Topic: MC2: A cryptocurrency based on a hybrid PoW/PoS system - page 25. (Read 195184 times)

Building my first startup in the highly competitive online ticketing industry taught me a lot about who wins and loses in a changing environment. Many people in the tech world suggest that all you need to do in order to attract customers is to build a great product and users will naturally come. While building a great product is vital, it’s not the whole story. All around us, we see large, imperfect companies dominating their market while new entrants with theoretically better products never quite gain traction. Many entrepreneurs rely upon this “create a better product” strategy and never understand why users aren’t willing to leave their old product for the shiny new thing. With many people questioning if Bitcoin is the best implementation of virtual currency, I can already see parallels in comparing Bitcoin with other options. The answer to whether Bitcoin is the long term winner in this race is actually quite clear.

First, most people would admit that Bitcoin is not perfect. The 10 minute confirmation time is not optimal for quick transactions. The 51% attack is still a looming risk. Then there’s the huge amount of energy “wasted” in the mining process – not great from an environmental standpoint. I’m not the first person to point these issues out, and in response, many people have already released other virtual currencies that aim to improve upon the movement that Bitcoin has started. Litecoin, Ripple, PPCoin, Feathercoin, BBQcoin and others all claim to be a better virtual currency, and their proponents are just waiting for bitcoiners to flock over. BBQcoin is obviously the most delicious of the virtual currencies and way more delicious than Bitcoin, but what would need to happen for it to truly rival Bitcoin?

I think it helps to take a step back and ask why a lot of Bitcoin’s imperfections exist in the first place. These imperfections were not oversights by its core developers; they were expected byproducts of thoughtful decisions that they made. For instance, the 51% attack is only possible because of the extremely distributed nature of the mining structure that makes Bitcoin unstoppable by groups that would limit it. A system like Ripple reduces this particular risk and uses far less energy in the process, but by using trusted gateways as the basis for making confirmations, it is prone to government manipulation. Though I believe Ripple as a technology is needed and will be successful, I see its form inevitably becoming influenced by the government. Bitcoin companies will have to play ball with regulation, but the currency itself will hold its ability to force desired change in world.

Beyond imperfections, Bitcoin has an attribute that will solidify its place as the only viable virtual currency: Bitcoin’s use as an IP address for money. While closed payment networks will initially be apprehensive to accept Bitcoin transfers, they will find that they must accept out-of-network Bitcoin transfers or become obsolete. Within the next five years, almost all closed payment networks will have an input for your Bitcoin address, turning them into open payment networks that can accept money from anyone. However, you won’t find two inputs on these apps for your Bitcoin and Litecoin address. Bitcoin is the only virtual currency that has sufficient adoption to become the standard. If you want to know how this story unfolds, I encourage you to read the history of the Internet and TCP/IP.

Further solidifying Bitcoin as the only viable virtual currency, wider adoption will lead to increased switching costs. Once a company, product or in this case, a currency takes dominance in an industry, people don’t tend to leave it for something with low value improvements. This happens, firstly, because people find comfort in familiar things and don’t become compelled to try something new unless the benefit is overwhelmingly obvious. Bitcoin already has far wider adoption than any of its alternatives and has substantially more infrastructure being built around it. Second is track record. For as bad as a product is perceived to be, proven “good enough” reliability goes a long way against unproven alternatives. Bitcoin’s four years of success in the face of hackers and growing transaction volumes builds confidence. Finally, Bitcoin has very social roots. Given the value now associated with the word “Bitcoin,” it is very unlikely that another virtual currency will match its caché in the next five years.

So will a better virtual currency make Bitcoin obsolete? The answer is very clear to me. Bitcoin isn’t perfect, but it doesn’t have to be in order to fend off competitors and remain the world’s dominant virtual currency. An understanding of this notion presents an opportunity for people that understand it today. Until traders widely realize that Bitcoin is here for good, there will be a lot of untapped value in Bitcoin’s market price. The currency’s longevity will become obvious over time and be reflected in prices down the road, so eat your BBQcoins, sell your PPcoins, and go buy some Bitcoins before they’re back at $200!

About the Author

Jaron Lukasiewicz is the CEO and Founder of Coinsetter, a New York City-based company that offers a high performance levered trading platform for Bitcoin. Prior to Coinsetter, Jaron was the Co-Founder of Ticketometer, a social media-focused online ticketing platform. Previously, Jaron was an Associate at The CapStreet Group, a Houston-based private equity firm; an investment banker at J.P. Morgan and Madison Williams in their global investment banking groups; and began his career as a summer analyst at SPB Partners, a Las Vegas-based private equity firm.

