[2014-09-18] Bitcoin Core Developer Jeff Garzik Believes NXT is a “Scamcoin”

[LiteCoinGuy]

Bitcoin Core Developer Jeff Garzik Believes NXT is a “Scamcoin”

Around the same time that Chris Odom, the creator of Open Transactions, was dismissing the relevance of altcoins at InsideBitcoins London, Bitcoin core developer Jeff Garzik was tied up in a public spat with the NXT community. As someone who has been suspicious of projects that create their own cryptocoins for quite some time, I’m happy to see this public debate on the legitimacy of appcoins

http://www.cryptocoinsnews.com/bitcoin-core-developer-jeff-garzik-believes-nxt-is-a-scamcoin/

[CoinMode]

Any "coin" that is not mined through a cryptographic algorithm is a scam. NXT, Ripple, and several others are not cryptocurrencies and should never, ever be compared to bitcoin. These non-crypto-coins have the exact same problems as our current financial system and will do absolutely nothing of value towards ending economic slavery around the world.

tl;dr If it isn't a mine-able crypto, then it isn't good

[teek]

Because it is a scamcoin..

[gmx95]

I think any coin except bitcoin can be considered a "scam coin" because they are all copied from it.

[cbeast]

I don't consider PoS altcoins as scamcoins, I consider them to be fiat. As such they are useful currencies for strong states that can back them with powerful standing armies and weapons of mass destruction.

[cryptoanarchist]

Any "coin" that is not mined through a cryptographic algorithm is a scam. NXT, Ripple, and several others are not cryptocurrencies and should never, ever be compared to bitcoin. These non-crypto-coins have the exact same problems as our current financial system and will do absolutely nothing of value towards ending economic slavery around the world.

tl;dr If it isn't a mine-able crypto, then it isn't good

Thankfully, coinmarketcap lets you filter out those "coins".

[chennan]

Bitcoin consumes a lot energy to be generated. To save energy, POS, Nxt currencies are coming out. The cryptocurrency is evolving. Which will be winner is not known yet.

[cbeast]

Bitcoin consumes a lot energy to be generated. To save energy, POS, Nxt currencies are coming out. The cryptocurrency is evolving. Which will be winner is not known yet.

That's like saying we have poison coming out so you don't need to bother eating anymore.

[notthematrix]

any non mineble currency is like fiat , it can be inflated forever and thats the problem.

[coretechs]

Tulip mania!  NXT isn't backed by anything, not even mining cartels!

Lots of misinformation here.  NXT is not a clone of Bitcoin, it was written from scratch using java + javascript and has almost nothing in common with Bitcoin aside from the general concept of using a blockchain.

NXT is a platform for decentralized services that is powered by NXT tokens.  Comparing NXT to Bitcoin as a "currency" doesn't really make any sense.  NXT and Bitcoin can function as complimentary systems (they already do) as NXT was designed from the ground-up to process a variety of transaction types that are not suitable for the Bitcoin blockchain.  I like NXT because I like being involved in projects with promising technology and contributing effort to help them grow - the same reasons I got into Bitcoin.  If a fatal flaw is discovered in the NXT PoS mechanism it will probably fail, but we won't know with any certainty unless we try.  Nobody is forcing anyone else to use NXT and it's certainly not a "scam".

tl;dr If it isn't a mine-able crypto, then it isn't good

If you want to "mine" NXT, you can use a pool like http://hashrate.org.  It mines other alt-coins and automatically sells them to buy NXT that it pays out to miners.  

[CoinMode]

Bitcoin consumes a lot energy to be generated. To save energy, POS, Nxt currencies are coming out. The cryptocurrency is evolving. Which will be winner is not known yet.

You don't seem to understand the concept of value. Something is more valuable if people are willing to do more work for it. Gold is scarce, sure, but so are many other precious metals. So why is gold more expensive? Because people are willing to do a lot of work (POW) in order to get it.

Bitcoin = real value generated by people willing to work for it
Scamcoins (NxT, Ripple) = fake value declared as such by a central authority figure

Bitcoin is lightyears ahead of NxT and Ripple, even in its original form.

