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What's the value of the in-app currency being a cryptocurrency (putting aside hype/pr), vs calling it a virtual currency, a Mysql database with a API on top? D

• s_dev 9y ago
  >What's the value of the in-app currency being a cryptocurrency In a word -- decentralization -- is the key difference between a virtual currency described by some SQL tables and an API and one described by a blockchain. A gov if it wants can take down a server if it is physically hosted in that country. A blockchain unless you've gargantuan CPU power is nigh on impossible to take down.
  • CPLX 9y ago
    It's not decentralized if one organization owns 52% of it.
    • vernon99 9y ago
      Not necessarily. This is actually orthogonal to decentralization question. Very much depends on their proof of stake implementation.
      • edraferi 9y ago
        I agree. It's more like they're retaining control of the money supply like a central bank does. It give you the power to indirectly influence the price / exchange rate of the currency, but you're not involved with every transaction.
        • hndamien 9y ago
          Except that you are with Proof of Stake.
      • maksimum 9y ago
        > Very much depends on their proof of stake implementation Exactly, if someone with >50% power can essentially double spend it makes the currency as a whole almost worthless. As a result it's very much in the creator's interest to either not have >50% or to come up with a distributed consensus algorithm where a majority party can't double spend (very hard).
  • jmcqk6 9y ago
    >In a word -- decentralization... That is the difference, but what is the value in that? You're making things much more complicated and for what - especially for an in-app currency.
    • s_dev 9y ago
      Redundancy -- you don't need to keep backups of a blockchain but you do if everything is centralized in a single place. It depends on the value of the backups I guess and the total cost involved. If you're looking at store of value there needs to be backups of backups. I see room for both depending on the needs of the business. It's just a trade off -- the blockchain is inherently more stable and secure than a server for certain purposes and server is far faster and cheaper depending on how you use it.
• imustbeevil 9y ago
  They can't make a cool 500 million from adding a row in their Users table for currency.
  • maksimum 9y ago
    I don't know if you've heard of the d2jsp forum. But the site's owner (he's essentially a 1-man operation) made a probably $10M+ by doing just that. Not sure whether this is possible (or optimal in terms of growth rate) at Telegram's scale.
    • natalyarostova 9y ago
      Hah, d2jsp... Haven't heard that name in a long long time.
• lakechfoma 9y ago
  I see this same thing happening at some corporations now trying to create blockchain as a service. If one corporation, or just a few, are the only ones participating in the chain then why not just use traditional DBs?..
  • rando444 9y ago
    The main reason is because you can't edit a blockchain. With a database there's always ways around editing the data if you own the entire system. With a blockchain it's not possible to edit the data without replacing the entire chain.
    • oh_sigh 9y ago
      You could still use merkle trees it similar technology in your own database and publish checkpoint hashes of the DB every so often
      • maksimum 9y ago
        Then it seems like the data being hashed would be serializations of databases rather than sets of transactions. I.e. you would be publishing snapshots of the world rather than agreed-upon changes starting from a pre-agreed on state.
      • woah 9y ago
        At some point you will just be implementing your own half-assed blockchain because you "don't need a blockchain". Why?
        • lozenge 9y ago
          Because git is easy and proven and a blockchain is complicated.
      • odammit 9y ago
        I’ve been curious about this. I’ve thought about it (inspired by event sourcing), but am not familiar with the Blockchain enough to know if it’s feasible from the trust/security side.
• goodside 9y ago
  It makes it possible for the asset to be traded on third-party markets without the knowledge, consent, or control of the organization that issued the tokens. It also helps you trust that movement of the asset will not be hindered by the issuer's inability to keep servers running in the face of potential DDoS attacks.
  • Maro 9y ago
    That's a good point. It assumes they don't control the miners, and don't demand "registration" to participate, which would void anonymity. It still sounds like they could use an existing coin though, no?
    • CPLX 9y ago
      Sure, but then they wouldn't get a few billion dollars of free money.
    • goodside 9y ago
      I'm not sure what you mean by "control the miners" — they're building this on OmiseGo, which isn't mineable. All of the substantial ICOs require some level of KYC/AML registration for direct public sales and pre-sales. Tokens later become available to everyone else through independent exchanges, which happens quickly these days.
      • mistermackle 9y ago
        Where did you see that they are building on OmiseGo?
