8 ms·

Wary of Bitcoin? A guide to some other cryptocurrencies

35 points by shawndumas 14y ago

Sniffnoy 14y ago
Why only ones derived from Bitcoin? There were cryptographic currencies before Bitcoin, right?
- PaperclipTaken 14y ago
  Kind of. There were theories before bitcoin but for the most part each had some major obstical that they were unable to overcome. Bitcoin represents the first cryptocurrency that was truly successful.
- aminok 14y ago
  No, Bitcoin is the world's first cryptographic currency.
- jplewicke 14y ago
  Most importantly, Bitcoin was the world's first distributed cryptocurrency without a centralized currency issuer. The blockchain was and is a very important advance over the previously existing Chaumian cash cryptocurrencies.
zanny 14y ago
I still don't understand the mindset behind all these clones of BTC thinking having a hard cap and eventual deflation in the monetary supply of their cryptocurrency is a good thing. What I want is something like PPC, except do it even better - you want a system that will generate coins just enough to make hoarding money a net loss. So if the coins themselves are rapidly becoming more valuable, you should introduce some algorithmic way to inject a lot of coins into the monetary supply, and if they are losing value you want to throttle coin generation. It would require the distributed network to agree on what the coins value is doing - which would be very complicated. But just flat fixed inflation of the monetary base annually works better than having a finite money supply that eventually means you are doomed to a deflationary spiral. It is probably chief amongst why BTC is such a commodity right now - since we already have over half the total bitcoins already in the system, the monetary base over the next hundred years is only going to grow less, and as more people want in on BTC, there is higher demand for a resource that has dwindling supply (especially once the rate of lost wallets and the coins therein outpaces the mining of new blocks).
- lmm 14y ago
  I think the simplest and most effective approach would be fixed difficulty. That way 1 FRC is always worth a certain number of hash calculations, so it's anchored to something real, but apolitical (the value of computer hardware); it follows natural inflation in line with Moore's law, and the money supply grows in proportion to the users. And this would actually mean a simpler codebase than what bitcoin does. AIUI the main argument against this is that it does nothing to encourage early adopters - why would anyone use my FRC when they can always just start mining them later if they become popular. Still, I'm interested in pursuing this if there's demand.
  - vbuterin 14y ago
    Problem is, 100% inflation per 2 years is a bit much.
    - julespitt 14y ago
      Depends entirely on demand. Everyone can play with the supply all they want - demand is still completely unpredictable.
- maaku 14y ago
  Did you read TFA, specifically the part about Freicoin? http://freico.in/ http://freico.in/
aneth4 14y ago
Replacing Bitcoin now would be like trying to replace gold with platinum or replace HTTP. It's not going to happen, no matter what technical advantages another currency has. Bitcoin has critical mass. Sorry. Game over. I don't say this as a Bitcoin fanboy. Bitcoin is far from ideal, but it is good enough, and capable of evolving to stay good enough. In my opinion, there is zero chance of another cryptocurrency being superior as money in the near future.
- kintamanimatt 14y ago
  Never say never. Bitcoin certainly doesn't have a critical mass, and won't until a majority of the world is using it. We've seen protocols replace other protocols (HTTP pretty much replaced Gopher), and incumbents squeezed out by upstarts (WordPress pushed aside MoveableType, for example). New can replace the old. In any event, the mission of Bitcoin appears to replace government-issued currencies which most certainly have a critical mass! Bitcoin just so happens to be the most popular cryptocurrency right now, but relatively speaking it's not all that popular. Its deflationary nature might be its downfall and there's certainly room for something to take its place, and it's very myopic to say that just because something appears somewhat popular now that it will remain that way forever.
  - rubinelli 14y ago
    Have you seen those physical bitcoins? It's possible to create something similar in digital form, a coin that "wraps" a wallet with a known amount of bitcoins. This would allow a new and better currency to offer "backwards compatibility" with bitcoins and a migration path.
