Topic: The Problem With Altcoins - page 2. (Read 16459 times)

I wouldn't say that at all.

Ebay is a good example where the network effect also drives people to one single company, but I don't see bitcoin to be profiting from that much against crypto competition. The more people using ebay increases the benefits from using just ebay over any competition, but on bitcoin it isn't bitcoin exclusive. Altcoins also profit from more people using bitcoin, so that doesn't make them much worse against bitcoins.

It's actually beneficial to use more than one crypto so I expect competition for btc to grow once people realize that.
The MC of altcoins is still very small compared to bitcoins, so more people using altcoins could trigger a networkeffect against bitcoin. More people using altcoin drive prices up which increases benefits for people that use altcoins.

Ah fuck it, I'll take a stab at this

1) Problem was really "discovered" apparently three years ago, and is not actually a problem. The people who wrote that recent paper made some glaring mistakes and assumptions regarding mining and the bitcoin economy, not the least of which is that the network doesn't care when you mined a block, just when it was broadcast. Being selfish and holding a block while mining the next one has a huge risk that someone else will mine a block and push it out to the network before you push your own out, making your block worthless. In short, #1 is not an issue.

2) Similar to #1, since this attack is costly to perform, and is extremely risky. Plus 0.9 may address it in part, since it will be the merchant that will be receiving, checking, and broadcasting transactions.

3) Its not the same as being owned by the government, because miners will still not have control over the currency. Only over transactions. And as long as two pools are competing for fees and mining revenue, they will continue to process as many transactions as they can. Also, the world is large. Instead of one government, you Han have many mining corps all around the world. Even the wealthiest corporation in the world, Exxon, still has tons of competition.
As for the ballooning blockchain, that will get pruned long before that becomes a problem.

4) Then I guess there is no fix, until bitcoin comes out with a fix.

5) Money is not valuable because you can print it at home, money is valuable because it is useful for transaction and commerce. Apt coins are mostly a waste of time and resources. Just because lots of people mine them will not automatically mean that they will be used in trade.
During the MtGox hack in the summer of 2011, it was revealed that there were over 65,000 MtGox users. That number very likely doubled or tripled by the summer of 2012. By January of 2013, MtGox was adding 25,000 new users every month, and my March/April that number was 50,000 every month.Services like instawallet boasted of having over 1.5 million accounts, and Blockchain alone recently said they had over 300,000 (which I found surprisingly low). And now we also have China, which surpassed even MtGox, and may have possibly doubled the number of bitcoin users around the world (though I suspect it may account for 1\3 of new users). Either way, your 350,000 number is extremely wrong, and was likely surpassed over a year ago, before we had Cyprus, Silk Road news, and China. (My personal guess on total number of bitcoin users is 2mil to 3mil users)

Bitcoin is much less vulnerable to competition than eBay is.

1.) I don't see any new problems with that at all. I think thats a huge problem if not fixed.
1.+2.) Who expected that mining will allways be cooperative.
4.) Can be seen as advantage aswell. It's better to have the option than be forced to use anonymity. Gov rather not fight crypto if it's trackable.

3.)You really spend some thinking on that ...
The problem with that are the extreme low incentives to keep a multitrillion dollar network safe. Fees can be avoided, so it would need a sort of central authority to be safe. Nobody would like that, but that seems to be not a choice by then.
is nothing we can avoid by then.
If most of all honest* miners agree to stay on one chain and fight (illegal) forks no matter the cost it wouldn't need any changes. Just the announcement would be enough. When most transactions are off chain anyways confirations required could take weeks,d'be damm expensive and must be approved by CA anyways.

A CA wouldn't have the powes todays govs have so I don't see many people protesting. Current bitcoiners excludet, but who are 350.000 people to the world anyways ...

6.) Goverments are stupid, but not the kind of stupid most people think of. Once BTC gets significant it will be overregulated. These regulations will be (as usual) useless, stupid and probably harmful for crypto in general, but alts might be able to adapt to them.


Since this thread is about the problems of altcoins I want to bring in the following real problems. The article in the OP and it's conclusion is biased and not plausible. Please don't argue that most of his busted myths on altcoins aren't actually true. I know that.

1.) Confilicting Requirements
It would have to be innovative and very lucrative for early adopters to reach a critical size to be even noticed. For later adoption it mustn't favour early adopters too much and be conservative.

2.) It's unlikely that bitcoin is flawed
in a way that it will have to be replaced within the next few years. Most flaws won't be noticeable by most people within this decade.

3.) Time and gamechanging innovations are running out.
The timewindow for establishing a new crypto is closing and the most basic features bitcoin lackes are already used by other alts or in development. It will be harder and harder to establish a new crypto in the future.

