I would think the universe of people who are wary of Bitcoin, but would be interested in a smaller, lesser known alternative currency would be quite small.
AGREE! Bitcoin is established compared to others (litecoin, feathercoin, namecoin, PPC, etc...). To be wary of Bitcoin now is to be one of the IGNORANT people that continue to call bitcoin a fad or a scam...they're just mad they didn't hop on it sooner.
I still don't understand the mindset behind all these clones of BTC thinking having a hard cap and eventual deflation in the monetary supply of their cryptocurrency is a good thing.
What I want is something like PPC, except do it even better - you want a system that will generate coins just enough to make hoarding money a net loss. So if the coins themselves are rapidly becoming more valuable, you should introduce some algorithmic way to inject a lot of coins into the monetary supply, and if they are losing value you want to throttle coin generation.
It would require the distributed network to agree on what the coins value is doing - which would be very complicated. But just flat fixed inflation of the monetary base annually works better than having a finite money supply that eventually means you are doomed to a deflationary spiral.
It is probably chief amongst why BTC is such a commodity right now - since we already have over half the total bitcoins already in the system, the monetary base over the next hundred years is only going to grow less, and as more people want in on BTC, there is higher demand for a resource that has dwindling supply (especially once the rate of lost wallets and the coins therein outpaces the mining of new blocks).
I think the simplest and most effective approach would be fixed difficulty. That way 1 FRC is always worth a certain number of hash calculations, so it's anchored to something real, but apolitical (the value of computer hardware); it follows natural inflation in line with Moore's law, and the money supply grows in proportion to the users. And this would actually mean a simpler codebase than what bitcoin does.
AIUI the main argument against this is that it does nothing to encourage early adopters - why would anyone use my FRC when they can always just start mining them later if they become popular. Still, I'm interested in pursuing this if there's demand.
Other CC's WON'T gain strong traction until a centralized exchange (i.e. MTGOX) has an easy UI like MtGox and allow withdrawal to currencies that pay the bills. Vircurex (the main LTC exchange...which exchanges LTC to BTC) recently has been hacked compromising wallets. One of LTC's strength was that it couldn't be mined with a GPU, FPGA, or ASIC...but thanks to reaper, now miners can get MHashes with their GPUS. And when MtGox announced that they were holding off on Litecoin integration, LTC dropped to almost $2 and miners on the forums had an exodus. First tech to people's impression remains the standard...in this case, it's Bitcoin. -quacker
Replacing Bitcoin now would be like trying to replace gold with platinum or replace HTTP. It's not going to happen, no matter what technical advantages another currency has. Bitcoin has critical mass. Sorry. Game over.
I don't say this as a Bitcoin fanboy. Bitcoin is far from ideal, but it is good enough, and capable of evolving to stay good enough. In my opinion, there is zero chance of another cryptocurrency being superior as money in the near future.
Replacing Bitcoin now would be like trying to replace gold with platinum or replace HTTP.
I rather suspect that replacing Bitcoin with something new and improved might first be like replacing Lycos or Excite (used as a search engine) with AltaVista, and then later like replacing AltaVista with Google. We won't know what a currency with true critical mass looks like until we see one. I can't predict what important feature differences the next electronic currency will offer that provide more user value than Bitcoin offers, but it's quite plausible to me, given the history of technology, that Bitcoin hasn't closed the market to other entrants yet.
From a nephew comment:
Reddit has become integral to the culture in a way comparable to Twitter and Facebook
Bitcoin is still staggeringly unadopted amongst the general population - it's like declaring Prodigy the winner in digital communications. Meanwhile, any currency is "as good" as Bitcoin when it is accepted and easily converted - so if CoinBase or Mt. Gox add new currencies, instantly they work as well as Bitcoin (as money, not necessarily as an investment) for the customer or merchant.
Only in information-poor environments does one need currency near-monopolies for economies to thrive - this is no longer the case.
