Topic: What is the perfect hedge for our bitcoins? - page 2. (Read 4973 times)
Peercoin has my vote, Sunny King designed peercoin to be a backbone currency. It's only know that many people are starting to catch onto Sunny King's concept that went into peercoin.
Also for those who discount Peercoin because of centralized checkpoints, they won't be part of the protocol forever. As many Peercoiners know, checkpoints are similar to training wheels. They are an added protection when the network is young. Once minting participation increases and the network strengthens, centralized checkpoints will be removed by Sunny King and Peercoin will be able to exist without them.
The Nu Network, which is one of our Peercoin forks has already removed centralized checkpoints due to its higher participation of minting by shareholders. The participation is higher because of the requirement of shareholders to place votes when minting, which are needed in order to successfully run the network and change the supply of NuBits. Nu has run without checkpointing for almost a year now with no problems and Peercoin will eventually reach this state. It's just a matter of time.
The Nu Network, which is one of our Peercoin forks has already removed centralized checkpoints due to its higher participation of minting by shareholders. The participation is higher because of the requirement of shareholders to place votes when minting, which are needed in order to successfully run the network and change the supply of NuBits. Nu has run without checkpointing for almost a year now with no problems and Peercoin will eventually reach this state. It's just a matter of time.
Peercoin: this is a good hedge against a flaw in PoW because it also has PoS combined with PoW. Seems a more secure solution AND it has the first mover advantage in the PoS space. But it doesn't offer anything else. And theoretically PoS could be implemented in BTC if needed (although unlikely).
It seems many people believe Peercoin is simply a PoS clone of Bitcoin, but they couldn't be more wrong. Sunny King designed Peercoin with a different purpose or role than Bitcoin. I'd like to talk about this aspect of Peercoin's philosophy that I think many Bitcoiners don't realize, but first I'm going to post some quotes from a couple days ago about the block size debate, one of them from Bitcoin Core Developer Gregory Maxwell...
Do we want it to handle all world daily transactions,
or do we want protection from current monetary systems and government involvement?
If we achieve the second, we can have both. But if we only achieve the first, we likely cannot have the second (and wouldn't find it to be a substantial improvement over the fiat systems we have now, even if).or do we want protection from current monetary systems and government involvement?
The reason for this is that if Bitcoin is secure and trustworthy, trustless decenteralized micropayment facilities can be built on top of it and extend Bitcoin's transaction security with arbritary speed or scale. But if the system is fragle and underminable by attackers (government or otherwise) then it won't be robust enough to underpin these things.
(and things like micropayment channels were't my invention, they were recommended by the system's creator-- thats part of why Bitcoin has smart contracts to begin with.)
whats interesting is Peercoin Achieves the second, now by design.
It heads of the whole Block size issue by going for the backbone, which is now becoming the problem for BTC as it tries to be 1 and 2, without being 2 first.
It seems that something like peercoin will take the lions share of large value transactions and BTC is falling into the middle of not being doge Ie doge can handle a high TPS at sacrifice of security [but who cares when your buying an ice cream and dont get hit up huge credit card fees], and not being good as a backbone.
Dont get me wrong I am a hardened BTC supporter, its just the boundary conditions do not support backbone currecy as well as Peercoin and so a debated like this rages.
I have being saying this for some time now, and it has come to fruition.
Just in case anyone is not clear on what Jubalix is saying here, Sunny King coined the term "backbone currency" in an interview on October 24th, 2013 where he laid out his vision for Peercoin and explained why he designed it the way he did. In his quote, Gregory Maxwell is describing Bitcoin as a backbone currency when Sunny King designed Peercoin to fulfill this exact role. Here is Sunny's main quote on this topic...
https://www.peercointalk.org/index.php?topic=2218.0
Quote from: Sunny King
"Both PPC and XPM are designed to last. PPC is designed with energy efficiency, XPM is designed with energy multiuse. Bitcoin has a long term uncertainty as to whether transaction fees can sustain good enough level of security. Before that the main concern is how to balance transaction volume and transaction fee levels. Currently I get the feeling that bitcoin developers favor very low transaction fees and very high transaction volume, to be competitive against centralized systems (paypal, visa, mastercard etc) in terms of transaction volume, to the point of sacrificing decentralization. This also brings major uncertainties to bitcoin's future.
