Gold collapsing. Bitcoin UP.

[Christoph Bergmann]

I'm not very informed about dark net markets etc., any of you guys have an idea if the Monero hype in this area has any substance?

Monero was the only altcoin that was ever said to be "interesting" by some (very Bitcoin maximalist) people, who introduced me to Bitcoin. No idea if it's true, but I read, that it's privacy features make it much harder to scale?

I think dnm did accept darkcoin some time ago and it wasn't a success. It's like as accepting bitcoin in a shop doesn't make the people pay with bitcoin.

Currently the only option to easily use monero is to buy it with shapeshift and send it to monero's online-wallet. This would make this two plattforms to mega-gatekeepers for drug markets money laundering.

Monero is fine, since it has two important advantages over bitcoin: it 1) uses a mining-algo that is resistent against asic, making monero more on the old vision of "one cpu, one vote" and making coin-distribution (in theory) more democratic / decentralized than bitcoin's, and 2.) Monero uses ring-signatures to hide who is sending something to someone else. Ring Signature means that a message (transaction) can be signed by a pool of keys and after signing it can't be determined which key did sign, so it is impossible to analyse who made a payment. I don't know how properly monero implemented ring signatures, but it seems to be fine

Monero has several downsides. 1) Mining is vulnerable to botnets, meaning that the bad guys with the botnets have most mining power (or the bad guys governing supercomputers). 2.) The monero-distribution is crazy and very short-term, meaning that already something like 80% of coins are mined. I never understood why nearly every altcoin has this rapid line of distribution while bitcoin has a longterm distribution plan, 3.) the original mining-software had a bug / was not optimal, while some people kept secret a better mining-software and mined a lot of coins, 4.) Ring Signatures need a lot of space / work, what means Monero is less scalable than even current bitcoin.

That's my impression on monero.

Edit: I forgot: Monero has no GUI by now, only command line. That's definitely a downside, as it lays the trust for everybody not used to command line on one single website.

 

[satoshis_sockpuppet]

@Christoph Bergmann
Thx!

Mining is vulnerable to botnets, meaning that the bad guys with the botnets have most mining power (or the bad guys governing supercomputers).

That's an often heard argument against ASIC-"resistant" PoW.

Two things I wonder about:

1. Isn't a PoW demanding a lot of ram somewhat protected against the use of botnets?
2. Wouldn't a PoW using a random subset of the UTXO set be protected against the use of botnets?

 

[Christoph Bergmann]

@satoshis_sockpuppet

1. I don't know. You mean, that you need at least 16 gb ram to execute mining? Maybe some algorithm can do this.

2. would be imho brillant, not only to protect against botnets, but also to keep a high number of nodes alive even when the size of the blockchain explodes. Imho it would be even better if you don't just use a random snippet of the utxo set but from the whole blockchain, so that miner's have to be archival nodes ... but I don't know if there is a method to do this ...

 

[albin]

I'm not very informed about dark net markets etc., any of you guys have an idea if the Monero hype in this area has any substance?

This development interests me because an ongoing talking point on the Bitcoin Uncensored podcast vis-a-vis Bitcoin maximalist invincibility is the dogmatic repetition of laughing at altcoins because darknet markets don't take them. I'm curious whether this development actually tangibly affects their worldview, or if they find some creative rationalization.

 

[lunar]

Grinding Higher

 

[Justus Ranvier]

2.) The monero-distribution is crazy and very short-term, meaning that already something like 80% of coins are mined. I never understood why nearly every altcoin has this rapid line of distribution while bitcoin has a longterm distribution plan, 3.) the original mining-software had a bug / was not optimal, while some people kept secret a better mining-software and mined a lot of coins,

That's why they're more properly called scamcoins.

Somebody launches a new token which they ensure they control and, via various smoke & mirrors tricks, pretend to be decentralized. Then they use some of their stash to build up hype by paying off shills & journalists with the goal of getting it listed on an exchange and attracting bagholders. Then they cash out.

 

[Bagatell]

@Justus Ranvier

(in my best jstolfi voice) how is this different form bitcoin?

 

[Justus Ranvier]

The simplest answer is that Bitcoin isn't a copycat.

 

[Christoph Bergmann]

That's why they're more properly called scamcoins.

