Plus I don't think I'm ever going to be able to get over how lopsided bitcoin favors early adopters.
Fundamentally, the value of anything is a function of its supply and demand, even currencies. In Bitcoin's case, the demand derives from the new utility provided by a unique and clever solution to the problem of distributed consensus among untrusted parties. Eg, people want to transact and neither trust each other to deal honestly nor trust a central monetary authority (either not to devalue the medium of exchange, or not track them, etc).
Bitcoin created a system to make that possible, and hence has demand (and limited supply) and value. As long as the underlying reasons for that demand don't vanish, it should always have some value.
The question is, can forks of Bitcoin provide that utility in a significantly better way, that gives them enough marginal demand over Bitcoin to incentivize most people in the Bitcoin network to switch? Same as the general competing currencies idea espoused by Ron Paul and others (for the record, I'm a skeptic, but find the idea interesting), just applied to virtual P2P currencies that are created by hackers rather than nation states (of course, there's nothing stopping a nation state from creating one either except their own laws, mindset, and momentum).
As for early adopters being favored, you can only make that observation with the benefit of hindsight. Had bitcoin failed early or never taken off, early adopters would have lost. The expected value back when early adopters decided to commit and mine and accumulate bitcoin is decidedly different from the realized value of bitcoin now.
Also, most currencies favor early adopters, even (especially) gold and silver. I don't think that's really anything new.
Solidcoin is not a decentralized system like bitcoin. Every other block must be mined by one of several trusted parties. This has advantages and disadvantages.
(Because there are only a few bitcoin clients and only one popular one bitcoin has some centralization problems too, but it's not really comparable)
The solidcoin trusted parties have used this ability to change the rules of the system substantially on the users. E.g. the payout per block was recently reduced from 32 SC to 5 SC. Users could not disagree by simply refusing to "upgrade" because the trusted parties stopped issuing blocks on the old network.
There is a bunch of other funny business as well. Do your research.
For those not familiar with Solidcoin, it has two alternating types of blocks. The odd-numbered blocks are mined through a computationally-expensive process similar to that in Bitcoin, though the Solidcoin one doesn't run as well on GPUs. The even blocks are created either by someone with more than a million Solidcoins (which no-one has) or by a node its creator controls that has a special 1.2-million-coin account.
The claim is that this prevents an attacker with 51% of the compute power rewriting history and spending the same coins twice because they can't create the modified even blocks required. The trouble is that I can't see anything stopping them. The even blocks are approved by including a special transaction showing ownership of over a million coins, but there's nothing tying that transaction to the contents of that block, or the previous block, or anything except the previous transaction using that account. An attacker should just be able to copy the block-approving transactions from the original even blocks to their malicious replacements.
Basically, its creator failed to grasp that if you want to validate something using a digital signature (the one proving ownership of the million coins) you need to make sure modifying that something invalidates the signature. Most of the Bitcoin clones have turned out to be inferior to Bitcoin in some way, actually.
(There's some subtle issues around timestamps that'd make this attack a bit harder but I'm not intending to provide a howto guide here.)
True, my bad. I know of the scam accusations, just assumed anyone reading a Bitcoin thread in HN would have as well and that I didn't need to. But in case not...
https://www.google.com/search?q=solidcoin+scam
I still think their FAQ page that explains their criticisms of Bitcoin is instructive, though.
Some of the criticisms of Bitcoin are valid, but they've already been fixed by other less problematic clones that still never became that popular. In practice they don't actually matter that much; for example, even 2 minutes to confirm a transaction is too long for many things anyway.
If you amend "currencies" to be "currencies of finite supply* then yes. However any currency administered by a central bank does not favor early adopters: The dollar being a very obvious case.
The question is, can forks of Bitcoin provide that utility in a significantly better way
Thats not really the question is it? It's not about better utility. It's about where you can unload the currency and for what/how much. It's not about usefulness it's ultimately about money. Real money. Bitcoins are only valuable in a world where there use is necessary. I wish I could bold that on HN, NECESSARY. Without the necessity any normal consumer would use a more convenient, less volatile system.
Lets shift for a sec. Think about the silk road marketplace. What they should really do is come out with a bitcoin clone of their own, get a bunch of early adopters behind it and then switch the website over to only accept their crypto currency. The'd rake in the cash and have a pile of it on hand from getting in early. They'd be selling the currency and the products you buy with it. The worlds best drug dealers. In fact theres no telling whether the bitcoin early adopters are involved in this very practice at silk road. It's not about beating bitcoin in usefullness, it's about real money.
Also, most currencies favor early adopters, even (especially) gold and silver. I don't think that's really anything new
Gold and silver don't compare. They're not currency, they're commodities that have actual use and value outside the realm of wealth exchange, and they didn't favor early adopters(thousands of years ago). That comparison holds little to no value and frankly I'm growing rather tired of people pretending like it does.
Of course, but it's worth mentioning here b/c people don't normally apply it to money.
>Thats not really the question is it? It's not about better utility. It's about where you can unload the currency and for what/how much.
For what and/or how much you can exchange the currency is a function of the level of trust in the currency, which is a function of the general demand for it, which is a function of several things - utility, soundness of the algorithm and system implementation, size of the network, etc. All these factor into its value. At any one time, different factors may be weighted differently by market participants, but those weights and the resulting market values can and do change.
>It's not about usefulness it's ultimately about money. Real money.
What is real money exactly?
>Gold and silver don't compare. They're not currency
Considering that gold and silver have been currencies for most of recorded human history, until just the past ~80 years, I beg to differ. But I wasn't attempting a strong 'comparison' there anyway, just a tangential observation.
This sounds like the Bitcoin-as-investment thinking that produced the bubble. Imagine a fork of Bitcoin that clears transactions faster, has less volatility, and has a better GUI; would you still judge it only on its exchange rate?
the idea is that the market will judge it on the features you enumerated (GUI/settling speed/volatility) and the exchange rate will reflect that, n'est ce pas?
It is not only about the new blockchain, it is the infrastructure built around it. Currently bitcoin is the cryptocurrency which is easiest to use and has most infrastructure.
If you want to start your own drug market for a new cryptocurrency, you have to setup exchanges etc. too for it.