20 ms·

Virtual-Currency Craze Spawns Bitcoin Wannabes

29 points by BrandonMarc 13y ago

NhanH 13y ago
Question: without regard to viability/ usefulness of the alternative coin in the long run (which the judgement for bitcoin hasn't even been reached yet), assuming that bitcoin is here to stay, will the alternative coin have any value as a tool for arbitrage? Considering that it's alot more difficult to move regular currency between exchanges, more so when they're of different currencies.
- bmelton 13y ago
  I'm not remotely an expert, or even exceptionally knowledgeable on the subject, but I don't know if I'm even sold on the idea that BitCoin is the crypto-currency to succeed. The current implementation works pretty well, but other currencies have other advantages. Litecoin, for example, is designed to be mined on more commodity CPUs than GPUs, and has an algorithm specifically designed to deter faster GPU processing. Meanwhile, WorldCoin (WDC) is optimized for faster transfer times. I don't know the ultimate long-term value on the former, but WorldCoin's advantage is pretty big, as currently BitCoin is too slow in transfer without slowing up the line to purchase a cup of coffee, for example. It's possible that other currencies come out mitigating more of BitCoin's deficiencies, or maybe BitCoin can be altered in such a way that its shortcomings can be ameliorated, or maybe they aren't really so painful that they're actually a problem that needs a solution. I dunno. Either way, I'd be surprised if the first-mover becomes the most entrenched permanently.
  - jquery 13y ago
    > I don't know the ultimate long-term value on the former, but WorldCoin's advantage is pretty big, as currently BitCoin is too slow in transfer without slowing up the line to purchase a cup of coffee, for example. That's not exactly true. The transfer is immediate. The verification that ensures you aren't the victim of double-spend fraud takes an average of 5 minutes (during which they are waiting for their coffee). The transaction will show up as unverified on the blockchain even sooner than that, during which a future merchant could choose to not accept payment until the previous payment clears. Even if they were successful once, the merchant could choose not to sell to them again. Considering the merchant charges on a credit card vs. the low transaction fees of Bitcoin, I would be surprised if Bitcoin didn't come way ahead in this scenario.
    - bmelton 13y ago
      Fantastic. Thanks for the correction!
    - nilkn 13y ago
      What if you want to buy something that doesn't require five minutes to prepare, like a newspaper from a newspaper stand on your way to work? Will you need to wait around for five minutes for the transaction to be verified or will the merchant take it on faith, temporarily, and require a way to track you down in case it's denied?
      - jsmeaton 13y ago
        Yeah, I'm wondering the same thing. Imagine Visa/Mastercard suddenly decided, as a way to combat credit card fraud, that a human had to visually verify the transaction, and that would take anywhere between 2 and 5 minutes. It would end the use of cards in the majority of in-person transactions.
        moe 13y ago
        The payment gateway providers will create the infrastructure to settle payments early where needed (by relaying/insuring the risk, credit scoring, much like they do today for CCs). In practice you may find that your starbucks coffee will take 10 minutes to buy with a newly created wallet, but comes in immediately when paid with a wallet that you've been using for a while (so it has a 'reputation').
      - qnr 13y ago
        In order to make a successful attack against a merchant accepting zero-confirmation transactions, the attacker has to: 1. Submit transaction A to miners 2. Submit another transaction B (spending the same coins as A) to the vulnerable merchant 3. This is the really hard part: make sure that the merchant doesn't know about transaction A until you got your purchase and ran away. If the merchant has good network connectivity, it is very, very hard to perform this attack successfully, certainly not something that would be done to get a free newspaper or coffee.
  - politician 13y ago
    > The current implementation works pretty well, but ... Exhibit A: HTML Exhibit B: SMTP Exhibit C: IPv4 If something kinda sucks, but kinda works pretty well, chances are that we'll still be arguing over it in ~10 years.
  - wmf 13y ago
    Litecoin, for example, is designed to be mined on more commodity CPUs than GPUs, and has an algorithm specifically designed to deter faster GPU processing. Heh. That was their goal, but it didn't work. Then they redefined Litecoin as GPU-friendly and ASIC-hard. Do we believe they're right this time?
joezydeco 13y ago
"Some altcoins incorporate interesting new ideas, but there is an essential feature of Bitcoin which they all lack. It is not a matter of its technology, but rather of its history and community. Quite simply, a medium of exchange that is more widely accepted on the market is more useful than one which is not." http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/ http://themisescircle.org/blog/2013/08/22/the-problem-with-a...
- blibble 13y ago
  so uh, exactly the same problem bitcoin has vs. real currency?
maaku 13y ago
These coins are worthless. If they ever start to gain value, it would trigger the end of bitcoin. For alts that have a chance from being different from bitcoin, see namecoin, freicoin, and zerocoin.
- maaku 13y ago
  *trigger the end of all coins, including themselves

