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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.

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...

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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/

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

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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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...

see if this helps

The Argument Against Bitshares
https://bitsharestalk.org/index.php?topic=2467.0

if not then that forum/post would be the perfect place to ask your questions. either way we'll find out if these experiments work soon enough.
i do like the idea of having these assets track to a Bloomberg ticker etc. i'm sure there will be a dac for that!

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

Same stuff as everywhere else

As everywhere else, he's just assuming without supporting it that consensus ("most people agree the price would track") will cause the value to track the asset in the name of the crypto. When backed into a corner as I quoted above he once even tried to argue that "it will track simply because of the name."

What else can he say? Bitgold and bitusd are hypothetical cryptocurrencies that differ *only in their names* and he's asserting that they will track gold and the usd respectively. Saying "it will track simply because of the name" is as absurd as it sounds but when the only difference is the name, he's literally got nothing else to go with.

On that DAx panel you've got the Mastercoin guy and the Ethereum guy talking about their technology, and explaining what they want to do in terms of their technology. Now contrast that with the other guy.

The other guy says you'll be able to earn "five percent or more" on gold or dollars "or anything." He talks about "creating dollars the same way your bank creates dollars" with collateral (by which he means one cryptocurrency is going to be collateral for another). "If you can lend dollars into existence you can lend gold, silver, oil, anything, bitcoin or mastercoin, can be lent into existence" -- and then he claims you're going to be able to earn five percent interest or more for lending these things into existence. Big promises, zero explanation for why it would actually work.

When the moderator asks him to go into some detail about how it would actually work, he dodges. He talks about the user experience. He makes promises about a crypto that tracks gold, without any gold. He says it works "just like a bank." He talks about applications. He says they'll use the blockchain to represent shares. They'll pay dividends to the shareholders to "maximize the value proposition."

That's not an explanation of anything! I've seen plenty of marketing/sales types put on the spot when they were making promises that the technology they were selling couldn't support, and sometimes I've been the one putting them on the spot when I knew they were bullshitting me. Pumping out the b-school cliches like "maximize the value proposition" when they can't come up with an actual explanation is a dead giveaway.

Unfortunately for him the moderator isn't satisfied by b-school bullshit. The moderator asks how it would work if you had a thousand barrels of oil and wanted to use them in a contract via bitshares. The guy's response is that it doesn't matter whether you actually have a thousand barrels of oil or not. "You get the purchasing power of a barrel of oil or an ounce of gold without actually having a barrel of oil or an ounce of gold."

That's where I gave up. It's the same thing in the whitepaper, the video, and the forums. If they ever launch bitusd and/or bitgold we can see what happens then, but my guess is that it's never going to happen.

oh it's gonna happen

the way i understand it is all those things (bitshares) will be backed by btc or other crypto's in a escrow system (open-transactions layer?) and you can go long or short. if you don't think it will track then put your crypto where your mouth is and profit, it's a prediction market.
if you are really concerned i suggest you ask your questions on the bitshares forum. complain over there and see what bytemaster says, he likes debates like that and i would be interested to see what he says. if you don't want to then maybe i will do it for you but i don't understand your disconnect so it would be best if you asked the questions and did the follow up yourself.
also like i said before someone will make a dac that will track a trusted ticker and then they can both compete in the free market.

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http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

disconnect

You say you don't understand my "disconnect," but I don't understand your "connect." You see him making these bizarre claims, promising five percent (or more) interest "on anything" and talking about how his system will allow you to "lend gold, silver, oil ... into existence" (his words), and prices will track "simply because of the name" (his words). How does any of that sound credible?

BTW he says the same thing about BitBTC, an bitasset that (he asserts) will track BTC without any BTC being involved. They say they'll create a new alt called BitBTC. These will be created by "lending them into existence" as he puts it, with no BTC involved in any way. The collateral for bitbtc and bitusd and bitgold, etc., is bitshares. So basically altcoin X, "backed" by altcoin Y, is going to be a BTC proxy without any BTC being involved in any way.

The exchange rate for BitBTC will be very close to the exchange rate for BTC, they assert. Why? Because it has BTC in the name, and investors will voluntarily respect that with no mechanism to enforce it in any way.

And even though there are no BTC involved, they assert creating BTC is the equivalent of "lending BTC into existence" to the extent that if you wanted to start a BTC company you might borrow BitBTC instead of BTC and pay 5% or more interest on that loan, because the BitBTC price and the BTC price will be so reliably close that holding one is equivalent to holding the other.