  - aminok 14y ago
    Gopher and HTTP came out at around the same time and were contenders from the beginning. This is very different than the situation with cryptocurrencies, where Bitcoin came out long before the competing derivatives, and where mindshare and market capitalization of alternative cryptocurrencies has always been insignificant compared to BTC. Bitcoin could be more properly compared to HTTP, and alternative cryptocurrencies as protocols that are slighty modified versions of HTTP that no one uses.
fixxer 14y ago
Never heard of Freicoin before this... While the theory is interesting, it is kind of hard to market such a product in the presence of alternatives that don't "rot".
- wmf 14y ago
  They may be thinking in national economy terms, but you can't apply that kind of thinking to an opt-in system.
  - fixxer 14y ago
    I think you're absolutely right: Freicoin is a crypto-currency for the Utopian state as envisioned by Occupy.
    - diffraction 14y ago
      Utopia? It's nothing that dramatic. Even with traditional currencies its pretty obvious that we are headed for a period of negative interest rates. It only makes sense that the shortest term government debt, or cash, has a negative interest rate as well.
      - namagiri 14y ago
        Well here starts the trouble with the whole "Freiwirtschaft" movement, surely our economy is heading for negative interest. But for an alternative currency growing within that economy, a negative interest rate may not be balanced at all. So maybe there is no fixed demurrage rate at 5% but instead this rate is just another price and should be adjusted accordingly to the state of the market (and may be positive or negative).
      - gfodor 14y ago
        Bernanke et al have signalled they're getting ready to pump the brakes. Or break the pump. Or whatever. In other words, interest rates might start climbing again sooner than you think. http://online.wsj.com/article/SB10001424127887324744104578475273101471896.html http://online.wsj.com/article/SB1000142412788732474410457847...
eli 14y ago
I would think the universe of people who are wary of Bitcoin, but would be interested in a smaller, lesser known alternative currency would be quite small.
- quackerhacker 14y ago
  AGREE! Bitcoin is established compared to others (litecoin, feathercoin, namecoin, PPC, etc...). To be wary of Bitcoin now is to be one of the IGNORANT people that continue to call bitcoin a fad or a scam...they're just mad they didn't hop on it sooner.
  - standeven 14y ago
    I think it's a fad but I don't think I'm ignorant. I do wish I had bought in at $5 and sold it at $200, but I'm not particularly mad about it; I tend not to invest in currencies or commodities.
    - quackerhacker 14y ago
      That's where I personally am disappointed, same as you, I wish I had got in on it back in 09'...but the same can be said about equity in Apple or Telsa. -quacker
dreeves 14y ago
I guess it doesn't count as a crypto currency but I'd add http://ripple.com http://ripple.com to this list.
- tagawa 14y ago
  Yes, I was wondering why it wasn't mentioned. While it may be quite different structurally it still counts as an alternative to Bitcoin IMO. Would love to see some analysis or arguments for/against it.
quackerhacker 14y ago
Other CC's WON'T gain strong traction until a centralized exchange (i.e. MTGOX) has an easy UI like MtGox and allow withdrawal to currencies that pay the bills. Vircurex (the main LTC exchange...which exchanges LTC to BTC) recently has been hacked compromising wallets. One of LTC's strength was that it couldn't be mined with a GPU, FPGA, or ASIC...but thanks to reaper, now miners can get MHashes with their GPUS. And when MtGox announced that they were holding off on Litecoin integration, LTC dropped to almost $2 and miners on the forums had an exodus. First tech to people's impression remains the standard...in this case, it's Bitcoin. -quacker
ibotty 14y ago
it has not been said here, and i certainly don't want to discuss this here. having said that, silvio gesell, the spiritual founder of freicoin, was very anti-semitic and there are substantial claims that the whole concept of schwundgeld is tainted by structural anti-semitism. i don't know any english sources, but for those speaking english, have a look at the book "Schwundgeld, Freiwirtschaft und Rassenwahn" by peter bierl. http://www.konkret-magazin.de/konkret-texte/texte-archiv/konkret-texte-nr-57.html http://www.konkret-magazin.de/konkret-texte/texte-archiv/kon...