[Sukrim]

Since some people seem to not have read the article, these are jgarzik's points of criticism towards NXT:

It is marketed like a scammy penny stock.

Anon early super large stakeholders + Proof-Of-Stake == the big guys run the table, if they choose. https://download.wpsoftware.net/bitcoin/pos.pdf  The central bankers are in place from Day One unless they are super-virtuous and give tons away “fairly.”

Anonymous developers

Closed developing process.  Source is periodically handed down from the ivory tower to the masses.

Certain notable personages (& key stakeholders) that dodge, dodge, dodge, when an obvious attack vector — mitigated in other crypto-finance projects by known techniques — is highlighted.

Active resistance to making it easier to independently reproduce the software

Technical criticism is routinely met with bizarre behavior (notably from come-from-beyond)

Attacking critics, rather than responding to criticism.

Several security incidents that smell like inside jobs.

These apply mostly to only NXT, the only universal issue with non-mined coins is the distribution problem (aka. "How do you hand out something fairly to a lot of people without including an element of trust or by fixing prices?"). Bitcoin also has a distribution problem (only miners can get coins, everybody else can only buy them), it is considered a superior solution to any other so far around here though (well, it's BITCOINtalk after all).

[CoinMode]

Since some people seem to not have read the article, these are jgarzik's points of criticism towards NXT:

It is marketed like a scammy penny stock.

Anon early super large stakeholders + Proof-Of-Stake == the big guys run the table, if they choose. https://download.wpsoftware.net/bitcoin/pos.pdf  The central bankers are in place from Day One unless they are super-virtuous and give tons away “fairly.”

Anonymous developers

Closed developing process.  Source is periodically handed down from the ivory tower to the masses.

Certain notable personages (& key stakeholders) that dodge, dodge, dodge, when an obvious attack vector — mitigated in other crypto-finance projects by known techniques — is highlighted.

Active resistance to making it easier to independently reproduce the software

Technical criticism is routinely met with bizarre behavior (notably from come-from-beyond)

Attacking critics, rather than responding to criticism.

Several security incidents that smell like inside jobs.

These apply mostly to only NXT, the only universal issue with non-mined coins is the distribution problem (aka. "How do you hand out something fairly to a lot of people without including an element of trust or by fixing prices?"). Bitcoin also has a distribution problem (only miners can get coins, everybody else can only buy them), it is considered a superior solution to any other so far around here though (well, it's BITCOINtalk after all).

Fixing prices would do absolutely nothing to help with distributing coins fairly because the process by which the price is fixed has to involve trust. When the market is free and prices are determined only by consensus of demand, then you have a fair distribution system.

Please explain how fixed prices would solve any of the issues involved in distribution.

[TraderTimm]

Bitcoin consumes a lot energy to be generated. To save energy, POS, Nxt currencies are coming out. The cryptocurrency is evolving. Which will be winner is not known yet.

This is by far the worst reason to back a coin. Saves energy? How about the energy saved comparing Bitcoin to the legacy financial system it will replace? I don't buy for a minute that these coins are created as some kind of "Green" initiative. They're parasitic and tertiary, and the fact that they can't even muster enough people to support a conventional mining network tells me quite a bit about their worth.

Don't tell me, you think that hashing is "wasted" cycles too, because you don't understand how the blockchain works.

[Sukrim]

Fixing prices would do absolutely nothing to help with distributing coins fairly because the process by which the price is fixed has to involve trust. When the market is free and prices are determined only by consensus of demand, then you have a fair distribution system.

Please explain how fixed prices would solve any of the issues involved in distribution.

Similar to Ethereum's approach it could be possible to simply assume something else outside of your currency to be well distributed (Bitcoin assumes "mining power" to be well distributed, Ethereum assumes Bitcoins to be well distributed) and then fix prices against this well distributed thing until you have either used up your currency or used up the external thing (e.g. all BTC in existence are used to buy Ether).

The basic idea is "if there is something out there that is already well distributed, provide a way to convert this thing into your currency over time". You can make markets (Ethereum), automate it (PoW coins), give it away (Stellar's approach was to assume facebook accounts are well distributed) and I'm sure there are many other distribution ideas out there.

