Bitcoin Wiki

GPU-friendly mining. 1m BTC market cap. 84m coins. 2.5 minute blocks. A Bitcoiner's report on Litecoin.

Litecoin, a Bitcoin-like Internet currency has seen its network gain significant hashing power in recent weeks, but the currency's long-term prospects remain unclear. This post aims to provide more information about the Litecoin network and currency.
In early to mid 2013, Bitcoin mining is likely to become largely unprofitable for GPU-miners due to the rise of efficient Bitcoin mining ASICs. It is expected that many GPUs will be removed from securing the Bitcoin network and will be redeployed for other purposes. Besides Bitcoin mining, there are three such uses for these GPUs: 1) gaming, 2) password recovery and security testing and 3) non-Bitcoin cryptocurrency mining. Since Litecoin is the cryptocurrency with the next greatest hashing power and is most efficiently mined with GPUs, understanding the current status of the Litecoin network and economy is desirable for those studying the options. Below, I have gathered information to help inform a decision on whether to commit resources to Litecoin.
Miners
The current hashrate of the network is roughly 3 gigahashes per second (GH/s). Due to Litecoin's scrypt-based mining algorithm, Litecoin hashrates are generally 1000 times slower than when mining Bitcoin on comparable hardware. Therefore, this hash rate is produced by an amount of hardware that would produce 3 terahashes per second (TH/s) on the Bitcoin newtork. The current 15-day window estimate for Bitcoin hashrate is 40 TH/s meaning the Litecoin network is roughly 7% the strength of the Bitcoin network.
Source: http://litecoinpool.org/pools, http://bitcoin.sipa.be/speed-lin-ever.png
History
Litecoin's genesis block was mined on Thursday Oct 13, 2011 at 03:00 GMT. Since then, over 15.5 million litecoins have been mined in the first 310,000 blocks. The network releases 50 litecoins per block which are targeted to be found evey 2.5 minutes on average. The block reward will halve every 840,000 blocks which will cause the network to produce 84 million litecoins in total.
The currency has traded in the 1.22 mBTC to 17.3 mBTC range since its birth. Trading is highly volatile with 40-50% changes occuring on a daily basis. Most trading volume can be found on the BTC-e exchange (https://btc-e.com) in the LTC/BTC market by a margin of 2:1 over the next highest volume of LTC/USD also at BTC-e. Other supporting LTC/BTC exchanges include Vircurex (https://vircurex.com) and BitParking (https://ltcexchange.bitparking.com).
All-time price statistics ------------------------- BTC - high: 17.69 mBTC on 3/12/2013 low: 1.22 mBTC on 8/15/2012 USD - high: $0.75 on 3/7/2013 low: $0.015 on 8/15/2012 
The current exchange rate for Litecoin at BTC-e is 12.3 mBTC or $0.55 for one litecoin.
Source: http://cryptocoincharts.com, http://btccharts.com, http://explorer.litecoin.net
Early-adopter advantage
The ability to acquire currency units cheaply through purchase or mining provided an important incentive to Bitcoin's earlier-adopters. By risking the loss of their time and money they have shared in financial gains proportional to the exchange rate and, by extension, the success of the system. Litecoin has a similar early-adopter incentive with one difference. Its launch into an already-sizeable community meant that a greater number of stakeholders existed from the beginning than were aware of Bitcoin in 2009.
A large proportion of early bitcoins were mined when it was extremely unclear if Bitcoin would last beyond a brief experiment. It is then reasonable to expect that many early users did not keep their wallet files or private keys and that a large proportion of early coins will never be spent. While it is difficult to estimate the magnitude of this effect, it provides a potential source of volatility in the future. In contrast, early Litecoin users, most of which were familiar with Bitcoin, could expect that Litecoin's success would make their coins worth keeping. The %-days-destroyed metric tracks what fraction of the money supply has moved since it was mined and for Litecoin is 60.3% versus Bitcoin's 43.7%.
source: http://explorer.litecoin.net, https://blockchain.info/charts/bitcoin-days-destroyed-cumulative
Diversification
Diversification helps to reduce risk and increase reliability of investments and technological systems respectively. Since Litecoin is the second-most established cryptocurrency and is also blockchain-based it may be used easily to diversify Bitcoin-denominated investments. The unique ease of currency exchange beween this currency pair results from each currency's decentralized management and low transfer fees. While current trading volumes and high volatiltiy limit Litecoin's use for significant and stable diversification, more research into LTC/BTC, LTC/USD, and BTC/USD exchange rate relationships is advised.