From my point of view, I think the cryptocurrency movement needs at least one 'backbone' currency, or more, that maintains high degree of decentralization, maintains high level of security, but not necessarily providing high volume of transactions. Thinking of savings accounts and gold coins, you don't transact them at high velocity but they form the backbone of the monetary systems.
Pure proof-of-work systems such as bitcoin is not 100% suitable for this task. This is because transaction fee is not a reliable incentive to sustain network security. If the mining generation amount is kept constant (there have been several such attempts in altcoins) it would work better security-wise but then it would also significantly weaken the scarcity property of the currency. XPM's inflation model is designed in such a way that it could serve as backbone currency better than bitcoin if needed, because it could maintain high security reliably for longer, with reasonably good scarcity property as well. Of course that's only from architect's point of view, whether or not it would be chosen by the market is a whole different matter.
PPC is designed to serve even better as a backbone currency. The proof-of-stake technology in PPC is not only energy efficient; it also maintains high level of security without relying on transaction fee. Thus PPC could be safely designed with strong scarcity property yet serving well as backbone currency. Both PPC and XPM use protocol enforced transaction fees, which reflects my preference that high transaction volume is discouraged in favor of serving as backbone currencies.
Right now if we are talking about micropayments in the US$1 range, both PPC and XPM still handle them with much lower overhead than credit card network. In the long term micropayments should be provided by centralized providers, or a less decentralized network optimized for high capacity transaction processing.
On the other hand there is no promise that minimum transaction fee wouldn't be adjusted. If processing capacity of personal computers continues to advance at the current pace, both max block size and minimum transaction fee could very well be adjusted at some point. However I do take a very cautious approach to adjusting transaction fees, as opposed to bitcoin devs. The impact to the fitness of the currency as a backbone currency is of great concerns to me."
From my point of view, I think the cryptocurrency movement needs at least one 'backbone' currency, or more, that maintains high degree of decentralization, maintains high level of security, but not necessarily providing high volume of transactions. Thinking of savings accounts and gold coins, you don't transact them at high velocity but they form the backbone of the monetary systems.
Pure proof-of-work systems such as bitcoin is not 100% suitable for this task. This is because transaction fee is not a reliable incentive to sustain network security. If the mining generation amount is kept constant (there have been several such attempts in altcoins) it would work better security-wise but then it would also significantly weaken the scarcity property of the currency. XPM's inflation model is designed in such a way that it could serve as backbone currency better than bitcoin if needed, because it could maintain high security reliably for longer, with reasonably good scarcity property as well. Of course that's only from architect's point of view, whether or not it would be chosen by the market is a whole different matter.
PPC is designed to serve even better as a backbone currency. The proof-of-stake technology in PPC is not only energy efficient; it also maintains high level of security without relying on transaction fee. Thus PPC could be safely designed with strong scarcity property yet serving well as backbone currency. Both PPC and XPM use protocol enforced transaction fees, which reflects my preference that high transaction volume is discouraged in favor of serving as backbone currencies.
Right now if we are talking about micropayments in the US$1 range, both PPC and XPM still handle them with much lower overhead than credit card network. In the long term micropayments should be provided by centralized providers, or a less decentralized network optimized for high capacity transaction processing.
On the other hand there is no promise that minimum transaction fee wouldn't be adjusted. If processing capacity of personal computers continues to advance at the current pace, both max block size and minimum transaction fee could very well be adjusted at some point. However I do take a very cautious approach to adjusting transaction fees, as opposed to bitcoin devs. The impact to the fitness of the currency as a backbone currency is of great concerns to me."
