Bitcoin Forum

I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.

I think it is an economic attack, so I place it in the Economics forum. Also because I don't get good reception from Bitcoin developers when I try to post in the developers forums. Lets see if they ignore this thread or come post to refute it. I doubt they will.

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.

That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.

Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. Once they adopt one, they will stay with that one due to inertia and network effects.

Thus I see Bitcoin is doomed and it is not a solution to anything long-term, although short-term it shows us what might be possible with decentralized currencies if we were to improve them.

http://hackingdistributed.com/2013/11/08/fairweather-mining/#comment-1126378553


Other recent discussion:

https://bitcointalk.org/index.php?topic=318001.msg3607709#msg3607709

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Related. I have shown there is no economic advantage to a money supply that is constant:

https://bitcointalk.org/index.php?topic=13035.msg3609132#msg3609132
https://bitcointalk.org/index.php?topic=222998.msg3607535#msg3607535

Damn. If only there was a way the originator of a transaction could directly connect to multiple mining pools of his own choosing and send his transaction to all of them simultaneously. Oh wait, there is a way: the way I just said. ::)

I think you missed my point. That is why I had linked to discussion where I had already refuted this.

The masses don't see that in this attack. They see Amazon.com's website (or partner network) and click a button to buy.

You assume the masses are smart and concerned enough to demand their clicks on Amazon.com go to multiple miners. Sorry that is not the way the masses behave. I have much experience in marketing on the internet. Users click and and want to be done it. They just want their damn pizza. They don't get a rat's ass about your technological nirvana.

(take your rolly eyes smartass attitude and shove it up your ignorant ass. I am much more intelligent than you know and much more well studied on these issues. Beware)

gavin andresen is hugely keen to get as much constructive criticism as possible and the first step i believe is to have your theory peer reviewed before the developer team would consider looking at it or wether an action would be required. this is fair as only today i read a theory on twitter that bitcoin price rise was a short squeeze and reprinted by several msm pundits on twitter. they need to have theories filtered at a fairly high level or else its just unwanted noise

How do Amazon get to say how my transaction is sent from blockchain.info when I click their buy button (or any other wallet for that matter)?

My Bitcoin : The Digital Kill Switch article was published at marketoracle many months ago and I have a thread on this bitcointalk.org for that article with 100s of posts. How much more peer review does it need.

Read the link I provided in my OP. I will quote from it for you.

Thanks for the link, but I must be dumb, I can't work out whether that answers my question. Explain like I'm 5 please... How do Amazon control my blockchain.info wallet, I'm not using Amazon's downloadable wallet.

Okay I apologize. I need to remember I speak to different audiences with different expertise.

A miner collects transactions then calculates a mathematical hash of them, then proceeds to search for a solution to the proof-of-work puzzle for that hash. If the miner finds the solution first, the miner publishes it to (other miners and eventually it is published to) the blockchain.info.

So the blockchain.info only records transactions that are in already solved blocks.

Normally miners share transactions and pass them around to each other, so that which ever miner solves the next block, those transactions will be included.

But it doesn't have to be that way.  A miner could decide to not share his transactions with other miners, thus if the other miners solve the next block, the withheld transactions won't be that block.

So you might say then that Amazon.com customers would be angry if Amazon withheld, because transactions would be slower (they would wait until one of Amazon's miners solved a block). But I have several rebuttals to such a rebuttal.

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

How can my ass be both smart and ignorant at the same time? ???

Beware of what? Unlike you, I am not afraid of knowledge.

Blockchain.info is a web service, and is unrelated to the Bitcoin blockchain except in name. Maybe you need to well study it some more.

Main rebuttal is Amazon could accept 0-confirmation transaction and let the withheld data sit on its own miners until they win a block solution. The customer wouldn't notice.

I have other possible scenarios for how the attack could be done.

Already rebutted in my immediately prior post where I mentioned Amazon accepting 0-confirmation transaction.


It is your problem, not mine. Talk to your ass. Don't waste our time here.


What "knowledge"?


I know that dufus. I was simplifying it for him, because he is a novice.

The point remains that the blockchain (either the decentralized protocol one or the web service copy of it) does not receive the withheld transactions until a block is solved by the miners withholding.

You are just making noise. You haven't made any point yet. Typical pompous idiot.

(I would have respected you, if you had respected me)

When I send a transaction from blockchain.info, you're saying it's not getting propagated to all the nodes on the network and put in their mempool?

The attack is applied for transactions from customers of the cartel, not for transactions from customers of blockchain.info website although they are affected eventually as explained below.

If you are a very widespread cartel such as Amazon.com, joined with McDonalds, WalMart, etc, then you may control a majority of transactions. They could chose to not propagate them to other miners as I stated.

What is the benefit? Well for one motivation, stomping their competition. If their competition will gradually lose hashrate because other miners go bankrupt, then everyone who doesn't send through the cartel ends up with very slow confirmations, eventually hours and days as the cartel gains more and more control.

Oh so I have to be using Amazon's wallet.

Not really. It will affect you eventually no matter which wallet you use as I explained in my prior post.

Customers of the cartel naturally transact at the cartel's website or retail POS terminals. So the cartel can control these transactions and starve the Bitcoin network of these revenues. Eventually this drives the Bitcoin mining network bankrupt, except for the cartel's mining servers which continue to function. Thus the mining network becomes asymptotically 100% controlled by the cartel. So then it affects you no matter which wallet you send from. The customers of the cartel will be happy, but you won't be if you don't also become a customer of the cartel.

Once the cartel controls the mining network, they control Bitcoin. Then the government can regulate the cartel, so the government controls Bitcoin. So then they do whatever they want, including printing as many new coins as they want to.

Why would they bother though? If so many people are using their wallet and paying them, why not just keep the payments off the block chain entirely? Yes, they capture their own transaction fees, but only for cases where they could avoid a transaction fee entirely anyway.

Clever reply. I expect as much from you. Kudos.

Because offchain would not be protected against double-spend.

You are describing another way the attack could be done, to destroy the Bitcoin network by forking it, but it would probably be safer (less chaotic) to dominate the Bitcoin network instead as I have explained.

I envision the attack being invisible to the "dumb masses" customers, so you wouldn't want to be offchain then, because you lose interoperability for the customers on their coins and coin change.

Also the cartel would ramp this up over time, and not dominate initially so it is easier to insideously cancer the network than to fork, because fork requires dominating force from the start.

So now we are using their central servers to process transactions off chain, why is their system vulnerable to double spends?

This off blockchain server supports sending payments to every single user, merchant, service provider on the planet?

Wow that is both amazing and never going to happen.   If EvilCorp has 20% of the network hashrate then sending a payment to anyone not using their centralized servers will take 50 FRAGGIN minutes for first conifrmation due to witholding the the tx from the other 80% of miners.

Yeah I see that service being "super popular".  Even if people don't care about the network security they certainly don't want massively delayed txs just so evilcorp can rule the blockchain.

Double spends.  Also the issue is if at the time when block generation rewards are phased out the miners will decide to continue them instead of reducing as designed and this type of withholding might get the rest of the miners onboard with the idea since their income will be severely reduced.  Of course all of that implies that mining will be highly centralized which may or may not happen.  Currently it is more profitable to sell miners to public at BTC prices higher then the total projected mining return.  That may always be more profitable then centralized mining thus eliminating both problems.

I thought miners were to be funded by the theoretical rise in value over time.

They don't have to withhold those. I said it can be insideous attack, where they slowly starve the network over time and build theirs. They are stealing (siphoning) resources and building their mass. Eventually they reach critical mass.


Of course the cartel wouldn't withhold transactions sent to parties who are not in their cartel.

But I think you fail to appreciate even how small businesses use Amazon to sell through.

Cartelization is the natural outcome of commerce and we see it happening before our eyes now.

That doesn't make any sense. The miners have to earn something on each block they solve, else why would they continue to expend electricity and hardware ongoing.

No I don't think they will do it offchain. They will keep it onchain to maintain seamless interoperability while they attack.

I can see you are confused. Unfortunately I don't think you understand how Bitcoin works well enough for me to explain this attack to you. Maybe just let the experts debate me. I will try to reply to you, but seems you are really confused.

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.   Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.  It is highly possible that "dual use" miners in the future providing home heating and hot water can operate at below electrical break even cost.   If anything they probably will starve the massive datacenter farms which simply can't compete.

Well that would be great. But I don't think that is the way it will work out. If you are going to get that cooperation, you would do it now and if you can't fix it now, it will be more difficult to fix it later, because the vested interests will be so entrenched 20 years from now.

In short, the larger political systems are, the more difficult to get any consensus.


Eliminating which problems?

Great argument.

How about you explain how a central off chain system can be vulnerable to double spends.  Explain to me like I'm a child, I don't care.

Also, if they are not doing it off chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

They can't.  He is saying you (and 99% of other Bitcoin users) will be stupid enough to use their fee withholding cartel wallet.  Of course the OP isn't stupid enough to do that, just everyone else in the world is.  The OP needs to save you from yourself.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.


Amazon can put their miners in Kuwait.


Refuted.

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.

Well no.  Their gross revenue may increase 6% but then all of the costs in marketing their network killing centralized client, convincing the dumb masses to use it, promotional costs (like you said provide free txs), dealing with the whistle blowers and advocates convincing users to jump ship, etc, eat into that additional margin.

You also assume that other miners can't continue to operate profitably even with a reduction in revenue and will be forced out.

Exactly.  So it's easier to keep selling them overpriced money making machines instead of running those machines yourself.

If I understand this right by 2033, the miner reward will drop to 0.78125 btc. If Bitcoin is as big of a success as the core believers expect, this may be in the neighborhood of a million dollars. I could imagine a lot of small timers taking a loss on mining just hoping to hit the jackpot. Even if Amazon holds transactions till they win a block reward, I think there will still be enough competition. Besides, if the world is headed towards decentralization, Amazon might be lucky to have 5% of the world ecommerce business.

Then they don't have Bitcoins and aren't making Bitcoin transactions.   Problem solved.  Unless dominoes is also running an exchange (includin expensive MT license) I really doubt most users first interaction with  a Bitcoin wallet will be the dominoes website.

That is an insignificant cost. They just change the backend for the "1 click button" they have now. Customer has the option of adding a Bitcoin address account to their spending profiles.

Amazon spends money all the time on sprucing up their website. That is in their ongoing budget.


Cartels recapture promotion fees because they destroy their competition. Their competition has to join them, or end up losing customers. This is no different than predatory pricing of goods.


We already have whistleblowers trying to convince people not to use WalMart because it destroyed the decentralized small stores that used to exist in the USA. Failed.

We already have whistleblowers saying Amazon is centralizing commerce on the internet. Failed

Cartelization is the natural mode direction of commerce.

You can deny it if you want to. Study history.


Eventually asymptotically their revenue will be 0.

So now you are arguing that Bitcoin will not be popular for most mainstream commerce.

Cartels have the incentive of cutting out their competition by offering lower transaction fees. They also have the other choice to keep transaction fees for themselves instead of trying to build market share.

Both of those are easy as doing nothing bad and both are more profitable.

Either way, they siphon from the Bitcoin mining network.

It declines asymptotically to 0 BTC. Eventually there comes a time when your argument is false. We could debate over when that time is, but you can not argue it never comes.

Your point is incorrect for another reason too. The difficulty did not decrease because if it did, the cartel can much more easily dominate the mining any way. So your income decreased while the difficulty did not. Therefor you go bankrupt. Your lottery point is irrelevant, because that lottery win still comes after a very long time and you are bankrupt by that time. Even though due to variance some miner might win the lottery before going bankrupt then certainly would stop mining, because the probability of winning it again before going bankrupt is astronomically unlikely. This is all in the math of probability.

I'm still waiting...

If the cartel records your spends offchain, then you can spend them again onchain to non-cartel merchants. The Bitcoin money supply would be in effect doubled, tripled, quadrupled, depending how many separate cartels do this.

But then how do the cartels spend this offchain money? Receivers of this money would only be able to trust it has value within the cartel members. So which copy of the money would be worth more? Depends which network has more value.

So it just adds chaos and risk to the cartel's outcome. It might be a way to destabilize Bitcoin, but it looks like customers and members of the cartel would revolt. So I don't think this would be attempted.


I already explained this to you upthread.

I didn't say they can withhold what you send from a non-cartel wallet.

I said they can withhold only transactions that their customers send on the cartel's wallet. The cartel will not permanently withhold these from the blockchain. They only withhold them from non-cartel miners. Once a cartel miner adds a block, then all these transactions get added to the Bitcoin blockchain.

The transaction you send from a non-cartel wallet client is affected because the cartel miners may refuse to include your transaction in the blocks they win. So depending on what percentage of the total network hashrate the cartel has, your transactions might be delayed. Eventually the cartel gains so much mass and has bankrupted the non-cartel miners, so then when you send from non-cartel client, your transaction never gets added to a block or very delayed.


Sorry for the delay but yours was the most difficult to explain because you were confusing some of the issues. So I responded to yours last.

I have to concede that the mining reward will eventually drop to insignificant since I don't believe that Btc will double in value every four years once it reaches it's peak.

I have secretly wondered if maybe we should always reward at least 1 btc every block even though this would eventually lead to over 21M btc, but I won't say anything since I don't want to be stoned for blasphemy.

Eventually the 1 BTC would become too small as the 21M would become 42M, 84M, etc.. Yet that would help.

I am getting stoned (not the maryjane type) but still alive.

I think an altcoin is a more viable solution.

This issue isn't going to affect Bitcoin until most of you have long since made your fortunes and exited.

I'm not sure you understand off-chain transactions. 

Lets interperate your sentence using what we have today:

1) I have bitcoins on MtGox.
2) I spend these bitcoins by sending them to another MtGox user or to MtGox themselves.  Lets say to buy a MtGox T-Shirt.  This transaction is recorded centrally on their systems.
3) I now send these bitcoins again (wat), but now using the blockchain.  I send them to Bitstamp.

How?

You can't because #1 was recorded onchain, not offchain.

They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

The other reason I think it would be better implemented in an altcoin, is because there are differences of opinion as to whether this attack will really occur or be successful. Because this attack involves economics on a wide-scale, not just a localized protocol game theory.

I am of course fairly worried that cartels will be the natural mode of outcome for commerce if they are not prevented from it with the protocol. Yet some of the others here in this thread think it is not likely. I disagree of course.

So I am thinking it is better to let people vote on their opinion of this issue by buying the altcoin or not.

And because I thus think you can't make this fix in Bitcoin without pissing off too many people. Which would hurt Bitcoin more in the short-term, which is what matters most to your investments.

However the argument against an altcoin would be that the cartels won't use it if Bitcoin is vulnerable to the attack they will prefer Bitcoin.

But personally I am fine with that. I just want something I can use that isn't cartelized for the non-cartel merchants. I just want freedom-of-choice when I am 70 years old.