Jaron graduated from Rice University on the President’s Honor Roll with a Bachelor of Arts in Economics and is fluent in Spanish and Portuguese. He is a frequent speaker at events on the topic of Bitcoin and financial technology and has been featured in The Wall Street Journal, Bloomberg, Fox Business News, TechCrunch, Mashable, Entrepreneur, Forex Magnates and other news media.

msg me i might be able to help

Does anyone have a Reddit account that's older than 90 days with 500+ karma? If so, please send me a PM. It's in regards to the Netcoin subreddit. Someone parked it a few months ago and has subsequently disappeared.

There is a procedure to get moderators added to it through Reddit, but it requires an established Reddit account. So if you have one and would be interested in helping moderate, please let me know! I'm a Reddit lurker, so unfortunately I can't follow the procedure by myself. It'll be really helpful to the project's future to consolidate that subreddit so we can pass some information through there as well! We could use a different subreddit, but it's kind of pointless to have an abandoned /r/netcoin when we gather momentum with this project in the future.

Please let me know if you can. Thank you!

Many of us, I'm sure, share the hope that you will develop your current GUIminer to facilitate the mining of NTC, Netcoin.

GPU mining will be available at launch.

Since the master is commenting, I had to ask: Did you think any about the suggestion I made about coin coloring as an easy way to explain decimals and fractions of coinage?

Also, when this comes out, what kind of plans (if any) are there for GPU mining?

For me the biggest arguments against bitcoin would be no protection against Shor's algorithm  should a quantum computer be made. EDIT Grover's Algorithm halfs the brute force attack, shor's algorithm doesn't apply to AES but none the less one should be aware of the possible vulnerabilities due to quantum computing.
Another potential counter argument is that since there is a record of every exchange you ever made, if your bitcoin account is traced back to a person a lot of information can be gleaned as well as governments could use it as a record against you


You're wrong, it uses SHA-256 (which is still not vulnerable to Shor's algorithm). However, the public key scheme used is vulnerable, which means that in the presence of a quantum computer you should never send from an address more than once.




An attacker with a quantum computer could spike the difficulty up to 1024 times what it is now, then stop mining and make the interval between blocks absolutely massive, requiring a protocol change to reset it back
Nobody has a general-purpose quantum computer right now as far as we know. Maybe in 20 years.

How bitcoin is already crumbling under its own success

The bitcoin community has recently discussed about government interference, but today, I want to discuss 2 mostly overlooked bitcoin news:
 * blockchain has reached a size of 8 Gb
 * transactions shall have, now, a minimum size

 These 2 events/news are closely related. Every transaction contributes to the 8Gb ledger size, and "they (the miners?)" want to limit the ledger size. This will be done by fighting transaction spam i.e. eliminating insignifiant exchanges and non-financial transactions such as those initiated by satoshidice.

Why is it needed to limit transactions when there are so few users?
Is limiting transactions today a sign that bitcoin will not scale well?

Some predict that bitcoin market capitalization will reach orders tens, hundred of billions or even trillions.
 * How many people will use bitcoins in a few years?
 * What will be, then, the size of the bitcoin ledger? Will it still be manageable? 

Most probably to keep the ledger at a computable size, transaction size will be limited to higher limits. People will be less able to use it, then, for day to day transactions, if the limit is set to 0.1 bitcoin (equivalent to 100$?) for instance.

Maybe are we going to need to use other currencies, for smaller amounts, such as litecoin sometimes deemed as "silver compared to bitcoin's gold"? If "open currencies" become mainstream, I guess in addition to gold and silver, copper, iron, lead and feather coins are going to be needed to be able to manage the huge number of transactions when half the planet is going to use these new currencies.

Today's amount of transfers is looking like ripples compared to tomorrow's tsunamis of transactions. If we consider bitcoin as the "Napster" of open currencies and expect future open currencies, answering to those questions, which I personnally find unsolved yet, is something essential.

I believe the peer review phase is coming. Taco did mention he is working on the whitepaper and based on the time frame it would explain why he has been quiet.

My guess is the whitepaper will be presented within 2 weeks and then peer reviewed.
Then of course the crowd funding phase comes after that, then the development phase.

Let us have faith in the integrity and work ethic of Tacotime. If he has not posted the whitepaper within 2 weeks then we should begin to worry.

Are you in contact with Taco or working on the whitepaper as well?

The next iteration of the whitepaper is almost done. If all goes well after that we can open the crowdfund and get developers ready.