From a technical standpoint, Litecoin shares many features and the vast majority of its codebase with Bitcoin. Litecoin therefor provides little additional security benefit to the cryptocurrency ecosphere as bugs found in Bitcoin are likely to apply to Litecoin. Mining infrastructure is probably where Litecoin offers the greatest independence from Bitcoin due to Litecoin's use of the scrypt mining algorithm.
Since Litecoin is very similar in use, Bitcoin-accepting merchants and payment processors can support Litecoin payments with minor modifications to the software they are using though at this time only a small number of businesses accept Litecoin.
Development
The core client Litecoin-qt/litecoind is based on Bitcoin-qt/bitcoind. It is currently at version 0.6.3 and is based on the same Bitcoin software version. It is 8 months behind the current Bitcoin client. The Litecoin codebase is maintained at https://github.com/litecoin-project/litecoin as a fork of the https://github.com/bitcoin/bitcoin project. While the same revision control system is in use, the current development model lacks the formal testing and release verification of bitcoin-qt/bitcoind.
Outside the core client codebase, many of the documents and websites created when Litecoin was launched remain untouched, display incorrect information, or have disappeared completely though a number of new sites and services have appeared in recent weeks.
Service Availability
While Litecoin services such as a block explorer, historical charts, and an Instawallet-like web wallet do exist, there are a number of important services that are not yet available. There is no client-side encrypted web-based wallet comparable to Blockchain.info/wallet or the extensive macroeconomic charts at that same site. Mobile software is also limited to a few mining programs with no mobile wallet or exchange rate monitor apps available. Finally, exchange volume is highly centralized on the BTC-e exchange and there is no payment processor that provides any functionality similar to Bit-Pay or Coinbase.
Conclusion
This report has provided information on the Litecoin peer to peer Internet currency and will likely be obsolete within hours of its release in many of the figures quoted. The reader is encouraged to retrieve updated information from the sources included in the report as they will undoubtedly affect any decision on whether to support Litecoin.
submitted by dsterry to CryptoCurrency [link] [comments]

[Table] IAmA: IAM Peter Vessenes, Executive Director of the Bitcoin Foundation. AMAA!

Verified? (This bot cannot verify AMAs just yet)
Date: 2012-09-28
Link to submission (Has self-text)
Link to my post
Questions Answers
Most proponents of Bitcoin seem to believe that there will be a point where one coin exceeds a value of $100 or even $1000. Sure, that is definitely possible and I can accept that it may happen one day. However, since each coin has this intrinsic potential value.. why would anyone spend them on trivial stuff like food now? How can you spend something that you believe will continue to grow in value effectively to infinity? That seems like a fair complaint to me, in general. In practice, and as opposed to Krugman's thoughts on the matter, we have many thousands of happy Bitcoin transactors, I think people like to spend their bitcoins with others, give them away, and use them for things. I do know some Bitcoin businesses that try never to spend their coins. That said, we have had some periods like last year where EVERYBODY wished they'd spent their coins.. To my mind volatility is a worse 'evil' than being deflationary. As I said above, I think most government economists wish an inflationary currency (and many bitcoiners hate this, and talk a lot about how much they hate it), but I think there's definitely a place in the world for a deflationary value system. An interesting thought experiment for you -- if you forked the Bitcoin blockchain and changed issuance so that it tracked say, USD or USD/EUR inflation rates for issuance, would it have the same uptake or not?
Every once in a while I hear stories about security breaches including 240,000 bitcoins that went missing the other month. How do you ensure security of account holders funds? The practical security aspects of running Bitcoin businesses are a REAL need, and it's something we want to help on with advice, and possibly opt-in certification at some point. I say more about this elsewhere in the AMA.
Furthermore, most sites I've came upon that sell goods seem poorly managed and difficult to use. Is there a Bitcoin equivalent to sites like Ebay and Amazon? Re: bitcoin site usability -- I agree, it's often terrible! I'm not sure why this is, except to say that bitcoins make transacting online so easy that even people who can't afford a designer can do it.
