Chasing Google: Bitcoin to Namecoin difficulty ratio
Google Summer of Code (GSoC) 2018 Project Ideas - Namecoin
Merged mining specification - Bitcoin Wiki
What to expect in the next 5-10 years. From the perspective of a long-time crypto holder.
I've been involved in crypto since reading about Bitcoin in 2010. I've seen coins come and go and everything in between. How many of you know what Solidcoin is? Yeah, I've seen a thing or two. Whether or not a coin does well in the long-term is tied to many factors. Among those factors, one of them is the emission rate of new coins. Emission rate, of itself, doesn't mean much because it is constant. However, it is a positive sign when you see a high level of demand which can be translated as the total network hashrate being rather large. At this time I see the number one Cryptonight bases coin is Monero. The Monero network hashrate is around 1000mh/s. This is very high and it is a testament to the fact that Monero is perceived to be a coin of value worth the effort to mine. Electroneum, at this time, has the next highest network hashrate of all Cryptonight coins. Currently it is bouncing between 250-300mh/s. This level of mining support tells me there is significant value in mining ETN. So, back to the emission rate. The emission rate of new coins is often pretty high. This is especially true for ETN. Like other coins, Sumocoin excluded, the emission rate is constantly decreasing. This feature isn't remarkable in itself, but in the case of ETN it will be more interesting than it is with other coins. I did the math for the ETN long-term emission rate and I figured that ETN block rewards will become effectively very small in comparison to the current reward in 10 years. In 5 years, the block reward will be about 10% of what it was at release. About 750 ETN. In another 5 years following that, it will be about 75 ETN. Understand, these rewards will be true regardless of the technology advances that occur. Even if the network hashrate grows to 1000Gh/s, the emission rate will not change and the rewards will still decrease to these numbers. In short, ETN will become much harder and expensive to mine. This will have a direct impact on the value of ETN in the future. So how much of an impact am I talking about? I'm going to throw some numbers out there. These are Very Conservative numbers, but I feel they are realistic for anyone interested in the long-term outlook. Assuming that ETN does nothing new from where they are today, it will be a safe conservative bet that ETN will be worth $0.25-0.35 in five years. If ETN can survive for five years, the five years following that will be the largest in growth. In ten years ETN will be worth $2.50-3.50. Lambos? No, not really. But for all practical purposes, a very good outlook for long-term investors. For many, these numbers are unacceptable. And I get where those people are coming from. They see coins skyrocket 10,000% in one year and they want some of that magic. The purpose and use case behind ETN could very well drive the price much higher than my predictions. But understand that my numbers are based on nothing new or remarkable happening for ETN. And with that, I should also provide a sober and alternative possibility for the future of ETN as well. This is what I call the Solidcoin Fate. Remember Solidcoin? Yeah, a lot of people don't. Solidcoin was a new coin that was introduced around the time that Namecoin was developed, although it wasn't related to NMC in any way. Solidcoin became the first new Crypto to have a significant percentage of miners drop BTC mining for mining Solidcoin. Things were looking great until the developer suddenly dropped support and abandoned everything. It wasn't a scam coin. The developer simply never intended it to take off like it did and became overwhelmed and disillusioned with technical difficulties at the same time. Thus, Solidcoin evaporated as quickly as it became a success. The lesson here is, a centralized coin can suddenly go belly-up if the developer suddenly abandons it. While I don't expect to see that with ETN, it is a possibility that could occur. Hopefully, as was the case for how Monero was born, a large group of supporters will take over and continue development as a decentralized coin. The number of supporters for ETN certainly supports a scenario like this if the worse were to happen. No matter what happens, it will be an interesting ride to take. As a holder and user of ETN (Yes, I use it. Bought several Steam games with it. It's not a currency if you don't ever spend it.) I naturally want to see the best outlook become reality. I am also a realist, and I don't subscribe to dreams of riches and "lambos". Even if magical things happen in the world of Cryptos, it isn't responsible to make investments and decisions based on fantasy. The reality for ETN, in my opinion, is that it will be a great coin to hold if you can hold for 10 years. I can hold for 10 years and I will. My investment isn't so great that I need to worry about it or that I'm always thinking about it. If yours is, you aren't investing responsibly. Best of luck to everyone.
Abstract So far, the topic of merged mining has mainly been considered in a security context, covering issues such as mining power centralization or crosschain attack scenarios. In this work we show that key information for determining blockchain metrics such as the fork rate can be recovered through data extracted from merge mined cryptocurrencies. Specifically, we reconstruct a long-ranging view of forks and stale blocks in Bitcoin from its merge mined child chains, and compare our results to previous findings that were derived from live measurements. Thereby, we show that live monitoring alone is not sufficient to capture a large majority of these events, as we are able to identify a non-negligible portion of stale blocks that were previously unaccounted for. Their authenticity is ensured by cryptographic evidence regarding both, their position in the respective blockchain, as well as the Proof-of-Work difficulty. Furthermore, by applying this new technique to Litecoin and its child cryptocur rencies, we are able to provide the first extensive view and lower bound on the stale block and fork rate in the Litecoin network. Finally, we outline that a recovery of other important metrics and blockchain characteristics through merged mining may also be possible. References
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A. Gervais, G. O. Karame, K. Wust, V. Glykantzis, H. Ritzdo rf, and S. Capkun, “On the ¨ security and performance of proof of work blockchains,” in Proceedings of the 2016 ACM SIGSAC. ACM, 2016, pp. 3–16.
A. E. Gencer, S. Basu, I. Eyal, R. van Renesse, and E. G. Sirer, “Decentralization in bitcoin and ethereum networks,” in Proceedings of the 22nd International Conference on Financial Cryptography and Data Security (FC). Springer, 2018. [Online]. Available: http://fc18.ifca.ai/preproceedings/75.pdf
I. Eyal and E. G. Sirer, “Majority is not enough: Bitcoin mining is vulnerable,” in Financial Cryptography and Data Security. Springer, 2014, pp. 436–454. [Online]. Available: http://arxiv.org/pdf/1311.0243
K. Nayak, S. Kumar, A. Miller, and E. Shi, “Stubborn mining: Generalizing selfish mining and combining with an eclipse attack,” in 1st IEEE European Symposium on Security and Privacy, 2016. IEEE, 2016. [Online]. Available: http://eprint.iacr.org/2015/796.pdf
J. Bonneau, “Why buy when you can rent? bribery attacks on bitcoin consensus,” in BITCOIN ’16: Proceedings of the 3rd Workshop on Bitcoin and Blockchain Research, February 2016. [Online]. Available: http://fc16.ifca.ai/bitcoin/papers/Bon16b.pdf
K. Liao and J. Katz, “Incentivizing blockchain forks via whale transactions,” in International Conference on Financial Cryptography and Data Security. Springer, 2017, pp. 264–279. [Online]. Available: http://www.cs.umd.edu/∼jkatz/papers/whale-txs.pdf
A. Zamyatin, N. Stifter, A. Judmayer, P. Schindler, E. Weippl, and W. J. Knottebelt, “(Short Paper) A Wild Velvet Fork Appears! Inclusive Blockchain Protocol Changes in Practice,” in 5th Workshop on Bitcoin and Blockchain Research, Financial Cryptography and Data Security 18 (FC). Springer, 2018. [Online]. Available: https://eprint.iacr.org/2018/087.pdf
Y. Sompolinsky, Y. Lewenberg, and A. Zohar, “Spectre: A fast and scalable cryptocurrency protocol,” Cryptology ePrint Archive, Report 2016/1159, 2016, accessed: 2017-02-20. [Online]. Available: http://eprint.iacr.org/2016/1159.pdf
Y. Sompolinsky and A. Zohar, “Phantom: A scalable blockdag protocol,” Cryptology ePrint Archive, Report 2018/104, 2018, accessed:2018-01-31. [Online]. Available: https://eprint.iacr.org/2018/104.pdf
A. Judmayer, A. Zamyatin, N. Stifter, A. G. Voyiatzis, and E. Weippl, “Merged mining: Curse or cure?” in CBT’17: Proceedings of the International Workshop on Cryptocurrencies and Blockchain Technology, Sep 2017. [Online]. Available: https://eprint.iacr.org/2017/791.pdf
A. Judmayer, N. Stifter, K. Krombholz, and E. Weippl, “Blocks and chains: Introduction to bitcoin, cryptocurrencies, and their consensus mechanisms,” Synthesis Lectures on Information Security, Privacy, and Trust, 2017.
A. Kiayias, A. Miller, and D. Zindros, “Non-interactive proofs of proof-of-work,” Cryptology ePrint Archive, Report 2017/963, 2017, accessed:2017-10-03. [Online]. Available: https://eprint.iacr.org/2017/963.pdf
N. T. Courtois and L. Bahack, “On subversive miner strategies and block withholding attack in bitcoin digital currency,” arXiv preprint arXiv:1402.1718, 2014, accessed: 2016-07-04. [Online]. Available: https://arxiv.org/pdf/1402.1718.pdf
A. P. Ozisik, G. Bissias, and B. Levine, “Estimation of miner hash rates and consensus on blockchains,” arXiv preprint arXiv:1707.00082, 2017, accessed:2017-09-25. [Online]. Available: https://arxiv.org/pdf/1707.00082.pdf
J. A. D. Donet, C. Perez-Sola, and J. Herrera-Joancomart ´ ´ı, “The bitcoin p2p network,” in Financial Cryptography and Data Security. Springer, 2014, pp. 87–102. [Online]. Available: http://fc14.ifca.ai/bitcoin/papers/bitcoin14 submission 3.pdf
R. Matzutt, J. Hiller, M. Henze, J. H. Ziegeldorf, D. Mullmann, O. Hohlfeld, and K. Wehrle, ¨ “A quantitative analysis of the impact of arbitrary blockchain content on bitcoin,” in Proceedings of the 22nd International Conference on Financial Cryptography and Data Security (FC). Springer, 2018. [Online]. Available: http://fc18.ifca.ai/preproceedings/6.pdf
M. Grundmann, T. Neudecker, and H. Hartenstein, “Exploiting transaction accumulation and double spends for topology inference in bitcoin,” in 5th Workshop on Bitcoin and Blockchain Research, Financial Cryptography and Data Security 18 (FC). Springer, 2018. [Online]. Available: http://fc18.ifca.ai/bitcoin/papers/bitcoin18-final10.pdf
A. Judmayer, N. Stifter, P. Schindler, and E. Weippl, “Pitchforks in cryptocurrencies: Enforcing rule changes through offensive forking- and consensus techniques (short paper),” in CBT’18: Proceedings of the International Workshop on Cryptocurrencies and Blockchain Technology, Sep 2018. [Online]. Available: https://www.sba-research.org/wpcontent/uploads/2018/09/judmayer2018pitchfork 2018-09-05.pdf
Abstract The term near or weak blocks describes Bitcoin blocks whose PoW does not meet the required target difficulty to be considered valid under the regular consensus rules of the protocol. Near blocks are generally associated with protocol improvement proposals striving towards shorter transaction confirmation times. Existing proposals assume miners will act rationally based solely on intrinsic incentives arising from the adoption of these changes, such as earlier detection of blockchain forks. In this paper we present Flux, a protocol extension for proof-of-work blockchains that leverages on near blocks, a new block reward distribution mechanism, and an improved branch selection policy to incentivize honest participation of miners. Our protocol reduces mining variance, improves the responsiveness of the underlying blockchain in terms of transaction processing, and can be deployed without conflicting modifications to the underlying base protocol as a velvet fork. 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The Strange Birth & History of Monero, Part III: Decentralized team
You can read here part I (by americanpegaus). This is the post that motivated me to make the part II. Now i'm doing a third part, and there'll be a final 4th part. This is probably too much but i wasn't able to make it shorter. Some will be interested in going through all them, and maybe someone is even willing to make a summary of the whole serie :D. Monero - an anonymous coin based on CryptoNote technology https://bitcointalk.org/index.php?topic=582080.0 Comentarios de interés: -4: "No change, this is just a renaming. In the future, the binaries will have to be changed, as well as some URL, but that's all. By the way, this very account (monero) is shared by several user and is meant to make it easier to change the OP in case of vacancy of the OP. This idea of a shared OP comes from Karmacoin. Some more things to come:
A website (URL will be monero.cc)
A GUI wallet
