All jokes aside, LiteCoin & Dogecoin(a fork of litecoin) have usage advantage or Bitcoin because it's transaction confirmation is ~2-3 mins vs 15-20 min for Bitcoin. 2-3 min is still not ideal, but it makes it better for the retail environment. The confirmation period checks if there is any fraud in the transaction. Bitpay for example takes on the risk of Bitcoin's double spend fraud (sending the same bitcoin to two merchants simultaneously). If there are some way to reduce the transaction confirmation time to seconds, then alternative crypocurrency could be widely adopted in brick and motor retail.
Note that that lower confirmation time results in lower security for the network and higher susceptibility to double spend from a well-equipped mining operator. A lucky miner could capture 50%+ for 2 minutes a lot more easily than for 10. Satoshi didn't set the block time to 10 minutes arbitrarily.
Network speed increases and increasing network hashing power and distribution make it less of an issue...but, the issue remains. Litecoin and Doge are less secure than Bitcoin in this regard and more susceptible to 50% attacks.
Edit: It's clear I don't actually understand all the implications of this. But, all of the replies below me don't seem to either. I need to re-read the Bitcoin paper.
A miner has the same likelihood of beating the rest of the network at N blocks no matter what the block duration is.
An attacker in a 1-minute block network will have the same likelihood of winning 10 blocks (in 10 minutes) as if they were running bitcoin and won 10 blocks (in 100 minutes).
However, in the 1-minute network, there are ten times as many opportunities in the same amount of time to attempt to perform this kind of attack.
If I wait for 2 confirmations in Bitcoin, is this more secure than, less secure than, or equally secure to waiting for 20 confirmations in Dogecoin?
In fact, if you take into account the time it takes to propagate a block across the network, shorter confirmation times may actually lead to less security.
e.x. if the confirmation time is 60 seconds, and it takes 30 seconds to propagate a block across the network, the miner that just mined a block will have a huge advantage in computing the next block.
Well, if we start getting pedantic :-) smaller blocks also mean more block headers, which also hampers performance.
On the flip side, I don't think mined blocks typically take more than five seconds, due to the efficiency of the highly-branching network (though I haven't looked at the numbers to confirm this...) But I admit I hadn't thought about that extra detail, thank for pointing it out.
That's not true, there's a very big difference per unit time.
The difficulty of attempting a double spend decreases linearly with the nominal length of the blocks, but it increases exponentially with the number of blocks required to confirm a transaction. So if for instance you decide you need an average confirmation time of 20 minutes, that'd be 2 blocks in Bitcoin and around 20 blocks in our hypothetical 1-minute Bitcoin. In general, for any given target confirmation time the 1-minute Bitcoin will be harder to attack than the 10-minute one - and this is especially true for the sub-10-minute and sub-20-minute confirmation times many merchants want.
If you're targetting an average confirmation time of say 5 minutes, that's a solid 5 confirmations with 1-minute-coin but a risky zero confirmation transaction with Bitcoin - and in practice a lot of services do accept transactions with zero confirmations because it's the only way to get the level of convenience their customers expect.
Your first statement is true only if the difficulty on both chains are equal.
Lets assume chain A and chain B have the same hash power across their respective networks. Chain A has a block every 10 minutes, and Chain B has a block every 1 minute. The difficulty of finding a block in Chain B will be 10x easier than Chain A. Therefore an attacker will be 10x as likely to find a block on Chain B than Chain A.
On chain A, 6 confirmations provides a certain level of security against a double-spend. To get that same amount of security on chain B, you need 60 confirmations.
Your security against double spend is equal to the total network hashing power multiplied by the time since your transaction was added to the chain. Increasing the block speed does not affect your security.
Increasing the block speed only provides a smaller measure of your security. If you are OK with 3 minutes of security at the current network hashing power, you still have to wait for the first block on chain A (up to 10 minutes). On chain B, you would be satisfied after 3 blocks (max 3 minutes).
> For an organization with 45% hashing power to maliciously double-spend cross 20 confirmations, it'd have to win the coin flip 20 times, or 0.00001% of the time.
That's not right. If they want to maliciously double-spend, they'd just have to get 20 blocks in less time than the rest of the network got it in, and publish their result. This is not the same as beating the network at 20 individual blocks.
For instance, you can double spend by getting your 20 blocks in 19 minutes, when the rest of the network took 21 minutes. This is not the same as beating the rest of the network at all 20 blocks - some of yours may have taken longer.
You're technically right - the correct calculation is in section 11 of Satoshi's original paper [1], though the probability of success still reduces exponentially with the number of confirmations in the same way that dragontamer's calculation does.
