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Author Topic: What happens if someone starts another blockchain or cryptocurrency?  (Read 15349 times)
Portnoy
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March 29, 2012, 07:51:20 PM
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Well there have been other cryptocurrencies started. Some have come and gone and others still exist.
 
Some seem to complement, or seek to serve another purpose from that of Bitcoin (e.g. namecoin),
while others seem to want to compete with it.

Is the Network Effect enough to protect Bitcoin?

Is this something to be concerned about, now or in the future?  


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March 29, 2012, 08:35:32 PM
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Or you could title the thread "What happened when someone started another chain" :p

My brief answer is that barring a revolutionary improvement it makes sense (from BOTH their own selfish perspective and the perspective of others) for each person to join the largest network if they are identical or similar.

It would already require a large improvement that was not possible to make to the existing bitcoin network.

The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.

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March 29, 2012, 08:47:45 PM
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My brief answer is that barring a revolutionary improvement it makes sense (from BOTH their own selfish perspective and the perspective of others) for each person to join the largest network if they are identical or similar.

It would already require a large improvement that was not possible to make to the existing bitcoin network.

The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.

Yes this is the way I feel when I hear people say things like, "We need this new cryptocurrency to solve this problem X with Bitcoin".

If there is a recognized problem with the Bitcoin protocol as it is why not just fix the problem with it instead of creating something new.
That way people won't have to worry about being stuck with coins of an obsolete cryptocurrency. 

Another question about alternative cryptocurrencies is, how much is it about solving some particular problem and how
much is it about trying to make a quick profit by getting people excited about the next big thing which could take off? 

I notice many people refer to many of these alternatives as "scamcoins".


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March 29, 2012, 09:11:01 PM
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The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.
I think the cleverest way to bootstrap would be to pick a bitcoin block and then look at the bitcoin balances of that block and copy them to the new genesis block. Then every bitcoin user would become a newcoin user automatically and they would be inclined to at the very least install the new client, copy their private keys to it and sell their newcoins.
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March 29, 2012, 09:21:19 PM
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I think the cleverest way to bootstrap would be to pick a bitcoin block and then look at the bitcoin balances of that block and copy them to the new genesis block. Then every bitcoin user would become a newcoin user automatically and they would be inclined to at the very least install the new client, copy their private keys to it and sell their newcoins.

I'm not sure what you are suggesting with "pick a bitcoin block".  A block only contains a subset of transactions that happened since the prior block was solved.

https://en.bitcoin.it/wiki/How_bitcoin_works


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March 30, 2012, 03:34:51 AM
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The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.
I think the cleverest way to bootstrap would be to pick a bitcoin block and then look at the bitcoin balances of that block and copy them to the new genesis block. Then every bitcoin user would become a newcoin user automatically and they would be inclined to at the very least install the new client, copy their private keys to it and sell their newcoins.

It might work, but you get a flood of newcoins that way (maybe not terrible I don't know). In the way I mentioned you get new newcoins whenever they are worth more than a bitcoin (because people will 'convert' bitocins then). But since bitcoin has no such feature it is a one way street and eventually you'll get the goodness of newcoin (whatever that may be) and the wide distribution of bitcoin and network effects.

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March 30, 2012, 03:42:34 AM
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Quote
I think the cleverest way to bootstrap would be to pick a bitcoin block and then look at the bitcoin balances of that block and copy them to the new genesis block. Then every bitcoin user would become a newcoin user automatically and they would be inclined to at the very least install the new client, copy their private keys to it and sell their newcoins.

I'm not sure what you are suggesting with "pick a bitcoin block".  A block only contains a subset of transactions that happened since the prior block was solved.

https://en.bitcoin.it/wiki/How_bitcoin_works



He just means pick a point in time marked by block number.

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March 30, 2012, 04:07:02 AM
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The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.

Bitcoin isn't really working. I've been around here for a long time now and still don't see much growth in real economic activity outside of speculation. This might be fixable with a better distribution scheme.