" (https://bitcointalk.org/index.php?topic=582080.msg6362672#msg6362672) -5: “Before this thread is too big, I would like to state that a bug has been identified in the emission curve and we are currently in the process of fixing it (me, TFT, and smooth). Currently coins are emitted at double the rate that was intended. We will correct this in the future, likely by bitshifting values of outputs before a certain height, and then correcting 1 min blocks to 2 min blocks. The changes proposed will be published to a Monero Improvement Protocol on github.” (https://bitcointalk.org/index.php?topic=582080.msg6363016#msg6363016) [tacotime make public the bug in the emission curve: token creation is currently 2 times what was intended to be, see this chart BTC vs the actual XMR curve, as it was and it is now, vs the curve that was initially planned in yellow see chart] -14: “Moving discussion to more relevant thread, previous found here: https://bitcointalk.org/index.php?topic=578192.msg6364026#msg6364026 I have to say that I am surprised that such an idea [halving current balances and then changing block target to 2 min with same block reward to solve the emission curve issue] is even being countenanced - there are several obvious arguments against it. Perception - what kind of uproar would happen if this was tried on a more established coin? How can users be expected to trust a coin where it is perceived that the devs are able and willing to "dip" into people's wallets to solve problems? Technically - people are trying to suggest that this will make no difference since it applies to reward and supply, which might be fair enough if the cap was halved also, but it isn't. People's holdings in the coin are being halved, however it is dressed up. Market price - How can introducing uncertainty in the contents of people's wallets possibly help market price? I may well be making a fool of myself here, but I have never heard of such a fix before, unless you had savings in a Cypriot bank - has this ever been done for another coin?” (https://bitcointalk.org/index.php?topic=582080.msg6364174#msg6364174) -15: “You make good points but unfortunately conflicting statements were made and it isn't possible to stick to them all. It was said that this coin had a mining reward schedule similar to bitcoin. In fact it is twice as fast as intended, even even a bit more than twice as fast as bitcoin. If you acquired your coins on the basis of the advertised reward schedule, you would be disappointed, and rightfully so, as more coins come to into existence more quickly than you were led to believe. To simply ignore that aspect of the bug is highly problematic. Every solution may be highly problematic, but the one being proposed was agreed as being the least bad by most of the major stakeholders. Maybe it will still not work, this coin will collapse, and there will need to be a relaunch, in which case all your coins will likely be worthless. I hope that doesn't happen.” (https://bitcointalk.org/index.php?topic=582080.msg6364242#msg6364242) [smooth tries to justify his proposal to solve the emission curve issue: halve every current balance and change block target to 2 min with same block reward] -16: “This coin wasn't working as advertised. It was supposed to be mined slowly like BTC but under the current emission schedule, 39% would be mined by the first year and 86% by the fourth year. Those targets have been moved out by a factor of 2, i.e. 86% mined by year 8, which is more like BTC's 75% by year 8. So the cap has been moved out much further into the future, constraining present and near-term supply, which is what determines the price.” (https://bitcointalk.org/index.php?topic=582080.msg6364257#msg6364257) [eizh supports smooth’s plan] -20: “So long as the process is fair and transparent it makes no difference what the number is... n or n/2 is the same relative value so long as the /2 is applied to everyone. Correcting this now will avoid people accusing the coin of a favourable premine for people who mined in the first week.” (https://bitcointalk.org/index.php?topic=582080.msg6364338#msg6364338) [random user supporting smooth’s idea] -21: “Why not a reduction in block reward of slightly more than half to bring it into line with the proposed graph? That would avoid all sorts of perceptual problems, would not upset present coin holders and be barely noticeable to future miners since less than one percent of coins have been mined so far, the alteration would be very small?” (https://bitcointalk.org/index.php?topic=582080.msg6364348#msg6364348) -22: “Because that still turns into a pre-mine or instamine where a few people got twice as many coins as everyone else in the first week. This was always a bug, and should be treated as such.” (https://bitcointalk.org/index.php?topic=582080.msg6364370#msg6364370) [smooth wants to be sure they can’t be stigmatized as “premine”] -23: “No, not true [answering to "it makes no difference what the number is... n or n/2 is the same relative value so long as the /2 is applied to everyone"]. Your share of the 18,000,000 coins is being halved - rightly or wrongly.” (https://bitcointalk.org/index.php?topic=582080.msg6364382#msg6364382) [good point made by a user that is battling “hard” with smooth and his proposal] -28: “+1 for halving all coins in circulation. Would they completely disappear? What would the process be?” -31: “I will wait for the next coin based on CryptoNote. Many people, including myself, avoided BMR because TFT released without accepting input from anyone (afaik). I pm'ed TFT 8 days before launch to help and didn't get response until after launch. Based on posting within the thread, I bet there were other people. Now the broken code gets "fixed" by taking away coins.” (https://bitcointalk.org/index.php?topic=582080.msg6364531#msg6364531) -32: “What you say is true, and I can't blame anyone from simply dropping this coin and wanting a complete fresh start instead. On the other hand, this coin is still gaining in popularity and is already getting close to bytecoin in hash rate, while avoiding its ninja premine. There is a lot done right here, and definitely a few mistakes.” (https://bitcointalk.org/index.php?topic=582080.msg6364574#msg6364574) [smooth stands for the project legitimacy despite the bugs] -37: “Since everything is scaled and retroactive, the only person to be affected is... me. Tongue Because I bought BMR with BTC, priced it with incorrect information, and my share relative to the eventual maximum has been halved. Oh well. The rest merely mined coins that never should have been mined. The "taking away coins" isn't a symptom of the fix: it's the fundamental thing that needed fixing. The result is more egalitarian and follows the original intention. Software is always a work-in-progress. Waiting for something ideal at launch is pretty hopeless. edit: Let me point out that most top cryptocurrencies today were released before KGW and other new difficulty retargeting algorithms became widespread. Consequently they had massive instamines on the first day, even favorites in good standing like LTC. Here the early miners are voluntarily reducing their eventual stake for the sake of fairness. How cool is that?” (https://bitcointalk.org/index.php?topic=582080.msg6364886#msg6364886) [this is eizh supporting the project too] -43: “I'm baffled that people are arguing about us making the emission schedule more fair. I'm an early adopter. This halves my money, and it's what I want to do. There's another change that needs to be talked about too: we don't believe that microscopic levels of inflation achieved at 9 or 10 years will secure a proof-of-work network. In fact, there's a vast amount of evidence from DogeCoin and InfiniteCoin that it will not. So, we'd like to fix reward when it goes between 0.25 - 1.00 coins. To do so, we need to further bitshift values to decrease the supply under 264-1 atomic units to accommodate this. Again, this hurts early adopters (like me), but is designed to ensure the correct operation of the chain in the long run. It's less than a week old, and if we're going to hardfork in economic changes that make sense we should do it now. We're real devs turning monero into the coin it should have been, and our active commitment should be nothing but good news. Fuck the pump and dumps, we're here to create something with value that people can use.” (https://bitcointalk.org/index.php?topic=582080.msg6366134#msg6366134) [tacotime brings to the public for first time the tail emission proposal and writes what is my favourite sentence of the whole monero history: “Fuck the pump and dumps, we're here to create something with value that people can use”] -51: “I think this is the right attitude. Like you I stand to "lose" from this decision in having my early mining halved, but I welcome it. Given how scammy the average coin launch is, I think maximizing fairness for everyone is the right move. Combining a fair distribution with the innovation of Cryptonote tech could be what differentiates Monero from other coins.” (https://bitcointalk.org/index.php?topic=582080.msg6366346#msg6366346) -59: “Hello! It is very good that you've created this thread. I'm ok about renaming. But I can't agree with any protocol changes based only on decisions made by bitcointalk.org people. This is because not all miners are continiously reading forum. Any decision about protocol changes are to be made by hashpower-based voting. From my side I will agree on such a decision only if more than 50% of miners will agree. Without even such a simple majority from miners such changes are meaningless. In case of hardfork that isn't supported by majority of miners the network will split into two nets with low-power fork and high-power not-forking branches. I don't think that this will be good for anybody. Such a voting is easy to be implemented by setting minor_version of blocks to a specific value and counting decisions made after 1000 of blocks. Do you agree with such a procedure?” (https://bitcointalk.org/index.php?topic=582080.msg6368478#msg6368478) [TFT appears after a couple days of inactivity] -63: “In few days I will publish a code with merged mining support. This code will be turned ON only by voting process from miners. What does it mean:
miners supporting merged mining are to update their nodes and miners. New miners will issue blocks with modified minor_version field indicating they are ready to accept AuxPoW blocks. But no AuxPoW blocks will be issued before 75% of last 1000 blocks will have a positive vote (a changed minor_version).
miners not supporting will not update but will still be able to mine and accept blocks. In case of successful voting they will have to switch to new code. In case of voting failed they can stay on old version.
The same procedure is suitable for all other protocol changes.” (https://bitcointalk.org/index.php?topic=582080.msg6368720#msg6368720) [And now he is back, TFT is all about merged mining] -67: “We don't agree that a reverse split amounts to "taking" coins. I also wouldn't agree that a regular forward split would be "giving" coins. It's an exchange of old coins with new coins, with very nearly the exact same value. There is a very slight difference in value due to the way the reward schedule is capped, but that won't be relevant for years or decades. Such a change is entirely reasonable to fix an error in a in coin that has only existed for a week.” (https://bitcointalk.org/index.php?topic=582080.msg6368861#msg6368861) -68: “There were no error made in this coin but now there is an initiative to make some changes. Changes are always bad and changes destroy participant confidence even in case these changes are looking as useful. We have to be very careful before making any changes in coins” (https://bitcointalk.org/index.php?topic=582080.msg6368939#msg6368939) [TFT does not accept the unexpected emission curve as a bug] -72: “You are wrong TFT. The original announcement described the coin as having a reward curve "close to Bitcoin's original curve" (those are your exact words). The code as implemented has a reward curve that is nothing like bitcoin. It will be 86% mined in 4 years. It will be 98% mined in 8 years. Bitcoin is 50% mined in 4 years, and 75% in 8 years. With respect TFT, you did the original fork, and you deserve credit for that. But this coin has now gone beyond your initial vision. It isn't just a question of whether miners are on bitcointalk or not. There is a great team of people who are working hard to make this coin a success, and this team is collaborating regularly through forum posts, IRC, PM and email. And beyond that a community of users who by and large have been very supportive of the efforts we've taken to move this forward. Also, miners aren't the only stakeholders, and while a miner voting process is great, it isn't the answer to every question. Though I do agree that miners need to be on board with any hard fork to avoid a harmful split.” (https://bitcointalk.org/index.php?topic=582080.msg6369137#msg6369137) [smooth breaks out publicily for first time against TFT] -75: “I suppose that merged mining as a possible option is a good idea as soon as nobody is forced to use it. MM is a possibility to accept PoW calculated for some other network. It helps to increase a security of both networks and makes it possible for miners not to choose between two networks if they want both:
BCN only miners will continue to mine BCN
BMMRO only miners will continue to mine BMMRO
merge miners will mine both at the same time (now some of them mine BCN only and other - BMR only)
Important things to know about MM:
MM doesn't imply that BMR is smaller or has a less hashpower. In case BMR will has more mining power than BCN it will simply accept less BCN blocks.
MM doesn't force BMR users to have BCN chain on their HDD - BCN chain isn't neede to verify blocks
MM doesn't require any specific parent chain. Miner decides himself which parent chain to use: BCN or any other chain supporting the same PoW method.