Therefore, Peercoin is designed first and foremost as a secure store of value which prioritizes decentralization over speed and transaction volume. This is the definition of a backbone currency. Further, Sunny said in the quote that large volume and high-speed microtransactions can be achieved by using off-chain networks, which could range anywhere from centralized solutions to semi-decentralized to trustless. This allows Peercoin to remain a highly decentralized network and store of value while the majority of transactions take place off-chain.
Peercoin just turned 3 years old and its blockchain is only around 400 MB. This is a result of Sunny King's very specific design. The Peercoin community has been promoting these ideas for a long time now. It seems that certain people are only now starting to realize the importance of them.
Bitshares has pegged fiat currencies, even has gold, silver and nasdaq composite indices:
http://www.bitsharesblocks.com/assets/market
nuBits is also pegged to USD.
http://www.bitsharesblocks.com/assets/market
nuBits is also pegged to USD.
Well, that's true. We will see (hopefully not) how these coins are doing during a bitcoin collapse
. But I guess a general distrust towards cryptoes will have some effect even on the most stable coins. Actually I'm really curious.Both provide a peg to the USD and in difference to e.g. Tether there's no single point that can be attacked (like collateral held in USD). I'm too lazy to look up how coinoUSD works
Fiat is a good hedge, but can't easily be withdrawn from exchanges. Would you want to leave money at exchanges for longer than necessary after all these exchange hacks and defaults?
Use bitUSD or NBT instead and withdraw them to your wallet!
Speaking of bitUSD and NuBits - both are products of decentralized corporations. It's something different from a "coin" you buy today hoping you can sell it for more money in the future.
The corporations will earn their owners money if they run well and generate revenue. The owners of these corporations are able to have a say.
At Bitshares delegates are elected, at Nubits people continuously vote with their shares (or register feeds if they don't want to follow development closely).
If it wasn't too late to buy shares, I'd recommend "Blocks & Chains Exchange" as well - another decentralized corporation that has recently completed funding. A kind of high risk venture capital operation (at the moment). But as the funding is over you need to try to buy shares at exchanges (e.g. here: https://www.ccedk.com/nbt-bks but there's not much of a market. Almost nobody wants to sell
)Peercoin is another lottery ticket like Bitcoin, but in a way more sustainable way. It has a hybrid process and PoS secures the blockchain; this consumes so little energy it doesn't play a role. You can run it on a RaspberryPi1!
Once the Bitcoin price plummets, the security risk for Bitcoin gets bigger and bigger. The rationale for that is here: https://www.reddit.com/r/Bitcoin/comments/2s8qge/its_happening/cnndc36
This risk doesn't exist for the Peercoin network. If anything is close to "digital gold" it's Peercoin: hard to mine it (via PoW), easy to secure it (via PoS).
Why not Slimcoin (the inventor of Proof-of-Stake to secure a blockchain) or Emercoin (similar to Namecoin, but based on PoS instead of PoW)?
There's so much more that is long in the wild than just Ethereum which yet has to prove that it can do what it was designed for...
There is no hedge for bitcoins unless you are storing your money outside cryptocurrency.
When bitcoin drops, all other altcoins will follow suit.
Not true for the coins pegged to USD (bitUSD, coinoUSD, NuBits, TetherUSD) When bitcoin drops, all other altcoins will follow suit.
[...]
Where bitcoin is designed to be a currency (inflation needed) - UNO was designed to be a store of value and functions like a POS model but no staking required and secured by bitcoin network hash power.
[...]
Where bitcoin is designed to be a currency (inflation needed) - UNO was designed to be a store of value and functions like a POS model but no staking required and secured by bitcoin network hash power.
[...]
A currency with no way to inflate AND deflate supply has a bad design. It might work as a means to transfer value, but never as currency - unless you don't care for fluctuations by two digit percentages on bad days
And as store of value Bitcoin is too expensive (thanks to the PoW arms race) and unfortunately UNO depends on Bitcoin due to merged mining.
Thanks, but no thanks.
If you look for a store of value, try the PoS pioneer Peercoin which can be sustained by RaspberryPis
There is no hedge for bitcoins unless you are storing your money outside cryptocurrency.
