16 votes

Beyond Bitcoin: A Guide to the Most Promising Cryptocurrencies

With growing acceptance from regulators, bitcoin is at the center of the virtual money universe.

Just as the success of Facebook helped spawn endless clones, Bitcoin’s arrival on the big stage comes with an assortment of digital currencies, known as “altcoins,” riding on Satoshi’s coattails. As the saying goes, a rising tide raises all ships. With Bitcoin up over 5000 percent since the beginning of the year, the altcoin market is booming. The price of Litecoin, what some consider silver to bitcoin’s gold, has traded as high as $20, up nearly 1000 percent in the last six months.

Successful competitors found a way to relevantly differentiate themselves. LinkedIn was for work. Twitter focused on short status updates you could broadcast publicly. Eventually, once Facebook matured, other entrants incrementally improved the social network’s fundamental features. Instagram filtered the photo while Snapchat perfected the selfie. Given bitcoin’s dominance, what will it take for an altcoin to succeed?

Litecoin: the little brother

Price at time of writing: $28.35

Market Cap: $503,102,328

Consistent with its name, Litecoin is essentially Bitcoin-lite and is the second most valuable altcoin. It shares nearly all the same features except it has a shorter block rate (every 2.5 minutes versus 10) and a different proof-of-work (scrypt versus SHA2). Shorter block rates mean (4x) faster transaction times, which is advantageous, but it’s not a huge change.


Namecoin: More than money

Price: $6.91

Market Cap: $51,210,571

As the fourth most popular crytocurrency, Namecoin is the first prominent iteration of the Bitcoin model that provides functionality beyond payments. While Namecoin can also be used as a currency, its purpose is to manage information access rather than money. In its current iteration, it utilizes all of the same Bitcoin principles to serve as a distributed Domain Name System (DNS) for the top level .bit domain. In other words, it’s a peer-to-peer version of ICANN.

Domain names are registered for a fee of 0.01 namecoins and recorded and maintained on the blockchain. New transactions occur when users transfer their domain name rights. Everything else works just like Bitcoin. The benefits of this DNS system versus a centralized one, like ICANN, is that it prevents internet censorship and theoretically reduces downtimes. But since domains are cheap and cannot be seized, cybersquatting is rampant by early adopters.

Namecoin is compelling because it proves just how versatile the decentralized Bitcoin model is. Beyond DNS, a similar system could be employed to manage logins, torrent trackers, or even decentralized email—all while maintaining the functionality of a currency. As such, it’s one of the only clones that may survive even if Bitcoin fails. Moreover, expect to see further variations of the system. As it turns out, Bitcoin is about more than just money.
(I no longer recommended NMC and prefer Bitshares DNS)

Primecoin: For science!

Price: $5.45

Market Cap: 17,511,483

As mentioned earlier, one of the primary drawbacks of Bitcoin is that the mining system is a complete and utter waste of energy (although more efficient than banks). And as Bitcoin expands, so does the waste, which is obviously a net loss for the environment.
in Primecoin, we have the first execution of the Bitcoin model where mining actually contributes to society by implementing scientific proof-of-work. Rather than solving an arbitrary hash, Primecoin miners search for chains of prime numbers, which happens to be a rich and historic mathematics tradition for a variety of reasons covered by the University of Tennessee at Martin. The Electronic Frontier Foundation even offers $550,000 worth of prizes for anyone who discovers a prime number more than 1 million, 10 million, 100 million and 1 billion digits long, of which the first two have already been claimed.
http://motherboard.vice.com/blog/beyond-bitcoin-a-guide-to-t...

