altcoin

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pages: 296 words: 86,610

The Bitcoin Guidebook: How to Obtain, Invest, and Spend the World's First Decentralized Cryptocurrency by Ian Demartino

3D printing, AltaVista, altcoin, bitcoin, blockchain, buy low sell high, capital controls, cloud computing, corporate governance, crowdsourcing, cryptocurrency, distributed ledger, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, Firefox, forensic accounting, global village, GnuPG, Google Earth, Haight Ashbury, Jacob Appelbaum, Kevin Kelly, Kickstarter, litecoin, M-Pesa, Marc Andreessen, Marshall McLuhan, Oculus Rift, peer-to-peer, peer-to-peer lending, Ponzi scheme, prediction markets, QR code, ransomware, Ross Ulbricht, Satoshi Nakamoto, self-driving car, Skype, smart contracts, Steven Levy, the medium is the message, underbanked, WikiLeaks, Zimmermann PGP

Altogether, 3,005 users registered accounts on the pool server, and a total of 5,108 pool workers were created and used.2 Arscoin showed how easy it is to create an altcoin and, intentionally or not, illuminated the pure ridiculousness of the entire altcoin ecosystem. But this particular experiment does not mean there aren’t coins with real uses that have a chance to become truly valuable someday. Through the rest of this chapter, I cover the top altcoins by market cap size—excluding coins still in their ICO (initial coin offering) phase—along with other altcoins chosen because they were either successful in the past or have a unique feature I feel is worth mentioning. No coin developers have paid me to include them on this list, and I am not a significant holder of any of them. This is far from a comprehensive list of all the useful altcoins out there. It is simply my honest attempt to portray the general landscape of the altcoin market as concisely as is practical.

April 25, 2015. https://www.youtube.com/watch?v=9Wj9ITc0444. Chapter 15: Altcoin Trading and Pump-and-Dumps Shame on you guys. You can’t advocate for Bitcoin and the transformative changes it enables while also pumping some ridiculous alt-coin. —Blogger Matt Branton, The Branton Bits, April 7, 2014 The same strategies that apply to Bitcoin can be applied to altcoins; the principles are the same. However, altcoins—especially once you get past the top few in market-cap size—are more susceptible to pump-and-dump tactics. Pump-and-dumps are not unique to cryptocurrency. They have existed in the stock market and especially in off-market penny stocks that have low liquidity. The same pattern applies to altcoins. The lower the liquidity of the market (i.e., how many people are buying and selling), the easier pump-and-dump schemes are to pull off and the more effective they can be.

Section IV: The Future of Bitcoin Chapter 21: Altcoins and Bitcoin 2.0 Projects We’re going to have millions of altcoins. —Andreas Antonopoulos, April 2014 So far I have talked a lot about Bitcoin, its history, its uses, and its mechanics. But Bitcoin is far from the only digital currency in existence. While it is arguably the first workable digital currency and undoubtedly the most successful, there are more than a thousand different alternative currencies out there, hundreds of which are traded every day. A few of them seem to have at least a chance at a successful future. Bitcoin is a risky investment, since no one can be sure that the digital currency revolution will be successful or that it will progress in a way that increases Bitcoin’s value. Investing in an altcoin, any altcoin, is at least twice as risky.


Mastering Blockchain, Second Edition by Imran Bashir

3D printing, altcoin, augmented reality, autonomous vehicles, bitcoin, blockchain, business process, carbon footprint, centralized clearinghouse, cloud computing, connected car, cryptocurrency, data acquisition, Debian, disintermediation, disruptive innovation, distributed ledger, domain-specific language, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, Firefox, full stack developer, general-purpose programming language, gravity well, interest rate swap, Internet of things, litecoin, loose coupling, MITM: man-in-the-middle, MVC pattern, Network effects, new economy, node package manager, Oculus Rift, peer-to-peer, platform as a service, prediction markets, QR code, RAND corporation, Real Time Gross Settlement, reversible computing, RFC: Request For Comment, RFID, ride hailing / ride sharing, Satoshi Nakamoto, single page application, smart cities, smart contracts, smart grid, smart meter, supply-chain management, transaction costs, Turing complete, Turing machine, web application, x509 certificate

Proof of Burn (PoB): Another approach to allocating initial funds to a new altcoin is PoB, also called a one-way peg or price ceiling. In this method users permanently destroy a certain quantity of bitcoins in proportion to the quantity of altcoins to be claimed. For example, if ten bitcoins were destroyed then altcoins can have a value no greater than some bitcoins destroyed. This means that bitcoins are being converted into altcoins by burning them. Proof of ownership: Instead of permanently destroying bitcoins, an alternative method is to prove that users own a certain number of bitcoins. This proof of ownership can be used to claim altcoins by tethering altcoin blocks to Bitcoin blocks. For example, this can be achieved by merged mining in which effectively bitcoin miners can mine altcoin blocks while mining for bitcoin without any extra work.

These include concepts such as Namecoin, where the primary purpose is to provide decentralized naming and identity services instead of currency. Currently, as of late 2018, there are hundreds of altcoins on the market, and they hold some monetary value such as Namecoin, Zcash, Primecoin, and many others. We will examine some of these later in this chapter. Zcash is a more successful altcoin introduced in 2016. On the other hand, Primecoin did not gain much popularity however it is still used. Many of these alternative projects are direct forks of Bitcoin source code although some of those have been written from scratch. Some altcoins set out to address Bitcoin limitations such as privacy. Some others offer different types of mining, changes in block times, and distribution schemes. By definition, an altcoin is generated in the case of a hard fork. If bitcoin has a hard fork then the other, older chain is effectively considered another coin.

In 2013 and 2014, the alternative coins (altcoin) market grew exponentially, and many different types of alternative coin project were started. A few of those became a success, whereas many were unpopular due to less interest and as a result, they did not succeed. A few were pump and dump scams that surfaced for some time but soon disappeared. Alternative approaches to bitcoin can be divided broadly into two categories, based on the primary purpose of their development. If the primary goal is to build a decentralized blockchain platform, they are called alternative chains; if the sole purpose of the alternative project is to introduce a new virtual currency, it is called an altcoin. Alternative blockchains will be discussed in detail in Chapter 16, Alternative Blockchains. This chapter is mainly dedicated to altcoins whose primary purpose is to introduce a new virtual currency (coin) although some material will also be presented on the topic of alternative protocols built on top of bitcoin to provide various services.


