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June 27 2013

The crypto-currency ecosystem

Just like the IP protocol, bitcoin is the culmination of several important advancements, all combining to form a paradigm-changing innovation. The Internet Protocol was not just an arrangement of headers and payload. It also represented the triumph of packet-switching, layered protocols and distributed routing algorithms — four or five critical innovations, combined in a single implementation that changed the world. Bitcoin is a combination of several innovations, arranged in a novel way: a peer-to-peer network, a proof-of-work algorithm, a distributed timestamped accounting ledger and an elliptic-curve cryptography and key infrastructure. Each of these parts is novel on its own, but the combination and specific arrangement was revolutionary for its time and is beginning to show up in more innovations outside bitcoin itself.

Take a look around bitcoin and you will quickly notice that these four parts are being mashed up in even more novel ways. There’s an ecosystem of innovation boiling around the bitcoin proof-of-concept implementation, in the form of alt-coins, meta-coins and blockchain-riders.

An alt-coin is the term used to describe a crypto-currency that shares the core building blocks of bitcoin, but differs in some of the particulars. Probably the best example of such an alt-coin is Litecoin, which is described as “silver to bitcoin’s gold.” Litecoin uses the same basic construct: blockchain, p2p network, proof-of-work algorithm and crypto, with a few important differences. Instead of a computationally-intensive proof-of-work algorithm like bitcoin’s SHA256, Litecoin uses a memory-or-computation algorithm, called scrypt. This makes it less appealing to ASIC optimization than bitcoin and therefore easier to “mine” with consumer computers. Litecoin also tweaks several of the design parameters of bitcoin, speeding up transaction processing and increasing the maximum currency-issuance ceiling from 21 million coins to 84 million. As the name suggests, Litecoin is a lighter version of bitcoin.

Litecoin is only one of dozens or perhaps hundreds of alt-coins. Each addresses a slightly different audience, solves a different “problem” or simply tries to improve on the basic bitcoin algorithm and design. All these alt-coins take the basic building blocks and re-combine them in slightly different arrangements, then compete in the small early-adopter marketplace for attention. What’s really exciting is that this ecosystem is a hotbed of innovation and experimentation. Best yet, the ecosystem is subject to evolution-like fitness function resulting in splintering, re-convergence, birth and death, or currencies at a frantic pace.

It is difficult to define a clear taxonomy of crypto-currencies, but in the family of the distributed blockchain, we find three broad sub-categories: alt-coins, meta-coins and para-chains.

Alt-coins are currency implementations that are forked from bitcoin and differ in the implementation fundamentals. They use their own blockchain ledger, their own P2P network. Some also use a different mining algorithm to secure the network. Examples include Litecoin, Terracoin, Devcoin and PPcoin.

Meta-coins are currency implementations that use the bitcoin blockchain itself but encode their own metadata within novel transaction semantics. The prime example of a meta-coin is Zerocoin, which implements strong transactional anonymity, unlike bitcoin’s weak pseudonymity. Another is Bitnotar, a distributed notary that encodes “proof of document existence” in the blockchain with special transactions.

Para-chains are implementations of the distributed blockchain but which encode non-currency, non-payment data. These may exist as completely separate chains or be mined together with bitcoin using merged-mining via a Merkle-Tree Root included in bitcoin’s blocks. Examples include Bitmessage (anonymous encrypted messages), Namecoin (distributed name registry) and Chronobit (distributed merged-mining notary and attestation).

We’ve seen this evolutionary process before in the technology of peer-to-peer networks. The first “generation” of P2P was centralized and clunky. The “fitness function” was sharing large files, and Napster quickly grew to fill that ecological niche successfully. Once smashed by incumbents, Napster’s demise led to a change in the fitness function: distributed and survivable P2P networks started emerging. As each one was attacked and destroyed, the successors adapted and optimized to become more evasive, less easy to squash, more efficient and more distributed. It’s arguable that today’s P2P networks have evolved to the point of becoming more or less unstoppable and have dominated dozens of niche network ecologies.

The alt-coins in the bitcoin ecosystem are currently exploiting niches where bitcoin is not a perfect fit. Some are more “transactional,” some reward developers, others offer demurrage instead of deflation. If bitcoin stumbles or is directly attacked, the ecosystem will change its fitness function to fill the gap. If bitcoin’s weaknesses are shown to be in the exchanges, in detection and monitoring, in centralization, then those will be the fitness function to solve. The alt-coins will surge in to fill the new ecological niche left open by bitcoin’s retreat, becoming more stealthy, more distributed, more untraceable and more efficient in response. Bitcoin is an expression of a viral networking pattern that will survive bitcoin.

Where bitcoin pioneered four new technologies, proving that a distributed currency could work at scale, it has now spawned a growing ecosystem of rapid innovation that is re-combining these core inventions. The distributed blockchain, consensus through proof-of-work/stake, and P2P networking will continue to evolve and astound us long after crypto-currencies become accepted and mainstream.

