Topic: MC2: A cryptocurrency based on a hybrid PoW/PoS system - page 31. (Read 195188 times)

Dan Kaminsky in the BTC conference (https://www.youtube.com/watch?v=si-2niFDgtI&list=PLUOP0P68GJ3BGjfqoLLnzAefk3ZzXQtJ7, 41:00 mark) seemed to strongly endorse the idea of a multiple hashes and felt that BTC would have to transition to that solution to avoid fatal centralization around the current ASIC miners.  Netcoin is likely to be the first place we see that implemented.

Of course they can, but such coin would have serious confidence problem (one can fear that project will disappear any moment due to legal problems) so it won't be easy to convince people to use such copy-cat currency.

I think you misunderstand the implications of what I'm saying. The purpose of a syndicate is to protect the network on the technical level (keep hashing power decentralized), and on the social level (protect the individual members from scams, protect profits, etc). These two innovations are not currently offered by Bitcoin, Litecoin or any other coin. Netcoin can differentiate itself by forming the kind of community that tries to look out for it's members because it's members are the network.

The free market is a jungle. In a jungle you have to protect yourself or die. Netcoin is in the position where it's going to have to protect itself and security does not just mean use a new hashing algorithm. New hashing algorithms or even a combination of hashing algorithms can help but technical security can only take you so far. Eventually the economic incentive will be enough that someone will invent an ASIC, and the economic incentive probably will be enough for someone from the Litecoin community to switch the massive GPU farm over. It's these big players with massive amounts of hashing power who will change the dynamics no matter how you slice it. The only solution I have is to accept that these individuals will exist and regulate it it in some way so that you don't end up with for example massive private Litecoin GPU farms waiting for the moment Netcoin launches and then mining it into oblivion while ordinary Joe Sixpack never stands a chance.

The way to even it out is to allow ordinary Joe Sixpack to start saving his money today, right now, to prepare for the launch, and set up an L3C or collective cloud based rig which sells shares to people like him. Do it right and anyone will be able to join in on the big launch even if they have no mining experience at all and no rig. Tell me why this would be bad and why it would be better to concentrate it into people who have mining experience and expertise to build massive rigs? Of course it would be best if everyone could be a miner but as cryptocurrencies become more mainstream it's going to have to include more people than just computer engineers and IT wizards.

The god of the market decides nothing. Human beings decide everything. We are dealing with information here, digits, nothing more. The ability to crunch those digits is being centralized into an elite and this is bad for cryptocurrencies in general and it's not going to be solved by appealing to the free market god. It will only be solved by creating the necessary structure so that decentralization can take place. The centralization of hashing power is due to the design of SHA256 and of Bitcoin itself which due to Moore's law will result in an ever increasing centralization of hashing power.

The lack of foresight of the community is also what led to Mt Gox and the centralization of the exchange mechanism. Only now after the fact is the community saying a decentralized exchange is needed. The free market by itself does nothing unless it's directed by human beings. So why not organize to use the free market to vote on the fate of Netcoin?


That is not what I said at all. I never said technical features make a currency popular. I argued against that. I'm saying the social network makes the currency popular and the investment and mining syndicate make the currency profitable and that if the syndicate does not protect the social network which protects the currency then nothing protects the currency and no amount of technical feature can change that. Ultimately Netcoin will be protected by the Netcoin community and organizing to do this early on makes sense if it's supposed to last and be competitive because the Bitcoin community by that time will be elite and will not help other cryptocurrencies as you're seeing with the venture capital flowing into Bitcoin specific companies and Bitcoin specific technology leaving Litecoin and PPcoin to reinvent the wheel all over again for the benefit of those who own a lot of Bitcoins. That is the free market, but those who own a lot of Netcoins might want to have the same businesses, wallets and infrastructure in their community and it's not necessarily going to be a good idea or even possible to rely on Bitcoin businesses to support the Netcoin community because they might not own any Netcoins and could easily decide against it and then what? No online wallets? No debit cards? No exchanges? None of the essential sites that make market cap go up?