35 points by shawndumas 14y ago

Sniffnoy 14y ago

Why only ones derived from Bitcoin? There were cryptographic currencies before Bitcoin, right?

PaperclipTaken 14y ago
Kind of. There were theories before bitcoin but for the most part each had some major obstical that they were unable to overcome. Bitcoin represents the first cryptocurrency that was truly successful.
aminok 14y ago
No, Bitcoin is the world's first cryptographic currency.
jplewicke 14y ago
Most importantly, Bitcoin was the world's first distributed cryptocurrency without a centralized currency issuer. The blockchain was and is a very important advance over the previously existing Chaumian cash cryptocurrencies.

zanny 14y ago

I still don't understand the mindset behind all these clones of BTC thinking having a hard cap and eventual deflation in the monetary supply of their cryptocurrency is a good thing. What I want is something like PPC, except do it even better - you want a system that will generate coins just enough to make hoarding money a net loss. So if the coins themselves are rapidly becoming more valuable, you should introduce some algorithmic way to inject a lot of coins into the monetary supply, and if they are losing value you want to throttle coin generation. It would require the distributed network to agree on what the coins value is doing - which would be very complicated. But just flat fixed inflation of the monetary base annually works better than having a finite money supply that eventually means you are doomed to a deflationary spiral. It is probably chief amongst why BTC is such a commodity right now - since we already have over half the total bitcoins already in the system, the monetary base over the next hundred years is only going to grow less, and as more people want in on BTC, there is higher demand for a resource that has dwindling supply (especially once the rate of lost wallets and the coins therein outpaces the mining of new blocks).

lmm 14y ago
I think the simplest and most effective approach would be fixed difficulty. That way 1 FRC is always worth a certain number of hash calculations, so it's anchored to something real, but apolitical (the value of computer hardware); it follows natural inflation in line with Moore's law, and the money supply grows in proportion to the users. And this would actually mean a simpler codebase than what bitcoin does. AIUI the main argument against this is that it does nothing to encourage early adopters - why would anyone use my FRC when they can always just start mining them later if they become popular. Still, I'm interested in pursuing this if there's demand.
- vbuterin 14y ago
  Problem is, 100% inflation per 2 years is a bit much.
  - julespitt 14y ago
    Depends entirely on demand. Everyone can play with the supply all they want - demand is still completely unpredictable.
maaku 14y ago
Did you read TFA, specifically the part about Freicoin? http://freico.in/ http://freico.in/

aneth4 14y ago

Replacing Bitcoin now would be like trying to replace gold with platinum or replace HTTP. It's not going to happen, no matter what technical advantages another currency has. Bitcoin has critical mass. Sorry. Game over. I don't say this as a Bitcoin fanboy. Bitcoin is far from ideal, but it is good enough, and capable of evolving to stay good enough. In my opinion, there is zero chance of another cryptocurrency being superior as money in the near future.

kintamanimatt 14y ago
Never say never. Bitcoin certainly doesn't have a critical mass, and won't until a majority of the world is using it. We've seen protocols replace other protocols (HTTP pretty much replaced Gopher), and incumbents squeezed out by upstarts (WordPress pushed aside MoveableType, for example). New can replace the old. In any event, the mission of Bitcoin appears to replace government-issued currencies which most certainly have a critical mass! Bitcoin just so happens to be the most popular cryptocurrency right now, but relatively speaking it's not all that popular. Its deflationary nature might be its downfall and there's certainly room for something to take its place, and it's very myopic to say that just because something appears somewhat popular now that it will remain that way forever.
- rubinelli 14y ago
  Have you seen those physical bitcoins? It's possible to create something similar in digital form, a coin that "wraps" a wallet with a known amount of bitcoins. This would allow a new and better currency to offer "backwards compatibility" with bitcoins and a migration path.
- aminok 14y ago
  Gopher and HTTP came out at around the same time and were contenders from the beginning. This is very different than the situation with cryptocurrencies, where Bitcoin came out long before the competing derivatives, and where mindshare and market capitalization of alternative cryptocurrencies has always been insignificant compared to BTC. Bitcoin could be more properly compared to HTTP, and alternative cryptocurrencies as protocols that are slighty modified versions of HTTP that no one uses.

