I have not yet read a competent technical rebuttal to the threats of Bitcoin becoming more centralized and losing coherence with the decentralized internet or perhaps even someone will argue that the internet giants will also succeed in centralizing the internet and we lose the freedoms that empowered the individual.
I am an engineer, programmer, mathematician, and logician. I want to see concrete technical arguments at the level of my OP. Frankly I am disappointed with the quality of the (rebuttal) posts thus far.
Update on Feb 20: Note I apparently deleted blablahblah's upthread rebuttal (or he deleted it, I can't remember), which I have quoted and replied to below.
Bitcoin is the the first cryptocurrency ever and it will continue to expand as long as its protocol is not compromised (which is very unlikely even in a distant future).
I provided specific technical attack threats. You have not refuted them.
Do not underestimate the importance of network effect.
It's like VISA, which launched in 1950s as revolutionary payment service. Although now it's too primitive comparing to hundreds of new electronic payment systems, it still covers the most of the market.
The government regulation that must be hurdled to compete with VISA is why we don't see global competition. Any one who has tried to compete has been raided and shutdown by the government, e.g. e-gold, the Liberty Dollar, and other one in Panama I forget the name.
As far as I know, we don't need to break any law to create the alternative coin design outlined in the OP. The legalities will fall on the exchanges, but with a cpu-only proof-of-work coin with built-in anonymity, one can mine the coins if they want to anonymous. Imagine you are a European trapped behind the coming capital controls iron curtain and so you go buy some PCs and mine your way out. Unlike specialized ASICs, you are likely to find PCs for sale person-to-person locally.
Now I'd really like to get a discussion going on this alt crypto coin saver. Could it be zerocoin?
No.
- Validation is too slow, thus can't work technically.
- Might be back-doored (although this might be fixable)
- Unproven, very complex new crypto. Needs many years to become trusted and stable.
- Storage size needed for full clients is impractical if it is mandatory for all users
- Mixers, laundries, and exchanging between coins which are not mandatory fail for the ex post facto reason I provided in the 3rd item in the Threats section and footnote [2] of the OP
- Subject to timing attacks, i.e. timing when inputs go in and outputs come out
- Doesn't obscure the IP address of the participants, and Tor + VPN are inadequate, this will be explained further at the appropriate time
What about Anonymint's own coin, how's that going?
I hope you can appreciate why I would never want to be provably the KEY developer of a such an anonymous coin. One doesn't need to break any law to be a
target for assasination. The USA and Europe are not far behind in terms of having
laws and executive orders to assassinate citizens without a trial if they are categorized as a "terrorist". I could see myself publicly contributing in a minor refinement bounty work role on such an altcoin, for as long as I am not the creator.
Another question, couldn't precious metals be a good alternative for saving wealth anonymously out of reach from confiscation?
Yes I expect them to locally, but more risky if you need to move them stealthy across a border or checkpoint.
And you can't send them as payment over the internet. Given my expectation of the Knowledge Age taking over the economy, then the global economy would implode if we can only use physical gold. This is what caused prior Dark Ages, the velocity of money plummets (already has fallen 50% since 2008) and gold coins get buried. We are still finding buried stashes from prior Dark Ages today.
Your prejudice against all things centralised or structured "top down" (aka: weasel words for social structures that you emotionally dislike),
I shouldn't need to point out the blatantly obvious...
The premise of the OP is the internet is decentralized and their is a huge demand for a decentralized money to enable internet enterprise to be as freedom-oriented as the decentralized publishing of web pages and other internet activity.
If you prefer a centralized internet, then please feel free to continue to using Paypal, VISA and other centralized payment systems.
fits right in with the 'myopic' Libertarian euphoria surrounding Bitcoin... in 2011 - 2012.
You conflate orthogonal issues. The premise of the OP has nothing to do with the irrational exuberance which caused the early Bitcoin price bubble to $30s then crash. This was due to the fact that early adopter geeks are not experienced investment speculators (technical analysis traders). They didn't understand the maturation and adoption cycle of new technologies.
In defence of the Libertarians here, most seem to have quite moderate views in advocating "small" governments and seeing their ideology as a "guiding principle" rather than a hard set of rules.
I am not a wishy-washy, fence-straddling Libertarian who accomplishes nothing. I am an anarchist, who makes it happen by releasing software that enables individual freedom.
Specifically I am some what near to being a polymath (although I am a poor writer and communicator), e.g. I probably connect to all clusters on the
Dark Enlightenment map (if following image doesn't display, then click that link to see it at top of page). Note for example I've exchanged communications on his blog with James A. Donald (who was the
first person to communicate publicly with Satoshi!).
Bitcoin is doomed to a future of top-down control and thus can't compete with the top-down global money solutions
That's BS. Central control implies a cohesive group of vested interests -- much more dangerous to legacy financial systems than a disorganised collective of FOSS enthusiasts.
You have not technically refuted the Threats section of the OP which drive Bitcoin to a centralized control. If Bitcoin can be taken over by vested interests, then we are back in the same predicament, just a different set of slave masters.