I think in the long term you can forget about ASIC and FGPA resistance. You can perhaps try and delay it but for what? In the long term it's going to go the same way and hashing power will be centralized due to Moore's law as I indicated before and it's only going to speed up in the future too. My opinion is that the hashing power should be decentralized and that a syndicate can form and make that a priority so that centralized hashing resistance isn't just built in as a technological feature but also as a sociological trend and legal resistance as well. Notice I did not claim specific technologies should be resisted, like ASIC, or FGPA. The reason why is let's say it is ASIC resistant and can only be mined on the CPU, what stops someone from using Amazon CPU farms or from setting up a $100,000 cloud farm with Silicon Valley venture capital and instead of doing it in the interest of the community they do it specifically to centralize the hashing power into the control of Google or whomever their investors are? Do you now see the problem is centralized hashing as a trend and the technology used is irrelevant?

Define market confidence, and how do you even know this? Is this based on what is actually happening because I see GPU farms popping up everywhere mining even the sort of alt coins which are just released. These farms are private meaning you and I don't get a share in any of the profits, and they act to centralize hashing power
into fewer and fewer hands. Yes I do believe Netcoin will be released and the private GPU/CPU mining farms with ridiculous hash rates will focus directly in on it.

The free market? We are the free market. We as in if we form a syndicate and become a collective entity then we can vote in the free market. If we do not form any legal entity and do not have any mechanism to control the market or the hashing power or anything else then what are you talking about? Are you saying Netcoin should just be released and that everyone will stand back and watch? What I predict is that on day one it's going to be hit with so much hashing power so fast that it's not going to even be like what you expect.

We are talking 2014? So if Bitcoin is $1000 and the Bitcoin ATM's are starting to spread, and Litecoins are $50, and so on, and the market caps of these coins are in the billions or hundreds of millions, you're telling me they wont already be organized? If you go with GPU then you'll have to deal with the Litecoin community which already is organized and already has businesses with GPU's and FGPA's selling shares and going to the cloud. So they can just point all their hashing power at Netcoin and take it instantly before Netcoin can form an identity of it's own. If Netcoin uses SHA256 then Bitcoin with it's venture capital backed LLC's will swoop in and take Netcoin.

I'm not against the free market, I just don't think Netcoin is going to have it as easy as Bitcoin and Litecoin because when Bitcoin and Litecoin launched the majority of people did not know what cryptocurrencies were, venture capitalists weren't involved, billionaires like Bill Gates weren't taking notice. By the time Netcoin gets involved Bitcoin will be mainstream and Litecoin will be where Bitcoin is right now. Netcoin is going to have to compete with PPcoin for third place and PPcoin is starting to get organized and build up it's community which means Netcoin is going to have to start organizing right now or you're right it could be DOA no matter what technology it comes with.

Technology alone does not increase market cap. Hype, organization, and starting businesses around the technology is what increases market cap. So the time to hype and start businesses is right when Netcoin development begins and we know what the technology is. The time to plan to build Netcoin centric cloud based hashing rigs is now, because if you don't someone else will and I really don't see how you can stop the hashing arms race now that Moore's law has kicked in. The only solution I have is to organize it into syndicates, decentralize those, and then offer shares, so that even if Netcoin does end up getting swamped by hashing power, and even if it's a hashing arms race scenario, that at least you'll always be able to buy shares no matter how much technical expertise or money you have to spend.

You wont have to worry about how expensive rigs become. You wont have to worry about electricity costs. You wont have to worry about any of that. Just like how we went from people hosting their own web servers in their house to paying web companies to host for them to hosting it in the cloud to virtual machines and VPS. Netcoin hashing power will be hosted in the cloud and you can cite this post of mine when Netcoin is released and see if I was right.

Is the wiki ready yet?