So it isn't 2^n, but a convolution summation over n-choose-r. Yeah... I don't feel like doing the "correct" math on this one.
But the concept is still correct. It is exponentially harder for the malicious user to double-spend based. It is much harder to break ten "one minute" confirmation, than one "ten minute" confirmation.
This is useful in practice if you are willing to accept only 1 or 2 confirmations. For retail type situations, a fast blocks are definitely better, which I touched on at the end of my post.
I constantly see the argument that 6 confirmations on LTC == 6 confirmations on BTC. This is the argument the original poster was making, and this what I am arguing against.
If an organization with 45% of the hashing power became malicious, it would be able to "double spend" 2 confirmations approximately 20.25% of the time. (the other 80% of the time, the 55% side of the network would "catch up").
For an organization with 45% hashing power to maliciously double-spend cross 20 confirmations, it'd have to win the coin flip 20 times, or 0.00001% of the time.
Methinks the faster hash rate is strictly better from a security standpoint... especially when you consider players who can perform a near-50% double-spend on the network. (A large 30% player may go for a "double-spend" within 2 confirmations, and will be successful 9% of the time)
Given the same amount of hashing power on the network, a one-minute block takes a tenth as much computation as a ten-minutes block. The network adjusts the difficulty so blocks are produced close to the desired rate.
If you have a security requirement, wait for 20 confirmations before accepting the currency.
The problem is that the "most convenient" BTC confirmation time is ~10 minutes (but can be as high as ~1 hour due to the random factor in finding the next block). You can always wait for more confirmations if you want security, but you cannot change the protocol to be faster once it is set.
10 minutes is far too long. I argue that 1 minute is still too long, but is far more acceptable. Again, if you really want high security, wait for 20 confirmations or more. It will take longer for BTC to reach 6 confirmations than for you to get 30+ confirmations on DOGE.
If they had the same size network, it would take 60 confirmations on DOGE to match 6 confirmations on BTC. If you are OK with 30 confirmations on DOGE, you would be OK with 3 confirmations on BTC. In other words, it would take the same amount of time on either network.
Due to their respective network size, it would actually take many hours on DOGE to equal the same security as 1 hour on BTC.
"If they had the same size network, it would take 60 confirmations on DOGE to match 6 confirmations on BTC. If you are OK with 30 confirmations on DOGE, you would be OK with 3 confirmations on BTC."
That's not actually true. Satoshi actually provided code in his original paper to calculate this which I've just run, and it turns out that if, say, an attacker controlled 30% of the total mining power of each network during their attack they'd have a 33% chance of successfully double-spending against BTC with its 3 confirmation requirement and a 0.015% chance of successfully double-spending against DOGE with its 30 confirmation requirement. That's a big difference.
Let's suppose we decided to take advantage of this to require less confirmations on DOGE, say 10. Then the chance of a successful double-spend goes up to 4%, still lower than Bitcoin. Of course, let's be generous and assume our attacker now has three times the opportunities to double-spend, upping that to a 12% chance of success. It'd still be safer to accept transactions with 10 confirmations taking 10 minutes on same-size-DOGE than ones with 3 confirmations taking 30 minutes on BTC.
Actually, it looks like if we give our attacker those extra attempts provided by a faster attack for free, 8 one-minute confirmations are at least as secure as 3 ten-minute ones for any size of attacker that BTC can realistically defend against at all. (And remember, we're already talking about attackers powerful enough that 3 confirmations in BTC isn't safe. If we assume a hacker with 10% of the total mining power, which is arguably all that 3 confirmations can realistically protect against, 5 DOGE confirmations are enough and take half the amount of time as a single BTC confirmation)
Someone suggested a way to fix that in Bitcoin, but I don't know if they're going to use this solution or not:
> tl;dr: We suggest a protocol modification to the block chain that securely allows blocks to be generated around once per second, can handle over 200 transactions per second at these rates, and consumes under 0.5 MBps in terms of bandwidth (less at lower rates than 200 TPS). All of this with no increased susceptability to 50% attacks. This essentially solves the problem that caused Satoshi to set the 10 minute target for the block creation rate. We also analyze the number of transactions per second Bitcoin can handle with and without our modification. We note that block propagation times are the primary obstacle for scalability.
With no confirmations a double spend is easy (would require a custom Bitcoin client designed for the purpose). Is it likely? No. So, if I ran a coffee shop, I'd hand over the goods without confirmation. If I were selling a house or a car, I'd wait for a whole lot of confirmations. Digital goods probably don't need to wait, either, particularly for returning customers.
So, yeah, I agree...I just want to be clear about why the risk is low: Because most people aren't going to cheat you out of a cup of coffee.
