Creating a bitcoin prediction market is a great idea.
One thing I’ve been wondering recently is why more people don’t create Bitcoin alternatives. Many of the alternatives that already exist have ridiculously high market capitalizations, with what appears to be minimal marketing and almost zero rationale for their existence. If you could create an alternative that had “baked in” solutions to some of the problems people complain about re: long-term adoption of bitcoin (limited divisibility, difficulty of transferring in/out of USD, volatility (somehow fix this? e.g. if the protocol was somehow robust to high-frequency trading, perhaps that would deal with volatility as HFT people traded using volatility pumping strategies), performance problems as the network grows large, general awkwardness of waiting for confirmations and stuff), or had some kind of killer app that bitcoin didn’t have, and then put an actual marketing push behind all this (and bribe the existing exchanges to accept it or find a way to piggyback on the existing bitcoin infrastructure), it seems like it could be a great way to make money.
Creating a bitcoin prediction market is a great idea.
I’m considering seriously. In the last several days I’ve analyzed the technology already in widespread, looked at the possibilities and explored the limits. The potential is huge. Cryptography is like wizardry that works in the real (abstract) world!
One thing I’ve been wondering recently is why more people don’t create Bitcoin alternatives.
The main not-ridiculously-pointless alternative on the horizon is ripple, which has a different focus to bitcoin. If they have marketing awesomeness behind them they could get people to play their game. (Low probability, high reward for them.)
An awesome cryptographic feature of the bitchain mining system is that new bitchains can be mined using the same computational resources that bitcoin miners use for negligible extra effort. ie. Instead of creating lottery tickets and entering them in one lottery they can create lottery tickets and enter the same ticket in 20 different lotteries. This drastically lowers (but doesn’t remove) the difficulty in getting alternate bitchains to be secure.
If you could create an alternative that had “baked in” solutions to some of the problems people complain about re: long-term adoption of bitcoin (limited divisibility
Is this a significant problem? 1 satoshi (the minimum division) is 0.000 000 01 BTC. That’s… not very much. And from one I understand changing the system such that it could allow lower divisions would be plausible if it became necessary. (ie. It is the kind of change that could easily be implemented and adopted by a supermajority of computing power of the miners and thereby become “distributed official”.)
, difficulty of transferring in/out of USD
The ‘ripple’ currency system has dreams of solving this via webs of (limited) trust and social networks. If this were solved in the ripple network it would also incidentally solve it in any currency that is significantly used.
, volatility (somehow fix this? e.g. if the protocol was somehow robust to high-frequency trading, perhaps that would deal with volatility as HFT people traded using volatility pumping strategies),
This volitilty can be solved within bitcoin itself via the adoption of “coloured coins”. Essentially, this means credible institutions can issue “MyBankUSDcoins” for example, with coins with a certain history being declared redeemable at a specified rate via whatever banking mechanism that kind of company does. Similarly pecunix could offer “Pecunix coins” which it backs with gold (its normal business model). Then transactions can be made in gold, or USD, or AUD via the same technology (and distributed security structure) that bitcoin uses.
The above is possible right now. It requires no change to the bitcoin (mining server side) software. It is just a matter of people with sufficient social influence potential making it happen and customers (including merchants) being convinced that they want it.
performance problems as the network grows large, general awkwardness of waiting for confirmations and stuff)
Yes, systems without the awkwardness would have an advantage.
Has anyone tried to solve the marketing issue by giving their coin a referral system similar to what Paypal had in the early days? I’m not 100% sure about this, but I think maybe the way it worked was if you referred your friend to Paypal, you would get $x and your friend would get $x. Supposedly this was a big reason why Paypal beat out competing services in its early days, ’cause people had this monetary incentive to spread it. (I have an acquaintance who worked for a startup that competed with Paypal and lost; I could probably get in contact with him if anyone has any questions.)
This volitilty can be solved within bitcoin itself via the adoption of “coloured coins”. Essentially, this means credible institutions can issue “MyBankUSDcoins” for example, with coins with a certain history being declared redeemable at a specified rate via whatever banking mechanism that kind of company does. Similarly pecunix could offer “Pecunix coins” which it backs with gold (its normal business model). Then transactions can be made in gold, or USD, or AUD via the same technology (and distributed security structure) that bitcoin uses.
