Why today's cryptocurrencies are doomed

[tspacepilot]

Totally agree that current generation cryptos are all doomed, but the problems can be fixed if we see some real innovation in alts. There is the possibility of making our own decentralised global identity system.

But this possibility seems pretty scary to me.  I'm supposed to put my global idenity into some sort of decentralized information network.  I worry about things like: what if this network is overthrown, who is organizing it?  More importantly, what if the information in this network is used against me?  Ie, people with X, Y, or Z characteristics are deemed unworth to A, B or C.

I'm not saying such a thing won't come to  pass, I just don't see it in our lifetimes.  Who knows, maybe in some future generations though.

[Anders]

Totally agree that current generation cryptos are all doomed, but the problems can be fixed if we see some real innovation in alts. There is the possibility of making our own decentralised global identity system.

Hmm... Interesting idea. There is a project called bitID or something like that. I haven't checked it out yet.

[digitalindustry]

The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:

Nice where did you come from? anyhow we like some argument here:

lets go though your list, i intend to show you why innovation can matter and "Gen 2.0" crypto already exists.

1. Too slow transaction times for general use.

- Quark has an effective 30 second block time, and its in its "EQ period" (see down the list) - both of these things provide some robustness and security. ( also dynamic checkpoints which can be taken off any time)


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2. Too bloated block chain for mainstream adoption.

- certainly a potential problem but not a deal breaker when you see how Quark has solved the other "issues" Like many other decentralized system Cryptocurrency is similar to say for example "Torrents" - if users are running full nodes they are serving the network, should/could there be some incentive to do this in the future , sure why not. that's the "if we do nothing to the core" scenario, there are of course many other options.



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3. Having to store coins "under the mattress" is a step backwards.

i'm going to be honest i've not idea what you are talking about? but you could be referring to a theory I proposed which i've called the "use/collapse" paradox , where because mining monopoly in Bitcoin creates price manipulation if the manipulators "use" the entity (Bitcoin) this will cause the market to "price collapse" (Bitcoin) so this causes it to be in effect "kept under the mattress "

lets explain:

Quark is fully distributed except for the EQ reward, this gives benefits (many) and causes some perceived problems  the benefits far outweigh the issues as Quark is priced by the market and moving forward will be used and utilized by the market.



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4. Proof of work will lead to too large transaction fees.

this ones my favorite but really i don't judge you for being ignorant of it - because when monopoly takes over any system, ignorance and humor grow usually.

The Quark EQ reward  -

EQ)uilibrium R)eward   is just a simple trickle amount of "inflation" 0.4% declining - that allows fees to be replaced, so its is the reward for mining not the generated fees.

To all intents and purposes Quark is fee free, (except for the protections on the "spam transactions"
It can be Fee free because of the this small amount of "inflation" ( which also effectively protects the network from monopoly)

Summary :
The EQ reward is a revolution in Crypto currency.
Quark is "fee free"



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5. Proof of stake leads to the rich getting richer.

True , generally, not sold on this one totally yet. it gets more complex.
(Quark is not PoS it has the EQ reward.)



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6. Lack of government support prevents mainstream use.

what's a "Government" oh you mean the guys that work directly for the people that issue the currency in to Debt?
the people that issue the currency into Debt are by default the leaders (in most cases) of the government.

next question:

Why would entities that issue debt money ever support ANY debt free system that means they lose all control over the "ongoing mechanics of debt issuance" ?

the answer is they won't and you are living in fantasy land if you think they will (just because.)

if they look like they are supporting it, its because they are either 1. actively destroying it. or 2. working towards that.



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7. Trading against ordinary fiat currencies causes volatility.

nope that's a Meme and a Myth as well - Quark solved it  ( we believe )

have a look at the charts here:

http://kolinevans.wordpress.com/2014/07/14/an-interesting-thing-happened-on-the-way-to-proving-that-decentralized-free-market-distribution-can-find-price-stability/


full distribution + free market pricing.

volatility is caused because all (most) crypto are price manipulated - once Real economists (Shiller etc)  understand "mining difficulty" they are going to 1. Slap themselves 2. laugh at you guys (just so you know)

[Leina]

Too many coins chasing too few dollars. For one coin to succeed, other coins must die.