IMO, cleverest way of handling initial distribution is to force miners to give away money to merchants who agree to accept the currency. Starting will small-time merchants and working up gradually to more important merchants as the currency becomes more valuable. Possible mechanism described here:
 
https://bitcointalk.org/index.php?topic=74573.msg825936#msg825936

Of course, bitcoin tries to do this through voluntary participation already. It is clear fail. People don't volunteer to give away significant amounts. You need to compel them.

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March 30, 2012, 04:17:20 AM
 #9



The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.

Bitcoin isn't really working. I've been around here for a long time now and still don't see much growth in real economic activity outside of speculation. This might be fixable with a better distribution scheme.

IMO, cleverest way of handling initial distribution is to force miners to give away money to merchants who agree to accept the currency. Starting will small-time merchants and working up gradually to more important merchants as the currency becomes more valuable. Possible mechanism described here:
 
https://bitcointalk.org/index.php?topic=74573.msg825936#msg825936

Of course, bitcoin tries to do this through voluntary participation already. It is clear fail. People don't volunteer to give away significant amounts. You need to compel them.

Ok, me me me I'm a merchant.

Maybe it is a clue that people are speculating that it's going to get a lot bigger? They don't spend money for no reason you know.

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March 30, 2012, 04:17:36 AM
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The cleverest way to bootstrap (handle initial distribution) imo would be to allow people to buy in to the new chain by destroying their bitcoins in a specified manner to 'move' them into the new chain. But really that is just a way to allow people a one-way ticket into a breaking change version of Bitcoin, not a completely new system.
I think the cleverest way to bootstrap would be to pick a bitcoin block and then look at the bitcoin balances of that block and copy them to the new genesis block. Then every bitcoin user would become a newcoin user automatically and they would be inclined to at the very least install the new client, copy their private keys to it and sell their newcoins.

Great idea thanks Smiley   This would be a good way to bootstrap a test coin with no inflation to see how mining for fees only will pan out.  
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March 30, 2012, 04:18:50 AM
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Ok, me me me I'm a merchant.



Can you convince a large number of people that sending you money is in their collective interest? If yes, then fine you get money. If no, then you get no money.


Maybe it is a clue that people are speculating that it's going to get a lot bigger? They don't spend money for no reason you know.


That is called a bubble. It pops and the speculators get liquidated. Just wait for it. It can take a long time.

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March 30, 2012, 04:25:35 AM
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Can you convince a large number of people that sending you money is in their collective interest? If yes, then fine you get money. If no, then you get no money.


Yes I can, that's what I'm doing now. Er, I assume they think it is in their individual interest.

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March 30, 2012, 04:32:09 AM
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Can you convince a large number of people that sending you money is in their collective interest? If yes, then fine you get money. If no, then you get no money.


Yes I can, that's what I'm doing now. Er, I assume they think it is in their individual interest.

Well, then you're the kind of person who might be targeted with free mining proceeds to persuade you to adopt the new currency. No individual would be willing to do this on a substantial scale. Taxation is required.

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March 30, 2012, 05:45:34 AM
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This is the conundrum. Bitcoin has been around for three years and is improving. One day it will be pretty cool and ready for adoption by the world. The world says, "hey no fair you already own all the Bitcoins and we don't want to give you all our wealth to buy them, so we'll start a new blockchain with the same core." They then release a Worldcoin. Now rich people have been screwed in the past when money is re-issued and wealth is redistributed. They don't want this to happen again, so they will do everything they can to make sure they hold their money. The rich people buy BIG mining rigs so they can keep much of their wealth. So what happens? Who would trust Worldcoin run by banksters over Bitcoin that was built by grass roots efforts?

Bitcoin wins every scenario I can think of.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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March 30, 2012, 06:09:08 AM
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This is the conundrum. Bitcoin has been around for three years and is improving. One day it will be pretty cool and ready for adoption by the world. The world says, "hey no fair you already own all the Bitcoins and we don't want to give you all our wealth to buy them, so we'll start a new blockchain with the same core." They then release a Worldcoin. Now rich people have been screwed in the past when money is re-issued and wealth is redistributed. They don't want this to happen again, so they will do everything they can to make sure they hold their money. The rich people buy BIG mining rigs so they can keep much of their wealth. So what happens? Who would trust Worldcoin run by banksters over Bitcoin that was built by grass roots efforts?