Actually the only change that goes with MM is that we are able to accept PoW from some other net with same hash-function. Each miner can decide his own other net he will merge mine BMR with. And this is still very secure. This way I don't see any disadvantage in merged mining. What disadvantages do you see in MM?” (https://bitcointalk.org/index.php?topic=582080.msg6369255#msg6369255) [TFT stands for merged mining] -77: “Merged mining essentially forces people to merge both coins because that is the only economically rational decision. I do not want to support the ninja-premined coin with our hash rate. Merged mining makes perfect sense for a coin with a very low hash rate, otherwise unable to secure itself effectively. That is the case with coins that merge mine with bitcoin. This coin already has 60% of the hash rate of bytecoin, and has no need to attach itself to another coin and encourage sharing of hash rate between the two. It stands well on its own and will likely eclipse bytecoin very soon. I want people to make a clear choice between the fair launched coin and the ninja-premine that was already 80% mined before it was made public. Given such a choice I believe most will just choose this coin. Letting them choose both allows bytecoin to free ride on what we are doing here. Let the ninja-preminers go their own way.” (https://bitcointalk.org/index.php?topic=582080.msg6369386#msg6369386) [smooth again] -85: “One of you is saying that there was no mistake in the emission formula, while the other is. I'm not asking which I should believe . . I'm asking for a way to verify this” (https://bitcointalk.org/index.php?topic=582080.msg6369874#msg6369874) [those that have not been paying attention to the soap opera since the beginning do not understand anything at all] -86: “The quote I posted "close to Bitcoin's original curve" is from the original announcement here: https://bitcointalk.org/index.php?topic=563821.0 I think there was also some discussion on the thread about it being desirable to do that. At one point in that discussion, I suggested increasing the denominator by a factor of 4, which is what ended up being done, but I also suggested retaining the block target at 2 minutes, which was not done. The effect of making one change without the other is to double the emission rate from something close to bitcoin to something much faster (see chart a few pages back on this thread).” (https://bitcointalk.org/index.php?topic=582080.msg6369935#msg6369935) [smooth answers just a few minutes later] -92: “I'm happy the Bitmonero attracts so much interest. I'm not happy that some people want to destroy it. Here is a simple a clear statement about plans: https://bitcointalk.org/index.php?topic=582670 We have two kind of stakeholders we have respect: miders and coin owners. Before any protocol changes we will ask miners for agreement. No changes without explicit agreement of miners is possible. We will never take away or discount any coins that are already emitted. This is the way we respect coin owners. All other issues can be discussed, proposed and voted for. I understand that there are other opinions. All decisions that aren't supported in this coin can be introduced in any new coin. It's ok to start a new fork. It's not ok to try to destroy an existsing network.” (https://bitcointalk.org/index.php?topic=582080.msg6370324#msg6370324) [TFT is kinda upset – he can see how the community is “somehow” taking over] -94: “Sounds like there's probably going to be another fork then. Sigh. I guess it will take a few tries to get this coin right. The problem with not adjusting existing coins is that it make this a premine/instamine. If the emission schedule is changed but not as a bug fix, then earlier miners got an unfair advantage over everyone else. Certainly there are coins with premines and instamines, but there's a huge stigma and such a coin will never achieve the level of success we see for this coin. This was carefully discussed during the team meeting, which was announced a day ahead of time, and everyone with any visible involvement with the coin, you included, was invited. It is unfortunate you couldn't make it to that meeting TFT.” (https://bitcointalk.org/index.php?topic=582080.msg6370411#msg6370411) [smooth is desperate due to TFT lack of interest in collaboration, and he publicly speaks about an scission for first time] -115: “Very rough website online, monero.cc (in case you asked, the domain name was voted on IRC, like the crypto name and its code). Webdesigner, webmaster, writers... wanted.” (https://bitcointalk.org/index.php?topic=582080.msg6374702#msg6374702) [Even though the lack of consensus and the obvious chaos, the community keeps going on: Monero already has his own site] -152: “Here's one idea on fixing the emissions without adjusting coin balances. We temporarily reduce the emission rate to half of the new target for as long as it takes for the total emission from 0 to match the new curve. Thus there will be a temporary period when mining is very slow, and during that period there was a premine. But once that period is compete, from the perspective of new adopters, there was no premine -- the total amount of coins emitted is exactly what the slow curve says it should be (and the average rate since genesis is almost the same as the rate at which they are mining, for the first year or so at least). This means the mining rewards will be very low for a while (if done now then roughly two weeks), and may not attract many new miners. However, I think there enough of us early adopters (and even some new adopters who are willing to make a temporary sacrifice) who want to see this coin succeed to carry it through this period. The sooner this is done the shorter the catch up period needs to be.” (https://bitcointalk.org/index.php?topic=582080.msg6378032#msg6378032) [smooth makes a proposal to solve the “emission curve bug” without changing users balances and without favoring the early miners] -182: “We have added a poll in the freenode IRC room "Poll #2: "Emission future of Monero, please vote!!" started by stickh3ad. Options: #1: "Keep emission like now"; #2: "Keep emission but change blocktime and final reward"; #3: "Keep emission but change blocktime"; #4: "Keep emission but change final reward"; #5: "Change emission"; #6: "Change emission and block time"; #7: "Change emission and block time and final reward" Right now everyone is voting for #4, including me.” (https://bitcointalk.org/index.php?topic=582080.msg6379518#msg6379518) [tacotime announces an ongoing votation on IRC] -184: “ change emission: need to bitshift old values on the network or double values after a certain block. controversial. not sure if necessary. can be difficult to implement. keep emission: straightforward, we don't keep change emission or block time. change final reward is simple. if (blockSubsidy < finalSubsidy) return finalSubsidy; else return blockSubsidy;” (https://bitcointalk.org/index.php?topic=582080.msg6379562#msg6379562) -188: “Yeah, well. We need to change the front page to reflect this if we can all agree on it. We should post the emissions curve and the height and value that subsidy will be locked in to. In my opinion this is the least disruptive thing we can do at the moment, and should ensure that the fork continues to be mineable and secure in about 8 years time without relying on fees to secure it (which I think you agree is a bad idea).” (https://bitcointalk.org/index.php?topic=582080.msg6379871#msg6379871) [tacotime] -190: “I don't think the proposed reward curve is bad by any means. I do think it is bad to change the overall intent of a coin's structure and being close to bitcoins reward curve was a bit part of the intent of this coin. It was launched in response to the observation that bytecoin was 80% mined in less than two years (too fast) and also that it was ninja premined, with a stated goal that the new coin have a reward curve close to bitcoin. At this point I'm pretty much willing to throw in the towel on this launch:
No web site
Botched reward curve (at least botched relative to stated intent)
No pool (and people who are enthusiastically trying to mine having trouble getting any blocks; some of them have probably given up and moved on).
No effective team behind it at launch
No Mac binaries (I don't think this is all that big a deal, but its another nail)
I thought this could be fixed but with all the confusion and lack of clear direction or any consistent vision, now I'm not so sure. I also believe that merged mining is basically a disaster for this coin, and is probably being quietly promoted by the ninjas holding 80% of bytecoin, because they know it keeps their coin from being left behind, and by virtue of first mover advantage, probably relegates any successors to effective irrelevance (like namecoin, etc.). We can do better. It's probably time to just do better.” (https://bitcointalk.org/index.php?topic=582080.msg6380065#msg6380065) [smooth is disappointed] -191: “The website does exist now, it's just not particularly informative yet. :) But, I agree that thankful_for_today has severely mislead everyone by stating the emission was "close to Bitcoin's" (if he's denying that /2 rather than /4 emission schedule was unintentional, as he seems to be). I'm also against BCN merge mining. It works against the goal of overtaking BCN and if that's not a goal, I don't know what we're even doing here. I'll dedicate my meagre mining to voting against that. That said, you yourself have previously outlined why relaunches and further clones fail. I'd rather stick with this one and fix it.” (https://bitcointalk.org/index.php?topic=582080.msg6380235#msg6380235) [eizh tries to keep smooth on board] -196: “BCN is still growing as well. It is up to 1.2 million now. If merged mining happens, (almost) everyone will just mine both. The difficulty on this coin will jump up to match BCN (in fact both will likely go higher since the hash rate will be combined) and again it is an instamine situation. (Those here the first week get the benefit of easy non-merged mining, everyone else does not.) Comments were made on this thread about this not being yet another pump-and-dump alt. I think that could have been the case, but sadly, I don't really believe that it is.” (https://bitcointalk.org/index.php?topic=582080.msg6380778#msg6380778) -198: “There's no point in fragmenting talent. If you don't think merge mining is a good idea, I'd prefer we just not add it to the code. Bitcoin had no web site or GUI either initially. Bitcoin-QT was the third Bitcoin client. If people want a pool, they can make one. There's no point in centralizing the network when it's just began, though. Surely you must feel this way.” (https://bitcointalk.org/index.php?topic=582080.msg6381866#msg6381866) [tacotime also wants smooth on board] -201: “My personal opinion is that I will abandon the fork if merge mining is added. And then we can discuss a new fork. Until then I don't think Monero will be taken over by another fork.” (https://bitcointalk.org/index.php?topic=582080.msg6381970#msg6381970) [tacotime opens the season: if merged mining is implemented, he will leave the ship] -203: “Ditto on this. If the intention wasn't to provide a clearweb launched alternative to BCN, then I don't see a reason for this fork to exist. BCN is competition and miners should make a choice.” (https://bitcointalk.org/index.php?topic=582080.msg6382097#msg6382097) [eizh supports tacotime] -204: “+1 Even at the expense of how much I already "invested" in this coin.” (https://bitcointalk.org/index.php?topic=582080.msg6382177#msg6382177) [NoodleDoodle is also against merged mining] This is basically everything worth reading in this thread. This thread was created in the wrong category, and its short life of about 2 days was pretty interesting. Merged mining was rejected and it ended up with the inactivity of TFT for +7 days and the creation of a new github repo the 30th of April. It is only 12 days since launch and a decentralized team is being built. Basically the community had forked (but not the chain) and it was evolving and moving forward to its still unclear future. These are the main takeaways of this thread:
The legitimacy of the "leaders" of the community is proven when they proposed and supported the idea of halving the balances for the greater good to solve the emission curve issue without any possible instamine accusation. Also their long-term goals and values rejecting merged-mining with a "primined scam"
It is decided that, as for now, it is “too late” to change the emission curve, and finally monero will mint 50% of its coin in ~1.3 years (bitcoin did it after 3.66 years) and 86% of its coins in 4 years (bitcoin does it in ~11 years) (was also voted here) (see also this chart)
It is decided that a “minimum subsidy” or “tail emission” to incentivize miners “forever” and avoid scaling fees will be added (it will be finally added to the code march 2015)
Merged mining is plainly rejected by the future “core team” and soon rejected by "everyone". This will trigger TFT inactivity.
The future “core team” is somehow being formed in a decentralized way: tacotime, eizh, NoodleDoodle, smooth and many others
And the most important. All this (and what is coming soon) is a proof of the decentralization of Monero. Probably comparable to Bitcoin first days. This is not a company building a for-profit project (even if on the paper it is not for-profit), this a group of disconnected individuals sharing a goal and working together to reach it. Soon will be following a final part where i'll collect the bitcointalk logs in the current official announcement threads. There you'll be able to follow the decentralized first steps of develoment (open source pool, miner optimizations and exchanges, all surrounded by fud trolls, lots of excitmen and a rapidly growing collaborative community.
