The Bitcoin Game presents a guest podcast

Musings Of A Shibe Podcast:

A Dogecoin P2P Sharing Economy Show

The Promise of Blockchain Technology

With your host Hiroja Shibe

My name is Hiroja Shibe, I would like to thank Rob Mitchell for giving me this opportunity to speak to the listeners of The Bitcoin Game and the members of the Let's Talk Bitcoin community. As you can tell from my name, I am a member of the Altcoin/Dogecoin ...

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Welcome to episode #7 of The Bitcoin Game, I'm Rob Mitchell.

The white hat hacker known as Johoe ("Yo-ho") rescued over 870 Bitcoins recently from addresses compromised by a temporary bug in Blockchain.info's web wallet. Today I'm honored to introduce Jochen ("Yo-hen"), who works as a computer science researcher at a university in Germany, and is known on BitcoinTalk.org as Johoe. Bitcoin is a hobby Jochen took up in early 2013, as he first discovered the repeated R value issue, due to a 2...

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Hello, welcome to The Bitcoin Game #6. I'm your host, Rob Mitchell.

I spoke to Adam B. Levine a few weeks ago. We talked about his original Bitcoin podcast, The Daily Bitcoin, and why it morphed into Let's Talk Bitcoin, with Andreas Antonopoulos and Stephanie Murphy. In this interview, I found out how insanely early Adam wakes up each day, his takes on crypto crowd-funding platforms, as well as some of his grave concerns about potential U.S. governmental actions against crypto-projects ...

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Welcome to episode five of The Bitcoin Game. I'm your host, Rob Mitchell. In this episode I present an uncut "fireside chat" between Bitcoin Foundation board member and longtime digital currency entrepreneur Brock Pierce, and Gem CEO/founder Micah Winkelspecht. Their conversation is followed by an audience Q&A (apologies for the sound quality of the audience questions).

This was a Los Angeles Bitcoin Meetup event held at the beautiful new Gem headquarters in Venice Beach, California, on Novem...

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Welcome to episode number four of The Bitcoin Game. I'm your host, Rob Mitchell. In this episode I talk to serial entrepreneur and angel investor David Johnston. We discuss the distributed app projects he's involved in, his impressive business background, how he went all in on Bitcoin several years ago, and much more. David is a real champion of decentralization open source projects.

Listen for the magic word, and submit it to your LetsTalkBitcoin.com account to claim your share of the we...

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Welcome to episode number three of The Bitcoin Game. I'm your host, Rob Mitchell. In this episode I talk to Joseph VaughnPerling at his alpaca ranch. We discuss Monero, the Crypto Kingdom game, Bitcoin's maximum block size proposal, the Bitcoin Specie Project, Sidechains, and a few tangents.

Listen for the magic word, and submit it to your LetsTalkBitcoin.com account to claim your share of the weekly distribution of LTBcoin. The magic word must be submitted within four days of this epis...

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Welcome to episode number two of The Bitcoin Game. I'm your host, Rob Mitchell. In this episode I talk to Peter Kirby about Factom, a distributed application that functions as a scalable permanent system of record. We also talk about the Texas Bitcoin Conference, and finally, discuss the price and value of Bitcoin.

Listen for the magic word, and submit it to your LetsTalkBitcoin.com account to claim your share of the weekly distribution of LTBcoin. The magic word must be submitted within fo...

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Welcome to the first episode of The Bitcoin Game. I was fortunate that Dan Roseman of the Bitcoin job board Coinality.com, decided to bring his Bitcoin Job Fair to Southern California on October 4th, 2014. The event was held at the Plug And Play Tech Center in Santa Monica.

In this podcast you'll hear interviews with principal members of four Bitcoin businesses that were hiring at the job fair (there were many more than just these four!). I started with a quick chat with ExpressCoin CEO Will ...

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Rob's Note: I changed the references to "simply" Cheryl and I discussed via DM. That's all I changed. Thanks!

Original (editor: dhimmel; proofreader: cheryl):

The world of cryptocurrency has progressed to a state where practically anyone can create their own cryptocurrency. With only basic experience using Bitcoin or Dogecoin, it is easy to create blockchain-based tradable digital-tokens, thanks to the Counterparty protocol, and its brand new implementation called Dogeparty.

How does Counterparty work?

The Counterparty protocol allows users to create and trade their own cryptocurrency tokens. Users do this with a wallet dedicated to sending and receiving Counterparty messages on the Bitcoin blockchain. The messages are broadcast by sending very small amounts of Bitcoin, coupled with Counterparty data. Only the owner of the private key for a Bitcoin address can send a Counterparty asset, and the complete history of counterparty transactions is as secure as the blockchain it runs atop (the Bitcoin blockchain, in the case of Counterparty, or the Dogecoin blockchain, in the case of Dogeparty).

