Bitcoin Forum

Dear Satoshi Nakamoto I would like to know your opinion about all the blocksize bitcoin drama.
I believe a brilliant mind as your surely thought of this when developing Bitcoin in the ol' days. I know you couldn't quantify the time needed for this to happen but I'm sure you already thought about this evenience.

Personally i believe that Bitcoin is one of the greatest invention of the modern industrialised epoch, I'm supporting it since 2013 and still loving, but i'm really pissed off by this new way of thinking bitcoin as the product of a company. In example BU seems one of the biggest fail in Bitcoin history, and I'm not talking technically but about the bitcoin philosophy instead: they tried to corrupt morally all the community to follow their "altcoin" while trying to subvert in a corporative way the original meaning of BTC.

I would very pleased to know your opinion on this, I'm not asking to take a position on this just know what you think about it.
If you are ever going to read this post i would be happy to tip you if you're going to give me an answer (lulz).

Cheers & have a bright life,

thanks again for your invention.




Bitcoin means from the community to the community, following the community not leading it.

I think your genius already considered that question in 2008:

http://satoshi.nakamotoinstitute.org/emails/cryptography/2/


He's talking about one or few centralized miner nodes, everyone directly connecting to it, and blocks of about 1 GB.
(the 100 GB is daily).

Then, he screwed up:

https://bitcointalk.org/index.php?topic=1347

why do you even want to know what Satoshi Nakamoto says! he is just a developer and one opinion at best and bitcoin is not centralized that you want to ask the owner what he thinks to follow it.

in the spirit of decentralization you either educate yourself to understand what is happening and support something that you, based on your knowledge think is best, or keep your fingers crossed that the overwhelming majority does it properly without ending up in chaos.

https://bitcointalk.org/index.php?topic=1347.msg23049#msg23049

Possibly the most prescient message on this forum. Who knows what the technical environment was like back then, I certainly don't, but they really should've seen this one coming and indeed this fella did.

Indeed, I saw it too in that thread !

The only guy that understood "immutability" (of the protocol) at that time !

This one, just before, is edifying too:

https://bitcointalk.org/index.php?topic=1347.msg17804#msg17804

very unlikely to get a reply; but nice try though. :P

Satoshi is the founder of Bitcoin. His vision of what Bitcoin is and should be is what made a lot of people sign up for it.
He designed Bitcoin so that everyone can decide on its future (that's decentralization), he doesn't get to decide by himself, nevertheless many individuals would value his opinion for that.

Satoshi Nakamoto won't reveal himself just because of this dilemma, bitcoin itself could solve the problem because it is a decentralized one, and we are here, all of the bitcoin users around the world will defend bitcoin until the end. Maybe Satoshi Nakamoto is making a move silently about this problem. And we don't have to worry about this problem because it is just for temporary, they are just making us to panic about this.

So, we are going to sell our bitcoin and they are the ones who are going to make profits out of it, if bitcoins price PUMPs again.

Blocksize drama will not over for sure and all these spam attacks on bitcoin network can't last long because it will cost so much for attackers. When all this attacks will be over, there will be no any problem regarding mempool being full with unconfirmed transactions and rise in transactions fees.  ;)

Satoshi predicted that nodes would become to "BIG" for everyone to run and that it would be centralized at some point in the future. We have

reached a point where "BIG" Pools are running the show and they are determining the future code for Bitcoin. We can only change this, if we

grow bigger than these pools. { By we... I am saying ... everyone needs to run a full node...  and force the change }  ::)

Satoshi went away when the first attack was looming... { Gavin }  >:(

In time like this the opinion of someone like Satoshi can't especially when there seems to be some cabals who wants to hijack the network. All of us won't be on this forum if not for the great Satoshi

Not quite.  He said that the only MEANINGFUL nodes would be the miners, that there would be only some specialized ones of them, and that the normal users should give up on having full nodes, and connect directly to the miner's nodes with a light wallet.  Read his 2008 post again, where he was implicitly talking about 1 GB blocks.

And then he screwed up, introducing 1 MB blocks, and thinking that it would be a small issue changing that, but when a guy proposed a work-around, he said that it would render him "incompatible with the network".  When some very insightful posters indicated all the problems this limit in the protocol introduced, no more Satoshi comments.

Of course, people liking conspiracies thinking of Satoshi as an evil genius, exactly wanted a small block, to keep bitcoin only for the rich, and to keep his mega mining farms financed, but couldn't acknowledge that at that time, because he needed useful idiots promoting it amongst the sheeple to pump up the money until they could be stripped off by the whales, and so waved away the "concern" by others, seeing the "problem" coming, by a simple "we would simply change it when it is appropriate" kind of comment - even though people were pointing out that miners would just LOVE small blocks and predicted the current situation already 7 years ago.

What i meant is basically: why all this FUD from community members themselves and not just trying to understand tht Bitcoin protocol ISN'T perfect, as anything made from humans can be absolutely perfect, but IS enough perfect to sustain a long way until a real saturation will occur so far?
If you ever had a read on the original mailing list conversation between SN and his first repliers you should notice how SN was able to solve pragamtically and theoritically all the limits he encountered when planning theory about Bitcoin itself and which other people pointed out.
I simply cannot believe that he eventually thought that a 1 MB block would be ok to handle a certain amount of transaction in a mass scale view: ok it was 2008/2009 (and maybe even years before while he was working hidden from public announcements) but already at that time the HDD capabilities and internet connections speeds were enough over the 1 MB scale.
There should be something hidden between the lines that community still doesn't know.

And then another question I just went speculating on myself: what if SN is already working on a Bitcoin derived project and he still have in closed private versions?

That is because at that moment, SN was the centralized, undisputed authority of bitcoin's protocol (something that Core thought, had inherited for good from SN, like the Pope from Jesus himself).   Satoshi decided by himself, after hearing about remarks and so on, about bitcoin and its protocol.


Well, obviously, 1 MB blocks were not OPENLY part of his view on bitcoin, nor in his 2008 post, nor in the thread I linked.  After people pointing out the fundamental difficulty of changing a protocol rule in a large network (especially a network which has been designed to resist change) he replied that "one simply would have to change the few lines of code".

Now, this can only mean two things.

1) Satoshi, being so used to be able to change the rules all by himself, had difficulties imagining that this would not be possible some years later (like Core attempted) - even though people told him that miners might oppose to a change as it would be lucrative to them.  In other words, Satoshi didn't fully grasp the immutability of the protocol himself (that's what I think).

2) Satoshi secretly wanted small blocks for different reasons that he could not admit publicly at that time:
a) because he was an evil genius on the payroll of the Rothschilds
b) because he had realized that his sound money doctrine, and reducing the block reward, would need fees for his mega mining farms to exist, so the miners should be able to squeeze out the users and he had secretly given up on bitcoin becoming money to buy your coffee with, and only gold for rich whales
c) Satoshi had build in a self-destruction bomb in bitcoin if ever the community couldn't come to a positive consensus over it
d) some other reason that could not be admitted back then but that were part of his almighty genius

I go for 1), because there are many OTHER issues with bitcoin, where Satoshi said that one could change the protocol if the need arose, like if ever the elliptic curve signature scheme became compromised, or some other cryptographic aspect turned out not to be secure, like when the hash function for PoW turned out to be cracked or so.
Also, all his solutions for that (namely, nodes automatically submitting transactions of all the existing wallets to new cryptographical protocols) would generate so many transactions (essentially a transaction per UTXO) that 1 MB blocks could never sustain such a protocol change.

What I think Satoshi got wrong though is that he didn't consider that how difficult a full node would be to run is only relative to how much people who use Bitcoin can manage.  Right now, the blockchain is moderately big but it's too late for miners to be decentralised and principled enough to vote through a high consensus change unless it's urgent like a fatal bug.

That means that as transaction fees rise, Bitcoin becomes more and more useful for wealthier people as fees are still low relative to credit cards and it offers them security over their larger amounts of funds.  They can get this security by running a node, so as Bitcoin's audience becomes wealthier the cost of running a full node to them will be insignificant compared to the increase in their perceived security.  That's why "normal users" would still run full nodes - because what a "normal user" is can change.

I'm sure full blocks felt like a stupidly ambitious idea back in the day, but had I been around at the time even I would've thought a limit of 250,000 or so transactions per day wasn't a great deal of headroom.

Satoshi already commented a bit on the blocksize debate here:
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-August/010238.html

An analysis of the validity of the email was determined here:
https://pastebin.com/Ct5M8fa2

Regardless of people saying that the last communication from him was on the p2p foundation website, it is just as likely that this email was the last communication from him.

It was so effective and likely legitimate that both Mike Hearn and Gavin Andresen didn't post anything for a few days after it hit the mailing list.

Segregated Witness came about slowly as a viable solution shortly after this email came out. The advantages that Schnoor signatures would provide also started to be spoken of around this time.