A: How does the intrinsic non-fiat nature of the currency affect its susceptibility to market fluctuation? I.E. Better or worse stability than fiat currency? So far, because market cap is so low, (Roughly $100mm of value), Bitcoin exchange rates are highly susceptible to people pushing it around. This is really tough for everyone. There are a bunch of businesses that might not be viable until you have some exchange rate certainties that extend beyond a short (one day-ish) window.
B: What can be done to improve the resistance to massive fluctuations in value stemming from exchange market manipulation or normal use? There are some macro-economic things that could be done, like exchanges publishing all trades to a central area, and implementing locks if prices rise / fall too suddenly, but those all have their own effects to consider. I think the fundamental thing to do is help Bitcoin acceptance and uptake grow, increasing the size of the pie until there are a much smaller number of parties that could push the price around.
C: Is there anything that can be done to the standard to improve stability or is it all up to the markets to implement safeguards? So, we all do have a part in that stabilization for sure. There's also the angle of creating whole supply chains that are bitcoin denominated -- paying our staff in Bitcoins only is an attempt to work on that angle.
What do you say to people that claim Bitcoin is nothing but a pump-and-dump pyramid scheme designed to benefit it's creators? That they're sitting on a huge pile of bitcoins obtained by them before the currency was made available to the public when mining was far easier then dumping huge batches of Bitcoins destroying the price over and over again to enrich themselves and fuck everybody else? And that they get more chumps into the system to inflate the price again, by going around the internet and promoting Bitcoins as an alternative currency rather than a complete fraud? This borders on the troll-ish, but I will say that the Bitcoin network autosizes coin generation based on how many people wish to do it. That is, people opt in to make the coins and secure the network. Nobody is forced to.
Is the Bitcoin Foundation a non-profit, tax-exempt organization in the United States? Who among the directors and the board has experience running a non-profit? Why is the ED also a member of the board? How does the ED have the time to run the organization given his obligation to CoinLab? Why haven't I seen any of the involved parties at either of the last two Bitcoin conferences? Can we get somebody who isn't a white male involved? We're a 501(c)6, Washington DC Nonprofit.
I have experience launching a non-profit, hence my job.
ED's typically get a salary and work full time at the job; we didn't know if we'd have budget to pay someone who could operate such a thing, so we went with this structure. I anticipate that I will step down from being the ED at the earliest moment we know we have someone better to do it; running CoinLab is plenty of work for me.
Our assistant director Lindsay Holland is not a white male.
In general, Bitcoin is a white male sausage-fest, though. I urge you and all Bitcoiners everywhere to work on changing that.
What is the future of bitcoins? Do you think they will ever make government-issued currency obsolete? I don't know the future of Bitcoin, but I hope that I and the Foundation are a part of it!
I don't believe Bitcoin will ever obsolete a government currency, but I only speak for myself when I say that. Bitcoin is a fascinating and novel technology with a HUGE number of potential benefits to the world, so I'm into it. I don't see a government wishing to cede control of its currency to anything like the technocratic / consensus model that Bitcoins are governed by, though.
That said, I do hope that Bitcoins will be able to help people in areas of the world that need better money features. Mpesa is a great example of something that helps Kenyans (and people from a few other countries) by changing how money is used. Bitcoin has the potential to help people like that, all over the world, whether or not the 'market' is large enough in that country.
I personally think that sort of thing is SUPER exciting.
Could you describe the bitcoin foundation for me? Sure! It's a trade organization, member-driven. Its goal is to promote, protect and help standardize Bitcoin. Our initial goals are to provide funding for the core development team, run a 2013 Silicon Valley Conference, and create some opt-in certification methods and best practices for businesses dealing with Bitcoin.
Join us.. :)
Standardize? I can tell you hate our goals, so I won't spend a long time trying to convince you. But, I will say that businesses often need a long, secure timeframe to make investment decisions, and they need to have some sense that what they work on or invest in will be roughly similar at the end of their investment to the beginning.
Why do you want to "standardize"? For instance, imagine ebay deciding to take bitcoins. The person-hours to get that done inside ebay are staggering to imagine, from wallet scalability issue to accounting treatments, refunds, ... It would be a major endeavor.