pages: 200 words: 47,378

The Internet of Money by Andreas M. Antonopoulos

AltaVista, altcoin, bitcoin, blockchain, clean water, cognitive dissonance, cryptocurrency, disruptive innovation, Ethereum, ethereum blockchain, financial exclusion, global reserve currency, litecoin, London Interbank Offered Rate, Marc Andreessen, Oculus Rift, packet switching, peer-to-peer lending, Ponzi scheme, QR code, ransomware, reserve currency, Satoshi Nakamoto, self-driving car, Skype, smart contracts, the medium is the message, trade route, underbanked, WikiLeaks, zero-sum game

I think it’s a bit silly. But, why not? I think at some point we’re going to see things like that happen. We’re not going to have hundreds of altcoins. We’re not going to have thousands of altcoins. We’re going to have hundreds of thousands, and then millions of altcoins. Then, there will be thousands of altcoins being created every day to organize local communities to express fads, to create popularity contests, to codify the latest internet meme. "We’re not going to have hundreds of altcoins. We’re not going to have thousands of altcoins. We’re going to have hundreds of thousands, and then millions of alt-coins." 7.3. Authority by Production With so many altcoins, how do you tell which ones have value and which ones don’t? In order to try to answer these types of questions, I often reflect on the emergence of the first decentralized system in my lifetime, the internet.

"Now, we live in a new world, a world in which currency is a choice, and not just a choice in terms of use… It’s also a means of expression." As I thought about the evolution of alt-currencies, as they’re called, I realized I was asking the wrong questions. How many currencies will there be? How many altcoins will there be? How will altcoins compete in a world of cryptocurrencies as we move into the future? Will there be hundreds of altcoins? If there are hundreds of altcoins, what does that mean for the value of each of the altcoins? How do they compete? That was the wrong way of thinking about it. I saw currency as a zero-sum game, just like it had been imposed on my worldview from the nation-states that created currency. Then, I started thinking of currency as an application. And then, I started thinking of currency as a means of expression.

It might have been called the Bitcoin and Ethereum Expo 2014. I don’t know if you noticed, but Ethereum had a pretty big presence here. An interesting question comes up, actually quite a few people have asked me: "Does Ethereum threaten the future of bitcoin? Does it steal some of its thunder?" Those are questions I’ve heard several times, and I’ve heard people refer to that issue in trying to understand altcoins - wondering whether altcoins essentially threaten the dominance of bitcoin, if they make bitcoin weaker, if they distribute the value of the network too broadly. 7.1. Born into Currency I’ve been thinking about this question for quite a while. I think, fundamentally, it’s a question that evokes the old paradigm of currencies. We’ve all grown up in a world where currencies are forced upon us in a monopolistic fashion, where currencies are defined strictly by the geographies in which they occur, and where the choice of currency is not yours.


pages: 233 words: 66,446

Bitcoin: The Future of Money? by Dominic Frisby

3D printing, altcoin, bank run, banking crisis, banks create money, barriers to entry, bitcoin, blockchain, capital controls, Chelsea Manning, cloud computing, computer age, cryptocurrency, disintermediation, Ethereum, ethereum blockchain, fiat currency, fixed income, friendly fire, game design, Isaac Newton, Julian Assange, land value tax, litecoin, M-Pesa, mobile money, money: store of value / unit of account / medium of exchange, Occupy movement, Peter Thiel, Ponzi scheme, prediction markets, price stability, QR code, quantitative easing, railway mania, Ronald Reagan, Ross Ulbricht, Satoshi Nakamoto, Silicon Valley, Skype, slashdot, smart contracts, Snapchat, Stephen Hawking, Steve Jobs, Ted Nelson, too big to fail, transaction costs, Turing complete, War on Poverty, web application, WikiLeaks

Instead, coders began to develop alternative cryptocurrencies, aping some aspects of Bitcoin but changing others. These were known as altcoins. There are now 300 or more kinds of altcoin. Many of them are scams and get-rich-quick schemes. Many of them are simply experiments. Most of them will amount – or already have amounted – to nothing. But some of them are quite legitimate. At present, they comprise just a few per cent of the entire cryptocurrency market cap. At $500 a coin, the market cap of Bitcoin stands at around $6.5 billion. All the other altcoins combined amount to about $350,000. Bitcoin has attracted all the publicity. Bitcoin has all the infrastructure and investment. For now Bitcoin dominates the space. But the altcoins may one day come to rival Bitcoin. Litecoin is said to be silver to Bitcoin’s gold. It has faster transaction time confirmation than Bitcoin, making it a better system of payment.

We’re not just going to go and inflate tulips in this day and age.’ ‘How would you invest in Bitcoin?’ I ask him. ‘Well, I think that what is more interesting is to find a good altcoin – to find a real network that’s growing that’s not Bitcoin. I think Bitcoin itself is a very interesting investment. You should probably have some money there. But on the side if you want to make the real money, the catch-up trade – some altcoins. I think your first trade should just be $50 to try and learn how the system works. Don’t do anything until you’re absolutely comfortable with how the system works. Then I suggest you go and put 90% of your crypto book into bitcoins and 10% into altcoins. To find the good ones, don’t believe the stories and avoid hype. Avoid new coins, they are actually worthless most of the time, and they’ve got no network.

I now drive a Range Rover because of what people laugh at and call fake money.’ But with the failure of companies such as MtGox, you can bet there are many stories that are as disheartening as the above are amusing. The world of crypto-currencies (there are now over 300 altcoins) has attracted all sorts of crooks and fraudsters, as well as those who religiously think they are changing the world. There are scams and get-rich-quick schemes galore. It has become a free-for-all, like the gold rushes of the Wild West. Over time, things should settle. But one of the things you quickly notice is the sense of humour to it all. Many altcoins are based around a joke – ‘Coinye West’, for example. (When my father read this he asked, ‘What’s the joke?’) Many are simply in it for the laugh. Dogecoin is, according to its website, ‘an open source peer-to-peer cryptocurrency, favored by Shiba Inus worldwide’.


pages: 271 words: 52,814

Blockchain: Blueprint for a New Economy by Melanie Swan

23andMe, Airbnb, altcoin, Amazon Web Services, asset allocation, banking crisis, basic income, bioinformatics, bitcoin, blockchain, capital controls, cellular automata, central bank independence, clean water, cloud computing, collaborative editing, Conway's Game of Life, crowdsourcing, cryptocurrency, disintermediation, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, financial innovation, Firefox, friendly AI, Hernando de Soto, intangible asset, Internet Archive, Internet of things, Khan Academy, Kickstarter, lifelogging, litecoin, Lyft, M-Pesa, microbiome, Network effects, new economy, peer-to-peer, peer-to-peer lending, peer-to-peer model, personalized medicine, post scarcity, prediction markets, QR code, ride hailing / ride sharing, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, SETI@home, sharing economy, Skype, smart cities, smart contracts, smart grid, software as a service, technological singularity, Turing complete, uber lyft, unbanked and underbanked, underbanked, web application, WikiLeaks

Still, it must be acknowledged that Bitcoin as a pseudonymous enabler can be used to facilitate illegal and malicious activities, and this invites in-kind “Red Queen” responses (context-specific evolutionary arms races) appropriate to the blockchain. Computer virus detection software arose in response to computer viruses; and so far some features of the same constitutive technologies of Bitcoin (like Tor, a free and open software network) have been deployed back into detecting malicious players. Another significant barrier to Bitcoin adoption is the ongoing theft, scandals, and scams (like so-called new altcoin “pump and dump” scams that try to bid up new altcoins to quickly profit) in the industry. The collapse of the largest Bitcoin exchange at the time, Tokyo-based MtGox, in March 2014 came to wide public attention. An explanation is still needed for the confusing irony that somehow in the blockchain, the world’s most public transparent ledger, coins can disappear and still remain lost months later. The company said it had been hacked, and that the fraud was a result of a problem known as a “transaction malleability bug.”