Somebody launches a new token which they ensure they control and, via various smoke & mirrors tricks, pretend to be decentralized. Then they use some of their stash to build up hype by paying off shills & journalists with the goal of getting it listed on an exchange and attracting bagholders. Then they cash out.

Yes - no - I don't know.

The cryptonote-algorithm seems like a pretty nice deal, solving some of bitcoin's biggest problems. But unfortunately the two most prominent incarnations of cryptonote - bytecoin and monero - are somehow scammy. There have been other implementations, quazarcoin, pepplecoin, boolberry, but their success on the market tends to zero ...

 

[Zangelbert Bingledack]

On the Monero news:

1) Dark market sites accepting Monero isn't that big a big deal by itself. It depends on how many individual vendors do.

2) Since I don't think any vendors or buyers have been caught through blockchain analysis (especially when using mixing), I doubt Monero has a chance of eroding Bitcoin's commercial network effect yet. Monero getting a user-friendly wallet and some high-profile arrests via chainalysis could change this.

3) Monero inflation schedule is somewhat fast, but not anywhere near as fast as some. It's a validly mined coin, as far as I know. It's essentially #3 in market cap after Litecoin now (Ripple, Ethereum, Dash, etc. don't count as they are very heavily premined/instamined, making their caps appear multiples higher than they should).

4) As always, spinoffs are Bitcoin's defense. If XMR starts to gain popularity on darkmarkets and Bitcoin cannot respond quickly within its current protocol, a spinoff using the Monero protocol should appear. Then every bitcoin holder would also be a "Monero" holder by default (not the XMR ledger, just the protocol). This is why altcoins are fundamentally pointless except as backups in case Bitcoin's ledger were to get ruined somehow.

5) Bitcoin being first in a moral sense doesn't matter, but the Bitcoin ledger being the established WWL does matter. It preserves the ledger as a store of value, rather than forcing each person to be an investment genius and very active researcher of new cryptocurrency developments in order to retain their purchasing power. There was no way to "airdrop" BTC on the whole world, so it made sense to mine a new coin with a clean-slate ledger as there was no other option. However, there is a way to "airdrop" XMR onto everyone in the Bitcoin community: a spinoff. That is what should be done (to retain store-of-value utility for cryptocurrency), not an altcoin with a bran new ledger. This should be obvious upon reflection, since technology continually marches forward and new ledgers cannot just be created willy-nilly every year or so with people losing all their money if they ever fail to make the right bet.

 

[solex]

Bitcoin Unlimited Foundation :- Registration Process

BU members and prospective members who are interested in this will find the thread here. Once the BUF articles are prepared in draft form they will be pasted into it, and open to public review before the actual filing takes place.

 

[IMALLIN]

Bingledack. I like your idea in theory but I don't see why a bitcoin spin off using Monero's tech would gain any ground vs Monero. Bitcoin is bitcoin and alts are alts. It would be nice if we could just use bitcoin spin offs instead of any alts gaining traction but I don't see the market reacting that way.

 

[Zangelbert Bingledack]

@IMALLIN

As of the spinoff date, a buyer using bitcoins is newly flush with XMR-bitcoins in hand that they are ready to use for purchases. With an altcoin, a buyer using bitcoins (especially if they are an investor spending from price-appreciation gains) will have to go out of their way to obtain the altcoin. Note that as the economy grows, most sellers will also be buyers, from upstream suppliers.

Spinoffs default to a situation where you're faced with the decision to sell the new coins or buy something with them (the latter saving you money because it is more efficient, provided you have something you want to buy). Altcoins default to a situation where you're faced with the decision to buy coins in order to buy something with them or just ignore them and continue using Bitcoin. Spinoffs seem to have the clear advantage in commercial network effect.

Think back to when silver was the money, and imagine people are talking about switching to gold or platinum since they are lighter. If you could airdrop gold on every silver holder proportionally, for completely free by magic, but for some reason this trick could not be performed with platinum - instead everyone would have to go trade in their gold for platinum - which do you think the network effect will move to, assuming gold and platinum are functionally identical as money?

 

[megadeth]

Altcoin investments have always been great to increase ones Bitcoin stash.

 

[Norway]

@Gavin Andresen quit as lead maintainer because he was tired.

But he got tired because some people made him tired. On purpose.

Well, that's my theory.

