6 ms·

Well, there's another vote of confidence in Bitcoin. It seems to be a battle of good and bad press. Ultimately, I don't think it matters. The votes are in and t

by gexla 13y ago

Well, there's another vote of confidence in Bitcoin. It seems to be a battle of good and bad press. Ultimately, I don't think it matters. The votes are in and the people have said they want virtual currency. If it's not Bitcoin, next man up.

rch 13y ago
Not sure what to make of the alt-coin thing. Is there an algorithm that favors FPGAs?
- Hermel 13y ago
  Digital currencies are a classical winner-takes-it-all market. There is not much room for alternatives besides Bitcoin. Also, Bitcoin has a huge lead - an altcoin would have to be fundamentally better than Bitcoin in order to take over. Similarily, TCP and SMTP have both never been replaced by newer protocols. I suspect the same to be the case for Bitcoin. Also, revising the core of Bitcoin in any significant way will be prove at least as hard as replacing IPv4 with IPv6.
  - Dwolb 13y ago
    Interesting. If it's true Bitcoin will be replaced by another algorithm, then Bitcoin does not make much sense to hold. It would then be true that Bitcoin is a tool to facilitate real currency transactions.
  - kristiandupont 13y ago
    What makes it a winner-takes-it-all market? I've been considering buying a Litecoin or two just for the fun of it. I have greater faith in Bitcoin for sure, but unless a technical flaw destroys it, I don't see exactly why Litecoin should disappear.
    - sfjailbird 13y ago
      For one I would think the market cap has to be enormous, to avoid any large entity being able to move the market. Even now with bitcoin at, what, 15 billion dollars? Price can still be swayed 5-10% by a million dollar purchase. Which is what leads people to criticise it for price swings. Not enough money in the world to support too many networks of the necessary size.
      - gnaritas 13y ago
        How does that same critique not apply to many of the worlds currencies? You're talking as if multiple new currencies are not possible when it clear that they are. People who use currencies don't care about the market, they care that products are priced in that currency and are relatively stable. The market will eventually level out as usage grows, anything new is going to be volatile but there's clearly room for more than one player as long as they're not identical and offer different value propositions then they'll be taken up if only to hedge against the weaknesses of their competitors. Bitcoin has flaws, it's terrible wasteful of energy as if proof of work were the only possible solution to creating coins. Other coins offer different less wasteful ways of minting new coins, that's going to have a market regardless of bitcoin's success.
    - Istof 13y ago
      It sounds like a proud Bitcoin owner pitching his coin. I think that Litecoin and a few others are already in a good position: http://coinmarketcap.com/ http://coinmarketcap.com/.
    - philwelch 13y ago
      The whole point of a currency is that it's a universal medium of exchange. On the other hand, most real world payment systems can handle FX between currencies already, so Bitcoin-to-Litecoin shouldn't be too hard.
      - gnaritas 13y ago
        The point of a currency is that it's an agreed upon medium of exchange, not necessarily a universal one. We're accustomed to dealing with multiple currencies, as you correctly note. None of our currencies have the trait of universal.
  - chipsy 13y ago
    I completely disagree. A digital currency is a game design in the clothes of a communication protocol. That is to say, digital currencies are poised to enter an indefinite period of competition and specialization based on the economic properties(rules of the game) that they offer and society's preferences for them; bitcoin is a tiny suggestion of what is possible. We are about to customize capitalism.
