with "planning", even less with political agendas of some sort.

[iCEBREAKER]

If/When they raise the 1MB limit for blocks it gets potentially more serious. But I still tend to agree with what the XMR devs have argued in this thread before, that a 1TB+ blockchain isn't going to cripple a currency.

I don't think you've paid attention over the years if this is in doubt.  Gavin has planned on a mega centralized BTC all along, (no, I am not shilling for Peercoin):

https://www.youtube.com/watch?v=EIIkHfU2o8Y

its this kind of ridiculous embellishment that destroys potentially helpful, enlightening dialogue.

+1, Gavin is just talking of the technical requirements to run a full node on a bitcoin network with orders of magniture more transactions than in 2011. It's just purely facts, it has nothing to do with "planning", even less with political agendas of some sort.

This is exactly why Cryptonite was created to take advantage of mini-blockchains.  Instead of a 1TB blockchain that takes a giant server to be hosted, mini-blockchains may be run anything from smartphones on up.  XCN has the entropy advantage of proof-of-work and the democratic decentralization/small footprint advantages of proof-of-stake.

Of course XCN doesn't exist in a vacuum, and will allow Bitcoin to focus on large transactions/wealth preservation by taking the burden of small transactions off its already bloated blockchain.

[Este Nuno]

If/When they raise the 1MB limit for blocks it gets potentially more serious. But I still tend to agree with what the XMR devs have argued in this thread before, that a 1TB+ blockchain isn't going to cripple a currency.

I don't think you've paid attention over the years if this is in doubt.  Gavin has planned on a mega centralized BTC all along, (no, I am not shilling for Peercoin):

https://www.youtube.com/watch?v=EIIkHfU2o8Y

its this kind of ridiculous embellishment that destroys potentially helpful, enlightening dialogue.

+1, Gavin is just talking of the technical requirements to run a full node on a bitcoin network with orders of magniture more transactions than in 2011. It's just purely facts, it has nothing to do with "planning", even less with political agendas of some sort.

This is exactly why Cryptonite was created to take advantage of mini-blockchains.  Instead of a 1TB blockchain that takes a giant server to be hosted, mini-blockchains may be run anything from smartphones on up.  XCN has the entropy advantage of proof-of-work and the democratic decentralization/small footprint advantages of proof-of-stake.

Of course XCN doesn't exist in a vacuum, and will allow Bitcoin to focus on large transactions/wealth preservation by taking the burden of small transactions off its already bloated blockchain.

Maybe it would have taken a giant server to host a TB block chain 10+ years ago but these days that can be accomplished quite easily. And it's only going to get better as time goes on.

AnonyMint's argument centered around scaling to the petabyte level. I think it's safe say that's not going to happen with Bitcoin.

I like the idea of a mini-blockchain and it's nice to see some new technology. But I'm not really convinced that's really enough to do it at this point.

[aminorex]

My major complaint about XCN is that it isn't interoperable and convertible with BTC.   It should have been done that way.  How far you can take that is debatable.  That you could take it a lot farther than XCN did is obvious.

[binaryFate]

The mini-blockchain idea is an undermining in terms of security. This is ok, as long as it might nevertheless fits well somewhere in a broad range of different security/scalability trade-offs. However I see two obvious concerns to make it deserves a meaningful place on that range at the moment.

The first concern is that it could be achieved with something based on the bitcoin blockchain, in fact all these trade-offs could be all linked and based on bitcoin, you don't need a completely separated altcoin to achieve that particular security/scalability trade-off.
The second concern is that the scalability in terms of storage of the blockchain, is a non-issue. Even for bitcoin. Even for cryptonote if it takes 10 times the bitcoin size. The real challenges are the bandwidth and computational power required to receive/check/broadcast transactions in a VISA-scale crypto network.

Anything that plays with the ratio security/scalability can be based on the same intrinsic currency (and most likely it will be bitcoin). For something else to be actually really needed, you must completely go out of that range of security/scalability trade-offs and seek for something fundamentally differents. Yes, Monero, I'm looking at you.

