[Cryptography] Digital currencies

Howard Chu hyc at symas.com
Mon Jun 20 02:25:05 EDT 2016

Jeff Burdges wrote:
> On Sat, 2016-06-18 at 00:42 +0200, mok-kong shen wrote:
>> How far advanced are the developments in digital currencies?
>> Would they ever be able to replace the classical currencies?
> If you mean blockchains, then one big issue is the need to many crypto
> currencies to waste more resources than traverse the system to protect
> the system.  These proof-of-wasteful-work schemes like bitcoin wont
> scale.

Blockchains as currently envisioned would never scale anyway. It's not like 
any of this is a newly discovered problem of distributed computing. The only 
way to make any system scale is to leverage locality. When we have colonies on 
the Moon and Mars a single blockchain isn't going to work - you need to break 
things apart by locality. The majority of transactions can be settled 100% in 
a local set of nodes. Broadcasting all txs and blocks globally across the 
entire network/blockchain is inherently a non-starter. A system designed to 
work with global broadcasting is doomed from the start. You need a system 
designed with segmentation and partitioning built in.
> We could replace them by proof-of-social-good, like filecoin's
> proof-of-possession idea.  And Lief Ryge's proof-of-storage and
> proof-of-onion-routing ideas inspired by filecoin.  Also,
> proof-of-science-work schemes will fail eventually too because the
> science work is too fickle.
> In general, a proof-of-social-good appears to only magnify the value of
> a more pure proof-of-work system, so they might still encounter scaling
> problems if used too naively.  I suspect you want a proof-of-burn type
> system coupled with a proof-of-social-good system to really eliminate
> all proof-of-useless-work.
> Imho, it's actually pretty great that providing free onion routing and
> free file storage or file sharing appear to be the only realistic ways
> to make something like bitcoin really scale up, as that could help an
> onion routing system like Tor or a free file distribution system scale
> up along the way.
> Jeff
> p.s.  We've mentioned it here recently but you should probably check out
> taler.net, which gives classical currencies many advantages over pure
> blockchain based currencies.  You can use Taler with a bank that
> operates in a blockchain based currency too though, so it's no real
> advantage for classical currencies, but it closes the gap somewhat.
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   -- Howard Chu
   CTO, Symas Corp.           http://www.symas.com
   Director, Highland Sun     http://highlandsun.com/hyc/
   Chief Architect, OpenLDAP  http://www.openldap.org/project/

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