{"id":283,"date":"2014-05-03T13:24:00","date_gmt":"2014-05-03T13:24:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/the-roads-to-innovation-in\/"},"modified":"2023-01-14T02:07:03","modified_gmt":"2023-01-14T00:07:03","slug":"the-roads-to-innovation-in","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/05\/the-roads-to-innovation-in.html","title":{"rendered":"The roads to innovation in cryptocurrencies"},"content":{"rendered":"
\"Research\"<\/a><\/div>\n

(BITSLOG<\/a>) Once upon a time there was Bitcoin<\/a>
\nand nothing else. History was being written by Satoshi and a few
\nilluminated minds that posted the most interesting ideas in the
\nBitcointalk forums and IRC channels. Almost every cryptocurrency idea
\nI\u2019ve heard of had a seed in some of these heated online discussions.
\nDuring 2009 improving every part of Bitcoin seemed to at the reach of
\nthe hand: changing the scripting system, the proof-of-work function<\/a>, the
\nblock format and more. Then the conservative era begun: Bitcoin value
\nhad risen considerably and much more money was at stake. So there was no
\nroom for destabilizing changes anymore. During 2010 ideas were still
\ndiscussed, but not implemented. But as powerful ideas cannot be
\ncontained so during 2011 alt-coins came into existence. Apart from Namecoin<\/a>,
\nwhich was something different than a mere cryptocurrency, the first
\nalt-coin code changes were all minor; only the economic constants, such
\nas the money supply, were changed (Devcoin<\/a>, lxcoin, l0coin<\/a>). Multicoin<\/a>
\nallowed simultaneous management of multiple block-chains, mainly to
\nexperiment with different economic constants. Soon other more extensive
\nchanges appeared, such as using another proof-of-work function (Tenebrix<\/a>, FairBrix<\/a>, Litecoin<\/a>).
\nAll these projects changed no more than a hundred lines of the parent
\nBitcoin fork. During 2012 cryptocurrencies started making deeper changes
\nin the code, using proof-of-stake instead of proof-of-work (PPCoin<\/a>, NovaCoin<\/a>, PeerCoin<\/a>).
\nBut still no cryptocurrency took more than a month of work to be
\nprogrammed, since there was no business model that could pay for the
\ndevelopment of entire new codebases.\u00a0\u00a0 Pre-mining was seen as a scam
\nrather than an investment in the development team, since no profound
\ninnovation had been achieved and no codebase had been started from
\nscratch.
\nThe first non-Bitcoin based currencies were created during 2013 (Ripple<\/a>, Nxt<\/a>, MasterCoin<\/a>, Counterparty<\/a>). Three promising new cryptocurrencies will be launched during 2014:\u00a0 NimbleCoin<\/a>, BitSharses<\/a> and Ethereum<\/a>.
\nWith the exception of NimbleCoin, all non-Bitcoin based currencies
\nadopted either an IPO business model or the pre-mine business model to
\npay the founders and support the development after launch. NimbleCoin<\/a>
\nseems to be the only one that still tries to bootstrap based on an
\nequal opportunity for all members of the community. Some of these
\ncurrencies (often called \u201c2.0\u2033) add new features not related to
\npayments: Smart contracts, betting, prediction markets, shares,
\ndistributed exchanges, user defined assets, contracts for difference,
\ndividends, Decentralized Autonomous Organizations (DAOs), distributed
\nstorage and gaming. Innovation seems to have been primary directed to
\nprovide a more extensible cryptocurrency and more features. Nevertheless
\nthis may not be what users require today. To be accepted world-wide,
\nusers will demand cryptocurrencies to satisfy their everyday needs in
\nterm of usability. They will demand the cryptocurrency to allow them buy
\nsome croissants in the local shop with a standard smartphone in a few
\nseconds so they can keep walking without even worrying about transaction
\nconfirmation time. Also, considering the deflationary properties of
\nBitcoin, and the expected rise in fees, users will soon demand lower
\ntransaction fees, which is also strongly tied to better scalability and
\nlower mining energy waste. Energy efficiency will also be demanded for
\necological reasons. More experience users will demand higher transaction
\nprivacy and more politicized users will demand higher decentralization.
\nAs I see the ecosystem right now, these are the main improvements users
\nwill demand, more than any new embedded financial instrument. Here is
\nmy wish list in order of importance:<\/p>\n

    \n
  1. More merchants accepting the coins (specially retail stores)<\/li>\n
  2. Lower price volatility<\/li>\n
  3. Faster payment confirmations<\/li>\n
  4. Lower fees (more transactions per second)<\/li>\n
  5. Less energy waste in mining<\/li>\n
  6. More decentralized<\/li>\n
  7. More private<\/li>\n
  8. More features<\/li>\n
  9. More extensible<\/li>\n<\/ol>\n

    It\u2019s interesting that the two last innovation areas, which in my
    \nopinion are the less solicited by the general public, are the ones where
    \nmost money and time has been invested. This may be because they are the
    \nmost \u201cgeeky\u201d and futuristic use cases. To summarize I present diagram
    \nwith the current roads to innovation in cryptocurrencies. Bitcoin it is a
    \nvery well-balanced and conservative design and it\u2019s plotted right in
    \nthe middle. I tried to plot how the current and past cryptocurrencies
    \nhave positioned themselves in the innovation landscape. In each category
    \nI have chosen the most innovative ones and highlighted the best
    \ncryptocurrency (IMHO). Note that Ripple is not part of the comparison
    \nbecause it still relies on private servers and so it has an unfair
    \nadvantage. If it were truly open and yet secure, it will probably win in
    \nmost categories. Also note that faster payments confirmations is not
    \nequal to lower block intervals: certain coins with low block intervals
    \nhave greater confirmation times because of stale block rate and frequent
    \nchain undoes (such as Quark). When     comparing new features<\/a>, I\u2019m
    \n    comparing cryptocurrencies<\/a> with the features built-in and supported by
    \nthe core development team. Ethereum can emulate practically every
    \nfeature, but special scripts must be developed and maintained for each
    \nfeature added, so it wasn\u2019t chosen in that category. There is another
    \ncategory I haven\u2019t included because it has too few members, which is
    \n\u201cMore Security\u201d. It comprises mainly the     GHOST protocol<\/a>.<\/p>\n

    Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

    (BITSLOG) Once upon a time there was Bitcoin and nothing else. History was being written by Satoshi and a few illuminated minds that posted the most interesting ideas in the Bitcointalk forums and IRC channels. Almost every cryptocurrency idea I\u2019ve heard of had a seed in some of these heated online discussions. During 2009 improving […]<\/p>\n","protected":false},"author":1,"featured_media":878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,76,299,678],"tags":[764,975,1331],"yoast_head":"\nThe roads to innovation in cryptocurrencies -<\/title>\n<meta name=\"description\" content=\"Stay updated on cryptocurrency insights on HolyTransaction's blog. 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