I doubt Satoshi would be fully against raising the limit or creating a method by which it could be algorithimically-increased, but he also clearly understood that political or convenience motivations to do so were the *worst* reasons to increase it. Bitcoin's fungibility is not something that can simply be discarded. In fact, its the lack of fungibility of fiat money that led to cryptocurrencies to begin with. It's upsetting to see people toss aside full node operators as unessential entities that do not need to be protected from the risks of centralization. If we make them easy targets then governments, large businesses, and central bankers will manipulate them into doing their bidding. Not today, perhaps not tomorrow, but later when it becomes easier and more politically-acceptable to do top-down governance of cryptocurrencies.

Indeed, it would appear there are already plenty of alt-coins that take this system of control by default, which is why Bitcoin must continue to remain a coin that does not have this flaw for the people that get exploited or burned on the other blockchains. The decentralization and scarcity of the Bitcoin network is what makes it a powerful and dangerous threat to government-run fiat currencies, forcing those governments to consider what happens when their citizens have an alternative way to store value. It weakens the power of governments and rent-seekers living off government largesse to choose tyrannical options for subjugating both their own citizens and innocent people living in other regions just as much as it stops fraudulent pump and dumpers or ponzi schemers. It is important we preserve this alternative indefinitely for the betterment of society as a whole.

Bilge. If it really had been him then he should've signed a message from one of his known blocks. Just maybe there were a few people at the time who had the incentive to spoof this.

At the time, that domain had an SPF record that prevented spoofing. The email came from the vistomail servers.

Well, Satoshi was clearly one of those people, as he said that literally himself in 2008.

The BTC protocol isn't perfect (and I think that wasn't mean to be  ;)) and doesn't have an answer to all questions that appeared after its release. IMO, we need to think what is the best use for BTC and its blockchain and turn to other cryptocurrencies to deal with this new requirements/features needed.

Any links to sources?

Dear Dead Guy,

You made this shit a long time ago before you died and now people are trying to jack it up. Can you do me a solid and come back to life and jack these people up because they're really pissing me off.

Cheers from a Bitcoin Core Supporter.

Link above quotes as follows:


If this is indeed the words of Satoshi Nakamoto:

The advent of pooled mining could indeed be something that Satoshi Nakamoto did not foresee, and certainly concentrates network security into the hands of a few mining cartels.
The post does not indicate what old writings are invalidated by knowledge acquired since his involvement in getting the project off the ground.
Since some may consider that segwit forks bitcoin, redefines what bitcoin is, is under widespread technical criticism, and uses populist tactics to promote it, the conclusion could be that bitcoin is indeed a failed project.
The post does not state what a fork proposal with widespread consensus would look like. The incentive for users to run nodes is the only clue provided. But does he mean all users, or just enough users to counter the political weight of the mining cartels?

And how would you counter the running of multiple nodes by one user if the nodes are incentivised?

https://bitcointalk.org/index.php?topic=1347.msg17804#msg17804

I agree, especially since generators are both the source of blocks and "votes" in the network.  Since a block restriction would allow generators to charge higher transaction fees, they might "vote" against an increase in the max size in the future.

It seems unlikely to be a real problem though.

Prophetic.... now it's a problem.

I am Moses; BitcoinMoses ! Official Spoke Person of Satoshi Nakamoto.

In the middle of a Jungle there was a wise Royal Bengal Tiger; Who thought to go for a holiday in the Kalahari Desert.  His Majesty the Royal Bengal Tiger thought it would be fun to chase a golden giraffe. So he ran after the giraffe and catch and nocked down. He thought the giraffe is too big for me alone to eat for the lunch. So he thought, he would invites few foxes who can not eat well because of the Lions and bloody hyenas.   All of a sudden a group of hyenas came out of no where and hijacked the golden jackpot the giraffe. The greedy hyenas are too many of them but there was one extraordinary clever with 180 degree IQ. So he claimed that he is the  Royal Bengal Tiger. He covered his bloody hyenas face with some banana leaf to hide his own identity. Now all the hyenas thought he is our Royal Japanese Hyena. Now, he took the major share of the golden giraffe and  eating quitely in the shadow of a tree. The rest of the hyenas are fighting each other to get better share of the golden giraffe. Now, few Alien Gremlins landed from the spaceship and saw that there is a golden giraffe and it is been killed and the hyenas are eating. So the aliens now planing to do some thing about it. The hyenas have no knowledge about the Alien Gremlins. The Gremlins has challenged the hyenas. Who knows the Gremlins might eat up the golden giraffe including all the boody hyenas too. Gremlins are hungry ! very very hungry ! The Royal Bengal Tiger has abandoned his holiday and planning to organises a Bitcoin Sumo Festival in Tokyo. You all are welcome to Bitcoin Sumo Festival to see who push out whom ?  Non violence of Gandhi is good  but not always good for the hungry foxes. The Army of Pharaoh of Egypt was very large and strong with armaments, I Moses, drowned them with Abraka Dabra magic of words. As you sow, so shall you reap. Where is Dr. Ross Ulbricht ? I am awarding him a Ph.D. in Dread Pirate ------- --------- for his successful achievement.

Now, As you have earnestly requested Satoshi Nakamoto to reply , So re-read the parable of the Golden Giraffe and try to comprehend the mystery of Bitcoin first, in order to understand the verdict of Satoshi Nakamoto the inventor of bloody Bitcoin.

  

Isn't it a Satoshi answer, that he invented Bitcoin in such a way that no shit fork like BTU could prevail eva?  :)

 :D Love it !

Thought I put them in already.

https://bitcointalk.org/index.php?topic=1876752.msg18654178#msg18654178

As Satoshi DID anticipate it (see my quotes in answers above), that new satoshi is suffering from amnesia, or, most probably, isn't the same Satoshi than the one that wrote in 2008.

Not trying to put any validity behind who was behind the quote, just question its content relevance.

Satoshi it appears did believe full nodes where mining nodes, and these would be run by specialised mining farms. I think there is a quote somewhere where he anticipated (numbers seemingly picked out of a hat) around 10,000 nodes and millions of users.

When block difficulty adjusts every 2016 blocks, even with mining nodes having similar hash rate and luck, it's hard to imagine that number of mining nodes.

Pooling to reduce luck variance has made the number of mining nodes even worse, and leaves a small number of distributed blockchain copies compromising its security (if all full nodes are mining nodes).

We might be able to get to a situation where there is 100 to 1000 mining nodes, so other economic nodes are required to keep the distributed blockchain ledger meaningful. However, not every user needs to run a full node, nor should they. An excess of nodes just leads to more Internet traffic and block propagation delays leading to higher orphan rates.

Could you point me to that ?  (honest question, I didn't see that)  I had the impression he only had a FEW nodes in mind.

The pooling seems like entirely predictable as a way to protect against lottery volatility: it is the basis of insurance !  Instead of having a huge gain/cost with low probability, you prefer to have an AVERAGE gain/cost with high probability.  This is the very first element you learn when you look at financial risk management: of two systems with equal expectation of gain, the one with lowest volatility is worth most.

Well, I don't see the use of that.  I don't see why there wouldn't be naturally a backbone, strong network between miner nodes, and then simply users directly connecting to miner nodes with light wallets, to get the needed pieces of block, and to transmit the transactions.  There's no need for a non-mining P2P network (unless if direct network connections to the miner backbone is unreliable for some or other reason, like the Great Wall of China or so).

https://bitcointalk.org/index.php?topic=286.msg2947#msg2947

A small number of mining nodes could easily lead to miner collusion, although it would not be in their economic interests to do so. The problem is that the blockchain would not be distributed enough amongst many jurisdictions. So non-mining nodes have a role to play by keeping the miners honest. How many nodes are required to keep the system honest? Probably only around 1,000 or so, but that is a number picked out of thin air. Many cryptocurrencies run on less, and bitcoin is running securely with around 5,000 nodes (some of which may be pruned or assuming valid blocks which is pointless for security).

Ok, I guess "less than 100 000" was a safe bet :)
5 is also less than 100 000 ;)

It is funny, because in a way, Satoshi's "LAN" looks exactly like a pool with its miner/customers connected to it.

Clearly, Satoshi understood that there would be an upper limit to the number of miners ; but you're right that he didn't realize how a global competitive market is usually distributed: there are a few market leaders, not 10 000.  There are not 10 000 "amazons" or "googles".  There are not 10 000 leading car brands in the world.  There are not 10 000 leading airplane manufacturers.
Mining pools are distributed like any other market: there are about 5 visible market leaders (most probably in the hands of one or two guys).

How so ?  They can SEE it, but they cannot do anything about it.
If the miners decide to make a given block chain, and not another one, what can the non-mining node do apart from noticing that there's no "good" block chain around and stopping to download it ?

If economic nodes stop accepting the miners blocks, then the miners cannot do anything with their coins. (Although since the miners confirm transactions, the economic nodes would grind to a halt. So they have no long term leverage).
To keep the system flowing to maximise the value of bitcoin, miners and economic nodes need to be in agreement. Users can decide whether to use bitcoin or not, but most of them are not educated in economics or technical details, so they really should not have any power beyond their choice of whether to use it or not.

And that's the problem with the system. Users can only get transactions confirmed if the miners decide they want to include them. It fails the permissionless test!

I think you echoed this old statement from ViaBTC in another thread.
https://twitter.com/ViaBTC/status/838349711870341120

This is always the same confusion.  You're talking about *economic* nodes.  But there are no economic nodes, there are simply economic USERS.  The fact of them having a node or not, doesn't matter, does it ?   The only thing that a full node can do, is INFORM its owner.  But that's it.