Hello cryptocurrency lovers! Welcome to Coin-a-Year, the laziest series yet in the Coin-a-Day publishing empire. This year's coin is Nyancoin (NYAN). I originally covered Nyancoin in an article here in /cryptocurrency published January 4th, 2015. Without (much) further ado, I'm going to include the original report next, unmodified. This is unlike my Coin-a-Week series, where I use strikeout and update in-text. Because this is going to be a longer update, I'll just make all further comments and updates below, just realize that all information below is as of January 4th, 2015 and thus is more than a year out of date as of posting now, at the end of February 2016. Since I use horizontal rules as internal dividers in the original post, I'll use a double horizontal rule to divide the original text from this prelude and the following update. Coin-a-Day Jan 4th Welcome to the fourth installment of Coin-a-Day! To see convenient links to the introduction and the previous entries, please see /coinaday. Today's coin is Nyancoin (NYAN). Summary • ~173.6 million available currently ; 337 million limit  • All-time high: ~0.000024 BTC on February 16, 2014  • Current price: ~3 satoshi  • Current market cap: ~$1,275  • Block rate (average): 1 minute   • Transaction rate: ~25? / last 24 hours; estimated $3-4  • Transaction limit: 70 / second  • Transaction cost: 0 for most transactions  • Rich list: ???  • Exchanges: Cryptsy  • Processing method: Mining  • Distribution method: proof-of-work block rewards and 1% premine for "bounties, giveaways & dev support"   • Community: Comatose  • Code/development: https://github.com/nyancoin-release/nyancoin ; there hasn't been a released code change in 10 months. The new developer has talked about some changes, but has not made a new release. He has given advice about how to keep the network running and operate the client.  • Innovation or special feature: First officially licensed cryptocurrency (from Nyancat) ; "zombie"-coin  Description / Community: So you're probably wondering why in the world we're talking about a coin which has been declared dead and already written off. I actually first selected this coin to illustrate a "deadcoin", but the more I dug into it, the more I was amazed at the shambles I discovered. I am combining the description and community sections for this coin, because the community (or lack thereof) is the central issue for Nyancoin. Substantially all, if not literally all, of the original infrastructure is gone. From the announcement post, the original website has expired. The nyan.cat site itself survives, but has no reference to the coin. The github repo remains, but then there was never much changed from the bitcoin/litecoin original. In fact, the COPYING file doesn't even list "Nyancoin Developers". None of the original nodes seem to be running anymore. @Nyan_Coin hasn't tweeted since July 6th. And that was just to announce posting an admittedly cute picture to facebook which makes a claim for a future which seems never to have developed. Of the original 15 pools, I think all are dead except p2pool, for which at least one node still supports NYAN. The original blockchain explorer, nyancha.in, is still running. The faucet is dead or broken. The original exchanges no longer list it (two of the three having died; SwissCEX having ended its trading as of the first of this year). And so forth. And yet:
[Of course, that scene finishes with knocking out the "recovering" patient so he can be taken away...not to mention the absurdity of including Monty Python in a financial article, but moving right along.] There is still just enough left to Nyancoin to keep it twitching, even if it is on life-support. Whether it's an individual node or whether it's a pool, there are blocks being produced at a steady rate as intended. Transactions are being processed. There is still a market. There is still a block explorer. And there is a dev. It is like a case study in the absolute minimum necessary to keep a coin alive. The most likely outcome is almost certainly a final collapse when one critical piece or another of the infrastructure goes away. And yet in the meantime, a person can own a million NYAN for $8 , and then move this coin quickly and easy, albeit with no particular external demand. It's like the world's most hyped testnet. I think this case presents an interesting example of what happens to an altcoin when its initial support dries up. NYAN coin is more fortunate than some, actually, as there are some where there are no longer any nodes running it nor the original announcement thread (in fact, there was actually a second Nyancoin launched around the same time. But it died hard and its original announcement thread was deleted and at this point I would have no idea how to access it; so "Nyancoin" thus illustrates how hard a coin can die (Nyancoin 2) as well as how it can hang around despite being proclaimed dead, with far more justification behind that pronouncement than there has been for bitcoin (NYAN) ). Footnotes  http://coinmarketcap.com/currencies/nyancoin/  https://bitcointalk.org/index.php?topic=402085.0 Regarding the premine, it's unclear to me where this money is now, since the original poster hasn't been active on BCT since May and the original site is down. However, given that it's only 1%, and about $25 in value right now, there seem to be more significant concerns for NYAN.  http://nyancha.in/chain/Nyancoin - Nyan blockchain explorer; blocks are somewhat inconsistent but somewhere around the 1 minute average  There doesn't seem to be anything automatically doing these stats, so I did visual inspection on about 1500 blocks (about one day) excluding the block generation reward (~250k/day). Most blocks are otherwise empty. I counted about 24 transactions or so scrolling through, with an outlier around 300k NYAN and another around 100k NYAN. In total, about 500k NYAN, excluding the block rewards. This is very approximately $3-4.  Nyancoin is a basically unmodified, slightly out-of-date bitcoin as far as code goes, and ignoring the change in block rate and total coin supply, as well as the difficulty retarget after every block. So for purposes of estimating maximum possible transaction throughput, I start with bitcoin's estimated 7 transactions per second, and multiply by 10 for having a block on average every minute rather than every 10 minutes. In any event, this limit is not likely to be reached in the foreseeable future.  Like bitcoin, transaction fees appear to be optional in Nyancoin. Unlike bitcoin, there is almost no transaction volume, and coins tend to sit for a relatively long time before being moved. So zero-fee transactions appear to be the norm from looking at a couple transactions on the block explorer.  I couldn't find one. See the disclosure section of this article: your humble correspondent is likely represented in some way on a top 100 if one were to be made or if one exists, despite not holding it directly, depending on how the exchange holds it.  I could not find any other exchanges still listing Nyancoin. SwissCex appears to have disabled it as of a couple days ago. Cryptsy has a notice that the NYAN/BTC market will be closing, but its NYAN/LTC market appears strong.  Essentially all of the original sites, pools, faucets, etc. are dead and there has been very little to replace it. There is basically a single node, or perhaps a very few, which are running the blockchain. However, there is a developer still trying to hold things together, maxvall_dev, maxvall on BCT. He is the last hope for the NYAN.  https://bitcointalk.org/index.php?topic=597877.0 This is the thread where maxvall took over as dev, and it also discusses switching to PoS, which hasn't happened as far as I know.  "zombie"-coin: Not to be confused with ZMB (my god, does it ever end?). This is my term to describe a coin which is "undead": by rights it should be dead. And yet it's still walking around and acting like it's alive. What is it? What's going on? It's quite debatable whether this gives it any special value, but I find it an interesting state, and it's why this was chosen for early coverage. There are plenty of actually popular and successful coins, and we will go onto covering more normal selections; we're looking for variety rather than repetition. But I think this is an interesting example for what can go wrong, and yet in the midst of that, how little it takes for a coin to survive. In fact, it's almost like an alternate history bitcoin to me; this shows the concept that "it was run on one computer before; it can be run on one computer again" to some extent. And there are even some strange pragmatic benefits as well, like having no competition for getting a transaction into a block and thus zero transaction fees.  And, in fact, the author chose to do so today, spending about 0.03 BTC for about 1 million NYAN. Additional Reading • /nyancoins - Like NYAN: mostly dead, but not quite • http://nyan-coin.org/ - new official website • BCT thread listing nodes, xpool (p2pool), for mining information. • americanpegasus predicting in February that NYAN will hit $1; always an entertaining read Giveaway Instead of a challenge today, since NYAN has enough challenges, I decided I would give away 10,000 NYAN to at least the first ten people who ask for it. This still remains at my discretion, but honestly, if you really want, say, 50,000 NYAN and create four new accounts to do so, I'll probably be too amused to say no. I don't expect to get ten requests. If I get more, I'll probably still fulfill them, but as with everything else, this is left to my whim. Donations and Disclosure Okay, this is an important one today because of the tiny market here. I actually hold less USD value in NYAN than in BTC, DOGE, and PPC (although my value in PPC might be about equivalent actually), but I hold more of the total market in NYAN than any of those three. And I'll probably be buying more. So I have a conflict of interest in writing this article. I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice. I personally hold just over 1 million NYAN on Cryptsy right now. Perhaps it would be better if I didn't write any articles about anything I were invested inspeculating on, but I started this series for my own education to further my speculation, so unfortunately, dear reader, your needs come second to my own. tanstaafl; you get what you pay for, and I'm giving you my thoughts. If by some strange quirk of fate you actually own NYAN and enjoyed this article and wished to donate some to me, K7Ho9HghBF6xWwS6JsepE6RAEPyAXbsQCV is mine (first non-empty account I've posted; transferred 1000 NYAN into here earlier from Cryptsy to test that the network and my wallet were actually working). Thank you all for reading and commenting! I've already learned a lot from this process and I look forward to more! Upcoming coins: • January 5th: Nxt • January 6th: Darkcoin • January 7th: Namecoin I'll use alphabetic labeling for footnotes in the updates to avoid any confusion with the footnotes in the original. For simplicity, unchanged items, like the 337 million limit and the 1 minute will not be mentioned, and we'll start with the summary changes. Updates: Summary
Community: We're not quite dead yet; in fact, I think we're getting better! [f]
Code/Development: I have an early draft of NYAN2, but I'm about six months past my initial goal for having it available to use. Life/work/lack of build machine/procrastination. NYAN2 will be a rebase onto a modern LTC codebase which will soft fork to fix a current vulnerability to a fork bug. For now, the network still runs on the same code that it did when I wrote the first article.
Discussion I'm going to consider the community first, since I pointed it out as the weakness and central topic in the last one, then talk about the technical situation briefly, and then review the financial results. The community has been excellent, if I do say so myself. We've got working infrastructure going thanks to the contributions of many Nekonauts (see [f]). Some original Nekonauts have returned or at least popped in from time to time, and new ones like myself have found Nyancoin (I would say given what I wrote in the original, I was still a skeptic of it at that point. Not that skeptics can't be Nekonauts, but I think I'd put my conversion to the cult of nyan shortly after writing that, even though I was already a nillionaire then for the heck of it.) While I do look forward to seeing the community continue to grow in future years and consider that important, I don't think the community is our weakest point any longer; I think it's now our strongest point. I've tried to encourage the community's revival as best I could, including giving away tens of nillions in total, and lots of long rambling articles on my views on ethics and philosophy and frankly it's worked better than I would've really expected (or at least it has coincided with an effective recovery of the community). The community also helped me through at least a couple hard times personally in there as well. The technical situation in Nyancoin is mostly unchanged but slightly improved, although with two additional known vulnerabilities. It's unchanged in that it's the same client. It's improved in that we have an active nyanchain explorer host (nyan.space), and we have a public draft of a plan for a soft forking security fix update in the near future (hopefully by the end of March (although I've slipped these deadlines before and may well miss March for release by a bit, I do think I'm inching closer now and then)). The most serious vulnerability is to forking. This is the bug which hit Peercoin if I recall correctly. NYAN2 is intended to solve this through its soft fork from the LTC fix upstream (from the BTC fix upstream). In the meantime, we've been lucky we haven't been attacked. The tiny marketcap probably helps with not being a particularly attractive attack target. We're not exactly about to pay ransom to move faucet outputs. But that's no excuse; we want this fixed and should have it finally done "soon" (tm). The less serious vulnerability is to a time warp attack in the difficulty function (Kimoto Gravity Well), which relates to general weaknesses it has and issues we've had with large gaps in the block chain because of spikes in the difficulty function causing it to be unprofitable and driving away most of the hash, and then low difficulty and price rise making it attractive to more hash, creating a spike and causing it again. While this is irritating, the chain still works, even if there are fits and starts at times. An important part of the reason I can get away with this is because there is at least one Nekonaut-supporting miner, CartmanSPC, who rescues us from time to time, and did so during the course of this article being written. We have a bunch of pools, but sometimes the hash just isn't there to get us unstuck when the difficulty goes high enough. Another part of the reason I consider it not an especially serious issue is because there's a workaround which works for me (classic bad developer logic): I use a large transaction fee (generally 337 NYAN, although I might have halved it after the most recent halving, I'll probably use 337 again) on my personal wallet by default. If necessary, I use a couple of them. It can make NYAN profitable to mine again despite the higher difficulty and "unstick" the chain. The difficulty function can go back down again in the next block if the gap has been long enough, so that can be enough to keep it going again for a while (although it can also get stuck again irritatingly fast at times). A fix for this will be putting in a better difficulty function for NYAN3, which will require a hard fork. This is tentatively scheduled for feature freeze around the middle of this year, coding to follow, activation sometime early 2017. Financial has been our most disappointing performance. A graph of the 1 year performance right now on coinmarketcap looks pretty sad, showing our fall from a little over 60 satoshi down to around 7 satoshi now. We rose too high, too fast, and I didn't stick with the safe high paying job like a sane person. Instead I hit the road, went to jail, and worked minimum wage. That doesn't sound like a sentence from a cryptocurrency financial review, does it? But the performance of NYAN since the article has been the story of my personal finances, which is the story of my life since then. So, autobiographical coinaday interlude, trying to keep it generally to the most salient points. Well, in 2014 I had been on my way home to Minnesota from California when I was pulled over leaving Eureka, Nevada for speeding (got sloppy and went 45 approaching the 45 sign and thus technically still in the 35; bored cop seeing out-of-state plates). My vehicle reeked of weed, what with having been in Mendocino County previously with no intention of traveling out of the county much less state anytime soon but family emergency brought me back, and the end result was a citation for possession of cannabis and paraphernalia along with the speeding. Fast forward to the beginning of 2015, I'm settled into a good software position and start looking more at cryptocurrency in my spare time. I write the coin-a-day series for a bit and then got annoyed and quit after a while when trying to do one a day on top of an actual job was too much for me (along with some annoyance over criticism; I can be rather thin-skinned at times). But I had gotten interested in Nyancoin, and started buying it up more and more with extra money I was making. And then comes the crash. I had to stop putting as much in as I realized that where I was living and what I was working on wasn't going to work out for me and I needed to figure something else out. So, as I seem wont to do, I went on a roadtrip. I quit my job. And I went back for the court date for my citations and refused to pay, instead spending 10 days in jail rather than pay ~$1400 (I actually had the money in cash available to me if I chose to pay as a backup if I chickened out, but the judge annoyed me enough that I really preferred to be jailed instead of paying, as stupid as that sounds since I'm quite sure the judge didn't care in the least one way or another). After that, I went back to roadtrip lifestyle for a while. It was a nice period. A lot of beautiful scenery; a lot of reading. Eventually, I busted up my car pretty badly...a couple times actually, the second time for good. Fast forwarding through the rest of the year, I worked a couple minimum wage jobs to pay bills and avoid cubicle life and kill some time until I figured out what I was going to do next. Just recently I quit as delivery boy after getting a speeding ticket (I swear, I'm not as horrible of a driver as this makes me sounds, although I have had a bad tendency to speed in the past, which I really have curbed to almost nothing; but I'm clearly not good enough) and am currently writing a Coin-a-Year article with a friend's incentive and applying to do documentation and development with the Nu project. Okay, so what did any of that have to do with NYAN? Well, it's the mess of a life that has led to the fall of the price from 60 satoshi to 7 satoshi. If instead my life history for the time since the article had been simply "I was happily employed writing software", then I don't believe we would have dropped below 20 satoshi. It's easy to see in hindsight. If anyone can lend me a time machine, I'm sure I can get some condensed instructions which should improve performance significantly. Otherwise, just going to have more chalked up for the "character building" tally. So, lessons learned if you are the major buy support for your coin: you need long-term reserves. Whatever you put in bids can be taken out in a moment by a dump for no apparent reason. This is particularly true if you may be quitting your cushy, high-paying job and wandering around without income for an extended period of time. Rather obvious, but hey, maybe someone else can learn from my mistakes. If I'd been bidding as cautiously as I am now from the beginning, I think the price would probably be somewhere from 10-20 satoshi now instead of around 7 satoshi. It's especially unfortunate given that I wanted to be able to demonstrate the more consistent growth possible building a stable store of value, as opposed to the pump and dumps common in altcoins. And instead we had a pump-and-dump looking graph ourselves after I bid up higher than I was able to sustain, and a large (10+ nillion) instadump crashed the market all the way back down to 1 satoshi momentarily. We've had a few large (2+ nillion) dumps since, but nothing that large. We haven't generally had that large of bids though either. It's hard to know when I've exhausted the supply at a price level, when it sometimes waits for a couple weeks or even more and then fills all the bids at once. But I want to maximize the minimum price paid because I think that's important for building confidence in a store of value long-term, which is one of my core goals for NYAN. At the same time, we're still up from the lowest parts of the floor and where I found it. Since I own about 30% [g], the very cheapest supply has been taken off the market. I plan to keep on buying up "cheap NYAN" as much as I can. I've bought up to 60 satoshi before, I'll probably buy up that high this time around. I've got a token 100,000 NYAN ask at 300 satoshi; I hope never to sell lower. Conclusions Now I try to wrap it all together as if I saw this all coming and am the wise expert, despite having had about 90% drop in price in the last year after bidding too high. My original concept was taking the "minimum viable coin" and reviving it to a powerhouse as a textbook example in how to do it. Part of my core concept in this is the arbitrariness of value: throughout history, humans have chosen any number of things as a store of value for the time: salt, large rocks, certain metals, disks, marked sticks, and so forth. While there has generally been a certain logic in the choice, in that there is a locally restricted supply in one way or another, and so forth, from the perspective of other centuries or cultures the choices can seem quite strange. Growing up, I was always struck by how strange the notion of salt being limited and valuable seemed in a world where people were trying to reduce intake and large amounts could be bought for trivial sums. And yet, a key nutrient necessary for life fundamentally makes more sense as being valuable than notched sticks or printed paper or a piece of plastic with some encoded information. Humans have perpetually come up with stranger and stranger ways of storing and transferring value. Each new step, as always, comes with its own disadvantages and, frankly, has generally appeared nonsensical at best and fraudulent at worst to the status quo. Which doesn't mean that each new attempt is valuable. The gold bugs always like to point out that every fiat currency ultimately returns to its true value of zero. And the skeptics of cryptocurrency argue that all cryptocurrencies will eventually return to their true value of zero. It's certainly possible. And it's possible the USD will hyperinflate someday. I tend to try the moderate view for a plausible guess of the future. By that type of logic, I would guess that over the course of decades, USD will in general lose value, and cryptocurrency will tend to slowly gain value. That might not seem the moderate view, but USD not losing value over decades would be truly shocking. And hyperinflation has been predicted since the USD went off the gold standard, or before. So some amount of inflation less than hyperinflation seems like the safe guess (but then, the Titanic arriving would also have seemed like the safe guess to me). And with cryptocurrency, I think it's clear by now the technology will continue to survive. So my first question is with what overall value as a market? It could go down, of course, but that seems unlikely in an already small, young market. Even if all the current crop die off and are replaced, whatever cryptocurrencies are around should be able to do better than a handful of billion in market cap in my view. I believe that cryptocurrency has a bright future ahead of it. The best coins should ultimately survive and thrive. But I've been wrong on most of my major calls so far, like for instance when I thought BTC was over-priced around $5-$10. I think Nyancoin can have an important role to play in the future of cryptocurrency in the years and decades to come, but it's a massively speculative long-shot. See also Nyancoin risks document. But like Linus Torvalds' autobiography, I try to keep "Just for Fun" as a core motto and principle. It's makes for a good hobby project because there will always be more to work on, with a core community motto of TO INFINITY AND BEYOND! Disclaimers / Sponsorship: As I said before:
I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice.