What gives you that authority? It would be great for bitcoin if ebay took bitcoins. Seriously great, but they can't right now until they feel there is some generally stable path going forward.
Why is the core development team so deserving of funding when they can't even make a decent client? You might hate everything about that, and that's cool. I urge you to go ahead, fork the code, advocate as much as you like for something else. Bitcoin's free, both the protocol and the software. Nobody is stopping you.
Is there any legal action to be done if someone steals your bitcoins? Yep, if you're in the US, file a police report, and call FBI Cybercrimes division.
As an individual member of the Bitcoin Foundation, what do I get? Any perks or privileges? Email aliases, voting rights, a newsletter, etc? Or are these memberships mostly a way of providing financial support to the foundation? The bylaws are up now, so you can read in great detail what the organization will provide its members: Link to github.com
In short, though, rights to vote people on / off the board of the Foundation, soon access to private forums, probably discounts to the bitcoin 2013 conference, happiness at supporting the dev team.
I would like to provide email aliases, we've got Patrick and Jon working on any possible gotchas there, though.
Many aren't taking bitcoin seriously because of the security issues some have had. What steps are you taking to legitimize this currency? Like Jeff says below, I would distinguish between fundamental protocol security and security practices.
Bitcoins fundamental protocol security seems pretty good at this point; I'm sure we'll all be keeping an eye on that quite intently into the future.
Practical Security has been, largely, terrible in the Bitcoin space for most businesses, Mt. Gox perhaps excepted. The amount of work it takes to secure 80 byte strings that may be valued in the million dollar range is non trivial. Think securing missile codes as to the level of security needed.
Many bitcoin businesses can't afford (or don't wish to) this sort of security. I'm hoping we can provide some tools and pointers for these businesses and their users to help people understand what they're getting into when they transact with a bitcoin business, and what their risks are.
The Bitcoin Foundation Membership (VIP) fees are definitely disproportionate. Why? Are we now heading for a two-tier bitcoin community? We got requests from large supporters to make a more expensive membership tier. I'm slow, but not so slow that I said 'no'.
I'm slow, but not so slow that I said 'no'. - So you said 'YES'? Someone said "Please make higher corporate member fees: Linux Foundation Top Tier member fees are $500k. Your plan is too low."
I said "OK, Thank you for that advice. We should do that."
Is the foundation primarily focused on US or also europe and the rest of the world? Right now Jon Matonis is considered our "Europe Expert" on the board. There's a huge amount of work to do just in keeping track of how Bitcoin is categorized and regulated around the world. I would expect the Foundation to put some time and energy into helping with that process, but it's not our first goal.
What would you or the Fundation do if the government declares Bitcoin ilegal? Advocate that such a thing is silly, unenforceable, and counterproductive.
Thats no answer to the question. Have you got any plans for the "unthinkable"? That really is what I would do. What do you suggest?
What are your thoughts on transparency of the foundation? How much revenue is there and how it is spent, will that info be public? We're aiming to be highly transparent. I proposed today that we publicize our cold wallet public keys so that people can check our balances. This got pushed back a month while we work on some logistics. I will follow up about this, though. I think having auditable books from day one is really cool.
What are your thoughts on fiat currency? I love it and wish more of it. I'm totally grateful that nations have standardized and created currencies for their people, so that I can travel and buy stuff without worrying about the reputability of a local bank when I go to exchange my money.
I read something recently about a Bitcoin based debit card system. How is that coming along? I don't know, but I want one! The Foundation would like one, too. We are trying to run the Foundation with only Bitcoins, so it would be nice to fuel up a debit card for some expenses.
Create an opt-in certification process for Bitcoin businesses. How will you be going about this? What will certification entail? TBD, But I am imagining that businesses could vet their processes and procedures against a set of published standards, pay for an audit, and then be able to help their users understand what level of security they provide, e.g. "Bronze certification -- the site could be trusted with 50 bitcoins of stored value per person."
Does the foundation intend to have control over bitcoin.org and thereby over the main distribution channel for Bitcoin-Qt? We're a member organization. Some of our members do have access to and influence over bitcoin.org and bitcoin-qt. I have no idea if they would like us to help manage bitcoin.org, since we just launched yesterday.