Suppose that you are a whale, holding 100 000 BTC.  You are running a full node, to watch those evil miners.  Now, suppose that those evil miners have decided to increase the block reward (that is, they change the protocol so that the next halving won't happen).  They keep on mining blocks with the old reward, and refuse to apply the halving.  They are not doing this in a sneaky way, they simply announce that they will apply a hard fork so that halving is not going to happen any more, for this and that reason.  95% of the hash rate is behind this move.

Your node sees this, and stops.  The last block it received and accepted, was the last block before the halving.  The next block in the only chain around is considered invalid, because the coinbase transaction is not correct, it isn't halved, as it should be, according to your node.

Now what ?   You decide to sell all of your bitcoin because you're not happy ?  What do you do with your 100 000 BTC ?  Where do you send your transaction ?

You're hoping for the 5% minority miners that wanted to keep the old chain ?  Maybe they do.  But the difficulty is now 20 times too high for them.  They can only mine one block every 3 hours or so, with HALF of the reward that their competitors win on the other fork.

Are they going to keep the "true" chain alive ?  With one block every 3 hours, for the next year or so ?  Or are they going to put their effort in the new bitcoin ?  Suppose they do.  Now, bitcoin has undergone a hard fork with no more halvings.  Your node is not happy about that.  What are you going to do with your 100 000 BTC wallet ?

Perhaps you would like to comment on my attempt to analyse the situation of economic weight in the event of a UASF (https://bitcointalk.org/index.php?topic=1865966.0).
Basically a stand off between economic nodes and miners would not last long due to its destruction of the bitcoin system operationally. A long standoff is a war of attrition. Economic business needs to continue or they will eventually go out of business. Miners need to be able to use their coin to keep running or they eventually will go out of business. It's Mutually Assured Destruction.

It is very difficult to foresee.  But you're missing the point: non-mining NODES don't matter in this affair.  This is between "miners" and "(economic) users", not "nodes".  The users can (try to) vote with their money and transactions, with or without a non-mining node.  

Suppose that the "economic majority" has its say.  It will have its say through the exchanges, not by running a node in its basement.  The interplay between economic users and miners is complex.   But whether or not these users run a node in their basement doesn't matter.

Exchanges will follow their customers, they don't care about the value of coins, they only care about the amounts of fiat that users trade, because exchanges take a fee on every flow of value, no matter to or from which coin.

What would a UASF mean ?  One vote per node ?  Does someone running a node, and holding half a bitcoin, have as much importance as the guy with his 100 000 BTC and also a node ?  

And if the guy with half a bitcoin fires up 500 nodes ?  Does that mean anything to an UASF ?  On the other hand, if you disgruntle 20 guys with each of them 100 000 BTC, maybe that matters ?

Finally, the miners sell their coins to whom ?  To whales ?  Or to NEWCOMERS that don't even have a node, nor a coin ?

Of course the economic vote matters, but the economic vote matters in the market, on the available choices, not on the non-available choices.  Miners decide what are the available choices (as long as the system is PoW).   Hell, even any dev can make a new available choice, by just making a new coin that forks off bitcoin, using PoW or even PoS.  Economic actors vote on those available choices in the market, but cannot create themselves, available choices.

And in all that, non mining nodes don't mean anything: they don't represent economic actors (certainly not proportionally), and they don't make new choices available.  They are only useful for their owners, informing them.  

Miners have electricity costs, warehousing costs, equipment costs etc.. Without a bitcoin economy that accepts their bitcoin (either directly or through fiat exchange), then the coins they mine have no use, and they will go out of business. In this case the entire bitcoin economy goes to hell.
Do you think there is any point in miners passing bitcoin tokens between themselves for fun? They have no purpose if there is no bitcoin economy. It becomes worthless hard to compute 1's and 0's. Everybody loses.
So I think economic validation nodes have their purpose, since it stops miners from making up the rules without scrutiny.

My point is that there's no such thing as "economic validation nodes".  There are economic actors, USERS, that have of course their economic weight in the market on available choices.  Whether these actors run a node or not doesn't change their economic choices in the market.
And running a node, or not, doesn't increase the economic choices of actors, nor their economic weight.  So I fail to see the purpose that "running a node" has.  The economic power of the actors is independent of them running a node or not.  And the choices the economic actors have, are independent of them running a node or not. So what changes between economic actors voting in the market on the choices that are available, when they run a node, or they don't run a node ?

Think about this:

a) Suppose that the economic actors don't agree with the miners, and refuse to buy their coins, even though they don't run a node themselves.  Is the situation now better for miners than if on top of that, these actors were running a node that stopped working because it didn't agree with the block chain that miners were making ?

b) Suppose that many economic actors run a node that stops working because it doesn't agree with the chain that miners make.  But enough actors buy their coins on exchanges.  Did those running a node annoy the miners in the slightest bit ?

You see, the nodes don't mean shit.  What means something, is the market value at which the miners can sell their coins, but that is also the market value of coins held by the whales.  There are also the newcomers, the most interesting party in this game, that have no stake but are most probably the ones buying up the new coins from miners.  In all of this, whether you run a node or not, doesn't matter, because it doesn't alter anything.

By validating the miners work, they are alerted to the fact that miners are changing the rules and can choose how to respond to the situation. If they blindly accept the miners work, they won't be alerted to the fact that the rules have changed. Hence they scrutinise the miners work and can choose to either change to the miners rules, or stop accepting that coin altogether.

Yes, we certainly should take into account the environment back then

Right now it is as clear as day that none of what was suggested back in the day would work in the long enough term. It is understandable that the guys couldn't yet fancy how to make off-chain transactions in a decentralized and reliable way which would principally solve the issue and allow for virtually unlimited scaling of Bitcoin. It is also an example of how a new paradigm may render all previous efforts to solve the issue pretty irrelevant

I would say: by "observing" the miner's work.  So yes, a full node informs its owner.  That's about it.  That's helpful if the miners were doing something sneaky.  If they openly announce that they don't apply the next halving, then your node just informs you that they did what they said, they were going to do.
Whether 5000 nodes tell you that, or just one, doesn't make much of a difference, does it ?

We still don't.  LN is banking.  We already knew that banking works, if all people have accounts in a connected net of banks and have deposited their holdings there. 

That is the very reason why the community has established an UASF so that the one who will have the power to adopt and approve changes to the bitcoin network will be us the bitcoin holders and the miners will be forced to follow to what our dictates are or else their production will go to waste. But set your worry aside since the exchanges are already doing their job screening the bitcoin that are entering their site.

You've gone from dinofelis only miners matter extreme, to the paper weight of users forcing the miners hand extreme. Bitcoin works when miners and the economy are working in consensus. UASF without miner majority is a charge of the light brigade (https://en.wikipedia.org/wiki/Charge_of_the_Light_Brigade) moment. It only takes one exchange to reject UASF and they gain the business of the usable majority chain, so there is an incentive for one of them to do so. The minority chain will either have to fork off, or fall in line with the consensus by cancelling the UASF. In other words segwit UASF will have to retreat like a wounded brigade after achieving very little gain. Since severe disruption to the bitcoin system of operation would have occurred for a length of time, people will start to play the blame game. I wouldn't be surprised if the blame was deflected onto the users. That's politics.

Yes. It's not even proved that Satoshi exist yet and this letter is kind of letter to nobody now. But I think you will find a lot of replies to your questions on the forum.

Yes,many such dramas would continue even in future trying to split bitcoin and fill their pockets.But as usual,all such attempts would fail and bitcoin would last long as the king of crypto coins.

I didn't say that.  The complex interplay between miners and users (in the market) is what matters.  But in that story, nowhere, non-mining nodes appear.  That's my point.  Miners are the only entities making block chains with the protocol's PoW voting rights.  Users are the ones that turn "tokens on a block chain" into something that has economic value, by spending value (fiat) to obtain it, and as such, finance the whole ecosystem, miners included.   But at no point - apart for the function of *informing* node owners what miners are actually doing - nodes that do not mine, play any role in this.  They don't make block chains, they don't offer block chain VARIANTS (allowing for choice in the market), and they don't relate to economic value in the market.  A user with 500 000 BTC running a node has just as much "node count value" as one running an empty node without owning any BTC.  A potential buyer of BTC on an exchange is maybe not running a node, but has important economic weight for a miner.   So non-mining nodes are 1) not offering opportunities of choice, and 2) do not signal or influence any economic choices in the market between the offered choices.

Can't say that much for bitcoins, unless we do something about the problems with bitcoins then we can't really scale to bigger heights. Look at it this way, if bitcoins will take forever to confirm at low costs then that would really be a turn off to the new users especially merchants who would want to wait for 1 confirmation atleas.

You are only considering the block building part of it. The blockchain is a distributed database. Validating nodes distribute the database amongst different actors and ensure the mining oligarchy can't fuck with the blockchain history.

Reading the comments i have seen many people criticizing Satoshi that he did not make any changes to the block size limit at that time and so is the reason we are having issues right now,first thing everyone must understand is bitcoin at that time was a prototype and every software needs upgrades to keep up with time and that is the exact thing we need now,we need a good upgrade to solve the issue and what is best must be determined after careful thought process and testing.

