Why today's cryptocurrencies are doomed

Lauda

legendary

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Terminated.

Quote from: Anders on August 14, 2014, 05:07:46 PM

The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:

1. Too slow transaction times for general use.
2. Too bloated block chain for mainstream adoption.
3. Having to store coins "under the mattress" is a step backwards.
4. Proof of work will lead to too large transaction fees.
5. Proof of stake leads to the rich getting richer.
6. Lack of government support prevents mainstream use.
7. Trading against ordinary fiat currencies causes volatility.

OP your lack of knowledge is amazing.
Do you even know how long does it take for a CC to process (Visa) ? You don't obviously.
Have you heard of Satoshis idea of pruning the blockchain? You have not.
You don't have to store anything under the mattress.
The fees can always be reduced, as they already have.
POS is bad, yes.
The point of it is to stay away from them.
That will change with time.
Anything else?

cryptnutter

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Many alts will just die off but something can easily come along that receives widespread adoption, maybe even more than Bitcoin.

I read one article where some guy predicted some sort of corporate run crypto could come along (like from a gas company, cellular company) that would allow people to pay for that service using the coin. Personally I don't see that taking off as distrust in corporations is growing. If a crypto comes along that surpasses Bitcoin, it will definitely be decentralized.

TaunSew

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Dot.com ended because it theoretically hit the limit that subsequent buyers were unwilling to continue the bubble, especially with all the scams that were ongoing at the time.

All you had to do was label a stock "IT" or dot something and people would pump it to millions, even if the company had nothing substantiated.

Thing is cryptos is only $7 billion or so at the moment. No one would be bothering with alternates and the government wouldn't be drafting laws or overhauling the tax code if people thought the limit was $10 billion. Cryptos are going to $trillions whether this takes 5 or 10 years.

digitalindustry

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‘Try to be nice’

Quote from: fudbuster on August 17, 2014, 03:12:57 PM

Sure most of the shitcoins out there will be dead within a year but Bitcoin is beyond the point of no return. It will not die!

yeah it's central mining authorities that are now split between China and the West will make sure of that !

that will work out because they will both work together to make sure that the network is secure !!!111

tspacepilot

legendary

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I may write code in exchange for bitcoins.

Quote from: fudbuster on August 17, 2014, 03:12:57 PM

Sure most of the shitcoins out there will be dead within a year but Bitcoin is beyond the point of no return. It will not die!

I think this is mainly what I believe. The storm of coin-a-day shitcoins is dying down and this is a good thing. If a bitcoin alternative does arise, it's going to be something that the bitcoin community eventually transitions to, not something a script-kiddie dreamed up as a pump-n-dump scam. Note that while the dot-com bubble did burst, internet activities did not. Similarly, many bitcoin is going to be around after the many spin-offs fail.

TaunSew

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Dot.com was actually around $7 trillion in the late 1990s. $2 trillion in investment gold. The more recent housing bubble was $10 trillion. There's $37 trillion in worldwide investments. $400 trillion in derivatives.

Crypto Currencies are like $7 billion? Digital currencies are getting more attention from the government and media than Dropbox (which has a capitalization around $10 billion).

There's still a lot of room for crypto currencies to grow. Bitcoin at $6 billion has far from taken over the idea - it's like in 2003-2005 when everyone thought Myspace would be the dominant social media website forever.

fudbuster

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Sure most of the shitcoins out there will be dead within a year but Bitcoin is beyond the point of no return. It will not die!

Anders

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Merit: 100

Quote from: digitalindustry on August 16, 2014, 08:45:46 AM

Quote from: Anders on August 16, 2014, 07:08:03 AM

Quote from: digitalindustry on August 16, 2014, 06:08:08 AM

I see two problems:

1. The "Government Orwellian" problem ( which has a bunch of sub problems) (it will be a "Corporation Orwellian" anyhow)

2. unnecessary inefficiency, it will fail because in a free market a better design than the "Global ID" system will prevail, the resons we have "Deb turd money" now is because of the threat of military and Orwellian police state, (and the lack of any alternative) - given a more efficient alternative and it will eventually become the system.

No i don't think hardware wallets are infallible, but that of course is irrelevant.