January 19 2012

Commerce Weekly: Slow in-app purchasers are worth the wait

Here are a few of the commerce-related items that caught my eye this week.

Report: Don't rush in-app purchases

Mighty Eagle from Angry BirdsIt's no surprise that app developers are betting on in-app purchases to generate revenue in the year ahead. Last summer, Flurry Analytics was already reporting that in-app purchases accounted for 65% of revenue in Apple's App Store and last week IHS Screen Digest said it expects to see the same trend across all platforms by 2015.

Now, developers want to know which users are most likely to make those purchases and who among them are most valuable. Localytics has dug a bit deeper to try to identify successful patterns in the freemium formula, and its findings are interesting and maybe slightly counterintuitive. Long-term engagement is more valuable over time, and it looks like those who engage too quickly are also less likely to stick around. In other words, it's better to let the hook sink in a bit. Localytics found that users who purchased quickly were less likely to stick with the app: of users who made a purchase on their first use of the app, only 16% go on to engage with the app 10 or more times — significantly lower than the 26% average. On average, users had the app at least 12 days before making a purchase, and 44% of all users who made an in-app purchase did so after interacting with the app at least 10 times.

When I think about mobile games, 12 days feels about right. Remember your second day on "Cut the Rope"? Still playing? It's fascinating to compare this to the durability of more complex games: "World of Warcraft" holds players for years, and some of us are known to every so often dust off games that are years older. (I'm looking at you, "Call of Duty II.")

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Bankers show interest in Bitcoin

BitcoinBitcoin is becoming increasingly mainstream — at least awareness of it, if not actual use. In addition to last fall's New Yorker profile that attempted to identify the real identity of Bitcoin creator Satoshi Nakamoto, a recent episode of the CBS drama "The Good Wife" focused on a court case in which the U.S. government was suing to get one of the attorneys to give up the identity of Bitcoin's (fictitious) creator.

Bankers being who they are, all this attention has led them to wonder (as they do with all things), "How can we profit from this?" A recent article in American Banker attempts to help them through their thinking. After explaining that the digital currency "was conceived as a rebellion against the banking system," it then goes on to say "it may also present business opportunities for banks that can get comfortable with the risks." The article does a nice job of laying out the pros (offering exchange services, accepting deposits) and cons (limited growth of the currency by design, slow uptake so far among merchants and consumers).

PayPal expands Home Depot trial

PayPal is expanding its point-of-sale trial at Home Depot. Just a few weeks after announcing a trial at five stores near PayPal's home base in Silicon Valley, the experiment will scale out to 51 Home Depot stores: one in Atlanta, six in Omaha, and 44 in the San Francisco Bay Area. All are expected to be online by March.

Customers can tap their PayPal accounts for all their DIY needs in a couple ways: swipe a PayPal card (available online) or, if you don't have one, you can get a pin to accompany your mobile number and use that to draw funds from whatever source your PayPal account is linked to.

Anuj Nayar, PayPal's chief spokesperson, told American Banker that PayPal needed to ramp up quickly to build momentum — and to meet the company's predicted $7 billion in mobile transactions this year. Early in 2011, PayPal predicted it would move $1.5 billion through its mobile channels. It didn't have any trouble beating that number, eventually overseeing nearly $4 billion in transactions by the end of 2011.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


Related:

January 01 2012

Le Blog d'Olivier Berruyer sur les crises actuelles > Charles de Gaulle sur l’or et le système monétaire (Pt 1&2) | les-crises.fr

Question – M. le Président, en changeant en or une partie de ses avoirs en dollars, la France a provoqué certaines réactions qui ont fait apparaître les défauts du système monétaire actuel. Etes-vous partisan de réformer ce système, et, si oui, comment ?

 

 

 

>>>> Première partie http://www.les-crises.fr/de-gaulle-smi-1/

>>>> Deuxième partie : http://www.les-crises.fr/de-gaulle-smi-2/



October 21 2011

Visualization of the Week: Occupy George

The website OccupyGeorge, an extension of the Occupy Wall Street movement, has come up with a novel twist for its visualizations about wealth inequality.

What's clever about these visualizations is not so much the data or its presentation, but rather the material on which the visualizations are printed: actual $1 bills. The website includes templates so these visualizations can be stamped onto physical money. The message then circulates with the bills.

Occupy George $1 bill, front

Occupy George $1 bill, back

Found a great visualization? Tell us about it

This post is part of an ongoing series exploring visualizations. We're always looking for leads, so please drop a line if there's a visualization you think we should know about.

Strata 2012 — The 2012 Strata Conference, being held Feb. 28-March 1 in Santa Clara, Calif., will offer three full days of hands-on data training and information-rich sessions. Strata brings together the people, tools, and technologies you need to make data work.

Save 20% on registration with the code RADAR20

More Visualizations:

April 28 2011

http://www.e-flux.com/shows/view/9525


Currently reading @e_flux announcement http://www.e-flux.com/shows/view/9525
so great idea! [from https://twitter.com/caravia158/status/63315759702622208]

---------------------------------------
// oA:nth

[...]