=============================================

After comparing BTC vs. LTC vs. PPC vs. XRP vs. NMC, the natural instinct is to wonder about the rest of the most capitalized cryptocurrencies. Here's a pros and cons comparison of each, in order of projected future value (by capitalization, not price).

protoshares

1. Protoshares - Buying a Future Piece of the Invictus-Innovation's Pie
Capitalization: $26 Million, Price: $25.31, Number of Coins: 1M (as of 12/4/13)

Protoshares are a confusing alt coin (any cryptocurrency that isn't Bitcoin). They're not just another cryptocurrency, though they are mined and can be traded like conventional crypto. Beyond that, they also represent shares in future Invictus-Innovation's cryptocurrencies and digital creations. Better than perhaps anyone, Invictus Innovations Incorporated has a strong grasp of just what cryptocurrency is and can do. While delving into their philosophy and thought is beyond the scope of this article, it suffices to say that they have a strong understanding of cryptocurrency as a platform, rather than just a speculative asset, or money transaction system. These all portend on the quality of the Protoshares as owning them means you own a piece of Invictus' future.

Pros

• Invictus classifies cryptocurrency as being part of a larger concept called DACs, or Distributed Autonomous Corporations. ProtoShares represent a share in future Invictus-Innovations DACs of a variety of types.
• Protoshares represent value in the future of Invictus via their primary DAC, BitShares, and are therefore not trying to be what Bitcoin is directly. This makes them unique.
• III has a variety of interesting ideas (to which Protoshares buy you a piece of) that include BitShares, a trading platform that will "interface with a growing number of government-regulated exchanges." • Invictus aims to make BitShares, the DAC that ProtoShares purchase part of, a meta-platform, essentially a platform for future cryptocurrencies and other types of investment vehicles saying, "Invictus will be making the open source tools we develop to launch BitShares available to our partners and competitors. Who knows what new DACs everyone will come up with?"
• Only 2 million are available meaning ProtoShares are relatively scarce.
• Keyhotee, another Invictus project one can own a part of with ProtoShares, is focused on letting users use one digital identity for everything, including moving any cryptocurrency.

Cons
• As this explanation shows, Invictus' project isn't exactly simple to even understand, achieving it will be extremely time-consuming. This means that ProtoShares may be riskier than they seem....

Read more at: http://www.heavy.com/tech/2013/12/qkc-vs-mec-wdc-ftc-pts/

http://protoshares.com/
=============================================

Anoncoin

In Bitcoin’s Orbit: Rival Virtual Currencies Vie for Acceptance

Bitcoin has been criticized for the anonymity of its transactions, which have made it attractive for buying drugs and guns online. But many altcoin fans are more bothered by how easily governments can follow bitcoin, because the transactions are all recorded on a public ledger. This was the motivation for the creators of anoncoin, which has been rising in value.

http://dealbook.nytimes.com/2013/11/24/in-bitcoins-orbit-riv...
https://anoncoin.net/

=================

Darkcoin Rising
Darkcoin, which was launched at the beginning of this year, has been on a bull run recently jumping from US$1.65 last Thursday to US$2.86 at the time of writing. Its market capitalization has also ballooned from US$7 million to almost US$12 million today.

Coin, cloak and dagger

The idea behind Darkcoin is, first and foremost, privacy. This cloak-and-dagger approach might sound like a redundant feature to some as many believe that Bitcoin provides users with complete anonymity, but this is not technically true.

A user that buys drugs on a site like Silk Road with the same wallet that he uses to buy an item on overstock.com can be traced albeit it requires much more effort when compared to credit cards. But, in fact, it takes a lot of work for Bitcoin users to achieve a desirable level of privacy using such arduous methods as having to juggle multiple wallets, cold storage, and numerous keys.

The brainchild behind Darkcoin, Evan Duffield, explained his motivation for creating this privacy-oriented crypto-currency:

“I believe the central problem with Bitcoin is that the public ledger, although a remarkable accomplishment, also allows a gross invasion of personal privacy by permanently listing all transactions the users have ever done publicly.”