Oxford, UK: Oxford University Press, 2014. 196 Swan, M. “Blockchain-Enforced Friendly AI.” Crypto Money Expo, December 5, 2014. http://cryptomoneyexpo.com/expos/inv2/#schedule and http://youtu.be/qdGoRep5iT0/. Index A address, How a Cryptocurrency Works Airbnb, Government Regulation Alexandria, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel altcoin, Summary: Blockchain 1.0 in Practical Use altcoin wallet, How a Cryptocurrency Works alternative currencies, Summary: Blockchain 1.0 in Practical Use-Relation to Fiat Currency, Cryptocurrency Basics-Ledra Capital Mega Master Blockchain List anti-censorship, Freedom of Speech/Anti-Censorship Applications: Alexandria and Ostel APIs, Blockchain Development Platforms and APIs Aráoz, Manuel, Proof of Existence archiving, Blockchain Ecosystem: Decentralized Storage, Communication, and Computation art (see digital art) artificial intelligence (AI), The Blockchain as a Path to Artificial Intelligence, Blockchain AI: Consensus as the Mechanism to Foster “Friendly” AI-Smart Contract Advocates on Behalf of Digital Intelligence artworks, Smart Property (see also digital art) Ascribe, Monegraph: Online Graphics Protection autocitation, Blockchain Academic Publishing: Journalcoin automated digital asset protection, Digital Asset Proof as an Automated Feature automatic markets, Automatic Markets and Tradenets autonomy, Smart Contracts B bandwidth, Technical Challenges banking industry (see financial services) betting, Bitcoin Prediction Markets, Smart Contracts big data, Blockchain Layer Could Facilitate Big Data’s Predictive Task Automation .bit domains, Namecoin: Decentralized Domain Name System "Bitbank", Financial Services Bitcoin colored coins, Smart Property concept, Preface digital divide of, Digital Divide of Bitcoin M2M/IoT payment network, M2M/IoT Bitcoin Payment Network to Enable the Machine Economy MOOCs, Blockchain Learning: Bitcoin MOOCs and Smart Contract Literacy neutrality, Blockchain Neutrality origins and applications overview, What Is Bitcoin?

The concept and operational details are described in a concise and readable white paper, “Bitcoin: A Peer-to-Peer Electronic Cash System.”7 Payments using the decentralized virtual currency are recorded in a public ledger that is stored on many—potentially all—Bitcoin users’ computers, and continuously viewable on the Internet. Bitcoin is the first and largest decentralized cryptocurrency. There are hundreds of other “altcoin” (alternative coin) cryptocurrencies, like Litecoin and Dogecoin, but Bitcoin comprises 90 percent of the market capitalization of all cryptocurrencies and is the de facto standard. Bitcoin is pseudonymous (not anonymous) in the sense that public key addresses (27–32 alphanumeric character strings; similar in function to an email address) are used to send and receive Bitcoins and record transactions, as opposed to personally identifying information.


pages: 309 words: 54,839

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts by David Gerard

altcoin, Amazon Web Services, augmented reality, Bernie Madoff, bitcoin, blockchain, Blythe Masters, Bretton Woods, clean water, cloud computing, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, distributed ledger, Ethereum, ethereum blockchain, Extropian, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, index fund, Internet Archive, Internet of things, Kickstarter, litecoin, M-Pesa, margin call, Network effects, peer-to-peer, Peter Thiel, pets.com, Ponzi scheme, Potemkin village, prediction markets, quantitative easing, RAND corporation, ransomware, Ray Kurzweil, Ross Ulbricht, Ruby on Rails, Satoshi Nakamoto, short selling, Silicon Valley, Silicon Valley ideology, Singularitarianism, slashdot, smart contracts, South Sea Bubble, tulip mania, Turing complete, Turing machine, WikiLeaks

For you to be contacted, you would have to post here or in PM to say you might lend me bitcoins, and approx. how many you’d be willing to lend me.283 Nicolle has not been seen online since the 120,000 BTC hack.284 Bitfinex does answer one common question asked of Bitcoin sceptics: “If you’re so critical of Bitcoin, why don’t you short it?” “Well …” Chapter 9: Altcoins Bitcoin was an open protocol implemented in open source code. So alternate cryptocurrencies, or altcoins, quickly sprang up – mostly slightly-tweaked versions of the Bitcoin code, many generated automatically at the now-defunct service coingen.io. Other blockchains might have different hashes, block sizes, block times or consensus models (how to choose who adds the next block). Short times mean you can verify transactions faster, but too short a time means a block may not get all the way across the network before it’s time for the next block – leading to “confirmed” transactions no longer being confirmed when another version of that blockchain is found that’s longer.

Litecoin Litecoin is the “me too” coin. It hasn’t many interesting stories, but it was the most prominent altcoin before the first Bitcoin bubble burst; for a few years, sites like the Pirate Bay that accepted Bitcoin donations often also accepted Litecoin donations. It was marketed as “the silver to Bitcoin’s gold.” The main difference from Bitcoin is a different hash designed to be resistant to GPU mining (though ASICs eventually came out) and a shorter block time. Litecoin’s price went up with Bitcoin’s until 2013, the price crashed with Bitcoin’s, and during 2014 it declined from its peak of $42 (spot prices of $68 on some exchanges) to $1.50. It hovered around $4 until it hit $30 in the second bubble – altcoin prices tend to track Bitcoin’s price – and the small current volume is Chinese speculators.