[coinsolidation]

I think all these systems are immature, and inevitably supplanted by a successor.  I'm not sure which generation/feature-set will provide a stable platform, and I don't care to bet on a guess.  For more I would have to read the stuff.  If I'm wrong about something fundamental, I probably should read the stuff, because writing it off may have been a mistake.  Otherwise, I saved time.

The problem is not governments shutting down crypto.  The problem is governments taking over crypto, and destroying its useful features, such as finite supply and transactional privacy and freedom.

Privacy is extremely non-linear; in the extreme case, it is nearly a kronecker delta.  Network effects follow power laws, so they generally dominate over usability factors, but are in turn, ceteris paribus, dominated by the privacy factor.

This is the courtesan channel.  We have standards.

You cannot get alts unless you first get BTC ... Consequently, there is more demand for BTC.  No dilution is even possible until alts are usable in cases where they displace BTC.

My estimation is that outright scams (whether via scamcoins or hacks or fractional reserve, what-have-you) are the largest value-drain on the BTC economy, by two orders of magnitude.

I named fraud and related property crime as one such factor which I think would overwhelmingly dominate over any impact of altcoin price fluctuations, taken as an isolated aggregate factor.

The body of court practice and precedent is large and complex, but fairly clear.  How it will be applied to crypto is less clear, but the natural and direct application can be quite disruptive.

My major complaint about XCN is that it isn't interoperable and convertible with BTC.   It should have been done that way.

It's nice to read, something worth reading.

[nioc]

The mini-blockchain idea is an undermining in terms of security. This is ok, as long as it might nevertheless fits well somewhere in a broad range of different security/scalability trade-offs. However I see two obvious concerns to make it deserves a meaningful place on that range at the moment.

The first concern is that it could be achieved with something based on the bitcoin blockchain, in fact all these trade-offs could be all linked and based on bitcoin, you don't need a completely separated altcoin to achieve that particular security/scalability trade-off.
The second concern is that the scalability in terms of storage of the blockchain, is a non-issue. Even for bitcoin. Even for cryptonote if it takes 10 times the bitcoin size. The real challenges are the bandwidth and computational power required to receive/check/broadcast transactions in a VISA-scale crypto network.

Anything that plays with the ratio security/scalability can be based on the same intrinsic currency (and most likely it will be bitcoin). For something else to be actually really needed, you must completely go out of that range of security/scalability trade-offs and sick for something fundamentally differents. Yes, Monero, I'm looking at you.

binaryFate, I enjoy your posts and I'm quoting yous because it is the latest to mention VISA scale.  I found the following interesting.  It comes from the most recent(?) discussions on the 1 MB block size limit. 

The bolded is mine as well as a video link illustrating gmaxwell's point

If Bitcoin is merely a high powered money for international settlement between large commercial entities, it will have failed in its mission of providing the world with a decentralized electronic cash. Bitcoin has to be accessible

Without commenting on the rest, the logic doesn't follow here.  It is not necessary that not doing soda pop buys directly in the Bitcoin blockchain means that Bitcoin hasn't provided people with decenteralized electronic cash.

but I don't see any reason why Bitcoin can't match Visa's

The Bitcoin blockchain is a very different system from the visa payment work which makes very different trade-offs. It will always be the case that in some respects the bitcoin blockchain doesn't match visa, just as much as visa fails to match Bitcoin.  If you insist your floor wax be a tasty desert topping you may get something which is the worst of all worlds instead.[/b]

https://screen.yahoo.com/shimmer-floor-wax-000000185.html

[coinsolidation]

VISA-scale

Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created. Later, when applicable, solutions like sidechain can be added.

With most new technologies people try to apply it to everything, replacing what already exists, needlessly, turning something simple and effective in to a bloated mess.

Often approaching a technology with the question "how does this fit in with what already exists?" produces a far better result.

[binaryFate]

Yes, gmaxwell explains it well (nice analogy!).

I don't believe myself bitcoin will ever reach VISA-scale. I don't believe it is what we should look at, even if everything should be done to make bitcoin and other crypto networks payments as efficient as possible, of course.

But for any alt popping up with strong claims involving VISA-scale somehow (not necessarily mentioned explicitly), the blockchain size on disk is far from being the major problem.
Let's exagerate that view to make it clear: it's a bit like someone claiming "hey guys, my coin scales better than yours, once compiled, the executable for the wallet is only 150KB instead of 1MB! More people can run it on their computer!". Who cares?