    - bendoernberg 13y ago
      Fantastic point, and it's a real shame that there don't appear to be any anthropologists, sociologists, game theorists, psychologists or political scientists advising in the models of any of these coins. The algorithms that underly these currencies are going to have massive impacts on the shape of our society going forward, without proportionate deliberation about their design.
      - kordless 13y ago
        You need a wide range of disciplines to understand how it works and grok how it also changes the financial markets. i.e. it's complicated.
    - gnaritas 13y ago
      Absolutely this. Gold bugs and Austrians like bitcoin. Keynesians call it deflationary they'll like peercoin better. The math community may prefer primecoin. Namecoin could be the base of the new DNS system as well as many others attracting the tech community. Each will attract people who prefer their rules. Customize capitalism, I like that; totally stealing that.
  - kordless 13y ago
    Comparing a cryptocurrency to the network stack doesn't make any sense. You are cherry picking out of one layer of the network stack to make a weak ad hominem argument to support a bandwagon effect bias. Regardless, your argument is flawed by the fact TCP and UDP traffic are about equal on the Internet. That's two protocols at your chosen network layer, each doing what they are good at. Note: SHA-256 and scrypt are the building blocks of most cryptocurrencies. SHA-256 is to UDP as scrypt is to TCP? Dunno.
  - axefrog 13y ago
    There will always be a market for altcoins alongside Bitcoin because (a) they can remain completely anonymous and (b) pure cryptocurrency exchanges that do not engage in trades for fiat currency provide an indirect avenue for trading in and out of official fiat currencies, via Bitcoin. With KYC and AML attaching themselves heavily to most Bitcoin exchange services, people will trade into or out of Bitcoin non-anonymously, and they'll trade their Bitcoins anonymously for another cryptocurrency. Those cryptocurrencies will then by used for illegal purposes and it'll be very difficult to prevent that value from being laundered back into legitimate currency because the exchange between different cryptocurrencies can't be effectively policed, especially once distributed exchanges get off the ground. In my mind, because of this, the whole field of KYC/AML restrictions being forced onto Bitcoin will ultimately fail or at least be extremely easy to circumvent, as long as altcoins exist.
    - foobarqux 13y ago
      How do you exchange BTC for LTC without using an AML-compliant organization?
  - philwelch 13y ago
    I think Bitcoin's deflationary nature and the naturally limited supply of it are likely show stoppers.
    - sneak 13y ago
      You think that 210000000000000 units of a thing are insufficient?
      - gnaritas 13y ago
        That's not what he said. Fixed supply means deflation, regardless of how many units exist as long as population and economies grow. Economists generally consider deflation a very bad thing that kills economic growth and creates artificial recessions.
        sneak 13y ago
        > Economists generally consider deflation a very bad thing that kills economic growth and creates artificial recessions ...except that bitcoin doesn't exist in a vacuum. It's not the exclusive currency of anyone, and never will be. Bitcoin doesn't affect economies.
        gnaritas 13y ago
