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Are Altcoins Undermining Bitcoin's Credibility?
An anonymous reader writes The editor of a Bitcoin advocacy site believes the proliferation of altcoins (cryptocurrencies other than Bitcoin) is harming Bitcoin's long-term potential as an alternative to traditional currencies. Posting at BadBitcoin.org, a site that seeks to expose online scams that target Bitcoin users, the pseudonymous ViK compares altcoins, including the Internet meme inspired Dogecoin, to a pump-and-dump scheme where developers create their own version of the Bitcoin wallet and blockchain and then "pre-mine" or generate a significant number of cryptocurrency units before the altcoin's official release. Later, when their value has risen, the pre-mined altcoins are exchanged for Bitcoin or in some cases converted directly to cash. While critics of cryptocurrencies in general might find ViK's comments about the altcoin "tulip" mania ironic, the self-confessed Bitcoin fan is nevertheless calling for an altcoin boycott: "The easiest way to stop them is to not participate. We all know that they only have one purpose, and that is to make Bitcoin for the so called developers."
I'm not really a fan of any "altcurrency", but this guy just comes of sounding whiney and self-serving.
If you want news from today, you have to come back tomorrow.
Bitcoin has about as much credibility as Monopoly money in my mind. Asking if something can undermine the credibility of monopoly money doesn't really make any sense.
I don't respond to AC's.
All of this is funny money.
Bitcoins are just in your imagination.
USDollars are merely imagined by the USGovernment.
Gold has no real value other than using it for things like electrical contacts, etc.
None of this is real money.
If you want real value, get a basket of eggs, hatch the chicks, raise them up, feed them pasture, your other asset - you are landed I hope - and they'll lay more eggs. Now you're in business and can feed yourself. When you succeed at that start feeding other people and they'll give you something of real value like a pork chop or firewood to stay warm with. What ever you do, don't accept cash, bitcoins, gold or other fraudulent currencies for your eggs. You want real value for your real things.
Anyone who supports any sort of crypto currency could say the same about bitcoin. Early adopters/(founders?) of bitcoin still control a huge number of bitcoin, so how is that not a pump and dump scheme itself?
I'm not a fan of crypto currencies at all.
...has an well-trained group of mercenaries that specialize in identifying, infiltrating, and disrupting social movements which threaten the profits of the ruling classes...
Here you go...
If you want news from today, you have to come back tomorrow.
But they said the exact same thing about Linux distributions in the 90's, after the post Redhat influx of distros. What we learned from that experience, and some of us knew it at the time, was that the more people you have working in their own isolated environments, solving the problems that are important to them... the more innovation you have in the greater Linux space. It's the trickle down effect in open source software, and it's what makes a product or product ecosystem stronger. And we're seeing the same effect in the Bitcoin space. Just look at the proliferation of Scrypt variation, Gravity wells, different variations on proof of work, proof of stake, and others. Like Linux, Bitcoin is more than a bundle of software products, it's an entire ecosystem. To dismiss that, and say that there should only be about Bitcoin seriously misses the way open source innovation works. The rest is all marketing, which is bullshit by definition.
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What does this even mean? Asic proof?
ASICs (Application-specific integrated circuits) represent specialized hardware specifically designed for a particular task, in this context the ASICs are designed to mine coins. ASICs outperform (both in speed and power consumption) CPUs and GPUs making ASICs far more profitable.
:-) 24/7 mining some coin.
Coin proof-of-work algorithms have some sort of difficulty setting to control the number of coins being awarded during a time period. The more mining horsepower there is the higher the difficulty goes. This rising difficulty level makes the mining calculations take longer. So as the total capability to do work (all the CPUs+GPUs+ASICs) goes up the difficulty goes up. An individual CPU, GPU or ASIC earns fewer coins per hour as difficulty rises but the total number of coins generated remain roughly constant over time.
ASIC-proof algorithms attempt to leverage the fact that ASICs are specialized. They try to incorporate things found in CPUs and GPUs but not in ASICs. The motivation is to allow CPUs and GPUs to profitably mine something. The problem is that the things missing from the previous generation of ASICs used to design the ASIC-proof algorithm have been finding their way into newer generation ASICs.
So the short story is that some alt-coins were partially motivated by CPU/GPU miner that were driven out of bitcoin mining. Newer generations ASICs are now taking over alt-coins and CPU/GPU miners are once again being driven out.
Those great deals you find on ebay for a used high end GPU. It very well may be a GPU that was over clocked and run just below the point of spontaneous combustion
Gee, you don't say?
Clearly Bitcoin has enough credibility for people to value it at hundreds of dollars ...
But not enough credibility for merchants to hold/keep the bitcoins they receive from customers.
Merchants tend to use merchant services offered by various bitcoin exchanges. Basically the merchant does all their pricing and accounting as normal in whatever fiat currency they use, dollars, euros, etc. When a customer indicates they wish to pay in bitcoins the merchant sends sale info to the exchange, the exchange converts the price from fiat to bitcoin and provides a payment address to send bitcoins to. This payment address is the exchange's, the merchant never touches a bitcoin -- lucky for them if they are subject to IRS jurisdiction but that's another story. When the merchant receives the coins they credit the merchant's account with the original fiat amount specified regardless of any particular fluctuation that may have occurred in bitcoin's price.
In short. The merchant prices and does accounting in fiat currency and receives fiat currency in payment. The only thing new is that their payment processor is a bitcoin exchange rather than VISA or Mastercard.
...but not necessarily have huge advantage.
ASIC-proof algorithms attempt to leverage the fact that ASICs are specialized. They try to incorporate things found in CPUs and GPUs but not in ASICs. {...} Newer generations ASICs are now taking over alt-coins and CPU/GPU miners are once again being driven out.
You can build an ASIC for pretty much anything, and beyond some point, it might be commercially reasonnable to attempt it (if the market is big enough and there are enough people interested into buying hardware, it might be worth trying to design sellable hardware).
Now the question is: is there an actual gain in doing it? And that's where all the details lie in.
Depending on the complexity of the Proof-of-Work algorithm, it might range from
- PoW is dumb easy. Each jump in technology (CPU, GPU, FPGA, ASIC) result in massive increase in performance. Hashing power jumps forward several orders of magnitude. Each new technology simply obliterates the relevance of the previous generation (that's the case with bitcoins' SHA256 algorithme).
all the way to the opposite:
- PoW is awfully complex. The algorithme has so much requirement, that your ASIC basically ends up being a slightly custom CPU. The only real benefit compared to GPU, is that the ASIC consumes a tiny bit less power when compared to a GPU.
Also, keep in mind that some PoW actually solve real-life scientific problems. If somebody managed to create ASIC hardware for PrimeCoin or RieCoin, there's some publication-worth fame to be made.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
PrimeCoin and RieCoin currently have no known FPGA nor ASIC implementation and the few GPU implementation don't seem to bring the huge leaps in performance that GPU brought to Bitcoin's SHA256.
It's not that they were designed with the purpose of being CPU-only (ASIC-resistant was never the main foal in creating them).
It's that they are based around actual scientific problems that ARE difficult. Designing silicon for them *would* be a scientific improvement.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]