Topic: rpietila Altcoin Observer - page 255. (Read 387493 times)

Great insight.

A diversified LIQUIDITY ecosystem must exist to support all Crypto Assets...
That's why we have 10,000 banks and not one...
In spite of the constantly misapplied "network effect".

Crypto will naturally evolve into a Shadow Version of global Financial Industry.

No you weren't. I think you need to read your own post again:


The amount of coins lost is completely meaningless. I cannot make this any clearer.

I'm talking about mining rewards moving to transaction fees only, which has nothing to do with what you're talking about.

I'm talking about mining rewards moving to transaction fees only, which has nothing to do with what you're talking about.

It's funny reading threads like this where people get outright angry at the existence of Litecoin.  The people with 5 stars by their name won't tell you the reason they're angry about it, but the reason is, they're scared a network won't function solely with transaction fees unless it has a monopoly on the entire market, and even then, it's still sketchy.  What I see happening in the long run is, eventually this model might prove to be faulty, but nobody will be able to gain consensus to change it due to being called Keynesians.  Some lower coin with a minimum block reward that never goes below X units will probably have to lead the way until the top coins are forced to change.

I don't want to be called  Keynesian as much as anyone else, but I foresee the amount of coins lost per year if cryptocurrency ever becomes mainstream to be a huge number.  People will lose passwords or die all the time with encrypted wallets and those coins will be lost forever.  The number lost per year is going to be at least 1% in my opinion, so having a coin supply that always emits new coins by a minimum of 1-2% wouldn't be a big deal.

The real conspiracy theory in this situation, would be if some government entity already knew this model wasn't viable, and tries to lure everyone into a one world currency using Austrian economics as bait, then pulls the rug out on them.  I don't consider always having a small, minimum block reward being a bait and switch, but there's no telling the scope of the bait and switch government regulation could pull off.

There's also the option that the miners themselves are going to vote themselves a raise in the form of minimum block reward, and everything will be quietly settled that way.

That's where all hints are pointing to!
+1

The Alt-coin Narrative Cycle

It is a commonly-held belief that Bitcoin is a technology and as such it could be de-throned by a better technology.  Although I disagree, this belief drives the "alt-coin narrative cycle."  The alt-coin narrative cycle represents "the search for the next bitcoin."  I would argue that as we witness the life and death of more and more alt coins that we thought showed "promise," we get closer to accepting bitcoin as highly useful exactly as it is.  

The alt-coin narrative cycle became evident to me with the explosion of Dogecoin in late 2013...

Dogecoin and the Birth of the Narrative Cycle

Dogecoin was created as a joke, but the transparancy of that joke helped build a community behind it.  People rallied around Dogecoin because it was a refreshing change from the dirty feel of the disingenuous alternatives being shameless promoted at the time.  Dogecoin's user base rapidly grew, eclipsing the Reddit/r/litecoin subscriber base within weeks and shortly approaching (but never exceeding) that of r/bitcoin.  The community's work building the Dogecoin tipbot, the doge-dice gambling site, and sending the Jamaican Bobsled team to the Olympics showed that the coin was actually being used.  At this point in time, the technology didn't matter, all that mattered was that the vibrant community was attracting new users.  

But the technology did matter.  And now unless Dogecoin forks to become merged mined with Litecoin (or another solution), the doge will be dead within eight months due to the rapidly dwindling cost of launching a 51% attack.  The market value of Dogecoin (in BTC) has fallen by approximately 75% since reaching its high in February 2014.  

Dogecoin's rise taught us the importance of community.  Dogecoin's fall will reinforce the how carefully every single parameters of a crytpocurrency must be chosen.  

Auroracoin and Community

Aurocoin piggybacked Dogecoin more than most realized.  The dominant narrative had become "community," and what better way to create a large community than by freely giving money to the people of Iceland (who had recently been the victims of the shenanigans played in the traditional financial system)!  Aurocoin even made waves within Parliament, for example, "during a parliamentary debate on March 14, 2014, MP Pétur Blöndal, vice-chair of the Parliament's Economic Affairs and Trade Committee (EATC), emphasized that potential tax evasion through the use of Auroracoin could impact Iceland's economy."  The attention only served to increase the hype.  Additional scrypt hashing power left Dogecoin in favour Aurocoin until the price hit a peak near 0.1 BTC on March 30, 2014 (approx 140,000 BTC market cap).  

