Bitcoin Clones use Same Network? (445 words)

Another comment I posted over on the TechZing Podcast. It was addressing Justin’s comment about bitcoin clones using the same “network” which is true, in that they share the same protocol but each have their own blockchain.

Each of the “bitcoin” clones are actually their own network. As far as I am aware they have no communication between each network in any form. Its also why each one’s blockchain is so different in size. Also the difference between bitcoin and litecoin (and its clones, such as dogecoin) is the proof of work algorithm they use to verify transactions. Bitcoin uses SHA256 (hence you are seeing lots of ASIC devices) whereas litecoin uses Scrypt, which is more ASIC resistant (although ASIC is starting to come out for them as well).

Most of the coins fall into those two groups, either SHA256 or Scrypt. Two coins that I know of that are slightly different are Primecoin and Vertcoin. Primecoin calculates primes as its proof of work algorithm, so its output is vaguely useful to anyone studying prime numbers. Its also the only coin that I am aware of that can only be mined by CPU. This makes it popular to run on botnets and spot instances in the cloud as you don’t need a GPU. Vertcoin by difference uses Scrypt, but a modified version which is supposed to be very resistant to ASIC mining, presumably by using even more memory then Scrypt.

I think both of you would be wise to actually have a look at dogecoin. The community has gotten more traction then litecoin has in 2 months and is catching up to bitcoin at a staggering rate. Once you get past the meme (which makes it easier to get into I guess?) there is a lot to like and its certainly gaining a lot of a adoption. Lastly its about to have its first block rate halving soon, so now is probably a good chance to pick some up before the price doubles again.

It sounds crazy, but the price is going nuts right now. Its the 3rd highest martketcap coin now and the reward is going to drop in 3 days so expect it to go up again.

http://tuxedage.wordpress.com/2014/02/06/a-serious-analysis-of-dogecoin-or-why-I-am-all–in-on-dogecoin/

I highly suggest reading the above. I don’t agree with it all but mostly it seems right to me. Dogecoin has the potential to be the new litecoin and possibly the new bitcoin. Especially with all of the activity taking place.

Be sure to have a look at http://reddit.com/r/dogecoin/ as well. The community is VERY active, enthusiastic and generous. They are spending the coins making doge more of a currency and less a value store.