Of course not.  The source of this database is the miners, and only the miners.  And any actor can get its data directly from the source, and doesn't need a proxy server to relay it.

Think of it this way.

Consider, for the sake of argument, 3 populations:

1) miners (I actually mean, mining pools) and their data-center nodes.

2) users with a lot of coins and cash, that only use online wallets or lightweight wallets

3) bitcointalk idiots like us, that run most of the non-mining full nodes.

Now, suppose that the miners change protocol (open in the clear).  Suppose that the users (2) don't really mind about that.
Suppose that all of us (3) are upset, and refuse to distribute this "corrupt" database.

What do you think will happen ?  The users (2) will connect their wallets directly to the miner nodes (1), instead of taking a copy of what the miners produce, from us (3).   We don't distribute anything.  We are optional proxy servers for the database that is produced by the miners, and only by the miners.

The point is that a crypto currency is not "software", it is a contractual protocol.  Upgrading a contract is difficult.

What stops the mining oligarchy from starting again from the genesis block and get 50 BTC block rewards? As soon as they connect to other validating nodes with the full  blockchain history they would have to sync to it!

The other thing to think about is if all mining nodes are located within a few jurisdictions, and those governments decide to simultaneously seize the mining nodes and take them offline, everybody's UTXO is lost. By having copies of the blockchain distributed around the world in the hands of different entities and jurisdictions, the blockchain data and UTXO set is significantly more secure.

Bitcoin is not software like Microsoft Windows is software.  It can't just be upgraded at will by the Bitcoin Core team, otherwise it wouldn't be the same immutable blockchain that it's supposed to be.  It takes mining support and a lot of effort and lot of proposed open source code for any upgrade to go through.

Crypto currency might not be a software but the process requires you to implement and run everything using a software and every software needs up gradation with time,  but here all the issues are centered around the block limit and since here in this case if the majority of nodes agrees to the changes then there wont be any issues in upgrading .It might not be that easy because there are many interest between different parties and unless there is an amicable solution they are literally killing the golden goose.

My point was that the *protocol* can be implemented by gazillion of software packages, that can update and add features as much as they like, as long as they implement the same protocol.  However, the protocol itself is a contract, which can only be changed if all parties agree, which is usually not the case if that change involves more advantages for some parties, and less for others.
The block size is such a change: more and cheaper transactions for users, less power and fees for miners. 

If ALL (or a very large majority) of miners decided to redo the chain, introducing a soft fork on the second block after the genesis block, so that they *would not* accept the traditional chain, then the traditional chain would come to a grinding halt entirely.  You would simply not get any block any more on the original chain ; or you would get a block ever so slowly if a small minority of miners decided to continue mining it.

Note that those redoing miners wouldn't be hindered at all by "non mining nodes having a better block chain", because they would simply introduce a softfork with a requirement (say, a check point) on the new block just after the genesis block.  Of course these miners would be aware of the original chain, and not bother !  Miners make the chains they like and don't HAVE to follow rules.  But they want to follow rules, because it is by following rules that they make block chains on which people buy their tokens.

The only question would be: what would motivate miners to do that ?  Of course, everyone would SEE that the normal bitcoin block chain is dead - until the newly mined chain overtakes the total hash power of the original chain, which can take a year or so.  At that point, all bitcoin holders would see an empty balance on the new chain.  And nobody is going to buy anything from these miners.

So what crazy set of miners would waste a year of mining on a chain that is not going to contain tokens that nobody is going to buy, instead of continuing to mine tokens on an existing chain where the tokens are worth a lot ?

So, essentially, the thing that stops them from doing that, is that those coins could not be sold to any fool anywhere.

Again, the whole block chain is simply produced by miners, and only by miners, because the block chain in bitcoin needs PoW and miners are the only providers of PoW.  Without PoW, nobody else can make a block chain, so miners are sole master of the AVAILABLE PoW block chains.  But miners are sensitive to the people (idiots ?) who pay for the coins they make on that block chain: they want them to keep paying for the coins they make.  So miners cannot mess too much with them.  Not because they run nodes, but because they are the people paying for the tokens on the chains they make.

I guess you are not telling the whole truth here

And it seems like you do that deliberately so that what you say next should fit better into your logic and sound more plausible. First of all, if all current mining pools decide to leave (let's assume that they just completely shut down their operation, for the beginning), the mining difficulty will quickly adjust (within two weeks), and after about a month we will be in exactly the same situation as before top miners leaving. New miners will just fill the void as soon as they see such a possibility. Let's now proceed to miners starting their own fork. Basically, we will have a dozen users of what would otherwise be a new altcoin. So what would make all users want to switch to this coin? These users are not interested in the raw hash power that this new coin will provide, and they will most certainly prefer to remain with the "old" Bitcoin, and then we are essentially back to our first assumption, i.e. when all top miners just choose to leave

No, that is not right.  Not within two weeks, within 2016 blocks.  

You first have to mine 2016 blocks at the old difficulty.  That's a "feature" of bitcoin that many altcoins corrected, but it can also be a thing on purpose, to make hard forks very risky and difficult.

So if, say, 95% of the miners stop mining tomorrow, and there are still 1008 blocks to go to the next difficulty adjustment, then you still have to mine 1008 blocks at the *current* difficulty, which was about so that with the previous hash rate, we would get a block every 10 minutes.  However, if you only have 1/20 of the hash rate mining right now, that takes 20 times longer.  So instead of 1 week before you have your 1008 blocks, you'd be doing this for 20 weeks, before the next difficulty adjustment.
Moreover, a difficulty adjustement can never be more than a certain factor (I think from the top of my head that it is 4, but I'm not sure).
If it is 4, then next time, the difficulty will be 4 times less, not 20 times less as it should be.  So the next 2016 blocks will take not 2 weeks, but 10 weeks before you get another difficulty adjustment.

In other words, if 95% of the miners leave in the middle of a difficulty period, you're 30 weeks gone before things return more or less to normal, and in those 30 weeks, you'd mine about 3000 blocks (instead of 30 000 blocks).

(I can be wrong with the factor of 4)

Segwit and BU have been came arise to pull the bitcoin in the world. Bitcoin existence is from the year 2009 and rate of people use in numbers has been increased to billions now. This is the reason we have been popular and exists in the world. Apart that bitcoin's price value and features such as anonymity, payment mode and fewer fees are attracting to the people. Therefore, will have the long life for bitcoin.

If bitcoin wants to upgrade, they always choose the most suitable source for development, and they will definitely organize a poll for everyone who is mine explorer on the lake. That is also the reason why bitcoin exists long term and is constantly growing. Perhaps, if the heads of the right to upgrade the bitcoin, they will conduct segwit, while segwit is not really necessary for bitcoin.

Even if we take your view there is nothing really dramatic going to happen

So instead of 10 minutes between blocks we will have to wait 200 minutes, i.e. roughly 3 hours for a few weeks. As to me, this is not too big a price to finally get rid of rogue and corrupted miners once and for good. And this is obviously the worst case scenario. It should be clear that as soon as evil miners are gone, there will be a quick patch accepted by the remaining consensus that would adjust the difficulty as required to continue flawless and uninterruptible operation of the Bitcoin network. Any way you look at it, the leaving miners would be shooting themselves right in the head

Well, "a few weeks" is 20 weeks if it happened mid-period, or, what, 4 months.  If it happened at the beginning of a period, that would become 40 weeks, or some 8 months.

With a block every 3 hours, that comes down to a transaction capacity as if the blocks were not 1 MB now, but rather 50 KB, during 4 or 8 months, followed by another period where things improve somewhat.

Of course, nothing would stop people at that point from doing a hard fork, and modifying the difficulty by hand. 

And you can be pretty sure that people will quickly switch to this "fork"

Because it won't be a hard fork in the eyes of a total majority of Bitcoin users primarily because nothing is going to change for them (even if technically that would be a hard fork). I think the most evil of miners know that perfectly well, so despite all their fear-mongering rhetoric I somehow don't see them leaving Bitcoin, neither now nor in the future. As I said, no one will be particularly interested in their "pristine" Bitcoin if they start mining it from "scratch" with all their hash power. And they simply can't ignore what most users think

Depends on how many of them are then around !  Who will decide ?  What if there are now 10 different versions of that fork ?