 

[Richy_T]

I think we may be about to see a new payment layer which is a hybrid of an exchange and something like shapeshift. You'll hold your alts but when you need to pay in Bitcoin, you'll pass the address to the layer and tell it how much and it will give you an address to pay your alts to and a minimum amount. It'll pay your bitcoin bill and return any excess alt and you won't have to deal directly in Bitcoin at all. This will be at a premium but worth it for not having to deal with the mess that Core have made of things directly. This is just a bridge to cutting Bitcoin out of the deal altogether, of course.

 

[molecular]

Altcoin investments have always been great to increase ones Bitcoin stash.

hehe... tell that to the bagholders of failed alts.

 

[go1111111]

That is what should be done (to retain store-of-value utility for cryptocurrency), not an altcoin with a bran new ledger. This should be obvious upon reflection, since technology continually marches forward and new ledgers cannot just be created willy-nilly every year or so with people losing all their money if they ever fail to make the right bet.

IMO "altcoins are doomed because if they're good they'll just be cloned with BTC's ledger" gets more true the more Bitcoin stakeholders there are, but it's not clear that the small # of Bitcoin stakeholders now provide a very solid defense against a sufficiently innovative altcoin.

Ethereum is picking up a decent mass of stakeholders now, and this mass is continually growing, but there is no strong movement to create an Ethereum-clone with the Bitcoin ledger (actually there was something called aethereum that tried to do this, but it didn't get traction). A Bitcoiner could say "sure, but Ethereum is still much smaller than Bitcoin and not used for anything real, so we still have time if Ethereum takes off." The question is, how long would Bitcoiners wait before launching the clone, and would it be too late?

One reason I think they may wait too long is that Bitcoiners are inherently less enthusiastic about any given alt than they are about Bitcoin. Taking Ethereum as an example again: Bitcoiners have already taken a position on BTC vs. ETH and have a long list of reasons why ETH sucks and is not a big deal. Being wrong about Ethereum would be a threat to a lot of Bitcoiners, and something they might resist admitting to themselves until Ethereum already has too big of a network effect for a clone to beat it.

Another reason why I think an alt has a chance to take over is that while the altcoin is gaining in popularity, there is still plenty of opportunity for savvy Bitcoiners to profit more by buying up the altcoin than by Bitcoin winning. So smart Bitcoin supporters may have an incentive to defect. For instance let's say Ethereum's total supply ends up being 6x that of Bitcoin, and using my deep cryptocurrency/economic/game theory knowledge I'm 70% sure that Ethereum will take over as the world's digital gold. I can either buy ETH, or somehow try to stop it to protect my BTC investment. Since Ethereum's price is currently 52x less than Bitcoin's, I'm better off switching a lot of my funds to Ethereum and having it win than trying to stop it.

The argument "but switching to an altcoin would ruin the idea of digital scarcity, so we all have an incentive not to do it" also gets weaker the earlier we are in the game. Just because Friendster fell to Myspace which fell to Facebook doesn't mean Facebook's social networking position is currently precarious. The changing fate of the social networks was all very early. Bitcoin's network effect now is extremely weak compared to the maximum theoretical network effect of a widely used cryptocurrency.

I still think Bitcoin is far more likely than any other alt to become dominant -- but i also think the "we'll just clone it, don't worry" argument gives us a false sense of security.

 

[satoshis_sockpuppet]

But he got tired because some people made him tired. On purpose.

I'm not sure that's right. To me it looked like he wanted to give up leaderships asap because he is smart enough to see, that it's not a good idea to be seen as "the guy responsible" for a threat to central banks. Sadly the guys who picked the "responsibility" up, aren't as smart and surely not as responsible.

He was a leader, who didn't want to be a leader. Not such a bad combination.

 

[Zangelbert Bingledack]

@go1111111

Yep, although switching ledgers constantly is folly, it's a collective action problem (it may be that no individual has incentive to prevent altcoin takeover). Also there could conceivably be a few switches before the final coalescence. The one concession I've made before is that altcoins can thrive when they market to a sui generis investment community, since there they are effectively THE world wide ledger, not an altcoin.

Many factors to weigh, and I'm pretty drunk right now, but since the motivation for people launching altcoins as NOT spinoffs is usually to profit from the premine (applies to Ethereum, not Monero), that generally ensures that investors gets shafted for going with the altcoin rather than the spinoff. As for non-premined coins like Monero, the Bitcoin network effect is very strong, so to me it's a question of whether it is stronger than Core's malign stranglehold. I tend to think so.