I would only trust a hardware wallet with small amounts of money in it. And I wouldn't want to manage my own cold storage. Maybe deterministic wallets will be good enough. But even that is a bit shaky:

"The problem is this: although you certainly can securely hand out child keys with no risk to the parent key, and you can hand out master public keys with no risk to the master private key, you cannot do both at the same time. The exploit for when that situation does arise is actually quite simple, and can be done with two lines of pybitcointools code." -- http://bitcoinmagazine.com/8396/deterministic-wallets-advantages-flaw/

I'm not so worried about Orwellian ID systems. The main problem as I see it is that it will take many years for such system to become a reality. Unless, some clever open source project can achieve both user IDs and anonymity in a secure way.

i will make a bet with you -

the market will find the solution without a "Global centralized ID"

You could be correct. So I'm not going to bet against that. If some open source project solves how to secure private keys easily on a distributed system, then checkmate! The banks and the other centralized financial services will be crushed. Not immediately of course. In the long run. The trustless distributed solution will be so superior that it will replace the whole old model.

digitalindustry

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‘Try to be nice’

Quote from: Anders on August 16, 2014, 07:08:03 AM

Quote from: digitalindustry on August 16, 2014, 06:08:08 AM

I see two problems:

1. The "Government Orwellian" problem ( which has a bunch of sub problems) (it will be a "Corporation Orwellian" anyhow)

2. unnecessary inefficiency, it will fail because in a free market a better design than the "Global ID" system will prevail, the resons we have "Deb turd money" now is because of the threat of military and Orwellian police state, (and the lack of any alternative) - given a more efficient alternative and it will eventually become the system.

No i don't think hardware wallets are infallible, but that of course is irrelevant.

I would only trust a hardware wallet with small amounts of money in it. And I wouldn't want to manage my own cold storage. Maybe deterministic wallets will be good enough. But even that is a bit shaky:

"The problem is this: although you certainly can securely hand out child keys with no risk to the parent key, and you can hand out master public keys with no risk to the master private key, you cannot do both at the same time. The exploit for when that situation does arise is actually quite simple, and can be done with two lines of pybitcointools code." -- http://bitcoinmagazine.com/8396/deterministic-wallets-advantages-flaw/

I'm not so worried about Orwellian ID systems. The main problem as I see it is that it will take many years for such system to become a reality. Unless, some clever open source project can achieve both user IDs and anonymity in a secure way.

i will make a bet with you -

the market will find the solution without a "Global centralized ID"

Anders

full member

Activity: 126

Merit: 100

Quote from: digitalindustry on August 16, 2014, 06:08:08 AM

I see two problems:

1. The "Government Orwellian" problem ( which has a bunch of sub problems) (it will be a "Corporation Orwellian" anyhow)

2. unnecessary inefficiency, it will fail because in a free market a better design than the "Global ID" system will prevail, the resons we have "Deb turd money" now is because of the threat of military and Orwellian police state, (and the lack of any alternative) - given a more efficient alternative and it will eventually become the system.

No i don't think hardware wallets are infallible, but that of course is irrelevant.

I would only trust a hardware wallet with small amounts of money in it. And I wouldn't want to manage my own cold storage. Maybe deterministic wallets will be good enough. But even that is a bit shaky:

"The problem is this: although you certainly can securely hand out child keys with no risk to the parent key, and you can hand out master public keys with no risk to the master private key, you cannot do both at the same time. The exploit for when that situation does arise is actually quite simple, and can be done with two lines of pybitcointools code." -- http://bitcoinmagazine.com/8396/deterministic-wallets-advantages-flaw/

I'm not so worried about Orwellian ID systems. The main problem as I see it is that it will take many years for such system to become a reality. Unless, some clever open source project can achieve both user IDs and anonymity in a secure way.

digitalindustry

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Activity: 798

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‘Try to be nice’

Quote from: Anders on August 15, 2014, 03:09:31 PM

Quote from: digitalindustry on August 15, 2014, 02:03:59 PM

Quote from: Anders on August 15, 2014, 08:40:59 AM

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

everything you said just now is insane and makes no sense - but you seem like a nice guy.

moving forward ...

what's the "global ID" all about ?

sound like a winner.