I pretty much don't know

But I think you shouldn't harbor false hopes that there will be 10 different forks. If matters do really come to this, I suspect there will be a single number to which everyone involved in Bitcoin will quickly arrive after a few iterations (with no more rogue miners sticking around and putting grit in the Bitcoin machine). What makes me think so? Simply because we have a reference point which is current hash rate (difficulty), and in the worst case scenario it will just remain the same for the time being. Even if there are 10 different forks, we will see a tough but short or rather flash competition with only one fork remaining since the only difference between them would be difficulty change

To be honest, I don't see any rogue miners.  I see miners do exactly what their job is: maintaining the integrity of the protocol and the consensus history.  I see a lot of non-miners wanting to deviate from the agreed-upon protocol, but miners resisting to that is their job in the eco system.  So, if any rogue forces, it are those wanting change, I'd say - even though in a permissionless and trustless system, there is no notion of rogue force ; only of immutability, and failure of immutability.

it doesn't make sense to ask satoshi, the whole bitcoin thing is based on consensus, which is the point of decentralization, having one man decide anything go against this, therefore the opinion of satoshi is pointless


this wasn't him at all, and it was already debunked long time ago, the last message form satoshi is in 2010, every other after that it's not him or there is not proof that it's him

Many people are already thinking of the asics baron Jihan Wu as a Bill Gates of mining

Do you deny that Microsoft had been and is (likely) still using nefarious tactics to subdue competition? I remember how in the early 2000's they had launched a massive smear campaign in mass media against Linux severely distorting facts in their favor (or rather "facts"). Ultimately, miners are rogue not because they are just rogue in and of themselves but because the current system of confirming Bitcoin transactions is rogue (as well as inefficient), and now the evidence of this has become overwhelming and omnipresent

I fully agree with that statement.  What we have now is the logical consequence of the initial design.

If such scenario has got created surely entire network might be a failed experiment. The controllability too might have beena big issue, because everyone will organise a group and make them support creating a destabilises situation to reach consensus.

I wouldn't consider that a failed experiment, on the contrary.  The more different crypto chains there are, the better: more competition, less monopoly, more decentralization, less speculation in the long term (because continual forking kills all hopes of "moon"), less singular points of failure.

If there are more crypto chains, that isn't always a good thing.  People need long-term speculation and the security of knowing that if they leave their money in a currency, it'll stay for a long time.

Bitcoin is the master chain.  The reason that not everyone through their money into DASH or something is because they know that the price is pretty unstable and it might go down in the long term.  People hold their money in fiat, and even though they know the value will go down a little bit because of inflation, they feel like they have enough security and they know where it's going to go.  Hundreds of chains isn't going to help more money go into cryptocurrency, if the lines are too blurred there won't be much money in crypto at all.

Only one shall prevail

I remember I had been discussing this issue with someone, though this is unlikely to be you. I basically claim that in the long run there will necessarily remain just a tiny group of coins even if we assume a free market competition between them. How come? For example, some folks love Rembrandt, others dislike cordially Bosch, but both are well known and famous. This is understandable, but this is not applicable to money simply because money is purely utilitarian. In other words, some may love Dash of its name, some may hate Bitcoin exactly for the same reason. But as the proverb goes (and here it fits absolutely), when money talks bullshit walks. So people will just stick to most popular coin, while the rest will get quickly abandoned and forgotten

I agree somewhat.
People are used to only using one currency, their local currency, and might only use another currency when they go abroad. Multiple payment cryptos are a hard sell for mass adoption.
There are other crypto's that provide a useful service beyond a mass consumer payment service. People might buy these coins when they need the service that these crypto's provide. That's not going to be the mass populous.

whether satoshi nakamoto still alive? If yes where can I find it?
about altcoin and bitcoin. why you do not agree with altcoin. If you have any solution how to get bitcoin? Please let us know your great idea

As I see it, there can be two basic types of coins

Since there are two primary functions of money which are mutually exclusive. These are the exchange function and store of value function. It is conceptually impossible to combine these functions in their pure form, without compromising either of these functions. If someone tries that the result will be neither here nor there. So we could have two major coins, one for circulation, the other for holding. They could be conditionally called as "bad" money and "good" money (according to Gresham's Law). Obviously, the "bad" money will be used for daily expenses while the "good"one for holding your wealth in and paying for expensive things

In some of the very old posts being discussed in this thread I saw some old posts by FreeMoney.  Does anyone have any idea what happened to him?  Since this is off topic you can respond to me in IM if you think that would be better.

Bryan narrowly avoided a class b felony 10 year prison sentence for running Seals with Clubs. Nevada gaming raided his house and confiscated his computers. After that he ran to Antigua with his wife and kid. He had to return to Nevada to live, pay a $25,000 fine and serve a probation term. If he breaks probation he will end up in jail. I expect he's still in Nevada serving out his probation.

Edit: From what I've been told FreeMoney and Bryan Micon are not the same people. The above is not what happened to FreeMoney.

Well, this is obviously empirically not the case, apart from the historical case of gold. 

The empirical proof to the contrary of your thesis is here:

http://coinmarketcap.com/charts/#btc-percentage

The reason is that bitcoin, and most crypto, is not money.  It is "greater fool" game for most of its market cap, the "money" part of it is really, really tiny.  And in a greater fool game, what counts is the upward belief space, versus the downward belief space.

So in this kind of game, the higher is a coin, the lower is its upward belief space.  The belief in "a factor upward of 100" for bitcoin becomes harder to sustain ; but a factor 100 upward for litecoin, for instance, is easily understandable, it would be only 2.5 times more than bitcoin now.   Of course, you can take an obscure coin down the list, and then its upward room is potentially higher, but its chance to go to 0, too.

As you go up the list in coinmarketcap, you have less and less upward room, but less and less risk that it goes totally to 0 also.  When you go down the list, there is more and more upward room, but chances that you will end up at 0 increase, too.  So somewhere around the 10th position must be the "best gambler's coin": not a total shitcoin that will disappear, and still small enough to have an upward force.

The higher you are in the list, the more "secure" (in the middle term) is your "investment", but the less hope there is for the kind of spectacular riches that the early bitcoin holders had.  What keeps crypto still up, is this dream, of what happened once, the early adopters of bitcoin that bought thousands of coins for some shit, and are now millionaires.... it will take several years before people realise that that was a once-in-a-lifetime happening, and it is this illusion that pumps up most of crypto for still a while.  So the higher in the list, the less incentive there is to gamble on it. 

So as long as crypto is driven by greater-fool dreams, more and more coins will get pumped against the ceiling where the dream of cheap coins that will make me rich in 10 years, starts fading away.

My impression is that bitcoin is slowly reaching that ceiling.  It can still move up, but not as fast as those beneath it.  When the first in the cue go slower than the rest, you get a traffic jam :)

Crypto is not money.  It was set up to be money, but it is hardly money.  It is mostly a gambler's token.  Because most crypto is based upon sound money doctrine, which induces deflationary spirals ("price rise of coins") and gambling.

This is true, and all crypto I know of is of the "store of value" kind because of their deflationary emission schemes, but given that they are a riskier store of value than classical stores of value like gold, real estate, stock, etc... they also become "investments with high return" (if there is risk, there must be return).  However, there being no intrinsic value creation in a crypto coin (in fact, if it is a PoW coin, there is only value FLOWING OUT), it becomes only sustained by newcomers flowing in: greater fool game.
'
 

That's why I'm mostly referring to future

Namely, when Bitcoin becomes money (if ever). In other words, only one cryptocoin (at max two, at best three coins) can become full-fledged money. If there were a free market for all money existing right now out there (i.e. without artificial limits and restrictions imposed by national governments), we would quickly move in that direction as well. So, in a few years, we would likely have the US dollar as a means of payment ("bad" money in Gresham's terms) and the Swiss franc as a store of value ("good" money). Obviously, until the respective governments decided to devalue these currencies

Well, when I was still enthusiastic about bitcoin, I thought that too.  Now I understood that it won't.  If ever, it would not be bitcoin, but a bitcoin-backed banking layer (LN looks like that).  But I don't think there is the slightest bit of demand or application of bitcoin-backed banking, because normal banking works quite well to do payments.


I think the only sensible monetary applications of crypto are those where fiat cannot go, is difficult, expensive, or dangerous.  For instance, in hostage taking, terrorist financing, dark markets, subversive action, secret weapon and disruptive technology development financing, free speech political actions, fiscal hiding of value production and income etc... I have to say that this is the only aspect of crypto I'm interested in, and the only aspect where I think it has true economic value.    However, I'm not sure that all of these aspects will be covered by one and the same crypto, because of the dangers that would go with that.


I'm not so sure about that.  After all, with each kind of money comes a certain policy, which you can like or dislike.  The dollar is the de facto world currency, which means that you would *denominate prices* in that currency, but that's not necessarily the reason to USE that currency.  Of course there is a certain friction in exchanges, but on the other hand, a monetary system is a belief system, and beliefs may cost some (friction) money.


I don't think so, because long term investments are not "money".  They must have an economic backing, like a company that produces value (stock), or real estate or something that is backed by that (derivatives).     A monetary asset that only serves as a store of value, is most probably a bubble (I think most crypto is).  That said, it can be a slow bubble.  This, in a difference with a true currency, where Fisher's formula sustains its value (the demand for it, in order to be able to PAY FOR STUFF, is what gives it value) ; or, in another way, where the economy that uses it, is in a way "backing" it.  If people's salaries, if grocery prices etc... are not only *expressed* but also *paid* in that currency, then the value of this is what makes up (through Fisher's formula), the market cap of the currency at hand.
Of course, you can, as a side effect, try to use a part of that currency as a long term store of value.  The Swiss franc is, in other words, backed by whatever you can buy with Swiss francs (the Swiss economy, including its banking), and the fact that the Swiss government is not very powerful, with the Swiss direct democracy, so there's little chance that politics in Swiss screws up the Swiss national banking policy.  This is also what makes the Euro a quite good currency: the fact that many states use it, make that the individual political influence on the European central bank is limited.  The Euro would become much weaker, if there were a stronger European government.  The US dollar is strong because even though it is highly politicized, it works still as a world reserve currency, and especially, you buy oil with dollars.
But nobody is using nor dollars, nor Swiss francs, as a long-term investment.   (as a store of value, to hide it from sticky fiscal fingers, yes, until recently the Swiss franc served at that, but that is because it is dark money mostly - what I thought was going to be replaced by crypto).