[meganite]

This is a great thread. Well, it *was* much better before digitalindustry inserted his senseless propaganda into it..... 


Anywho, I tend to agree with those that see a form of GlobalID coming into existence; something that automatically identifies your place on the blockchain, no matter where you are. However, such a concept is extremely frightening, as it would have serious, serious implications if abused or utilized by nefarious actors, especially actors of the corporate and governmental persuasions.

[digitalindustry]

This is a great thread. Well, it *was* much better before digitalindustry inserted his senseless propaganda into it.....  


Anywho, I tend to agree with those that see a form of GlobalID coming into existence; something that automatically identifies your place on the blockchain, no matter where you are. However, such a concept is extremely frightening, as it would have serious, serious implications if abused or utilized by nefarious actors, especially actors of the corporate and governmental persuasions.

You (of course ) are a :

1. A Sock puppet

2. Talking about a "Global ID"

So your "credibility rating" is currently T*


* Turd.

If you don't want a discussion fuck off back to your WOW game?

[Anders]

3. Having to store coins "under the mattress" is a step backwards.

i'm going to be honest i've not idea what you are talking about? but you could be referring to a theory I proposed which i've called the "use/collapse" paradox , where because mining monopoly in Bitcoin creates price manipulation if the manipulators "use" the entity (Bitcoin) this will cause the market to "price collapse" (Bitcoin) so this causes it to be in effect "kept under the mattress "

lets explain:

Quark is fully distributed except for the EQ reward, this gives benefits (many) and causes some perceived problems  the benefits far outweigh the issues as Quark is priced by the market and moving forward will be used and utilized by the market.
 

As a use case, how will grandma store her QarkCoins? Does she have to print private keys on paper, on a computer disconnected from the Internet, and with several separate copies that later must be put together? That's worse than even money under the mattress! Or does she need a hardware wallet, that needs to be backed up in case of hardware failure? In which case, we are back to square one again with private keys on paper or stored on a hard drive disconnected from the Internet. Extremely cumbersome management.

There is some wallet that uses a 12 word pass phrase or something like that, and then generates private keys with a deterministic algorithm. But would grandma try to remember the whole pass phrase or write it down on paper?

[Anders]

6. Lack of government support prevents mainstream use.

what's a "Government" oh you mean the guys that work directly for the people that issue the currency in to Debt?
the people that issue the currency into Debt are by default the leaders (in most cases) of the government.

next question:

Why would entities that issue debt money ever support ANY debt free system that means they lose all control over the "ongoing mechanics of debt issuance" ?

the answer is they won't and you are living in fantasy land if you think they will (just because.)

if they look like they are supporting it, its because they are either 1. actively destroying it. or 2. working towards that.

You would probably trust having your money stored in a bank account. Would you trust having your cryptocurrencies stored in a MtGox?

The EU for example could issue a regulated cryptocurrency:

* Low incentive for hoarding (high currency flow)
* Low volatility (stable value short-term)
* Stable in terms of inflation and deflation
* Decentralized
* Peer-to-peer
* Block chain with encrypted user IDs/wallet addresses (so that the coins don't have to be cold stored)
* Zero transaction fees (low friction)
* Miners that are run by the EU member states as a public service
* Fast and reliable transaction times
* VC Protocol regulated by EU authority
* User ID system regulated by EU authority

[Anders]

For people who are computer savvy and interested in cryptocurrencies, the problems may not be a big deal. That's however only a tiny percentage of all potential users. For the average person the problems with today's cryptocurrencies are obstacles enough to prevent a mainstream adoption.

[digitalindustry]

As a use case, how will grandma store her QarkCoins? Does she have to print private keys on paper, on a computer disconnected from the Internet, and with several separate copies that later must be put together? That's worse than even money under the mattress! Or does she need a hardware wallet, that needs to be backed up in case of hardware failure? In which case, we are back to square one again with private keys on paper or stored on a hard drive disconnected from the Internet. Extremely cumbersome management.