4.) Regulation
Whem gov finished regulation on bitcoin they will be against anything new that isn't regulated yet. Anonymity could be a requirement by the community and also a reason to outlaw that crypto.

5.) Bubbles and Risk
Price bubles and risk in general are higher on altcoins. Noone ever invested in bitcoin lost money if he just had the patients to stick to it. A serious altcoin bubble could do enourmous damage and won't recover like btc.

6.) You will get super rich, no risk or skill involved
Scamcoins won't always be so primitive and easy to spot. Madoff had stolen billions and a premine isn't the only way to grab some fool's btcs. A succesful scamcoin could keep serious players away from alternative coins.

EDITED
*) I mean they don't doublespend, freeze funds, delay transactions, ...

I hereby initiate a list of things that are broken in Bitcoin, which an altcoin can fix, and label which ones Bitcoin is unlikely to fix because of the mining vested interests (Tragedy of the Commons) which control Bitcoin. Please comment on and help improve this list.

1. A new 25% attack on PoW (proof-of-work) which affects all PoW coins. However, until Bitcoin makes the suggested fix, it is a 1% attack!

2. Pools are subject to the "withholding attack" until the "oblivious share" fix is added to the blockchain.

3. Bitcoin stops giving coin rewards to miners in 2040, but the rate of debasement drops below 1% by 2033 and gets relatively low by 2020s compared to today's 11% and the recent past of several times that rate. Everyone thinks transaction fees are a solution, but they haven't even really considered this deeply. Transaction fees could be 0% (or refunded if mandatory) by large corporations, e.g. Amazon.com. This would drive most transactions to them, and they might withhold sending these out to other miners. Thus all mining WILL be owned by cartels and banks in the future. This is the same as owned by the government, since in fascism (that we have now in the world), corporations and governments cooperate (just review the NSA scandals with large internet companies revealed by Snowden if you doubt that you already live in a fledgling fascism). Btw, this takeover of mining by corporations was predicted by Satoshi and is supported by the core Bitcoin devs. You can find the relevant post somewhere on this site, I had the link to the post once before.

Note the ballooning multi-GB (eventually to be TBs) blockchain (which the Mini-blockchain design proposes to fix) also leads to either pools or large corporations doing the mining. And not fixing #2 above, means pools can be attacked later. Thus another factor that will drive Bitcoin mining to cartels in the future.

4. Bitcoin relies on anonymity to be provided by external protocols, e.g. Tor or other "clearnet". None of these practically usable "clearnets" are 100% reliably immune to traffic analysis, especially not by a global adversary such as the NSA.

5. Bitcoin can't be mined by regular computers. Any altcoin that fixes this may potentially get millions of new users who download and mine some coin (especially if a pool comes standard). Bitcoin only has 350,000 users in 4 years. That is very slow. A download application which prints new coins will grow much faster the usership. I know from my past experience of growing CoolPage.com from 0 to million users in 2 years back in 1999 - 2001 when the internet was 1/10 the size, i.e. that would be 10+ million in 2 years today.

Any more?

My opinion is that Bitcoin can not fix any of these except #1. #2 because some pools may have proprietary "semi-solutions" which give them an edge on their competitors. #3 because it is ingrained in the selfish-miser-man-is-an-island-goldbug illogic ("no money printing", scarcity of coins = more appreciation) of the community as promoted by Satoshi's white paper. #4 because adding anonymity to Bitcoin would upset the apple-cart of expectations of where Bitcoin lies in the regulatory space. #5 is absolutely impossible to change in Bitcoin.

---

Thus the OP is lacking perspective of the technical issues. Bitcoin is very vulnerable to competition. Just no one has yet really competed with Bitcoin.

There are significant advantages to being able to move money between cryptocurrencies, even if you're only a bitcoin user

This guy understands very little of tech of money creation

"make moneys rather than to become money"

no one makes money except of a central bank, due to stateist controls, and arguably now bitcoin miners.

further tech does not work that way, it can ealiy be adapted and evolve, and the evolved from takes over the market or a new form.

This works 2 ways eg BTC could absorp in inovation in a way say the aircraft company would struggle to.

It's hard to think or many first movers, retaining the lead in any field, if I am wrong through a few at me.

Apparently being an amateur musician armed with a guitar and a bus pass can get you 3 hours of interrogation with the TSA and denied entry into the USA, because somehow the TSA had information from his private emails. How did they get that info?

Supposed to be allowed 90 days visa-free.

Naw, we don't need anonymity, and there is no police state. I am delusional for sure.

Etlase2, I would never want to diminish your effort, except by any other reason of necessity. I have no wish for you to fail nor to be arrogant. Let's move forward.