“Ethereum contract security: An Ethereum Roulette”. 14 August 2015. [350] Ethererik. “GovernMental’s 1100 ETH jackpot payout is stuck because it uses too much gas”. Reddit /r/ethereum, 26 April 2016. [351] “Post-Mortem Investigation (Feb 2016)”. King of the Ether. (archive) [352] “Hi! My name is Rubixi. I’m a new Ethereum Doubler. Now my new home – Rubixi.tk”. Bitcointalk.org Bitcoin Forum > Alternate cryptocurrencies > Marketplace (Altcoins) > Service Announcements (Altcoins), 11 April 2016. (archive) [353] Vitalik Buterin. “Live example of ‘underhanded solidity’ coding on mainnet”. Reddit /r/ethereum, 10 April 2016. [354] brockchainbrockshize. Comment on “Attacker has withdrawn all ETC from DarkDAO on the unforked chain”. Reddit /r/ethereum, 25 July 2016. [355] The DAO front page, archive of 22 June 2016. Yes, that’s after the hack. [356] Dino Mark, Vlad Zamfir, Emin Gün Sirer.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, altcoin, bank run, banking crisis, bitcoin, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cryptocurrency, David Graeber, disintermediation, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, hacker house, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

If any of these “gateway” institutions are suspicious—as some bitcoiners are—of Ripple’s profit motives, they could try Stellar, the clone that Ripple’s estranged cofounder Jed McCaleb set up with a deliberately charitable agenda. Alternatively, projects such as Realcoin, an altcoin built upon the bitcoin blockchain that’s transparently backed by an auditable reserve of dollar-based assets, turn altcoins into a proxy for the dollar and an instrument with which people can cheaply send money to each other without incurring bitcoin’s exchanges’ risks. Or there’s Bitreserve, Halsey Minor’s in-house system in which account holders can send digital dollars, yen, or euros to each other at no cost. Any or all of these could form the components of a cryptocurrency-based financial system. Still, bitcoin is the clear frontrunner to become the cryptocurrency platform of the world’s transactional system. Its market capitalization dwarfs all other altcoins combined. Wences Casares, the CEO of bitcoin wallet and custodial firm Xapo, sees bitcoin’s future as the “native currency of the Internet,” where it would become the preferred unit of exchange for online commerce.

One was that by 2011, bitcoin was inspiring imitators—some outright copies, others clear attempts to remove what were seen as some of bitcoin’s flaws. Altcoins, as they came to be known, would use the same or similar aspects of bitcoin’s system, all made possible because of bitcoin’s open-source protocol and its lack of an owner. Anybody can download the software, copy it, and build something new from it. Lawsuits for copyright or patent infringement are simply not a concern. As of this writing, several hundred of these digital coins exist, most too small to be worth mentioning, but a few with sizable followings. They all fall well short of bitcoin in ranks. Litecoin, the oldest and largest of the altcoins, had a market cap of about $150 million at the time of writing. Bitcoin’s was around $6.5 billion. Some are dubious-looking projects, quite blatant pump-and-dump schemes.

Many bitcoiners welcome these projects as new elements of the same cryptocurrency revolution in which they are engaged. But others are openly hostile to what they see as interlopers, fearing that the nascent movements gathering around them could detract from the broader mission of change. At the same time, the community development around some of these altcoins is instructive to the broader question of how communities develop around cryptocurrencies. Bitcoiners can learn from how passions have been stirred by some of them. Case in point: dogecoin, an altcoin that started out as a joke by Billy Markus and Jackson Palmer in December 2013 that quickly took on a life of its own. The “doge” was appropriated from an Internet meme that started with a 2005 puppet show on YouTube, in which one of the puppets misspells dog as doge, and the other mispronounces it as “dohj.”


pages: 571 words: 106,255

The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

Airbnb, altcoin, bank run, banks create money, bitcoin, Black Swan, blockchain, Bretton Woods, British Empire, business cycle, capital controls, central bank independence, conceptual framework, creative destruction, cryptocurrency, currency manipulation / currency intervention, currency peg, delayed gratification, disintermediation, distributed ledger, Ethereum, ethereum blockchain, fiat currency, fixed income, floating exchange rates, Fractional reserve banking, full employment, George Gilder, global reserve currency, high net worth, invention of the telegraph, Isaac Newton, iterative process, jimmy wales, Joseph Schumpeter, market bubble, market clearing, means of production, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, Paul Samuelson, peer-to-peer, Peter Thiel, price mechanism, price stability, profit motive, QR code, ransomware, reserve currency, Richard Feynman, risk tolerance, Satoshi Nakamoto, secular stagnation, smart contracts, special drawing rights, Stanford marshmallow experiment, The Nature of the Firm, the payments system, too big to fail, transaction costs, Walter Mischel, zero-sum game

It would be relatively easy for central banks to get any of the teams behind this currency to destroy it, or alter its operation in a way that prevents it from competing with national currencies. No single altcoin has demonstrated anything near Bitcoin's impressive resilience to change, which is down to its truly decentralized nature and the strong incentives for everyone to abide by the status quo consensus rules. Bitcoin can only make this claim after growing in the wilds of the internet for nine years without any authority controlling it, and very ably repelling some highly coordinated and well‐funded campaigns to alter it. In comparison, altcoins have the unmistakable friendly culture of nice people working together on a team project. While this would be great for a new start‐up, it is anathema to a project that wants to demonstrate credible commitment to a fixed monetary policy. Should the teams behind any particular altcoin decide to change its monetary policy, it would be a relatively straightforward thing to achieve.

Being the first such invention, Bitcoin demonstrating its value as digital cash and hard money was enough to secure growing demand for it, allowing it to succeed when the only person behind it was an anonymous programmer who practically spent no money on promoting it. Being fundamentally knock‐offs that are very easy to recreate, all altcoins do not have this luxury of real‐world demand, and must actively build and increase this demand. This is why virtually all altcoins have a team in charge; they began the project, marketed it, designed the marketing material, and plugged press releases into the press as if they were news items, while also having the advantage of mining a large number of coins early before anybody had heard of the coins. These teams are publicly known individuals, and no matter how hard they might try, they cannot demonstrate credibly that they have no control over the direction of the currency, which undermines any claims other currencies might have to being a form of digital cash that cannot be edited or controlled by any third party.

No coin other than Bitcoin can lay a credible claim to being outside the control of anyone else, and as such, the entire point of utilizing the extremely complex structure underpinning Bitcoin is moot. There is nothing original or difficult about copying Bitcoin's design and producing a slightly different copycat, and thousands have done this so far. With time, one can expect more and more of these coins to enter the market, diluting the brand of all the other altcoins. Non‐Bitcoin digital currencies are, in the aggregate, easy money. No single altcoin can be considered on its own merits, because they are all indistinguishable in what they perform, which is also what Bitcoin performs, but very distinguishable from Bitcoin in that their supply and design can easily be altered, whereas Bitcoin's monetary policy is for all intents and purposes set in stone. It is an open question if any of these currencies will succeed in offering a market‐demanded service other than the one offered by Bitcoin, but it appears patently clear that they cannot compete with Bitcoin on being trustless digital cash.