Indeed, some users may find tremendous appeal in Darkcoin. It essentially makes transactions invisible in the public blockchain. And with 4 million darkcoins already in circulation and growing, the currency is expected to find its target users who prefer a higher level of anonymity.
http://cointelegraph.com/news/111441/darkcoin_rising

Forbes: The Top 30 Crypto-Currency Market Capitalizations In One Place

Virtual currencies like Litecoin, Peercoin, Namecoin and others are part of a group of alternative virtual currencies that have become popular, mostly because of the rising value of the bitcoin currency. The biggest gainer is Litecoin, which is trading at $28.31 (as of writing) with a market cap of more then half a billion dollars.
http://www.forbes.com/sites/reuvencohen/2013/11/27/the-top-3...
==================================================

Bitcoin 2.0 Explained: Colored Coins Vs Mastercoin Vs Open Transactions Vs Protoshares
2014 Will Show the True Power of the Blockchain

Protoshares

Much like Mastercoin, Protoshares is an altcoin that actually gets people excited because it offers something different than a simple clone of the Bitcoin blockchain. The idea behind Protoshares is that anyone who owns Protoshares will also get a stake in the decentralized autonomous corporations that are created by Invictus Innovations. Their first project, Bitshares, is basically their way of going after the problem of creating a decentralized exchange. Their solution is similar to the contracts for differences idea that Mastercoin is also implementing. Basically, various assets, such as BitUSD and BitGold will derive their value from two parties who own Bitshares and place long and short positions on that particular asset. You can find an explanation as to where BitAssets will get their value from bytemaster on the bitcointalk forum. Bytemaster, aka Daniel Larimer, is the CEO of Invictus Innovations. After BitShares is ready, Invictus will then begin to work on DomainShares and a number of other decentralized autonomous corporations that can replace some of the centralized online services that we use today.

Decentralized Autonomous Corporations

You may have noticed the term "decentralized autonomous corporation" being thrown around a few times in the section on Protoshares. What exactly is a decentralized autonomous corporation or DAC? A DAC is basically a way to use the blockchain technology behind Bitcoin to created a decentralized service.
We will soon see many different DACs come about that will offer decentralized alternatives to services such as Facebook, Twitter, Gmail, online sportsbooks, voting booths, SSL, cloud storage, and much more.
http://voices.yahoo.com/bitcoin-20-explained-colored-coins-v...
==========
Charts:
Crypto-Currency Market Capitalizations
http://coinmarketcap.com/

http://cryptmarketcap.com/

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darkcoin / anoncoin

Here is the fatal flaw:

"Using a trusted central party to assist with the process, until enough Bitcoin clients trust it and are willing to support it natively"

read: honeypot.

?

sounds like you're talking about old zerocoin specs. drk is decentralized.

where's that unattributed quote from?

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

anoncoin.net is down

it was linked there but you can search for that quote in a search engine and you will find who the source is

like i said

that is an issue with zerocoin not darkcoin. i'm guessing anoncoin will try and fix it before they implement zerocash, if they ever do. i just sold a bunch of my anc a few days ago and bought drk. drk is totally different from zerocoin/zerocash and once ring signatures and ip obfuscation are implemented in drk v2 zerocash will be inferior due to what you mentioned.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

what is your thoughts

if the 42 hosted darksend servers are actually feds?

decentralized masternodes

lol, fat chance. do you have any proof? no you don't and they would have to control all of them to be effective. i may sell half my ltc and get a drk masternode going just to spite you. even if they did control all the masternodes you are still just as anonymous as btc.
pretty sure you're just trolling but for the record do you really think the gov controls all the drk masternodes? we are talking about the same people that gave us the obamacare website you know.

if you're paranoid you should wait for v2 with ring signatures. i'm not worried at all.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

"do you have any proof?" --famous last words

Funny that you are demanding proof from me for merely posing the question, while giving an automatic pass to the cryptocoin groups.

That's called "ridicule without investigation" and it demonstrates that your mind is out of your control.

You can believe want you want. Close those eyes tightly. Everything is fine.

how dare i demand proof of your absurd accusation

i like how you just plow forward never acknowledging you have been proven wrong time and time again. instead you just raise more crazy questions and don't bother to answer questions asked of you. plus you always come with old outdated info that waste time. please educate before you hate.
here's the latest masternode graph and right now we are at 166 mn's in over 16 countries who you claim are all conspiring with the us gov? you got any proof? please don't bother, it's a fool's errand.

http://drk.poolhash.org/masternode.html

it hasn't been 42 mn's in weeks and will be over a thousand soon. one quick look at the graph proves the gov does not control all the mn's. where do you come up with these things? is there a haters group you're reading from? you never post links, just debunked fud.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Proof is an impossible axiom.