I was expecting you to say that :)

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

Let me remind readers that this offchain discussion has nothing to do with my OP and the attack I described. It a unnecessary tangent we are discussing here.

Why do I still own these coins if I have spent them?

JoelKatz implied or asked if (https://bitcointalk.org/index.php?topic=336350.msg3610047#msg3610047) cartels might prefer to not send the transaction to the Bitcoin blockchain ever. And keep them offchain. Did you get it now?

P.S. I don't think they would choose that strategy, so please stop cluttering this thread with this off-topic discussion on not understanding the Bitcoin technology and terminology (e.g. offchain). If you still don't understand, please send me a PM and I will explain there. I am not angry, I appreciate your posts, but please in PM so I can explain without burdening the thread okay.

If we aren't sending them to the blockchain ever then we are using Cartel-Coins, not bitcoins.

Look, you don't make any sense.  If I send bitcoins to my cartel wallet, I don't control those bitcoins anymore.  What I have now is a claim for those bitcoins from the cartel.

P.S I'm not cluttering this thread, your theoretical attack is baseless at best.  You proclaim to be the expert and look down upon other people, yet you can't even understand off-chain transactions.

Exactly. That is what JoelKatz suggested. I never suggested that attack. It has nothing to do with my attack. You are conflating what JoelKatz wrote with the attack I have described. Please stop doing that.


You don't have sufficient understanding. The others here understand that I do make sense. They may disagree with whether the attack I described is likely or not, but they don't say I make no sense.

JoelKatz's attack is not likely in my opinion, so I don't know why you continue to discuss it in my thread.


Agreed in JoelKatz's attack. But that is not the attack I described in my OP. Go talk to JoelKatz about his attack in another thread. That is not the attack I described.


Trust me, there are many people here reading and they understand you don't understand. It is very obvious you don't understand. You think JoelKatz's attack is my attack.

You missed my point entirely. 

My off-chain transaction debate has nothing to do with your theoretical attack.

I'm calling you out on how the hell I can double double spend bitcoins off-chain as you said here:

I never wrote that Bitcoins could be double-spent off-chain. Can't you read above what I wrote?

I said that the offchain coins would not be protected against a double-spend, meaning that the Bitcoin chain could still spend the coin again, which was also "spent" into the offchain.

The double-spend notion comes from the fact that the customer has gained double value from one original Bitcoin, the offchain coin and the Bitcoin coin.

If you still don't get this, please give up. It would mean you are hopelessly retarded. I tried to be nice to you for a few posts, but you just go on and on with your inability to grasp a simple concept.

Again readers, the above is JoelKatz's suggested attack, not the attack I described in my OP.

Excellent, at least we agree that bitcoins cannot be double spent off-chain, unless the system has a grave error.


Which party is spending the coin again?

MtGox has a pool of coins, the coins aren't linked to any customers.  When I send those coins to my MtGox wallet, MtGox now control them.  They could spend them straight away, do whatever they want, it has no effect on the customer.

Which word of "give up" do you not understand?

You've forgotten what I already explained to you upthread. You will get no more hand-holding from me. Sorry. I like to help people, but you have to be willing to not forget what you've already been told.

lolz  ;D, I am getting quite bored of this as well, we are going around in circles.

I will concede that you can't explain to me how a customer can double spend or benefit from sending coins to MtGox.

Done.

Retail cartel != MtGox

MtGox owns the Bitcoin on the Bitcoin chain

Retail cartel owns nothing on the Bitcoin chain, instead has issued the customer a Cartelcoin in exchange for the Bitcoin which was never received.

JoelKatz proposed that, not me.

Actually he may not have even proposed that. He may have implied that cartel issues Cartelcoins in exchange for Bitcoin which was received but never uses Bitcoins again after that.

Sigh.

Constant money supply is bad for crypto-currencies for more than one reason:

https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848

You can't have it both ways. If you need protection from double spends on the regular block chain, then you need to get your transactions mined as soon as possible. If you don't need protection from double spends, then you can conduct your transactions off-chain. This "attack" just doesn't make any sense.

There are (at least) two orthogonal cases of risk from double-spends.

1. Cartel is in race to protect against a rapidly issued double-spend which is trying to achieve this by propagating two spends where one ends up orphaned. Or where cartel is trusting a 0-transaction spend.

2. Cartel permanently accepts a Bitcoin as a cartel coin, without ever requiring the spend in the Bitcoin blockchain, thus the customer could at some point in the future also spend the Bitcoin and the cartel coin separately.

It doesn't seem like #2 makes much sense as a cartel strategy, so I assume we both agree it won't be employed.

So let's focus on #1.

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.

The the cartel can accept 0-confirmation transactions and wait until the cartel's miners solve a block, to add the spend to the Bitcoin blockchain.

Thus my attack works perfectly well as I have explained throughout this thread.


Sorry you presented no cogent, logical argument to support that opinion.

I wrote downloadfast.com back in 2001. I did payment processing for software authors back when we had to devise our anti-fraud strategies in-house. I know these issues very well.

Joel I have had several months to think about this. I have a very high IQ. You are not going to win this. But please keep trying. I want to accept all challenges just to make sure I didn't miss something.

i belive offchain, dont know why u dont

So, again, you have two cases:

1) Cases where the cartel cares about double spends, in which case it must get transactions into the block chain as soon as possible.

2) Cases where the cartel doesn't care about double spends, in which case, they don't need the block chain because this is the only service it offers.

Any cartel large enough to successfully make this attack work would have to handle a large enough fraction of Bitcoin transactions that it would just do them off the block chain. All the cartel would do is keep for itself transaction fees it wouldn't need to pay anyway.

But there's another reason this attack can't possibly work that's even more fundamental. The cost to the cartel of mining its own transactions would equal the benefit of not paying transaction fees on its own transactions. This attack is only sensible if zero-fee transactions rarely, if ever, make it into blocks. That means blocks will typically be full of fee-paying transactions. That means every transaction of its own that the cartel mines is one fee-paying transaction it gives up the chance to mine. So what's the point?

Cartel doesn't need to get the transactions into the Bitcoin block chain asap, for the reason I explained in my prior post.


You appear to be ignoring the game theory of a cartel. A cartel grows because it hurts competitors who don't join the cartel.

I explained the game theory upthread, and I will repeat a summary again.

As the cartel gains more and more of the Bitcoin network hashrate, it can delay non-cartel transactions by an ever increasing delay, i.e. asymptotically infinite delay.

This forces non-cartel entities to join the cartel else lose their businesses.


Thanks. Fundamentals are a genre of peer review that has high utility IMO.


I am not entirely following your logic here. Are you referring to mining them on the Bitcoin chain?

I will say this which might cause you to conclude that your line-of-thinking could be irrelevant. The cartel's incentive is the value of all the business that is not already in the cartel.

Could you clarify your logic further? I think I may understand, but I don't want to try respond until I am sure I understand your point.

I guess I am not so stupid after all, the author the selfish-mining paper took an interest in my proposed fix (http://hackingdistributed.com/2013/11/09/no-you-dint/#comment-1118886357).

But as long as it clears before Amazon ships, nobody will be the wiser.  And if Amazon is putting that much processing power into the network to save a few measly fees, I still think it's a net loss for Amazon (in our hypothetical).

Agreed on your first sentence which is support of my theory.

Disagree on the second sentence. Please re-read my last reply to JoelKatz on the profits cartels make by eliminating the competition.

In your 'cartel' situation, who controls the private key for the customer's wallet?
If it is the customer, then the cartel website cannot sign a spending transaction, and so cannot withhold it from the network, it would have to be send by the customer.
If it the cartel, then the customer cannot sign a double-spend transaction.

Sorry but you don't understand the technology well enough. The reason most readers dismiss my posts, is because they lack knowledge to ascertain how correct I nearly (as in 99.9%) always am if I've studied some matter for a sufficiently long time.

The attack as described in the OP is for example the customer issues a spend with his her private key to the cartel for example on the cartel's website or POS terminal. The customer would either give the private key to the cartel or sign in a client-side application provided by the cartel which would send the spend only to the cartel's server. Either case supports the attack. The masses do what they are told to do when visiting a retail website or storefront, as they just want to pay and be done with it. They don't care about your technological nirvana idealism. It is irrelevant to their purchase at that moment where they want their pizza and be on their way.

You raise an irrelevant point about double-spends (which incidentally I have also refuted in the preceding paragraph), because the offchain strategy was JoelKatz's idea and has nothing to do with the attack described in the OP. And I resoundly refuted JoelKatz's technical points as pertains to this attack.

This attack can't be disproven. I've thought out it for months and debated all comers in my Bitcoin : The Digital Kill Switch thread, as well in this thread. You can bet that none of the core devs will come here and debate me, because they know they will lose. And it is the sure way that any crypto-currency without perpetual debasement ends up as the government coin.

The only reasonable counter-point upthread was from DeathAndTaxes. Which I believe I also refuted because the cartel punishes competitors and thus takes a larger and larger market share over time, but everyone is free to make their own estimates on his point.

P.S.  JoelKatz is apparently a Bitcoin developer, but not a core one.

Actually the situation is precisely the opposite of what you assert. In a free market cartels tend to be unstable because it in the interests of members to cheat.

That is incorrect. A cartel grows because the competitors have no economic means to deny joining it. For example, with Rockefeller's Standard Oil he gained economies-of-scale that were impossible to compete with if you weren't larger than his operation. So you couldn't compete on price, so you had to sell your operation to him or join in the cartel.

Cartels are only unstable when the government breaks them up. But the government doesn't really break them up of course, they just pretend to. For example, they broke up the telephone monopoly, but then why does the USA have the worst price-performance internet in the developed world (http://www.huffingtonpost.com/2013/07/24/us-internet-speed_n_3645927.html)? Because the monopolies were sustained via a cartel of the entities created from the break up of the former monopoly. This is because cartels and government sleep in bed together.

Perhaps you missed the following quote which I wrote upthread:

I've decided to respond to this theory in as much detail as I can muster, since it seems to be a perversion of my 'Walmart versus Target mining cartels' concept from two years ago....



Indeed, it does make no difference.  I makes no difference now, however the miners are funded.  Mining has always been intended to be a competitive function that tends towards a zero markup.  I'll get there soon....


No, we could do it sooner than than that, and I expect it will happen within the next two years.  However, I don't consider it an attack, I consider it a feature.  I'll explain why shortly....


Not even close to being the first.  This is one of the set of memes that pops up repeatedly under the many "I'm a noob, but I alone am so smart that I have discovered the Great Bitcoin Flaw!" posts.  

Let me summerize the root of this (assumed) attack vector, for clarity.  If I miss a fine point, I'm sure that you will point it out, and we can adress it then.


As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

There are many counter-economic effects that would contradict the leverage that such a mining pool could gain over the network, so I'll only go over a few of the most significant.

First and foremost; the mining pools, nor any other miner, are not significant contributers to the fee paying transactions on the bitcoin netowrk.  Said another way, it's not in the interest of merchants to only submit their transactions to one mining pool, even if it's the largest.  It's in the interest of merchants to spread any transactions intended for themselves as far and wide across the bitcoin network as possible, as that reduces the risks involved in a well timed double-spend attack.  And being a p2p netowrk, there is no way for a mining pool to prevent any valid transaction from spreading regardless of whether or not that particular mining pool forwards said traansaction to it's competitiors or not.

Second, the largest miners have an economic incentive to cooperate with one another with regard to the bandwidth and information flow across the network, since working together they have a small, but notable, speed advantage over small mining outfits that must rely on slower Internet connections.  The more and faster peer connections major miners have to one another, the faster that they (as a group) can include those fee paying transactions into their own queues.  The faster they can do that, the more likely that whichever miner (among themselves) to solve the next block will have all of the fee paying transactions available at the moment.  Any effort to corner the market on transactions would be regarded as not playing square with the rest of the major players, and will end up getting that pool cut out of the core of the network, and edge connected miners have a slightly higher rate of orphaned blocks as well.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.  Since it's not safe to accept such transactions without confirmations, it then becomes highly in Walmart's own interest to sponsor a mining outfit that will process free transactions intended for Walmart's own wallet of addresses as quickly as possible.  Said another way, it's in Walmart's interest to pay a mining out fit (be it a mining pool, a seperate company, or an internal group to Walmart corporate) to process transactions at a loss.  Of course, it's also not in Walmart's interest to process a competitors' free transactions (i.e. Target) in the same way, so Walmart is also paying to keep Target's free transactions out of their own mining pools.  This sets up competing cartels, that each serve different players in each industry.  Say, as an example, that BTC Guild took contracts to mine for Walmart, McDonalds & Sears; while Eglius took contracts to mine for Target, Burger King & JCPenny's.  While this certainly is consolidation of the market for mining services, and consistant with the dirve towards driving the profit margin for mining to zero (or perhaps lower, under certain conditions) it's also impossible for there to be only one, because if any single mining pool were to gain more market share over the others, the others would suddenly be able to offer these out-of-band services for much cheaper to unrepresented merchants.  The cartels are, thus, self limiting in scope with regard to the bitcoin network itself, which is all that we really care about on the macro scale.

And fourth, there will always be a minority of small and sigular miners that mine at less than zero profit for various reasons.  One such reason is simply that mining produces heat in the winter, and thus a mining rig, once you already own it, is nothing more than an elector-resistive heater.  If you live in a area with both a high heat demand & relatively chaep electricty (i.e. Iceland) any actual coins your mining rigs produce become secondary profit.  No mining pool will ever be able to compete with that, if for no other reason than bandwidth consumptionbecomes a greater burden than solo mining in this context.

Questoins?  Objections?

Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.


No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.


Indeed! That is why the attack I described happens.

The cartels will take over the mining.

I mentioned the 0% transaction fee aspect of this attack upthread.

Slow down and re-read the thread more slowly and reflect it on it for a while before you post again.

Don't make noise here please. I will get angry. Be professional.

I'm not that interested in proving it, so you can keep your false pride.


That's not different.  Customers don't interface with a pool or miners now.


Granted.


Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

You're sticking with that, I see.


I don't care if you get angry.  I'm not going to read all this noise.  You can link back to whatever proof you have offered others, but I don't need to disprove your theory, you need to defend it.  Anger is a sign of your failure.  I'm not a professional.

Yes it is, because pools get transactions from numerous bitcoin clients (software apps) thus transactions can't be withheld from other pools.

Whereas the cartel can lock in the transactions and not share them because the customers are buying at the cartel's storefront (e.g. website or POS terminal).

It is an entirely orthogonal game theory.


So then don't say it is not different above.


You just put your foot in your mouth. You write "has no basis" and "they can't", when you should first ask me "can they?". Because you are incorrect.

Now wrap your brain around a point you failed to see.