And I'll reiterate that I own about 30% [g] of the current supply of NYAN, which makes me by definition maximally biased. Also, I'm not sure what's up with the address from the first post. It doesn't show up in my current wallet as a recognized address. So, anyhow, don't send there. :-) If you'd like to donate, please consider sponsoring a coin-a-day or coin-a-week article. This is the first sponsored article. This Coin-a-Year article has been brought to you by spydud22 's generous patronage. I'd been meaning to do a Coin-a-Week article on Nyancoin for a while, but between wanting to "wait until the price recovered a bit" and general procrastination, then it seemed like it would make a good Coin-a-Year article, and then I wanted to wait until the price recovered a bit more...anyhow, so thank you spydud22, for causing me to finally do this. :-) Footnotes
[a] nyan.space/chain/Nyancoin ; as of block 1091430, 263738786.71890615 NYAN outstanding. This is slightly over 50% more than the last report, which is what we would expect, since it had existed for about a year then, and has approximately annual halvings. The first year generated about 50% of total supply; the second year generated about 25% of total supply. We should expect in a year to have about 17% (one-sixth) more than we have now.
[b] https://www.cryptopia.co.nz/Exchange?market=NYAN_BTC ; this is the only market reflected in coinmarketcap and it is the primary one on which I trade. Cryptopia also has other base pairs which operate at significantly higher spreads (lower bids; higher asks) and have minimal volume. In the time since the last report, NYAN has traded as high as 60 satoshi (and briefly a little higher at times), but over the last almost twelve months since a peak about a year ago, the price has been generally declining overall, as a gross oversimplification of a lot of movements. This has been an effect of me not being able to keep buying as much and there being large dumps I wasn't expecting from time-to-time. Now I'm taking the approach of building large (one or more nillion (million NYAN)) bids on each price as I slowly work my way back up again in order to be able to handle possible dumps with less price shock.
[c] coinmarketcap.com/currencies/nyancoin/ ; as noted in [b], this only reflects the /BTC basepair on Cryptopia but that's where most of the volume is anyhow. Of course, the market is also not particularly liquid since I'm the primary buyer and have rather limited means currently.
[d] I haven't setup a script to count this yet, among many things on my to-do list for someday, so I went through by hand from what was the then-latest block of 1091430 on nyan.space back to 1089766 which was the first block generated less than 24 hours before. There was actually a three and a half hour block gap at that point, such that the next prior block was about 24 hours and 15 minutes before 1091430 while 1089766 was only about 20 hours and 45 minutes prior, and has a disproportionate number of transactions and value compared to a typical block (8 and ~313,000 NYAN respectively) from the build-up during the gap. But since that gap conveniently started right about at the start of the 24 hour period, doesn't really skew our results here.
Note that there are often times where the UTXO created during one transaction during the day is spent during a later transaction in the day. This can be considered the "same" Nyancoin being "spent" twice in the same day in our total. But in practice, I believe what's happening here is the faucet is breaking off small (10-50 NYAN) pieces from a larger (~40,000 NYAN) chunk, and so that pops up a bunch of times. So the total NYAN blockchain volume as counted for this topline number should not be interpreted as "NYAN spent in the day" but "NYAN moved on the chain", where the "same coin" can move many times. So it's a very easily gamed metric and not a strong / resistant metric like the market price tends to be (at least relatively speaking), but it's a fun number to calculate and provides a little bit of information. The transaction count can also be easily inflated and certainly, for instance, having the faucet does generate transactions which are a very common transaction. And this is also just an arbitrary 24 hour period compared to a previous arbitrary 24 hour period. Nonetheless, I do think there's clearly a bit more activity on the Nyanchain, even though the typical block is still empty and the number of transactions and volume is still tiny compared to the major cryptocurrencies. Here's an arbitrary example of the faucet transactions Note the zero transaction fee, which I love that the miners support (the defaults are all quite low as well). Here's an example of what may be the smallest transaction by NYAN volume of the day; but no, I followed its small, spent output, and it led to this gem which also links to this. I have no idea what's going on here, but it's hilarious and I love it. How's that for microtransaction support? :-)
[e] Obviously Cryptsy went down. We had had more than enough red flags with Cryptsy (including one time where I was able to withdraw 6 nillion more than I had in my balance) and got onto Cryptopia. spydud22 basically accomplished that for us, although I helped out in the tail end of the campaigning.
[f] Our community is still small (I wish there were literally dozens of us!) but we've had valuable activity from multiple people, including, just as highlights, vmp32k who hosts nyan.space, a clone of the original nyancha.in, jwflame who created the excellent nyancoin.info intro site, with the awesome status page (which currently notes that "the last 500 blocks actually took 111 minutes, which is approaching the speed of light, causing the universe to become unstable"), KojoSlayer who runs the faucet and dice, spydud22 who got us on Cryptopia, and many other Nekonauts have made worthy contributions, and the Nekonauts mentioned have done more than just that listed. So while we are small, we are active at least from time to time and technically capable.
Hello, I feel like I had to make a post about it. I read too many BS everywhere from people who have no understanding in how this would work. So this post is an attempt to explain what was meant by merged mining. First: MERGED MINING != LITECOIN/DOGECOIN BECOMING ONE COIN. Ok, now read it one more time: MERGED MINING IS NOT A CURRENCY MERGE. Okay, now let's dive a bit more into specifics. What is merged mining, what does it mean, and who would be impacted. Merged mining already exists in the cryptocurrencies world. For example, Namecoin supports merged mining with Bitcoin. You can verify it for yourself, Bitcoin and Namecoin both still have their blockchain, and they're both different currencies. Merged mining is the process of mining two (potentially more) currencies at once. If LTC and DOGE were merged mining, that means that the hashrate of BOTH network would be current_hashrate(DOGE) + current_hashrate(LTC). It helps secure the network by giving it a higher hashrate. So, how is it possible to mine two currencies at once ? What is required to do so ? First, this require writing some code to support this. In the Namecoin/Bitcoin case, Namecoin implemented the code to support merged mining with Bitcoin. Bitcoin didn't change anything. Basically, that means that the Namecoin network considers a Bitcoin PoW a valid PoW for itself (provided that the difficulty matches). If you want more technical details, I suggest you read this post: http://bitcoin.stackexchange.com/questions/273/how-does-merged-mining-work Only miners would be impacted by such merged mining, as it doesn't change anything else in how things work (for end users). One of downside is that the blockchain of both (but mainly the blockchain of the currency that supports merged mining) would be a bit bloated by block hash / tx hash from the other network. I hope this post will help people gains a better understanding at merged mining. If you feel like reading a more in depth explanation, please read the StackExchange link as their explanations are very good. PS: This post doesn't advocate for merged mining LTC/DOGE. It's not against it either. It's just an explanation.
Several people have started to agree with me recently that litecoins aren't dead yet. But I wasn't quite able to give a concrete answer as to why, until a comment reminded me that litecoins are the most widely traded of all the altcoins. BTC-e, for example, doesn't deal in phoenixcoins and ronpaulcoins. Being widely traded is a significant advantage, even if the coin doesn't itself have any advantages. I'm not sure why ASICs are relevant to the price of altcoins. ASICs are going to be distributed amongst miners just like they were with bitcoins; this just makes the miners fight a losing battle with each other, costing each other money. As long as one person doesn't get all the ASICs, it doesn't have any effect on network security. A while back, all the speculation was that litecoins would overtake bitcoins once Mt Gox accepted them for trading. In the interim, however, we have several major exchanges trading them. When an exchange wants to expand into altcoins, they don't look towards the trendiest new thing; the first mainstay they adopt is litecoins. The other advantage litecoins have is that there is a certain amount of "lock-in" with other coins. I've already commented about the concept of technological "lock-in." In this case, you have exchanges like Cryptsy that denominate some altcoins solely in litecoins. I found out that there is a class of altcoins that can only be traded Bitcoins -> Litecoins -> Altcoin. Even if you don't want litecoins, you still have to buy them if you want to play the game with these "penny stock" coins. That keeps their price high because even if merchants do not accept them, they still have utility and "acceptance" by exchanges. Also, a quick thought to ponder: a lot of the reason why people buy bitcoins is that bubbles crash, things change, and bitcoins are still around. Have litecoins reached the point where people expect them to die, they don't, and therefore they think there must be something to them?
Max Keiser recommends Darkcoins; I do not
Max Keiser put out a tweet trying to sell darkcoins to his followers, saying he thinks they will recover after their recent bug-fueled crash. Remember that Keiser was also the one who said to buy the essentially 98% premined Quarks too, and that failure alone might be reason enough to ignore whatever he says. I like the idea that when an altcoin has a lot of hype, it's not time to buy it. Darkcoins may have some benefits, but there is so much hype around them that there is almost certainly a bubble there. Don't confuse that with the idea that darkcoins won't have a niche in the future. However, just like bitcoins, there are times when hype gets out of proportion to the advantages the technology has.