To elaborate, a merchant can easily monitor (or pay someone to monitor) transactions being sent to miners in real time. The probability of a successful double spend decreases drastically as the time since the first spend increases. If someone hasn't tried to double spend in ten seconds or so, they'll likely fail if they try.
This is simply false. Many mining pools allow you to push to transaction to them. If your first spend has a 0.0001btc fee and the second has a 0.001btc fee, they will choose the 0.0099btc fee.
You cannot monitor transactions being sent to miners if they aren't propagated through the normal bitcoin network.
Along with that, there have been cases where mining pools have doublespent unconfirmed transactions and stolen lots of bitcoins. GHash stole 3000btc from betcoin https://bitcointalk.org/index.php?topic=327767.0
It's pretty easy to steal and use a credit card, doesn't mean a lot of customers do it. For low-value transactions, it's not worth spending much time on. You save that for low-volume high-value transactions.
It's well established that shorter block times result in less security per block, but it's also possible shorter block times result in less security per unit of time (given equal total network hashing power)
This is due to the time it takes for newly mined blocks to propagate through the network. Miners work on old blocks a larger portion of time, leading to more forks and waste of mining resources.
Of course Bitcoin has far more hashing power than Litecoin or Dogecoin anyway, since the hashing power will correlate with the value of the mining rewards.
IMHO the real solution for both transaction speed and scalability is networks of "off-chain" transactions processors that occasionally "settle" on the blockchain. Of course such networks should retain the open and trustless properties of Bitcoin.
How many confirmations do you really need for micropayments? I just ordered a pizza and it went through almost instantly without paying mining fees. Bitpay saw the transaction on the network and knows I'm not going to try double spending 15 EUR.
EDIT To expand on that: the longer block times can actually be an advantage because the probability of orphans is smaller. If my transaction ends up in some orphaned block and is not resend the merchant won't get any money.
1. more coins for larger transactions instead of fractions
2. faster block rate (one a minute)
3. faster difficulty adjustment time (4 hours vs days or weeks)
4. faster reward halving time (every other month or so)
5. faster time to last block (mid 2015)
6. faster confirmations on transactions
7. random rewards
So it's not just a meme-coin, it has advantages technically too.
Their blockchain size is going to bite them though next year if not later this year. It is going to be massive and the client needs to only download block headers for performance.
Unless they have the developer and cryptographer attention bitcoin has looking for flaws, a bunch of technical changes like that is not an advantage, it's a likely flaw that may make the coin less secure.
Just because someone says this list of things make it better doesn't make it so, I seriously doubt the implications of those changes on security have received even a fraction of the attention bitcoin has received by those looking for attack vectors.
Indeed. In fact those changes are known to decrease security. Those aspects of bitcoin where chosen on purpose and for good reason.
People seem to make it out as though the bitcoin developers didn't know how to make faster confirmations or quicker difficulty adjustments, and that the dogecoin devs discovered how to do it better. The truth is that the dogecoin devs decided to lessen the security in order to make the currency more attractive on the surface, even thought it undermines the stability of the coin in the long run.
Arguably Bitcoin was a lot more conservative than it should've been in terms of stuff like the speed of confirmations, though, and in practice this has actually reduced security since all the popular payment services accept transactions with zero or one confirmations. With Bitcoin's sluggish design that's the only way to complete with the speed and convenience users are used to from services like credit cards and PayPal.
(If anyone here hasn't paid attention to the technical details of Bitcoin, the number of confirmations is a lot more important than the total amount of time taken on them. A lot of Bitcoin proponents tend to argue otherwise in order to encourage people to use it over newer alternatives, but they're fairly unambiguously wrong and even Satoshi's original white paper explaining Bitcoin makes this clear.)
> Their blockchain size is going to bite them though next year if not later this year. It is going to be massive and the client needs to only download block headers for performance.
Gee, who whould have thought maintaining a massively replicated transaction database over a huge number of globally distributed internet nodes would be a bad idea?
Seriously though, you're right, their block chain is going to balloon. At this rate they will probably overtake Bitcoin (which is approaching 14gb) before the year is out.
That's the problem with these blockchain systems, you have to find a delicate balance between things like max block size (max TPS rate), confirmation times, blockchain size, p2p network size, etc. Basically none of these coins really scale in any direction.
Dogecoin is just a Litecoin fork with shibas, comic sans, and joke settings like generating billions of coins and 1-minute blocks. It's not like they tuned anything for long term usage.
Do you really think random rewards is a technical advantage? I can understand why you might (wrongly) think the other six are advantages, but ending on that note makes me think you're just trolling.