The cartel has a % of the total network hashrate, and this % is always growing as they starve the rest of the network of transaction fees and delay transactions for the rest of the network.

Thus they can delay transactions. If for example they have 20% of the network hashrate, they can delay the transactions from non-cartels 20% of the time. This is Bitcoin 101 stuff. Go read the Satoshi whitepaper again, you apparently failed to comprehend it entirely.

And I thus explained why this spirals to 100% over time.

Now please stop intentionally pissing me off and learn how to conduct a debate professionally and cordially by asking questions instead of making baseless statements.



Because you did fail. You just couldn't see, but now hopefully you do.

You seem to enjoy using big words, but it's still not different however you say it.  An Amazon.com vendor may or may not be compelled to use the Amazon.com POS; but that is no garantee that the transaction can be kept within house, but even if it can....


Saying that Amazon can have it's own mining servers isn't remotely sthe same as saying that they can lockout the vendors from the bitcoin network.  You seem to lack a basic understanding of how the p2p netowrk actually functions.


This is a dodge.  Any native English speaker would know that my posing of the question above was retorical.  Either show how Amazon could prevent progagation of transactions across the main bitcoin network, or admit that you don't know how this part of your thory would actually occur.


All I see is that you had no point that was visable.  Again, it's your theory.  It's not mine to prove your theory wrong, it's yours' to prove my objections wrong.  You havent' even tried to do that.  You're the one that stated it as an economic attack.  I simply preesented four simple counter forces to your theory.  If you cannot address those counter points, then you have no theory.  Your back in class, son.


But how does the idea tha tAmazon can mine it's own transactions lead to this conclusion?  It's a stretch by any metric.  I've seen no argument that they can, economic or otherwise; and I personally know of several effects in the protocol that would undermine any such efforts, economic incetives notwithstanding.  I haven't even touched on those points yet.


Thus?  You've just made a conclusio without an argumetn.  You are presuming your conclusion, really.


Nope.  I'm not the one who missed something there.  BTW, I do agree that a major player can delay[/b] the procesing of bitcoin transactions under certain conditions.  The obvious problem with this is that delays are part of the protocol, and thus delays are not, into themselves, an issue.  Your premise depends upon Amazon preventing competitors from mining on fee paying transactions outside of their own network scope.  This is not possible.  If you disagree, show me how] such a mechaism would work.  With details, not vague statements.


You have done no such thing.  


Baseless?

Look whose acting all professional now.  You get one forum member who's been around long enough to have seen this crap before, and you just fall to bits.  This is why the developers don't pay you any mind, they know you're full of shit.

Wow, page 4 and no mention of proof of stake yet? I think bitcoin will adopt proof of stake at some level in the next 20 years to remain competitive and reduce the massive electricity consumption it would otherwise involve. Also if mining hardware is available in the format of electric heaters, hot water heaters, etc. then decentralized miners will always be able to operate cheaper than miners in a data center.

Once you have stake mining in addition to proof of work mining it becomes much more expensive to dominate the network.

MoonShadow is the type of person who is too stupid to understand (or too stubborn, I am not sure which) when he has been refuted. He will go on and on ad nauseum with noise, even after his points are clearly refuted.

I don't want to feed him, because he will never stop. He will try to bury the thread in noise.

The whole point of cartel is they won't let you in if you don't follow the rules. That is all I need to say to refute all that noise in his latest post above.

P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.

---

calin, I am aware the PoS would claim to avoid this attack. Also perpetual debasement of the coin is a fix with PoW.

Bitcoin might adopt proof of stake in the future, as the protocol does permit it to be spliced into the blockchain with some effort.  However, proof of stake is a much more complicated security model that has yet to prove itself.  Proof of work certainly works, even if it is computationally expensive.  However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly. 

If you can't be paid anything, you can't pay your electricity. Then you can't continue mining.


You missed the point that this entire thread is about when coin rewards diminish to near 0.

Please do not post in this thread again. You don't have the knowledge to post in this technical thread. Please. You are making noise.

If you continue to post batshit nonsense, I will raise this with the moderator. I want high quality rebuttals in this thread.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.  As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.  Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

I haven't analyzed that, and you may be correct the PoS doesn't eliminate the postulated attack.

Sure I can.  I'm doing it right now.  It's 33 degrees outside, my electric rate is 7.5 cents per KWH, and my basement needs supplemental heat anyway.  I also mine solo, and haven't caught a block in over a year, but so what?  If I ever catch another, that's just free money.  The need for heat pays for my electric consumption, and my mining rig is already a sunk cost.  If you think I'm unique, you're deluding yourself.


Go ahead and raise anything you like with moderators.  It's yourself who seems immune to reason.

BTW, coinbase rewards don't diminsh to near zero until around 2130.  So I doubt that either of us will live to see resolution here.

Now you raised the level of your dialogue and logic to something worth discussing. Thanks.


History has shown this. Yet you are correct I can not prove that cartels will or won't continue to occur as they have throughout history.

Thus you can't prove they won't either.

It is a stalemate, but I have history of my side.

Normally the market will take advantage of any profit opportunity if it is overall more efficient. So your job if you want to prove it won't happen, is to prove it won't be overall more efficient. This is probably impossible to prove one way or the other since there are too many potential exogenous factors.

I have history of my side as to the real risk of this attack. I also know the government and banks feel threatened by bitcoin (or at least feign concern, if they realize they can take it over). So there is a lot of motivation to make a cartel.


Not my attack. It was never discussed. I've read everything from the early days with Satoshi. They assumed the corporations would be benign.


Sorry but the logic is clear. If they can withhold a percentage of funding from the network, they gain a parasitic and spiraling advantage over the network hashrate power.

The only way to argue against this is to explain how someone can afford to lose money on mining. Two or more competing cartels? Still not a good outcome.


It is not easy for them to turn away. They get an ever increasing percentage of their sales from Amazon, because it is more efficient for both the customer and the vendor.

And many vendors are ready to take the place of those who leave.

Efficiency is always the reasons cartels win. This is how Rockfeller justified what he did with Standard Oil, including all the dirty tricks. He said he detested waste.

Correct but irrelevant because in my attack the transaction fees are withheld, so what is your point about fees can't be spent for some delay? How is that relevant my attack?

Generally speaking, POS implies that the higher the number of coins that any particular miner has in savings, and is willing to 'stake' (i.e. freeze for a term, in order to gain a mining advantage without interest paid) than that miner can gain a bias advantage towards either mining in general, or towards special numbered blocks.  So Amazon, under your theory, would be able to magnify their advantage somewhat by staking their bitcoin earnings, and make their odds of finding the next block even higher.  POS throws the 51% mining rule off a bit, making it more into a 66%/33% rule (lessor versus major stakers).  However, POS in practice means different things to different people, so it also matters in detail how it might be implimented.  POS has been attempted by several alt-coins in different fashions, but none have amounted to much as of yet.  So far, the market doesn't put as much faith into POS as do the founders of these alt-coins.  I contributed to the destruction of one such alt-coin, because the particular version of POS permitted an attack wherein a trusted node turns malicious. (pure POW such as Bitcoin uses doesn't have trusted nodes, all nodes are untrustworthy)  I just framed how such an attack could occur, and someone else actually performed said attack about a month later.  Now I can't even remember what it was called.

I've reported this to the moderator. I will not tolerate posts intended to deceive that have no information in them. This is a serious thread.

MoonShadow thank you for your contribution on PoS. I can't judge it to be correct or not at this time, so it will stand on its merits with no opinion from me. I do also have my doubts about PoS.

That isn't the attack described in this thread.

The OP is about a cartel (or cartels) withholding their customers' transactions from the other miners.

That is an optional mode of doing the attack. It is not required for the attack. It may help them accelerate the attack by drawing more customers to the cartel.


The other miners wouldn't process them any way (when coin rewards are near 0). The effect is still to withhold fees and revenue from the other miners.


I said the attack would still be possible for a coin that decided to make transactions fees mandatory. In bitcoin transaction fees are voluntary and variable, but I was just preempting the incorrect argument that mandatory and/or fixed-rate transaction fees would be a fix.

Historicly, cartels rise as a form of regulatory capture.  Said another way, cartels form functional monopolies in a regulated industry, within a country, because governments exist.  What influence any particular govenrment, or all of them together (unlikley), can have upon the bitcoin economy remains to be seen.  However, it cannot rationally be assumed that cartels will rise in an unregulated environment.  They never have before today.

And before you start spouting about Railroad Robber Barons or Standard Oil; the railroads were a government project from the start and Standard Oil was no more of a monopoly than Microsoft was during the 1990's.  They were simply market dominators who had not yet been out innovated by new competitors.


I could prove it, with great effort, but (once again) I don't need to do any such thing.  It's your theory.  In the long run, you could make a fortune betting your side of the theory if you are correct.  I'll stick with my side, and we will see who goes broke first.


You just talked yourself into a circle.  I can easily prove that a mining cartel cannot be the most efficient.  I can prove it with existing examples, and have literally done this more than once over the past three years with nearly identical claims of cartel/monopoly based theories.  The key you're missing is that the protocol doesn't require that miners be paid within the system itself, or even at all.  Fee less transactions exist, and they can be paid for out-of-network.  Beyond that, off-network transactions are not only possible, they already occur quite regularly; even if they remain a small minority of the total economy.  On-network transactions are the high-mark of trustless security, but Satoshi undrstood that not everyone would really require such a high degree of security, nor trustless interactions.  In fact, he was counting on parrallel networks (such as Stratum) to develop without his own help that would handle less perfect transactions among parties that trust one another well enough, and thus remove a significant amount of network traffic from the main bitcoin network.  By the time your attack could even be tested, the majority of transactions wouldn't even be using the bitcoin network at all, and the main network would be more akin to the ATM network banks use today.  More of a backbone of the most risky or sensitive international transactions than what Joe Six Pack uses to order an ebook for his kindle.


Motivation alone is not enough.  There also must be a credible regulatory path.  I don't see one.  If there is one, than government regulation is a greater risk than the rise of a single mining cartel.


Dude, that's not even possible.  Reading all of that, I mean.


I might be clear to you, but you don't understand the system yet.  Amazon can't withhold funding from the network.  They can only delay processing of their own transactions.  Time is definately money, and there is a hidden cost to Amazon to do this under any conditions.  They also open themselves up to a double spend attack if they do this in any significant capacity, and someone is going to use that against them eventually.  If you think that Amazon holding their own transactions so that other miners can't get their transaction fees is a problem, why not just issue fee-less transactions?  The fees would just be going back to Amazon otherwise.  You have not discovered something new here, AnonyMint.  Just because Amazon might refuse to pay other miners a mining fee, doesn't mean that they are denying funding for the network.  Other miners are just as able to ignore Amazon's transactions, and just as able to refuse to forward transactions to them.  In fact, I'm fairly sure that games like this already occur.  I'd be surprised to discover that no miners refuse to process free transactions, except for those who are on some kind of whitelist.  Miner favoritism is expected, but in the aggregate, has zero effect upon the network as a whole.  On the aggregate, the network is, and will remain, impartial towards fee paying transactions.  And fee-less transactions are expected to be ignored by a large portion of the professional mining class.  Why would it be any other way?  


I've already explained two conditions wherein miners can literally "afford" to lose money on mining.  You didn't even bother to respond to them.

Two or more competing cartels is an outcome that functionally prohibits the complete takeover of the currency, which was the endgame of your attack theory.  I can't think of one reason that a consumer should care about any cartels, if the currency continues to function as far as he is concerned.  Cartels aren't the risk, a monopoly is the risk, and that is impossible.


What do you think they will do if it's no longer efficient?  Do you think they will just sit back and take it?  Or do you think that they will contrive to come up with other solutions, with or without Amazon's explict permission?


So?

Ha!  I knew we'd get here eventually.  

Again, Standard Oil was not a monopoly, or even a cartel.  Standard Oil was a temporary market dominator, and could only remain such as long as it was the most efficient provider of services.  As for the dirty tricks, Microsoft, Coca-Cola and Ford have all been caught playing dirty trying to maintain a dominate market position that would eventually fall anyway.  No one still considers Coca-Cola to be a monopoly on soft drinks, if they ever did.  I don't know anyone who still buys the meme that Microsoft is, or ever really was, a monopoly for operating system software.

Whether they accept them or not is irrelevant. The relevant point is they won't receive any fees for those transactions. As the cartel grows, then more and more of the transactions will either be withheld from the other miners or sent to them with 0 fees offered.

At some level, those other miners go bankrupt. The cartel starving them of a portion of their revenue yet they still need to produce the ENTIRE difficulty of hashrate because the cartel is paying their own miners from either the non-free transaction fees and/or from profits of being a cartel. Cartels gain more size and thus economies-of-scale efficiency as well they can charge higher prices once they have eliminated the competition.


I refuted that already upthread. Why can't you read the thread carefully?

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Only the non-cartel transactions get delayed, because the cartels miners won't include them when they win the blocks sometimes.


The market rate for transaction fees has nothing to do with my attack.

I only said that alternate coin designs would still be subject to the attack.

You waste my time here.

Incorrect. You will find that for example in the case of Standard Oil that the initial stage of the cartel was to be more efficient. The regulatory capture came later once it was such a huge operation that they could do regulatory capture and then later to protect against smaller paradigm shifts. So by the end, Rockefeller was a liar about efficiency. But in the start, he was more efficient for example by moving rails closer to farms (the cost from the farm to the rail was often higher than the long-distance rail shipping rate) and consolidating inefficient managements, etc..


hahaha you argue Microsoft didn't have a monopoly with Windows for decades.


Moving most transactions off the blockchain would indeed be a possible fix to my attack. It doesn't however make my attack wrong, because that is not the case today and no one can guarantee it will be so.


You haven't see the new laws that you can't root your cell phone in the USA?

Don't be too naive okay.


I do my research. And no better place to start, than at the beginning.


I have refuted this same point 2X already upthread. See my latest reply to anth0ny.


Sorry I must have missed that. You can reiterate.


Cartels always functionally merge because it is more profitable, i.e. they can charge higher prices with less competition.

That is monopoly.

Customers do buy from monopolies. They bought Windows like hotcakes up until Linux started to compete effectively recently.

Microsoft was not able to attain regulatory capture to prevent Linux, so monopoly was eroded and now dying.



You may not like it, but they stick with the monopoly. That is the way monopolies work out, unless there is an alternative. Cartels are good at regulatory capture.

And the government and banks have every incentive to go along with it in this case.

Nope.  This is where your theory falls apart.  Out-of-band transactions exist, and they exist because fee-less transactions are permitted.  The cartel can't grow, because it needs to have a dominate position among miners to start with.  It can't happen.  Currently, the bitcoin network is more than a 1000 times faster than the fastest unclassified supercomputer on Earth.  It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.  Even the NSA couldn't pull this one off, and they tried it more than a year ago.  You can't bankrupt the independent miners, there is simply no way to undercut the guy who's mining rig heats his flat.


