

Bitcoin ≈ MySpace - joeyrichar
http://5nf5.blogspot.com/2013/06/bitcoins-are-dead-long-live-cryptocurrency.html

======
SFN
"...the security could be updated but I do not see how this can be done in
practice without a central authority"

The same way the fork was fixed and how any upgrade happens with Bitcoin. An
idea is proposed, a small group of developers work on it, the mining pool
operators decide to implement it or not, then all the individual miners vote
on it by deciding which mining pool to mine for. Basically any change has to
have 51% agreement from the miners.

"Ironically, for what is suppose to be a highly decentralized currency, the
collapse was avoided because the system was "controlled by the will of a very
small number of people – particularly, the operators of mining pools" who
effectively agreed which block chain to support."

The avoided collapse only appears to be a centralization of power because it
was a good decision. I'm defining good decision here as one that increases the
value of a bitcoin. The majority of miners were using the new software, the
majority of businesses were using the old software. If nothing was done,
bitcoin mining for everyone with the new version would have kept plugging
along fine, but all the businesses that had to re-install or rewrite their old
Bitcoin software would have had to shut down for many hours or days.

The majority of mining pool operators decided that it was better for the
longterm growth of Bitcoin to give up the bitcoins that they mined on the new
chain and minimize the downtime of Bitcoin businesses rather than keep the
small amount of bitcoins and have Bitcoin suffer bad publicity in the coming
week. This is a very important point. Every individual miner had a choice of
what pool to use. When they found out about the change, they could have just
as easily flipped a switch and started mining for a pool that decided to keep
the bitcoins. That didn't happen. The Bitcoin miners/holders aren't reacting
only to what gives them the most bitcoins today. They are thinking long term
and are doing what they think will give their mined bitcoins the most value in
the future.

Bitcoin is sort of like the federal government and the altcoin experiments are
like state governments. If there's a really good idea that an altcoin comes up
with, Bitcoin can integrate it by a 51% vote. If an altcoin experiment uses
SHA-512 successfully and is gaining value over Bitcoin because of it, bitcoin
can integrate that feature by a 51% vote. If an altcoin has a desirable
feature, then bitcoin might be able to integrate it and enjoy the benefits of
the feature + the network effect to stay relevant.

------
drcode
To be fair, OP admits limited knowledge and possibility of being wrong. Also,
he/she makes some relevant points, though the overall "Bitcoin is dead"
argument is muddled. Most of the points of this post have been raised
countless times on the btc forums in the past.

The primary issue with this post is that the author doesn't give any reason
_WHY_ bitcoin will be supplanted by alternatives- In a similar way, I can say
"Google stock is worthless because in a hundred years something better will
have taken Google's place". No one would consider that to be a cogent
argument.

Yes, currently the price of bitcoin shows that there is great pessimism among
investors regarding its viability (i.e. a single bitcoin isn't worth $1000 or
more right now, which would be the minimum rational value for a successful
currency of this type).

This is because it is not lost on the bitcoin community that btc is a crazy
idea and can still spectacularly fail for a multitude of reasons. I think any
rational bitcoin user would agree that the chance of bitcoin's large-scale
success within the next decade is less than 50%- This is why the reward for
any investment in bitcoin right now is likely to pay of 10x-100x in the case
it DOES succeed. However, if it doesn't succeed I believe it could only be
because the concept of a wide-scale cryptocurrency is fundamentally flawed (I
have yet to see any such flaw) not because it gets beaten by the competition.

As for the chances of another, similar, cryptocurrency supplanting bitcoin: I
am almost 100% sure this won't happen. The reason for this is that bitcoin is
the "javascript" of cryptocurrencies: Any deficiency that exists in bitcoin
can be added as an extension to bitcoin and hence can't be a meaningful
selling point for a competitor. At best, competing cryptocurrencies can fill
niche roles within the bitcoin ecosystem. (For instance, a cryptocurrency with
faster confirmations will probably eventually be grafted onto bitcoin payment
services, but again only to fill a niche role, with bitcoin continuing as the
leading currency.)

(The sole exception I think would be if the core bitcoin dev team were to
screw up very very badly somehow, then another cryptocurrency might have a
fighting chance.)

------
r3demon
The author is wrong in many points:

1\. Bitcoin is the open base for monetary innovation, you should compare it to
internet protocols like IP or HTTP, Linux, not some privately-owned social
networks.

2\. There's hardly any need to enhance anything in bitcoin itself, the
security is enough, nobody has proven otherwise.

3\. Alternative cryptocurrencies are 99.9% copies of bitcoin with hardly any
innovation. Only proof-of-stake(ppcoin) algorithm and scrypt hashing(litecoin)
are real changes and it is questionable if they add any value.

4\. The slow speed of transactions (~10min), which other cryptocurrencies are
trying to "fix", could be easily brought to instant with a help of third-party
service, there are many way of doing it.

5\. Bitcoin developers and pool operators aren't some kind of "kings", they
are merely leaders guiding the community.

------
Nursie
Interesting.

Personally I hope for a crypto-currency scheme that inflates with use and
avoids the runaway "lets burn electricity as fast as we can" aspect of BTC
mining.

~~~
lightweb
The computational cost of Bitcoin mining not only serves to bootstrap the
totality of the BTC into the ledger but also is designed to protect the
network. It is also a teeny-tiny fraction of the power required by the legacy
banking infrastructure all over the world. It is not a waste.

~~~
Nursie
1\. I don't care how much electricity the banks use. That's why I didn't say
banks are awesome and bitcoin sucks because of power usage.

2\. The power of the network only really protects against the 51% attack. Why
not have a crypto system that doesn't have such a ludicrous, energy burning
arms race built in?

And of course it's a waste!

------
bachback
how lame is that? " I do not profess to know what the startup-stage version of
the Facebook equivalent is for cryptocurrencies but there are plenty of
possibilities. To name a few with interesting prospects: YACoin, Litecoin,
PPCoin, Freicoin." BTC is much better than these. The author has 0.0 knowledge
of BTC.

~~~
obviouslygreen
Are you drawing the conclusion that all of his points are mistaken based on
this statement?

If not, if you can point out the weaknesses in (the rest of) what he's saying,
I'm sure a lot of us (myself included) would be interested to read your
counterpoints. I for one don't know enough about the relevant topics to debate
this piece, but it would be great to read what more informed HN'ers think
about his assertions (and why).