You are the one who is obviously delusional if you think suggesting law enforcement might sign on to host servers is somehow absurd and crazy.

Only zealots like yourself believe things can be proven and disproven like a mathematical formula.

First, you have the gall to demand "proof" of a possible scenario. Second, you claim that your graph proved the scenario false.

My job is merely to point out the obvious flaw in the system. Now that I have pointed it out, I suppose it is your job to kick and scream about it.

You see, it is actually you who is pre-supposing the unsubstantiated truth. The graph, (which shows 42 nodes as of 12 days ago, by the way, wow, old news) -is not proof of anything at all.

current price - $7.50

i should have bought more of these @ .50-.60 cents, oh well.
i just sent half my ltc to the exchange so hopefully we can get a nice correction to $4-5 and i'll get a masternode going for you.

sorry you weren't able to double your money overnight but i tried to help. you can lead a horse to water but you can't make them drink, that would be a violation of the NAP!

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

the fallacies continue

You won't be laughing if your grandchildren wake up in an Orwellian world where financial sovereignty was a thing that historians only write about.

The $ is flattering and is why your mind is controlled on the matter. It strokes your ego and you are unable to know what real anonymity is and real money is.

You have become pusher of a cashless society, and you didn't even know it happened.

you've been watching too much pessimism porn

good news, i just read that anoncoin is implementing zerocoin with something called "ufo" that solves the trust problem you mentioned so it will be trustless just as i said.

i've been ready for the zombie apocalypse for years now and have more silver than i can carry. i love it but it is very heavy and not very portable for when the nwo boogie men come for me.
the cashless society is coming whether you like it or not. why do you prefer to transact in fiat plastic and paper fed reserve notes?
when the cashless society comes will you still prefer fed backed gov plastic or a p2p currency that the gov can't seize or freeze?

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Happy you came out of the closet

"the cashless society is coming whether you like it or not." --MMJ Ministry, May 15, 2014

Thank you for identifying that you are not just pro virtual currency, but you are anti physical. I appreciate you coming out on that side of the fence - it makes it easier to understand your motive.

Darkcoin Rising - Current Price $4.65

by Allen Scott @ 2014-05-14 03:05 PM
Darkcoin, which was launched at the beginning of this year, has been on a bull run recently jumping from US$1.65 last Thursday to US$2.86 at the time of writing. Its market capitalization has also ballooned from US$7 million to almost US$12 million today. ($ 20,178,162 now and entering the top 5)

Coin, cloak and dagger

The idea behind Darkcoin is, first and foremost, privacy. This cloak-and-dagger approach might sound like a redundant feature to some as many believe that Bitcoin provides users with complete anonymity, but this is not technically true.

A user that buys drugs on a site like Silk Road with the same wallet that he uses to buy an item on overstock.com can be traced albeit it requires much more effort when compared to credit cards. But, in fact, it takes a lot of work for Bitcoin users to achieve a desirable level of privacy using such arduous methods as having to juggle multiple wallets, cold storage, and numerous keys.

The brainchild behind Darkcoin, Evan Duffield, explained his motivation for creating this privacy-oriented crypto-currency:

“I believe the central problem with Bitcoin is that the public ledger, although a remarkable accomplishment, also allows a gross invasion of personal privacy by permanently listing all transactions the users have ever done publicly.”

