Arscoin, our own custom cryptocurrency

Don't you hate it when people conflate money with credit. That's why all the bitcoin fans can never win; even if bitcoin was the world reserve currency (similar to how gold still is today - held by central banks), it would mean jack shit because everyone would use fractional reserve lending and credit, like we've done for ages, with the booms and busts and skimming that go with it. So IMHO nothing will ever change.

> There will be millions of crypto-coins in the future

This doesn't make sense. If everyone had their own altcoin, even if they all used Scrypt, nobody would be secure because a 50% attack on your personal blockchain would be trivial. Bitcoins security relies solely on it being one of few significant coins of its kind.

In any case, Bitcoin is huge because its decentralised and nobody has to make decisions. If everyone had to decide what chains to trust then you may as well switch to a superior cryptographic protocol that allows you to mint your own coin without a blockchain. These exist, there's just no incentive for them inside the traditional banking system (too anonymous), or indeed on the inter-personal micro scale (too inconvenient).

Coloured coins make sense, but that's not really the same thing.

Clearly the currency of the future will be crypto-currencies.

I'll buy your hat for 150 crypto-currencies.

Going even further, a cryptocurrency could be like shares in a company which can earn profit by performing services that couldn't be done except by a distributed autonomous entity.

The founder of Ethereum used to be a founder at Invictus, a company with several DACs in the pipeline (check out http://invictus.io/bitsharesx.php). He was asked to resign for mysterious reasons.

Ha, company crypto-scrip.

http://en.wikipedia.org/wiki/Company_scrip

"If I had before me a fly and an elephant, having never seen more than one such magnitude of either kind; and if the fly were to endeavor to persuade me that he was larger than the elephant, I might by possibility be placed in a difficulty. The apparently little creature might use such arguments about the effect of distance, and might appeal to such laws of sight and hearing as I, if unlearned in those things, might be unable wholly to reject. But if there were a thousand flies, all buzzing, to appearance, about the great creature; and, to a fly, declaring, each one for himself, that he was bigger than the quadruped; and all giving different and frequently contradictory reasons; and each one despising and opposing the reasons of the others—I should feel quite at my ease. I should certainly say, My little friends, the case of each one of you is destroyed by the rest. I intend to show flies in the swarm, with a few larger animals, for reasons to be given."

http://www.gutenberg.org/files/23100/23100-h/23100-h.htm

> "how shall I maintain my faith that bitcoin has a value these others don't"

If you believe currency value derives from scarcity, you should never have believed bitcoin had any particular value. If you believe value derives from the network of other people who agree to use it for transactions, then scarcity was little more than a marketing bullet-point for the early adopters.

I guess it's the same as with paintings. Bitcoin is like a Picasso. There are just so many and you have to pay a lot of money to get one.

On the other hand, if you go to the next university and visit the art classes, you'll find enough talented people who'll sell you their own pictures for a lot less.

It's a demand thing.

That would be pretty much like asking why the dollar as value while the others don't.

For example the Botswana pula is a real currency, but is pretty much useless -for you- because is not the one they use where you live.

Things have value because they have demand. Things have demand because they provide utility. Relative utility determines relative value. And actual price is the ratio of demand:supply. So ask yourself, do any of these altcoins provide some utility bitcoin doesn't? To the extent any do, they will have value to the extent of their marginal utility over bitoin and other altcoins.

Every altcoin is trying to provide some marginal technical improvement over Bitcoin, and hence some marginal value. But Bitcoin's first mover advantage, resulting network effects, and stable/reliable core dev team and non-profit foundation all provide significantly more utility - namely trust - than the marginal technical improvements of most altcoins, hence why most will never approach Bitcoin in value.

Litecoin is one exception, as the first widely trusted altcoin with a few technical improvements over Bitcoin. Ethereum could also be a possible exception to this, if they can make it work. Very ambitious, will probably have growing pains for a few years at least.

I think there's two kinds of value. A short term (definitely less than a year, medium of exchange), and long term (saving for retirement). Clearly the long term value is questionable given there is no scarcity; that would seem to be a necessary but not sufficient requirement.