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility. So if they existed then would we ditch regular Bitcoins for them? How much software would need to be changed in order to implement colored coins?
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad, and ultimately the interest in them is mostly from speculation… if there’s any interest in using them as an actual currency, it’s liable to be faked interest from people who have large bitcoin balances and would profit if that happened.
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad
Well there was a lot of interest in Bitcoins in southern Europe following the Cyprus, bank account confiscations. Basically, if people are treating putting money into Bitcoins as an alternative to putting it in banks.
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility.
Alas no. They have most of the advantages of bitcoin since they are still bitcoin in full. However, whatever additional value the ‘color’ grants to the coin over the base worth os a BTC is based on trust in a specific agent. They are nothing more than a promise from a supplier to redeem the coins into another form of value at some time in the future. It is a trade off. Convenience and stability purchased by requiring trust.
So if they existed then would we ditch regular Bitcoins for them?
The regular coins are still what are required to produce coloured coins (the name is really good analogy). Coloured coins being used more would seem to lower the expected price of uncoloured bitcoin, but they couldn’t make uncouloured coins worthless since they themselves entail a demand for them.
How much software would need to be changed in order to implement colored coins?
It would mean taking the existing ‘beta’ implementations, making them stable and having people start to use them. Merchants accepting them automatically (and being able to tell they are worth more than uncouloured coins) would also require making improvements to whatever software it is that they use now.
An awesome cryptographic feature of the bitchain mining system is that new bitchains can be mined using the same computational resources that bitcoin miners use for negligible extra effort. ie. Instead of creating lottery tickets and entering them in one lottery they can create lottery tickets and enter the same ticket in 20 different lotteries. This drastically lowers (but doesn’t remove) the difficulty in getting alternate bitchains to be secure.
I thought merged mining only worked for Bitcoin+Namecoin? I was looking into mining Bitcoin and Litecoin simultaneously, but it looked like it simply wouldn’t work with cgminer and in general.
I thought merged mining only worked for Bitcoin+Namecoin? I was looking into mining Bitcoin and Litecoin simultaneously, but it looked like it simply wouldn’t work with cgminer and in general.
Merged mining requires a small change to the bitchain of all but one of the currencies. So you can merge mine bitcoin + 20 merge mining enabled currencies OR you can merge mine litecoin + 20 merge mining enabled currencies.
Currencies that can currently be merge mined with BTC (and that I am aware of):
NameCoin—Store aliases and soforth conveniently. Is complementary to bitcoin for some use-cases.
DevCoin --- (Roughly speaking) a charity for funding opensource developers.
TonalCoin—Which somehow is also embedded in the bitcoin blockchain and allows bitcoins to be traded using a different number system.
IxCoin—Utterly pointless attempt to cash in on crypto speculation.
Creating a bitcoin prediction market is a great idea.
One thing I’ve been wondering recently is why more people don’t create Bitcoin alternatives. Many of the alternatives that already exist have ridiculously high market capitalizations, with what appears to be minimal marketing and almost zero rationale for their existence. If you could create an alternative that had “baked in” solutions to some of the problems people complain about re: long-term adoption of bitcoin (limited divisibility, difficulty of transferring in/out of USD, volatility (somehow fix this? e.g. if the protocol was somehow robust to high-frequency trading, perhaps that would deal with volatility as HFT people traded using volatility pumping strategies), performance problems as the network grows large, general awkwardness of waiting for confirmations and stuff), or had some kind of killer app that bitcoin didn’t have, and then put an actual marketing push behind all this (and bribe the existing exchanges to accept it or find a way to piggyback on the existing bitcoin infrastructure), it seems like it could be a great way to make money.
I’m considering seriously. In the last several days I’ve analyzed the technology already in widespread, looked at the possibilities and explored the limits. The potential is huge. Cryptography is like wizardry that works in the real (abstract) world!
The main not-ridiculously-pointless alternative on the horizon is ripple, which has a different focus to bitcoin. If they have marketing awesomeness behind them they could get people to play their game. (Low probability, high reward for them.)