That's the same as their story for gold, not surprisingly since BitGold and BitBTC differ *only in the name of the alt coin*. If it doesn't sound whacky when they're saying it about gold or usd, without any actual gold or usd involved in any way, can you hear the whackiness when they're talking about creating a pseudo-bitcoin and all of the promises they make about it?

The safest prediction that I've ever made about cryptos is this: if they launch bitgold or bitusd or bitbtc it won't track the price the way they're asserting. It won't even be close. But I'll be *extremely* surprised if they launch any of these, especially after hearing him in that panel.

we'll see, said the zen master

it's a prediction market and will should track pretty closely. it's the free market at it's finest. if you think you know it won't track close then you should get in there and make some money. i predicted bitBTC will track as close as any of the other bitcoin exchanges do. i suspect all the other bitassets will too. once again if you don't think so you should get in and make some nice profits.
it's totally decentralized and safer than the current centralized exchanges.
you should also create a dac that tracks a kitco/mtgox ticker and competes with bitgld/bitbtc in the free market. if i knew how i would but somebody will that's for sure. i suspect bitgld would track closer to the real physical price than the fake paper kitco price. there's gonna be many markets for eagles and Krugerrand etc etc. this is brand spanking new tech that is just getting started and Invictus is going to be the first to do it, most of the others are a year or more behind.

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prediction market

it's a prediction market and will should track pretty closely.

The problem is that other than having "btc" in the name it's an alt coin that has no connection to btc whatsoever. There's no reward associated with bitbtc tracking btc, and no penalty when it doesn't.

Contrast this with any other prediction market that has real money attached to it. Those work because you make money if you get the prediction right, you lose money if you don't. With bitbtc, you make money for predicting *the direction of btc* correctly, entirely and completely independent of whether the direction is pro-tracking or anti-tracking.

As for making money off of believing it won't track, suppose on day one they set it at parity, and I'm convinced that there's no rational reason that it should track. What's the winning bet?

But you're right, we'll see. Ask them when they're going to launch bitbtc, or bitusd, or bitgold. I can't find a launch date, or even an approximate date.

there's gonna be many markets for eagles and Krugerrand etc etc.

You don't mean a DAC for (physical) Krugerrands, do you?

Decentralized anonymous consensus

"There's no reward associated with bitbtc tracking btc, and no penalty when it doesn't."

the free market will decided. if you predict wrong the penalty is you lose money, if you predict right the reward is you make money. the 5% dividends comes from the money that is normally wasted on mining.

if you know it won't track then you should take the bet and profit. one of the links i posted goes way more in depth into the technical aspects of how/why it all works. if you want expert advice on the underlying technicals then you should ask in their forum.
i feel i understand it enough to throw a few btc'a at this new tech and let it ride. i will probably throw a btc at ethereum too and maybe even mastercoin but i haven't yet. hell mst has dropped 50% since it first debuted on http://coinmarketcap.com/, i'm very tempted to get in at least a little Bit.

"You don't mean a DAC for (physical) Krugerrands, do you?"
no. i mean decentralized and unseizable. the goal is it will track and you can then meet up with someone like on localbitcoins or craigslist and trade bitkrg to someone for a physical krugerrand.

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free market

the free market will decided. if you predict wrong the penalty is you lose money, if you predict right the reward is you make money.

The free market doesn't operate independent of rewards. If they had set up the system so that tracking accurately would be what was rewarded, then that's what the free market would do and potentially do very well. But there's no reward for accurate tracking, and no penalty for wild divergence from tracking.

It's an alt coin with the ability to short. People can make money by being long when it's going up or short when it's going down. Predicting whether it's going to go up or down is what's being rewarded, and that has zero connection to whether it's tracking anything else. I predict that the free market will pursue the thing that's being rewarded. Expecting the free market to instead cause the price to do something that's not in any way being rewarded sounds like a misunderstanding of the free market.