No, I wouldn't. I didn't spend over 2 years doing this to give it away. Where is your algorithm, Anonymint? Oh yeah, no where. I've done far more than my fair share of being free with information. You have contributed nothing but ego. And you constantly misinterpret EVERYTHING in a way that you can easily attack (oh, he must mean private keys! I can attack that!). You are a hopeless cause and your stubbornness knows no bounds.

All is proven by discussion. If you want to quit, that is okay with me.

I have spent a lot of time thinking and researching on that. If you truly had something important to say, you would explain it clearly.

P.S. I have no ill feelings towards you and you know that.

EDIT: of course whitepapers must come out. And someone can then implement. Or maybe someone will prefer to implement before publishing whitepapers to keep the good ideas secret so they aren't copied by another altcoin first.

Why, so we can continue this game of you thinking you know everything and can prove everything incorrect by saying so? Stop wasting everyone's time including yours and build your wonderful system on top of broken technology. No one's going to validate an idea that you have not proposed. No one (else) is going to code it either.

Logic fail!

But it doesn't matter because they can't identify me if I employed strong IP anonymity (at least not without going to extraordinary measures of tracking me physically or with a virus, etc.).


Then explain what you mean please. I am eager to hear this hair-brained idea about generating a new key offchain. It can't be secure!

Disastrously incorrect. Anyone in the line of coin taint who is caught can leave trails to prior coin holders.


No, for fuck's sake, I don't.

Private wealth surely won't like your altcoin then if crazy devolution comes!

Some private wealth escaping is the only thing that stops a 600 year Dark Age from reigning every where. While Rome fell for 1000 years, Eastern Byzantine did not.

Your logic is too binary. There are gradients of result and strong IP anonymity helps those who want to move to where the freedom is.

We were additionally talking about dealing with coin taint in a normal functioning society (non-devolutionary) case.


Exactly. And anonymity helps capital move there.


I never proposed implementing anonymity that added any hindrance whatsoever. It should be even easier and less intrusive than Tor. And I've written down such an algorithm already. Serious implementators can PM me.


Incorrect on both points.

Coin taint is no problem in the ledger if your IP address is never known and you never otherwise reveal your identity on any spend. Thus the ledger alone is not the problem.

And the mini-blockchain solves/improves nothing on taint, because the full history has been saved by someone. It just isn't required to be a full verifying client.


You mean EXchanging (transferring) the private key.


That does nothing for solving taint. This can't be anything more than a mixer at best (which I already explained upthread are useless without EVERYONE using IP anonymity and otherwise not revealing their identity), and at worst it is simply the recipient using your private key to transfer to a new address.

Also it isn't secure until the receiving party sends it to a new address and 6 or so blocks have elapsed.

You still need IP anonymity when transferring the private key. It is very unlikely you can find a FX exchange bid without going online.

You simply have not thought this out deeply yet.


Agreed. But it doesn't help your point.


Incorrect. The traffic+timing analysis adversary can, unless the data is encrypted (which it is not on Bitcoin) without any control of any node nor pool nor peer.  Additionally even if encrypted it can be known if the adversary also controls the peer decrypting the data, i.e. the pool server (or the ISP that hosts the pool server). How can you know the pool is safe? You can't. Bitcoin is a target.


They are all low-latency (unless you are talkig freenet, which isn't practical for this use case), and thus it doesn't matter how many you chain, traffic+timing analysis still applies for a global adversary such as the NSA.


What account change? You mean the exchange of private keys idea which is wrong. Or you mean restarting your Tor session. IN any case, you are wrong sorry.

But this is wrong. Private property isn't going to survive a crazy devolution of society. That's why it's a crazy devolution of society. If the establishment kicks and screams so hard to stop it, there is nothing to be done for western society. As I mentioned previously to you in a PM, it becomes time for the "3rd world" economies to take the reign where the governments have much less power. They can't go after everybody, so anything that is a hindrance to adoption by everybody slows down the possibility of a quick and hopefully less painful switch.


Coin taint is only an issue with a transaction ledger--less so with the "mini-blockchain" but still there. Rather than square pegging the round hole, the universally better design of the account ledger solves it natively.

Additionally, in lieu of "sending coins", one can simply send accounts by changing keys. Following this principle, it is impossible to follow more than one hop in an account's life without rubber hosing each person down the line. If done correctly, it is impossible to know how much was even sent.

As far as IP anonymity, the NSA cannot be everyone. Timing attacks on tor cannot isolate individual transactions from the noise. With a healthy mix of clear net and tor nodes, very good IP anonymity is possible with very little effort (and those who wish for greater privacy help those who don't care!). And, if they do catch something, all they have is the tiniest window of information that is stopped in its tracks at the next account change. And of course for those who need even more, there are more precautions that can be taken. But the protocol should not be designed to cater to them.