Where I think you may have gone wrong is in believing that all the hype on this forum surrounding this release gave the currency a "price premium"  so then with that price factored into your belief , you designed a "syndicate" system around its protection .


You stepped about 3 or 4 steps too far ahead of yourself for a currency that has a current market price of Zero.


And then you are now proposing to step in the way of the free-market to determine that price.

Amazing and grievous negligence of market economics.

Iucky lucky lucky ........

Somewhere amongst the deep diving into the technical of "netcoin" you have seemed to lose sight of the economics of a free market .

Here are a few points for you to think about .

1. You are arguing that large gpu farms can control a market or make it "unfair" that is so far away from reality it hurts my mind .

2. The free market decides the equilibrium related to any market confidence in a currency entity.


To break that down and simplify it :

If X coin is released and it is one amoung to many others in the market it is essentially starting its life at 0 market price .

You in error believe that this forum or " technical features" are what makes a currency popular.

The only techcnical feature that improves a currency viability is one that gives more "market confidence" that will generally be one that adds more "distribution" to the market.  So these features that add ASIC or FPGA resistance or "POW" resistance are popular in the market.

3. The price risk cost ratio mechanism will ensure the market finds equilibrium even the biggest GPU farm is not going to spend power and wasted time on a currency that has Zero price and little market confidence.

Do you understand what I am saying here ?

The free market will balance the equation, your Netcoin is DOA . On its current path .

Yes, but people could just ignore that.

Maybe netcoin could be open source but with license attached that do not allow to use netcoin specific parts ito make other coins? Can it be done?

What you don't understand about my post because you're so focused on "red flag words" and it sounds 1%ish,  is the fact that by the time this coin releases the cryptocurrency landscape will be very different.

Individuals aren't going to be in the mining business like they are now. There will be huge farms set up run by businesses who will simply point their hashing power at this coin or any other coin. So anything other than a syndicate, collective, or organized release, is not going to be fair.

How is it fair if you and I have let's say 1200Mhash/s but we can't get any coins at all because the moment of the IPO 5 corporations with farms all point their hashing power at it? ASICminer whether you like what they did or not has permanently changed the way things are done. If we don't have to worry about technical details and can just buy shares in a rig that is part of the Netcoin network certified by the community then what is the issue with that? How can it get more fair than that?

At the same time if we remain unorganized then you'll never achieve a high market cap in a short amount of time. Market cap is a result of organization, people starting businesses, hiring each other, etc. I'm advocating that we start the businesses in parallel to the development of the coin. I used the word syndicate precisely because that is the word that businesses use to describe it. IPO is also a word businesses use. Marketing is also a word used by businesses, so what?

Here is the point, many people are anti-business, but being a business owner should not be considered a bad thing. It should not associate you with the 1% to want to be a business owner. It should not associate you with the 1% to want to be an investor. If you set the business up correctly, in the right legal form, it will benefit the community by providing jobs and building up infrastructure as a whole while organizing the community. Netcoin, Bitcoin or any other coin cannot be a success without a syndicate (use another word if you like) built around it.

Bitcoin has the foundation, but that foundation is really only set up to pay for development and isn't doing anything at all to pay for infrastructure. This left a big hole for venture capitalists and individuals actually from the 1% to take control of critical businesses so that over time they'll own all the shares in the important businesses which provide critical infrastructure instead of individuals like you and me.

What I propose is that individuals like you and me own shares in the syndicate itself which will support the community and build infrastructure for the benefit of it's shareholders in pursuit of it's mission. This sounds very business like, but if the idea is bad please give a better reason to dislike it other than it's language. It's kind of like saying some was a bad idea because the language sounds too liberal. Either the idea can work, or not, and that should decide.


This is the argument I'm trying to make. I'm saying we should organize right now so that we can start buying shares in stuff like that prior to launch so that when it does launch no one can say it wasn't fair. If you bought your shares in the syndicated mining rig then you'll guarantee to get dividends etc. This would build excitement right now and cause people to start businesses prior to Netcoin even being officially launched. By the time Netcoin launches it will be the most anticipated launch in altcoin history.