An awesome cryptographic feature of the bitchain mining system is that new bitchains can be mined using the same computational resources that bitcoin miners use for negligible extra effort. ie. Instead of creating lottery tickets and entering them in one lottery they can create lottery tickets and enter the same ticket in 20 different lotteries. This drastically lowers (but doesn’t remove) the difficulty in getting alternate bitchains to be secure.
Is this a significant problem? 1 satoshi (the minimum division) is 0.000 000 01 BTC. That’s… not very much. And from one I understand changing the system such that it could allow lower divisions would be plausible if it became necessary. (ie. It is the kind of change that could easily be implemented and adopted by a supermajority of computing power of the miners and thereby become “distributed official”.)
The ‘ripple’ currency system has dreams of solving this via webs of (limited) trust and social networks. If this were solved in the ripple network it would also incidentally solve it in any currency that is significantly used.
This volitilty can be solved within bitcoin itself via the adoption of “coloured coins”. Essentially, this means credible institutions can issue “MyBankUSDcoins” for example, with coins with a certain history being declared redeemable at a specified rate via whatever banking mechanism that kind of company does. Similarly pecunix could offer “Pecunix coins” which it backs with gold (its normal business model). Then transactions can be made in gold, or USD, or AUD via the same technology (and distributed security structure) that bitcoin uses.
The above is possible right now. It requires no change to the bitcoin (mining server side) software. It is just a matter of people with sufficient social influence potential making it happen and customers (including merchants) being convinced that they want it.
Yes, systems without the awkwardness would have an advantage.
Has anyone tried to solve the marketing issue by giving their coin a referral system similar to what Paypal had in the early days? I’m not 100% sure about this, but I think maybe the way it worked was if you referred your friend to Paypal, you would get $x and your friend would get $x. Supposedly this was a big reason why Paypal beat out competing services in its early days, ’cause people had this monetary incentive to spread it. (I have an acquaintance who worked for a startup that competed with Paypal and lost; I could probably get in contact with him if anyone has any questions.)
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility. So if they existed then would we ditch regular Bitcoins for them? How much software would need to be changed in order to implement colored coins?
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad, and ultimately the interest in them is mostly from speculation… if there’s any interest in using them as an actual currency, it’s liable to be faked interest from people who have large bitcoin balances and would profit if that happened.
Well there was a lot of interest in Bitcoins in southern Europe following the Cyprus, bank account confiscations. Basically, if people are treating putting money into Bitcoins as an alternative to putting it in banks.
Alas no. They have most of the advantages of bitcoin since they are still bitcoin in full. However, whatever additional value the ‘color’ grants to the coin over the base worth os a BTC is based on trust in a specific agent. They are nothing more than a promise from a supplier to redeem the coins into another form of value at some time in the future. It is a trade off. Convenience and stability purchased by requiring trust.
The regular coins are still what are required to produce coloured coins (the name is really good analogy). Coloured coins being used more would seem to lower the expected price of uncoloured bitcoin, but they couldn’t make uncouloured coins worthless since they themselves entail a demand for them.
It would mean taking the existing ‘beta’ implementations, making them stable and having people start to use them. Merchants accepting them automatically (and being able to tell they are worth more than uncouloured coins) would also require making improvements to whatever software it is that they use now.
I thought merged mining only worked for Bitcoin+Namecoin? I was looking into mining Bitcoin and Litecoin simultaneously, but it looked like it simply wouldn’t work with
cgminer
and in general.Merged mining requires a small change to the bitchain of all but one of the currencies. So you can merge mine bitcoin + 20 merge mining enabled currencies OR you can merge mine litecoin + 20 merge mining enabled currencies.
Currencies that can currently be merge mined with BTC (and that I am aware of):
NameCoin—Store aliases and soforth conveniently. Is complementary to bitcoin for some use-cases.
DevCoin --- (Roughly speaking) a charity for funding opensource developers.
TonalCoin—Which somehow is also embedded in the bitcoin blockchain and allows bitcoins to be traded using a different number system.
IxCoin—Utterly pointless attempt to cash in on crypto speculation.