Indeed, some users may find tremendous appeal in Darkcoin. It essentially makes transactions invisible in the public blockchain. And with 4 million darkcoins already in circulation and growing, the currency is expected to find its target users who prefer a higher level of anonymity.
http://cointelegraph.com/news/111441/darkcoin_rising

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Cyril's picture

More insights about Zerocoin :

More insights about Zerocoin :

Prof. Matthew Green Talks about ZeroCoin, in Real World Cryptography Workshop, NYC (13-15 January 2014)

http://www.dailypaul.com/311535

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

thanks for posting!

i did not see that post. i'll 4 sure watch the video, thanks.

check out the latest ltb episode 80 about DAx, good stuff there.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Vitalik Buterin reveals Ethereum at Bitcoin Miami 2014

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

E80 – Beyond Bitcoin Uncut

We’ve talked before on LTB about Metacoins. For the last several months I have immersed myself in them. There’s really no question in my mind these tools to create decentralized consensus about anything represent the next great leap forward in whatever the release of the Bitcoin protocol catalyzed.

The afternoon before Miami’s recent North American Bitcoin conference I organized a private panel discussion, Charles Hoskinson representing the Ethereum project, David Johnston of the Mastercoin Foundation and Daniel Larimer of Invictus Innovations representing the Bitshares project. Jason King, founder of Sean’s outpost led the conversation as moderator over the course of about an hour and a half.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Here's the full list of cryptos

Here's the full list: http://www.dailypaul.com/311232/ronpaulcoin-and-86-other-cry...

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

Ethereum Launches ‘Cryptocurrency 2.0’ Network

This Saturday, a group of cryptocurrency advocates will unveil a new system that they hope will rewrite the rules of cryptocurrency.

Officially titled Ethereum, creators are calling it “Cryptocurrency 2.0″. It’s a decentralized mining network and software development platform rolled into one, and it will allow people to create their own altcoins, among other things.

The project, which will be unveiled at the North American Bitcoin Conference, is the brainchild of Vitalik Buterin, co-founder of Bitcoin Magazine, who has also been working on competing browser-based wallets Dark Wallet and KryptoKit. He wants new altcoins to be written for, and run on, Ethereum:

“You would have no need for mining if you do it on top of Ethereum. That’s the thing; Ethereum makes it dead easy to make a new crypto.”

Mining

The Ethereum network uses its own mining technology, Dagger. It utilises some of the concepts in the Scrypt mining algorithm to keep the mining process even and fair.

Scrypt (which is used by altcoins like litecoin), was designed to be more friendly to CPUs (and unfriendly to ASIC miners), so that a core elite of powerful ASIC users didn’t get an unfair advantage. Slowly, people are circumventing that protection, and developing powerful mining hardware for ASIC, so Dagger tweaks those concepts in an attempt to make things more democratic once again.

Dagger is an initial proof of concept, and the Ethereum team is considering a contest for the best possible ASIC-resistant proof of work. The developers are also looking into proof of stake, and they have developed a new PoS algorithm called Slasher. It solves many problems associated with older algorithms.

http://www.coindesk.com/ethererum-launches-cryptocurrency-2-...

======================================

Bitcloud: We Will Decentralise and Revolutionise the Internet

One could hardly accuse Bitcloud’s developers of lacking ambition. The small team wants to decentralise the Internet, and possibly even replace much of the Internet infrastructure we use today.

It’s quite a goal, and to make it all come together the founders will need quite a few backers, but the concept is rather interesting to say the least. Instead of using processing power to move around digital currencies, Bitcloud wants to use a very similar method to provide Internet services.

Instead of mining cryptocoins, Bitcloud miners (if you can call them that) would allocate their hardware resources to other uses: providing storage, computing or routing. They would be rewarded for their efforts, depending on how much bandwidth or storage they contribute.
Cloudcoins and processor cycles

According to the Bitcloud white paper, the system would be underpinned by a digital currency dubbed “Cloudcoins”. A key argument in almost every critique of bitcoin and other digital currencies is their lack of intrinsic value. However, it should not apply to cloudcoins: they might not be worth their weight in gold, but they would be backed by actual services provided by the miners.

The network would use a routing process similar to Tor’s hidden services, and it would employ a “proof of bandwidth” to ensure only connected nodes generate money – thus avoiding any attempts to fool the network and flood it with useless connections. In essence, this approach would allow “miners” to make serious money, but only if they perform serious services.

http://www.coindesk.com/bitcloud-decentralise-revolutionise-...