When bitcoin drops, all other altcoins will follow suit.
When bitcoin drops, all other altcoins will follow suit.
Quote
"Namecoin: This is based on the bitcoin codebase, but why do I include it in the "shortlist"? Well, I don't think a new decentralized naming system is fair, because that would render all registered domains on namecoin useless and invalid. However, I don't think it's a good hedge, because it's really a niche currency and has the same codebase as BTC."
then UNO meets your qualifications
like Name it is merge mined on the bitcoin network
and in case of bitcoin market crash causes high difficulty high mining cost (feed back loop)
Name and Uno might just drive the bitcoin network in such an event
The kicker over Name coin is that UNO only inflates the money base at 7 coins per day ... name coin is just on it's first half, no?
This means UNO favors investors over miners, super low inflation.
Where bitcoin is designed to be a currency (inflation needed) - UNO was designed to be a store of value and functions like a POS model but no staking required and secured by bitcoin network hash power.
Also, as far as I know, NMC still can not be redeemed for a domain name? So the business model seems to have been gunked up by mis-management.
also, the Poelstra PoS criticism is deranged
Vitalik Buterin provided a strong counter argument. But regardless of whether PoS has more gameable entropy or not, for sure PoW can distribute new coins (and redistribute existing wealth...a necessary requirement of all money since dawn of mankind) and PoS can not.
Why necessary to redistribute money (at slow rates of debasement)? Because otherwise the macroeconomic incentives to invest with risk to produce more instead of save in deflation are not balanced.
In NXT the 'forging' (mining PoS) where you receive the transaction fees in a block, is just for helping secure the network, not as a source of new wealth. The low value of the coins (tokens) you receive is hardly enough to pay for electricity (yes, even when it runs on a Raspberry Pi)
If NXT whales really want to actively increase their wealth, they'd do better to invest in projects (=risk), buy and trade NXT assets (=risk). Just leaving their NXT in the account forging doesn't do much for them. So PoS isn't relevant for wealth imo when it's like this.
If stimulus spending is guaranteed to boost NXT then why don't Bitcoin whales like Roger Ver give away their millions or fund huge advertising events? "$10,000 Bitcoin here we come!". Instead the Bitcoin millionaires can't even be bothered to spend $79.99 on a decent HD webcam..
also, the Poelstra PoS criticism is deranged
Vitalik Buterin provided a strong counter argument. But regardless of whether PoS has more gameable entropy or not, for sure PoW can distribute new coins (and redistribute existing wealth...a necessary requirement of all money since dawn of mankind) and PoS can not.
Why necessary to redistribute money (at slow rates of debasement)? Because otherwise the macroeconomic incentives to invest with risk to produce more instead of save in deflation are not balanced.
In NXT the 'forging' (mining PoS) where you receive the transaction fees in a block, is just for helping secure the network, not as a source of new wealth. The low value of the coins (tokens) you receive is hardly enough to pay for electricity (yes, even when it runs on a Raspberry Pi)
If NXT whales really want to actively increase their wealth, they'd do better to invest in projects (=risk), buy and trade NXT assets (=risk). Just leaving their NXT in the account forging doesn't do much for them. So PoS isn't relevant for wealth imo when it's like this.
I think the perfect hedge is to diversify your investment to avoid the potential risk. I would recommend to split your investment to btc / whatever coins you like, dollar, gold/silver.
also, the Poelstra PoS criticism is deranged
Vitalik Buterin provided a strong counter argument. But regardless of whether PoS has more gameable entropy or not, for sure PoW can distribute new coins (and redistribute existing wealth...a necessary requirement of all money since dawn of mankind) and PoS can not.
Why necessary to redistribute money (at slow rates of debasement)? Because otherwise the macroeconomic incentives to invest with risk to produce more instead of save in deflation are not balanced.