Burning isn't wasting

The coin that acts as the fuel for the Counterparty system is XCP. The developers decided the most fair way to distribute XCP to those who saw the value in the Counterparty protocol was to allow people to acquire it for Bitcoin. People who wanted to own XCP sent Bitcoin to an address that has no private key, so all Bitcoin sent to that address was gone forever. But it was not wasted. It was effectively transformed, at a given rate of exchange, into XCP, which was distributed to each address that contributed Bitcoin. This process is referred to as burning, and it is often panned as a wasteful destruction of a coin and its value. However, the destruction of value in one coin sprouts new value in another coin, so the net effect is transformation, not destruction. Proponents see this method of coin-creation as the least corruptible way to launch a new platform; it removes major greed motive, and thus also removes the potential skepticism inherent to new platforms that provide huge fundraising windfalls to the development team.

Why Dogeparty?

Many people have jumped on the Counterparty platform, as it is the first easily-accessible way to create tokens that leverages the inherent security of the Bitcoin blockchain. For example, the Let's Talk Bitcoin ecosystem is currently run on a Counterparty asset called LTBCOIN. While the Counterparty protocol is relatively cheap to use, the costs add up when there's a lot going on. That's because each transaction requires sending Bitcoin and enough in miner's fees to make sure the transaction is recorded to the blockchain. Thus, any time you send a Counterparty token, you need to send a base-level of Bitcoin. Recently, the Counterparty developers decided to create a version of their protocol that would live on the Dogecoin blockchain. That not only reduces the transaction fees to less than 1% of the those running on the Bitcoin blockchain, it also allows for much faster transactions. Now, anyone who wants to experiment with asset creation on the Counterparty protocol can do so for pennies! 

The Dogeparty protocol uses XDP as the native unit for the system, instead of XCP used for Counterparty. If you want to create your own assets, you need XDP, plus some Doge (as you must send Dogecoin to carry the date for the Dogeparty transaction). Because the Dogecoin protocol just launched, the "burn" period is still in effect, so you can acquire XDP by using the Dogeparty Wallet to send Doge to a specific non-recoverable address. I've seen this process interpreted as a non-sensical wasting of Dogecoin, as an artificial attempt to prop up the overall Doge platform. But that overlooks the fact that people are converting their Doge into XDP, because they believe in the potential of the Dogeparty platform. After seeing how well Counterparty has worked on the Bitcoin blockchain, it is not surprising there's excitement about Dogeparty, even for people who have never been involved with Dogecoin.

Counterwallet & Dogeparty Wallet

One thing you'll immediately notice is how easy the developers made it to get started with their web wallets. Simple go to counterwallet.co or wallet.dogeparty.io, click the button to create a wallet, and save the pass phrase you are given. That's it. People can send you asset tokens on the platform, or you can create your own assets, provided you have the native coin (XCP or XDP) and some Bitcoin or Dogecoin to send in tiny amounts, to carry your token transactions. Once you have both the native token and the blockchain currency in your new wallet, you simply go to Address Actions, and click "Create a Token (asset)," and fill in a handful of details about the asset. Note that the asset name land-grab has already begun on both platforms.

When you have a wallet running in your browser, it is not simply a connection to a Counteryparty server. Once the wallet is launched, your browser is actively a javascript wallet. Thus, trying to log into your wallet from a second computer, when the wallet is already open on another computer, can cause problems (fortunately, the wallet warns you if you try to do this).

Risks

This is all experimental (for that matter, even Bitcoin is technically still in Beta). It is certainly possible there are bugs or exploitable flaws in both implimentations of the Counterparty protocol. Of course, the hashing power securing the Dogecoin blockchain is but a tiny fraction of the hashing power securing the Bitcoin blockchain. And, unlike Bitcoin's trend of ever-increasing hashrates, Dogecoin's hashrate is well off of highs reached in February of this year. So there's a lot more risk of a 51% attack on Doge. Such an attack could render recent transactions (of Doge or Dogeparty assets) invalid, but Dogecoin and Dogeparty assets still couldn't be spent without having the private key for a particular address. Counterparty's original flavor, running on the Bitcion blockchain, appears to be much more secure from 51% attack, as its hashrate eclipses all others.

Perhaps a greater risk is that most users are using the online Counterwallet or Dogeparty Wallet. All that's required to access either wallet is a passphrase, because two-factor-authentication has not been implemented yet. Many people would not feel comfortable with their tokens being so accessible if their computer (or password itself) was compromised, so I hope 2FA will be added to the online wallet soon. There are also offline wallets offered that can be complied by users, but it is unclear how many people will utilize these much more technical wallets. If you're about to put any serious value into a Counterwallet or Dogeparty Wallet, or base an important project on these protocols, an offline wallet is the safe way to go. 

Bottom line

These are very exciting technologies that bring nontechnical cryptocurrency enthusiasts the ability to create their own asset tokens, at a very low cost. And that doesn't scratch the surface of these protocol's more complex abilities, or explore interesting uses that may develop on top of these platforms. If you have any desire to experiment with these platforms, now is your chance to dive in as an early adopter.

Disclosure: I own small amounts of XCP and XDP. Note that implications of trading in these new tokens may be a tax headaches for those who attempt to be 100% compliant with outdated tax regulations. Read More