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Getting to Where We Think Bitcoin Should Be

This is an archived post from the bitcointalks thread on April 23 2014

Quote from: JFK01 on April 23, 2014, 01:54:50 PM

I guess that Skycoin just want to test the water first. There is nothing wrong with that. They are engineers and want to do testing for everything. They have been very cautious for the development as well. This is something they are good at. Just do what you are good at. This project is a long shot.

If you look at the top coins, Peer Coin, Ripple, Bitcoin, Nxt, Litecoin, it’s clear that most coins with a fundamental innovation on Bitcoin’s security model have done very well.

  • Bitcoin was the first and introduced Proof of Work.
  • Litecoin introduced a new hashing function Scrypt.
  • Peer Coin introduced Proof of Stake.
  • Ripple introduced a model of relational consensus, which is flawed but innovative. Has a new codebase.
  • Nxt introduced pure proof of stake. Has a new codebase.
  • Namecoin introduced a key value store on the blockchain.

Market caps:

  • Bitcoin: 6 billion
  • Litecoin: 300 million
  • Peercoin : 50 million
  • Ripple: 1 billion (but users have less than 1% of coins; so free float is only 50 million)
  • Nxt: 25 million
  • Namecoin: 20 million

Skycoin has a fundamentally new consensus model that is a major advance by itself.

  • Transactions in seconds.
  • Transactions cannot be reverted by people who control hashing power.
  • Low cost to run network.

Just the consensus model by itself will do well. A major attack affecting Bitcoin exchanges or abuse by miners could move people away from PoW towards coins like Skycoin that guarantee against attacks that revert transactions.

We knew about signature malleability three years ago and a decision was made not to fix the problem in Bitcoin, until people began using it to steal coins. We know about several attacks on Bitcoin that are theoretical, but which are becoming more likely and profitable as the coin value goes up. If you can use a router exploit and hack an internet router that traffic for a Bitcoin node goes through, you can fork the network for that node and steal coins from exchanges, banks and gambling sites.

Skycoin is hardened against all known vulnerabilities in Bitcoin. We were immune to signature malleability before the attacks on Bitcoin even began. We check for hash collisions from the start and did not have to monkey patch it. If someone develops a widespread SHA256 preimage attack, Bitcoin is dead and Skycoin will probably still be running.

Banks and businesses do not want to learn about or check for Signature Malleability. They don’t want to know how Bitcoin works. They want to be able to trust that the developers fix known vulnerabilities before coins get stolen. Bitcoin is not clean or mature software. Fixing many of the minor issues in Bitcoin require a blockchain reset, that the developers are unable and unwilling to do.

With the financial success of Bitcoin, we have forgotten that Bitcoin was first and foremost an experiment. Many of the earliest developers of Bitcoin were selling massive blocks of coins when the price hit a dollar, because they never believed it would even get that far. People talk about Bitcoin 2.0, but we should be trying to get to Bitcoin 1.0 . No one can look at the Bitcoin-qt wallet and tell me that this is the best we can do.

In other words, the first goal of the Skycoin project was not to surpass Bitcoin, but merely to get to where we believe Bitcoin should be.