So, the future? Hundreds of cryptocurrencies, private currencies, and still mostly good old fashioned government currencies. All instantly convertible so no merchant need really care what a customer pays in, as long as he gets the one his obligations are predominantly denominated in.
Never say never. Bitcoin certainly doesn't have a critical mass, and won't until a majority of the world is using it. We've seen protocols replace other protocols (HTTP pretty much replaced Gopher), and incumbents squeezed out by upstarts (WordPress pushed aside MoveableType, for example). New can replace the old. In any event, the mission of Bitcoin appears to replace government-issued currencies which most certainly have a critical mass!
Bitcoin just so happens to be the most popular cryptocurrency right now, but relatively speaking it's not all that popular. Its deflationary nature might be its downfall and there's certainly room for something to take its place, and it's very myopic to say that just because something appears somewhat popular now that it will remain that way forever.
> Replacing Bitcoin now would be like trying to replace gold with platinum or replace HTTP. It's not going to happen, no matter what technical advantages another currency has. Bitcoin has critical mass. Sorry. Game over.
There's some real cognitive dissonance if you think that bitcoin has a chance against fiat but no currency could take on bitcoin.
No, It would be like replacing Gopher with HTTP. Gopher was fantastic, and well adopted (for it's time, at least in the Mid-West) but then Tim Berners-Lee came along with a better solution that people ended up using.
Never heard of Freicoin before this... While the theory is interesting, it is kind of hard to market such a product in the presence of alternatives that don't "rot".
I am the primary programmer behind Freicoin (and the one quoted in the article). I would be happy to answer your questions.
Regarding the presence of alternatives, that is in fact the entire point. Money that you do not need liquid and at hand for cash flow purposes should be invested or spent. That keeps the monetary supply moving at a high and near-constant velocity. It also creates a marketplace for credit as people are in need of investment opportunities which do better than demurrage.
It's a little confusing, but what we're trying to do is to separate the medium-of-exchange from the store-of-value: two very different purposes for money that are naturally at odds with each other.
Yes, I was wondering why it wasn't mentioned. While it may be quite different structurally it still counts as an alternative to Bitcoin IMO. Would love to see some analysis or arguments for/against it.
it has not been said here, and i certainly don't want to discuss this here.
having said that, silvio gesell, the spiritual founder of freicoin, was very anti-semitic and there are substantial claims that the whole concept of schwundgeld is tainted by structural anti-semitism.
i don't know any english sources, but for those speaking english, have a look at the book "Schwundgeld, Freiwirtschaft und Rassenwahn" by peter bierl.
Kind of. There were theories before bitcoin but for the most part each had some major obstical that they were unable to overcome. Bitcoin represents the first cryptocurrency that was truly successful.
Most importantly, Bitcoin was the world's first distributed cryptocurrency without a centralized currency issuer. The blockchain was and is a very important advance over the previously existing Chaumian cash cryptocurrencies.
[+] [-] eli|13 years ago|reply
[+] [-] quackerhacker|13 years ago|reply
[+] [-] zanny|13 years ago|reply
What I want is something like PPC, except do it even better - you want a system that will generate coins just enough to make hoarding money a net loss. So if the coins themselves are rapidly becoming more valuable, you should introduce some algorithmic way to inject a lot of coins into the monetary supply, and if they are losing value you want to throttle coin generation.
It would require the distributed network to agree on what the coins value is doing - which would be very complicated. But just flat fixed inflation of the monetary base annually works better than having a finite money supply that eventually means you are doomed to a deflationary spiral.
It is probably chief amongst why BTC is such a commodity right now - since we already have over half the total bitcoins already in the system, the monetary base over the next hundred years is only going to grow less, and as more people want in on BTC, there is higher demand for a resource that has dwindling supply (especially once the rate of lost wallets and the coins therein outpaces the mining of new blocks).