I wouldn't say Anonymity* is a must have for an altcoin to succeed (against bitcoin), but it would be nice to have.
Not so sure about it anymore

On the other features I'm more strict. A crypto without POS and POW rewards can't ever beat bitcoin longterm.

That's not due to security issues or programming, but economical problems. It's a difference to work or paying someone to work for new coins and having to to buy them directly. POW is also nessasary because it provides additional coins to everyone and makes them physilogically easier to spend. It gives exponential growth and IMHO without exponential growth currencies can't work.

Exponential growth is no problem as long everyone can participate.

In short:
POS rewards earlier adopters while new POW rewards prevent newcomers to get screwd by early adopters. Once PPC has moved to POS only it will be very hard for new people to get coins. Prices will rise, ok that looks good, but real value of all coins doesn't. That's like having a really expensive collection of all paintings from one painter, sell one and it's a million, but sell all and you won't get much ...

Finding paramets on this will be extremly problematic, since early adopters expect rising prices of one unit.

EDITED

Etlase2, I am thinking about what you wrote that everything is going to f---ed up, where you were implying that anonymity couldn't really solve every problem and that we shouldn't expend too much effort there nor inconvenience ourselves because you implied it won't be our savior.

I am thinking privacy is fundamental to private property. The only way for private property to survive against the crazy devolution of society that always occurs with widespread economic failure and defaults, is for the private property to be mobile and well private.

Gold was never marked with your identity. And cryptocurrency will not be a better gold for as long as it is.

Anonymity is thus non-negotiable. We either have it, or we don't have anything.

Even in a normally functioning society, taint is a very big problem if the money carries your identity or traces of crime in a decentralized system like cash or bitcoin, at least for gold it can't even carry a drug residue like paper cash can. Issues range from the ones I already wrote about upthread, to even identity theft. Even with a credit card, you run some risk of your identity being stolen and used for nefarious activities.

Many Bitcoin users may think this doesn't affect them, and again I ask them what percentage of the trade in Bitcoin is drug dealing, money laundering, crony Chinese officials moving money offshore, etc??

My thought is that if you really believe in the altcoin, you will put some of your money there for safe-keeping, because you trust its future more than Bitcoin. And just like with Bitcoin, there will be numerous perilous plunges in the price, which should be seen as buying opportunities, because the others will not stop coming to realize what you realized.

So the key is are the features of that altcoin compelling enough to cause you and others to strongly prefer it over Bitcoin.

For me personally, without built-in strong IP anonymity I won't even consider an altcoin seriously, because I understand the taint issue is assured death of bitcoin down the line (or morphed into something we wouldn't recognize as a decentralized currency any more). And there is no such altcoin, not even anoncoin has a strong form in my analysis (and I told them about it and they are aware of it).

And I will also not take seriously any altcoin that doesn't fix the ballooning blockchain and resultant cartelization of mining which also due to not being CPU-only PoW or PoS.

What are readers thoughts on this and are there any required features I have failed to mention? Feel free to disagree with me of course. This isn't my thread. Apologies for so many posts.

Okay maybe the underlying issue for you is that the type of anonymity I am proposing for an altcoin perhaps won't work with your Decrits design, so maybe that is why you are trying to convince us we don't need it?

I suppose it was on-the-feral-side-of crazy in Rome when the population fell from 1.4 million to 30,000 and stayed that low for 1000+ years. Are you asserting such events never happen?



Are you aware of the things government did during the fall of Rome:

http://armstrongeconomics.com/693-2/2012-2/anatomy-of-a-debt-crisis/

So why are the limbs of statues littered all over the countryside, if crazy, feral outcomes never occur?



Because if you are going throw around a loaded word like that, you should be able to at least provide some rationale for what is crazy and what is not crazy?

Now I really want to see how you can respond in a rational way to that challenge I just gave you.

I think it is crazy that Bitcoin was created by some entities named "Satoshi" we can't identify, yet we blindly trust it even though it has cartelized mining by design.

I think it is crazy that Bitcoin accommodates drug dealing and money laundering which can taint all our coins, yet it was designed to not have anonymity built-in.


I agree there is nothing that can challenge yet. Several of us have pointed out that we don't think an altcoin has to defeat Bitcoin in order to be viable.

Not at all. Your argument was, eh, ok, and I thought of refuting it, but then you waded into crazy, and I decided not to bother.


My bad, I mistook that line to refer to the prior paragraph. But it was some deep crazy you were speculatively wading in. We have a lot of members here who are in that part of the pool, and it's easy to get lost in that crowd. Besides, your speculation was presented as your opinion of how things are. Not my fault it sounded crazy.


I am quite a realist (just ask the people in the religious threads  ) I'm not biased for Bitcoin, I just don't see anything that can challenge it in any way, yet.