So yes, you hit the nail on the head. I have pointed out the same thing before, that there is an infinite supply of crypto currency.

If you ask me, I'd prefer south sea shares for long term saving. No, just kidding, I'm a tulip bulb guy - those are at least finite.

The same reason that the US Dollar (a piece of paper) is worth over 10x more than a South African ZAR (also a piece of paper)

Simple. Hash power.

What makes you think that wasn't partially intended? :)

This was my first understanding, glancing at it on the news list. I was half-hoping for a lewd dogecoin.

They should have started with crypto penny with that kind of name.

For now it's just another altcoin (zetacoin clone) that is riding the same speculative trend as auroracoin has been for the last couple weeks. If it is actually officially recognized by the tribe and if it starts getting used more like a real currency on tribal lands, it stands a chance at establishing a more stable value and breaking new ground as a cryptocurrency. I figure this is at least several years off and is highly speculative in itself. The coin additionally still has the problem that all the others do, and most of them will end up in the hands of cryptocurrency speculators and not indians, which would seem to cast a rather uncertain future on the coin.

That being said, I bought some and am mining some, I think it's cool.

Why not "ArsTechnica Electronic Coin" or "Ars e-coin"?

These could be used to purchase "ArsTechnica Electronic Hats" or "Ars e-hats" for avatars. Spend more coin, get a bigger hat. The biggest arsehat would have invested in acquiring the most arsecoin.

Yes, I'm giving away my best startup idea so far today.

Don't you want some arse coins?

As an English person, I would not use "Arscoin".

Alternatively, they knew what they were doing.

Maybe it's for donkeys.

That's precisely what the article was talking about[0].

[0] http://www.coingen.io/

Which will be kind of like the olden days of a hundred or two hundred years ago, when every state issued its own currency, or every bank, or every goldsmith.

Which is to say that it will fly in the face of the general trend of development of these things, which has been towards fewer currencies, not more. More currencies means more friction in trade and commerce, since it makes price comparisons harder and forces buyer and seller to constantly be making conversions; this in turn means less commerce happens, which makes everyone poorer. That's a bad thing, not a good thing.

It's already been done. See: https://news.ycombinator.com/item?id=7004681 ;).

Not sure that's a good idea, as it lets people create their own giftcards by mining coins. If a company make a cryptocurrency that isn't accepted anywhere else, they essentially end up giving away free stuff.

Getting paid for a good or service with USD is useful because you can spend it to cover your expenses. If Overstock made OverstockCoins instead of accepting bitcoins, how do they pay their suppliers?

I guess that's more or less what Ars is doing, but I don't see how it makes any sense.

Would they really want an easily tradable currency to replace giftcards? I don't know what the redemption rate of gift cards is, but I imagine it's much less than 100%, which is pure profit.

Also, people have an incentive to concentrate on the strongest currency. The one with the most mining is most secure against 51% attacks, and the one with the most users is most useful.

Value comes through scarcity but more importantly willingness to accept the currency for goods and services. Anyone can make a currency out of shells and beads, but it will only have real value when more people will accept it as payment.

I imagine it's not much different than different real world currencies; they'll all become relative to one another through a common conversion rate (ie. USD).

Plus somewhere in the middle someone will create a meta-cryptocurrency payment service and sign up vendors to accept any type of cryptocurrency while making a conversion fee.

The creation of a new coin has no bearing on the scarcity of another.

Scarcity is just one requirement for something to act as a currency; another would be that it can be exchanged for goods and services (read: other things that people value, and for which they want things that they also value).

> have value, and that value is preserved through scarcity

Adam Smith, Benjamin Franklin, Thomad Malthus, David Ricardo, Jean-Baptiste Say, Thomas Malthus, John Stuart Mill etc. and all the early economists did not believe value was preserved through scarcity.

People tried to change this idea in the 19th century, but in the early 1950s the idea that value was preserved through scarcity was only held widely in the USA, and perhaps in some quarters in Western Europe.