You refuted nothing of the sort.  What you are describing is an intentional network split, although asyncronous.  The small side of the split always loses, there is no exceptions.  No cartel would be willing to commit the resources to acheive this end, because it would be a money pit until they hit 51% of the hashing.  Over 58,000 Petaflops.  The fastest supercomputer on Earth is 33 Petaflops.  And that is now, what will it be in 20 years?


Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.


That happens now.  No mystery there either.

Anthony- Your argument reminds me of inane theorizing done in grad school with game system models that seldom work in the real world.

This supposed attack would not work for as many psychological/behavioral reasons as technical ones. Among them:

People want authenticity and will avoid cartels that disrupt the authenticity of bitcoin. Especially given the premise of bitcoin.

Over time, a body of law may come about making the Amazon-type activity you postulate illegal. Even if that does not happen, there will be cooperation by miners, users, and others to have the end result of such a cartel be the same. Failure.

Your theory is seriously lacking in common sense, and your attention to technical detail and pronouncements re. your IQ indicate that, like your theory, your ideas are not informed by any insight into real human behavior.

Fail.

Offchain activity is irrelevant to my attack. You can't predict the future. If offchain becomes the dominant mode of commerce, then my attack will be less useful. But it doesn't make my attack not exist for as long as onchain activity is the norm. You can speculate all you want about the future being not on the blockchain, but I deal with the reality as it stands today. Please don't argue this point further because I will ignore it as it is not relevant. It is a strawman.

Stay on topic please if you want me to discuss.


Nonsense. Amazon controls more servers than the largest mining pools today.

Besides that is irrelevant and shows you don't understand this attack well.

Amazon controls a significant AND GROWING percentage of global commerce (heck I even order from them from Asia), plus there are other large outfits they can merge with in other countries, and thus they can starve the network of transaction fees when the coin rewards are insufficient.

Thus they can shrink the hashrate that they have to compete against by starving the pools of income.

Please don't make me repeat this again. I've stated it too many times already upthread.


Incorrect. I will let you figure out why that is nonsense.


Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.



It does not if the non-cartel includes a fee to pay miners!

You are just going around in circles in your arguments and forgetting the points of the attack.

If you intentionally waste my time again, I will ignore you. I don't have time for nonsense posts. Please try to think before you post. I know you are not stupid now.

This is not anth0ny's attack. He is arguing against this attack of mine. You must be confused or was that a typo?


Cartels happen often in the real world.


I already refuted this upthread in the early pages of the thread! Dam it read the thread before you post!

The customers of Amazon don't give a rat's ass about your ideological goals. They want their damn goods and click a button and are done with it. They follow what the website dictates.


The government (elite) power comes from control over fiat and you assume they will outlaw the way to take over Bitcoin and capture it?

Sorry you speak nonsense to me.

Fail.

You have just verified my point.  Standard Oil wasn't a cartel/monopoly to start with, they were the market dominator due to efficiency.  So they were the market dominator before they changed their methods to dirty tricks, in order to maintain an untenuable market position.  The regulatory capture was critical to maintaining that position.  Regulatory capture is (probably) impossible within bitcoin, since bitcoin is, itself, resistant to regulation.


They didn't.  They had a dominate market position, as I stated.  During the 90's they used copyright law and dirty tricks of their own to maintain that market position, but in hindsight, we know that it was already be eroded by GNU/Linux.  You're using linux right now, and you do it everytime you do just about anything on the Internet.  More than half of all servers are some flavor of unix successor, that was already true when the US Department of Justice was sueing Microsoft for anti-trust (monopoly) violations.  It just took a while for the rest of the market to notice the quiet changes underway.

If you disagree, make an argument; rather than just a childish remark.

Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.


I have seen that news.  Strangely, my phone is still rooted.  If the simple fact that a law against it existed really worked, then the US doesn't have a drug war going on anymore either.


I'm the naive one?


You still haven't read all there is to read on this topic.  You probably haven't even read all that I've personally written on this topic.  I wouldn't want to read all that myself.


Just because you say it, does not make it so.


One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins. 


Only if regulatory capture is an option.  There has never been an exception.  There is no evidence that regulatory capture is possible in bitcoin mining.


I already addressed this one.


That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.


My point is that there is an alternative, even for Amazon's vendors.  You just seem to be blind to the alternatives.


Doesn't matter if they do.

My post was directed at AnthontMint. Sorry for confusion.

The argument just seems so inane and theoretical and devoid of behavioral analysis and common sense.

Search this forum for the elusive "mystery miner" of yesteryear.

The government (elite) power comes from control over fiat and you assume they will outlaw the way to take over Bitcoin and capture it?

Sorry you speak nonsense to me.

Fail.
[/quote]

Anyone with a college degree or even self taught student of history ought to know that any elite is not homogenous. There are always divergences of opinion and action within the elite. Some of the elite will seek to protect bitcoin's authenticity, others won't. This is already happening. Again, you miss the most basic, rudimentary understanding of human behavior.

Sidenote: Are you being paid by a hedge fund or other entity that wants to accumulate more bitcoin for cheap? Your overly technical arguments and choice use of jargon seem like they're intended to mislead newbies. Or maybe you are just upset you didn't buy when the price was right. Or maybe you really believe your theoretical nonsense. In any case, you leave yourself enormous wiggle room by saying bitcoin will reach a trillion dollars before going to 0. Gee, thanks for the deep insight, like most human endeavors things will ebb and flow. Aside from self-agrandizing theoreticizing, I don't see much in your posts.

That is not an argument. It is 0 specific information content.

I already refuted your specifics.

I need to go eat guys. Be back later.

Offchain activity is irrelevant to my attack. You can't predict the future. If offchain becomes the dominant mode of commerce, then my attack will be less useful. But it doesn't make my attack not exist for as long as onchain activity is the norm. You can speculate all you want about the future being not on the blockchain, but I deal with the reality as it stands today. Please don't argue this point further because I will ignore it as it is not relevant. It is a strawman.
[/quote]

You can speculate as much as you like as well.  Once again, I don't need to disprove your theory.  You need to disprove my objections.  Thus far, you have failed to disprove any of them.  Not one, and I have provided at least 6 market forces that undermine your theory.  I have not even touched upon the technical/protocol reasons your theory is flawed. 


What part is nonsense?  First, show me that Amazon has control of 58,000 petaflops of computational power.  Then show me how they would be able to commit same to such a project without completely starving their existing businesses for resources.  I know that you can't show either, because while Amazon certainly has quite a network, they are actually using it for a great many other business functions.

Furthermore, the 33 petaflop supercomputer sits on more than 40 acres.  Amazon doesn't possess 40,000 acres of server farms.

I understand your attack better than you do, you just don't know it yet.  The percentage of global commerce that Amazon may control is what is irrelevant.  You don't know enough about the protocol for me to even explain why this is.


Won't work.  It's been tried already.  It didn't work for them either.


You've never actually stated anything of substance.  If you ever did, you'd have to admit failure when others ate out your substance.  Personally, I'd like to see it.


Prove it.


YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

Please address the question of whether you are being paid to spread fear re. bitcoin in order to influence the price.

Absolutely false. I would like to see an altcoin which fixes this attack.

Feel like poking at this somewhat amusing
Breaks it down into assumptions postulation hypothesis statements and fact
   
Transactions Withholding Attack
November 17, 2013, 07:22:44 AM
Reply with quote  #1
I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.

I think it is an economic attack (Assumption) so I place it in the Economics forum.

Also because I don't get good reception from Bitcoin developers (Assumption) when I try to post in the developers forums.
Lets see if they ignore this thread or come post to refute it. I doubt they will. (Assumption)

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. (Fact) The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. (Postulation and Assumption)

Then put them on the blocks found by its own mining servers. (Assumption (Heavy Centralization)

This would starve the rest of the network of funding (Postulation and Assumption)
and eventually the cartel would be doing all the mining. (Assumption)

They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers. (Assumption and Postulation)

That is the same as turning Bitcoin into a centralized currency, (Statement)  and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. (Assumption and Postulation) Once they adopt one, they will stay with that one due to inertia and network effects. (Assumption)

Thus I see Bitcoin is doomed and it is not a solution to anything long-term, (Postulation) although short-term it shows us what might be possible with decentralized currencies if we were to improve them. (Statement)

Well that was amusing

On the Assumptions

OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks

On the Postulation

OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

Rebuttal:

It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.

OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)

Rebuttal:

We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.

OPs viewpoint on the end result:

This would starve the rest of the network of funding (Postulation and Assumption)

Rebuttal:

Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability

OPs conclusion:

and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Rebuttal:

This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned

___

Sort of interesting but runs into a lot of assumptions and postulation that make it weaker when broken down through a case by case point analysis
Also it was mostly restating your points and your presumptions when you made your statements not really breaking any of your points down rather than clarifying your position

Seems clearer to me maybe it will be clearer to the thread too have fun you all  8)

freedomno1, I can't read that. It is very poorly formatted and worded. Click Edit and improve or I will ignore it.

No edit required :) (But I edited anyways should be clearer now it was basically a restatement of your own statement)
I just sorted your points into assumptions postulation facts and statements you made.

I copied your OP to the bone then added brackets where I thought your points fit

To that extent I put a (postulation) (assumption) (hypothesis) in Brackets after each of your sentences and left your OP untouched
If you can't read your own OP after each sentence then it is your poorly worded formatting :)

Carrying on I then evaluated each of your sentences in the categories below

Your Assumptions

Your Hypothesis

Your Postulation

Then provided a rebuttal to each assumption or postulation you made
Nice and organized

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Whereas when the non-cartel transactions are delayed because the cartel's mining servers don't include them in their blocks, the non-cartel customers using a normal bitcoin client will notice the delays.

So thus this drives the system towards competing cartels which can offer 0-confirmations due to repeat customers.

Then cartels merge to increase profits.

Same old shit that happens over and over in history.

freedomno1, I don't respond to something written in jumbled way like that. Sorry. My time is valuable to me.

I think I understand this attack, and will now summarize it in a form a five year old can understand:

http://www.youtube.com/watch?v=-vohNUTTx3A

Haha that is funny. I don't think the masses care enough for it to be $trillions in terms of the retail model. But I do get your deeper point which is innovation could create entirely new business models perhaps that are much more productive. Indeed cartels fail when the paradigm changes out from under them, e.g. Microsoft.

But I don't yet see retail changing, except we might someday be downloading and 3D printing and perhaps that would lower the capital requirement for retailing so much that it could disrupt amazon's lead.

But here is the thing. Amazon is not profitable now. They are already a front for someone who wants control of the market, not profit.

And the government will not give up their monopoly on money at any cost. Thus I can see the attack is already being formulated.

Bezos bought the Washington Post, so it means he must be part of or cowtail to the elite now. Mass media is definitely rubbing shoulders with the ilk of Bilderbergers.

Fine edited it :)

Meat:

OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks

On the Postulation

OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

Rebuttal:

It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.

OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)

Rebuttal:

We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.

OPs viewpoint on the end result:

This would starve the rest of the network of funding (Postulation and Assumption)

Rebuttal:

Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability

OPs conclusion:

and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Rebuttal:

This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.  ;)

OP assumes that something needs to be fixed when the Economic incentive to do so is not there as it would create an instability in the system
IT is after all an economic attack :D

So assuming there's something worth worrying about here, what's to prevent the same thing from happening off the blockchain:

1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%

Extending on that the Amazon cartel would need to have a majority of the network to initiate the 50% attack and we would run into the Double Spend and reverse transaction problems which could be significantly worth more to the Cartel than transaction fees from withholding blocks

OP assumes that the 50% attack is not a greater risk if it can control the servers its not decentralized at less than 50%
Each node being independent and what not
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining.

That makes no sense to me. My proposed fix is to not stop coin rewards.

And that has the benefit of increasing distribution, and possibility making it a currency and not a ponzi scheme as bitcoin most unarguably is (https://bitcointalk.org/index.php?topic=323988.msg3648893#msg3648893). If you want to refute that not-a-currency-and-is-a-ponzi point, do it in the linked thread, not off-topic here.

If you don't like an altcoin with coin rewards, then don't buy it.

I am not proposing to fix bitCON. They would never fix it any way.

Well if you can code a theoretical fix then propose it to the Dev team assuming they accept it as a real concern. (Why shouldn't I fix the attack?)

What is your proposed fix

Coin rewards and bonus blocks ?
And bitcoin is not a ponzi

I digress that is off topic here but the point must be stated for the record


Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.

Done now provide your solution to the problem in this thread

I refuted you over at the other linked thread. The solution is never stop coin rewards. That also improves the distribution problem, which fixes the fact that BitCON can never be a currency, as I explained in my rebuttal at the other thread.

Hahaha. Hahahahahahaha!


I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.

Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.



Of free energy and perpetual motion!  ::)

I didn't write "reduced" costs, I wrote "free" costs.


Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.   ???

As if they do it for free  ::)


And what do you think I am trying to do by explaining and defending this attack?

Fix it! With open source! And you are trying  to stop me!

Great logic you have there.  :'(

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

The reason the core developers won't debate with you is that you appear to be a know-all blowhard who simply ignores any posts that don't agree with your views, and repeatedly tell the entire world how much smarter you are than them.


You raised it, not me.

ok, ok, ok, I see your dick size. Now...

Any way, you still haven't refuted my attack.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

This line of thinking was already refuted. See my replies to JoelKatz.

BTW he is a Ripple core dev ;)

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

I guess you missed where I wrote the market cap will likely go to the $trillions first, and the market cap today is about $7 billion. So where does this "Shit! Sell sell sell!" nonsense come from?   ???

Who wrote about no more gold in the earth's crust (https://bitcointalk.org/index.php?topic=222998.msg3657876#msg3657876)?  ???

What universe are you reading from?

If by refuted you mean: waved hands at, blustered and ignored, sure.
If Amazon control the wallet, there would be no reason for them to have on-chain transactions in the first place, they would do the entire accounting in-house. Just like exchanges do already.

You said the 21 million coin limit makes it unarguably a ponzi scheme. If we suddenly had mined all of the gold in the universe, would that magically make gold unarguably a ponzi scheme?

The limit has no influence on whether people perceive bitcoin to have value or not. However, as long as people perceive that it has value at all, the limit puts *positive* pressure on the price. You can't turn around and say that same limit is proof bitcoin is a ponzi scheme.

You don't turn the steering wheel 15 miles before a curve that may never come.

There are definitely some cases where fixing a problem early has huge advantages. For example, if you're developing a product, it's better to fix a problem in the design stage than after manufacturing. And it's better to fix it after manufacturing than after shipping. And so on.

