Proof-of-work is a horrifying disaster. Proof-of-stake has been six months away for years. Bitcoin failed at most of its early promises.

But can we get the tantalising promises of cryptocurrency — decentralised, censorship-resistant, fast, cheap, secure — without the headaches?

There’s a pile of approaches along these lines — IOTA, Nano (formerly RaiBlocks), Hashgraph, MaidSafe, the Snowflake/Avalanche family — that promise new consensus mechanisms. And many don’t even use a blockchain.

I’ve been calling these the “mathcoins.” They’re of varying quality, credibility and audacity of promises.

You see a confusing page full of equations. Someone’s trying to sell you a token based on it. What do you do? How does a non-mathematician judge these things?

The pitch

Mathcoins are marketed by someone waving a PDF at you and shouting “you can’t disprove my thesis — buy my coin!”

A mathcoin will present a white paper full of equations — written in L A TEX, or at least Computer Modern, to appear properly sciencey — to justify their exciting new non-blockchain approach to the problems Bitcoin tried to solve.

This is the blockchain space — so the product here is not the mathematics, but the near-magical promises.

Should I buy the token?

The price of a mathcoin is completely unrelated to the maths. Ignore the white paper.

If a coin exists and someone’s trying to sell you on it — treat it as you would any altcoin pump. Pump-and-dump rings and ridiculously manipulated markets are standard in altcoins. Mathcoins are no exception.

When the IOTA network was literally broken and not working at all for a few weeks in October 2017, the token price went up 14%. Because for trading purposes, it’s just another altcoin on an exchange.

“Coming soon” is no reason to buy a token.

The species of mathcoin

A mathcoin will sometimes have credible computer scientists attached — Emin Gün Sirer advised Snowflake/Avalanche — or at least had them take it seriously — Sirer politely critiqued Hashgraph.

Other times, it’ll attract widespread criticism of bad or obscurantist maths or cryptography — IOTA has been notorious for its utter failure to engage reasonably with outside security researchers.

The maths falls into three broad groups:

Obviously broken idea — e.g., nothing about IOTA works or makes sense.

— e.g., nothing about IOTA works or makes sense. Old idea, put forward as new — there’s a lot of recycled ideas, or someone comes up with something that looks clever that they haven’t done the reading on.

— there’s a lot of recycled ideas, or someone comes up with something that looks clever that they haven’t done the reading on. Actually new idea — Sirer: “I might be biased, but Snowflake/Avalanche is in this category.”

The teams’ track record is critical:

Has delivered software before — this is rare — few teams have a track record of delivery.

— this is rare — few teams have a track record of delivery. Has tried and failed so far — e.g., MaidSafe has been in development hell since 2002.

— e.g., MaidSafe has been in development hell since 2002. This is their first attempt — typically someone with an idea, and someone collecting money to throw at the problem — will often be hoping to buy in enough expertise.

Most teams are pushing a broken idea, and it’s their first attempt. A few are pushing an old idea, and it’s their first attempt.

The products are one or more of:

No product yet — even with credible people involved, a non-mathematician shouldn’t worry too much about these until there’s something there.

— even with credible people involved, a non-mathematician shouldn’t worry too much about these until there’s something there. Not decentralised at all — or not yet, coming soon, honest. e.g., IOTA still has the central coordinator node — and no idea how they’ll remove it.

— or not yet, coming soon, honest. e.g., IOTA still has the central coordinator node — and no idea how they’ll remove it. Doesn’t actually work — IOTA again, whose code barely compiles, and whose network falls over in a stiff breeze.

Far too many mathcoin white papers are the mathematical version of mad scientist monologues. “They said I was mad — but I’LL SHOW THEM ALL!!”

Watch the people involved

You’re not a mathematician, you’re not up on graph theory, you can’t tell whether a given paper is credible work — or if it’s Time Cube in L A TEX.

But you do know about the cryptocurrency and blockchain space — and how the people behave. Do they behave in a professional manner, responding well to critique? Or do they react badly? Are they just pumping their token?

IOTA has been notorious for this. Its leadership and community were volatile and abusive enough for it to get written up in the Financial Times. The UCL Centre for Blockchain Technologies broke off relations with the IOTA Foundation over their threats to security researchers.

Other mathcoins will make it obvious that it’s all about the token price. One RaiBlocks pumper literally stopped Rory Cellan-Jones from the BBC in the street to pitch their coin.

The rule in blockchains is: hypotheticals are worthless. Grandiose promises of magical results rarely, if ever, work out.

If someone in crypto says something’s coming soon, that’s nice, but it should absolutely not be treated as “exciting news” until they have a product — and the product doesn’t fail in some hilariously obvious manner.

No white paper without a product should be taken as “exciting news” unless you are actually a mathematician or a computer scientist and have a direct professional interest.

Thanks to Emin Gün Sirer for suggesting axes for differentiating ideas and teams.