Nowadays things are contradictory. Contradictory in the sense that the establishment speaks about government and free market in a certain way, then flips to the total opposite idea and demands banks be bailed out by taxpayers, then flips back to what they were originally saying once that is done.

The establishment economists say value is through scarcity. Then they demand that mp3's, movies etc. not be "pirated" because "artists deserve the fruit of their labors" and the value they imputed to these mp3's, movies etc. But how can that be if value is derived through scarcity? If things are write once, read many, then there is no unfairness going on if no one buys movies and songs and "pirates" them.

The mainstream economists say value is derived through scarcity, but then, when things can be reproduced digitially with no more scarcity, they try to impose the old legal system on things - the legal system which always more-or-less acknowledged that value came from labor time, whether or not the idealogues acknowledged things as such.

This is also why Bitcoins are as worthless as tulips were in 1637 Holland ( http://en.wikipedia.org/wiki/Tulip_mania ), or bum real estate projects in 2008, or Pets.com and Webvan stock in 2000 etc. The Mt. Gox collapse and such is just the heralding of the inevitable collapse of the worth of Bitcoins.

In science, facts, such as say the inevitable collapse as Bitcoin, or the contradiction of where mp3's derive their value, and so forth, change established theory. But as who gets a bigger piece of the big pie is not a scientific endeavor, it's a struggle with lots of propaganda and such. If scientists predicted something, and then the evidence showed them wrong, they would change their theories. The inevitable collapse of Bitcoin will not change its slick huckster's propaganda one iota. They'll just sucker you into buying into their next MLM scheme. How long until it happens? However long Dutch tulip bulbs, or the housing bubble, or the dot-com bubble went on should be a clue. As Keynes said, markets can remain irrational longer than you can remain solvent. But those who want to understand how the world really works, will look at the inevitable crash of Bitcoin, meaning when they are worth not $630 or so each, but 63 cents each, or less - those who want to understand how the world works will see when that happens and will reconsider whether value comes from scarcity or not. Most won't. The ones who hype it today will have other reasons for why that collapse, which today they say will never happen, will have had happened. The propaganda will go on. But those who want to understand the world can take that time to reconsider things. Even though the discourse will be dominated even then by the phonies and hucksters who were just proven to be frauds. That day will come in the next few years, as it is impossible for Bitcoins to retain value due to "scarcity".

KloutCoin? So all the "attention economy" peddlers had it right after all? Then many of us doing old-school value-adding are royally screwed.

A cryptocurrency whose hashing was somehow based on protein folding (i.e. Folding@Home) would be comparatively simple to pitch to laymen. Q: "Where does 'curecoin' come from?" A: "From people who research new medicines. Those who perform the most research for new drugs are occasionally awarded new 'curecoins'. Those coins are eventually spent into the economy." Etc.

Could you elaborate a bit? This sounds promising but I'm having trouble understanding how it would work. You need to donate to charity to verify a transaction?

While they haven't yet figured out how to make a proof-of-work do useful work, one can make a relatively low-power one that mostly (95%) substitutes memory latency for computation, as in my https://github.com/tromp/cuckoo

If I were smarter, I would make a folding@home encryption algorithm so that when the NSA is breaking our https encrypted cat photos, they would be curing cancer. Afaik, they have over half the super computer power in the world and always have. Think about that, integrate under that curve, hell of a lot of wasted flops.

I think we need a thin client on your Google Glass that feeds your personal interactions continuously to an AI engine in the cloud.

Having established that you were the recipient of a well-merited compliment that significantly pleased you, the identity of the complimenter, and the fact that your benefactor is HappyCoin(tm)-enabled, the engine would automatically calculate the exact monetary value of your happiness and create a microtransaction as payment, which you would then hopefully approve while still uplifted.

You might be interested in Bhutan's use of "gross national happiness" as a metric[0]

[0] http://en.wikipedia.org/wiki/Gross_national_happiness

We've had FlappyCoin for weeks now: http://reddit.com/r/flappycoin

Isn't that against the TOS?

Thank you for this.