But when the problem is a possible problem for the far future, there are huge disadvantages to fixing it early. For one thing, the technology available to fix it will get better the longer you wait. The problem may never even materialize, in which case the effort expended to fix it is wasted. Other problems may actually materialize and it may be possible to fix both problems with the same effort. The attempt to fix the problem may create a risk of other problems that are more serious or more likely to appear.

Basically, you have to prioritize resources. If you can propose a fix and make the case that the effort and risks associated with the fix exceed the risk associated with the attack, then maybe you have something. But "I have an obscure theoretical risk that might or might not materialize in the future under circumstances that might or might not be plausible, why don't you all work to fix it?" doesn't cut it.

The merchant will care.  He will not get paid until the transaction is processed.  If the transaction is withheld from the majority of the miners, that opens an opprotunity for a double spend attack after product has been shipped.  This will harm merchants directly, and they will either not accept bitcoin transactions via Amazon at all (nullifying your trhoery altogether) or only accept bitcoin transactions with the added garantee from Amazon against double spend fraud.  This will hurt Amazon.

Because you don't know what you are doing.  You're welcome to start your own alt-coin, however, and see how it turns out.  Nothing is stopping you.

Just because you say it, does not make it so.


It may or may not reintroduce 3rd party risk.  Consumers may or may not be willing to invite government back into their economic activity.  Doesn't matter, it's their choice.  But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.


Reduced costs are free costs to someone.  Please respond to the effect that sero profit margin miners would have upon your theory.


They would do it for free, because it would still be cheaper at scale than their current "cost centers" for online commerce security, as well as the overhead with the handling and security with regard to both credit card transactions and cash transactions today.  Do you think that armored cars are costless?  That IT security gurus work cheap?  That Walmart puts cameras above every cash register because they trust their $7.50 per hour part time cashiers to be trustworthy with hundreds or thousands of cash dollars?


I'm not trying to stop you from fixing whatever you think is broken, just don't try to fis inside Bitcoin.  Go start an alt-chain, and if you're right about the problem, as well as how to fix it, then you will profit.  For that matter, considering your proposed fix, you don't even have to start a new coin, inflation coins without the block reward reductions already exist, and have for years.  Go have fun.

There is no way that this cartel starts with anything near 15% of the hashrate.

Ifs have nothing to do with my attack. We can debate if there will be nuclear winter this year too. I am not here to debate every possible exogenous factor in the universe.

If the blockchain is not the majority, we no longer have decentralized currency any way. Private offchain currencies means cheating and fractional reserves, which means failures and government intervention.


No they are not. Zero fees still bankrupts a miner with very small costs.


Obviously inflacoin is not compelling, because high levels of debasement are not very enticing to those who think a small coin supply returns greater ponzi system gains (oh we know they rationalize away that it is really a ponzi scheme so they don't pay attention to that tradeoff of not distributing new coins perpetually).

Large debasement and no other significant advances over Bitcoin are not going to succeed in the market place.

Disagree.

Even if so, 1% of the hashrate means the spend will be in the block-chain before it ships in most cases.

And even if not so, that is irrelevant because the customer will want to buy from the cartel again and not lose reputation.

Besides Amazon doesn't sell to those who don't provide a name, address, and credit card (i.e. some form of ID), thus they can send the collection agencies after you.

To argue that a cartel can't invoke the powers of the law against fraud is nonsensical.

As well to argue that a cartel can't issue 0-confirmation transactions is nonsensical, and this is a good thing for Bitcoin since the 6-confirmation time is 1 hour.

P.S. Tangentially to argue that a cartel which controls 15% of the online transactions (by value not quantity) can't control on the order of 15% of the network hashrate when mining will be solely funded by transaction fees is also nonsensical.

Are you so thick brained that you can't read what I wrote to JoelKatz upthread.

Let me write it again for you! You force me to hand-feed every lazy idiot who can't read what was already written upthread.

Do you think I like all these people wasting my time because you are too lazy to read? And you expect me to be nice to you when you intentionally waste my time and try to deceive in order to induce me to repeat what was already written upthread! Fuck man!

The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Duh!

Shut up mofo.

P.S. I seriously regret not making this a self-moderated thread. Major mistake on my part.

Yup I knew that. So he may not like my comment against fractional reserves. Frankly I have not studied Ripple enough to have fully formed opinion of it.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.

Can you turn on the physically disconnected webcam or microphone on my computer to see or hear what I am doing. Are you able of intercepting my IP packets or otherwise monitoring my internet activity. Have you put a virus on my computer and monitoring all my keystrokes and reading my hard disk.

It wasn't an argument, it was my personal opinion.

Please spread that opinion as much as you want to. That helps me.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.  With 51% of total hashrate, such a cartel could do so, but there are other consequences to that cartel for doing so, and even then it requires that the cartel keep it up.  If they ever stop, those delayed transactions complete nearly immediately.  It's apparent to many of us that you still don't really grok how the p2p protocol actually does what it does, so you have made up a theoretical flaw based upon what you believe happens.

You think that is so?  You must not be much of a libertarian.  Reputation matters a great deal here, and I have a very good reputation.  A great many members here will take my opinion of you on faith, whether or not I come across as a dick or not.

Your ignorance of Satoshi's white paper and Bitcoin 101 stands out like a blackeye.

The percentage of the hashrate controls the percentage of blocks won, which therefor controls the percentage blocks that the cartel can exclude non-cartel transactions.

Now shutup mofo.

Reputation? You just blew yours to smithereens.

A miner will do what he think is best for him. In most cases, he has coins and won't join the cartel. Neither as miner nor as customer since it will destroy his economy. The zero fees won't matter the more coins he already has.

I want to destroy my reputation.

Because those can't discern truth from filibuster don't deserve the extravagant fruits I will bestow on them.

Matthew13:10 The disciples came to him (Jesus) and asked, “Why do you speak to the people in parables?”

11 He replied, “Because the knowledge of the secrets of the kingdom of heaven has been given to you, but not to them. 12 Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. 13 This is why I speak to them in parables:

“Though seeing, they do not see;
    though hearing, they do not hear or understand.

John 15:19

19 If you belonged to the world, it would love you as its own. As it is, you do not belong to the world, but I have chosen you out of the world. That is why the world hates you.

Proverbs 12:1

Whoever loves discipline loves knowledge, But he who hates reproof is stupid.

Proverbs 17:10

A rebuke goes deeper into one who has understanding Than a hundred blows into a fool.

Deuteronomy

"The LORD will send upon you curses, confusion, and rebuke, in all you undertake to do, until you are destroyed and until you perish quickly, on account of the evil of your deeds, because you have forsaken Me.

Ezekiel 33:7-12

“So you, son of man, I have made a watchman for the house of Israel. Whenever you hear a word from my mouth, you shall give them warning from me. If I say to the wicked, O wicked one, you shall surely die, and you do not speak to warn the wicked to turn from his way, that wicked person shall die in his iniquity, but his blood I will require at your hand. But if you warn the wicked to turn from his way, and he does not turn from his way, that person shall die in his iniquity, but you will have delivered your soul.

Timothy 6

False Teachers and the Love of Money

These are the things you are to teach and insist on. 3 If anyone teaches otherwise and does not agree to the sound instruction of our Lord Jesus Christ and to godly teaching, 4 they are conceited and understand nothing. They have an unhealthy interest in controversies and quarrels about words that result in envy, strife, malicious talk, evil suspicions 5 and constant friction between people of corrupt mind, who have been robbed of the truth and who think that godliness is a means to financial gain.

6 But godliness with contentment is great gain. 7 For we brought nothing into the world, and we can take nothing out of it. 8 But if we have food and clothing, we will be content with that. 9 Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

Matthew 10

12 As you enter the home, give it your greeting. 13 If the home is deserving, let your peace rest on it; if it is not, let your peace return to you. 14 If anyone will not welcome you or listen to your words, leave that home or town and shake the dust off your feet. 15 Truly I tell you, it will be more bearable for Sodom and Gomorrah on the day of judgment than for that town.

31 So don’t be afraid; you are worth more than many sparrows.

32 “Whoever acknowledges me before others, I will also acknowledge before my Father in heaven. 33 But whoever disowns me before others, I will disown before my Father in heaven.

34 “Do not suppose that I have come to bring peace to the earth. I did not come to bring peace, but a sword. 35 For I have come to turn

“‘a man against his father,
    a daughter against her mother,
a daughter-in-law against her mother-in-law—
36     a man’s enemies will be the members of his own household.’[c]
37 “Anyone who loves their father or mother more than me is not worthy of me; anyone who loves their son or daughter more than me is not worthy of me. 38 Whoever does not take up their cross and follow me is not worthy of me. 39 Whoever finds their life will lose it, and whoever loses their life for my sake will find it.

40 “Anyone who welcomes you welcomes me, and anyone who welcomes me welcomes the one who sent me. 41 Whoever welcomes a prophet as a prophet will receive a prophet’s reward, and whoever welcomes a righteous person as a righteous person will receive a righteous person’s reward. 42 And if anyone gives even a cup of cold water to one of these little ones who is my disciple, truly I tell you, that person will certainly not lose their reward.”

Matthew 25:14-30

The Parable of the Bags of Gold

14 “Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. 15 To one he gave five bags of gold, to another two bags, and to another one bag,[a] each according to his ability. Then he went on his journey. 16 The man who had received five bags of gold went at once and put his money to work and gained five bags more. 17 So also, the one with two bags of gold gained two more. 18 But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

19 “After a long time the master of those servants returned and settled accounts with them. 20 The man who had received five bags of gold brought the other five. ‘Master,’ he said, ‘you entrusted me with five bags of gold. See, I have gained five more.’

21 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

22 “The man with two bags of gold also came. ‘Master,’ he said, ‘you entrusted me with two bags of gold; see, I have gained two more.’

23 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

24 “Then the man who had received one bag of gold came. ‘Master,’ he said, ‘I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. 25 So I was afraid and went out and hid your gold in the ground. See, here is what belongs to you.’

26 “His master replied, ‘You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? 27 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.

28 “‘So take the bag of gold from him and give it to the one who has ten bags. 29 For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. 30 And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.’

Mark 10:17-31

The Rich Man

17 As Jesus was starting out on his way to Jerusalem, a man came running up to him, knelt down, and asked, “Good Teacher, what must I do to inherit eternal life?”

18 “Why do you call me good?” Jesus asked. “Only God is truly good. 19 But to answer your question, you know the commandments: ‘You must not murder. You must not commit adultery. You must not steal. You must not testify falsely. You must not cheat anyone. Honor your father and mother.’[a]”

20 “Teacher,” the man replied, “I’ve obeyed all these commandments since I was young.”

21 Looking at the man, Jesus felt genuine love for him. “There is still one thing you haven’t done,” he told him. “Go and sell all your possessions and give the money to the poor, and you will have treasure in heaven. Then come, follow me.”

22 At this the man’s face fell, and he went away sad, for he had many possessions.

23 Jesus looked around and said to his disciples, “How hard it is for the rich to enter the Kingdom of God!” 24 This amazed them. But Jesus said again, “Dear children, it is very hard to enter the Kingdom of God. 25 In fact, it is easier for a camel to go through the eye of a needle than for a rich person to enter the Kingdom of God!”

26 The disciples were astounded. “Then who in the world can be saved?” they asked.

27 Jesus looked at them intently and said, “Humanly speaking, it is impossible. But not with God. Everything is possible with God.”

28 Then Peter began to speak up. “We’ve given up everything to follow you,” he said.

29 “Yes,” Jesus replied, “and I assure you that everyone who has given up house or brothers or sisters or mother or father or children or property, for my sake and for the Good News, 30 will receive now in return a hundred times as many houses, brothers, sisters, mothers, children, and property—along with persecution. And in the world to come that person will have eternal life. 31 But many who are the greatest now will be least important then, and those who seem least important now will be the greatest then.[c]”

Proverbs 23:5

5 Cast but a glance at riches, and they are gone,
    for they will surely sprout wings
    and fly off to the sky like an eagle.

Proverbs 13:11

Dishonest money dwindles away,
    but whoever gathers money little by little makes it grow.

2 Timothy 3

3 But mark this: There will be terrible times in the last days. 2 People will be lovers of themselves, lovers of money, boastful, proud, abusive, disobedient to their parents, ungrateful, unholy, 3 without love, unforgiving, slanderous, without self-control, brutal, not lovers of the good, 4 treacherous, rash, conceited, lovers of pleasure rather than lovers of God— 5 having a form of godliness but denying its power. Have nothing to do with such people.

6 They are the kind who worm their way into homes and gain control over gullible women, who are loaded down with sins and are swayed by all kinds of evil desires, 7 always learning but never able to come to a knowledge of the truth. 8 Just as Jannes and Jambres opposed Moses, so also these teachers oppose the truth. They are men of depraved minds, who, as far as the faith is concerned, are rejected. 9 But they will not get very far because, as in the case of those men, their folly will be clear to everyone.

A Final Charge to Timothy

10 You, however, know all about my teaching, my way of life, my purpose, faith, patience, love, endurance,

While the percentage of total hashrate controls the percentage of blocks that said cartel can control, they can't control the others in any fashion.  Control of blocks is not akin to control of transaction processing, nor is it akin to delaying of transaction processing.  I can accept that, under some rather extreme conditions, such a cartel could force up the market rate for transaction fees, and perhaps backlog transactions with insufficient fees for a period of time if blocks are regularly full; however this is a far cry from the assumption that such a cartel can delay those transactions to any noticable degree.  (It might be measureable, but not likely noticable to the average bicoin consumer/merchant)  That all changes at the 50% mark, ut getting there is no small task.  As I write this, the network Petaflops rate is roghly 1000 petaflops higher than when I mentioned it yesterday. It took three years to build the 33 petaflop supercomputer that holds the top spot worldwide.

You are displaying your ignorance of the proof-of-work technology.

This is wonderful. You are destroying your reputation all by yourself.

You better go research, because what I wrote (above in bold text) is 100% correct.

(variance will mean it is not a level percentage but will vary greater and lower, but that is irrelevant)

You think it out, or go ask JoelKatz or any knowledgeable Bitcoin developer.

I certainly could not make this case for Bitcoin, because the marketing demographic is based significantly on the asymptotic limit of 21M coins.

And the only fix I currently see is to not diminish coin rewards asymptotically towards 0.

But crypto-currencies are a broader topic than Bitcoin. And an altcoin could offer the proposed fix, c.f. my upthread reply to MoonShadow where I claim that an inflatacoin with no other compelling improvements over Bitcoin would not succeed in the market place.

Also inflatacoin is entirely the wrong connotation, since non-excessive coin rewards have no algebraic correlation to inflation (https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848), even Mises admitted that. Even at the current 12.5% per annum (monotonically decreasing) debasement of Bitcoin, the coin is deflationary (ahem, well not the past couple of days with the fall in price).