Bit by Bit: How P2P Is Freeing the World by Jeffrey Tucker

Affordable Care Act / Obamacare, Airbnb, airport security, altcoin, bank run, bitcoin, blockchain, business cycle, crowdsourcing, cryptocurrency, disintermediation, distributed ledger, Fractional reserve banking, George Gilder, Google Hangouts, informal economy, invisible hand, Kickstarter, litecoin, Lyft, obamacare, Occupy movement, peer-to-peer, peer-to-peer lending, QR code, ride hailing / ride sharing, Ross Ulbricht, Satoshi Nakamoto, sharing economy, Silicon Valley, Skype, TaskRabbit, the payments system, uber lyft

Every problem cries out for a fix, and the fix is then forthcoming. Question: What is an altcoin? Answer: Altcoin stands for alternative to bitcoin, which is mostly based on the bitcoin protocol. There are tens of thousands or more in circulation. Some are serious, many are scams, and most fall somewhere in between. They do provide an excellent testing ground for future developments in cryptocurrency. Question: Are they scams? What is pump and dump? Answer: As in any sector, there are scams, among which is “pump and dump,” meaning that developers release a coin, fuel the hype, and then sell it. Which ones are real and which ones are not is impossible to say. There are serious risks to such altcoins and it will be some time before the altcoin market becomes stable and reasonably disciplined by market forces. This is part of what happens in any startup technology.

What we can do now is be careful not to trust any institution fully. Security for your property is at a premium until the market shakes itself out. Question: What is Dogecoin? Tell me about it. Answer: It’s very cool, or maybe it is a silly fad. The market has to decide. Dogecoin is one of many currencies built on a Litecoin protocol, which in turn was built on bitcoin. There are tens of thousands of so-called altcoins in circulation today. This is market competition at work. They all live in their own ecosphere. May the best coin win! Question: How does the U.S. government classify BTC? Answer: The Treasury Department says bitcoin is property subject to taxation. FinCEN, a bureau of the U.S. Department of Treasury whose mission it is to safeguard the U.S. financial system, says it is a foreign currency subject to regulation.

This is part of what happens in any startup technology. Question: Can you tell me about one or two popular altcoins? How are they different? Will they replace bitcoin? Answer: Litecoin is the second most popular cryptocurrency. It is based on a different algorithm from bitcoin, and it has an infinite inflation rate. Others include Namecoin, Dogecoin, Worldcoin, Peercoin, Primecoin, and Feathercoin. All have unique properties and some appeal to people for specific reasons. The Indian nation of Lakota, for example, uses its own coin called Mazacoin. 41 The cryptocurrency market is still in its infancy. There is no way to predict its precise direction. However, the technology is there and its growth has been absolutely phenomenal to behold, as if development had been truncated by 100 years of government control.


pages: 416 words: 106,532

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond by Chris Burniske, Jack Tatar

Airbnb, altcoin, asset allocation, asset-backed security, autonomous vehicles, bitcoin, blockchain, Blythe Masters, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, disintermediation, distributed ledger, diversification, diversified portfolio, Donald Trump, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, fiat currency, financial innovation, fixed income, George Gilder, Google Hangouts, high net worth, Jeff Bezos, Kenneth Rogoff, Kickstarter, Leonard Kleinrock, litecoin, Marc Andreessen, Mark Zuckerberg, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, packet switching, passive investing, peer-to-peer, peer-to-peer lending, Peter Thiel, pets.com, Ponzi scheme, prediction markets, quantitative easing, RAND corporation, random walk, Renaissance Technologies, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, Sharpe ratio, Silicon Valley, Simon Singh, Skype, smart contracts, social web, South Sea Bubble, Steve Jobs, transaction costs, tulip mania, Turing complete, Uber for X, Vanguard fund, WikiLeaks, Y2K

Those with the foresight to have bought Google during its “Initial Public Offering” (IPO) would have seen a 1,800 percent appreciation by August 2016, and those who bought Amazon’s IPO would have seen a 1,827 percent appreciation.10 Blockchain architectures and their native assets are well on their way to becoming the next great meta-application to leverage Internet infrastructure. They already provide services that include global currencies, world computers, and decentralized social networks, among hundreds of others. The native assets historically have been called cryptocurrencies or altcoins, but we prefer the term cryptoassets, which is the term we will use throughout the book. The terms cryptocurrencies and altcoins convey only a fraction of the innovation that is occurring in the cryptoasset economy. Not all of the 800 existing cryptoassets are currencies. We are not just witnessing the decentralized creation of currencies but also of commodities and polished digital goods and services, as blockchains meld technology and the markets to build Web 3.0.

As of January 1, 2017, already 76.6 percent of bitcoin’s supply had been brought into existence,13 and by the time the next block reward halving happens in 2020, 87.5 percent of the bitcoin ever to be minted will be in existence. A few years after 2100, we will reach a supply of 20,999,999 bitcoin, which is effectively 21 million. It is bitcoin’s scarce supply schedule that makes many think of it as digital gold.14 THE BIRTH OF ALTCOINS Within a couple years of launching, it had become clear that bitcoin was the first fully decentralized cryptocurrency to gain significant adoption, but there were some aspects with which people were not fully satisfied. For example, bitcoin’s 10-minute block time meant that, depending on when a consumer hit send, it could take up to 10 minutes, sometimes more, for the transaction to be appended to Bitcoin’s blockchain.

The new software operated similarly to Bitcoin, but required its own set of developers to maintain it, miners to provide the hardware, and a separate blockchain to keep track of the debits and credits of the new native asset. Through this combination of open-source software and ingenious programmers, many other cryptocurrencies have been brought into existence. Those that are only slight modifications of Bitcoin are often referred to as altcoins. BITCOIN’S FIRST DIGITAL SIBLING Namecoin15 was the first significant fork away from Bitcoin. Interestingly, it was less about creating a new currency and more about utilizing the immutable nature of the blockchain, a use case we’ll address more in the next chapter. A website created with Namecoin comes with the .bit domain (as opposed to the .com domain) and provides security and censorship resistance to those sites registered with it.16 Namecoin grew out of an idea on the Bitcointalk forum in 2010 that focused on BitDNS (DNS stands for domain naming service, which handles all web addresses).17 In 2013, a service called NameID was released that uses the Namecoin blockchain to enable the creation of and access to websites that have a Namecoin identity.