        > ...except that bitcoin doesn't exist in a vacuum. No currency exists in a vacuum, this is a meaningless point. > It's not the exclusive currency of anyone, and never will be. You don't and can't know that. > Bitcoin doesn't affect economies. It will if it gets mass adoption, so again an irrelevant point since we're talking about its future, not its present.
  - lectrick 13y ago
    Since all of these are fluid and electronic, it wouldn't take very much for someone like bitpay to write a coin-agnostic API that interfaces with multiple cryptocurrencies.
- EdJiang 13y ago
  Most altcoins use scrypt instead of SHA256, so that it's harder to make FPGAs/ASICs, thus relatively easier for people with GPU/CPUs. This is because if only people with specialized hardware could mine, the network could be more vulnerable to 51% attack from a well-funded team, versus when every person with a graphics card can mine. See https://litecoin.info/Comparison_between_Litecoin_and_Bitcoin#SHA256_mining_vs_scrypt_mining https://litecoin.info/Comparison_between_Litecoin_and_Bitcoi...
- kordless 13y ago
  There are basically two hashing algorithms for cryptocurrencies: SHA-256 and scrypt. SHA-256 is the one used for Bitcoin and its derivatives. Litecoin uses the scrypt algorithm, as does its derivatives, like Worldcoin. There are a handful of other proof of work algorithms as well used by a few other currencies. Side note, check out namecoin: http://en.wikipedia.org/wiki/Namecoin http://en.wikipedia.org/wiki/Namecoin. It's based on SHA-256. scrypt uses the SHA-256 algorithm for hashing the blocks, but the caveat is that it also uses a high number of read/writes to RAM. In fact, there is very nearly parity to the number of compute cycles to read/writes cycles. Here's the paper on it: http://www.tarsnap.com/scrypt/scrypt.pdf http://www.tarsnap.com/scrypt/scrypt.pdf. In order to build an ASIC miner for Litecoin, one would have to build a circuit that had a massive number of CPUs encrusted with a fairly massive amount of fast RAM. As this more or less describes a video card, whoever designs an ASIC for Litecoin will have a nice challenge in front of them. Edit: Working URLs
  - gnaritas 13y ago
    Not all coins are so dependent on mining, proof of work is an option, it's not the only only option. Proof of stake exists as well.
  - ksrm 13y ago
    http://www.coindesk.com/asic-miners-litecoin-soon/ http://www.coindesk.com/asic-miners-litecoin-soon/
argumentum 13y ago
That's the brilliance of Coinbase .. it's not tied to BTC, in fact the creator of Litecoin is part of their team now. They are building an infrastructure layer for cryptocurrency, period, and they seem far ahead of any competitors atm.
- infruset 13y ago
  Could you expand? It seems they only handle bitcoin on their main page
  - infruset 13y ago
    why the downvote?
- simbolit 13y ago
  do you really think that in the hypothetical situation of a major bitcoin crash litecoin will still stand? i think this highly unlikely. imho all the altcoins derive their value from the faith of people in bitcoin and by association in crypto currencies. the big one fails, all of them fail.
  - gnaritas 13y ago
    No. The point of some of the alt currencies is to address perceived weaknesses in bitcoin, like deflation, or wasted energy in mining for example. Bitcoin created a market but that market will outlive bitcoin if it fails. Now litecoin is basically a clone so it'll fall with bitcoin, there's nothing interesting about it, but others like peercoin or primecoin are substantially different in ways that may matter greatly.
  - SkyMarshal 13y ago
    The VC's are looking to invest in people selling shovels, not panning for gold/speculating on price. They've built cryptocurrencies' naturally high volatility into their expectations, and are looking for ROI on service fees.