:)


Perhaps you misunderstood what they were talking about.  Have you ever considered the possibility that you're wrong?

anth0ny has been placed on ignore.

MoonShadow, you will need to find a more convincing way to weasel out of your display of ignorance of the proof-of-work algorithm.

You might as well put me on ignore also, because I'm not the one displaying ignorance while feigning understanding.

Isn't it ironic when a Dunning-Kruger dolt thinks he is arguing against me, yet the logic implied by what he wrote is supporting my point. He of course doesn't realize this, thus it is wisest not to point it out to him. Then hopefully he shuts up thinking he won the argument.  ;)

I regret the argumentation by filibuster here, i.e. very few new points were made after the first few pages of this thread. My huge mistake not to make this a self-moderated thread.

At the time I started this thread, I was thinking openness was the most important. Thanks to those who have taught me why open-source never works without a benevolent dictator (http://en.wikipedia.org/wiki/Benevolent_Dictator_for_Life) such as Linus Torvalds or Guido van Rossum.

...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen, this is Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!

Why would a Wookiee, an 8-foot-tall Wookiee, want to live on Endor, with a bunch of 2-foot-tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this case? Nothing. Ladies and gentlemen, it has nothing to do with this case! It does not make sense! Look at me. I'm a lawyer defending a major record company, and I'm talkin' about Chewbacca! Does that make sense? Ladies and gentlemen, I am not making any sense! None of this makes sense! And so you have to remember, when you're in that jury room deliberatin' and conjugatin' the Emancipation Proclamation, does it make sense? No! Ladies and gentlemen of this supposed jury, it does not make sense! If Chewbacca lives on Endor, you must acquit! The defense rests.

Seriously capable technical people don't view technical debates as public juries.

They view them as founded in facts and objective consensus, because rational people know when they are wrong (or at least rationality is recognition of lack of sufficient expertise).

Whereas, arrogant Dunning-Kruger technology neophytes who don't understand what they are talking about and motivated by what they naively perceive to be political "rewards", can filibuster forever and prefer a subjective political contest by obfuscating the information content with pages upon pages of 60 Hz noise. Political contests are won by whom every can make the most useless noise, because the other dolts in the public jury commit the erroneous conclusion the entire thread is noise.

That is precisely a form of Tragedy of the Commons failure.

This is one of the synergistic reasons why academics communicate using cryptic vocabulary and symbols, so the dolts are unable to participate.

P.S. It is intentional that the dolts will perceive this post as a victory for them, and the technologically capable will realize who won the debate.

The very fact that you regard this whole debacle as a form of a Tragedy of the Commons failure is evidence enough that only you regard yourself as a member of the "technologically capable".  In fact, most people have resorted to mocking you simply because trying to reason with you is futile, and none of us are here for your benefit.

Just remember you blew your credibility to smithereens with your ignorance of proof-of-work math upthread (https://bitcointalk.org/index.php?topic=336350.msg3657769#msg3657769).

And every time you try to reply with subjective political grandstanding, I am going to repeat the same statement until you shut up.

I'm amused.

Can you envision any information that might force you to reconsider your position?  Or are you truely this certain that you understand this topic?

Prior art?

http://arstechnica.com/information-technology/2013/11/the-best-way-to-take-control-of-bitcoin-rally-other-greedy-selfish-miners/

You claim that you've laid this attack out months ago.  Perhaps you have.  It's still not the first of this type of attack that I've seen claimed, but I have to admit that this is the first of it's type to earn it's own whitepaper.

Of course, the authors of this same whitepaper also offer a simple solution to this kind of attack as well, that simply involves a small protocol change in how mining clients decide upon the block version that they build upon.  I've yet to read this whitepaper myself, so I'm not yet ready to comment on their take on the attack.

Selfish-mining as published by those from Cornell is based on withholding block solutions until another peer generates a block solution then using a high gamma of propagation advantage to cheat the network.

That is entirely different than the attack that this thread describes. And yes I described this attack in the bitcointalk discussion of my Bitcoin : The Digital Kill Switch article earlier this year, which was widely syndicated. Google can find it for you.

No, it's similar in nature, but not quite the same, I think.

However, after reading the whitepaper for it, I can see how the 'selfish mining pool' can gain a profit advantage.  I don't agree that the end result is that all miners choose to join said cartel pool, because it would become rather obvious that one pool is doing this when they win block races too often for chance, and the rate of orphaned blocks increase.  Also, I can think of a number of counter-stragedies other pools could use to negate the selfish pool's outsized advantages, not the least of which is to simply do the same thing.  If all mining pools act in a similar manner, no pools can gain a profit advantage; but then orphaned blocks become much more common.  Much better would be to simply identify pools that don't play by the rules and take counter-measures until they quit acting badly.

More research is required....

Not similar, and I will not discuss it with you further. Please stop filibustering me with noise.

I'm amused you assumed any of those words were my own.

Credit: http://en.wikipedia.org/wiki/Chewbacca_defense

Incidentally, there's a simple diagnostic test for Dunning-Kruger effect. If you understand it mainly as a reminder you don't know everything, you probably aren't affected. If, on the other hand you use it primarily to call other people out for having it, well, I have some bad news for you...

Why?
You think they will create transactions that don't need to exist, just so that they can not send them out to the rest of the network?
From the network point of view that is the same as the transactions not existing in the first place.
Why bother with all the hassle, just to pay yourselves transactions fees that could be totally avoided by doing offchain transactions in the first place?

They need to gain hashrate in order to withhold transactions.
They need to withhold transactions in order to gain hashrate.
Phase 3: Profit?

You are confusing the cartel's transactions with the non-cartel transactions. The later are the ones that get delay. The cartel's miner excludes them when adding a block solution to the block chain.

In a cartel attack, the 50+% derives from having a majority of the customers, so they retain 50+% of the value, even if the 50-% decides to make a fork. Then they can attack that fork too.


This was already refuted by me upthread. Amazon would only need to delay transactions which are paying to their vendors. And sends to destinations outside the cartel, could be shared normally.


You can fill up the butt hurt report form (https://bitcointalk.org/index.php?topic=338975.msg3642882#msg3642882) to air your grievances.



Still much higher than the value of the minority fork. They will likely blame the minority fork for it and avoid it like the plague.

[snip]

The rest of the technologically ignorant blabber was not worth responding to.

I should have left this in this thread days ago....

https://yourlogicalfallacyis.com/burden-of-proof

True.

The OP started with "Once Bitcoin's coin rewards decline to less than can pay for the miner's costs"

As this needs to be fact before a "TWA" could be considered, could you please explain to me the background as to why bitcoin's miner rewards get to a point of reward less than miner costs?

Thanks in advance.   

This is an open question being discussed at my other thread (https://bitcointalk.org/index.php?topic=340686.0).

I am still trying to formulate a coherent theory of how the variables of voluntary transactions fees, mandatory diminishing coin rewards, asymmetry of motivations, and difficulty scaling will behave.

Does anyone know of any research modeling this?

Using say 2030...Here is a calc that could be used http://www.coinish.com/calc/ to model (BTC reward is ?) add in the proposed difficulty and assume hardware is $X cost in X year and determine a hashrate. 

Taking a a break from reading MoonShadow's substantive domination and rebuttal to go eat lunch at one of the 150 restaurants nearby, ruthlessly competing on price for my business, and all of whom have apparently ignored the OP's conclusion that monopoly is the natural order of things.

I agree that one of us is confused, but I'm not sure it is me.

In your original post, you said:

ie. The cartel would withhold their transactions from other miners' blocks.
Now you are saying that they would withhold other peoples' transactions from their blocks.
That is a completely different issue.

Yup. I had mentioned both of these upthread. What took so long. :) Well thanks for joining the party.

You've mentioned lots of things.
Noone seems to have found a coherent, logical threat in what you have said though.

And you still haven't answered my question from above, why would the cartel go through all the hassle of creating on-chain transactions simply to withhold them from the rest of the network, when they could accomplish the same things with off-chain transactions?

Not coherent for you. Very coherent for me. :) Cheers.

Hahahahaha! Oh mo god! Sorry I missed this thread earlier, and it was such a slog to read through it all, but it's frikin hilarious! AnonyMint just misses point after point after point with this easily refutable non-issue (which, by the way, I understand perfectly, including the parts MoonShadow misunderstood), and then nearly made me lose it with the wall of scripture on page 9. I mean, I knew he was all "I have a high IQ and am more intelligent than you, you should be thankful that I give you the fruits of my mind" type, or whatever, but a christian fundie too? Haaaaaaa!  :D :D :D

God, I hope you are actually seriously this broken and not a troll, otherwise I'd feel bad for falling for this level of smug idiocy. Jesus, AnonyMint, did you get your high IQ score from an internet quiz?


EDIT: Aaahahahaaa! And then you of the "I am smarter than you, and understand this new Bitcoin thing I just found better than you, because I am so smart!" bring up Dunning-Krueger, in a rather blatant display of suffering from that effect yourself. Seriously, are you sure you're not just trolling? I can't stop laughing!

P.S. MoonShadow commands a lot of trust and respect on this forum, because even if he says something wrong, he can admit it and change his mind. On the other hand, your "Ignore” button is getting browner every day.

Smart people know how to read. I can't refute every person who has misconceptions in their head. The thread stands on its merits.

It has none

Opinions are like assholes, everyone has one.

Interesting

I received the following PM which I feel is very a good challenge to my hypothesis, so I want to answer it publicly. I maintain the anonymity of the author, as I want to encourage others to PM me if they don't feel comfortable to post their thoughts publicly. I normally won't quote a PM publicly, unless I overwhelming feel it warrants a public exposure.


Please refer to the upthread debate between MoonShadow and myself. I covered the stages of cartel from winning by increasing efficiency to the latter stages of hanging on past the point of being most efficient by use of (market mass and/or captured government) force, e.g. market force could be predatory pricing, exclusionary distribution contracts, etc.. I also wrote that so-called government breakups of cartel/monopolies are usually a farce.

Agreed the free market ultimately overruns them with a paradigm shift, e.g. Microsoft is entering its terminal decline now.


I am not omniscient enough to answer this question factually. I can only express an opinion. My current opinion is none of them, but I haven't studied them all deeply, so my opinion is more of an intuition based on what I do know about them.

Sorry I couldn't provide a more enthusiastic and satisfying answer at this time. I am working on finding the best answer to this question.

So basically you say the cartel will for bigger future profits, now not reap the profits of non-cartel transactions. (that do give transaction fees, transaction without fees I now disregard, as i find it normal nobody wants to work for free...)

So analogy in the ´real´world in the sense that a cartel of shops somewhere lower their prices substancially, running losses, to outdo other shops to bankrupcy, and after that raise prices and earn a lot of money ?

Also I noticed you talk about 2 things: firstly a cartel not forwarding transactions to other miners, secondly a cartel not accepting transactions from non-cartel members.

The first thing I find completely OK, as they are running risks here for double spends I guess (if somebody double spends in other shop, and they find the block earlier), so up to them... The second not accepting transactions from non-cartel members (thinking about transactions that do pay fees, free transactions no need to be taken in blockchain anyway, as nothing is for free), then the cartel is refuting to earn money, and thus running less efficient than other miners / competing "cartels".

Basically another mini cartel (so not the big evil cartel being talked about) could mine its own transactions, and that cartel also accepting paying transactions from non cartel members will make more money, because they take up profitable transactions out of their own customerbase (out of their cartel).

Thats the whole thing, I dont believe too much in cartels.  Because as we see, the miner that would fake being part of the cartel, is gonna win.
(as the cartel is artificially lowering its turnover (not accepting certain offers on which they do make profit, read: not accepting transactions that do pay fees)

The only real cartel is Government itself (cartel by legislation, or by government making it difficult to enter a market due to excessive cost, etc etc), in a free market (without legislation) I just dont see cartels hold on any long....as each individiual member of the cartel is better of not being member of the cartel. (unless they think of in some future day being able to rule 100%...but they wont think that...)

Or do I completely miss the point you want to make?

What I see as a real threat to bitcoin, is not an economical attack but a political attack. (as to say, some group who thinks to profit from hurting bitcoin, simply ordering 1 million asics, and take 90% of the network.) (how difficult is that gonna be if all fees earned by miners are transaction fees....transaction fees not to be huge, to make a ultra secure network that cannot be overtaken with some billions of dollars.) So basically for bitcoin its a race against the clock i guess.

And realize that because of those 2 things, this is horrific case where the cartel can both continue to profit on the transaction fees, i.e. it doesn't have to sacrifice by offering lower prices, and depriving the non-cartel miners of (increasingly greater share of) income while also depriving the non-cartel merchants and their customers of fast transactions.


They are also depriving the non-cartel miners of transaction fees too, so on balance they are still earning just as much before because the proof-of-work difficulty will decline (relatively speaking) as non-cartel miners lose income too.

Risk of double-spends against a cartel is basically nil since most everyone is a repeat customer. Cartels have mass.


But they can't gain mass by causing the non-cartel to have delayed transactions, which forces customers to switch to the cartel for faster transactions. And if they don't have mass, they can't be as safe from double-spends, since their repeat customers may be fewer.

Really this is about destroying the small merchants. Bringing everything into a few competing cartels. Then the cartels merge because they can raise prices.

I already wrote all of this upthread.


I don't understand. Please try to explain more clearly. I don't think so. But let me read your more lucid logic?


Political is one threat.

There are many hypothetical attacks emerging on Bitcoin, not just political:

https://bitcointalk.org/index.php?topic=336816.msg3716861#msg3716861

Question: can you come up with 1 successfull cartel/monopoly, which does not exist due to force( gunpoint, government)

Of course many times competing companies might make agreements to make higher prices etc, but i want to know of a successfull cartel existing over some period of time.

In an unregulated economy, there are no cartels ( my point of view)

So this discussion, as for me, can also be reduced to whether cartels really do ever exist anyway to start with. ( would like to hear some examples)

If not, then might bitcoin give rise to the possibility of successfull cartels?
Cartels is something from a static world i think, ours is very dynamic and ever changing.

I agree with your thought process and thus if this Transactions Withholding Attack is technically correct (which it is), then it means Bitcoin won't sustain in a free market (i.e. assuming no force).

Thus I hope you see your thought process does not invalidate my attack.

The only transaction fees they will receive are from transactions they generate. They are just paying themselves, that can't generate profit.
Exactly the same result would be achieved by just mining their own transactions for zero fees, or processing them off-chain.

Do you realize how frustrating it is for me when you think you've discovered a flaw, yet you haven't read the thread carefully, because I have already refuted that 3 or more times upthread.

You can reread the discussion I had with JoelKatz about offchain transactions.

