Cryptocurrencies that may change the world

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This page is still being updated. It's possible certain project will be removed.

Understand Cryptocurrencies:

What is cryptocurrency

Cryptocurrencies are simply digital currencies that are designed to be decentralized or trust-free.

What is not cryptocurrency

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990's. I hope it's obvious it was only the centrally controlled nature of those systems that doomed them. – Bitcoin creator Satoshi Nakamoto, February 15, 2009

Criteria for evaluating cryptocurrencies:

  • Security over scalability. A more secure, less scalable currency is more valuable than a less secure, more scalable currency.
  • Decentralization over centralization. This is what cryptocurrency is all about:  Decentralization. And everything else being equal, the more decentralized a currency is, the more secure it is. A good example: fiat currencies are much less secure than decentralized currencies, because they have single points of failure. (This also means decentralized currencies are all undervalued.All of the World’s Money and Markets in One Visualization)
  • Proof of work over traditional proof of stake (Explained here: http://www.truthcoin.info/blog/pow-cheapest/)

Trusted Third Parties are Security Holes – Nick Szabo , 2001

Degrees of Decentralization & Trustless:

There are no 100% decentralized currencies, but some currencies are designed to be more decentralized than others.

  • Centralized:
    • 1 Tokens from Initial Coin Offerings ( A person or company issue tokens)
    • 2 Fiat currency (The government and central banks control & print fiat money)
  • Decentralized:
    • 3 Bitcoin (Mined by miners from all over the world, world currency)
    • 4 New Generation of decentralized currencies(Mined by miners from all over the world, world currency)
  • Currently there are 4 strategies for mining decentralization:
    • 1 Using “clever algorithms” or regularly switching POW algorithms.  This strategy most likely won't work because programmable FPGAs can always adapt to new algorithms.
    • 2 Trying to develop Memory Hard algorithms to prevent ASICs.  Example: ProgPoW
    • 3 Proof of work based on IOPS of large RAMs or SSDs :  Snowblossom (Currently space requirement is larger than 256GB)
    • 4 Choosing an algorithm that make the coin very easy to make Asics for.  This is what Amoveo did. According to Amoveo creator zack: “The goal is for there to be multiple competing asic manufacturers instead of just one. By making it easy to build, more people can afford to compete.”
  • Learn more about Trustless: Theory of trust by Amoveo Inventor Zack(Must Read)

Note 1: Cryptocurrencies are still at its early days.  No projects are 100% guaranteed to succeed in the long term. There's risk in anything, bitcoin included. If you are an investor of cryptocurrencies, you should only invest what you are willing to lose.

Decentralized Currencies

The first killer app of distributed ledger technology is decentralized and censorship resistant currency.

  • Bitcoin $BTC

    • Value Proposition: Digital Gold, Store of Value ( Bitcoin's original goal was to become decentralized medium of exchange, it failed)
    • Programiming Language: Written from Scratch in C++
    • Consensus Mechanism: PoW (Proof of work, video: What is PoW &PoS)
    • Block hashing algorithm: SHA256
    • No ICO, No premine;  It's estimated that Satoshi controls around 1 million bitcoins based on information publicly available
    • First decentralized currency, most well known, longest history, strongest network effect, backed by most hashing power(mining), backed by electricity
    • Secure & Slow
    • Some of bitcoin's problems:

Note: Most definitions or statements that are made below each project are simply reiterations of what the team has stated themselves. The author is not explicitly or implicitly vouching for the validity of these claims or the efficacy of these projects.

 