by gexla 13y ago

rch 13y ago

Not sure what to make of the alt-coin thing. Is there an algorithm that favors FPGAs?

Hermel 13y ago
Digital currencies are a classical winner-takes-it-all market. There is not much room for alternatives besides Bitcoin. Also, Bitcoin has a huge lead - an altcoin would have to be fundamentally better than Bitcoin in order to take over. Similarily, TCP and SMTP have both never been replaced by newer protocols. I suspect the same to be the case for Bitcoin. Also, revising the core of Bitcoin in any significant way will be prove at least as hard as replacing IPv4 with IPv6.
- Dwolb 13y ago
  Interesting. If it's true Bitcoin will be replaced by another algorithm, then Bitcoin does not make much sense to hold. It would then be true that Bitcoin is a tool to facilitate real currency transactions.
- kristiandupont 13y ago
  What makes it a winner-takes-it-all market? I've been considering buying a Litecoin or two just for the fun of it. I have greater faith in Bitcoin for sure, but unless a technical flaw destroys it, I don't see exactly why Litecoin should disappear.
  - sfjailbird 13y ago
    For one I would think the market cap has to be enormous, to avoid any large entity being able to move the market. Even now with bitcoin at, what, 15 billion dollars? Price can still be swayed 5-10% by a million dollar purchase. Which is what leads people to criticise it for price swings. Not enough money in the world to support too many networks of the necessary size.
    - gnaritas 13y ago
      How does that same critique not apply to many of the worlds currencies? You're talking as if multiple new currencies are not possible when it clear that they are. People who use currencies don't care about the market, they care that products are priced in that currency and are relatively stable. The market will eventually level out as usage grows, anything new is going to be volatile but there's clearly room for more than one player as long as they're not identical and offer different value propositions then they'll be taken up if only to hedge against the weaknesses of their competitors. Bitcoin has flaws, it's terrible wasteful of energy as if proof of work were the only possible solution to creating coins. Other coins offer different less wasteful ways of minting new coins, that's going to have a market regardless of bitcoin's success.
  - Istof 13y ago
    It sounds like a proud Bitcoin owner pitching his coin. I think that Litecoin and a few others are already in a good position: http://coinmarketcap.com/ http://coinmarketcap.com/.
  - philwelch 13y ago
    The whole point of a currency is that it's a universal medium of exchange. On the other hand, most real world payment systems can handle FX between currencies already, so Bitcoin-to-Litecoin shouldn't be too hard.
    - gnaritas 13y ago
      The point of a currency is that it's an agreed upon medium of exchange, not necessarily a universal one. We're accustomed to dealing with multiple currencies, as you correctly note. None of our currencies have the trait of universal.
- chipsy 13y ago
  I completely disagree. A digital currency is a game design in the clothes of a communication protocol. That is to say, digital currencies are poised to enter an indefinite period of competition and specialization based on the economic properties(rules of the game) that they offer and society's preferences for them; bitcoin is a tiny suggestion of what is possible. We are about to customize capitalism.
  - bendoernberg 13y ago
    Fantastic point, and it's a real shame that there don't appear to be any anthropologists, sociologists, game theorists, psychologists or political scientists advising in the models of any of these coins. The algorithms that underly these currencies are going to have massive impacts on the shape of our society going forward, without proportionate deliberation about their design.
    - kordless 13y ago
      You need a wide range of disciplines to understand how it works and grok how it also changes the financial markets. i.e. it's complicated.
  - gnaritas 13y ago
    Absolutely this. Gold bugs and Austrians like bitcoin. Keynesians call it deflationary they'll like peercoin better. The math community may prefer primecoin. Namecoin could be the base of the new DNS system as well as many others attracting the tech community. Each will attract people who prefer their rules. Customize capitalism, I like that; totally stealing that.
- kordless 13y ago
  Comparing a cryptocurrency to the network stack doesn't make any sense. You are cherry picking out of one layer of the network stack to make a weak ad hominem argument to support a bandwagon effect bias. Regardless, your argument is flawed by the fact TCP and UDP traffic are about equal on the Internet. That's two protocols at your chosen network layer, each doing what they are good at. Note: SHA-256 and scrypt are the building blocks of most cryptocurrencies. SHA-256 is to UDP as scrypt is to TCP? Dunno.
- axefrog 13y ago