Bitcoin wins every scenario I can think of.

Even disregarding the 'who', why would someone stake anything in the second copy of the same thing? Obviously a third is coming along to screw you. Obviously baring large improvements.

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March 30, 2012, 12:12:18 PM
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Bitcoin isn't really working. I've been around here for a long time now and still don't see much growth in real economic activity outside of speculation.
I used to think that this is an important indicator, but now I don't. Gold is also hoarded rather than spent (indeed, payment system based on gold are probably even less used than payment systems based on Bitcoin), but that does not mean it's not working. In other words, you have it backwards: the primary economic indicator is the hoarding, not the spending. If it wasn't hoarded, that would be failure.

There's no reason to set a specific timeframe for the spread of Bitcoin payment systems. Open source projects take their time and are not dependant on a particular company's business plan working out. I've been using linux for about 15 years now, so I remember how it was when it was less widely deployed. There were assorted pundits blabbering nonsense about how it has no future, because they did not comprehend the paradigm shift occurring around them. Most of them wisened up eventually (or at least shut up), but some continue even now, oblivious to reality. Rob Enderle and Bob Metcalfe are some of the loudest ones.

From functional point of view, the core features of Bitcoin, low transaction costs and decentralisation, are still present. Obviously, there are all kinds of other issues (some of which you have pointed out yourself), but they can be addressed in the future, and are not judged relevant by the current users. Also, competitors, even if they manage to publish working code, do not provide a compelling alternative (again, judged by the users).

So, pundits can just relax and let the innovators do their job.
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March 30, 2012, 01:47:54 PM
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Bitcoin isn't really working because deflation destroys trade. There, I've said it.

Bitcoin's spread is a self-defeating prophecy: bitcoins are valuable only in as much as they can be widely used as an exchange medium, yet all those who acquire or have them treat them as a long term investment, preventing their very spread which would enable bitcoins to fulfill their promise. Therefore the promise is a lie.

The early adopter crowd has already priced-in the chance that they will sometime be a widely used for exchange; so in order for Bitcoin to achieve it's potential as an exchange medium, an implausibly massive transfer of wealth must occur from the millions of people that would use it to the hundreds of people that currently hold the bulk of the monetary mass.
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March 30, 2012, 01:55:04 PM
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Bitcoin isn't really working because deflation destroys trade. There, I've said it.
Jeez, give it time. Gold was less valuable than iron at one time.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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March 30, 2012, 02:14:23 PM
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Bitcoin isn't really working because deflation destroys trade. There, I've said it.

Bitcoin's spread is a self-defeating prophecy: bitcoins are valuable only in as much as they can be widely used as an exchange medium, yet all those who acquire or have them treat them as a long term investment, preventing their very spread which would enable bitcoins to fulfill their promise. Therefore the promise is a lie.

The early adopter crowd has already priced-in the chance that they will sometime be a widely used for exchange; so in order for Bitcoin to achieve it's potential as an exchange medium, an implausibly massive transfer of wealth must occur from the millions of people that would use it to the hundreds of people that currently hold the bulk of the monetary mass.

Correct in part. However, the money does not need to be transferred to millions of people. Bitcoin is relatively easy for consumers to acquire should they want it. The problem is that there is no reason for a consumer to want bitcoin (notable exception of silk road).

To fix this, money needs to be channeled into businesses to convince them to accept bitcoin. The mining system could be designed to perform this function by passing out coins to people the community judges to have performed socially useful functions. Instead, mining distributes coins to people who engage in a waste and destruction of resources. It is sad, unfortunate, and fundamentally unnecessary.

Finally, I don't have any problem with deflationary currency or speculation/investment as a motive. The problem is not that hoarding is bad. The problem is that hoarding is not sustainable if the currency remains nearly useless for any other purpose.

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March 30, 2012, 02:18:18 PM
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I think these threads are very useful. Every time I see one I think "*@&$!% not this thread again >:{ ", and them I'm always pleasantly surprised when it turns out to be directed to resolving that very problem.

Nice work.

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