A currency, though, that is "backed" mainly by "store of value in the long term" (and not, where this store of value is a side-effect from the value of that currency as a real currency) is, in my opinion, most of the time, a bubble.  The only thing that is not like that, throughout history, is gold.  But gold is special.

In fact, I also think that Bitcoin as it is today (with rogue miners still sticking around) is not quite on par with any decent currency specifically as a currency. That said, I don't think that LN would turn Bitcoin into something entirely alien and different. Indeed, it will be a different Bitcoin, but it will still remain Bitcoin, anyway. If what you say were truly applicable, we would already be using something which is not Bitcoin (since today's Bitcoin differs substantially from "canonical" Bitcoin as it was conceived by "Satz"). Further, I differentiate between US dollars and Swiss francs in relative terms, not in absolute value. In other words, the latter would be better as a store of value, while the former as a means of payment, but that doesn't mean that you should necessarily store your wealth only in Swiss francs. Fiat money is not a very good store of value as such due to the lack of what can be loosely called intrinsic value

Apart from transactional utility, of course

In fact, any money which is de facto (1) backed up by some worthy asset or directly represented by that asset, for example, by gold. Europe was full of silver in Medieval times while gold was rather scarce back in the day (at least, before the outbreak of the Black Death in the mid-14th century when both metals heavily lost their value due to total population "depreciation"). So people were using silver as a means of exchange while gold as a store of value. Not surprisingly, that kings and other rulers demanded taxes to be paid in pure gold. They were not fools!

(1) Certainly not like the US dollar which was only de juro backed up by gold after the Bretton Woods conference of 1944

I really don't think that most people HODL bitcoin for "saving", that is, keeping the same value over a long time (maybe with a very modest increase).  "putting aside for later".  I think most people hodling bitcoin do so because they expect/hope for/ a spectacular rise in price "when bitcoin will replace he world's gold" or "when bitcoin will replace the world's fiat", because "only 21 million coins for all that wealth, makes for a huge price, hell, with my 20 bitcoins aside, I'll be almost a billionaire !".

In fact, this is the wet dream of re-living what early adopters of bitcoin could see: from 10 000 BTC for a bloody pizza to $1000 for a BTC !  "imagine I was the guy selling the pizza !".  The belief that "it is still just the beginning" and that still a big factor is in view (when all the gold will be replaced by bitcoin, or when all fiat will be replaced by bitcoin, when bitcoin will be the world's mainstream currency).

That's not how I saw my "savings account" when I was young.  I wasn't expecting when I put the equivalent of $20,- in it, to be one day a millionaire.   I really don't think that most people buying bitcoin, want to get out "about the same buying power they put in - saving" 20 years from now.

But could it actually come that way in the end?

As to me, the major Bitcoin drawback as of now (barring rogue miners of course, but they are conceptually rogue, not technically, which is what I'm concerned here with) are slow confirmation times and high fees (let's assume miners have nothing to do with that), so if we remove these hurdles and make transactions ping-time fast as well as scalable without limits and cheap as dirt at that (or even cheaper), we would see a spike in real world usage of Bitcoin. Right now you make a payment, pay a sizable fee, and then wait, wait and wait till your payment finally comes through

Well, that's already what happens essentially with credit card payments, so what would move people to leave those for crypto ?  One always talks about the internet revolution, but there WASN'T such a network in place, and internet offered a lot of totally new possibilities to people. 

I see it like PC systems.  Windows rules, and there was also Apple.  When linux started to become usable for non-geeks (early 2000 or so at best), the place was taken.  Linux didn't overtake the PC.  I use linux at home and everywhere, but I'm pretty much alone.  Linux broke through because there was an entirely new application world, mobile devices, and it got there through a centralized industrial force: Google with android.   People are much much more wary with financial stuff than with their PC.  The law is much more wary with everything financial than with your PC (for the moment).  In other words, I think the place has been taken, and it is a firmly held place by the most powerful forces in the world.  Crypto doesn't offer much to the mainstream that isn't already provided for.

You can say, my credit card costs some money. True, but you do get a service in return, from legal protection, to insurance, to a legal framework that you can turn to when you think you are being scammed.  As I said elsewhere, what banks take, is small beer to what the state takes as taxes.

So I don't see crypto go mainstream as a means of payment.  Most people around me know of bitcoin.  I'm not aware of anyone wanting to use it. It is not that they never heard of it.  They simply are at best, neutral with respect to it, but most are outright hostile about it.  Most say it is to do things that are illegal, and I'm one of the few people who is actually a proponent of illegal things.  Most people in my environment are openly hostile to anything that is illegal or could give the means to do illegal things even if not intended that way.

You don't see the forest for the trees

Payment cards are as centralized as anything that comes from a single company. The final settlement of payments made via such cards still takes a few days, you should not forget that. And this system is not as scalable as many erroneously think. It cannot be smoothly scaled up with a lot of new users joining the system. And what is most important here, scalability is not an inherent and integral part of the system so it will be expensive. You would need more banks to scale up efficiently. It is different with Bitcoin since potentially every Bitcoin user can set up a payment channel. In this way, the system becomes even more scalable with further expansion. In other words, scalability is built in and this is really fascinating. This is the concept of money accomplished in practice

Well, central control is usually an advantage when it comes to scaling.  Central control, and distributed treatment, is usually the most scalable solution.


Huh ?  It is up and running for years.  How many people have credit cards, bank cards, things like that ?  Any decentralized solution can always also be implemented easier and cheaper by a distributed, centralized system, because there are central points of trust, which resolve a lot of issues that are difficult to solve in a decentralized system.  So it is almost a theorem that if a decentralized system can attain a given performance, a similar, centralized distributed system can reach the same performance.


I have the surreal experience here that you are explaining that what is happening every day, cannot happen and will be too expensive ?  Most buying online *is already* done with normal banking.  All of Amazon's business is pure credit card stuff.  Hello ?  It *will be too expensive* ?

He's still actively involved in the community, just under a different aliases.

You don't get my point absolutely

Let's assume that you have 1000 users and just 1 bank (or a payment processing company like MasterCard) that processes payments. If the number of users increases 1000x and reaches 1M the processing capacity of the bank will likely get quickly overwhelmed. Even if it doesn't, the same 1 bank will have to process 1000x more transactions. Now imagine that 1 of every 10 users can process transactions in a decentralized way, and what will happen if the total number of users increases the same 1000x. The processing capacity will increase just as much since the scalability is built in (this is the crucial point here) in the system itself and it comes at no cost at all since the same 1 user will process transactions for the same 10 people as before


You talk as if you have been frozen for the last ten years, and when you are told about Bitcoin, you say that it is impossible

There are two points here.  MasterCard doesn't have to scale up by yet another factor of 1000, because they already have a big part of the world as their customers.   There is no "infinite amount of customers" and hence no unbound scaling problem.  The only reason why we talk about scaling problems with crypto, is that they already saturate at microscopically tiny levels of transactions, but we don't have to scale up to the size of the universe.  There's a finite and quite limited amount of customers and daily transactions to have had.  When that is reached for a system, the system is good enough.  It seems to me that companies like MasterCard are already covering a significant part of the market, so their biggest "scaling problem" is maybe a factor of 10, in their wet dreams.

The second point is what I already said: if a decentralized system can do it, a centralized, distributed system can do it too.  Take your "one out of 10 users" and replace that by a node belonging to the distributed system.  Hell, maybe the bank can find an agreement with one out of 10 of their customers to have a terminal in their house !  In the beginning, this is how commercial internet got started: certain ISP just gave free internet access to customers, if they could install a rack of electronics in their basement, so that they had calling points all over the place.  I have an ISP that uses my home router also as a WAN emitter for customers passing in the street.  But this is a centralized, but distributed system.

The only difference between a distributed, and a decentralized, system, is political, or in other words, who knows the "admin password".



I don't see where you get that from.  I'm saying that centralized systems have much less difficulties in handling large volumes than decentralized ones.  You tell me that centralized systems will never be able to handle eh, the traffic they are handling daily.

I'm not saying that bitcoin is impossible.  I'm telling you that it proposes a difficult solution for which people have already a well working solution since years, and that that difficult solution has more problems scaling than the system that doesn't need to scale any more, because it has already reached mainstream adoption and usage.

The main issue with your reasoning is that the question is not about users

Obviously, it is about the number of transactions, and, honestly, I don't think these companies are anywhere near "already having a big part of the world as their customers". Whenever I'm at a cashier's I see only maybe one out of ten buyers paying with a payment card (me included). Anyway, the question is about transactions, not a number of users, and the former can increase pretty steep


Why do I have a feeling that you are trying to sidestep the issue?