Decentralized means the vested interests can't take control, only contribute in a decentralized competition. Centralized means it gets swept into the
power vacuum of democracy.
Re: the $150T bubble collapsing?
Not gonna happen unless levels of mutual distrust in society reach a crisis point.
Eventually you run out of other people's money and productive lifespans. Then comes the outcome that has repeated throughout recorded human history,
as linked in the OP.
That most people believe it is impossible for history to repeat, is why we are nearly doomed to an
Apocalyptic or Mad Max outcome outcome. The people expect the government and the collective system can take care of them, but in fact it turns on itself like a cancer and eats itself because the money has to come from some where to continue to pay for all the entitled expectations of the people.
Look up the causes of hyperinflation. There doesn't even need to be an increase in the money supply -- hyperinflation is fundamentally a runaway collapse in the amount of trust the average person has in the underlying system.
We are headed into massive deflation, and perhaps you fundamentally don't understand that
hyperinflation only occurs in peripheral economics, not in the core of the global economy.
http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/http://armstrongeconomics.com/2014/01/14/hyperinflation-is-it-even-possible/http://armstrongeconomics.com/2013/11/20/hyperinflation-all-just-hype/http://armstrongeconomics.com/2014/01/14/hyperinflation-impossibility-in-private-sector/http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/http://armstrongeconomics.com/2012/07/04/hyperinflation/http://armstrongeconomics.com/2013/02/24/the-untold-truth-about-the-german-hyperinflation/http://armstrongeconomics.com/2013/06/24/12703/http://armstrongeconomics.com/2013/12/29/law-of-unintended-consequences/http://armstrongeconomics.com/the-taxman-cometh/http://armstrongeconomics.com/2013/10/30/world-trade-turning-negative-same-as-protectionism/http://armstrongeconomics.com/2013/11/14/the-coming-deflation/http://armstrongeconomics.com/2013/11/09/deflation-the-great-equalizer-now-greece-was-there-a-different-tested-response-in-history-yes/My point in the Errata section of the OP about centralized control over debasement isn't that hyperinflation results. I never wrote the word hyperinflation. Rather my point is those who have captured the government gain the fruits of that debasement, or it is wasted by the poor fitness of top-down allocation of resources.
Mining is a temporary bootstrapping thing.
No other proof system (i.e. only proof-of-work a.k.a. "PoW") solves the
Byzantine Generals Problem which is necessary for decentralized trust over an untrusted network like the Internet. No other proof system distributes new coins to users to both avoid exchange AML and KYC laws, and redistribute capital from the wealthy (dumb, usury parasitic capital) to the masses which is the
role socialism was formerly doing.
As a feature of money, the 'costliness' of the tokens has near zero utility. Calling that cost "intrinsic value" is just a distraction for people who haven't quite wrapped their heads around more advanced ideas that cash is a
symbolic pointer to a web of trust.
Mining is a (maybe) necessary evil so that trust can be built on immature networks where no naturally trustworthy leaders have emerged yet. Bitcoin allows proof-of-stake to be added. Whereas
perpetual POW crappyness is implausible.
I strongly posit proof-of-stake will be proven insecure. It lacks the expanding entropy of proof-of-work.
Trust via reputation (i.e. social capital) or stake (i.e. capital share) inherently degrades to centralization and low entropy outcomes.
I had written in more detail about this. I will try to find my old post, but it is getting extraordinarily difficult for me to find such posts as they are buried in 1000s of posts I have written.
Remember that in March 2013, I was researching the possibility of a proof-of-diskspace alternative, and did some discussion in the Decrits thread to learn more about the
issues of how entropy relates to proof of trust in an untrusted network. That is when I had the epiphany that entropy is a critical factor. And I abandoned proof-of-diskspace.
built-in anonymity (to minimize non-anonymous users)
meh.
You didn't comprehend thoroughly the 3rd item in the Threats section of the OP. Without widespread anonymity, the entire coin can be forced to be non-anonymous and thus take over by the government and right back to fiat again.
zero transaction fees (with economic transaction spam resistance)
So you want to reinvent hashcash? How? Perhaps a small fee to prevent ddos? Maybe all the miners get together and vote to determine fee levels?... You haven't thought this through, have you?
You are blind, see in the OP where I wrote "with economic transaction spam resistance".
And you ignored the other Threats that derive from non-zero transaction fees and declining debasement coin rewards.
faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained
2nd gen cryptos like Ethereum could make that issue completely irrelevant. E.g.: Ethereum would allow you to set up any centralised cash or share system inside a contract, and the "decentralised cloud server mining" nonsense is outsourced and non-intrusive. Your server just runs seamlessly until it runs out of funds.
Off-chain solutions don't entirely replace all on-chain use cases. (Novice readers, we are referring to transactions that occur on the coin's decentralized block chain which requires trusting no one i.e. Satoshi's new technology of proof-of-work, versus those that are done by "trusted" third parties i.e. right back to the fractional reserve private banking model of the 1800s)
Btw, that name Ethereum is not going to work. It is extremely difficult to select a name for the next currency of the world. I understand "it lives in the ether" but that isn't going to work for most people. It needs to sound like money, but not "coin".