pages: 273 words: 72,024

Bitcoin for the Befuddled by Conrad Barski

Airbnb, AltaVista, altcoin, bitcoin, blockchain, buttonwood tree, cryptocurrency, Debian, en.wikipedia.org, Ethereum, ethereum blockchain, fiat currency, Isaac Newton, MITM: man-in-the-middle, money: store of value / unit of account / medium of exchange, Network effects, node package manager, p-value, peer-to-peer, price discovery process, QR code, Satoshi Nakamoto, self-driving car, SETI@home, software as a service, the payments system, Yogi Berra

The country in which you live and the currency you want to exchange for bitcoins are also factors in choosing an exchange. Some exchanges facilitate only USD to BTC operations, whereas others offer multiple currency pairs. You might notice that some Bitcoin currency exchanges offer currency pairs you have not heard of—for example, LTC, FTC, TRC, PPC, XPM, and so on. These other digital currencies—called alternative coins or altcoins—were created after, and largely inspired by, Bitcoin. To learn more about such digital currencies, check out “The Strange World of Altcoins” on page 181. Many exchanges also have different BTC/USD exchange rates! This means you can sell bitcoins at a higher price on one exchange and buy them for a lower price on the other exchange. So this is free money, right? Well, yes and no. If the price difference is substantial and you are the first person to notice it, then indeed you have an opportunity to make some free money.

They were delicious. BRIEF CONTENTS Preface Chapter 1: What Is Bitcoin? Chapter 2: Bitcoin Basics Chapter 3: Storing Your Bitcoins Safely, Securely, and Conveniently Chapter 4: Buying Bitcoins Chapter 5: Lost at Sea: A Cryptographic Adventure Chapter 6: Why Bitcoin Is a Big Deal Chapter 7: The Cryptography Behind Bitcoin Chapter 8: Bitcoin Mining Chapter 8.5: The Strange World of Altcoins Chapter 9: Understanding the Different Types of Bitcoin Wallets Chapter 10: Bitcoin 2030 Appendix A: Hello Money! A Simple JavaScript Program Appendix B: Bitcoin Programming with BitcoinJ Index CONTENTS IN DETAIL PREFACE Acknowledgments Chapter 1: WHAT IS BITCOIN? Why Bitcoin Now? The Benefits of Using Bitcoin The Complexity and Confusion of Bitcoin What’s in This Book? Chapter 2: BITCOIN BASICS How Bitcoin Works in Simple Terms Bitcoin Units The Bitcoin Address The Private Key The Bitcoin Wallet Creating Your First Bitcoin Wallet with Electrum Acquiring Bitcoins in Your Wallet Spending Bitcoins with Your Wallet Bitcoin Addresses Generated by Your Bitcoin Wallet Program The Blockchain The Blockchain Lottery Blockchain Forking Transaction Confirmations, Double Spending, and Irreversibility Mining Bitcoins The Complexity of the Bitcoin System Chapter 3: STORING YOUR BITCOINS SAFELY, SECURELY, AND CONVENIENTLY Storing Your Private Key(s) Hot Storage vs.

The Dangers of Decentralized Digital Money Chapter 7: The Cryptography Behind Bitcoin A Brief Cryptography Overview One-Way Functions Cryptographic Hash Functions Verify Information Public Key Cryptography Digital Signatures Using Digital Signatures Why Bitcoin Needs Cryptography Authorizing Transactions with Digital Signatures Verifying the Validity of the Transaction History Proof-of-Work in Bitcoin Mining Extra Protection for Bitcoin Private Keys Cryptographic Methods Used in Bitcoin Cryptographic Hash Functions: SHA256 and RIPEMD160 Crowley and the Unfortunate Jelly-Filled Donut Incident Moving Around on a Line Elliptic Curve Digital Signature Algorithm (ECDSA) Signing a Bitcoin Transaction Using ECDSA The Security of Bitcoin’s Cryptography Pseudocode for Elliptic Point Summation and Point Multiplication Chapter 8: BITCOIN MINING Why Is Bitcoin Mining Needed? A Parable of Two Generals Applying the Parable to Bitcoin Preventing Attacks with Mining Distributing New Currency with Mining How Does Bitcoin Mining Work? How Miners Solve a Block Anatomy of a Block Pooled Mining Bitcoin Mining for Profit Theoretical Hash Rate Limits Decentralization in Bitcoin Mining 8.5 THE STRANGE WORLD OF ALTCOINS Chapter 9: UNDERSTANDING THE DIFFERENT TYPES OF BITCOIN WALLETS Wallet Software Design Fundamentals Offline vs. Online Transaction Signing Random Key Generation vs. Deterministic Key Generation (vs. Single Key Generation) Full vs. Simplified Payment Verification Other Common (and Not So Common) Bitcoin Wallet Features Future Wallets Which Wallet Is Right for You? Additional Wallet Considerations Chapter 10: BITCOIN 2030 What Will a Bitcoin Be Worth in 2030?


pages: 349 words: 102,827

The Infinite Machine: How an Army of Crypto-Hackers Is Building the Next Internet With Ethereum by Camila Russo

4chan, Airbnb, algorithmic trading, altcoin, always be closing, Any sufficiently advanced technology is indistinguishable from magic, Asian financial crisis, bitcoin, blockchain, Burning Man, crowdsourcing, cryptocurrency, distributed ledger, diversification, Donald Trump, East Village, Ethereum, ethereum blockchain, Flash crash, Google Glasses, Google Hangouts, hacker house, Internet of things, Mark Zuckerberg, Maui Hawaii, mobile money, new economy, peer-to-peer, Peter Thiel, pets.com, Ponzi scheme, prediction markets, QR code, reserve currency, RFC: Request For Comment, Richard Stallman, Robert Shiller, Robert Shiller, Sand Hill Road, Satoshi Nakamoto, semantic web, sharing economy, side project, Silicon Valley, Skype, slashdot, smart contracts, South of Market, San Francisco, the payments system, too big to fail, tulip mania, Turing complete, Uber for X

Also, many alternative digital currencies were popping up for the first time as developers worked to improve on Bitcoin and speculators bet on the next great thing. From 2008, when Satoshi Nakamoto created the first decentralized digital currency, to 2011, Bitcoin ruled alone. But by December 2013, dozens of new coins, also known as alt-coins, had been created, and the speculation around them helped fuel the rally that year. When the early Ethereum team gathered in Miami, the first alt-coin bubble in cryptocurrencies’ short history had just reached its high point. As they schemed and dreamed of greatness, they were also planting the seeds for what would become a much bigger alt-coin boom. But that would be a few years later. That week the only thing people in the house cared about was that they were witnessing the birth of the next Bitcoin as in, the next big thing in cryptocurrencies. Some of them also cared about how to become a part of it, each for their own particular reasons—whether it was stroking their ego, getting rich, or changing the world.