There is some wallet that uses a 12 word pass phrase or something like that, and then generates private keys with a deterministic algorithm. But would grandma try to remember the whole pass phrase or write it down on paper?

Grandma has a Hardware wallet - with multi sigs

but she won't call it that, she will call it my.

"Money widget thing" and she will know that if she presses this or that button she can spend money.

- as for long term storage, "Banks" revert back to the original "Coin storage" facilities they were in ancient times, literally they could be just protecting a crypto "Paper bond"  with he ability to "make liquid" that bond and add to your "Money widget thing"

so in summary:

Hardware wallets,  multi-signatures, and storage facilities.

want to hear something terrifying?

just as the "Internet" equalized  information flow , Crypto will "equalized" capital flows, if you haven't figured out what that means, i can say it like this:

its very likely that there will be a "re-balance of wealth".

I'll let you figure out the rest.

[Anders]

As a use case, how will grandma store her QarkCoins? Does she have to print private keys on paper, on a computer disconnected from the Internet, and with several separate copies that later must be put together? That's worse than even money under the mattress! Or does she need a hardware wallet, that needs to be backed up in case of hardware failure? In which case, we are back to square one again with private keys on paper or stored on a hard drive disconnected from the Internet. Extremely cumbersome management.

There is some wallet that uses a 12 word pass phrase or something like that, and then generates private keys with a deterministic algorithm. But would grandma try to remember the whole pass phrase or write it down on paper?

Grandma has a Hardware wallet - with multi sigs

but she won't call it that, she will call it my.

"Money widget thing" and she will know that if she presses this or that button she can spend money.

- as for long term storage, "Banks" revert back to the original "Coin storage" facilities they were in ancient times, literally they could be just protecting a crypto "Paper bond"  with he ability to "make liquid" that bond and add to your "Money widget thing"

so in summary:

Hardware wallets,  multi-signatures, and storage facilities.

want to hear something terrifying?

just as the "Internet" equalized  information flow , Crypto will "equalized" capital flows, if you haven't figured out what that means, i can say it like this:

its very likely that there will be a "re-balance of wealth".

I'll let you figure out the rest.

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

[digitalindustry]

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

everything you said just now is insane and makes no sense - but you seem like a nice guy.

moving forward ...

what's the "global ID" all about ?

sound like a winner.

[Anders]

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

everything you said just now is insane and makes no sense - but you seem like a nice guy.

moving forward ...

what's the "global ID" all about ?

sound like a winner.

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

[BitCoinPokerBro]

The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:

1. Too slow transaction times for general use.
2. Too bloated block chain for mainstream adoption.
3. Having to store coins "under the mattress" is a step backwards.
4. Proof of work will lead to too large transaction fees.
5. Proof of stake leads to the rich getting richer.
6. Lack of government support prevents mainstream use.
7. Trading against ordinary fiat currencies causes volatility.

If u were in 90s, u would have said the internet will fail too. Some people simply cant see the future...

Dude this timeline is awesome!

[wbaw]

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

And how is an ID system supposed to work without private keys?

I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.

[Anders]

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

And how is an ID system supposed to work without private keys?

I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.

The ID system would be like a deterministic wallet. So from a single master key, many new keys can be generated. If an ID system like that can be implemented with blockchain technology, then that would be good.

[Anders]

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux.

[hodap]

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux.

Ripple and Stellar will not gain big market share due to it being highly controlled and highly concentrate of ownership.

For someone to willingly add value to the coin, the distribution of the coin need to be more even.

[Anders]

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux.

Ripple and Stellar will not gain big market share due to it being highly controlled and highly concentrate of ownership.

For someone to willingly add value to the coin, the distribution of the coin need to be more even.

Fractional reserve banking is pretty horrible, but it has been useful for taking our civilization to where we are today. That's an old model. Ripple and Stellar seem to cling to that old model of concentration of power.

Greed can be ok (or at least profit is good), if someone can separate that from the actual currency. There are many companies making money on Linux today, but not by owning or controlling Linux itself.

[Anders]