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

I see two problems:

1. The "Government Orwellian" problem ( which has a bunch of sub problems) (it will be a "Corporation Orwellian" anyhow)

2. unnecessary inefficiency, it will fail because in a free market a better design than the "Global ID" system will prevail, the reasons we have "Debt turd money" now is because of the threat of military and Orwellian police state, (and the lack of any alternative) - given a more efficient alternative and it will eventually become the system.

No i don't think hardware wallets are infallible, but that of course is irrelevant.

Anders

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Activity: 126

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Making money by trading money is like gambling. Nothing wrong with gambling. It's great fun. It's just that a serious future currency should primarily be used for trading goods and services. And I think an official cryptocurrency with zero transaction fees will come to dominate. Transaction fees are just middleman interference, causing unnecessary friction in the system. Spam transactions can be avoided by having a user ID system. And governments could run miners as a public service. Plus an officially regulated cryptocurrency would integrate easily with the ordinary fiat systems.

Anders

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Merit: 100

Anders

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Quote from: hodap on August 16, 2014, 12:58:42 AM

Quote from: Anders on August 16, 2014, 12:53:53 AM

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux. Roll Eyes

Ripple and Stellar will not gain big market share due to it being highly controlled and highly concentrate of ownership.

For someone to willingly add value to the coin, the distribution of the coin need to be more even.

Fractional reserve banking is pretty horrible, but it has been useful for taking our civilization to where we are today. That's an old model. Ripple and Stellar seem to cling to that old model of concentration of power.

Greed can be ok (or at least profit is good), if someone can separate that from the actual currency. There are many companies making money on Linux today, but not by owning or controlling Linux itself.

hodap

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Quote from: Anders on August 16, 2014, 12:53:53 AM

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux. Roll Eyes

Ripple and Stellar will not gain big market share due to it being highly controlled and highly concentrate of ownership.

For someone to willingly add value to the coin, the distribution of the coin need to be more even.

Anders

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Activity: 126

Merit: 100

Then what about currency systems like Ripple and Stellar? Those are more like open greed than open source. Like the virtual currency Beenz where the owners kept 50% to themselves.

A common excuse is that they need to reward the developers, the risk takers, fund marketing etc. Yeah, right. Like Linux. Roll Eyes

Anders

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Activity: 126

Merit: 100

Quote from: wbaw on August 15, 2014, 11:39:12 PM

Quote from: Anders on August 15, 2014, 03:09:31 PM

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

And how is an ID system supposed to work without private keys?

I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.

The ID system would be like a deterministic wallet. So from a single master key, many new keys can be generated. If an ID system like that can be implemented with blockchain technology, then that would be good.

wbaw

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Quote from: Anders on August 15, 2014, 03:09:31 PM

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

And how is an ID system supposed to work without private keys?

I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.

BitCoinPokerBro

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Quote from: BitCoinDream on August 14, 2014, 05:21:26 PM

Quote from: Anders on August 14, 2014, 05:07:46 PM

The original Bitcoin protocol is very innovative. However, there are several reasons for why today's cryptocurrencies will fail:

1. Too slow transaction times for general use.
2. Too bloated block chain for mainstream adoption.
3. Having to store coins "under the mattress" is a step backwards.
4. Proof of work will lead to too large transaction fees.
5. Proof of stake leads to the rich getting richer.
6. Lack of government support prevents mainstream use.
7. Trading against ordinary fiat currencies causes volatility.

If u were in 90s, u would have said the internet will fail too. Some people simply cant see the future...

Dude this timeline is awesome!

Anders

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Merit: 100

Quote from: digitalindustry on August 15, 2014, 02:03:59 PM

Quote from: Anders on August 15, 2014, 08:40:59 AM

I wouldn't trust a hardware wallet since the hardware can fail. And without backup the money would be gone. And with backup we are back into paper wallets, offline hard drives or MtGox again.

If ordinary banks, PayPal and Visa etc would accept cryptocurrencies, then that would work for ordinary people. There is a great risk however that this will not happen.

An alternative is that new cryptocurrency companies can become trustworthy enough to replace ordinary financial services like banks, PayPal and Visa. But then there is the messy problem of legal regulations.

everything you said just now is insane and makes no sense - but you seem like a nice guy.

moving forward ...

what's the "global ID" all about ?

sound like a winner.

Sounds like you believe a hardware wallet is infallible.

The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.

Topic: Why today's cryptocurrencies are doomed (Read 2922 times)