  • Snowblossom $SNOW

    • Programming Language: Written from Scratch in Java
    • Consensus Mechanism: PoW (Proof of work through storage IO, Proof of IOPS of storage)
    • No ICO, no premine, self-funded
      • Donation:
        • Developers may get donation from miners, who may support the developers by choosing to mine with a mining pool with dev fee option enabled, or starting a new mining pool that have that option enabled) 
    • Simple – Modern, Efficient, and Readable
      • Snowblossom is written in a straightforward fashion so that anyone could verify or maybe even contribute. Snowblossom is also built deterministic ally with bazel
    • Post-Quantum Security: (Read more on snowblossom wiki:Quantum Tough)
      • It's estimated that 256-bit elliptic curve (what bitcoin uses) could be broken by a quantum computer with about 1600 qubits.
      • Currently, If you use QHARD keys (which is a 3of3 multisig with EC, 8192-bit RSA and DSTU) in your Snowblossom Client you should be safe until quantum computers are in the 16000 qubit range.(In March 2018, the chip google announced is only 72 qbit)
      • Snowblossom is waiting for a winning quantum resistant algorithm from the NIST Post-Quantum Cryptography process: [1] Since Snowblossom is designed to support multiple signing algorithms, if someone comes up with a new signing method it can be added(assuming it follows the standard form for signing and verification).
      • It is possible that the winner or winners will be state-full algorithms that require more data to be tracked or have other requirements that will make them more difficult to add to Snowblossom, however with our flexible protobuf based protocol design we are confident that it can be done.”
      • “So in short, once the algorithms are ready and vetted we will add them to Snowblossom and get to full Quantum Resistant or even Quantum Safe.”
      • Read More about Quantum computing attacks
    • Decentralization: ASIC Resistance via storage IO Based Proof of Work
      • ASICs or “Application Specific Integrated Circuits” are super powerful processors made for doing one thing, very very fast. In other cryptocurrencies, these specially created chips have created severe problems with miner centralization, and as a result, threatens their censorship resistance, scaling, and more.
      • With OTHER cryptocurrency mining:
      • Hardware Hashes Per Second
        CPU 50,000
        GPU 100,000,000
        ASIC 14,000,000,000,000!
      • Snowblossom is designed to cripple specialized hardware attempts by requiring an expanding, massive amount of readily available storage, and relies on the IOPS of that storage.
      • According to Snowblossom Creator: “Consensus is PoW mining based on a random reads into a large snow field. This makes the mining more IO bandwidth intensive than CPU/GPU/ASIC. “
      • “In more detail, the hashing algorithm is based on doing reads into the large snow field files. They started at 1gb, but are up to 256gb right now. Each hash operation requires 6 lookups into that field. The field is generated using a nightmarish algorithm that ensures that you can’t just quickly make a few chunks of the file in memory as you need them. People can generate the file, the algorithm is checked in, but it writes sectors over and over as it progresses through its rounds so it takes some time. Most people download the torrents. But the merkle roots of these files are checked in as well, so nodes and clients don’t need these huge files to validate blocks. The block headers include a merkle proof for each of those reads to prove the data was there as included in the headers. It makes the headers a few kb larger than other coins but I think it is a reasonable trade-off.”
    • Scalable
    • Portable
    • Ready to go Block Explorer, Pool, Miner software
    • Technical Design
    • Why does the world need SnowBlossom?
      • “I’m not entirely sure it does. I made it to try some things and to avoid some of the mistakes that were made in Bitcoin. Not trying to fault Bitcoin, it is just that we have learned a lot in these past 10 years. Some key mistakes as I see it:
        • Combined node and wallet — these should be separate
        • Fee implicit vs explicit. In Bitcoin, the fee is anything left over after you’ve created the outputs. In Snowblossom, the fee has to be explicitly set in the transaction and inputs must equal outputs plus fee. This avoids the situation of a user accidentally sending a huge fee when they just forgot to put in a change output. This isn’t a huge problem, but to a few people, an important and costly mistake to make.
        • Everything about script. I think most of a confusion and complexity of Bitcoin came from the script implementation and all the various ways an output address may be specified and the silly things people can do with scripts. But for a simple currency, you don’t need that. In snowblossom everything is a plain multisig address. (1 of 1 multisig for a single key address) There is no script language to do strange things with and no bugs related to it.” – Fireduck
    • People behind Snowblossom:
      • FireDuck, Joseph Gleason
      • 2003-2008 – ACM Programming Team member and later coach
      • 2009-2013 – Amazon AWS Messaging (SQS/SNS)
      • 2013-2018 – Google SRE
      • Developer of Satoshi Dice
        • “A little over a week from launch, he became aware of the sizable profit he had generated through his simple concept. With zero knowledge regarding the processes to obtain a legal gambling license, he soon transferred ownership of the service to Erik Voorhees.”  “Later, in July of 2013, Satoshi Dice sold to an anonymous buyer for 126,315 Bitcoin. Based on Bitcoin valuations at the time, this was approximately $11.5 million dollars, and was the first recorded M&A deal in blockchain history”
      • Fireduck: “Without really meaning to, the projects I've worked on have ended up being an in depth study of Bitcoin internals. With my mining pool software I had to get rather intimate with block details. With my electrum work I got to learn a great deal about UTXO databases, fast and stable local data stores (rocksdb FTW) and the various ways to index and think about block chains. This has put me in the position to do this snowblossom work learning from many Bitcoin lessons.”
    • Learn more:
    • Traded on: Qtrade.io vinex.network
    • Conclusion: Experimenting with Storage IO based proof of work, and built from scratch with quantum computing risk in mind,  snowblossom might become the best back-up plan for Bitcoin.
    • Community:

I think the world may need a simple cryptocurrency that isn’t trying to do everything. One that has the features it needs but no more. – Fireduck (Joseph Gleason)

 

  • $NYZO

    • NYZO – The highly efficient blockchain that actually works for everyday spending.
    • Programming Language: Written from Scratch in Java
    • Consensus Mechanism: Proof of Diversity (NYZO invented Proof of Diversity)
    • No ICO, No premine. More detail: https://nyzo.co/buildingNyzo
    • Nyzo is an open-source, highly decentralized, democratic, and highly efficient blockchain.
      • Fast: 7-second block duration
      • Scalable: can support thousands of transactions per second
      • Sustainable: includes a plan for immunity technological obsolescence
      • Democratic: will be 100% community controlled within one year
      • Open-source: all-new, concise, readable code
      • Secure: blockchain is independently mathematically verifiable
      • “It (NYZO) actually works well: it’s secure, scalable, and fast. It also doesn’t require kilowatts of power to process a single transaction. It’s fully decentralized and fully democratic.” – NYZO
    • About NYZO Codebase
      • The codebase does not use a single line of code from any previously existing blockchain project.
      • NYZO is not a derivative of another project, and it is not just a few new features or a slight design change from other projects.
      • NYZO didn't fork an existing codebase and swap out one part of the process to make it seem like they created something new.
      • NYZO didn't duct-tape together a bunch of huge libraries to create a massive, unwieldy project.
      • The only dependency is a small library implementing EdDSA cryptography.
      • The source is simple and easy to read.
      • The Nyzo source is licensed under the Unlicense, and the cryptography library it uses is licensed under the CC0 license.(These are exceptionally permissive licenses that give as much control as possible to the community)
    • Nyzo is exceptionally flexible and extensible — the sender data field of Nyzo transactions allows for virtually unlimited possibilities for applications that utilize the Nyzo blockchain — but this flexibility is not obtained at the cost of reliability or stability.
    • Scalability
      • The block time is seven seconds, and the system scales well to high transaction volumes.
    • Transaction fees are low and predictable.
    • Decentralization:
      • Proof of diversity (Not POW or POS)
        • It is a totally new proof system that relies on diversity of participation for strength.
        • While proof-of-diversity has its own unique concerns that must be addressed to ensure integrity of the blockchain, it is immune to many of the attacks and problems inherent to proof-of-work and proof-of-stake systems, and it is significantly more efficient.
        • Unlike proof of work, which can be manipulated at will by anyone in possession of sufficient computational resources, proof of diversity requires active participation in a particular blockchain to have any influence on that blockchain.
        • There is no mining.
        • Simply participating in the mesh gives a node the opportunity to verify transactions, and the queueing system is designed so that transaction fees are distributed equitably to all participants.
        • Very little computational power is required of a node, and having superior computational power will not allow a node to gain a larger share of transaction fees.
      • Proof of diversity(POD) vs Proof of work(POW)
        • POD is faster and at the same time  decentralized
        • NYZO:
          “in speed, we simply take the first hash that is computed
          so instead of going through millions, billions, or trillions (or more) hashes, we just take the first
          and proof-of-diversity will naturally get more decentralized over time
          unlike PoW, which actually has a tendency to get less decentralized with the big mining operations
          if we look at block 0 of Nyzo, we had 100% of the cycle
          and then we let a few other people in
          and if there's a manipulation of the system to try to keep control of the cycle, the best you can ever do is keep the current level of decentralization
          but if the system works properly (and we're going to keep working on it to make it work properly), then it will always be more decentralized tomorrow than it is today
          and it is almost impossible to go in the other direction, as long as there aren't bugs in the system
          and we're doing everything we can to work the bugs out of the system”
    • Governance(Democratization)
      • At early stages, NYZO developers plan to continue contributing to the official Nyzo repository indefinitely, and NYZO developers will let the community decide whether they want to use developers' implementation.
      • While the proof-of-diversity blockchain has some rules that must be followed, these rules are incredibly simple, and all of the consensus rules can be modified or replaced without jeopardizing the proof of diversity.
      • At any point in time, the decisions of the active verifiers in the current verification cycle determine the direction of the blockchain.
    • Post-Quantum Security
      • NYZO: “from our perspective, we think that we're still far enough from any legitimate concerns from quantum computing”
        “it's one of those things that can be changed later without risking the authoritative form of the Nyzo blockchain”
        “yes, a 3000-qubit quantum computer would likely allow someone to forge a version of the current Nyzo blockchain (if they had one right now), but everyone would still know what the authoritative version of the blockchain is, and we would have plenty of lead time to switch to a quantum-resistant scheme”
    • Sustainability
      • If technological advancements render the current Nyzo system or blockchain obsolete, and a new blockchain needs to be released, all the coins in that system should be derived from original Nyzo coins.
      • The way the sustainability program works is described in detail in the nyzo whitepaper.
      • “Applying this(the sustainability program) transitively, we can imagine a fifteenth generation of Nyzo enabling global commerce 200 years from now, with every last coin in that system having a lineage traceable back to the Genesis block of the original Nyzo blockchain.”
    • Adoption:
      • NYZO: ‘our real goal is that if you want to buy anything digital, then Nyzo would be by far that most reasonable, most efficient choice and we think we'll have no problem scaling to tens of thousands of transactions per second of course, it will take a lot more computing power from the verifiers to do that but the really fun thing about Nyzo is that verifiers can actually be profitable not like PoW where more and more people will start mining if the coin becomes more valuable'
    • People behind NYZO:  Anonymous team
    • Conclusion: NYZO is scalable, highly efficient and secure against 50% attack.  Relatively speaking, it is one of the few cryptocurrencies that are more likely to succeed as medium of exchange.
    • Learn More: https://nyzo.co/whitePaper
    • Traded on: Qtrade.io vinex.network
    • Community:

We consciously avoided putting any features into the blockchain that can be implemented as add-ons (smart contracts, for instance) – NYZO

The blockchains that do work well sacrifice decentralization for effectiveness, though. If you’re going to do that, you’re missing the whole point of blockchain. – NYZO

Financial Derivatives

The 2nd killer app of distributed ledger technology is blockchain for financial derivatives.

“Financial derivatives are an important part of finance today. They are for risk management and investment. Financial derivatives are the biggest part of the economy that can be put onto a blockchain. The most popular cryptocurrency project that facilitates financial derivatives will be worth hundreds of trillions of dollars.”

Amoveo $VEO

  • Programming Language: Written from Scratch in Erlang
  • https://amoveo.io/ (maintained by amoveo community members)
  • Consensus Mechanism: PoW (Proof of work)
  • Hashing Algorighm: SHA256
  • No ICO, no premine, Developer reward currently is decided by community through futarchy 
  • Amoveo is lead by the person(zack)who invented state channels and turing complete state channels. (History of the invention of State Channels.).
  • Zack also wrote the minimum viable product for aeternity & augur. From one of Zack's tweets: “I designed Augur, Aeternity, and Amoveo. I implemented the minimal viable product for all 3 projects. I wrote Amoveo after learning from my mistakes in the previous 2 projects. Amoveo has the best design. It can scale much bigger.” https://twitter.com/zack_bitcoin/status/990177154863378432
  • Amoveo is a blockchain meant for enforcement of investment and insurance contracts.
  • Using Amoveo you can host a market on a server where you make money every time anyone trades. Using Veo in the markets, you can buy and sell risk in anything
  • With Amoveo it is impossible for customers to steal from a market, and it is impossible for the market to steal from its customers.
  • Governance:
  • Dominant assurance contract.  This is a contract made for raising money for public goods. It is not like an ICO, no new subcurrency is created. This make initial coin offering obsolete. (icos are bad., insured crowdfunding, raising funds with amoveo)
  • Derivatives, not Subcurrencies. It is impossible to do ICOs on Amoveo, but Amoveo does support other forms of fundraising. Amoveo has something much better than subcurrencies, it has derivatives. With derivatives, you can build an asset that stays the same value as a Euro. It is a synthetic asset. You can send these synthetic-Euros to your friends, and treat them like Euros. You could participate in a market that is priced in synthetic-Euros. Read more about subcurrencies and why they are incompatible with channels here.
  •  “The killer app of blockchain is a scalable market to trade assets whose price is determined by a trust-free and affordable oracle. State channels are worthless without markets. There is no value in being able to make smart contracts if you can't securely determine the market price for those contracts. All the rest of the security doesn't matter if they can get away charging you above the market rate. A market provides liquidity, so you can trade financial risk with other users at the current market price. Markets on Amoveo are centralized and trust-free. Each market exists on a centralized server. The market is secure because the rules are enforced by channel smart contracts. Here is an explanation of how the market smart contract works.” (From amoveo github)