"Investing into crypto to avoid inflation"
*Buys Bitcoin* *Does not realize it has over 8% inflation a year and there's still 6-7 million coins coming out*
Bitcoin has more inflation than currencies in developed first world countries.
https://www.cryptocoinsnews.com/bitcoin-price-90-users-want-higher/
90% of Bitcoiners want the price to be higher. A good example of Stockholm Syndrome is where these same 90% of users will continue to support inflationary PoW. Yet it is this inflationary PoW which creates a downward pressure on Bitcoin's price! The user base does not know about alternative mechanisms.
The only non-inflationary crypto that was in the top 10 was NXT. "Why didn't NXT go to the moon, then?". Just because you don't have inflation doesn't not mean you can ignore the network effect.
*Buys Bitcoin* *Does not realize it has over 8% inflation a year and there's still 6-7 million coins coming out*
Bitcoin has more inflation than currencies in developed first world countries.
https://www.cryptocoinsnews.com/bitcoin-price-90-users-want-higher/
90% of Bitcoiners want the price to be higher. A good example of Stockholm Syndrome is where these same 90% of users will continue to support inflationary PoW. Yet it is this inflationary PoW which creates a downward pressure on Bitcoin's price! The user base does not know about alternative mechanisms.
The only non-inflationary crypto that was in the top 10 was NXT. "Why didn't NXT go to the moon, then?". Just because you don't have inflation doesn't not mean you can ignore the network effect.
Yes but the inflation drops after a while. And with bitcoin we know exactly when it decreases and stops completely. So it's not like FIAT which can be printed whenever they decide to.
With that said I believe USD is winning the currency war so it might be a good investment but I don't see how it's better than Gold and Silver?
perfect hedge is fiat i think 
Funny how everyone is talking about fiat.. Wouldn't Silver & Gold be a better option?
I thought most people invested in cryptos to avoid inflation.
I thought most people invested in cryptos to avoid inflation.
"Investing into crypto to avoid inflation"
*Buys Bitcoin* *Does not realize it has over 8% inflation a year and there's still 6-7 million coins coming out*
Bitcoin has more inflation than currencies in developed first world countries.
https://www.cryptocoinsnews.com/bitcoin-price-90-users-want-higher/
90% of Bitcoiners want the price to be higher. A good example of Stockholm Syndrome is where these same 90% of users will continue to support inflationary PoW. Yet it is this inflationary PoW which creates a downward pressure on Bitcoin's price! The user base does not know about alternative mechanisms.
The only non-inflationary crypto that was in the top 10 was NXT. "Why didn't NXT go to the moon, then?". Just because you don't have inflation doesn't not mean you can ignore the network effect.
Funny how everyone is talking about fiat.. Wouldn't Silver & Gold be a better option?
I thought most people invested in cryptos to avoid inflation.
I thought most people invested in cryptos to avoid inflation.
Oh cool a teleport matrix.. I didn't think StarTrek technology was out and ready to use for us average joe's already?!
NEM difficulty = StarTrek level. hahaha
some people just run with trading groups (like mine in signature *sigh*) and do the "hedge funds" this way
more secure than just giving money to other people to invest
more work than just giving money to other people to invest
more secure than just giving money to other people to invest
more work than just giving money to other people to invest
litecoin, because bitcoin can take all the hits and gives litecoin the early heads up on whats coming and how to improve before it becomes a problem.
Litecoin is PoW and any PoW coin will centralize just like Bitcoin.
litecoin, because bitcoin can take all the hits and gives litecoin the early heads up on whats coming and how to improve before it becomes a problem.
Practically speaking, my choice would be Nubits or Tether or both. However from a technical approach I'd go with VNL.
proof of importance is the biggest bullshit scam ever invented. ¨
PoI is one of the most complicated consensus mechanisms in crypto created by real published academics. Stellar also has real academics working on their consensus mechanism, but it works in a completely different way so it is hard to compare.
For an in depth explanation you can read the technical report in chapter 7. http://nem.io/NEM_techRef.pdf
Oh cool a teleport matrix.. I didn't think StarTrek technology was out and ready to use for us average joe's already?!
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