Time/Bank aims to create an immaterial currency and a parallel micro-economy for the cultural community, one that will create a sense of worth for many of the exchanges that already take place within the art field.

At Portikus, the Time/Bank will be comprised of four main components: an exhibition of artist-designed prototypes for a time-based currency; a currency mint that will print and circulate four hundred Hour Notes—one for each hour of the exhibition; an archive of notgeld notes—the legendary German alternative currency popular during the hyperinflation of the 1920s; a branch of Time/Store offering a range of commodities, groceries, and articles of daily use, as well as a selection of artist's editions and books produced by Portikus.

[...]
Reposted fromcaravia caravia

December 08 2010

02mydafsoup-01

Tagung: evangelische Akademie in Tutzing - WELTWIRTSCHAFT IM UMBRUCH AUSWEGE AUS DER KRISE

02mydafsoup-01
Studiogespräch: “Es ist natürlich ein Skandal” | quer-Blog 20101126 blog.br-online.de

Max Otte ist Professor für Betriebswirtschaft an der Fachhochschule in Worms. Den Börsencrash von 2008 hatte er schon 2006 vorhergesagt. Über Lobby und Juristen, meint er, schreiben sich die Banken den größten Teil ihrer Gesetze selbst.

May 18 2010

Kommentar zum Euro: Alles Lüge | Frankfurter Rundschau - Wirtschaft | Robert von Heusinger 20100518

Der Euro ist stark, nicht schwach. Erstmals seit vielen Jahren ist er wieder fair bewertet. [...] Der Euro notiert bei rund 1,23 Dollar. Seit seiner Einführung vor elf Jahren bei 1,17 Dollar sank er erst bis auf 82 US-Cent. Das war im Herbst 2000. Danach verdoppelte er sich auf 1,60 Dollar, das war im Sommer 2008. Während all dieser Jahre lag der fundamentale Wert bei rund 1,20 Dollar, wie unzählige Studien herausgefunden haben. Deshalb ist der Außenwert des Euro heute endlich mal wieder fair bewertet.

[...] Seit dem Ausbruch der Finanzkrise müsste es ein Gemeinplatz sein, dass Finanzmärkte nicht effizient sind, sondern geprägt vom Herdentrieb. [....] Warum akzeptiert die Gesellschaft, die Politik, überhaupt flexible Wechselkurse? Warum darf der wichtigste Kurs der Weltwirtschaft so irre schwanken? [...] Weil Banken daran verdienen [...] [Es] ist [...] höchste Zeit, die Mutter aller Spekulationen durch feste Kurszielzonen zu ersticken.

Kommentar zum Euro: Alles Lüge | Frankfurter Rundschau - Wirtschaft | Robert von Heusinger 20100518

Der Euro ist stark, nicht schwach. Erstmals seit vielen Jahren ist er wieder fair bewertet. [...] Der Euro notiert bei rund 1,23 Dollar. Seit seiner Einführung vor elf Jahren bei 1,17 Dollar sank er erst bis auf 82 US-Cent. Das war im Herbst 2000. Danach verdoppelte er sich auf 1,60 Dollar, das war im Sommer 2008. Während all dieser Jahre lag der fundamentale Wert bei rund 1,20 Dollar, wie unzählige Studien herausgefunden haben. Deshalb ist der Außenwert des Euro heute endlich mal wieder fair bewertet.

[...] Seit dem Ausbruch der Finanzkrise müsste es ein Gemeinplatz sein, dass Finanzmärkte nicht effizient sind, sondern geprägt vom Herdentrieb. [....] Warum akzeptiert die Gesellschaft, die Politik, überhaupt flexible Wechselkurse? Warum darf der wichtigste Kurs der Weltwirtschaft so irre schwanken? [...] Weil Banken daran verdienen [...] [Es] ist [...] höchste Zeit, die Mutter aller Spekulationen durch feste Kurszielzonen zu ersticken.

March 31 2010

Why Germany cannot be a model for the eurozone - ft.com 20100330 by martin.wolf@ft.com

[...] [T]he prospect for the “improved economic co-ordination” mentioned in the Council statement is nil. Worse, Germany does wish to see a sharp move by its partners towards smaller fiscal deficits. The eurozone, the world’s second largest economy, would then be on its way to being a big Germany, with chronically weak internal demand. Germany and other similar economies might find a way out through increased exports to emerging countries. For its structurally weaker partners – especially those burdened by uncompetitive costs – the result would be years of stagnation, at best. Is this to be the vaunted “stability”? [...] [T]he eurozone will not work as Germany wishes. As I have argued previously, the eurozone can become Germanic only by exporting huge excess supply or pushing large parts of the eurozone economy into prolonged slump, or, more likely, both. Germany could be Germany because others were not. If the eurozone itself became Germany, I cannot see how it would work. [...]
Reposted by02myEcon-01 02myEcon-01
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