
Wary of Bitcoin? A guide to some other cryptocurrencies - shawndumas
http://arstechnica.com/business/2013/05/wary-of-bitcoin-a-guide-to-some-other-cryptocurrencies/
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eli
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.

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quackerhacker
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.

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standeven
I think it's a fad but I don't think I'm ignorant. I do wish I had bought in
at $5 and sold it at $200, but I'm not particularly mad about it; I tend not
to invest in currencies or commodities.

~~~
quackerhacker
That's where I personally am disappointed, same as you, I wish I had got in on
it back in 09'...but the same can be said about equity in Apple or Telsa.
-quacker

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zanny
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).

~~~
lmm
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.

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vbuterin
Problem is, 100% inflation per 2 years is a bit much.

~~~
julespitt
Depends entirely on demand. Everyone can play with the supply all they want -
demand is still completely unpredictable.

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quackerhacker
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

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aneth4
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.

~~~
julespitt
I'm going to take the opposite view.

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.

~~~
aneth4
Currency has two major functions.

As a medium of transfer, you may be correct.

As a store of value - I find it hard to believe another cryptocurrency will
approach Bitcoin.

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fixxer
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".

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maaku
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.

~~~
fixxer
Perhaps it is just my confusion... but given those free alternatives, how does
Freicoin become anything more than a hot potato?

Suppose for some reason I have to use Freicoin to make a purchase. Since it
rots, I keep my wealth in something else (Bitcoin, for sake of example). I go
into an exchange and sell some btc for Freicoin, and make my purchase.

On the seller side, they've now got a bunch of rotting Freicoin. So, they go
into the market and sell them for, say, bitcoin (or their preference for
wealth).

Why would either the buyer or seller go through the extra hop (commissions) of
Freicoin when Bitcoin (or whatever non-rotting FX is liquid) serves as both a
store of value and a medium-of-exchange.

I challenge the claim that a medium-of-exchange is diametrically opposed to a
store of wealth. You need wealth storage to maintain liquidity, do you not?

~~~
apw
It's worth mentioning that the US dollar is also a "hot potato".

~~~
maaku
Perhaps, but inflation is less than the basic interest/liquidity premium, so
you only need to lend out/invest some of your cash to stay ahead.

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dreeves
I guess it doesn't count as a crypto currency but I'd add <http://ripple.com>
to this list.

~~~
tagawa
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.

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ibotty
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.

[http://www.konkret-magazin.de/konkret-texte/texte-
archiv/kon...](http://www.konkret-magazin.de/konkret-texte/texte-
archiv/konkret-texte-nr-57.html)

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Sniffnoy
Why only ones derived from Bitcoin? There were cryptographic currencies before
Bitcoin, right?

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PaperclipTaken
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.