Back on the road, he continued studying to get an online master’s degree in digital currencies from the University of Nicosia, said to be the first university to offer such a thing, and decided to code up an Ethereum smart contract for a homework assignment. He had recently stumbled into the Ethereum Reddit page and posted the contract and a blog post explaining it, to get feedback. Griff seldom participated in the Bitcoin and altcoin forums because he felt they were too negative and critical, so he was amazed when nobody ridiculed his amateurish code. Ethereum developer Alex Van de Sande even took the time to edit it. “This is home,” Griff thought. He immediately looked for work in the Ethereum community and asked to join Slock.it, what he thought was one of the most exciting crypto projects out there. After designing the system and building the prototypes, Slock.it needed funding.

We believe in the original vision of Ethereum as a world computer you can’t shut down, running irreversible smart contracts,” the Ethereum Classic website said. “We believe in a strong separation of concerns, where system forks are only possible in order to correct actual platform bugs, not to bail out failed contracts and special interests.”7 Others supporting the survival of the old chain were Bitcoiners who wanted to make a point: Ethereum is a silly little alt-coin with sycophantic followers bowing to their supreme leader, Vitalik Buterin. As he tried to make sense of what was happening, Vitalik got a message from Gregory Maxwell, a prominent Bitcoin developer. He wanted to buy Vitalik’s coins on the old chain. With his offer, he was signaling his support for Ethereum Classic. Basically, he was “taking off his glove and slapping Vitalik across the face,” Emin said.


pages: 515 words: 126,820

Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

Airbnb, altcoin, asset-backed security, autonomous vehicles, barriers to entry, bitcoin, blockchain, Blythe Masters, Bretton Woods, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, cloud computing, cognitive dissonance, commoditize, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Galaxy Zoo, George Gilder, glass ceiling, Google bus, Hernando de Soto, income inequality, informal economy, information asymmetry, intangible asset, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, money market fund, Network effects, new economy, Oculus Rift, off grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, QR code, quantitative easing, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, social graph, social intelligence, social software, standardized shipping container, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, unorthodox policies, wealth creators, X Prize, Y2K, Zipcar

Ten minutes is also too long for financial transactions where timing matters to get an asset at a particular price, and where latency exposes traders to time-based arbitrage weaknesses such as market timing attacks.6 The immediate solution for entrepreneurs has been to fork the bitcoin code base, that is, to modify the source code by tweaking a few parameters, and to launch a new blockchain with an altcoin in place of bitcoin as incentive to participate. Litecoin is a popular altcoin with a block time of 2.5 minutes, and Ripple and Ethereum are entirely reengineered blockchain platforms that have latency of seconds, not minutes. A sixth dimension is behavioral change in a deeper sense than Netiquette. Today, many people count on their bank or credit card company, even talking with a real person, when they make an accounting error, forget their passwords, or lose their wallets or checkbooks.

Irrevocability of a transaction and instant reconciliation of financial reporting would eliminate one aspect of agency risk—the risk that unscrupulous managers will exploit the cumbersome paper trail and significant time delay to conceal wrongdoing. Value Innovation: The bitcoin blockchain was designed for moving bitcoins, not for handling other financial assets. However, the technology is open source, inviting experimentation. Some innovators are developing separate blockchains, known as altcoins, built for something other than bitcoin payments. Others are looking to leverage the bitcoin blockchain’s size and liquidity to create “spin-off” coins on so-called sidechains that can be “colored” to represent any asset or liability, physical or digital—a corporate stock or bond, a barrel of oil, a bar of gold, a car, a car payment, a receivable or a payable, or of course a currency. Sidechains are blockchains that have different features and functions from the bitcoin blockchain but that leverage bitcoin’s established network and hardware infrastructure without diminishing its security features.

Although Bob’s computer was hardly optimized for mining bitcoin, he entered it into a mining pool. In a 137-hour session, it mined 152.8 microbitcoin (μBTC), roughly three and a half U.S. cents at the time. But at ten cents per kilowatt-hour, Bob’s computer used about fourteen cents of electricity. Bob concluded, “The days of mining bitcoins from your PC are now over.” So any design change to the original bitcoin protocol, whether through an altcoin or an upgrade, must keep in mind appropriate economic incentives to sustain miner decentralization, so that the network gets good value from miners in exchange for the large sums of bitcoin. Bitcoin core developer Peter Todd likened this task to designing a robot that can buy milk at the grocery store. “If that robot doesn’t have a nose, before long store owners are going to realize it can’t tell the difference between unspoiled and spoiled milk, and you’re going to get ripped off paying for a bunch of spoiled milk.”43 To Todd, that means that smaller miners in geographically dispersed locations should be able to compete nose to nose with larger miners that are geographically centralized, that is, large mining pools in Iceland or China.


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The Truth Machine: The Blockchain and the Future of Everything by Paul Vigna, Michael J. Casey

3D printing, additive manufacturing, Airbnb, altcoin, Amazon Web Services, barriers to entry, basic income, Berlin Wall, Bernie Madoff, bitcoin, blockchain, blood diamonds, Blythe Masters, business process, buy and hold, carbon footprint, cashless society, cloud computing, computer age, computerized trading, conceptual framework, Credit Default Swap, crowdsourcing, cryptocurrency, cyber-physical system, dematerialisation, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, failed state, fault tolerance, fiat currency, financial innovation, financial intermediation, global supply chain, Hernando de Soto, hive mind, informal economy, intangible asset, Internet of things, Joi Ito, Kickstarter, linked data, litecoin, longitudinal study, Lyft, M-Pesa, Marc Andreessen, market clearing, mobile money, money: store of value / unit of account / medium of exchange, Network effects, off grid, pets.com, prediction markets, pre–internet, price mechanism, profit maximization, profit motive, ransomware, rent-seeking, RFID, ride hailing / ride sharing, Ross Ulbricht, Satoshi Nakamoto, self-driving car, sharing economy, Silicon Valley, smart contracts, smart meter, Snapchat, social web, software is eating the world, supply-chain management, Ted Nelson, the market place, too big to fail, trade route, transaction costs, Travis Kalanick, Turing complete, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, universal basic income, web of trust, zero-sum game

It’s forcing the incumbents within them to see the spotlight that this new technology shines on the inefficiencies of their old, centralized work processes. And some of the ideas being developed there will no doubt be of great value to the wider ecosystem of blockchain development. But we believe the “permissionless” ideal first laid down by Bitcoin and since followed by countless alternative “altcoins” and blockchains is a vital one for the world to focus on. As we stated in The Age of Cryptocurrency, Bitcoin was merely the first crack at using a distributed computing and decentralized ledger-keeping system to resolve the age-old problem of trust and achieve this open, low-cost architecture for intermediary-free global transactions. It may or may not be the platform that wins out. Perhaps something else will come along and fulfill for the age of cryptocurrency what the Transmission Control Protocol/Internet Protocol, or TCP/IP, pair of protocols did for the age of the Internet.