A few of the points against offchain:

* cartel can't scale up by leveraging the existing network
* cartel can't delay non-cartel transactions to force their customers to the cartel
* cartel can't prevent the customer from spending the BTC else where if cartel doesn't process onchain, thus doesn't deprive non-cartel of revenue
* transaction fees are paid by customers thus it is revenue
* they generate profit by growing the cartel, using the above factors

I think I made other nuanced points upthread on this line of thinking.

the attack is technically incorrect i think, because cartels theoretically are inherently instable. (or an organisation that calls itself a cartel,really never exists as a cartel, unless they want to know them selves a cartel) (just anecdotical read something about opec cartel, http://edwardjayepstein.com/archived/opec3.htm)

I asked you for naming me 1 succesfull stable cartel, not thanks to governmenthelp (or even a government cartel).
I still did not get any reply for this.

The cartel you describe is simply trying to disrupt bitcoin, and is willing to pay a price for it.

You could make it more simple: what if amazon and some friends buy 1 million asics, and mine only their own transactions, others will loose business, because their blocks get mined too late, have double spends, etc etc

If Amazon-cartel does not subsidize its mining department, then how ever can they gain traction just because they get all the work from their own network? (even refuting others transactions so loosing business)
Amazon is here by doing this basically loosing money, as they give all transactions to their daughter company, where another mining company might be willing to do certain transactions at certain times for lower fees.

Anyway: amazon/cartel (which is inherently instable as all members of cartel could earn more money by not obeying the cartel-rules) will have to subsidize its mining activities, and thus invest in something, for which later the cartel should receive some kind of payout.

I dont see this attack happening really...

What does that actually mean? Simply paying yourself fees that you could just pocket in the first place doesn't leverage anything.

That makes no sense. Generating empty blocks would delay other transactions just as much as generating blocks with their own transactions.


Of course they can. In the off-chain scenario, customers would deposit funds to addresses in a cartel wallet, and therefore would have no opportunity to later double-spend them. If you wanted to buy a dozen things from Amazon over the course of a week, rather than a dozen separate on-chain transactions, you would buy Amazon points up-front, with a single on-chain transaction, then spend those points off-chain.
This isn't exactly a new idea. It is how existing stored-value systems work, like Apple gift cards, Microsoft points, Sony PSN wallets, existing BTC exchanges...


They can take the fees from the customer either way, it makes no difference whether they then actually spend them as transaction fees.
(Plus, they would gain more customers by instead waiving the fees and offering cheaper processing than non-cartel merchants)

The above factors don't make sense, so this doesn't add anything.

jajansen,

Why do you assume force and possibly government collusion won't be involved?

You can't win the debate by arguing that cartels have never existed.

You attempted to construct a strawman and say that if cartels don't use force or government collusion, they are unstable. And I agreed and said the cartel attack would thus destroy Bitcoin if the community creates an altcoin that is resistant to this attack, i.e. rendering the outcome unstable for the cartel in agreement with you. But that does not invalidate the attack (as it stands against Bitcoin and clones). And it would actually require the free market to create an altcoin that is not vulnerable to this attack.

murraypaul, read the thread. It has been covered already. Your replies are nonsense, and you will see it if you understand the upthread discussion well. You are not paying me to be your secretary. I refuse to rewrite all the prior discussion and distill it for you.


I am just shaking my head at how stoopid (or too lazy to read upthread) you are. It is hopeless for me to explain it to you. Would have to write 10 more pages and you still might not get it.

Sorry to have to be so frank, but I don't know how else to put it to you.

So you have no answers, and just refer to your previous non-answers.
People can see that, you know?
(And you'll write 10 more pages, either in this thread or another, because you can't seem to help yourself)

Sigh.

I agree some government force could destroy bitcoin, but not a cartel (this cartel is never gonna exist) of companies, they will never arrive to the attack, as for the members of the cartel, it would pay NOT to subsidize. (isnt it the same as opec cartel members completely not following opec policy, but going for own gain, at the cost of the other opec-cartel members. As to say, the opec-cartel, does not exist...or better said, the opec intends to be a cartel, but never was and never will)

As you state its a slow process where the cartel gains power, with in the back of their heads the idea of being able to raise prices later when the cartel-strategy succeeds...
Also please note that amazon transactions are and will be quite a small part of the transactions. It would really have to be some kind of supercartel like never seen before in history (and theoretically unstable, so it will never exist as the cartel how it was intended).
Total world production is like 70 trillion, so then (if all pay bitcoin), some 25 trillion stable cartel would have to come up.
Also most transaction in bitcoin will still be the cup of coffee in the morning in the small cafee (ok...starbucks....)

This economical attack I really see it not happening. (if governments have to be involved, I would rather call it a political attack)
If a cartel cant exist, then how can it make the attack?

jajansen,

The cartel profits along the way because customers leave the non-cartel because the transactions for non-cartel customers are delayed by an ever increasing delay as the cartel's % of the hashrate rises.

The cartel profits by keeping all their transaction fees to themselves starving the network of them, thus reducing the network hashrate due to lower funding for all the other miners, thus increasing the cartels % of the mining hashrate (did you forget to read upthread that the cartel is mining?).

I hope you see I just described a spiral in favor of the cartel.

Amazon and Walmart together control a large chunk of transactions in the USA. If they jumped in early (e.g. 2016 or so) before most other merchants had, they could command a huge percentage.

The cartel starts with less than 50% of the hashrate, therefore their transactions are delayed on average longer than non-cartel transactions are, therefore, by your argument, customers should leave them for the non-cartel parties.
You have handwaved at this by saying that the cartel can just accept transactions without waiting for confirmation, but that non-cartel merchants can't, without giving any good reason why.


The cartel loses money because they refuse to process transactions (and thus take transaction fees) from other parties.
Other parties profit because they are (unwittingly) withholding their own transactions from the cartel.
The cartel has less than 50% of transactions, therefore they lose more fees than they withhold from the non-cartel parties.
Therefore, by your argument, the cartel mining hashrate will reduce due to lower funding.


Exactly the opposite.

Take away all the cartel fluff, and what you are basically saying is that someone who can fund a major portion of the network hashrate, and take constant losses due to refusing transactions, can delay transaction processing.
That isn't a new idea.
You've really failed to show any link between that, and a rational reason for Amazon et al to attempt such an attack.
The purpose of the attack would be to damage Bitcoin.
The purpose of Amazon is to make money.
Damaging Bitcoin does not make Amazon money.

Which is of course why Amazon and Walmart have formed a cartel to control credit card payments, denying their fees to existing players like Visa and Mastercard, with such low payment costs that other merchants have been forced to join their cartel.
Oh wait, they haven't done that, have they?

Interesting idea OP.  :)

There is one disincentive to using this "attack". If Amazon used such a technique they could hurt the value of bitcoin and their own bottom line. Amazon does not want to hurt bitcoin it wants to profit from it. I suspect they will develop a bitcoin payment gateway that adds value with services such as escrow. That is where they can make a scalable percentage into perpetuity, rather than a short term mining trick that drives users away from BTC.

AnonyMint,

I can go pretty much with murraypaul's answer, thats how i would say things go.

The only thing that I thought about, regarding this so called (theoretically inexistent cartel in free market) cartel, is that they could attempt to mine their own transactions, and thus, having a buffer of transactions always being able to fill their blocks 100% with transactions, and thus mining more efficently...
As I current understood, each block has a certain amount of transactions, but they are not always 100% full... The trick would then be as a mining company to always have blocks 100% filled with transactions...and this will give you an advantage...and I guess this is only possible if you have a loyal backing that gives you all transactions and just is ok with waiting more than average for the confirmation. (so that there is always a buffer of transactions such that blocks are always full)...

Anyway dont know if the above written is correct, and also dont know if it has any serious implications. In anyway, they will have more than average delayed confirmation times. (not that this confirmation time is of any importance really to amazon or the customer)
So to become the biggest miner, they should then slowly increase their business, always being sure to fill blocks more efficient than others, with the backing of the obedient transactions of amazon that will simply wait untill its their turn....

Or is all above complete nonsense?

jajansen,

I don't think we are making progress. I will bow out of trying to reexplain what I have already explained. I understand the attack very well, but it would probably require many flowcharts and explanations to get normal people to understand it. I can carry that all in my mind, no need for the flowcharts, but most people can't see things in their mind's eye. They need illustrations. I have the advantage that I understand it because it was developed in my mind. If I were reading this thread for the first time, maybe I wouldn't get it either.

OK, I've skimmed over a bit, but I don't see the point of this argument. So we're saying that in 30 years amazon is gigantic. So the point is they're linking their payment thing with their own client with no transaction fees.

It isn't that this would not be an issue, its just that its a terribly stupid way of doing it.

The easiest way to get away from fees would just to do their transactions off network. Get people to send btc to an online "wallet" and just do everything off network once they get the btc balance. You can't stop them from doing this and the transactions are just as feeless as if they did the stupid own wallet.

The wallet idea is stupid. No one would ever use something with a 50 minute confirmation time unless somebody accepted a 0 confirmation spend, which only amazon would accept so they might as well take their transaction off network on their own wallets.

If someone sees something I don't, please respond.

Its not like you could stop them or that it would be illegal or against the way a lot of the current stuff is handled ....

No you missed the entire point. Try again.

Amazing to me that such an easy concept for me is so difficult for so many readers.

Actually I don't think I did. If they had their own client without TX. Lets say they have 20% of the network has hash rate.  It would take 50 minutes for a single confirmation. No one would use it unless the person they send to takes zero (or maybe 1 confirmation).  At that point it would only be used for Amazon purchase (assuming we're using Amazon as a stand in).  At that point they might as well just make the transactions off block. Where did my reasoning go wrong?

Sorry AnonyMint, but despite you having a 160 IQ, and being very intelligent and smart, and being able to see things in your mind and conceptualize better than anyone else here, based on what I have been reading here, I can still see things even above and wider beyond you, am still more intelligent than you. MoonShadow may not have understood your premise exactly, but you are still not grasping the offliine thing completely, as well as a few other things that have been discussed before. To me, it's as if you are able to see the entire clearing up to the trees, and are proclaiming yourself to the the total expert on this clearing you have just wandered into, while I can see the trees, the forests, and the oceans beyond :P

So, let's see if I understand your proposed attack correctly:

We start with a normal steady state, where miners are only competing on hashing power, all transactions are broadcast from privately owned clients, everyone, including miners, can hear all transactions, and block rewards are insignificantly small, with all mining rewards coming exclusively from minning fees.

Amazon, a large corporation that may have reached the size and power of a cartel, steps in and creates their own custom AmazonWallet, which has the following features:

• People can deposit and store their own bitcoins into the AmazonWallet
• Amazon allows people who use their AmazonWallet to shop on their website, possibly even giving them a discount for using their wallet
• AmazonWallet may or may not charge fees, and may charge zero fees as incentive to get people in
• Amazon owns and operates their own mining hardware, which may, for example, account for 20% of the total hashing power
• All transactions created by AmazonWallet are sent exclusively and directly to Amazon's provate mining farm, and never broadcast to the rest of the bitcoin network until Amazon's miners manage to include it in a block
• AmazonWallet still allows you to send bitcoins to any other outside wallet that doesn't belong to Amazon, but the transaction still has to go through, and be mined by, Amazon's private mining farms
• Amazon may choose to use their 20% of world's total mining capacity to mine only AmazonWallet's transactions, keeping all other transactions out of the blocks they mine

Do I have it right so far? Anything I missed or misunderstood?

Rassah, I think you are well aware that I understood his premise at least as well as he thinks that he understood his premise.

When you were arguing about the details of the AmazonWallet, it seemed you have missed that the wallets would ONLY connect to Amazon servers, and thus only broadcast all their transactions to Amazon's miners. You were arguing about how P2P works, but these wallets will obviously not be P2P.

I didn't miss that point, I took that as evidence that he didn't understand how the p2p network actually worked, that it was in Amazon's own vendors' interests that transactions be broadcast widely regardless of whether or not there was a profit to be gained from doing so.  Thus, it would be in the vendors' own interests to undermine the cartel's goals.  Amazon uses an exclusive payment system now, but most vendors can still do business outside of that system using their own websites.  Amazon is like a huge shopping mall, some people go there just to look around, and some small specialty shops benefit from being seen there.  That doesn't mean that they don't have stores that aren't in the mall.

AntonyMint.

I come from a more technical background, but I do believe I understand the economic implications of the Bitcoin technology and I do also clearly see the point you are trying to make with your attack.

I do however believe that your attack is not viable in the long run...or rather, it's negligible.

There are, I think, two possible scenarios of how the cartel could withhold the transactions from the rest of the network, and a hybrid approach using both depending on whether the transaction is internal to the cartel network or not.


1) The cartel wallet would only connect to nodes that use the same wallet. The only part of this segregated cartel part of the network that would connect to the complete Bitcoin network would be the mining servers. They would be configured to farm all attractive transactions, while not forwarding any to the rest of the network, effectively keeping the transactions from their cartel nodes for themselves.

I suppose this is a rather unrealistic scenario on the technical front, as only a single ill-behaved node in the cartel section of the network sending transactions to a single member of the non-cartel part of the network would propagate most of the transactions from the cartel network onto the non-cartel network before being mined. A few of these nodes - and I don't doubt someone in the Bitcoin community would make it happen - and the networks would effectively be joined again. So let's move on.


2) I would assume that the scenario you have in mind would involve a custom cartel wallet, that directly sends the transactions to one or several cartel mining servers. At the same time, the cartel mining servers would exchange transactions. In this case, the only connection that allows the cartel part of the network to siphon revenue of the non-cartel part of the network are the mining servers of the cartel, and they are effectively the only part of the cartel network that is actually operating as Bitcoin nodes.

Effectively, this would stop the cartel wallet software from enabling transactions to the rest of the network. In this case, I would argue that the cartel would basically implement an off-chain payment system, which additionally records transactions on the blockchain with a delay. This comes down to nothing but blockchain bloat.


The real issue with your attack is, though, that, as long as any one node of the cartel network is running the Bitcoin protocol on some level, the transactions can be funneled back into the non-cartel network quite easily. As soon as the cartel tries to control its own part of the network to an extent where the nodes are no longer part of the Bitcoin network, they will de facto implement their own payment network with their own hybrid Bitcoin/cartel wallet. Personally, I would then consider the fees to be cartel fees, not Bitcoin fees. As they will also require proportionally more hashing power to verify their own transactions, their take from the Bitcoin network would not really create an imbalance in my view.

The question then is, at what point do you still consider fees attached to such a transaction as revenue of the Bitcoin network. Basically, on a basic level, what you are saying is that somebody who makes additional profit (in any way) can use those profits to increase their share of the mining power in the network. This is already possible nowadays, in much simpler ways than through your attack scenario.

