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Why Proof-of-work isn’t suitable for small cryptocurrencies
- CPLX 8y agoInteresting article, but perhaps the more important question is what exactly is the reason why we should have "small cryptocurrencies" in the world at all.
- R3DJOK3R1 8y agoIt is the free market
- wyldfire 8y agoNewly introduced cryptocurrencies are likely to be "small" by necessity. That doesn't mean that they can't add value beyond Bitcoin and friends.
- gruez 8y ago>Newly introduced cryptocurrencies are likely to be "small" by necessity not if you fork. see: bcash's price of ~0.1BTC upon forking.
- brokensegue 8y agosmall can be defined in terms of hash power
- earenndil 8y agoIf it's so easy so fork a cryptocurrency at high value, why don't you make a crypto fork that's worth 0.1BTC.
- deleted 8y ago[deleted]
- CPLX 8y agoRight, and what is that value, beyond additional speculation?
- chrisco255 8y agoDifferent technical solutions solving the problems of scalability, privacy, smart contract execution, governance, sidechain platforms, language and runtime improvements, etc. In any other tech, there exists a myriad of competing technical solutions, why should crypto be any different? And why should you presume that speculation alone is the driver behind all of them?
- deleted 8y ago[deleted]
- Bjorkbat 8y agoSame reason we have so many javascript frameworks I suspect.
- gexla 8y agoLooks like the "proofof.js" namespace is available if you wanted to create another JS framework.
- kerng 8y agoMaybe the answer is the Token concept, and building on top of existing larger blockchains for smaller corner cases.
- AJ007 8y agoWe have so many small cryptocurrencies because so few buyers from last years boom bothered to read or understand anything about how Bitcoin worked.
- TangoTrotFox 8y agoI think this question is similar to me asking why we should have any "reality television" at all. The existence of a non-zero price demonstrates there is a demand, and quite substantial, for small cryptocurrencies. Just because they may not be your cup of tea ought not lead you to be judge, jury, and executioner in terms of their right to exist.
- ben_w 8y agoPerhaps not “executioner”, but we have every right to be jury. I’m open to the observation that prohibition seldom (or never) fully achieves its goals, and the possibility that it can make things worse, but right now — based on all I know — my metaphorical jury vote would be “bitcoin is bad even for the goals people state when trying to promote it”.
- CPLX 8y agoWe should have reality television because people find it to be entertaining. That doesn't answer the question about small cryptocurrencies though. Or perhaps it does.
- TangoTrotFox 8y agoAccording to some. In my opinion reality TV does little than dumb down people and drive the normalization of emotion over logic that is playing a significant role in harming the country and the deterioration of American collective intellect - we're really not all that far from the satire of Idiocracy where people tune in to watch others get kicked in the balls. In either case, entertainment is just another form of a "want". There are clearly people that want reality TV as judged by the shows' ratings. And there are clearly people that want small cryptocurrencies as judged by their market values. And the nice thing about a free country is that people are and ought be free to make their own decisions, even when many of us may feel such decisions are idiotic.
- CPLX 8y agoRight but I'll sit down and watch a reality program because I want to be entertained. That's understandable. I can see buying a smaller or alt token because I hope to profit from speculating on it, that makes sense to me. What's the other reason?
- CyberDildonics 8y agoThey exist because people made them. I'm sure there are lots of things that exist despite what you want.
- bmcusick 8y agoAs opposed to what? Proof of Stake? Not even Ethereum can get that to work securely. I'm not familiar with all of those small coins, but the problem with Bitcoin Gold is that it uses the same Proof of Work that several other coins use, so a miner can buy ASICs and then switch between coins. So they can mine honestly on Coin 1 for a while, then switch to Coin 2 and do some double-spend attacks, then when Coin 2's price collapses, they switch back to Coin 1 or move on to Coin 3. The miner has no long term incentive to support the value proposition of any one coin, and they can attack coins that use the same PoW algorithm as their "main" coin at will. The same problem applies for coins that use ASIC-resistant PoW's, only more so. You can just rent an AWS cluster for an hour to run your attack, then ghost with the profits. What coin developers need to do is design their proof of work and mining activity to ensure that miners have the same (or close-enough) long term incentives as coin holders.
- admax88q 8y ago> So they can mine honestly on Coin 1 for a while, then switch to Coin 2 and do some double-spend attacks, then when Coin 2's price collapses, they switch back to Coin 1 or move on to Coin 3. The miner has no long term incentive to support the value proposition of any one coin, and they can attack coins that use the same PoW algorithm as their "main" coin at will. On top of that, I think proof of stake will make this sort of attack 10k worse. With proof of stake there is essentially no resource cost for you to mine an additional fork. Proof of Stake is not computationally expensive, so there's no pressure for you to choose the one coin/chain you want to invest your resources in.
- bigdaddyrabbit 8y ago> ...proof of stake will make this sort of attack 10k worse. With proof of stake there is essentially no resource cost. This is not true. For a 51% style attack on a PoS chain, you need to acquire a majority of staked coins. Each coin you buy increases the cost of the next coin, (demand/supply and all that), and the price of the coin increases exponentially as an attacker accumulates 51% of the coins. With PoW, cost of acquiring hashpower is linear (acquiring the last 1% costs the same as the first 1%), which is why PoW is easier to attack.
- famsam 8y agoIt seems inaccurate to call this theft. I think in these 51%+ cases, the currency is working as designed and whoever thought this wouldn't happen lacks imagination. Is it theft if someone figures out a way to predict lottery numbers (e.g. time travel)? Only where there are laws.
- WhiteOwlLion 8y agoProof-of-work is fine for small crypto. Being ASIC and GPU resistant helps. XVG and Electroneum have been plagued with problems. Other devs point to the poor coding, but there doesn't seem to be a recognition by the coin devs that the code changes will actually address the exploit(s).
- mythrwy 8y agoOr they don't really care about addressing the exploits at all. Electroneum raised 10's of millions in ICO for a handful of "devs" and a former Herbalife salesman. I wonder what the real incentive to do the hard work is now? Sure they could dump a few more coins if they could pump price but maybe a lot of money they had to do almost no work for is worth more than a little they do. In this case those pesky hackers taking down their network oh well shit happens may be ok from their perspective. I can't imagine they wouldn't take the basic steps they didn't if it wasn't.
- niftich 8y agoI prefer to think of this as a feature, not a bug, because it incentivizes vested parties to keep PoW-mining power parity with each other. Successful execution of a 51% attack shows that there's not sufficient volume and diversity of vested parties, and the dominant party is adversarial and can't be trusted to refrain from manipulating the chain.
- ddtaylor 8y agoSmall coins can use merge mining if they really want to, most don't because they have some far-fetched idea on how PoW should work (like "ASIC resistance" and other tarpits)
- beagle3 8y agoSpaceMesh[0] and Chia[1] are currencies that use "Proof of Space" (or "Proof of Space-Time") instead of Proof-of-Work or Proof-of-Stake. I wonder [0] https://spacemesh.io/ https://spacemesh.io/ [1] https://techcrunch.com/2018/03/28/chia-vs-bitcoin/ https://techcrunch.com/2018/03/28/chia-vs-bitcoin/