Bitcoin Is Having Its Moment But There Are Better Sustainable Currencies

[ArticMine]

Proof of Stake has one little problem. Stake does not equal exposure once a derivatives market develops. So go long the coin and get the "stake", then go short the derivatives for an equal amount to create zero exposure, while keeping the "stake".

[bytemaster]

Proof of Stake has one little problem. Stake does not equal exposure once a derivatives market develops. So go long the coin and get the "stake", then go short the derivatives for an equal amount to create zero exposure, while keeping the "stake".

I think the entire debate misses the point:  consensus is based upon users not code.   Code helps people reach a consensus faster, but in reality users would reject a fork that came out of nowhere based upon stake manipulation.

With Delegated Proof of Stake, as used by BitShares X, if the broad user base can mostly agree on 101 delegates then an attacker would have to buy up 51% to gain the right to produce a single block... but they wouldn't be able to change history and of course everyone would know there was a new sharif in town and could choose to hard-fork the attacker out (all balances voting for the attacker as delegate) without anyone suffering any losses.

Bottom line, these networks are social in nature and not based upon technology.  Technology just helps.

Also DPOS allows anyone to earn block rewards regardless of their stake assuming they can convince the shareholders that they provide a valuable service.

With DPOS you cannot even have a delegate producing blocks on two chains at once without it resulting in a provable automatic firing.

BitShares X has built in derivatives (to be enabled in a month) so it should put centralized derivative markets out of business.  This in turn means that an attacker that attempts to leverage against BTSX on chain through buying BitUSD cannot profit from bringing down the network because BitUSD is backed by BTSX.   Now you have a system that is even resistant to derivatives.

[nwfella]

Well, a lot of people are in to Proof of Stake currencies which use very little energy compared to Bitcoin. Which obviously "wastes"(I use that loosely since it's a loaded term) a ridiculous amount of energy.

Proof of State coin is not a decentralized currency.

lmao.  "proof of state"...that's rich!

[CasinoBit]

Proof of stake is shit, why would I use a currency where an elite can issue and reverse transactions as they please and only they get issued new currency, kind of reminds you of the existing monetary system doesn't it? The whole argument that if the elite would become tyrannical in a PoS system they would hurt themselves the most by devaluing their own assets is incredibly stupid, doesn't nearly every major monetary system create inflation in excess of the "ideal" or "projected" rate and the sheeple still eat it up? The sheeple can put up with a lot of abuse like razor thin safety margins, defaults, uneven distribution and even gambling away their life savings by letting criminal tyrants control them financially as long as you have a couple of clown experts in suits saying that it's all for the best.

[smoothie]

"sustainable" 

[freedomno1]

So what's the other "Better Sustainable Currency" aside from bitcoin?

http://www.ahametals.com/bitcoin-moment-better-sustainable-currencies/

So the ones they listed are a bunch of no name altcoins
Well if I get owned by them it's a fair point that I would not see those three coming.
That said one is the leader and one needs to be proven and that is going to be Bitcoin.

[bytemaster]

Proof of stake is shit, why would I use a currency where an elite can issue and reverse transactions as they please and only they get issued new currency, kind of reminds you of the existing monetary system doesn't it? The whole argument that if the elite would become tyrannical in a PoS system they would hurt themselves the most by devaluing their own assets is incredibly stupid, doesn't nearly every major monetary system create inflation in excess of the "ideal" or "projected" rate and the sheeple still eat it up? The sheeple can put up with a lot of abuse like razor thin safety margins, defaults, uneven distribution and even gambling away their life savings by letting criminal tyrants control them financially as long as you have a couple of clown experts in suits saying that it's all for the best.

Don't assume that POS means that an elite can issue and reverse transactions or get issued new currency.   Sure that may be the case with Peercoin, but it isn't the case with Nxt or BitShares.        

In fact, I would argue that POW means an elite can issue and reverse transactions because they can control the POW with their access to the latest manufacturing and economies of scale.   Regular users get debased with all POW systems.   So sheeple will tolerate POW based upon the bogus cost-theory-of-value economics.  

You see it isn't technology that rules, but the people using the technology the define what is "valid" or "legitimate".   So POS and POW are protected against inflation and arbitrary rule by the same social process.  POW just consumes 100's of millions in resources every year that make us all poorer while creating barriers to entry that protect the bitcoin elite.

[CasinoBit]

Proof of stake is shit, why would I use a currency where an elite can issue and reverse transactions as they please and only they get issued new currency, kind of reminds you of the existing monetary system doesn't it? The whole argument that if the elite would become tyrannical in a PoS system they would hurt themselves the most by devaluing their own assets is incredibly stupid, doesn't nearly every major monetary system create inflation in excess of the "ideal" or "projected" rate and the sheeple still eat it up? The sheeple can put up with a lot of abuse like razor thin safety margins, defaults, uneven distribution and even gambling away their life savings by letting criminal tyrants control them financially as long as you have a couple of clown experts in suits saying that it's all for the best.