How are you going to replace "one out of 10 users" by a node belonging to the distributed system? What is this node exactly? The only "viable" solution to solve the scalability problem that such a system will inevitably face if the number of transactions surges is to increase the number of banks in the system or to increase their processing capacity by adding more equipment. It should be straightforward that this has nothing to do with an inherent scalability that I'm talking about which grows organically together with the system. Further, your argument of buying processing power from clients is pointless since it essentially comes down to just using the distributed decentralized payment system that I'm speaking of (though in a strange, bizarre way). I guess you can't have it both ways. In other words, you should stick to your guns

There's maybe a cultural difference then.  Where I live, almost everything is done with credit cards.  At the supermarket, at the gas station, even at the baker's, grocery shops.  Even buying coffee, although that is maybe 50/50 done with cash.  I rarely have more than 10-20 Euros of cash in my wallet, unless I want to do something without taxes or so.  I essentially pay everything with credit cards/bank cards (no difference, same piece of plastic), down to amounts of about 1 or 2 Euro.
I'm doing hundreds of transactions every month only using credit/bank cards, and so are most of the citizens around me.  Essentially only elder people, children, and drugs traffickers pay mostly in cash.


I don't know.


As I said, if ever that's needed, give 1 out of 10 users some advantage, and install a working system in their home, that would do the same as their node, but now by central control.  But it is not needed.  Facebook doesn't need to have servers in 1 out of 10 homes.  Amazon doesn't, either.   Your internet service provider doesn't need that any more, either.

In a centralized system, transactions are rather small amounts of network data, rather easy to process.

Yep that one post is the I told you so.
On the other hand consensus at that time probably didn't seem like a big issue but alas it was.

I also avoid using cash as much as possible

Though I have some cash reserves in case of emergency, naturally. But I understand that if I'm extensively using payment cards, that doesn't mean that everyone around me uses them as well (though some certainly do). It would be an obvious case of selection bias (I hope you know what I mean). Anyway, we have 1.4B Chinese and almost as many Indians. Do you really think that even one tenth of them uses payment cards? I doubt it


I guess you first have to explain why anyone would ever want that

If you are going to say that banks and payment card companies are going to pay for these nodes, then you have to explain how that would be conceptually different from just buying more processing equipment. As you can see, this still comes down to expenses, while in case of an expanding decentralized payment network, the capacity expands on its own and at no cost at that. Further, what you say is just pointless as such since what you suggest means losing control over payments and you no longer remain "centralized". Basically, you just confirm the infinite scalability of a payment mesh or grid built around independent payment channels in a trustless network (banks are trustees of MasterCard and friends, which is a key difference here). As I said before, you have to stick to your guns, i.e. not change your point halfway

And what does it change ?  If the banking density in those countries attains the banking density in western countries, why should there be a bigger problem for them to have credit cards than for us ?  Really, centralized systems have absolutely no problem with the amount of customers.  Facebook and amazon need to handle more data and processing than banking for the same number of customers, and they don't have problems.


This is where your reasoning fails, because of course there are expenses by all these customers of a decentralized network: the use of their computing equipment and network bandwidth.  You can think that it is tiny, but then, with economies of scale, putting them on more centralized entities is even cheaper.  1 million people running software on 1 million computers at their homes, and using the bandwidth of their internet connections, is in total much more expensive, than a few distributed data centers serving all of them.  This is why the internet is not a P2P network, but has a spoke structure.  The internet is not, as it was in the beginning, a network of nodes linked together with point-to-point lines, making up a mesh: it has a hierarchical structure with many customers connected to centralized even though distributed ISP.  You don't connect with a wire to your neighbour, who connects to his neighbour, etc... as it was in the beginning.  You use lines to a centrally served entity.

In other words, the total cost for a large network is less per subscriber in a centralized, distributed architecture, than the total cost of a true P2P network.  As such, the centralized distributed architecture can ask a small fee to its participants, which is lower than the self-induced costs they would have to run a true P2P system. 

My "proof" is very simple: if ever it were possible that a true P2P architecture were more performing than a distributed, centralized system, the distributed, centralized system can take on exactly the same architecture as the P2P system, and hence will be just as performing.

I'm just talking here about the technical performance, not about any political viewpoint.  Centralized, distributed systems are, on the purely technical side, always superior to decentralized P2P networks.  However, decentralized P2P networks have political advantages, but that is their *sole* reason of existence: the lack of central authority, the lack of a single point of political failure.

The problem is that the technical advantages, by economies of scale, are such, that centralized, distributed systems tend to win almost always over true P2P decentralized systems, unless the cost and difficulty of the P2P system is accepted for its political advantage.  My point is that this is not the case in payment systems.  The political desire to be "independent" with money and payment, apart from some useful idiots like me and maybe you, is non-existent with the mainstream public.  It is even not there for communication. 

Everybody can set up a web page at home.  True P2P "social networking".  Nobody does.  Everybody uses facebook.  Very few people set up a Tor node.

Maybe it was agreed at the time, but it does not mean that people will accept it now, things change depending on the market, never keep something too long.

The banking density would come at a cost, right?


Indeed, their computer equipment just like network bandwidth would cost them something

But you seem to deliberately ignore to see my point here. If they are using Bitcoin (let's assume Bitcoin will be the first to introduce decentralized payment channels), they would have to bear these costs anyway, while turning their hardware into payment processing nodes would cost them nothing apart from what they have to pay anyway just due to simple use of Bitcoin. Why do you choose to completely ignore this?


Your so-called proof lacks one crucial point which instantaneously renders it null and void. Your distributed centralized system requires trusted network, and to expand it would require you to pay tremendous amounts of money. This is the point which you choose to ignore as well. As soon as you take into account this factor, your system becomes economically losing since you can add only trusted nodes to it (read you have to pay for them) while in a trustless network it doesn't matter (since every node pays for itself if it wants to use Bitcoin). Before it was not possible because there was no decentralized currency circulating in a trustless network. Modern fiat currencies are already decentralized but only within a banking system (where commercial banks are trustees of a central bank)

I hope you not only spoke on the lips only. Show idea that you think not to fail. Post your profile are here, i will remember you, we as hunter is readily worked if it is the best, remember that. I want to a real job. Not only rhetoric a moment

I don't ignore this.  But for the sake of my "proof", there is a difference between the bandwidth and a computer having up and running all or most of the time to "serve on the network", and the bandwidth, and only a smartphone application, to contact your local bank to do payments (like I do now).  I agree that the difference is not big, but we're talking about very tiny costs in any case per customer/user.  My point is that if you charge a fee comparable to the cost induced by having to have a computer running, and the bandwidth consumed, by millions of individual users, you have more than enough money to run a centralized, eventually distributed system that has the same or bigger capacity, handling what these people do.  Hell, most probably, the usual household internet bandwidth and a running PC can handle the *centralized* needs of a few tens or even hundreds of thousands of "bank customers" !   Let's estimate: if a centralized transaction costs, say, 10 KB (big, no !), and a typical customer does 10 transactions a day, that would put him at 100 KB a day of bandwidth.  Now, I have a modest 1 MB/s link, but I could get much more if I wanted to.  That means I can serve 10 customers per second, or 10 000 customers in 15 minutes at maximum, so 100 000 a day seems feasible.  With a single simple PC and a household bandwidth.   So a local bank office, with a very small data centre in its basement, can easily handle several millions of customers.  Centralized banking is really, really simple as compared to decentralized banking, because there's no consensus to be found, there's no trustlessness to be solved, etc....  

Suppose that the "negligible cost" of running your PC and your network bandwidth is $20 a year.   Hell, then the small data centre 10 times bigger than my home PC and some more powerful network connection, serving a million customers, could reap in $20 million per year.  With $20 million per year, you can power such a system with personnel and everything !

Imagine, a banking fee of $20 a year ?  Most banks are way more expensive, so the "network cost" is really, really nothing.

Can you imagine people finding $20 a year too expensive for their banking affairs, and wanting to do everything with their own PC ?   Hell, people spent of the order of $100 for a Windows licence, while they could have linux for free.


No, as you can see, a tiny data centre (well, simply a rack with a few industrial PC !) can easily handle a million customers or more without any hassle in a centralized network, at a cost that is probably even smaller than the hidden cost of running a decentralized system yourself.


The point is that the cost per customer in the trusted network is smaller or at worst comparable to the self-inflicted cost of the trustless system.  

You don't build trustless systems because they are economically more performant, they aren't.  They are way more expensive.  However, you build trustless systems because for political reasons, you are willing to bear the extra cost and hassle to avoid the power of centralisation.  But it comes with a price.

[Quote from: satoshi on October 03, 2010, 13:07:28]

https://bitcointalk.org/index.php?topic=1347.msg15207#msg15207


Counter argument

[Quote from: caveden on November 20, 2010, 05:19:29]


https://bitcointalk.org/index.php?topic=1347.msg23049#msg23049


So, Satoshi already chimed in on this long ago....it was all already foreseen.