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Goldman Sachs involved in this

From what I understand, Goldman Sachs has a stake in Ethereum.

For the fun of it, I got ethereumscam.com whereby I can either use it for my business in a positive way if the platform takes off, or in a negative way if it doesn't.

Based on all of the domain names taken with ethereum in it, from all over the world, it looks to be like something that would take off.

Having Goldman Sachs involved, if you know how they work which I know everyone here on DP does, and from an investor point of view, gives it some risk vs. reward potential.

They have a fundraising event that begins in February. I may participate in it but know that one who contributes cannot get anything back from it until incrementally beginning after 1 year a portion, and only 100% after 3 years.

What can you expect to get back? Who knows...

I'm mentioning Bitcoins in my next book "Illusions of Wealth." It's rather facinating to me and to see the likes of JP Morgan and Goldmans Sachs involved, and what Congress will do with it along with the Treasury et al will be something to watch.

Thanks for posting MMJ Ministry. Wonder how this fits in with the honest weights and measures thingy? lol

Ye shall do no unrighteousness in judgment, in meteyard, in weight, or in measure. Leviticus 19:35

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

Goldman Sachs not involved, and launch date not Feb 1

They've said that two of the developers formerly worked at Goldman Sachs (presumably doing financial software) but that Goldman Sachs is not involved. If you know something different from that I'd like to hear it.

Also the fundraiser has been postponed. It's no longer Feb 1.
http://blog.ethereum.org/?p=100/conference-testnet-and-fundr...

It's a pretty cool idea. Obviously there's some demand for implementations of contracts, derivatives and so on for cryptos. Protoshares was one of the first. Mastercoin is a mess but the promises it made got it a lot of attention. I've seen a few others but nothing very innovative.

Ethereum's cool spin on it is that rather than trying to anticipate and implement all the possible uses (escrow, contracts, derivatives, external data sources, etc.) they're embedding a programming language that you could use to implement all of these things and lots of other things as well. It's such a compelling idea I expect any future competitors trying to do similar things with contracts/derivatives/etc. will use ethereum's approach and not the protoshares/mastercoin approach.

It's like the difference between buying a smartphone that only has built-in apps and you don't get any new ones unless the manufacturer adds them, and buying a smart phone that is programmable and anyone who comes up with a great idea can implement it and put it out there to see if there's a market for it. Ethereum might not be the long-term winner, but the new ideas behind ethereum are a slam dunk win over their current competitors.

They're also being very smart about the launch, from what I've seen. And they've got a strong team. It's the most interesting thing I've seen in cryptocurrency technology in weeks.

Thanks doggy

It was actually two former Goldman employees who are working for the company. I did read that about the delay of the fundraiser too. Could just be marketing ploy to build up more excitement (the takeaway).

Thanks for posting and your conversation with MJM.

Author of Buy Gold and Silver Safely
Next book: Illusions of Wealth - due out soon
Also writing book We the Serfs!

i mostly agree but

"I expect any future competitors trying to do similar things with contracts/derivatives/etc. will use ethereum's approach and not the protoshares/mastercoin approach.
It's like the difference between buying a smartphone that only has built-in apps and you don't get any new ones unless the manufacturer adds them, and buying a smart phone that is programmable and anyone who comes up with a great idea can implement it and put it out there to see if there's a market for it."

that sounds just like how protoshares DAC's work. anyone can come up with a new DAC not just the pts devs. from what i can tell ethereum offers a little bit more programmable options but nothing that i would say is a game changer over pts etc. what am i missing?
i know they are very similar and one of the main ethereum guys was fired from the pts project. i've also read some not so flattering things about him. i may invest but i'm still read through some of the issues with ethereum and not liking what i'm seeing.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

protoshares

Protoshares has a slick-looking web site but I've tried several times to figure out what they're doing technically and have hit a brick wall each time. And I'm usually fairly good at figuring out technical details.