Today's altcoin mining report
Altcoin mining profitability is all over the map today. If I had started testing this pool back during the last cycle, it would have been interesting to see if we could deduce any patterns from this data. As you can see in the charts at: http://shoemakervillage.org/temp/altcoins2014-06-07.jpg there are about 20 coins that are constantly switching as the most profitable. This may be partially a result of those new coins that have extremely fast difficulty adjustments. The chart isn't as useful without being able to mouse over the bars, but it gets the general point across just seeing all the colors. People obviously do not value most altcoins for their specific features anymore; most of them are just a game. There is one trend that is not all over the place: http://shoemakervillage.org/temp/altcoins2014-06-07-2.jpg The expected payout of scrypt coins is at $1.33/Mh/day now, which is completely opposite the trend of increasing bitcoin prices.
The effects of orphanage
Some altcoins reduce the block confirmation time by making the coin ridiculously easy to mine. There's no advantage to creating an altcoin that has huge numbers of blocks, because then all that happens is that your "confirmed' transaction is more likely to get orphaned. In testing, I was getting 30% orphanage rates on some of these fast coins. Look at what happened last night in the course of a few blocks: http://shoemakervillage.org/temp/altcoins2014-06-07-3.jpg However, I'm still trying to figure out whether orphanage actually reduces the pool's revenue or not. The conclusion I'm coming to is that it only cuts miners' revenue from the expected value if your orphan rate is higher than the average orphan rate of the network. If everyone has 30% of blocks rejected, then the blocks are still being created at the same rate and everyone gets the same amount of money. You only lose money if you have more orphans than everyone else does. Am I missing something here? If not, then orphanage is only an indicator of a bug or of monetary losses if I have orphaned blocks for long networks like bitcoin, where having another pool finding a block within a second or two is very unlikely.
None of the altcoins has the innovation that bitcoin needs
The only true innovation from any altcoin that would pose a threat to bitcoin is if someone came up with a yet-unknown solution to the 1MB transaction limit, that will be permanent for an indefinite period of time, and released a new coin with it. Some people mistakenly say that people will switch to altcoins to get around the block size limit, but that isn't the case because the most any altcoin has done to resolve it is to make blocks more frequent, which only raises the limit to some hardcoded value. Raising the limit to some hardcoded value isn't "solving" the problem, it's just putting it off into the future. Don't make a mistake and buy altcoins thinking that some altcoin is going to address that limit, because none has.
Altcoin code is a mess
Altcoins are a mess, when you are trying to compile their code. If you haven't done this with many coin daemons, which most probably haven't, then you probably don't know that almost all altcoins are just clones of bitcoin with some minor changes. This is one of the reasons why bitcoins have such an advantage, because you can't be innovative when you just copy stuff from the bitcoin developers. What some people don't know is that most altcoins aren't even doing that. There are a few altcoins that have changed little in many years, so instead of incorporating fixes that have been included in bitcoin since then, those coins never upgraded to newer block templates and they don't include the latest features. It also means that bugs that were later fixed are still present in those coins. Some coins, like namecoin, are in horrible shape and for many, it's a matter of time before this code aging causes some sort of security issue to be discovered.
Dogecoins are doomed?
Dogecoins are supposedly doomed. The idea is that the block reward is decreasing too rapidly, and the price of dogecoins needs to rise to avoid a 51% attack. I'm not so sure that the developers of dogecoins will just roll over and die, given how large that community is. More likely is that if the price stays stable and more block reward decreases occur, they will release a fork to stop the reward decline earlier than expected. That will devalue dogecoins significantly. If the hashrate of dogecoins starts to drop, I would get out. I don't think the network is "doomed," but I do think that the only solution to the problem is to devalue coins, and you obviously don't want to be holding when that is announced.
Negative "interest" rates
Apparently, the speculation now is that negative interest rates are going to spread to the rest of the world, and that banks will start charging an account maintenance fee, along with eliminating interest payments. In that case, what is the purpose of using a bank? I won't be keeping a checking account if that happens. Instead, I'll close my account, buy a safe and store cash in it, using banks only to trade stocks. I don't think I spent a single dollar in actual cash for the past year before this, so this is a technological regression. What kind of world is this where it is a better idea for me to store wads of cash in a safe instead of putting it in a bank, where they actually take money from me?
It looks like the news finally became interesting enough to comment on again.
Merchant adoption is happening top-down
Last year, someone who predicted that Wal-Mart would be accepting bitcoins in two years would have been looked at as insane. Now, some people view that scenario as inevitable. The important part of merchant adoption isn't the people paying in bitcoins; it's that there is another place for businesses to spend bitcoins. The more the space develops, the more likely it looks that the first people to use bitcoins for common purchases will be business to business transactions. If you have lots of bitcoins from customers, and your supplier also accepts bitcoins from customers, then there is no reason to pay Coinbase a fee to cash out your bitcoins and then pay bank fees to pay the supplier. Some businesses have a model where the same goods are purchased every day, and these businesses are perfect for the beginnings of this. For example, Subway needs to buy huge numbers of fresh tomatoes every day for its stores. If Subway accepted bitcoins, it makes more sense for them to just send their bitcoins immediately to the tomato supplier. That way, they are shielded from volatility and they don't have to pay fees.
Bitcoin as a big-money transfer network
Everything is pointing towards bitcoin, for the foreseeable future, becoming a network for business-to-business transfers. Seeing as how it is taking a while for people to add wallets to their phones, the logical first users are businesses. Businesses are also largely unaffected by the 1MB transaction limit, because transaction fees are constant. For them, if you need to buy $1m in tomatoes, $0.50 will get you into the next block easily. I've said in the past that bitcoin could become a clearinghouse between banks. The factors are lining up that non-financial business-to-business transactions could be coming first, followed by transfers between banks.
Unfortunately, it looks like people are back at it in /bitcoinmarkets again, and it disappoints me to see that. This time, someone is being personally attacked in a hugely out of proportion thread where some users have alleged that he has some "motive" to influence the price of bitcoins. I can't ever get into someone's head to see what he is thinking. Just using the logic of math, there are so many possible thoughts a person can have that the odds of me coming upon the correct one by chance are astronomically small. Therefore, it would be inappropriate of me to accuse people of thinking something when my accusation is almost guaranteed to be false. The other issue with accusing people of "motives" is that they really aren't relevant. Talk is cheap, but actions are relevant. This is why laws specifying greater penalties for "hate crimes" should be eliminated. If you rob someone and kill him, then you took someone's life unnecessarily regardless of whether you drew a swastika on the door on the way out. I strongly disapprove of anyone who attempts to attach "motives" to people who are posting on the Internet. There aren't many blows cheaper than that. If you disagree with someone, then say so, and if you think that a person's posts are not contributing to the discussion, then say that or report them to the moderators. *Note: I edited this post after someone mentioned to me that it isn't illegal to post a swastika on a door without committing a murder. So if I painted the symbol on my door, there would be no penalty for that act, but if I killed someone on my porch and then painted the symbol on my door, the penalty for that act would be several additional years in prison, even though I did the same thing both times.
Follow the money
To figure out what's really happening with anything in life, follow the money. My dad yesterday called me and was wondering if he should sell. Selling certainly wouldn't be a bad idea, given that I told him to buy at $68. He had watched one of those YouTube videos where people were talking about the invention of bitcoin and its significance. In the video, a guy was arguing that the blockchain technology was going to bring a lot of changes, but that bitcoin itself might fail. I simply don't comprehend this argument. Money is the simplest, most logical, most useful, and most necessary of all the applications for which the blockchain can be used. If you don't use a blockchain of money, then how do you have a distributed stock exchange? What surprises me, but which confirms my argument, is that almost all of the $130m in venture capital that went into bitcoins this year is going into services based on accepting and processing bitcoins, with the largest going to BitPay. Nobody is investing millions into proofs of existence or voting systems. These people don't just throw money around when it isn't going to provide a return. That demonstrates that money is the application where the blockchain technology will be most successful.
Why most blockchains will fail
This brings me to why most of these alternate blockchain technologies will fail. Ethereum is an example of a technology that was not primarily designed to be used for money. Namecoin is another example. The problem with these technologies is that miners need to be rewarded in some way. Namecoins are not money; they are tokens that can be used to register domain names. If you want to register a domain name, then namecoins are great for you, but if you don't, then you want to get rid of them so that you can obtain something that is fungible and is valued by everyone. The only people who value namecoins are people who want domains, people who are squatting domains, and people who think that other people will pay more for them. Unlike bitcoins, namecoins and ethereum are not accepted at 60,000 merchants. Namecoins would have succeeded if people who mined them were rewarded with bitcoins. But rewarding namecoin miners with bitcoins not only would have been difficult to implement, but would also would have defeated the purpose of their existence as a separate chain. Had they been implemented as colored coins, they might have had a different outcome.
Speaking of namecoins, one way to earn bitcoins while mining namecoins is through merge mining. In merge mining, a miner hashes multiple coins at once, and when a block is found for one of them, then he also gets blocks in all the other coins of lower difficulty. Merge mining has been heralded as a solution to a number of problems for altcoins. I'm not sure that it's all it's cracked up to be. For one, merge mining does more to centralize mining than anything else. Now, a pool like mine can mine ten coins at once rather than one, and sell them all at once to get bitcoins. Since merge mining is complicated to set up, and requires miners to be aware of all the new coins coming out every day, solo mining is not optimal for merge mining. Meanwhile, pools can easily add new coins and all of their miners will be mining the newest coins. Also, merge mining makes coins extremely vulnerable to 51% attacks. Imagine that you have 10 coins you are mining, there are three pools, and there are no other miners. One pool mines 3 of them, one pool mines 6, and the third pool mines all of the coins. The third pool, which makes the most money, therefore attracts the most miners and obtains 40% of the market share of all three pools. The other pools have 30% each. In this situation, 7 of the 10 coins are unintentionally subjected to 51% attacks. Three of the coins are mined by the two other pools, so the largest pool has a minority share in those coins. For the other 7 coins, the large pool has 70% or 100% of the hashpower. To make things worse, price is irrelevant to merge mining, since adding a new coin requires no more electricity. The most expensive coins are just as likely to be killed as the most inexpensive coins. If darkcoins were merge mined, they would be just as likely to be killed off as krugercoins would, despite krugercoins having no meaningful advantages over other types of coins. Not only does this jeopardize "better" coins, it also means that junk coins will stick around much longer because nobody will be able to put an end to them. Merge mining is a great equalizer: price, vulnerability, and features (or lack thereof) all become the same.
11-28 21:33 - 'Thanks for your detailed response! / [quote] [The link you provided] seems to be very specifically talking about how he wants "transaction types" to be flexible, and so he coded in the possibility for scripts to be created that co...' by /u/AD1AD removed from /r/Bitcoin within 2-12min
''' Thanks for your detailed response!
I linked to a quote from Satoshi where he talks about how much effort he went through when designing Bitcoin to make sure it could be upgraded via soft-forks, and in the link, it's almost uncanny how well his description of potential future upgrades he envisioned matches how SegWit was implemented (he even talks about how transaction version upgrades -- like SegWit -- can be ignored by older nodes that don't understand them yet, without problems).
[The link you provided]1 seems to be very specifically talking about how he wants "transaction types" to be flexible, and so he coded in the possibility for scripts to be created that could be evaluated by the network. Does segwit take advantage of those scripts? My understanding is that segwit puts the merkle root of the witness data in the coinbase transaction, and uses addresses that are treated by default as anyone-can-spend address until you reference the witness data broadcast separate from the block itself. Does any of that have to do with these transaction scripts he's referencing?
In that very same link, Satoshi talks about how Bitcoin's core design was "set in stone" from the very beginning, essentially doing his utmost to discourage what are now known as "hard forks" a la BCH. It is worth reading the full comment directly, in my opinion. In fact, over the years, Satoshi spent a lot of time and effort to discourage alternative forks of Bitcoin, and would say things like "I don't think a separate implementation will ever be a good idea" (because he considered network consensus so sacrosanct). BCH proponents consistently ignore inconvenient truths like this.
He's almost definitely not discouraging hard forks in that link... he's discouraging "a second, compatible implementation" (emphasis mine). By which it looks like he means a second client software that is compatible with the Bitcoin network, which is the opposite of a hard fork (which becomes incompatible by default and results in its own network). He's discouraging the attempt at a second compatible implementation because of the possibility that if "the second version screwed up, the user experience would reflect badly on both". That isn't the case with BCH, which made a clean break.
It's important to remember that Satoshi was the one who put the blocksize limit consensus rule in place in the first place, and in every instance where someone tried to raise it, he chimed in to say that he disagreed and that it should only be raised if the network truly needed it (and only with a long lead time and with extensive precautions taken to notify all users of the change). He was actually surprisingly fanatical about keeping blocks (and the blockchain in general) as small as possible, and if you go digging through his writings, you'll see tons of cases where he was adamantly opposing blockchain bloat and championing keeping Bitcoin as lightweight as we possibly can.