But it was all hype.  We learned that you can't airdrop money to an indifferent community and expect it to have value.  Today Aurocoin trades at 0.0006 BTC: it has lost over 99% of its value in less than two months.  

Blackcoin and PoS

We were bored with "community" and the narrative switched to "the wastefulness of bitcoin mining" as a soapbox for proof-of-stake (PoS) consensus mechanisms.  Experts in the community already knew that decentralized anonymous consensus by PoS was thought to be impossible; no one had a reasonable solution for the "nothing at stake" problem.  Had Dogecoin completely failed by this point and the community had finally realized the importance of technical soundness, I don't think Blackcoin would have garnered attention.  But we are humans and we must learn everything the hard way.  

Blackcoin exploded in price and later Nxt advocates used the attention that Blackcoin was receiving to push there PoS system.  They claimed to have solved the nothing-at-stake problem, using a confidential algorithm that would be revealed at some point in the future.  This became known as the Nxt "secret sauce."  The PoS narrative even captured the hearts of long-term bitcoin supporters such as Stephen Reed who launched a campaign to convert bitcoin to PoS by 2016 in order to "save electricity."

Recently we got a whiff of Nxt's secret sauce.  It stinks.  Now interest in proof-of-stake coins is dwindling.  The market value (in BTC) of Darkcoin has fallen 76% after hitting its peak on April 14, 2014.

Darkcoin and Privacy

Privacy has always been important to the bitcoin community and perhaps it was only a matter of time before this narrative was exploited.  Darkcoin is the first example of this: it is a bitcoin-derived coin that uses master nodes to create giant coinjoin transactions, thereby obscuring the link between sender and receiver.  

Darkcoin has seen enormous growth with a market cap exceeded by only Bitcoin and Litecoin.  This is the power of narrative.  But Darkcoin was illegitimately insta-mined, has closed-source binaries, is not technologically innovative, and has a volatility-enhancing block reward equation¹.   In fact, since Darkcoin transactions are essentially bitcoin transactions with forced coinjoin, I don’t see why wallets like Darkwallet can’t achieve similar benefits with little of the drawbacks.   I predict Darkcoin will collapse, some will call it a scam, and others will say they shouldn't have invested in something they didn't understand.

But instead of seeing the protocol-enforced privacy narrative as narrative, people might look for a more technically-sound alternative to Darkcoin and without the insta-mine black eye.

The Final Narrative

The alt-coin narrative cycle will continue to play out.   In the end it doesn't matter: each cycle that plays out strengthens bitcoin.  It teaches us that the simple, flexible and robust bitcoin protocol coupled with its diverse user-base and large market cap is the most useful, if for no other reason than because it is used most often.  And besides, if, in the distant future, a superior payment technology is identified, the Blockchain Ledger will be forked or spun-off to this new technology.  There will never be a need to "panic trade" out of the bitcoin ledger and into some foo-coin ledger.  Value is stored in the Blockchain Ledger.  


At best, alt-coins are vying for second place.



¹The Darkcoin block reward decreases with increasing network hashrate and increases with decreasing network hashrate.  This tends to further limit new coin supply during rallies (adding to the pump), and increase new coin supply when miners have lost interest (adding to the dump).

heres a hint - we at Quark didn't offer future promises, we are all apart of the community - it is what it is. price goes up and down, we will see.

There are plenty of Quark clones but DRK isn't one. Different hashtype (11 hashes instead of 5), different coin generation model / different economy, different tech characteristics (masternode payments, per block reward with DGW, darksend), more features to be added (mainstream features) after anonymity development is over, dev commited to evolve the coin over 2 years (jan 14 - jan 16). First 5 months were promising in terms of delivery, another 19 to go in terms of expectation (what he'll bring next). This is a development platform (from which over 25 coins have benefited through copying technical stuff - and more queuing up to copy darksend and masternode payment protocol*).

* Which in itself can provide a lot of potential for services over the network, beyond anonymity.

Darkcoin is a Quark Clone with a straw-man "anonymity"  but i still like it because i respect the way in which it was carried out.

you could have just said -  "i brought Monero buy it now"

sorry i usually don't Troll other "coin advice threads"

your term "terminal decline" Re Quark proves you are not involve with Alt for a reason, because you substantially do not understand the cycles.

if you have only purchased BTC that's understandable because you haven't really been subject to a free market yet- so here's your official welcome:


"Welcome to the free market !"