If anyone can come up with a new DAC, can you point me to a list of user-created DACs? A technical paper explaining how users can create their own DACs?

They create a lot of new jargon like "polymorphic digital assets" and make the same kinds of promises as mastercoin ("track the value of gold"), but when I try to dig into the technical details, such as they are, I come up empty. Here's what the posted as a whitepaper:
http://static.squarespace.com/static/51df1ba4e4b08840dcfce19...

Here's the section on "Connecting Gold to BitGold price":

All market participants have something to gain if a common understanding can be reached that BitGold is an derivative of a 1oz gold coin bond at the current dividend rate. However, initially there will be no 'trust' in what BitGold actually means. As a result market participants will start out placing orders with a wide spread. As the market depth increases the spread will also decrease until a price is reached that has market consensus and is near parity with a 1oz gold bond paying the current dividend rate.

All parties will be going long or short BitGold based upon which direction they think BitGold will move. The only rational way to invest is to assume that it will follow the price of physical gold because on what grounds would you assume that it would diverge from physical gold in any particular direction? The only grounds for a price divergence from gold is a changing demand for BitGold based upon its yield which would give BitGold a premium or discount relative to gold. This premium or discount would be a largely fixed offset and mostly independent of the BitShare to Gold price exchange risk.

There is clearly a difference between ETF gold and physical gold price. Because most individuals have no ability to directly transact in ETF gold, but could trade a gold coin. BitGold could be defined as the price to receive immediate delivery of a 1 oz Gold Eagle and thus slightly decoupling it from the manipulations in the ETF price and also factoring in premiums on Gold Eagles.

I've seen how Mastercoin and several others try to peg the price of a crypto to the price of gold (something I'd love to see someone succeed at doing) and I don't think any of them would actually work in practice, but at least they give understandable, technical explanations of it. I critiqued Mastercoin's approach in another thread, and there I could explain where I disagreed with them in terms of the clear, detailed, technical explanation they give. Whether it works or not in practice there's no mystery about what exactly they are doing.

I've reread protoshare's explanation above several times now and I can't make sense of it. Maybe it's brilliant stuff, but to me it sounds like the kind of gibberish you get out of marketing departments when they try to write about something they really have no clue about technically. Most things on the protoshare site, when you get down to the technical details, sound that way to me -- new jargon and buzz-wordy descriptions that I can read over and over and still not make any sense of. The fault could be on my end, of course.

protoshares is just like ethereum and others

as far as how all the markets technically work. there are slight differences from what i've seen but i'm not going to try and pretend i have everything figured out. it's complex stuff but i have a good enough grasp on all of it to invest a few btc's. i still have a lot of the same questions you do.

so far there is one protoshares dac called memorycoin that started about a month ago. if you owned protoshare at whatever block it was you just upload you're private pts key into the mc wallet and get free coins. it was the first independent dac and they only gave 1% i think so i have not done it yet but can at anytime in the future.
the way i understand it is if the dac is created by Invictus(pts devs)then they are gonna give like 10-50% shares.
if someone was to clone memorycoin and offer say 2% or more then people would go with the new better offer. Invictus has kits you can get to develop your own dac's but that's beyond my area of expertise.
it's all complicated as hell and i'm still working my way through all of it with your help and others.

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Can you explain it to me?

If you understand it, I'd love to hear an explanation of what that section means where they are allegedly explaining how they'd create an alt coin pegged to the price of gold.

Mastercoin tries to do it with "trusted data sources" and a certain kind of derivatives, and their theory for how they'll control the alt coin price without having any physical gold involved is that the money supply for that alt coin is tightened or relaxed depending on whether the alt coin price is below or above the price of gold. The data source idea is simply that some web resource, such as a yahoo finance quote for the price of gold, is designated the official source, and that data source is periodically sampled and the value is recorded in the block chain. The money supply for the alt coin is tightened or relaxed by creating or destroying coins. There's an escrow account used to do this, the theory being that the escrow account is funded essentially by doing arbitrage, selling new coins (created out of thin air) when the price is higher than the target, and buying and destroying coins when the price is below the target. There are *lots* of problems with this, huge problems with this, but at least there's a clear technical explanation for what they hope to do and why they think it might work.

