Quote from: gene on June 05, 2011, 01:49:51 PM

Unk is correct on his points, and those with the necessary technical skills should carefully consider and attack the issues he raises.

If you say so.

Quote from: unk on June 05, 2011, 07:05:15 AM

Quote from: Astrohacker on June 05, 2011, 06:46:00 AM

Suppose you constructed a bitcoin competitor, say bitcoin2, that relied on proof-of-work. Your bitcoin competitor has much less computational power than bitcoin. Any of the bitcoin miners could therefore conquer your tiny network and start reversing transactions whenever they pleased. For this reason, there can only be one. Even if your bitcoin competitor were technologically different than bitcoin, but still relied on proof-of-work, then it could be conquered by any of the bitcoin miners at any time.

there isn't just one kind of proof of work, however. an alternative could require a greater (or lesser, or just different) capital investment than gpus and thus be roughly as secure with more or fewer users. for example, consider one network that relied on a computation that could not easily be sped up with gpus, other asics, or fpgas; there, only cpus would be relevant, whereas gpus and other devices would be relevant to bitcoin. the two could exist in parallel without one being monotonically 'more secure' than the other.

I challenge you to actually create this alternative currency that uses an alternative proof-of-work. By the time you do, bitcoin will already be ubiquitous.

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but the more important point remains that 'most secure' is not what's important. a system needs only to be good enough to do what people want it to do. multiple competing currencies could achieve that, even though only one of them is 'most secure'.

Sure. People still trade with gold. People probably trade shares of companies without ever using currencies in between. And you can obviously have many---small-time---digital currencies operating at the same time, like Second Life and WoW. But only one will come to dominate as the ubiquitous general purpose currency. Why? Because people will find it more convenient to deal with a single currency. The same basic reason why US dollars dominate world trade at present.

There's an important point here which I have made which I'm not sure you have understood: The details, at this point, are irrelevant. Bitcoin is the first currency to solve the problem it solves. No other currencies of that nature can possibly beat the enormous momentum that bitcoin has. No bitcoin alternatives will survive for the same reason no alternative WWW protocols will survive, or no alternative internet protocols will survive, or no alternative set of microprocessor instructions will survive, etc., UNLESS they solve a different problem than the problem solved by bitcoin.

For what it's worth, I do not believe bitcoin will last forever. There will be a quantum bitcoin for quantum computers on a quantum internet. We shall dub this qbitcoin. Qbitcoin solves the problem of securing a decentralized digital currency in a world where quantum computers can readily crack classical encryption. Since qbitcoin solves a different problem than bitcoin, it can survive alongside bitcoin and even beat it (because at that point people will realize their bitcoins are not secure). However, qbitcoin is obviously many years away. By the time it gets here, bitcoin will have long been ubiquitous.

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I agree that if a decentralized currency didn't rely on proof-of-work then it could compete with bitcoin. But no one has actually invented such a thing, and I suspect that it's not possible.

there are two responses to that. the simpler is that proof of work isn't necessary; as satoshi recognized, you just need proof of resources, and he picked work as a judgement call. there are any number of other kinds of resources that could be used. for example, satoshi considered and ruled out ip addresses, but they're not obviously better or worse than cpus or gpus in the steady state. (ip addresses were probably more prone to what would have been perceived as 'manipulation', but then often so are cpus by network administrators, and using computation has many downsides.) there are other resources too, like bandwidth, which is of course the foundation of the emule and bittorrent 'economies'. it could be used in a currency, though it would be more complex to do so.

sheesh. that was what i called the 'simpler' response. the more complex one is that the only feature of decentralisation that requires proof of work is the initial distribution of the currency, though that is perhaps a contentious point. i believe i could show, however, that the block chain's consensus mechanism is not needed merely to prevent double spending; other decentralised technologies could achieve that goal without proof of resources, with whatever probability of correctness was appropriate to a system. (it's all about probabilities; no system to prevent double spending is perfect, including bitcoin's.) the double-spending problem is considerably easier than the question of how to allocate initial wealth without trust, but unfortunately bitcoin uses the same solution for both, thus making the double-spending solution susceptible to more attacks than would otherwise strictly be necessary.

Irrelevant details.

Let me know if you actually figure out how to easily print new bitcoins, easily steal bitcoins, or easily disable the bitcoin network. Those would be problems worth caring about.