(Speaking of shorting, if anybody is paying close attention, what you can actually do in terms of shorting is go long a certain other alt coin, which serve as collateral, and go short some bit asset. Basically you're long alt coin X and short alt coin Y. If your short on Y is too far under water, your collateral is taken from you and used to buy the alt coin Y that you need to cover the short. The manipulation this enables is called a short squeeze -- someone buys heavily enough to force some shorts to cover, at which point they become buyers when their collateral is spent to buy the bitasset. Then that buying can itself trigger more margin calls, which triggers more buying, which triggers more margin calls, etc. Short squeezes like this happen in the stock market too sometimes. It's a recipe for high volatility.)

if you know it won't track then you should take the bet and profit

Like I said before, take *what* bet? Suppose it's at parity, because they launch it that way, but I'm convinced that with no reward or penalty based on whether it tracks the asset or not, and no enforcement mechanism at all, it's got zero chance of tracking. What's the winning bet? It could be too high, so being long wins, it could be too low, so being short wins. It could be way too high one minute and way too low a short time later. BTW, if you go short now, confident that it's headed to zero eventually, you could lose it all in a short squeeze, because the way they've implemented it being right about long-term isn't enough, because being wrong in the short term can wipe you out and close out your position.

All I'm confident of, and after seeing them give the same non-explanation over and over I'm extremely confident of it, is that if the ever were to launch bitgold or bitusd or bitbtc, it wouldn't track the asset in the name. I'm not saying I can predict the direction in which it will diverge at any given time.

the 5% dividends comes from the money that is normally wasted on mining.

My impression from this thread starting here:
https://bitsharestalk.org/index.php?topic=2644.msg33663#msg3...
is that he's backing away from the 5% idea. ... it seems best to simplify everything and just use 0% interest.

Bitcoin Anonymity Upgrade Zerocoin To Become An Independent Cryp

Bitcoin Anonymity Upgrade Zerocoin To Become An Independent Cryptocurrency

When a group of cryptographers launched Zerocoin last year, they hoped their cryptography project could upgrade Bitcoin to be as anonymous as its most privacy-focused users have always wanted it to be. Now, after six months of waiting in vain for their code to be adopted by the Bitcoin community, they’re taking a bolder approach: Creating their own cryptocurrency, with privacy baked in from the start.

At the Real World Crypto conference Monday in New York, Johns Hopkins cryptography professor Matthew Green announced the next phase in the evolution of Zerocoin: creating an alternative cryptocurrency with an infrastructure independent of Bitcoin.
http://www.forbes.com/sites/andygreenberg/2014/01/13/bitcoin...

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Another Bitcoin alternative appears: RonPaulCoin

Libertarian lovers of Bitcoin have a new virtual currency to fawn over: RonPaulCoin.

The digital currency named in honor of the popular libertarian and former member of Congress officially launched Dec. 29 and is looking for support.

“I believe that Bitcoin and cryptocurrencies will be the closest things to truly bring about the ideas that Ron Paul stands for,” Colin Hutchings, the creator of RonPaulCoin, said.

Hutchings, who owns an online business and runs several websites, first became interested in Bitcoin in early 2013, having been a follower of Paul and his monetary policy relating to gold. When Bitcoin exploded in popularity, Hutchings decided to make his own cryptocurrency that commemorated Paul.

Hutchings said what drew him to cryptocurrencies was the accountability.
http://washingtonexaminer.com/another-bitcoin-alternative-ap...

https://bitcointalk.org/index.php?topic=389070.0

http://www.reddit.com/r/ronpaulcoin

https://www.facebook.com/ronpaulcoin

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http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...

why am i not surprised

that's your pick. you just love the bankster money don't you.

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Yeah, hip hip

hurrah! Let's us all forget about "Smart" phones and NSA, and the "Cloud". Let us all embrace a digital currency, because NOTHING , absolutely NOTHING could possibly go wrong with cyber space and the HONEST companies that control it.
OMG, the scum bags that some call "The Elite" must pee themselves laughing at how easy it is to take candy from babies! (and tip up the pram, and stomp them on the face….just for "Good" measure).
Grow up!! Your wealth belongs first in your heart, secondly in TANGIBLE wealth.

so then i take it you don't use credit cards or a bank etc?

cash only huh, good for you. the fed hates it when you use their fiat blood money, yeah that will show them, you go girl.

"Grow up!! Your wealth belongs first in your heart, secondly in TANGIBLE wealth."
it's gonna break your heart when "The Elite" scum bags come for you in the middle of the night and seize your tangible assets. maybe you could bury your tangible assets in the backyard, surly they won't look there.

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http://www.dailypaul.com/303151/bitcoin-has-gone-on-an-insan...