Yes, he put it there as an anti-spam/anti-DoS measure, right? Do you have a reference to what he considered the sort of situation that would constitute "if the network truly needed it"? The most relevant quote I can find is this one:
It can be phased in, like: if (blocknumber > 115000) maxblocksize = largerlimit It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don’t have it are already obsolete.
Where he seems to treat it as a non-issue. What could possibly more constitute the the network "truly needing" a blocksize increase than the blocks being full?
In fact, when BitDNS was first proposed (which eventually evolved into Namecoin), people started discussing the possibility of merging this functionality directly into Bitcoin. They even proposed a generalized state machine (just like Ethereum) and many were of the opinion that this, too, should be added to Bitcoin. Satoshi weighed in to say that he was strongly opposed to doing this, because (in his words): "piling every proof of work quorum into a single dataset doesn't scale" and he went on to say that over time, Bitcoin users might (and apparently in his opinion should) become "increasingly tyrannical" about limiting the size of Bitcoin's chain so as to keep it lightweight and thus available (and affordable) for as many users as possible to join in and participate on the network.
Right, that makes sense, and at the end you mention that it would be being kept lightweight so that it would be "available (and affordable) for as many users as possible to join in and participate on the network". Doesn't that last sentence apply to transactions at least as much as, if not more than running nodes? As in, the majority of block space should to go to transactions so that the transaction capacity could be maximized? And isn't transaction capacity now being limited by the blocksize?
Satoshi thought that lite client (SPV) security would be a good way to allow users to get most of the benefits of Bitcoin without running a full node themselves, but he said that this would make sense when the network got to be "very large", and the exact figure he mentioned for such a scenario was 100,000 nodes (which we're sadly woefully short of at the moment).This is why some people (like Luke-Jr) argue that the current blocksize limit is already too high; the network node count is very much on the low side, right now, and it seems like Satoshi would probably agree with his take on the subject.
It seems like you're arguing here that because we don't have enough full nodes running, we should reduce transaction capacity. But isn't transaction capacity necessary for adoption? In which case we should go the opposite direction? I guess what it really comes down to is: Do you think that the number of nodes would not increase as adoption increases? Sure, a smaller percentage of users might run full nodes as blocks got bigger (if blocksize outpaced moore's law), but bigger blocks would imply higher adoption rate, and as long as adoption rate increase (percentage-wise) outpaced the decrease in those who run nodes, then we would end up with a net increase in nodes.
Beyond mere blocksizes, there are other aspects of BCH that would almost certainly invoke the wrath of Satoshi. For one, the cumulative chain difficulty is massively lower than that of the real Bitcoin network, and even though most of the proponents of BCH spent incredible amounts of effort arguing that "hashrate defines Bitcoin" (which, in my opinion, is total bunk), by this criteria BCH is as far as you can get from Bitcoin and it should have died long ago. Of course, they don't like to acknowledge this nowadays.
Sure, anyone who argues that hashrate defines Bitcoin (or probably more accurately, total accumulated proof of work defines Bitcoin), and then defines Bitcoin Cash as Bitcoin is contradicting themselves. But how would its lack of lacking the most accumulated proof of work invoke the wrath of Satoshi? It seems like he would just says "Bitcoin Cash is not Bitcoin until, if ever, it overtakes the current Bitcoin in accumulated proof of work."
Finally, mining of BCH is incredibly centralized; it seems that almost all (if not all) mining pools that mine it are subsidiaries of Bitmain.
A suggestion for wider .bit TLD adoption USBCA: Simple browser addon
Hello all, The difficulty of visiting .bit websites has been bugging me for a long time. Without an easy way for novices to visit websites under a .bit domain I do not think this will ever really take off. Solutions are in the making like the freespeechme Firefox addon but unfortunately it is way too complex and if I'm not mistaken, requires users to download the whole Namecoin block chain (and the installation process is pretty far from passing the "can my grandmonther do this" test). There's also speech.is which is promising but development seems to have ceased and as I understand it it's just a glorified proxy. I love the app proxy at dot-bit.org for its simplicity which actually makes .bit links clickable but again, it's a proxy - everything goes through the proxy server. There's also the basic proxy I run on dotbit.me/proxy which works but forces people to go though dotbit.me to visit .bit sites. I would like regular links on regular pages to .bit sites to be resolved. For instance, try clicking on dot-bit.bit and right now it will fail for most of you. I hate the idea of people having to install extra software to be able to surf .bit sites but for now that seems like the easiest alternative. Addons to browsers are quick and easy to install and that's why I propose the following: I would like to have an addon written for Chrome and Firefox that does the following:
Whenever a .bit address is requested by the browser, the IP is fetched from ns.dotbit.me.
...and nothing else. Regular domains IP addresses are fetched by the default nameservers as normal. No settings to change, no icon needed or anything like that.
This is not perfect, a peer-to-peer function where everyone has a complete zone file locally is much better but in my opinion the current solutions discussed above are too complex for mainstream adoption. Anyway, I have never created any browser addons and I am not sure an addon that changes the nameserver for a particular TLD is even possible. But if it is possible, I am willing to pay (in Bitcoin, Litecoin, Namecoin or cash) to have it done. I would very much appreciate your thoughts and comments. PM me if you're interested in creating the addons. Thanks, Tagide dotbit.me Edit: http://www.reddit.com/Jobs4Bitcoins/comments/1y8kwp/hiring_basic_addon_for_firefox_chrome_that_does/
Merged mining is coming..can MtRed be one of the first pools to support it?
First, if you're not familiar with merged mining, here's some information:
The major goal of this change - proposed by vinced - is to use one miner to mine (at least) two blockchains. For that reason you'll have one parent blockchain and at least one auxiliary blockchain. As the most common usage of merged mining will be merging the mining of bitcoin/namecoin we'll assume bitcoin as parent blockchain and namecoin as auxiliary.
The block the Namecoin client will perform the merged mining change to has been decided as 24,000, which means that we should see it take effect within 2-3 months from now. The potential is pretty significant, and I think a good deal of hashing power is going to switch over to whichever pools support merged mining at the outset, since you'd be doubling your income (with current difficulties and exchange rates for BTC and NMC). Unfortunately, while the bitcoind has been patched to support it, pushpoold still doesn't have support (but presumably will soon). The big change will probably be with the UI. Is this something other users are interested in? Also, RedditorRex, is this something you're looking into at this point, and do you have any comment on it? Thanks. :)
What is NXT? Nxt is considered a 2nd generation crypto currency. With all the alt coins coming out that only change things such as hashing mechanism, time between blocks, starting difficulty, and so on, Nxt brings much much more to the table and was designated this way for a number of reasons:
It is not an "alt coin" like coins such as litecoin, peercoin, and others who have their code based on Bitcoin's source code. It is brand new from scratch with its own code.
It provides built in support for planned extra features such as a decentralized peer-peer exchange, colored coins, messaging/chat, decentralized DNS, and options for instant transactions. We will describe these advanced features later in this article.
It is a 100% proof of stake versus the proof of work mechanism the vast majority of other coins are based on. This effectively removes a large security risk inherent in most other coins, as now the issue of a 51% attack or other vulnerabilities inherent to PoW coins are now gone. The biggest plus here is how green this protocol is (not a reference to colored coins) in power consumption, since PoS doesn’t require massive amounts of hashing power
It was announced weeks in advance, unlike mere hours like most coins. The 71 stakeholders are responsible for distributing the 1 billion Nxt coins that were ejected from the genesis block via an injection of bitcoin (donated by them, 21 BTC total) into the genesis block. This is a requirement for this PoS system to work and this distribution is now in progress. Nxt is listed on http://coinmarketcap.com/ and people are trading on a 1on1 basis in the forums as well as on a temporary (centralized) exchange http://www.dgex.com.
Let's get into the first planned feature, a decentralized exchange. How do we currently trade coins now? Well you have to sign up for an account on a centralized platform such as Cryptsy/BTC-E/Bteetc, transfer them your coins and pay them for transactions. This brings in a large concern that I personally have yet to be seen brought to light, in that it’s possible that the exchange could just bail with everyone's deposits. This has actually already happened when the Sheep Marketplace did just that with 96,000 bitcoins, ending up as the largest theft in history. The developers of NxT (BCNxt and his crew) are developing a peer-peer exchange into the software to allow for decentralized trading which will eliminate this trust point. It will also eliminate trading fees! Obviously this is all still completely secure and anonymous as are current bitcoin transactions. But let’s not stop there. If you can have a decentralized exchange based on the peer-peer model then what else is possible? Well, quite a bit as it turns out; the developers are also building in a decentralized DNS system to compete with namecoin. Also in the future we can expect messaging and chat systems that, like the p2p exchange, will also be completely secure and anonymous. Think of what this will allow: Completely anonymous websites, AND anonymous payments, to go with an anonymous support system in the chat/messaging feature, all 100% secure, encrypted, and irreversible. Nxt (pun intended) is one of the more curious services: colored coins. To understand the concept of colored coins requires a fairly deep view into bitcoin transactions that most people aren’t aware of. With bitcoin, each transaction's output hashed address is based on a previous receiving address that originally received that coin. So with the blockchain, a set of bitcoin transactions can be traced. Not to a person mind you, but what is meant is that an individual coin or pieces of that coin can be traced back on a transaction by transaction basis. Since this is a case, then if it was possible to expand the protocol to allow a person to designate or "color" a particular coin, then we can build a bridge from the virtual crypto currency world to the physical world. In effect that coin can then be used to represent some physical entity here on earth. Property, stocks/bonds, commodites, or really any concept that can be concretely identified could be used. This protocol expansion is exactly what is being built into Nxt’s unique code to allow for the use of colored coins. Let’s talk about Proof of Stake and green energy. Everyone knows how bitcoin is based on Proof of Work. That is there are thousands of miners around the world crunching away at hashes and gobbling up TONS of power. Now, PoS doesn’t really involve ‘mining’ per se; it’s important to realize that unlike bitcoin, all Nxt that will ever exist already exists, so client wallets now ‘mine’ for transaction fees. A growing trend is to refer to this as ‘forging’ instead of ‘mining’. Since this can be done on a client wallet loaded on a PC (CPU mining), it is MUCH more environmentally friendly and power efficient. Now, on to the nuts and bolts of Nxt’s implementation of PoS. Its elegantly simple: transaction fees are distributed out proportionally to all users based on the amount of Nxt a client has. (assuming that client is running and unlocked). So if a client has 1 million Nxt, then they have 1/1000 of a chance of receiving the transaction fee for any transaction. The math here is 1 million (amount the client has) divided by 1 billion (total Nxt in existence) is 1000, so that is 1/1000 of a chance. Some extra notes about Nxt: Nxt is a brain wallet, a very long and secure passphrase MUST be used to generate your account. As stated, to forge (AKA mine) for transaction fees, your client must be running and unlocked on your machine. The software is currently java based, and closed source. Pieces of the code are available for review upon permission of the devs, but the full code will not be released until Jan2014 official launch. Many people refer to this as 100% pre-mined, but this isn’t really accurate since there is no mining, and the PoS system depends on all coins being distributed out. The Nxt official thread in bitcointalk.org is at https://bitcointalk.org/index.php?topic=345619.0
I've watched the crypto-securities space a while, and in trying to understand my own thoughts and observations, I wrote this long essay. I'd like to share my thoughts, challenge my own assumptions and hear some differing opinions, what-if's, etc. So, for your reading pleasure... Preface: I'm long crypto-securities in general. I think there's major innovation coming in this space, and we'll see awesome new business models in the coming years, disruptive ideas that haven't been possible or profitable until now. That said, the current space has some challenges to overcome. I. General Comments and Challenges 1) Challenge of Valuation.
Securities are priced and paid for in BTC. It's hard to part with coins when they could be worth more next week, let alone next month.
BTC fluctuates, making fair valuation a difficult task. We've seen companies double or half their value based on their BTC valuation. The company may grow naturally at a decent click, but the valuation moves wildly.
Excitement cycle from dividends or good results or can pump up the BTC value of a stock, pushing the fiat value into the sky.
All this has lead me to price out securities based on a range of Bitcoin prices, a wide range (at the present time) from $2000 to $100 per coin. This outputs as a matrix of BTC prices on one axis, and the target asset's price on the other, and forces me to think of where BTC price is going within the next 3 months (at least), and consider the trade-off for coin / security. I don't always get my target prices in the matrix, but the idea is to provide some analysis and restraint, and try to think long-term. 2) Challenge with IPOs.
The approach to IPOs in this space is a bit bewildering. Traditionally, a company might be content to grow organically, using whatever profit to fund the next phase of growth, whether that be paying for marketing, hiring new employees, adding new infrastructure, whatever. More importantly, founders are greedy, and rightfully so, it's their own blood and sweat that built the company! Those founders will do anything to avoid diluting their own control and own share of the company, because when they decide to IPO, those shares will be worth millions. Also, diluting too much means that the founders are no longer in charge, that a board serving the shareholders runs the show.