If the decision makers for bitcoin.org and bitcoin-qt want us to help out in those areas, I wouldn't mind. I don't think either of those things is super strategic to helping Bitcoin right now; there's more need for messaging and some financial security for the core team, and the other stuff we said we're going to work on this year. bitcoin.org and -qt publishing don't seem broken to me or risky right now.
Given that Mt Gox has a (rightfully deserved) place on he board, what steps can and will you be taking to ensure that independent exchanges are encouraged and not ignored? Also what steps, if any, can and will you take to ensure the public that the commercial interests of those on the board do not conflict with the decentralised ideals and paradigm of Bitcoin itself? I don't know how we'd encourage or ignore exchanges, since everyone is welcome to join.
I do think this individual / corporate angle is at the heart of the Bitcoin, though; it's got a lot of parties that care about it, passionately. Some are investing millions of dollars. Some are tirelessly advocating for Bitcoin. Many sit around and troll and waste people's time.
I guess that partly we expect our board members will act with integrity, and that if they aren't representing the needs of their member class, they'll get replaced with someone who will.
I also don't know how we would, practically, decentralize Bitcoin, even if we wished such a thing. I don't think anyone on the board thinks Bitcoin is doing badly. We're all really excited about it and want to help. I personally believe if corporations (a small group or just one) ever provably controlled Bitcoin, they would become vastly less appealing and useful. So, we're on watch.
Not as on watch as a paranoid bitcointalk forum troll wants us to be, but we're on watch.
Why do you require a real name and real address, when bitcoins core values are to be anonymous? The Foundation's core values include openness and transparency. I think the Bitcoin anonymous thing is overblown and a bit of a myth, by the way. Every bitcoin transaction links two addresses; often people can be determined from those addresses.
At any rate, we wish to make sure you can't stuff the ballot box during voting, and we wish civil productive discourse among our members, so we need real names and addresses.
If you just want to support us without joining, you can always send money to our vanity donation address: 1BTCorgHwCg6u2YSAWKgS17qUad6kHmtQW.
What is the current, largest obstacle when it comes to wider Bitcoin adoption? I think Bitcoin adoption is growing nicely. There seems to be a sort of stair-step function where people figure out something new and broadly appealing to do with them, and it makes a big jump. I expect we'll see that many times over the next five or ten years.
Doubts about the network's scalability, uncertain status about its legality or something else? Bitcoin's brand seems bad to me; mostly the highly publicized exchange attacks worry people. It's too hard to have a secure cold storage wallet for even a very smart individual. I'd like to see some of those things improved.
Does Bitcoin have any plan to combat criminals using the currency to purchase things on online black markets? I can't speak for Bitcoin, but the Foundation has no criminal combatant plans. We do want our members to use their real names and promise that they only engage in activities legal in their jurisdiction, though.
That's mostly just a way of us saying who we want to hang out with, and expressing some community values we think will help our organization be a success.
Did you expect for the Bitcoin concept to explode as it has? I sort of did, but I definitely didn't put my wallet behind that explosion. Sigh.
Also, where do you see it going in the future? I talk elsewhere in the AMA about what I'm hoping for Bitcoin.
Will the foundation be sponsoring Bitcoin software outside of Bitcoin.org? What do you mean? Like if Jeff Garzik made cool software that would help the Bitcoin world but didn't release it at bitcoin.org would we try and help him?
The answer is yes.
I.e., the Foundation would provide a service with recommendations such as wallet security for an exchange, but I don't think the Foundation should be in the business of "certifying". Yeah, there's an interesting set of questions there about certification. I would LOVE to see a certification that brought with it the ability to be insured against loss and theft. Think how nice it would be for an exchange or wallet business to be able to offer that insurance. That said, I don't know of any bitcoin company that has such insurance yet. I think we have some work to do vetting out the processes and procedures, and then some sales and relationship work with insurance companies first. At any rate, we won't be stumping up security for certified companies through the main Foundation corporate vehicle ever. But I think the membership will want to discuss what a good set of next steps is toward that goal, if we're all sold on trying to make it happen.
What's the advantage to using bitcoins over government issued currency, basically why should I invest my $US in bitcoins? Some people have ideological preferences for Bitcoins money issuance scheme.
