Re: [DEAD] Coiledcoin - yet another cryptocurrency, but with OP_EVAL!
Pyramid schemes necessarily involve fraud, particularly assertions about a products quality, or market penetration, or underlying value.
Not necessarily. There were several pyramid schemes started here on this forum which were quite open from the beginning: you pay X to enter, you receive a certain percentage of what people after you pay etc. No fraud involved.
Name them. Most of the claims on this board involve supposedly new and improved crypto currencies. Many of these are neither new, nor are they improved. They also involve a submission of a proof of work in return for new allocations of currency. They do not involve a percentage of this new allocation given to earlier blocks. They are pump and dump schemes, not pyramid schemes.
Luke-jr used the result of peoples computing power, not the power itself. Why is this distinction important and is it actually a distinction? People who signed up with Eligius did so in order to mine Bitcoins. Merged mining involves no additional work in order to function, it uses the results of other proofs of work in order to build its own blockchain. Luke used the results of the BTC mining to attack CLC. Eligius users would earned the exact same number of BTC had Luke-jr not attacked CLC. Since nothing was taken from Eligius users, no economic damage occurred. Eligius users did no extra work to take part in the attack on CLC.
I understand how merged mining works and that it costs nothing extra to miners. But it doesn't matter, I don't believe you can say that miners are giving "full authorization" to pool operators to do whatever they want with their calculations. It's as if your neighbor borrow you a knife for some cooking he's intending to do, and ends up also using this knife to harm someone. Or even to do something not criminal but that you personally don't agree with and that was not clear from the start, like, I don't know, torturing/killing his own dog or something. The fact that he returns the knife intact to you (no lost) doesn't change the fact that he betrayed the implicit agreement.
If he did the cooking and you did not restrict the use of the knife to only cooking, no fraud occurred and there is no broken contract. Lets say after he is done cooking, a home invasion occurs and he successfully defends his family with your knife. Again, as long as he did what he said he was going to do with the knife (say to cook some food for you) and delivered both food and knife to you as agreed, there is no violation of contract. If you want to make sure that the only thing he uses the knife for is the cooking, you had better spell that out (for instance, kosher rules governing what the knife touches).
Should a crypto coin with such a deep structural flaw deserve to survive?
What deep structural flaw? I mean, bitcoin itself could receive such attack, by someone with much more processing power. This new coin was on infant stage and obviously could not counter Eligius attack, as there's no other big pool honestly mining it AFAIK.
The coin was released with merged mining and the largest pool doing merged mining was not acting to appreciate the currencies value. That is a structural flaw in the launch of the coin. The fact that it was not foreseen by the founders is irrelevant. Bitcoin could not have received such an attack as there was no such thing as merged mining when it started, also there is no crypto currency with orders of magnitude more hashing power than BTC that is required for such a scenario to play out today.
The entire premise of cryptocoins is that they are immune or at least very resistant to such manipulations as occurred with CLC.
The only known way so far to resist a >50% attack is by centralizing the network.It was the centralization of CLC in Eligius that created the conditions where a 51% attack can succeed. You cannot eliminate the potential for the attack, you can only minimize it by distributing the resources among many nodes. Since the ultimate control of the currency is in the hands of the users, they could all band together and decide to modify it in any way they see fit. That is technically a 51% attack, since the majority of the miners decide to change the protocol. The implementation of OP_EVAL in BTC by the developers will technically be a 51% attack on the original protocol. Ideally, no losses of BTC will occur.