        • 45h34jh53k4j 9y ago
          It will be an eth token like OMG until they launch their 'main chain and 2^92 sidechains' LOL! good luck with that
        • philfrasty 9y ago
          speculation at this point IMO https://www.reddit.com/r/omise_go/comments/7oif3j/telegram_ico_telegram_open_network_ton_built_on/ https://www.reddit.com/r/omise_go/comments/7oif3j/telegram_i...
• fastball 9y ago
  Because if Telegram ever goes under as a company, your "virtual currency" doesn't disappear overnight.
  • Maro 9y ago
    Yes, but if the Telegram app/platform was the only place I could conduct commerce using their money, I'm still screwed, unless a "secondary" marketplace emerges where you can use it. In which case, why not use Bitcoin or Eth to begin with? (Genuine question.)
    • ribosometronome 9y ago
      >In which case, why not use Bitcoin Is there anyone using bitcoin for transactions anymore? Fees are absurdly prohibitive.
      • hndamien 9y ago
        Crypto markets use it a lot.
  • cantrip 9y ago
    Just like if the US Government ceases to exist we'll still have all these dollar bills.
    • shafyy 9y ago
      Or if the world stopped to exist we also wouldn't need any currency. You know where I'm going. The default risk of Telegram cannot even be compared to that of the US.
      • cantrip 9y ago
        I honestly don't know where you're going with that argument. My point was that if the central bank behind a currency goes away so does all of its utility, even if the currency is still physically or digitally there. No one said anything about default. You can't default on a currency that isn't backed by anything.
• dpflan 9y ago
  To add to your point, the article states that Telegram will try to retain a 52% stake in its economy to control it. "Telegram will The white paper also makes clear that four percent of the supply of Grams (200 million Grams) will be reserved for Telegram’s development team with a four-year vesting period. Telegram also plans to retain “at least 52 percent” of the entire supply of the Grams cryptocurrency to protect it from speculative trading and maintain flexibility. The remaining 44 percent will be sold in both the public and private sale. The currency will be listed on external exchanges and used inside the Telegram app."
  • hndamien 9y ago
    This is really the deal breaker. If they had a fair distribution function then I'd be ok adopting it. This is really one of the virtues of Bitcoin. Everybody had their chance - even after significant media attention - to help participate and bring about the change.
• eitland 9y ago
  Just like Filecoin and Ethereum this is a possibility to use cryptocurrencies for something smart and distributed instead of just as a settlement layer between banks. If mining is somehow built on shuffling messages around this might be the good parts about old Skype (close to decentralized) without the problems (steals your bandwidth without asking). That said: as with anything cryptocurrency-related I'm hugely sceptical.
• 659087 9y ago
  It's a cash grab, just like 99% of the rest of the ICOs out there. They know there are lots of poorly informed, greedy greater fools trampling each other to give their money away right now, and plan to take full advantage of it.
  • tluyben2 9y ago
    You can wonder if that is good or bad. Well it is kind of bad but it is happening anyway and at least these guys won't just disappear with the pot overnight. I put some smallish amounts (like $100 per ICO) and in bunch of ICOs to see what would happen in the summer. At first all the negative stuff here on HN did seem to happen, now, more than half a year later, with some buy/sell actions at the right times, this only ICO portfolio is all black with a profit of over 30k. I took 50% to fiat and left the rest. The negativity is interesting on here: there are enough like me who know it's a gamble, who put experiments out with money they can miss if it is gone and who continue playing with profits only. Ofcourse we win only because your 'fools' lose, but we are on HN, you would think the people here would be in the former category. For now it is simply free money and where I live, legal and very low taxed. Besides some bad ICOs, which you can very easily recognize by the way, there are actual strong believers who fight for their company and reap the benefits. It is a bubble but not all is a fraud and ponzi in the blockchain space. Many are seeing it as a good way to run a real startup with real plans and products.
• ojr 9y ago
  no one would be able to write a smart contract on top of your cryptocurrency if it is not on the same blockchain or follow certain standards cryptocurrency exchanges expect to have in a tradable digital asset. For example in Solidity a language that targets the Ethereum Virtual Machine. You can have constructor parameters in your contracts like addressOfTokenUsedAsReward, then you provide the smart contract address ex "0x12dgsdg..." of the token you built. These contracts unlike your mysql database are immutable and the code can't be changed, even if there is a vulnerability in it.
• Eridrus 9y ago
  Durov is basically a huckster who jumps on trends.
• olalonde 9y ago
  You answered your own question. It's a borderline scam to make money. Otherwise, they would just use an existing coin (e.g. Bitcoin).