Don't assume that POS means that an elite can issue and reverse transactions or get issued new currency.   Sure that may be the case with Peercoin, but it isn't the case with Nxt or BitShares.        

In fact, I would argue that POW means an elite can issue and reverse transactions because they can control the POW with their access to the latest manufacturing and economies of scale.   Regular users get debased with all POW systems.   So sheeple will tolerate POW based upon the bogus cost-theory-of-value economics.  

You see it isn't technology that rules, but the people using the technology the define what is "valid" or "legitimate".   So POS and POW are protected against inflation and arbitrary rule by the same social process.  POW just consumes 100's of millions in resources every year that make us all poorer while creating barriers to entry that protect the bitcoin elite.

So what are the barriers? Intellectual barriers? Perhaps you'd be better off siding with the commie bastards that claim that bitcoin is too complex for the average joe thus distribution is not fair.

How can we know for certain that someone will not buy out Bitshares or Nxt to gain 51% or that the distribution was fair to begin with, you do get issued more currency the more you have after all. The current banking system is wasting such significant resources that if they all switched to Bitcoin it would cost less than 1% of the resources that the banking system is wasting currently, it's nothing more than propaganda aiming to harm BTC that the whole system "wastes" anything.

All that energy is allocated towards securing a monetary system in a decentralized manner and it does so in an extremely secure way requiring a fraction of the energy that centralized monetary systems use and I would rather have it take up 100,000 times as much energy as PoS and have it secure rather than based on words of tyrants.

[bytemaster]

Barriers to entry for proof of work?  Can you design and manufacture ASICs using the latest manufacturing techniques?  Can you get economies of scale necessary to do the work profitably?   Proof of work is all about who ever is willing to do the most work for least gain and no one is more effective at that than government.

If someone bought up 51% of the BitShares then you thank them for their money and start a new chain without them.  Without the barriers to entry represented by Proof of Work you can easily start a new chain.  With proof of work however, there is nothing you can do to start a new chain.   

It doesn't matter what POW algorithm you use, economies of scale will always favor government.

[Brangdon]

A 51% attack is against a specific pseudonymous target.

There are many kinds of 51% attacks, but I gather that is the kind you want to talk about.

If that happened, it would not kill Bitcoin, but would make people realize how powerful mining pools are and that they should be avoided.

As an aside, I think the most likely kind of Bitcoin 51% attack is one that rejects transactions with low fees. Since that would benefit miners in the long run, they might see no need to avoid mining pools. I'll be mildly surprised if this doesn't become a real concern in 2 or 6 years, when the block-reward halves.

In NXT, there is little cost if everyone wanted to attack a specific person, it would be quite easy. Mob rules. There would be no mining pools to blame. Nobody would know who is innocent and who is guilty because it only takes 51%.

As far as I can tell, what you have in mind is like 50% of Americans deciding to boycott Walmart. It's not likely. I'm not sure where you get "only 51%" from. 51% is a lot.

This is why anonymity is crucial. Nobody can be targeted if they can't be traced. The same thing goes for attackers, they are also anonymous. If an attack happens, good luck, they are behind 7 proxies.

You seem to be saying anonymity is a two-edged sword.

If a target was found out, and a lynch mob of at least 51% was convinced to attack the target, how would anyone know who to blame? If it was a business that managed to aggregate 51%, how would you even know it was an attack and not a normal orphaning since there are no IPs to compare blocks like GHash.io.

In Nxt, the blocks are signed by the accounts that forged them, so we'd know which accounts to blame. There's not much anonymity in Nxt. If a single entity gains 51% of NXT, then its true Nxt has a huge problem. I think an attack like you describe would destroy all confidence in the currency, so the entity would lose the value of their coins. It'd be very expensive for them.

There is no electricity cost to bring a bunch of miners in, just get a bunch of coin and attack your enemy. Then sell the coin anonymously. Your enemy is defeated and it cost very little compared to the same attack in Bitcoin.

Trying to buy 51% of NXT will be very expensive and will push the price up. Dumping 51% of NXT will crash the price, so they won't be sold at the price they were bought for. The attacker will lose a lot of money. The price crash would be a problem, even without the attack.