I actually think Monero is interesting - I respect Tacos work and always look at anything hes involved in.

I assume the same but we can never be sure. This is another reason why Satoshi's anonymity and complete withdrawal are so genius.

It says that nowhere. It also makes no claims about resisting the inevitable. Satoshi knew CPU was not the final frontier.

Initially Bitcoin was mined with commodity hardware (CPU, GPU). When it became apparent we are on a road to centralisation the playing ground  in the distance no longer looked level. Some people didn't like that.

Therefore huge reason for adding Scrypt as a proof-of-work into a bitcoin clone, instead of straight copy pasting bitcoin with a shorter block interval was to allow for a diversification away from that-  a safe haven if you will. Back to 1 CPU 1 Vote where everyone is on level playing ground.

That's the reason it gained so much favor in the first place.

That was an ultimate selling point. Now that ultimate selling point isn't valid-  in fact it's MORE centralized than bitcoin.

So why invest into litecoin OVER bitcoin? What does it do for me as a random individual that bitcoin doesn't do?  Those are the questions I would be asking.

the point with darkcoin is that it has a somewhat first mover advantage - additionally the instamine was distributed quite well see otc for darkcoin. the developer has shown that he is capable of setting the right economic incentives as well as shown talent regarding coding.

for me personally it would be better if mro would win the game, because I simply have more but I think darks position is stronger.

what you called "premine" is not always premine - some people try to solve the byzantines generals problem differently. if you are really interested in 2.0 coins you should read

http://www.ofnumbers.com/2014/03/04/chapter-3-next-generation-platforms/

probably there are newer publications but this guy seems to know what he is talking about - from my perspective 2.0 applications make bitcoins useful in the western world - this is where blockchain stuff really gets exciting.

That´s interesting you say that, because I naturally think the opposite. BTC as the worst enemy for the TPTB. Could you ellaborate about this?. Could you clue us to some solid info that we are missing?.

I was an early investor in MRO. What do you suggest, Risto?

My total crypto holdings consist now for 25% of MRO due to the large increase in exchange rate.
I think it's too much.

I started selling 10% when the exhcange rate doubles starting at 4 mBTC/MRO (ammount devided in 20 "batches")
should I increase my selling % ?

edit: the MRO I hold now are pure profit, already have my BTC I invested back...

Where in the Satoshi whitepaper does it say that Bitcoin is only to be mined with ASIC?  lol?

I think cryptonote is great personally. No interest in DRK.

Many cpu- coin holder (mro for example) will claim that there is no such botnet on the network; (even with stats before any public pool existing looking more than a little skewed ) They will say it's mostly individuals, peppered with a couple of sysadmins who have few hundred CPU at their disposal;  and finally those who rent large qty of cloud instances. One thing they will say; 'no botherder wants to add 'alpha' level coin' or 'all botherder want to keep cpu without stressing for more profitable activitys like viagra spam .'

You had to laugh when you saw the first 'optimization' of MRO.

https://github.com/NoodleDoodleNoodleDoodleNoodleDoodleNoo/bitmonero/commit/3cc45e9324a402aee91e2f46861b2ca393d711aa

Yes this was discovered 14 days AFTER launch from independent source. And team is so confident about anti- TMTO with things like above 'slipping' through the net? how many spotted this earlier and made nice profit

It's matter of time for optimized implementations. When it is private, everyone will say not possible .. we're all on equal footing!  then when it becomes public an adjustment period- some will dump, there will be some drama , and then sentiment usually shift to saying 'it's good for the network'.  That's assuming nobody is willing to hard-fork.



above: mandatory chart with squiggly line.  (cpu-coin holder emotional reactions upon discovering cpu coin is no longer cpu only )

 The same happen with Scrypt. many were GPU deniers,  artforz, mtrlt and whoever else had advance knowledge & were laughing. then ASIC deniers while gridchip et al lining their pockets. I  had an argument in december last year with a technically competent guy and senior member of litecoin community who was adamant 'it's not possible' to create a litecoin asic- what can i tell him when the damn unit mining away in front while he was so sure it can't exist. ?

Now people have turned around and seriously claim scrypt pow was never designed to be GPU/FPGA/ASIC resistant