29 points by BrandonMarc 13y ago

NhanH 13y ago

Question: without regard to viability/ usefulness of the alternative coin in the long run (which the judgement for bitcoin hasn't even been reached yet), assuming that bitcoin is here to stay, will the alternative coin have any value as a tool for arbitrage? Considering that it's alot more difficult to move regular currency between exchanges, more so when they're of different currencies.

bmelton 13y ago
I'm not remotely an expert, or even exceptionally knowledgeable on the subject, but I don't know if I'm even sold on the idea that BitCoin is the crypto-currency to succeed. The current implementation works pretty well, but other currencies have other advantages. Litecoin, for example, is designed to be mined on more commodity CPUs than GPUs, and has an algorithm specifically designed to deter faster GPU processing. Meanwhile, WorldCoin (WDC) is optimized for faster transfer times. I don't know the ultimate long-term value on the former, but WorldCoin's advantage is pretty big, as currently BitCoin is too slow in transfer without slowing up the line to purchase a cup of coffee, for example. It's possible that other currencies come out mitigating more of BitCoin's deficiencies, or maybe BitCoin can be altered in such a way that its shortcomings can be ameliorated, or maybe they aren't really so painful that they're actually a problem that needs a solution. I dunno. Either way, I'd be surprised if the first-mover becomes the most entrenched permanently.
- jquery 13y ago
  > I don't know the ultimate long-term value on the former, but WorldCoin's advantage is pretty big, as currently BitCoin is too slow in transfer without slowing up the line to purchase a cup of coffee, for example. That's not exactly true. The transfer is immediate. The verification that ensures you aren't the victim of double-spend fraud takes an average of 5 minutes (during which they are waiting for their coffee). The transaction will show up as unverified on the blockchain even sooner than that, during which a future merchant could choose to not accept payment until the previous payment clears. Even if they were successful once, the merchant could choose not to sell to them again. Considering the merchant charges on a credit card vs. the low transaction fees of Bitcoin, I would be surprised if Bitcoin didn't come way ahead in this scenario.
  - bmelton 13y ago
    Fantastic. Thanks for the correction!
  - nilkn 13y ago
    What if you want to buy something that doesn't require five minutes to prepare, like a newspaper from a newspaper stand on your way to work? Will you need to wait around for five minutes for the transaction to be verified or will the merchant take it on faith, temporarily, and require a way to track you down in case it's denied?
    - jsmeaton 13y ago
      Yeah, I'm wondering the same thing. Imagine Visa/Mastercard suddenly decided, as a way to combat credit card fraud, that a human had to visually verify the transaction, and that would take anywhere between 2 and 5 minutes. It would end the use of cards in the majority of in-person transactions.
      - moe 13y ago
        The payment gateway providers will create the infrastructure to settle payments early where needed (by relaying/insuring the risk, credit scoring, much like they do today for CCs). In practice you may find that your starbucks coffee will take 10 minutes to buy with a newly created wallet, but comes in immediately when paid with a wallet that you've been using for a while (so it has a 'reputation').
    - qnr 13y ago
      In order to make a successful attack against a merchant accepting zero-confirmation transactions, the attacker has to: 1. Submit transaction A to miners 2. Submit another transaction B (spending the same coins as A) to the vulnerable merchant 3. This is the really hard part: make sure that the merchant doesn't know about transaction A until you got your purchase and ran away. If the merchant has good network connectivity, it is very, very hard to perform this attack successfully, certainly not something that would be done to get a free newspaper or coffee.
- politician 13y ago
  > The current implementation works pretty well, but ... Exhibit A: HTML Exhibit B: SMTP Exhibit C: IPv4 If something kinda sucks, but kinda works pretty well, chances are that we'll still be arguing over it in ~10 years.
- wmf 13y ago
  Litecoin, for example, is designed to be mined on more commodity CPUs than GPUs, and has an algorithm specifically designed to deter faster GPU processing. Heh. That was their goal, but it didn't work. Then they redefined Litecoin as GPU-friendly and ASIC-hard. Do we believe they're right this time?

joezydeco 13y ago

"Some altcoins incorporate interesting new ideas, but there is an essential feature of Bitcoin which they all lack. It is not a matter of its technology, but rather of its history and community. Quite simply, a medium of exchange that is more widely accepted on the market is more useful than one which is not." http://themisescircle.org/blog/2013/08/22/the-problem-with-altcoins/ http://themisescircle.org/blog/2013/08/22/the-problem-with-a...

blibble 13y ago
so uh, exactly the same problem bitcoin has vs. real currency?

maaku 13y ago

These coins are worthless. If they ever start to gain value, it would trigger the end of bitcoin. For alts that have a chance from being different from bitcoin, see namecoin, freicoin, and zerocoin.

maaku 13y ago
*trigger the end of all coins, including themselves