

Virtual-Currency Craze Spawns Bitcoin Wannabes - BrandonMarc
http://online.wsj.com/news/articles/SB10001424052702304607104579210051252568362

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joezydeco
"Some altcoins incorporate interesting new ideas, but there is an essential
feature of Bitcoin which they all lack. It is not a matter of its technology,
but rather of its history and community. Quite simply, a medium of exchange
that is more widely accepted on the market is more useful than one which is
not."

[http://themisescircle.org/blog/2013/08/22/the-problem-
with-a...](http://themisescircle.org/blog/2013/08/22/the-problem-with-
altcoins/)

~~~
blibble
so uh, exactly the same problem bitcoin has vs. real currency?

------
NhanH
Question: without regard to viability/ usefulness of the alternative coin in
the long run (which the judgement for bitcoin hasn't even been reached yet),
assuming that bitcoin is here to stay, will the alternative coin have any
value as a tool for arbitrage? Considering that it's alot more difficult to
move regular currency between exchanges, more so when they're of different
currencies.

~~~
bmelton
I'm not remotely an expert, or even exceptionally knowledgeable on the
subject, but I don't know if I'm even sold on the idea that BitCoin is _the_
crypto-currency to succeed.

The current implementation works _pretty_ well, but other currencies have
other advantages. Litecoin, for example, is designed to be mined on more
commodity CPUs than GPUs, and has an algorithm specifically designed to deter
faster GPU processing. Meanwhile, WorldCoin (WDC) is optimized for faster
transfer times.

I don't know the ultimate long-term value on the former, but WorldCoin's
advantage is pretty big, as currently BitCoin is too slow in transfer without
slowing up the line to purchase a cup of coffee, for example.

It's possible that other currencies come out mitigating more of BitCoin's
deficiencies, or maybe BitCoin can be altered in such a way that its
shortcomings can be ameliorated, or maybe they aren't really so painful that
they're actually a problem that _needs_ a solution. I dunno.

Either way, I'd be surprised if the first-mover becomes the most entrenched
permanently.

~~~
jquery
> I don't know the ultimate long-term value on the former, but WorldCoin's
> advantage is pretty big, as currently BitCoin is too slow in transfer
> without slowing up the line to purchase a cup of coffee, for example.

That's not exactly true. The transfer is immediate. The verification that
ensures you aren't the victim of double-spend fraud takes an average of 5
minutes (during which they are waiting for their coffee). The transaction will
show up as unverified on the blockchain even sooner than that, during which a
future merchant could choose to not accept payment until the previous payment
clears.

Even if they were successful once, the merchant could choose not to sell to
them again. Considering the merchant charges on a credit card vs. the low
transaction fees of Bitcoin, I would be surprised if Bitcoin didn't come way
ahead in this scenario.

~~~
nilkn
What if you want to buy something that doesn't require five minutes to
prepare, like a newspaper from a newspaper stand on your way to work? Will you
need to wait around for five minutes for the transaction to be verified or
will the merchant take it on faith, temporarily, and require a way to track
you down in case it's denied?

~~~
qnr
In order to make a successful attack against a merchant accepting zero-
confirmation transactions, the attacker has to:

1\. Submit transaction A to miners

2\. Submit another transaction B (spending the same coins as A) to the
vulnerable merchant

3\. This is the really hard part: make sure that the merchant doesn't know
about transaction A until you got your purchase and ran away.

If the merchant has good network connectivity, it is very, very hard to
perform this attack successfully, certainly not something that would be done
to get a free newspaper or coffee.

~~~
nilkn
Thanks for the response.

I just dug up an interesting and relevant bit of history. Here is, to my
knowledge, the very first response, ever, to the original bitcoin proposal on
the cryptography mailing list:

[http://www.mail-
archive.com/cryptography@metzdowd.com/msg099...](http://www.mail-
archive.com/cryptography@metzdowd.com/msg09963.html)

"For transferable proof of work tokens to have value, they must have monetary
value. To have monetary value, they must be transferred within a very large
network - for example a file trading network akin to bittorrent.

To detect and reject a double spending event in a timely manner, one must have
most past transactions of the coins in the transaction, which, naively
implemented, requires each peer to have most past transactions, or most past
transactions that occurred recently. If hundreds of millions of people are
doing transactions, that is a lot of bandwidth - each must know all, or a
substantial part thereof."

So it appears the timeliness of verification on a large scale was possibly the
very first concern ever voiced about bitcoin.

------
maaku
These coins are worthless. If they ever start to gain value, it would trigger
the end of bitcoin. For alts that have a chance from being different from
bitcoin, see namecoin, freicoin, and zerocoin.

~~~
maaku
*trigger the end of all coins, including themselves

