Aren't Altcoins as Useful as Metacoins?
Twitter User @vakeraj asked this question today, in regards to why and how Counterparty's Tokens are any different than altcoins. In this video, shot from the ...
Do you see that? Fuck you. Fucking little bitch. Hey they got it on film. Fucking old bitch. Fucking old bitch was going to run me over, man. Goddamn right.
I hate when they do that. Hi, Fort Lauderdale. What's up, party people? Chris DeRose here, Community Director of the Counterparty Foundation and today's video is asked to me by Vakeraj. Vakeraj, thank you. This came from Twitter. It's V-A-K-E-R-A-J on twitter, is his handle.
And the question is this, since you can easily and instantaneously convert between block chains, doesn't that mean altcoins can indeed serve some use? So, there a lot going on here. Altcoins can serve some use. I don't think that it serves a lot of use. A lot of you know that I'm very skeptical about altcoins but here we are, they do exist in some capacity. My point is that they're over used as is and they probably aren't very important long-term, anyways. But more directly to the question, can't you easily convert them from chain to chain? And the answer is, right off the bat, well, no.
Certainly not right now and probably not ever. If you wanted to convert them from chain to chain, you need a center of authority. So if you're looking at what Shapeshifter is doing, which is actually a pretty cool product, they do some really good stuff there. And what Shapeshifter is doing, is nonetheless a very centralized authority. So, yeah, if you're okay with centralization at that level then that's fine. And there is a place for centralization so I'm okay with that but the place for centralization isn't between block chains.
In my mind, it's between a block chain and a traditional finance institutions or a bank of any kind. So you can convert, at some level, between them in that capacity. Now, contrast that instead with what I advocate and what I envision, which is the metacoin space. So certainly within Counterparty we have a distributed exchange. So all Counterparty assets can be exchanged for each other and they can be used to, in a decentralized way, transmit value and perform orders and receive matches, buyers, sellers, all that, without a center of authority. But even more so than that.
Let's take it out of the Counterparty space and lets talk about the metacoins in general. If you want to support the exchange of a colored coin for a Counterparty asset, it's highly conceivable that you can do that easily without a center. It's already largely the case already. It probably would be trivial for the protocols to add support for something like that whereby an asset is burned in one protocol and, as a result of that burning, appears in the next. And it's easy to do because they're on the same block chain. You have all the same infrastructure.
You have all the same message-passing architectures and you have all of the same inertia by using the same block chain. This is what we see online as well. You see this in the form of IP being the sub-layer for a bunch of other protocols that sit on top. Well, so too do we see, and will we see, in bitcoin, bitcoin being the layer below upon which other metacoins and assets and things of value are built on top. So, yeah, you can do a lot of what we talk about currently with altcoins but there's a lot of risk in the system. There's a lot of centralization in the system, and typically even during these exchanges you need to hold these assets in the custody of somebody else.
So it's kind of dangerous, kind of defeats the purpose of, at least in my mind, reducing risk through decentralization. So that's my answer on the subject. I'm sure a lot of people disagree. So if you do, why don't you leave your comments below? I always love hearing your opinions, even the bad ones. But leave what you've got to say for the rest to deliberate on and lets discuss the issue. If you like this video, you want to see more videos on my channel, subscribe and check out the rest of the videos.
Later, party people.