You are again severely distorting the facts as they better serve your point

In this case, you compare things which you simply can't compare. You compare a full node running as a payment channel with a smartphone with which you can only make payments, not process them. I guess this is not a valid comparison by any means. First, you should compare a payment processing node with your rack full of "industrial PCs" (and consequently their costs), and, second, I could access a payment node with the same smartphone and make a payment through it just as easily as you would contact your local bank with it to do basically the same stuff. I think you may want to restate your other ideas since I didn't get much of what you tried to say. In the very least, you should address the flaw in your argument that I have just pointed out

I'm comparing a decentralized system, where your participant needs to run a full node and be online to process LN transactions, to a centralized system where the bank's offices do the processing, and the customer only has to chime in with his smart phone application when he wants to do a payment, if it isn't the terminal at the cashier that is doing it for him, because these are the two systems we are comparing.

My claim is that a centralized (even though maybe distributed) system is always at least as performing than a decentralized system, because in the worst case, the centralized system can take on exactly the same form as the decentralized one ; a hypothesis I didn't even need in the particular case we're considering, but which I will try to take on here now.

Your claim is that a decentralized system "pays for itself".  My claim is that the hidden cost of this decentralized system are largely capable to pay for the visible cost of a few distributed, but centralized nodes that handle all the traffic.

If each of the participants in the decentralized system works as a "payment processor", then the (small) overhead of each of these nodes at the place of each of these network users, is in total much larger than the cost of a few centralized nodes that handle the same load, where the customers don't have to bother at all, and just pay a small fee for the service provided.


Ah, but if you are considering that not every node in the decentralized network is a "payment processor", but only "one out of X", then the argument becomes even easier: replace these decentralized payment processors by centrally controlled, distributed controllers ; it would most probably not be practical, because X would be too small a number: if X is 1000, that means, every 1 out of 1000 participants has a "payment processor node" in the decentralized system then we would have "banking agencies" which handle only 1000 customers.  There are better economies of scale to be had by putting many of these into one single small data centre.  But for sake of argument: each of these decentralized "payment processing nodes" would be replaced by a "box from the bank" that you place in your home, but cannot access.  If you do so, you get a "free bank account", while others have to pay a small fee.  You cannot do anything to the box: it is just connected to your network, is entirely secured, and is remote-administered by the bank's officials.  You are just a bank customer, that accepts to place this box at your home, in return for the favour of a free bank account.  

The network configuration is then identical to the decentralized one, so the more customers, the more network nodes the bank has, in exactly the same way as the decentralized system, but the difference is that the box is entirely controlled remotely by the bank (that's why it is a distributed system and not a decentralized system).

As I said, the bank won't do that, because it is more hassle to put 1000 boxes at 1000 customers, rather than to have one single office that can handle 1000 000 customers directly.  The 1000 boxes at 1000 users is the decentralized system ; one hub with 1000 000 customers is most probably what LN will give us for reasons of economies of scale.

Yes, the bank has to finance a box for every 1000 customers.  However, the decentralized node operator will also finance his computer and network with the fees he takes.  So if the bank asks these same fees to customers (not having a box at their place), it can normally finance without problems the box it has to put at the special customer's place.

But it can apply economies of scale, and use more performing data centres.

You knowingly tried to compare what you simply can't compare

And now when you got caught with that (for the sake of your "proof"), i.e. comparing a full node processing payments with a smartphone which is only requesting that processing ("a computer running all or most of the time... and only a smartphone application"), you backpedal your comparison. I'm not much interested in this sort of discussion since it is obvious that you are just weaseling out of your own pitfalls. I may be unfamiliar with some technical details but you can't hope to push through such stuff. Anyway, I won't let you get away with it since it shows that you don't have substance behind your claims if you stick to these tricks (you should understand what it means for the credibility of your claims)

I'm not.  Try to build logical arguments instead of trying to make a trial of intentions on my back, and try to understand what I'm writing instead of thinking I'm ill-intentioned.

I'm telling you that a centralized but eventually distributed communication system is always, purely technically, more efficient and more performing than a decentralized one, simply because the centralized distributed one can in principle take on exactly the same TECHNICAL topology as the decentralized one, but it has more possibilities than the decentralized one.  So the set of possible technical configurations of a decentralized system is a SUBSET of the set of possible configurations of a centralized system ; as such, any technical metric on the whole set will never reach a maximum in the subset, that will not be reached in the overall set.

You claimed otherwise, that centralized systems are fundamentally limited in their capacity, while decentralized systems aren't, which is in obvious contradiction to the above, rather simple, observation.

I illustrated two forms of a centralized system: one with a bank office serving a million of customers (A), and one with boxes for every 1000 customers (B).

I compared that to two forms of decentralized systems: one where each node is doing processing (C), and one where only one out of 1000 nodes is doing processing (D).  (considering "decentralized" systems where only one out of a million nodes does the processing, begs the question of decentralization, although we could do the exercise, and the result wouldn't change).

In all cases, the centralized system can largely be financed by the hidden costs of the decentralized system.  The lowest cost system is (A).  It can be financed with the hidden costs of (C) (the 20 dollars per year times a million).
But as you weren't happy, I showed that (B) and (D) are technically equivalent and that (B) can be financed by the fees for (D) - which is the essence of my "theorem" (the subset).   Although most probably, (A) is cheaper than (B), so the bank will most probably go for (A) - which the decentralized system cannot do unless it becomes de-facto centralized.

I think that this is probably the best time for satoshi to make an appearance. Bitcoin community is divided by never before right now and the drama is all over the place, although the price is still staying high.

His words left on the forum has been speculated upon, and bitcoin "as satoshi intended it to be" is sort of an ideal right now.

I really don't think that he'll make an appearance though. I think he'll respect the community's decision as well.

I see what I see, and I think it's no good trying to call white black and vice versa. The fact is that you chose to bring forward a devastatingly deceitful and fraudulent argument, which, as to me, was a deliberate act and which tells it all if you have ears


I've told you already that this is not a technical matter

And I never meant it to be so since this is all about economics. You can take 1,000 independent nodes and 1 unit with the same processing power as theirs combined, and it will be more efficient on purely technical ground but it will be 10-100x more expensive than these 1,000 independent nodes. The latter would likely cost you, say, 1M dollars in total while the former dozen million dollars per unit (and don't forget about redundancy). The numbers are purely random but the relationship holds. And you basically don't have to pay anything for these processing nodes, they are paying for themselves (as I also told you already). In other words, their payment processing power comes at no cost to the system. No need trying to fool anyone here, you may want to try your luck elsewhere

How can that be ?  If it is purely technically more efficient, that's what determines the (open or hidden) cost.


Mmm.  That's hard logic  ;D
This must be the reason why people don't use facebook.

Seriously, your "argument" doesn't hold water.  If you agree on the fact that technically, the centralized option is cheaper, then that's all that matters, because that is the real cost.  The hidden cost for the decentralized users will make them ready to pay a fee of the height of their hidden cost, and that fee can, as per technically lower cost, largely finance the centralized option.  Running an online node at home all the time, or having to pay a fee of $20 a year, almost all people will go for the fee.

As I said higher-up, I remember in the 90-ies, internet being exactly such kind of distributed system, where some people had some hardware at their homes, and connected to others through leased telephone lines, serving as a meshed network of decentralized hubs for the internet.  Others could connect to them.  That quickly got replaced by centralized bigger data centres to which people were connected in a wheel-and-spokes way, and that's now the general structure of the internet.  Simply because one data centre with a few racks of electronics and 3 employees, is way more efficient and cheaper than the decentralized model.

You may want to learn the basics of economics. Top processors are times more expensive than the mainstream ones while their processing power may be only a dozen percent higher


Technically better doesn't mean economically cheaper

In fact, the direct opposite is almost always true. For a better efficiency you have to pay a higher price. But that's not the main problem here. The main problem is that to get a somewhat more efficient system you have to pay a significantly higher price. In short, you just don't know what you are talking about. But even that is inconsequential to the discussion. The scalability of a decentralized payment system is built in, i.e. it scales up together with its expansion (and thus its processing capacity is effectively unlimited). With a centralized system, its processing capacity remains the same, and if the number of transactions increases beyond its limits, you will have to buy new capacity. As simple as it gets. And I hope that will help you shut at last the fountain of empty verbiage you produce

You're right.  That's why banking never worked, and why nobody's using facebook, amazon or google.  Sorry for my verbiage, your argument is crystal clear.

Apart from the economics basics, you may want to learn more about how Google is actually built inside

Banking worked in the past and continues to be working so far simply because there was no such thing as decentralized "banking" in a trustless network in the past (in the form of payment channels). Strictly speaking, we are not there yet (you should know that yourself) but for issues not related to its advantages or deficiencies. Personally, if we assume free competition (i.e. no governments with their laws), I'm inclined to think that a decentralized payment system will quickly crowd out the current banking system. In fact, I don't even need to address this issue as such since this is how Internet itself is built. To access hosts on your network you use your nearest cheap router or switch (which is able to process only a few requests per second) and you don't have to walk to the top-level nodes (which otherwise should be able to process millions of such requests per second as well as have millions of ports) just to reach out for your neighbor. In this way, Internet is also scalable without limits conceptually (if we discard delays due to signal processing and the finite speed of light). You just need to add more digits (octets) to an address pool as the network expands