[+] [-] lmm|13 years ago|reply
AIUI the main argument against this is that it does nothing to encourage early adopters - why would anyone use my FRC when they can always just start mining them later if they become popular. Still, I'm interested in pursuing this if there's demand.
[+] [-] maaku|13 years ago|reply
http://freico.in/
[+] [-] quackerhacker|13 years ago|reply
[+] [-] aneth4|13 years ago|reply
I don't say this as a Bitcoin fanboy. Bitcoin is far from ideal, but it is good enough, and capable of evolving to stay good enough. In my opinion, there is zero chance of another cryptocurrency being superior as money in the near future.
[+] [-] tokenadult|13 years ago|reply
I rather suspect that replacing Bitcoin with something new and improved might first be like replacing Lycos or Excite (used as a search engine) with AltaVista, and then later like replacing AltaVista with Google. We won't know what a currency with true critical mass looks like until we see one. I can't predict what important feature differences the next electronic currency will offer that provide more user value than Bitcoin offers, but it's quite plausible to me, given the history of technology, that Bitcoin hasn't closed the market to other entrants yet.
From a nephew comment:
Reddit has become integral to the culture in a way comparable to Twitter and Facebook
Nope.
[+] [-] julespitt|13 years ago|reply
Bitcoin is still staggeringly unadopted amongst the general population - it's like declaring Prodigy the winner in digital communications. Meanwhile, any currency is "as good" as Bitcoin when it is accepted and easily converted - so if CoinBase or Mt. Gox add new currencies, instantly they work as well as Bitcoin (as money, not necessarily as an investment) for the customer or merchant.
Only in information-poor environments does one need currency near-monopolies for economies to thrive - this is no longer the case.
So, the future? Hundreds of cryptocurrencies, private currencies, and still mostly good old fashioned government currencies. All instantly convertible so no merchant need really care what a customer pays in, as long as he gets the one his obligations are predominantly denominated in.
[+] [-] kintamanimatt|13 years ago|reply
Bitcoin just so happens to be the most popular cryptocurrency right now, but relatively speaking it's not all that popular. Its deflationary nature might be its downfall and there's certainly room for something to take its place, and it's very myopic to say that just because something appears somewhat popular now that it will remain that way forever.
[+] [-] maaku|13 years ago|reply
There's some real cognitive dissonance if you think that bitcoin has a chance against fiat but no currency could take on bitcoin.
[+] [-] Retric|13 years ago|reply
Bitcoin can't do fast or even reasonable speed transactions (aka less than 10 minutes) and unless that's fixed it's doomed.
[+] [-] tekromancr|13 years ago|reply
[+] [-] bpodgursky|13 years ago|reply
[+] [-] fixxer|13 years ago|reply
[+] [-] maaku|13 years ago|reply
Regarding the presence of alternatives, that is in fact the entire point. Money that you do not need liquid and at hand for cash flow purposes should be invested or spent. That keeps the monetary supply moving at a high and near-constant velocity. It also creates a marketplace for credit as people are in need of investment opportunities which do better than demurrage.
It's a little confusing, but what we're trying to do is to separate the medium-of-exchange from the store-of-value: two very different purposes for money that are naturally at odds with each other.
[+] [-] wmf|13 years ago|reply
[+] [-] dreeves|13 years ago|reply
[+] [-] tagawa|13 years ago|reply
[+] [-] ibotty|13 years ago|reply
having said that, silvio gesell, the spiritual founder of freicoin, was very anti-semitic and there are substantial claims that the whole concept of schwundgeld is tainted by structural anti-semitism.
i don't know any english sources, but for those speaking english, have a look at the book "Schwundgeld, Freiwirtschaft und Rassenwahn" by peter bierl.
http://www.konkret-magazin.de/konkret-texte/texte-archiv/kon...
[+] [-] Sniffnoy|13 years ago|reply
[+] [-] PaperclipTaken|13 years ago|reply
[+] [-] jplewicke|13 years ago|reply
[+] [-] aminok|13 years ago|reply