Bitcoin and Cryptocurrency Technologies

Namecoin is technically interesting, and it’s also historically interesting — it was in fact the first altcoin
to be launched, in April 2011, a little over two years after Bitcoin was launched. It features “merge
mining” which we’ll discuss later in this chapter.
Namecoin isn’t used very much as of 2015. The vast majority of registered domains are taken by
“squatters,” hoping (but failing so far) to sell their names for a profit. Namecoin supporters tend to
argue that the existing DNS puts too much control over a critical component of the Internet into the
hands of a single entity. This view is popular in the Bitcoin community, as you can imagine, but it
doesn’t look like mainstream users are clamoring for an alternative to DNS, robbing Namecoin of the
killer app it needs to see significant adoption.
Litecoin.​Litecoin was also launched in 2011, some time after Namecoin. For the past several years,
Litecoin has been the number one altcoin in terms of overall popularity and user base. It is also the
most widely forked codebase. In fact, it has been forked more times than Bitcoin itself.
The main technical distinction between Litecoin and Bitcoin is that Litecoin features a memory‐hard
mining puzzle (based on scrypt), which we talked about in Chapter 8. When Litecoin was launched,
Bitcoin mining was in the GPU era, and so the goal of Litecoin’s use of a memory‐hard mining puzzle
was GPU‐resistance. When it was launched, you could still mine on Litecoin with a CPU, long after this
had become futile for Bitcoin. But since then, Litecoin hasn’t succeeded in resisting the transition to
GPU mining and then to ASICs. Each of those mining transitions took a bit longer in Litecoin than
Bitcoin, but it’s not clear if this is because Litecoin’s puzzle was actually harder to implement in
hardware or simply because Litecoin’s lower exchange rate provided less incentive to do so.
In any case, the performance improvements of ASICs compared to CPU mining are roughly similar for
Litecoin as they are for Bitcoin. In this sense, Litecoin failed in its original goal of creating a more
decentralized system by maintaining a community of CPU miners. But, importantly, this narrative still
worked for bootstrapping Litecoin — it attracted many adopters who ended up staying even after the
original premise failed. Litecoin has since explicitly changed its narrative, stating that its initial
allocation was more fair than Bitcoin’s because it resisted ASICs for longer.
Litecoin also makes a few minor parameter changes: for example blocks in Litecoin arrive four times
faster than in Bitcoin, every 2.5 minutes. Litecoin otherwise borrows as much from Bitcoin as possible.
In fact, its development has followed Bitcoin, so that as patches and improvements have been made
to Bitcoin, Litecoin has also adopted these.
Peercoin.​Peercoin, sometimes called PPCoin, was launched in late 2012 and was the first altcoin to
use proof‐of‐stake mining. We discussed proof‐of‐stake mining (and Peercoin’s implementation of it)
in Chapter 8, but Peercoin is interesting to discuss for an additional, entirely different reason: its
administrators have a trusted public key which they use to assign checkpoints of “blessed” blocks
every so often. This is intended to act as a safeguard against forking attacks, but it is controversial
because the ability of the administrators to control the system means that Peercoin isn’t truly
decentralized. The checkpoint system isn’t inherent to Peercoin and could be removed in the future;
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