But the protoshares explanation doesn't even make that much sense. To the extent the explanation isn't just gibberish, the key idea is this: The only rational way to invest is to assume that it will follow the price of physical gold because on what grounds would you assume that it would diverge from physical gold in any particular direction?

That's not a technical explanation. It's not even an explanation. They're just saying that this hypothetical bitgold will track the price of gold by consensus, because it's defined that way, and the only rational way to trade it is to assume that it will track the price of gold. If you think there's a more coherent story buried in all the jargon-enhanced verbiage, I'd love to hear it.

I know this is just one aspect of what protoshares is claiming, but it's typical of their level of technical explanation in my experience. Clearly they've created an alt coin. Beyond that, I haven't been able to figure out any technical details that would make me think they've done anything significant beyond that. I'd like to think I'm usually pretty good at figuring out technical details on these things, when those details have been made public, but the fault in this case could be mine.

here's some links that may help

E80 – Beyond Bitcoin Uncut
We’ve talked before on LTB about Metacoins. For the last several months I have immersed myself in them. There’s really no question in my mind these tools to create decentralized consensus about anything represent the next great leap forward in whatever the release of the Bitcoin protocol catalyzed.

The afternoon before Miami’s recent North American Bitcoin conference I organized a private panel discussion, Charles Hoskinson representing the Ethereum project, David Johnston of the Mastercoin Foundation and Daniel Larimer of Invictus Innovations representing the Bitshares project. Jason King, founder of Sean’s outpost led the conversation as moderator over the course of about an hour and a half.
http://letstalkbitcoin.com/e80-beyond-bitcoin-uncut/#.Uu4BPb...

if you still don't understand it after all that then this is the best place to ask your questions...
https://bitsharestalk.org/index.php?board=3.0

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

Thanks but they still don't explain it

There's still no technical explanation of why it would work, not in the video and not in the forums that I can find. In fact since the video just says the same thing as the whitepaper, I'll stop giving them the benefit of the doubt that there's a technical explanation that they just aren't expressing clearly. They don't give an explanation because they don't have one.

Skip to 8:10-8:30 in the first video there. He just asserts that the consensus will converge on the USD. That's it! There's no argument (here or in the whitepaper) for *why* it will converge on the USD, other than it having "USD" in the name.

In fact, over on bitcointalk, one of the bitshare creators tries to assert exactly that!
https://bitcointalk.org/index.php?topic=279771.420
Skip down to where he tries to argue "Actually, it isn't absurd to suppose that it will track simply because of the name."

But it is *completely* absurd to suggest that because they put USD in the name of bitusd, and "gold" in the name of bitgold, that longs and shorts will cause those coins to naturally, without any enforcement mechanism or actual gold or USD involved in any way, converge on the prices in their names.

And he's stuck trying to argue this way because those two proposed coins differ only in their names!

That alone should convince you that their argument, to the extent it can be called an argument is bogus. If you can find some technical details that I'm not finding let me know. If it's as it seems, I don't believe they'll launch bitusd and bitgold, ever.

Mastercoin at least has a proposed mechanism, and it's enforced in the protocol, and they have an explanation for why they think the mechanism would work. They're making some questionable assumptions about the directness of coupling between the money supply and the price. But at least they aren't just pulling the assertion out of their asses. Essentially, what Mastercoin is doing with their idea of "trusted data sources" and the escrow mechanism with automatic creation and destruction of the alt coins to try to control the money supply thereby controlling the price, is very directly a recognition of the fact that without an enforcement mechanism there's no rational reason to expect convergence.

Certainly not "simply because of the name."

did you listen to the ltb DAx panel?

good stuff!

Official Daily Paul BTC address: 16oZXSGAcDrSbZeBnSu84w5UWwbLtZsBms
My ฿itcoin: 17khsA7MvBJAGAPkhrFJdQZPYKgxAeXkBY
http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...