Some are nerds, and like it for nerdy reasons.
Some just like being able to pay whom they choose when they choose.
Some deal with payment infrastructures that are scary (Paypal freezes are scary), or slow (wiring money in and out of small country central banks is REALLY slow).
Also, they're neat.
How does it feel to know that a kitten wearing a top hat has more upvotes than you? That kitten is so damn cute. I spent some of my AMA time going "AWWW"
How will you try to keep BIG businesses from buying their way into "THE" Bitcoin Foundation? Bitcoin is inherently free, it's peer to peer, it can be forked, it's not controlled by the Foundation, especially one that's one day old.
So, I look forward to large donations from BIG businesses. We will use that money to further the Foundation's mission. Our members will, no doubt, be highly engaged in discussions about what to do with large donations. I'm looking forward to it.
What is your opinion on Canada's new digital currency, "Mint Chip"? How does this affect Bitcoin? I don't know much about it, but I think it's cool from what I do know, (and is it technically flawed? I don't recall). I'm all for money system experimentation, as you might guess.
You are starting to get increased media/congressional notice. Are you at all worried about being shut down and prosecuted like E-Gold was? Who is we? The Foundation is a member organization, nothing else.
There are some bitcoin exchange operators that actively flout the same AML laws that got the E-Gold founders in trouble.
There are some that try hard to do the right thing, jurisdiction by jurisdiction.
Personally, I don't worry about the ones trying to comply, and I don't transact with the ones flouting the laws.
Why do you have different vote classes, is one class worth more then another? Corporate members vote their seats, Individual members vote theirs.
Anecdotally, there are fewer corporate members, so a corporate membership vote has a greater proportional influence over a board seat than an individual membership.
so a corporate membership vote has a greater proportional influence over a board seat than an individual membership. - So there may be poll when votes of both classes come together? Like asking ALL members to opt out changes to the source code? I would be stunned if we voted on source code, ever. I don't think anyone thinks that is in the remit of the Foundation.
Pragmatically, the dev team is one arm of bitcoin source code governance, and miners are the other, since they can refuse to work with code changes they don't like if they do it in bulk.
The board meets often, and should be listening to its constituents; sign up as a member, and then mail your appropriate rep. As a sample of what we discussed today: "Should we do an AMA? Who will get member signup confirmations out? Can we publicize Patrick's bylaws yet?" were the scintillating topics of conversation.
Will I be getting an e-mail with receipt for my payment confirming my membership subscription? Yes, we are ACTIVELY working on it. Apologies.
What's the dev's payroll? TBD, now that we know what our member signups are.
I don't know if we'll release payroll or budget numbers outside the membership -- something we have to discuss.
What power does this foundation have over Bitcoin? Why did you make Satoshi the founder without his permission? We have no power over Bitcoin whatsoever.
I think we felt a foundation that didn't somehow acknowledge Satoshi would be a bit churlish, like ignoring Linus completely while making the Linux Foundation. Satoshi is, as always, free to participate as he/she chooses.
Has there been a growth in algorithmic trading of Bitcoins in the past year? If so, is that growth in algos added stability to the Bitcoin Market? I have no idea. But I'm curious about this too!
Why hasn't (almost) anybody heard of you before today? I keep a low profile. Until yesterday. Also, I gave up on the forums a long time ago; not productive enough for me.
That was very informative, thanks. Not that hard to grasp when somebody spells it out. The reason you do it is to provide a second element of value to a chain of transactions; the first element of value is consensus -- what everyone else says happens.
Is there a reason for doing this? Or just a way to pace the grinding nature of mining bitcoins? The second, arguably more powerful one is provable computation time spent on creating the consensus. So you can look at a set of bitcoin transactions and say "Ah ha, that had roughly [say] $1mm worth of computation time put in to securing and validating it! I believe it's safe to consider my $55 transaction secure."
Just out of curiosity, do you have any idea how many people have applied so far? Yep. We'll release end of first-month member numbers in 29 days. :)
How does one go about buying bitcoins? Probably the fastest way is to ask a friend who has some.
Next would be to use a service like Link to bitinstant.com.
How long are terms for each board member? Two years.