fixxer 14y ago

Never heard of Freicoin before this... While the theory is interesting, it is kind of hard to market such a product in the presence of alternatives that don't "rot".

wmf 14y ago
They may be thinking in national economy terms, but you can't apply that kind of thinking to an opt-in system.
- fixxer 14y ago
  I think you're absolutely right: Freicoin is a crypto-currency for the Utopian state as envisioned by Occupy.
  - diffraction 14y ago
    Utopia? It's nothing that dramatic. Even with traditional currencies its pretty obvious that we are headed for a period of negative interest rates. It only makes sense that the shortest term government debt, or cash, has a negative interest rate as well.
    - namagiri 14y ago
      Well here starts the trouble with the whole "Freiwirtschaft" movement, surely our economy is heading for negative interest. But for an alternative currency growing within that economy, a negative interest rate may not be balanced at all. So maybe there is no fixed demurrage rate at 5% but instead this rate is just another price and should be adjusted accordingly to the state of the market (and may be positive or negative).
    - gfodor 14y ago
      Bernanke et al have signalled they're getting ready to pump the brakes. Or break the pump. Or whatever. In other words, interest rates might start climbing again sooner than you think. http://online.wsj.com/article/SB10001424127887324744104578475273101471896.html http://online.wsj.com/article/SB1000142412788732474410457847...

eli 14y ago

I would think the universe of people who are wary of Bitcoin, but would be interested in a smaller, lesser known alternative currency would be quite small.

quackerhacker 14y ago
AGREE! Bitcoin is established compared to others (litecoin, feathercoin, namecoin, PPC, etc...). To be wary of Bitcoin now is to be one of the IGNORANT people that continue to call bitcoin a fad or a scam...they're just mad they didn't hop on it sooner.
- standeven 14y ago
  I think it's a fad but I don't think I'm ignorant. I do wish I had bought in at $5 and sold it at $200, but I'm not particularly mad about it; I tend not to invest in currencies or commodities.
  - quackerhacker 14y ago
    That's where I personally am disappointed, same as you, I wish I had got in on it back in 09'...but the same can be said about equity in Apple or Telsa. -quacker

dreeves 14y ago

I guess it doesn't count as a crypto currency but I'd add http://ripple.com http://ripple.com to this list.

tagawa 14y ago
Yes, I was wondering why it wasn't mentioned. While it may be quite different structurally it still counts as an alternative to Bitcoin IMO. Would love to see some analysis or arguments for/against it.

quackerhacker 14y ago

Other CC's WON'T gain strong traction until a centralized exchange (i.e. MTGOX) has an easy UI like MtGox and allow withdrawal to currencies that pay the bills. Vircurex (the main LTC exchange...which exchanges LTC to BTC) recently has been hacked compromising wallets. One of LTC's strength was that it couldn't be mined with a GPU, FPGA, or ASIC...but thanks to reaper, now miners can get MHashes with their GPUS. And when MtGox announced that they were holding off on Litecoin integration, LTC dropped to almost $2 and miners on the forums had an exodus. First tech to people's impression remains the standard...in this case, it's Bitcoin. -quacker

ibotty 14y ago

it has not been said here, and i certainly don't want to discuss this here. having said that, silvio gesell, the spiritual founder of freicoin, was very anti-semitic and there are substantial claims that the whole concept of schwundgeld is tainted by structural anti-semitism. i don't know any english sources, but for those speaking english, have a look at the book "Schwundgeld, Freiwirtschaft und Rassenwahn" by peter bierl. http://www.konkret-magazin.de/konkret-texte/texte-archiv/konkret-texte-nr-57.html http://www.konkret-magazin.de/konkret-texte/texte-archiv/kon...