Involving trust and fairness is not mutually exclusive.

Don't tell me, you think that hashing is "wasted" cycles too, because you don't understand how the blockchain works.

From https://bitcoin.org/bitcoin.pdf page 4

The steady addition of a constant of amount of new coins is analogous to gold miners expending
resources to add gold to circulation. In our case, it is CPU time and electricity that is expended.

Hashing is simply making sure as much electricity is expended as you claim. If this is a "waste" or not, is debatable. It however does mostly serve to distribute BTC units; to solve double spend issues solutions like PoS are also possible.

[ShroomsKit_Disgrace]

Reading this amount of fallacies and ignorance coming from legendary members of this forum is almost making me cry...

They aren't better than the reasoning from Garzik:

"Hashes don't match? it is a SCAMCOIN!"

[visual111]

It is good to see people criticize offshoots of Bitcoin, just like people who criticized Bitcoin itself when it was new to the scene. No other coin has survived the same stress test that Bitcoin has so far, which is why we see so many fervent supporters.

but now I see Bitcoiners who are in the same place as the Bitcoin naysayers were, that of "it isn't going to work. sure, fiat has its problems, but it gets the job done".

"it isn't going to work. sure, Bitcoin has its problems, but it gets the job done"

it seems short sighted to believe that Bitcoin is the best crypto, which is the view that a fair amount of people propagate. this isn't logical to me - bitcoin is the first attempt at using Bitcoin protocol for purposes of currency. obviously all cryptos that proceed the bitcoin currency aim to fix its flaws. I would wager that there is already a more powerful coin out there, but it will remain undiscovered until a majority of Bitcoiners detach themselves from the fatal ideology that is "Bitcoin is the best"

people are more interested in protecting their investments than in supporting a better technology, that is really what this all comes down to

[cbeast]

It is good to see people criticize offshoots of Bitcoin, just like people who criticized Bitcoin itself when it was new to the scene. No other coin has survived the same stress test that Bitcoin has so far, which is why we see so many fervent supporters.

but now I see Bitcoiners who are in the same place as the Bitcoin naysayers were, that of "it isn't going to work. sure, fiat has its problems, but it gets the job done".

"it isn't going to work. sure, Bitcoin has its problems, but it gets the job done"

it seems short sighted to believe that Bitcoin is the best crypto, which is the view that a fair amount of people propagate. this isn't logical to me - bitcoin is the first attempt at using Bitcoin protocol for purposes of currency. obviously all cryptos that proceed the bitcoin currency aim to fix its flaws. I would wager that there is already a more powerful coin out there, but it will remain undiscovered until a majority of Bitcoiners detach themselves from the fatal ideology that is "Bitcoin is the best"

people are more interested in protecting their investments than in supporting a better technology, that is really what this all comes down to

but now I see Bitcoiners who are in the same place as the Bitcoin naysayers were, that of "it isn't going to work. sure, fiat has its problems, but it gets the job done".

"it isn't going to work. sure, Bitcoin has its problems, but it gets the job done"

This is your supporting evidence.

people are more interested in protecting their investments than in supporting a better technology, that is really what this all comes down to

This is your hypothesis. It's a non-sequitur.

[kodtycoon]

Well said visual.. These types of threads only reassure me that 2.0 platforms are a very real serious threat to bitcoin.. How many scams have their been around the alt section? And how many threads made by hero members and also mainly populated by hero/legendary members spreading fud has there been? It's embarrassing to see once reputable bitcoiners lower themselves to scrapping the barrel for what ever FUD they can come up with!

[cbeast]

Well said visual.. These types of threads only reassure me that 2.0 platforms are a very real serious threat to bitcoin.. How many scams have their been around the alt section? And how many threads made by hero members and also mainly populated by hero/legendary members spreading fud has there been? It's embarrassing to see once reputable bitcoiners lower themselves to scrapping the barrel for what ever FUD they can come up with!

You can call them 2.0 platforms, but you can't call them Bitcoin 2.0 platforms because you are not using the Bitcoin blockchain. Again, this is a Bitcoin forum. Why are you even here?