Will the Bitcoin Foundation promote a Vulnerability Reward Program ? I would like to see that, but I think the first things to do in terms of importance are on our published list.
Will the funds for a permanent memberships be put into an endowment, or will they be spent immediately? We haven't discussed it. Budget discussions are next couple of weeks, now that we have our heads around some numbers.
We also have to discuss if the foundation wishes to go long bitcoin, or instead spend to its annual budget. All TBD; if you have opinions send them on to your member reps.
I'm curious about this too. I'm not sure I understand how they work entirely. Maybe somebody could Explain like i'm five... Totally. They are confusing; it's a truly novel solution. Essentially it mixes something non-intuitive and magical-seeming (public key cryptography) with something very hard to imagine a solution for (distributed timestamping among non-trusted parties).
We will be seeing the concept extended out into a number of technology arenas over the next 25 years I imagine. It's an incredibly powerful solution-space.
I spent maybe an hour on the wiki reading the FAQ and everything, and it still makes references to "blocks" and "mining blocks" and those that mine have the option of transaction fees.. and I'm still not really sure what is happening. Yep, like I said. I've been thinking hard about them for two years, I have a cryptography background, and I still have 'a-ha!' moments weekly, at the very least.
There are a couple pretty good bitcoin explanation videos out there, but I'm not up to date on what the best one is. Maybe someone helpful can post a link.
After establishing support for food and shelter for Gavin, will there be opportunities for other bitcoin developers to apply for grants - maybe for specific implementations or features desperately needed. I'd love it. I think Gavin will be working out the specifics of what we want to do. I'd LOVE to see money put into a huge test suite, personally.
Thank you for furthering the effort of Cryptocurrency, I have written several policy papers in this arena, and look forward to the day where the deep web stigma is removed from the currency. Thanks FapNowPayLater! We genuinely appreciate the support.
Last updated: 2012-10-02 22:30 UTC | Next update: 2012-10-03 04:30 UTC
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submitted by tabledresser to tabled [link] [comments]

GPU-friendly mining. 1m BTC market cap. 84m coins. 2.5 minute blocks. A Bitcoiner's report on Litecoin.

Litecoin, a Bitcoin-like Internet currency has seen its network gain significant hashing power in recent weeks, but the currency's long-term prospects remain unclear. This post aims to provide more information about the Litecoin network and currency.
In early to mid 2013, Bitcoin mining is likely to become largely unprofitable for GPU-miners due to the rise of efficient Bitcoin mining ASICs. It is expected that many GPUs will be removed from securing the Bitcoin network and will be redeployed for other purposes. Besides Bitcoin mining, there are three such uses for these GPUs: 1) gaming, 2) password recovery and security testing and 3) non-Bitcoin cryptocurrency mining. Since Litecoin is the cryptocurrency with the next greatest hashing power and is most efficiently mined with GPUs, understanding the current status of the Litecoin network and economy is desirable for those studying the options. Below, I have gathered information to help inform a decision on whether to commit resources to Litecoin.
Miners
The current hashrate of the network is roughly 3 gigahashes per second (GH/s). Due to Litecoin's scrypt-based mining algorithm, Litecoin hashrates are generally 1000 times slower than when mining Bitcoin on comparable hardware. Therefore, this hash rate is produced by an amount of hardware that would produce 3 terahashes per second (TH/s) on the Bitcoin newtork. The current 15-day window estimate for Bitcoin hashrate is 40 TH/s meaning the Litecoin network is roughly 7% the strength of the Bitcoin network.
Source: http://litecoinpool.org/pools, http://bitcoin.sipa.be/speed-lin-ever.png
History
Litecoin's genesis block was mined on Thursday Oct 13, 2011 at 03:00 GMT. Since then, over 15.5 million litecoins have been mined in the first 310,000 blocks. The network releases 50 litecoins per block which are targeted to be found evey 2.5 minutes on average. The block reward will halve every 840,000 blocks which will cause the network to produce 84 million litecoins in total.
The currency has traded in the 1.22 mBTC to 17.3 mBTC range since its birth. Trading is highly volatile with 40-50% changes occuring on a daily basis. Most trading volume can be found on the BTC-e exchange (https://btc-e.com) in the LTC/BTC market by a margin of 2:1 over the next highest volume of LTC/USD also at BTC-e. Other supporting LTC/BTC exchanges include Vircurex (https://vircurex.com) and BitParking (https://ltcexchange.bitparking.com).