Or we can take the usual approach taken by PPcoin and others and just release the coin knowing it has the best technology and then just wait for a community to form around it. By the way I'm also willing to buy both shares in the Netcoin IPO or in a hashing company provided that the company is set up as a limited profit company (or maybe a collective?) and is accepted by the community. The reason I like the idea of syndication is so that people will know which companies are certified and which are potentially scams, or invested in or trusted by the community or not invested in and trusted by the community.


This depends on how tacotime chooses to do it. Closed source will not be a popular decision but at the same time if it doesn't stay closed source for long it might not matter. It matters for how long it's going to be closed source. Honestly it's better to release it all open source from the start but if that is technologically difficult to impossible then open source it in stages with set dates which do not change.

Such as approximately X weeks after initial release, the source will be completely open. Then the community can say if it's not released open by that time they will ditch the coin.



Hear me out, mining pools are old tech which came about after GPU power wasn't enough for people to solo mine as individuals. Mining farms or cloud mining syndicates are new tech which are coming to replace mining pools because soon most individuals will not be able to mine with profitability at all as the technical and accounting burden may become too much. If the security of Netcoin is based upon a distributed group of miners, in my opinion a syndication of the mining network would provide decentralization of the hashing power, while also providing farms which handle all of the technical issues so that individuals can simply hash in the cloud and only worry about paying a portion of their paycheck into these farms. These farms could accept credit, debit or whatever else and even grandma could own a share or two. I see that as the way forward. If you want to solo mine you still can but how if Bitcoin is mainstream at the time you're gonna have people throwing $20,000 into a room full of rigs and eventually these people will become the new median solo miner and even if you keep the pool infrastructure the pool still requires you to purchase, configure, and run your own mining hardware and what if you simply don't have the connections to get an ASIC, the technical expertise to build an ASIC, or the money at the time? If you set it up so people mine in the cloud then any amount of money, even $50 would get them something. This would remove the burden of technical expertise and connections and make mining more like an investment that anyone could get into just by buying the shares and when it's that simple then there will be much more hashrate overall and it would benefit the security of Netcoin as I understand it.

But who will certify these farms or hash clouds as being officially endorsed or not endorsed so that grandma knows which ones benefit the Netcoin economic eco-system and which ones are set up just to make money? By using alternative corporate legal entities such as collectives and syndicates or L3C's this can give us the assurance to know that. The syndicate would bring trust, which is something Bitcoin does not really have as a lot of people myself included have been scammed. It also would act to prevent power from concentrating into one mining farm or cloud hash service because if they are all L3C's you cannot have a MtGox type situation.

It would be fantastic to get infrastructure such as pools/trading areas/securities set up well in advance of netcoin launching. If benny (or someone!) wants to set up a hashing company that will pay out in netcoins then I for one would happily buy shares for it in LTC or BTC and get paid dividends in netcoin.

If we can get a community up that will support it then it won't end up like the pump and dump copycoins that we've seen flash by.

Really excited by Netcoin, to be honest I've to date only considered LTC and BTC to be worthwhile.

From my very limited technical understanding, I believe there are security concerns with having it completely open source from the very beginning. I might be wrong though. I do believe it was elaborated on in this thread, but I'm too dumb to try and explain it. The way I look at it is that someone came on here and produced a whitepaper full of real improvements to advance the current state of the field. There's been peer-review, and that speaks to how they operate in a huge way. There's been a surprising lack of openness in the crypto-community with all the scams going around. Netcoin is different in that way. The ideas in this coin are some of the necessary advancements to strengthen cryptocurrency as a whole.