Why do people dilute with an IPO so early, or even at all? The question immediately points to 1) Why do you want this money?, and 2) What's the plan? If you're about to quadruple the size of the company, hire 50 people, add a dozen servers and open a dozen offices, then yeah, you probably need a couple handfuls of BTC and the only way is to seek outside investment. That's all in the business plan.
What are they going to do with the BTC once raised? Change it immediately for fiat? Keep and maintain a balance? Also inherent in the plan is some plan for hedging BTC volatility risk.
The turnaround time between IPO announcement, and IPO launch is short, leaving little time to review the prospectus.
Prospectuses lack quality and/or business acumen.
So, not rocket science exactly, but a concise business plan and the company's approach to the IPO should point the way to a decent business model worth investment. Risk, both possible good and bad, must be included. 3) Challenge of making an informed, semi-rational decision, based on the above. For extra fun and unpredictability:
The company is overvalued, or not enough stocks are issued at IPO. The stock spikes at the start. People realize the valuations don't make sense, and the stock flattens out long term. Any amount of dividends don't make up for the loss in share value.
The company is undervalued, or too many stocks are issued at IPO. The stock drops like a rock right away, and is a bargain after the IPO bagholders go first.
The stocks are thinly traded and often act like micro-caps or penny-stocks. It's not unusual to see profound shifts based on little volume.
Hype cycle, news rumors, pump or depress valuations to extremes, or generally a market that acts like a bucking bronco,. Time to sell the overpriced stuff and/or look to buy neglected, killer deals!
Scams: Getting "hacked" or just plain absconding with the funds, and a non-regulated space means no traditional shareholder protections.
Actually getting hacked because of poor business model, bad security model.
These further complicate the task of trying to act rationally in exposing your investment to risk. II. Observations on assets classes, and risk/reward. 1) Mining A company buys racks of hardware and configures to mine coins. The SHA-256 proof of work coins require a high capital investment in ASIC mining that ultimately result in diminishing returns due to the fierce competition and increasing difficulty. The next generation of hardware released to market erases differences between mining groups, so the only advantage is temporary, assuming your new hashing hardware even ships at all. Other advantages, such as lower operating overhead, seem short-lived. Many of these mining securities show a quick spike, and then fall flat, as would be expected in an industry where competition is mostly neck-and-neck tied. ASICMINER basically did this, along with the added salt in the wound when the BTC price exploded, share price, as denominated in BTC, collapsed. So, with regret, I don't see crypto-mining as a good long-term investment. 2) Fiat-gateway industries This is perhaps the most promising sector. People are taking notice of BTC and altcoins, and fiat-for-coin exchanges are popping up all over. Great possibility for attractive profits because they set their own fees for a product in demand and short supply, and can hedge against both fiat and coins. The success of these companies will much depend on how their home jurisdiction acts towards cryptocurrency. China and India seem to hate BTC right now, but these are also states infamous for capital controls. Look for a friendly regulatory environment, good legal counsel, good technical/security expertise, smooth money transfers and a good marketing plan. Then cross your fingers and hope they don't delist. 3) Security exchanges Rough times for these guys lately. Bitfunder and BCTO shut down a while ago, and some people still have value locked up in limbo. Havelock, CryptoStocks and a few others are still out there, but longterm I think the future belongs to a decentralized exchange system. A single point of attack or failure in this day and age is… unfashionable. These exist in early forms, Ripple, OpenTransactions and colored coins but it's hard to say what's going to catch on and dominate. Everyone seems to have a favorite… 4) Vice industries Gambling sites like Satoshi dice and variants offer an obvious business model: the house always wins. Then there's CANNABIT, which could be lucrative, but I cannot imagine this going well long-term. There will likely be more innovation in this sector, and more ability for these services to operate outside the bounds of the authorities to quash them, but the risk to investment, the risk of de-anonymization and criminal charges under RICO? No thanks. Vice is nice but not necessarily in the portfolio. III. Exciting, gamechanging stuff Interesting thought: What if this innovation is unstoppable? What then?
Autonomous economic zones that encourage cryptocurrency and voluntary association: here and here.
Namecoin DNSNMC or another technology for decentralized, censor-proof services and reputation systems.
Decentralized smart contracts on Ripple, OpenTransactions, enabling decentralized exchanges, as mentioned above.
If you got this far, I hope this was an interesting read and food for thought. So: What do you like/hate in your portfolio? What risk exposures do you like, and which do you think are poisonous? What gamechangers on the horizon do you like/hate? Is it, in fact, nobler in the mind to suffer the slings and arrows of outrageous fortune? :)
Using the Bitcoin protocol for more than just money
I think Bitcoin is a very interesting technology, and I'm glad to see it's taking off. But at the same time, I think it could be so much more. The real interesting technology is the block chain. With a few improvements and minor modifications, it could be the basis of much more than a digital currency. Namecoin and Bitmessage are two examples of other uses for a block chain, but AFAIK each uses their own, independent chain and network. I feel like should be possible to combine them. Please mind that I haven't studied the protocol in extreme detail and I'm not a mathematician or a cryptographer, so I might be wrong on some understandings of the details. Corrections are highly welcomed. Please also don't just view this as another "Bitcoin protocol sux, here's how it should be done" post. That's only the first section. ;-)
Improving the protocol
Firstly, I think the biggest issue Bitcoin (and all alternatives I know of) has is overhead. The block chain is several gigabytes, and bitcoind likes to choke my network with a lot of connections and big uploads. Maybe the growth of technology will outpace the growth of Bitcoin's resource needs, but I don't think we can rely on that. Phones have been stuck at ~16GB of internal storage for quite a while now (maybe there are some reaching 32 and 64GB, but I don't know of any), and internet service is actually making backward progress in much of the western world - slower connections and tighter caps. One of Bitcoin's goals is also to prevent being controlled by any government or central authority - but if it relies on fast network connections, that's something an oppressive government can easily restrict to choke it. Especially for a new client, to have to download the entire block chain can be daunting. And for a mobile client, the amount of network I/O seems like far too much for the piddly data caps mobile networks have, and the block chain would quickly eat up their available storage.
Size of the block chain
My understanding is that the solution to the blockchain size issue is to create a new genesis block; essentially replace the entire chain with a single block containing a hash of all previous blocks and start chaining again from there. But as far as I know, this is something that the Bitcoin developers have to do manually with a change to the source code (which also means they have to be able to do it - what if they disappear?), and this hasn't been done yet. This new genesis block creation needs to be built into the protocol and happen automatically, so that the chain never grows too large.
As for network issues, I don't know why Bitcoin requires so much overhead, but I believe it's from clients transmitting large portions of the block chain (sometimes the entire chain) to new clients who don't have it. I think a simple solution here would be to download small chunks from many clients instead of large chunks from a few clients. The new client still has to download all the blocks it's missing, but the sending clients don't need to upload as much, so their connections won't be as strained.
Block generation rate
One thing I've never understood is why blocks are generated at 10-minute intervals. Litecoin shortens that to 2.5 minutes, but that's still fairly long. 10 minutes might be plenty of time if you're ordering online, but if you want Bitcoin to completely replace fiat currency, it needs to be as fast as fiat currency. Nobody wants to wait 2.5 minutes (let alone 10) in the grocery store or fast food drive-thru for their transaction to go through. Cash payments can be as simple as handing over a bill, and debit payments can complete in a few seconds. The usual suggestion for how to resolve this is to put some Bitcoin in an account, controlled by some payment processor, so that when you later want to actually buy something, you just ask the processor to transfer from your account and they can do so immediately, and the shopkeeper can trust that the transaction will go through. But isn't this just a bank? How can we be sure we can trust the payment processors to not just run off with the money (especially with no controlling authority), and to not pull the kinds of annoying things banks do (fees fees fees)? To me it seems like relying on some third party to handle your Bitcoins is no better than the existing system Bitcoin intends to replace.
Scientific value of computations
One altcoin that I really like is Primecoin. Instead of brute-forcing hashes, Primecoin's proof of work is finding prime numbers. I feel like this is a nice benefit - in addition to everything the network does, now it's also doing calculations that are useful to science, instead of calculations that exist solely to be difficult. Of course, if someone found a much more efficient algorithm to compute prime numbers, then this protocol would break. But the same is true of the hashing Bitcoin uses. Also, most existing cryptography is based on prime numbers, so I think there'd be a lot more to worry about than just Bitcoin. (That also implies that if the difficulty of prime numbers is trustworthy enough for everything else, it's probably good enough for Bitcoin too.) In either case, the protocol can be updated to a harder algorithm (even if it means going back to calculations that aren't scientifically valuable).
Using the block chain for messages and information
Already, every client has to download every block, and look through it for transactions involving its addresses. It should be an obvious and trivial extension to allow it to store messages sent to a Bitcoin address as well. This method of exchanging messages has a few nice advantages as well:
Since Bitcoin addresses are already public keys, it would be trivial to encrypt the message so that only the intended recipient can read it. Or you could opt not to encrypt, for a publicly readable message.
Transaction fees would help discourage spam.
Specially-formatted public messages can be used for things like publishing your public key and other contact information. Just as only you can spend your coins, only you could send a new message saying "this information replaces/supplements the information specified in message X", to update your contact info.
The distributed, decentralized nature of the network prevents censorship.
Perhaps old messages can be replaced with only their hash (to ensure the block can still be verified) to avoid taking up too much space. If a client has already done this, but then wants the original message again, it could ask other peers if they still have it - see the next section for details on that.
Making Bitcoin function as a P2P file sharing network
Expanding on the above idea: who says the messages have to be text? By using a binary format (perhaps with a container such as a zip file), it would be simple to send someone a file this way as well. Of course, once you start sending blocks containing files, the size of the block chain becomes an issue again (and the size/quantity of the blocks for a large file could push transaction fees quite high as well). I think there are various ways to resolve this. The way that appeals to me is to do what Freenet does:
To upload a file, you split it into small chunks and send them to a bunch of random peers.
Each peer may keep a copy of each chunk it receives, and may pass them to other peers.
By sending enough copies of each chunk to enough peers you can be relatively certain that the entire file can be found in the network.
To download a file, you ask several random peers for each chunk. (A file's URI identifies the chunks that belong to it.)
If a peer has a copy of that chunk it will probably send it to you.
If not, it may ask another peer for it. In this way a chunk can be passed through several nodes before reaching its destination. Each node may also keep a copy.
The downloading peer also re-broadcasts some chunks to other random peers. This helps keep the chunks of commonly accessed files from vanishing, and makes it difficult to determine which nodes are actually downloading a file, and which are only passing it along.
A peer may delete an old chunk that hasn't been requested in a while to save space.
I've emphasized may here because it's important in Freenet. Since there's no guarantee which clients will save/pass along a chunk, it's difficult to tell which clients have it. Bitcoin clients, then, would be running this sort of chunk exchange system to share files. The block chain would just keep a record of the file's existence. It would identify the chunks that belong to a particular file, and perhaps the "owner" of the file - so that just as only the owner of a coin can spend it, only the owner of a file can upload a new version of it. Clients might also periodically broadcast a public message, stating that they have (or no longer have, or know where to find) chunks X, Y and Z (which may or may not be all the chunks they have). Of course, another way to share files would be to simply broadcast a message saying "file X can be found at ftp://blah.blah.blah/X". But this isn't really sharing files, only their locations. This method doesn't give you any of the benefits of the Freenet method, but it might be suitable if you don't care about people being able to find out that it was you, in particular, who uploaded/downloaded the file. (Peers could still randomly grab copies of the file and rehost them, perhaps in chunks, to maintain availability and mask who's actually requesting it.) Again, it'd be possible to encrypt a file with someone's public key, or leave it in plaintext so everyone can see. What Freenet does is something along the lines of including the decryption key in the file's URI. That way the nodes who hang on to its chunks can't know their contents (which means you can't get in trouble if someone uploads something illegal and your node happens to cache it), but anyone can be given the URI, allowing them to decrypt the file.
Using the block chain as a generic record of object ownership
Already the block chain is essentially a big record of who owns what coins. More generally, it's a giant key-value store. Spending a coin is telling all your peers "I'm giving Bob ownership of my Foo", and having them agree that you're able to do that. There should be little reason it couldn't record the ownership of other things, and other messages than just transfers of ownership, such as:
Domain names (as is done with Litecoin), and names/addresses in general
Lists of known peers on the network (if this isn't done already), including perhaps known trustworthy or untrustworthy peers. As you download the block chain from other peers, you learn about more peers you can connect to.
Votes - everyone is issued one vote, and only its owner can say "for vote X, my choice is B". Everyone can see the votes, but they can't tell which vote belongs to which person.
TL;DR Bitcoin and its block chain technology could be not just a digital currency, but the future of decentralized networking, incorporating email, DNS, file transfer and just about anything else all in one system. (edit: add a couple more possible uses)
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