All-time price statistics ------------------------- BTC - high: 17.69 mBTC on 3/12/2013 low: 1.22 mBTC on 8/15/2012 USD - high: $0.75 on 3/7/2013 low: $0.015 on 8/15/2012 
The current exchange rate for Litecoin at BTC-e is 12.3 mBTC or $0.55 for one litecoin.
Source: http://cryptocoincharts.com, http://btccharts.com, http://explorer.litecoin.net
Early-adopter advantage
The ability to acquire currency units cheaply through purchase or mining provided an important incentive to Bitcoin's earlier-adopters. By risking the loss of their time and money they have shared in financial gains proportional to the exchange rate and, by extension, the success of the system. Litecoin has a similar early-adopter incentive with one difference. Its launch into an already-sizeable community meant that a greater number of stakeholders existed from the beginning than were aware of Bitcoin in 2009.
A large proportion of early bitcoins were mined when it was extremely unclear if Bitcoin would last beyond a brief experiment. It is then reasonable to expect that many early users did not keep their wallet files or private keys and that a large proportion of early coins will never be spent. While it is difficult to estimate the magnitude of this effect, it provides a potential source of volatility in the future. In contrast, early Litecoin users, most of which were familiar with Bitcoin, could expect that Litecoin's success would make their coins worth keeping. The %-days-destroyed metric tracks what fraction of the money supply has moved since it was mined and for Litecoin is 60.3% versus Bitcoin's 43.7%.
source: http://explorer.litecoin.net, https://blockchain.info/charts/bitcoin-days-destroyed-cumulative
Diversification
Diversification helps to reduce risk and increase reliability of investments and technological systems respectively. Since Litecoin is the second-most established cryptocurrency and is also blockchain-based it may be used easily to diversify Bitcoin-denominated investments. The unique ease of currency exchange beween this currency pair results from each currency's decentralized management and low transfer fees. While current trading volumes and high volatiltiy limit Litecoin's use for significant and stable diversification, more research into LTC/BTC, LTC/USD, and BTC/USD exchange rate relationships is advised.
From a technical standpoint, Litecoin shares many features and the vast majority of its codebase with Bitcoin. Litecoin therefor provides little additional security benefit to the cryptocurrency ecosphere as bugs found in Bitcoin are likely to apply to Litecoin. Mining infrastructure is probably where Litecoin offers the greatest independence from Bitcoin due to Litecoin's use of the scrypt mining algorithm.
Since Litecoin is very similar in use, Bitcoin-accepting merchants and payment processors can support Litecoin payments with minor modifications to the software they are using though at this time only a small number of businesses accept Litecoin.
Development
The core client Litecoin-qt/litecoind is based on Bitcoin-qt/bitcoind. It is currently at version 0.6.3 and is based on the same Bitcoin software version. It is 8 months behind the current Bitcoin client. The Litecoin codebase is maintained at https://github.com/litecoin-project/litecoin as a fork of the https://github.com/bitcoin/bitcoin project. While the same revision control system is in use, the current development model lacks the formal testing and release verification of bitcoin-qt/bitcoind.
Outside the core client codebase, many of the documents and websites created when Litecoin was launched remain untouched, display incorrect information, or have disappeared completely though a number of new sites and services have appeared in recent weeks.
Service Availability
While Litecoin services such as a block explorer, historical charts, and an Instawallet-like web wallet do exist, there are a number of important services that are not yet available. There is no client-side encrypted web-based wallet comparable to Blockchain.info/wallet or the extensive macroeconomic charts at that same site. Mobile software is also limited to a few mining programs with no mobile wallet or exchange rate monitor apps available. Finally, exchange volume is highly centralized on the BTC-e exchange and there is no payment processor that provides any functionality similar to Bit-Pay or Coinbase.
Conclusion
This report has provided information on the Litecoin peer to peer Internet currency and will likely be obsolete within hours of its release in many of the figures quoted. The reader is encouraged to retrieve updated information from the sources included in the report as they will undoubtedly affect any decision on whether to support Litecoin.
submitted by dsterry to litecoin [link] [comments]

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