As we were going to print, Tezos’s viability was in question as an ugly internal spat, discussed in chapter four, undermined people’s confidence. Still, Tezos’s contribution to the development of more robust governance systems has been an important one. Every new idea will have shortcomings, yet, if developed by serious engineering teams, each idea can move the ball forward toward decentralization, functional governance, scalability, and privacy. This has been so with altcoins such as Litecoin, whose alternative approach to the proof-of-work algorithm showed that it was possible to stall the entrance of high-powered, industrial players into the mining network. Others—notably Vertcoin, discussed in chapter four—have improved on Litecoin’s model. Vertcoin has avoided Bitcoin’s unwelcome experience, in which the unrestrained competition for block rewards fostered a concentration of computation-heavy, electricity hungry mining operations.

But the question of fair distribution still comes up, especially with the proof-of-work algorithm. That’s because those who gain the most tokens are those with the most powerful computers. Yet not every mining-based cryptocurrency needs to end up as Bitcoin has, where only the biggest, most powerful computing operations—now managed on an industrial scale—can effectively compete for coins. Some new altcoins are designed to be “ASIC-resistant.” This means that the protocol’s in-built consensus algorithm—the puzzle miners must solve to win coins—compels their computers to carry out various functions that can’t easily be performed by existing versions of the super-fast Application-Specific Integrated Chips now uniformly embedded into the equipment of the biggest bitcoin miners. The idea is to give no special advantage to those who own these expensive, single-purpose raw computation machines.


pages: 161 words: 44,488

The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar

Airbnb, airport security, Albert Einstein, altcoin, Amazon Web Services, bitcoin, Black Swan, blockchain, business process, centralized clearinghouse, Clayton Christensen, cloud computing, cryptocurrency, disintermediation, distributed ledger, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, fixed income, global value chain, Innovator's Dilemma, Internet of things, Kevin Kelly, Kickstarter, market clearing, Network effects, new economy, peer-to-peer, peer-to-peer lending, prediction markets, pull request, QR code, ride hailing / ride sharing, Satoshi Nakamoto, sharing economy, smart contracts, social web, software as a service, too big to fail, Turing complete, web application

Recording and time-stamping delivery of medical procedures or events, in order to reduce insurance fraud, facilitate compliance and verification of services being rendered. Recording the maintenance history of critical pieces of medical equipment, for example, an MRI scanner, providing a permanent audit trail. Carrying a secure wallet with our full electronic medical record in it, or our stored DNA, and allowing its access, in case of emergency. Verifying provenance on medications, to eliminate illegal drug manufacturing. “CaseCoins:” originating specific altcoins that create a cryptocurrency market around solving a particular disease, such as FoldingCoin, a project where participants share their processing power to help cure a disease, and get rewarded with a token asset.10 Energy Blockchain applications can help achieve a more efficient management of the power distribution grid, low-cost microtransactions between peers or machines, secondary markets creation, or rule-based payments.


pages: 326 words: 91,559

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Clayton Christensen, collaborative economy, collective bargaining, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, Food sovereignty, four colour theorem, future of work, gig economy, Google bus, hydraulic fracturing, Internet Archive, Jeff Bezos, jimmy wales, joint-stock company, Joseph Schumpeter, Julian Assange, Kickstarter, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, multi-sided market, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Jobs, Steve Wozniak, Stewart Brand, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, Y Combinator, Y2K, Zipcar

Users were probably more than 90 percent male.6 Entrusting money to algorithms, it turns out, was no guarantee of a better result than managing it with institutions and people. Nakamoto’s longing for money free from trust simply shifted the location of that trust. The blockchain technology at work in Bitcoin is flexible; it can be rearranged for cooperation rather than competition, for reputation tracking rather than anonymity, for democracy rather than oligarchy. Some early experiments along these lines, among the hundreds of “altcoins,” did away with intensive mining altogether. But unlike Bitcoin, they were short on financing and evangelists. A lot of the people I knew who had been around for the early days of cryptocurrency—software hackers who became overnight whizzes in monetary theory—were soon building Bitcoin-like systems for the very banks they thought they would utterly disrupt. Other imperatives took over. I remember this shift in priorities becoming especially evident one evening at the Bitcoin Center.


pages: 395 words: 116,675

The Evolution of Everything: How New Ideas Emerge by Matt Ridley

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Alfred Russel Wallace, AltaVista, altcoin, anthropic principle, anti-communist, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Boris Johnson, British Empire, Broken windows theory, Columbian Exchange, computer age, Corn Laws, cosmological constant, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, cryptocurrency, David Ricardo: comparative advantage, demographic transition, Deng Xiaoping, discovery of DNA, Donald Davies, double helix, Downton Abbey, Edward Glaeser, Edward Lorenz: Chaos theory, Edward Snowden, endogenous growth, epigenetics, Ethereum, ethereum blockchain, facts on the ground, falling living standards, Ferguson, Missouri, financial deregulation, financial innovation, Frederick Winslow Taylor, Geoffrey West, Santa Fe Institute, George Gilder, George Santayana, Gunnar Myrdal, Henri Poincaré, hydraulic fracturing, imperial preference, income per capita, indoor plumbing, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Khan Academy, knowledge economy, land reform, Lao Tzu, long peace, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, meta analysis, meta-analysis, mobile money, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, Necker cube, obamacare, out of africa, packet switching, peer-to-peer, phenotype, Pierre-Simon Laplace, price mechanism, profit motive, RAND corporation, random walk, Ray Kurzweil, rent-seeking, reserve currency, Richard Feynman, rising living standards, road to serfdom, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, sharing economy, smart contracts, South Sea Bubble, Steve Jobs, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, twin studies, uber lyft, women in the workforce

As Dominic Frisby remarks, not only has bitcoin’s evolution so far been chaotic, unplanned and organic, but the people around it are ‘an eclectic mix of all sorts from the computer whizz to the con artist to the economist; from the opportunist to the altruist to the activist’. None the less, it is worth remarking just how much the humble bitcoin has achieved in a world where it has no intrinsic value whatsoever, which bodes well for future crypto-currencies online. There are now more than three hundred rival online crypto-currencies competing with bitcoins – altcoins, they are called – and though none has yet gained anything like the market share of bitcoin, it may only be a matter of time. Just imagine what might happen if decentralised crypto-currencies really do take off. If people started putting their savings in them, and financial firms started offering interesting crypto-currency-based products, governments would find their room for manoeuvre much diminished.