Random rewards prevents easily predictable behavior and forces people to group together to mine because a miner could work all day and produce one block worth 10 coins, or collaborate with 10 other people and produce 10 coins, some of which are worth a 100k coins, to average out the 10 coins.
It's more social engineering than technical engineering but still.
That explanation didn't make any sense at all. What do you mean group together? In a mining pool? That already exists with bitcoin.
Also, how is predictable behavior a bad thing? Perhaps the US mint should have super-mint months where they print 20 times as much currency as they usually do.
Over bitcoin maybe (along with some disadvantages). However,it doesn't have any technical merit over litecoin, or many of the other several dozen litecoin clones.
It seems as though it's more like heading on its way to substituting it. Instead of having a thousand opinions on Bitcoin plastered on the front page, it'll be about Dogecoin now.
I'll hand it to these people: Dogecoin is one of the most successful culture jams in recent times.
It even goes beyond that though, Bitcoin enthusiasts actively downvote any negative stories on HN/Reddit because they don't want the price to go down. I can't remember the last time I've seen a fair and balanced discussion about the pros and cons of Bitcoin pretty much anywhere.
The currency's not even 2 months old and people are ascribing all sorts of importance to it. Not even in a year and it will be dead with all the other crypto-currencies.
People get too sentimental about some things on the Internet sometimes.
The long-term success of Dogecoin is beside the point. It
doesn’t have anything close to Bitcoin’s developer
backing. And basing a currency on an internet meme
presents its own risks: for example, the joke might get
old. Those are two of many reasons that Bitcoin will keep
its lead for now. But it will be interesting to see where
and how smarter branding gets incorporated into new
efforts.
It's not about whether Dogecoin stays big, it's about how cryptocurrencies can or should use clever branding to differentiate themselves, rather than just technical differentiation.
People love their pet dogs, and many get more upset when a dog dies than a person. Don't underestimate the power of the dog image. Shibe is like a pet dog for a lot of people, it also promotes a giving nature, which is what the world needs, especially in cryptocurrency and finance, where central banks can print money for themselves at will.
Also, many thousands of people saying "to the moon" together, you don't think that's going to have an effect on consciousness, especially when they visualize it as well? Crikey.
There are big coins under threat, though. Because at the end of the day, they're all very much the same. Newcomers will want something they can relate to, and one that has opportunities and a future, and where they don't feel late to the party yet still supports them. Doge might fade, but not for ages and ages.
It's a brand, symbol and tool anyhow, not a meme, that fits perfectly with a currency.
It's also a brand that people are using for themselves and 'making their own' and this provides a powerful stimulus in itself. There's an entire subreddit of art: http://www.reddit.com/r/dogecoinart/
It's a self-perpetuating, crowdsourced brand and eco-system. This is way beyond meme. It's a marketer's dream. It unites people on their own terms, in a world where brands and currencies cannot be touched for fear of legal repercussions.
The image of the dog at the table with dollar glasses on: that's just one person's interpretation.
I think what is really important about it is the possibility of an endless series of temporary and largely speculative currencies popping up.
This dilutes the brand of the entire sphere of crypto-currencies. It also raises serious questions for how much normal people should ever trust these currencies. Do you have to hang out on hacker news or r/bitcoin just to know if there are any issues with a currency ? That makes these currencies unusable.
When I see a title "Why [alternative currency prefix]coin is Important", I really see: "I have a substantial amount of [alternative currency prefix]coin, and I want to exchange rate to increase so I put out positive PR for it."
That's the game: identify a population of suckers with spare cash, appeal to them with imaginary stuff marketed as "currency," and fleece them for all you can. Techno-libertarians and Russian mobsters? Bitcoin. People with free time to look for lulz on the net? Dogecoin. People stuck in a 60s science-fiction novel? Marscoin.
Is there a -coin yet aimed at replacing multi-thousand-dollar fashion accessories as a way for rich men to get laid?
If you think of each coin, as a startup with a wide distributed team:
Branding, marketing, customer service, and appealing to your customer are a lot more necessary than "developer backing" or technical features.
"Branding" or "narrative" as a differentiating factor for altcoins. Reminds me of Marscoin (similar to Litecoin) which competes on the meme of implications for the future of cryptocurrencies on a planetary scale.
If all you want is a few doge, set a computer to mine for the afternoon. Even on a relatively weak computer, you'll end up getting a couple hundred doge.
EDIT: I only do this as part of a pool. I don't know how it is for solo mining.
Wow. Doge has gone way up. I sold all mine at 50 satoshi. That may have been poor judgment on my part. I've mined another 20k since then, maybe, though, so all is not lost.