I think you are underestimating how difficult it is to get 51% of NXT. It's not like in Bitcoin, where entities have got that much hashpower almost by accident. In Bitcoin, you can get it almost unilaterally, by buying from ASIC manufacturers who have no stake in the currency. To get 51% of NXT, you have to persuade people who own NXT to sell to you. Likewise, to sell afterwards you'd have to persuade someone else to buy. Nxt has been running for 8 or 9 months now, and has had the third highest market cap for much of that time, but no-one has done the attack you describe.

[ejinte]

Well, a lot of people are in to Proof of Stake currencies which use very little energy compared to Bitcoin. Which obviously "wastes"(I use that loosely since it's a loaded term) a ridiculous amount of energy.

Actually I thing energy consumption wont be any deal breaker regarding future world currencies. PoS will never make it big, if they would they would have done it already.

[achimsmile]

Actually I thing energy consumption wont be any deal breaker regarding future world currencies. PoS will never make it big, if they would they would have done it already.

Why do you think the huge energy waste wont be a deal breaker? What will happen when all BTC are mined?


The conclusion of your second sentence doesn't follow from the premise, because your first premise is wrong imo:

P1: If a "Proof of X" currency hasn't already made it big, it never will.
P2: Proof of Stake has not made it big.

C: PoS will never make it big.


P1 was proven wrong in the past, when PoW made it big. Would you have said the same about bitcoin before it was big?

[gtraah]

Actually I thing energy consumption wont be any deal breaker regarding future world currencies. PoS will never make it big, if they would they would have done it already.

Why do you think the huge energy waste wont be a deal breaker? What will happen when all BTC are mined?


The conclusion of your second sentence doesn't follow from the premise, because your first premise is wrong imo:

P1: If a "Proof of X" currency hasn't already made it big, it never will.
P2: Proof of Stake has not made it big.

C: PoS will never make it big.


P1 was proven wrong in the past, when PoW made it big. Would you have said the same about bitcoin before it was big?

The idea is that by the time Bitcoin is mined out there would be more transactions going from a > b to sustain the amount of miners that would be staying in the game. Difficulty adjusts itself as miners leave making it more profitable

[achimsmile]

The idea is that by the time Bitcoin is mined out there would be more transactions going from a > b to sustain the amount of miners that would be staying in the game. Difficulty adjusts itself as miners leave making it more profitable

The question is: How high will the transaction rate have to be to incentivise enough miners to keep the network secure?

Or: How low can the difficulty fall for the network to be considered secure?

[cbeast]

There is no law that says Bitcoin must be the singular currency. There is no proof that it's even possible for a global singular currency to function. There's also no reason it cannot.

[StevenS]

The question is: How high will the transaction rate have to be to incentivise enough miners to keep the network secure?

Or: How low can the difficulty fall for the network to be considered secure?

It won't be a problem because the number of minors won't change suddenly. While a drop of 50% in the block reward seems like a lot, it really isn't, because it's the some order of magnitude. It would be a big drop if it happened without warning, but minors plan their purchases will in advance.

A 50% drop in block reward means a 50% drop in mining revenue, assuming everything else stays the same (transactions fees and the BTC exchange rate), which in theory could mean a 50% drop in the number of minors. At that number, the network would still be considered secure, based on the current numbers.

Today, the block reward is half what is was 4 years ago. The BTC exchange rate, however, is much more that twice what it was. I believe that statement will be true for decades to come. Thus, there will always be enough minors.

[Harley997]

For all we know BTC could be dead in a few years and another coin could be worth MORE than what bitcoin's price is now, maybe even higher than BTC highest, who knows?

[Este Nuno]

For all we know BTC could be dead in a few years and another coin could be worth MORE than what bitcoin's price is now, maybe even higher than BTC highest, who knows?

That's quite possible. But I highly doubt BTC will be ever be dead.

Even as cryptocurrency evolves beyond Bitcoin, since Bitcoin was the original and scarce crypto so it will probably end up considered something like gold. Scarce and valuable, not as good as alternatives for use as a daily currency, but a good store of value.

[X7]

BTCBTCBTCBTCBTC

SEAT BELTS ON - STRAPPED IN!

[inBitweTrust]

For all we know BTC could be dead in a few years and another coin could be worth MORE than what bitcoin's price is now, maybe even higher than BTC highest, who knows?

Nope, for these reasons:

1) All other open source block-chain currencies depend upon the success of Bitcoin. If Bitcoin fails than doubt of long term survivability will be cast upon them as well.

2) The network effect is strong within protocols that have developers and hardware designed around them. The same reason other technologies are scaffold-ed around IPv4 and HTML despite any weaknesses and flaws in them is the same reason Bitcoin will succeed.

3) Bitcoin has many ardent supporters , some would suggest are "religiously" devoted to Bitcoin. Because of this Bitcoin will never go to 0 and always hold value even as a collector item.