[r0ach]

My estimation is that outright scams (whether via scamcoins or hacks or fractional reserve, what-have-you) are the largest value-drain on the BTC economy, by two orders of magnitude.

Altcoins provide a valuable role to serve the unbanked and specialty sectors.









"Borg coin has 500,000,000 coins to be minted. 500 million being based on the mass ton of the borg trans warp ship with a maximum rated speed of 29.968 warp factor with advanced trans warp drive. The fastest trans warp drive ship ever to exist. Join the collective now."

[smooth]

Yes.  Monero had one of the most fair launches of any coin.

I definitely would not say that.  The botnet problem is understated if anything.

I was there for Monero launch on the first or second day and got 0 coins mining with two CPUs.  There's just too much CPU power out there for really any CPU coin to be considered "fair" in the current environment.  Same thing happened with that Cryptonite coin.  Some guy posting about how he mined with 30 CPUs on the second day and got 0 coins.  I mean come on, just how many CPUs is one supposed to own to be able to mine a CPU coin?  These things are just charity events for botnets at the moment.

I've mined tons of GPU coins at launch before and even if you only put a single GPU on them, you would still probably get a block.  Thirty CPUs and no block for Cryptonite launch just indicates an invalid mining scheme.  Botnet resources are just far too high for low market cap coins.  It would be much less of a problem for a coin with a large market cap, but all this tells you is that it's completely pointless to launch an "altcoin" utilizing CPU mining instead of GPU.

Considering there is one miner who has been mining (and is still mining) almost 25% of the coins this should not be too surprising.

http://minichain.info/address/CNCzEBdvxzKSsGGdeqdGv17zuyWLeyAFvw

Interesting it appears he hasn't sold any, although that could be a bug in the block explorer.

[smooth]

OK so it's not the coins themselves that can be traced, but the people:

http://www.coindesk.com/bitcoin-fungibility-essential/
http://www.coindesk.com/government-sale-bitcoin-establishes-fungibility-precedent/

These articles may be misleading.  The body of court practice and precedent is large and complex, but fairly clear.  How it will be applied to crypto is less clear, but the natural and direct application can be quite disruptive.

Even without any direct legal issues, fungibility may be an issue at the point of acceptance.

Would you accept bitcoins from a known drug dealer or terrorist?

I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.





 

[iCEBREAKER]

Maybe it would have taken a giant server to host a TB block chain 10+ years ago but these days that can be accomplished quite easily. And it's only going to get better as time goes on.

AnonyMint's argument centered around scaling to the petabyte level. I think it's safe say that's not going to happen with Bitcoin.

I like the idea of a mini-blockchain and it's nice to see some new technology. But I'm not really convinced that's really enough to do it at this point.

I'm glad you're not yet convinced minichains are "really enough to do it at this point."

Nobody (except Bitfreak and Cation) should already be convinced by a coin which has only taken the first few baby steps towards proving the promise of it's underlying technological innovation.

But aren't we all enthralled by the enticing *possibility* that XCN may live up to hype?  Exploding volume on bter says 'yes we are.'

Yes, 1TB of storage is trivial, bandwidth and RAM somewhat less so.  But it is not "safe to say" Bitcoin usage will not expode to "Visa levels" in the event of some black swan (I'm looking at you, Mr. End of Petrodollar Hegemony).

In the event of a dollar collapse type black swan, Bitcoin would either have to scale to petabyte levels and/or be relieved of less important transactions by XCN.

Remember, only two years ago people thought it 'safe to say" Bitcoin would never reach $1000...   

[Lohoris]

VISA-scale

Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created.

Yeah, like inputs.io!

Even without any direct legal issues, fungibility may be an issue at the point of acceptance.

Would you accept bitcoins from a known drug dealer or terrorist?

I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.

Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received.

+1000

Anyone who attacks fungibility – and to my dismay there's plenty of people who do that – is a clueless fool randomly blabbering about things he doesn't even try to understand.

[itod]

Even without any direct legal issues, fungibility may be an issue at the point of acceptance.

Would you accept bitcoins from a known drug dealer or terrorist?

I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.

Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received.