  There will always be a market for altcoins alongside Bitcoin because (a) they can remain completely anonymous and (b) pure cryptocurrency exchanges that do not engage in trades for fiat currency provide an indirect avenue for trading in and out of official fiat currencies, via Bitcoin. With KYC and AML attaching themselves heavily to most Bitcoin exchange services, people will trade into or out of Bitcoin non-anonymously, and they'll trade their Bitcoins anonymously for another cryptocurrency. Those cryptocurrencies will then by used for illegal purposes and it'll be very difficult to prevent that value from being laundered back into legitimate currency because the exchange between different cryptocurrencies can't be effectively policed, especially once distributed exchanges get off the ground. In my mind, because of this, the whole field of KYC/AML restrictions being forced onto Bitcoin will ultimately fail or at least be extremely easy to circumvent, as long as altcoins exist.
  - foobarqux 13y ago
    How do you exchange BTC for LTC without using an AML-compliant organization?
- philwelch 13y ago
  I think Bitcoin's deflationary nature and the naturally limited supply of it are likely show stoppers.
  - sneak 13y ago
    You think that 210000000000000 units of a thing are insufficient?
    - gnaritas 13y ago
      That's not what he said. Fixed supply means deflation, regardless of how many units exist as long as population and economies grow. Economists generally consider deflation a very bad thing that kills economic growth and creates artificial recessions.
      - sneak 13y ago
        > Economists generally consider deflation a very bad thing that kills economic growth and creates artificial recessions ...except that bitcoin doesn't exist in a vacuum. It's not the exclusive currency of anyone, and never will be. Bitcoin doesn't affect economies.
        gnaritas 13y ago
        > ...except that bitcoin doesn't exist in a vacuum. No currency exists in a vacuum, this is a meaningless point. > It's not the exclusive currency of anyone, and never will be. You don't and can't know that. > Bitcoin doesn't affect economies. It will if it gets mass adoption, so again an irrelevant point since we're talking about its future, not its present.
- lectrick 13y ago
  Since all of these are fluid and electronic, it wouldn't take very much for someone like bitpay to write a coin-agnostic API that interfaces with multiple cryptocurrencies.
EdJiang 13y ago
Most altcoins use scrypt instead of SHA256, so that it's harder to make FPGAs/ASICs, thus relatively easier for people with GPU/CPUs. This is because if only people with specialized hardware could mine, the network could be more vulnerable to 51% attack from a well-funded team, versus when every person with a graphics card can mine. See https://litecoin.info/Comparison_between_Litecoin_and_Bitcoin#SHA256_mining_vs_scrypt_mining https://litecoin.info/Comparison_between_Litecoin_and_Bitcoi...
kordless 13y ago
There are basically two hashing algorithms for cryptocurrencies: SHA-256 and scrypt. SHA-256 is the one used for Bitcoin and its derivatives. Litecoin uses the scrypt algorithm, as does its derivatives, like Worldcoin. There are a handful of other proof of work algorithms as well used by a few other currencies. Side note, check out namecoin: http://en.wikipedia.org/wiki/Namecoin http://en.wikipedia.org/wiki/Namecoin. It's based on SHA-256. scrypt uses the SHA-256 algorithm for hashing the blocks, but the caveat is that it also uses a high number of read/writes to RAM. In fact, there is very nearly parity to the number of compute cycles to read/writes cycles. Here's the paper on it: http://www.tarsnap.com/scrypt/scrypt.pdf http://www.tarsnap.com/scrypt/scrypt.pdf. In order to build an ASIC miner for Litecoin, one would have to build a circuit that had a massive number of CPUs encrusted with a fairly massive amount of fast RAM. As this more or less describes a video card, whoever designs an ASIC for Litecoin will have a nice challenge in front of them. Edit: Working URLs
- gnaritas 13y ago
  Not all coins are so dependent on mining, proof of work is an option, it's not the only only option. Proof of stake exists as well.
- ksrm 13y ago
  http://www.coindesk.com/asic-miners-litecoin-soon/ http://www.coindesk.com/asic-miners-litecoin-soon/

argumentum 13y ago

That's the brilliance of Coinbase .. it's not tied to BTC, in fact the creator of Litecoin is part of their team now. They are building an infrastructure layer for cryptocurrency, period, and they seem far ahead of any competitors atm.

infruset 13y ago
Could you expand? It seems they only handle bitcoin on their main page
- infruset 13y ago
  why the downvote?
simbolit 13y ago
do you really think that in the hypothetical situation of a major bitcoin crash litecoin will still stand? i think this highly unlikely. imho all the altcoins derive their value from the faith of people in bitcoin and by association in crypto currencies. the big one fails, all of them fail.
- gnaritas 13y ago
  No. The point of some of the alt currencies is to address perceived weaknesses in bitcoin, like deflation, or wasted energy in mining for example. Bitcoin created a market but that market will outlive bitcoin if it fails. Now litecoin is basically a clone so it'll fall with bitcoin, there's nothing interesting about it, but others like peercoin or primecoin are substantially different in ways that may matter greatly.
- SkyMarshal 13y ago
  The VC's are looking to invest in people selling shovels, not panning for gold/speculating on price. They've built cryptocurrencies' naturally high volatility into their expectations, and are looking for ROI on service fees.