I do know that TacoTime completely supports open source from what I've read here. I also know that there are special considerations that one must take even with open source projects. We need to accept that the crypto-community has a malicious streak, and there are people that will attack and seek to destroy the things others have built very openly. If keeping it secure in the developer's hands until we are strong, then that's reasonable to me. At the end of the day, it's simple. If a coin screws everyone over, people won't mine it. It comes back to the point on peer-review. Anyone who opens an idea like that is going to take into consideration the security of the project and balance it with its openness, regardless of how that works from a temporal stance. I say bravo and forward to the new world!

Agreed. NetCoin needs to be open source from the start I believe, otherwise it will lack legitimacy. I believe as well that a Netcoin clone would be seen through by the community, with people gravitating to the "real deal" because of it's innovator advantage and strong development community.

I quoted you because of your rugged good looks.

I was simply trying to disconnect that one Luckybit post from the project in a friendly, non-disrespectful way.  I'm not sure why you quoted me, but I'm certainly not for anything other than perhaps a mix of TacoTime and Coblee's release week ideas.

its already not well marketed, if they exclude a bunch of people it will just be a failure - plane and simple .

The design will be ripped sadly and then someone will re-release it, with a different name and no pre-mine "syndicate" "ipo" or pear tree.

This will be a pump dump because a few will have many units and the temptation to offload at profit will be great, such is the free market.

- what about a better idea - my security network friend was saying , are not orphans , just all about latency to the original block chain?

- what about this then, here is simple market genius –

1.    what about a pool that is set up , secure and stable servers, that is announced days before the release weeks even, with all the info-

2.   Then have everyone connect to that pool in which is hosting the BC - at good latency - start at near or close to near 0 diff, but let everyone that wants to mine get good quality units with almost no orphans.

3.   Set the pool % fee high at the start for the Devs , say 15 % then the closer to diff 1 lower the % so .5 - 7%  so on until diff 1 ,then lower the % to 4% and let the market go ,as other pools will be up by this stage and if others are hosting at below 4% then good.

4.   Because there is a number of units in the first critical period the % will pay the devs a lot of units , people will see that as fair as long as the orphan rate is lower than other currencies.

Its wins all around. “net coin “ gets a decent start at life.

I said it a bunch of pages back I think, but for Netcoin, I don't think copy-coins will be a huge issue. Because Netcoin is so unique it will be apparent to most of the community that it is the real deal, and not the inevitable copy coins. I think slowly but surely folks are getting tired of all the lame alt copy cats.

I'd say it would be highly unlikely that a copy of Netcoin could come out soon after Netcoin and become more popular than Netcoin. Some copy coins will come, but I doubt any of them will last longer than a few weeks, and maybe even they'd help promote Netcoin itself.

Since Litecoin was released, and during the 'alt coin scam craze' of the last 2 months or so, I think the community has changed, become more experienced, and the worst is over...here's hoping the popularity of the obvious scam coins will fade.

I just can't easily conceive in any scenario that a Netcoin copy-coin could do better than the original deal, because of all the community support and people working on Netcoin to make it a success. Not to mention, people will know that Netcoin is the real deal because of all its original work. Obvious copy-coins will be obvious, and [I think] shunned.

Of course whatever Mr T.T wants to do with his baby is cool with me. Just my 2 cents.. .

I would shy away from having anything "closed" in this project.. as soon as you do that, you alienate everyone that isn't "in the club" and that's the last thing this coin needs.

Luckybit uses some red-flag words that I personally believe no coin should associate itself with.  Crypto-followers definitely didn't rally behind the nascent world of these coins hoping to follow the same, old, fiat trails on that vector.  When I start seeing terms like IPOs, syndicate, pre-release (other thread), I also hear, "Danger, Danger Will Robinson!"  We could call it "The 1%ers Coin."

As I don't believe that is the intended direction of crypto-currency, in general, I do not believe that is the direction of this one, either. There are legitimate ideas in his recent thread, but they're perhaps difficult to see below the text. Early organization is important, but I'm not certain we can't refine these ideas to be more popular among the community.