Basically, your attack falls apart the moment other factors than just the revenue from mining play a role. As Bitcoin miners are likely to find other applications, such as heating, or - as mentioned by posters before - can be paid by some other company to keep mining while prioritizing their transactions, they will generate extra revenue, too, which, in turn, they can also use to increase their share of the mining power in the network. In fact, every big mining player will strive to diversify his income streams. I would even say that a lot of big mining operations will not solely be mining businesses anymore. For many, it might not even be their main activity.

In the end, the imbalance created by your attack will just play a small role in the overall economic balance of the mining market and will just be one extra revenue stream next to many others. The mining part of business might become secondary and the profits derived thereof might no longer be relevant to the economic balance of the market, which will be dominated by the same economic forces as the more traditional markets. The only consequence of such an attack would be to starve off businesses based solely on mining - something I think is a natural development even without your attack scenario.

In the end, I can come up with many technical ways to reduce the impact of your attack, but in a way you are right. I don't think it's realistic to remove this attack vector completely without modifying the core Bitcoin protocol. I do however believe it will simply not matter enough and the implications will be significantly less drastic than you imagine.

Refuted upthread. (not intending to obfuscate nor be unhelpful, but really I can't rewrite the thread for every person)

I never claimed that. My IQ is some where between 125 and 150 IQ. Roughly I can conceptualize what at least 9 out of 10 people can't. It could go as high as I sometimes see what only 1 in 100,000 can.

IQ or g is not a complete model of intelligence.


Mostly correct, except don't assume that Amazon will require customers to hold balances in Amazon wallets. I assume it would be in their interest to keep all balances on the Bitcoin block chain. Reasons were stated upthread.

And remember that Amazon can accept 0-confirmations for their transactions, since the customer is beholden, so no delay while waiting for their mining servers to win a block.

And remember that keeping the non-cartel transactions out of 20% of the blocks, means 20% of the time the non-cartel transactions will be delayed by 20 minutes, 4% of the time by 30 minutes, and 0.8% of the time by 40 minutes. Would you shop at the non-cartel if 0-confirmation was not an option with that tiny merchant and the delay was not acceptable (e.g. buying fast food at drive through, buying almost anything retail)?

Thus certain types of tiny merchants will need to join a cartel.

It is the way online (delayed shipment) cartels can capture all the retail (in person, instant delivery) market.

Also note the deleterious effect on the non-cartel miners. They have to compete with the difficulty driven 20% higher, yet they don't get that 20% of the revenue. Thus over time the non-cartel miners have less profits and thus can buy less hardware and thus the cartel continually increases that 20%. Once they exceed 50%, they control (the original fork of) Bitcoin.

This is a Tragedy of the Commons outcome, everyone must join a cartel to compete. It is form of selfish mining, although technically and economically quite different than the recently announced selfish-mining attack (which btw I showed can be easily defeated (http://hackingdistributed.com/2013/11/25/block-propagation-speeds/#comment-1139339199), which is a 180-degree-turn from my original position on it).

jajansen's mistake is he assumes the design of Bitcoin is free market. I am attempting to show the design is a Tragedy of the Commons.

And I agreed that Amazon would broadcast transaction P2P when the destination recipient was not a member of the cartel. That was not a refutation of my attack.

The attack applies even more so (because relative effect on convenience is more noticeable) if we reduce the block period to 1 minute (which is probably about the minimum that can work technically at current network propagation speed (http://hackingdistributed.com/2013/11/25/block-propagation-speeds/)).

So 20% of time delayed by double, which means 20% longer checkout and drive thru lines.

Don't forget the other optional attack vector is the cartel offers lower transaction fees (which are spiraling higher and higher on Bitcoin), thus the customers prefer the cartel and also the non-cartel miners are cheated of income while the difficulty is higher. Cartel profits from economies-of-scale from more customers thus offsetting loss of fees.


Another destruction of decentralization and taking us back to the system we have now.


The cartel withholds transactions from non-cartel miners that win the next block.

I did not propose the cartel will run an internal P2P network. I proposed the cartel will centralize each customer's payment from the Bitcoin chain to the cartel's balance. Then the cartel can pay cartel vendors in separate transaction(s).



The cartel centralized command and control, owns and controls the mining servers and can 100% dictate what they do.

That is not decentralization, because you have counter-party risk. Also big fish eat little fish, so trends towards centralization over time.

Besides retail is going away as the 3D printer rises and we will download and print. Don't think the 3D printer will be limited to simple materials and forms, they already have multi-head printers and later will surely see automated sewers and weavers, etc..


Retail is going away because you lose an hour driving there and back, and selection is limited. Instant customization is coming delivered via the internet instantly.


Ha. I think you are wrong. Let's see who wins this bet.


Some people had fantasies for a long-time about PCs being ubiquitous. It didn't happen for the first 3 decades, but now with the smartphone, it is happening.

Those large sites are next on our list to slay, after we are done slaying Bitcoin.

We were basically lacking a funding model to compete with those large sites decentralized. With a better Bitcoin, we will have it. I've had many ideas about how to destroy facebook, but the barrier was always the f$cking credit card companies and Paypal bullsh8t.

The 3D-printing revolution will take away market share from Amazon, right?

We still have to pay for and download the designs to feed into the 3D printer.

I want to prevent this cartel attack so the non-cartel merchants can be small, diverse, and numerous.

There will be a lot of free, open-source designs for common products and it will be easier for designers to sell their proprietary designs directly to customers without the need for an Amazon. 

Those don't impact our discussion.


If we prevent the cartel attack I have described.

P.S. Saw this on this page:

Been reading and more reading and more reading.

And all I hear is noise that Amazon will try to destroy bitcoin by adopting it.

- own downloadable client... don't really see that happening, at least not in the near future. (loads of work + time = loads of money)
- integrated in website, possible even likely. Them modifying the code with malicious intent, doubtful.
- Them setting up a huge mining pool, unlikely.
End of story, executing this attack, means you need to be a multi billion dollar company, investing multi millions, on something that is not morally acceptable.

Ok true thats what big companies often do. (if they see profit in it)

So lets assume Amazon did this,
Due to the open nature of the blockchain, people would find out, sooner or later. (expect sooner)
The moment this gets found out, several things can happen.
- Miners cartel against Amazon, Amazon blocks no longer get accepted. (bye bye profit, and reputation of the company)
- Miners don't care and continue their business of making money. (the world is bigger than Amazon) Users however scream murder at Amazon and will petition to boy-cot Amazon.
- Nobody cares and Amazon makes a little bit more money than they would otherwise.

Already refuted upthread.

Amazon can wait until its miners win a block. Amazon can use 0-confirmations for its customers as explained upthread (customers are repeat). Small merchants often can't.


You entirely missed the points upthread about how a cartel penalizes everyone else and forces them to join the cartel, e.g. Amazon delays the transactions of everyone else. Etc.

Please comprehend the thread before posting more noise. You will probably need a week or two of studying the thread slowly.

Have you been keeping up with the new stuff proposed in release 0.9? Or the process of doing business with VISA under the threat of chargebacks?
I would guess not. Small merchants, and likely most transactions, will be accepted with 0 confirmations. The bigger ones may require a confirmation, or may be accepted with 0 confirmations if the customer provides some ID. So from the merchant's point of view, small merchants will get their transactions accepted between 10 and 20 minutes, while Amazon will have their transactions accepted between 20 and 60+ minutes. From a customer's point of view, who is used to 0 confirmation transactions, using their own wallet will make their transaction show up almost instantly with the merchants and likely with Amazon, while using Amazon's wallet their transaction will show up instantly when shopping on Amazon, but will take an extremely long time to show up when shopping with other merchants.

So, option A, use your own wallet, get instant 0-confirmation purchases everywhere,
Option B, use Amazon's wallet, get 0-confirmation purchases at Amazon, and 60 minute confirmations everywhere else.

I think people would avoid the "broken" Amazon wallet.


If Amazon was actually stupid enough to block everyone else's transactions from being accepted in blocks, then all they will be doing is wasting mining resources for reduced fees, and, although they will be delaying transaction confirmations a bit (which, as mentioned, won't matter to small merchants), they will basically be generously giving those excluded transactions to all other miners. Think about it, if Amazon has 20% of the hashing power, and you as a mining pool only have %10, before Amazon you would get 10% of all blocks and 10% of all transaction fees, but now you will still get 10% of all blocks, but those 20% Amazon-rejected transactions will get spread out, giving you an extra 2% in reward fees. Chances are that this may even increase overall mining profitability (for everyone but Amazon) enough to entice new mining power to join the network, and reduce Amazon's 20% share ever further. In the end, it's a penalty on the customers, who, being used to 0 confirmation transactions won't notice or care, and a reward to all other miners, who don't care about confirmation times anyway.


BTW, I am not posting this as a reply to AnonyMint, but instead only for the benefit of other readers who may be new to bitcoin, because


is a perfect description of AnonyMint's modus operandi.

There is nothing stopping the Bitcoin owner who is also an Amazon customer, from having copies of his/her private keys and sending his/her transactions from any client he/she wishes to. Moreover, there is no way to detect that a spend was sent from an Amazon wallet where Amazon is merely holding the private keys for the customer and can issue the send transaction for innumerable IP addresses (heck botnets only cost $100).

I am not going to bother replying to this dolt's other nonsense.

I see this idiot continues to attempt character assassination, yet it isn't working.

Which just creates a special wallet that is only useful for Amazon transactions. Extra inconvenience to shop at one business, and


this doesn't make sense, since the original proposition of the attack was that Amazon transactions wouldn't be shared with others, anyway. What's the point of hiding Amazon transactions in various IPs, if the only time others see them is after they are included in a block? So, again, in the end, you end up with the option of

A. Use Amazon's wallet, which lets your transaction show up instantly when shopping on Amazon, but forces you to wait 10+ minutes for your transaction to show up when shopping elsewhere, or
B. use your own wallet, which lets your transactions show up instantly regardless of where you shop

OR if Amazon forces people to only use their own wallet software to buy from Amazon:
C. Use Amazon's wallet to show at Amazon, your own wallet to shop elsewhere, both with instant transactions, and have Amazon give miners a 20% revenue boost by not bothering to process the available transactions.

It also doesn't make sense for Amazon to hold the private keys AND still use those keys to add transactions to the blockchain AND mine those transactions and their fees themselves, since Amazon can achieve the exact same thing by using an offline wallet system, where customers transfer funds into Amazon's shared wallet instead of Amazon's wallet app, still charge the same fees they would charge before but do it directly, and just do their 20% mining with not accepting other transactions into their blocks on the side, completely independent from this offchain transaction crap.

As has been shown over and over and over and over and over again, you just don't get how bitcoin works. Also, I thought you were ignoring me?

It is not amazing this low IQ idiot continues to miss the points that were made upthread.

Yes Amazon won't share its transactions, but above you were writing about customers of Amazon sending transactions to other merchants, not Amazon. That you can't understand that the customer can be both a customer of Amazon (the cartel) and of non-cartel merchants and that doesn't violate any of my upthread points, shows how much you don't understand this thread.

I guess it still hasn't clued into your slow brain that the customer will have his transactions delayed by cartel miners when he sends his transaction on the open Bitcoin network to a non-cartel merchant. Yet when that same customer sends his transaction through Amazon's client it will be accepted with 0-confirmation and then added the Bitcoin block chain by cartel miners. (the cartel  knows which transactions are theirs, the non-cartel merchants don't know which transactions are for a non-cartel merchant or a cartel and can't determine that from IP address, so the attack is asymmetrically in favor of the cartel)

I had explained all of this upthread. And I am not going to explain it again.

If you continue this intentional FUD, I am going to reply to every post you make with the first sentence of this post.

It's amazing how you continue to ignore me, and continue to reply with "I have refuted that point" over and over, not realizing that if you had done a good job of refuting them, I and other people would not keep repeating them. Sometimes when everyone else things you are wrong, it may be wise to recheck your premises.

Also, my IQ is around 160, so  :P

You are now a confirmed liar.

I know of at least one 160 IQ person and he is smarter than me. You don't even demonstrate Mensa 132 level, which I am above (https://109.201.133.195/index.php?topic=354713.msg3796155#msg3796155). More evidence (http://unheresy.com/Essence%20of%20Genius.html).

I also learned to talk when I was 1, learned to read by 3, read most of our house library, including grownup stuff, by the time I was 5, learned to play the piano proficiently, including classical by Bach and Chopen, by the time I was 7 or 8, was admitted into a professional boy's choir as one of the youngest members by 7 and our choir won the national competition when I was 8 or 9, learned advanced Algebra by 4th grade, Calculus by 6th grade, skipped 7th grade entirely, got A's and B's in all my classes despite almost never studying by deriving exam test answers right during the exam (grades dropped in 11th and 12th grades because I didn't do any work at all), received a doctorate level education in electromagnetic physics when I was still in 12th grade, and actually graduated from two schools at the same time, the public I attended with everyone else, and the private 6 year one I attended on weekends that focused on history, literature, theology, and politics of Eastern Europe. Oh, and I have a Bachelors and Masters in business finance and economics, and I speak, like, 5 languages fairly fluently, and am learning two more.

Oh, I am also a descendant of Konstantin Tsiolkovsky and Oleg Tozoni, and a direct descendant of a royal lineage, which technically makes me a Count.

Now prove any of that is a lie  ;D

Also, this


doesnt actually prove you have a high IQ, it just proves that you are a racist with a possible eugenist streak.

My younger brother has a tested IQ above 160.  He also has a mild case of Asbergers's Syndrome, and has real trouble making practical decisions as a direct result.  No one that has ever met him would think that he is so intelligent, particularly since IQ doesn't measure intelligence.  Only those who don't know what the IQ actually measures use it as evidence of their own superiority.

I rang in at 149 as a teen, BTW.

I have it bigger than all of you...my IQ I mean!

I find it all silly, myself.

Ditto but I quickly diverged from reading and language to taking everything apart, math, and algorithms. There is a photo of me as an infant with tools.


To the extent that any of that is true, it appears to demonstrate an affinity for the language arts, which is completely inapplicable to the this thread which is deeply algorithmic. And the above may also be due to prodding and elitist connections of your lineage, e.g. pushing you early.

Whereas I was not pushed and in fact my formal elementary and primary school education was chaotic and neglected with big gaps of wasted years. Thus my raw intellect has usually been obscured from most people.


Again you demonstrate very low comprehension skills. You didn't discern that in the linked post I was presenting links from James A Donald, not my own views. And I ended the relevant paragraph with a link to Eric S Raymond's perspective, whom I credited as being smarter.

And you don't factor in all the possibilities. For example you didn't factor in the possibility that I was writing allowing Donald to play the role of the devils advocate from which I could present a multiplexion or permutation of logic.

You have consistently failed to factor in all the variables in your analysis of this thread. One of the reasons I am programmer with million user commercial successes, is because I am capable of holding dozens if not hundreds of variables in my head in a model.

I am not claiming I am infallible.


Perhaps it is because none of you took a real IQ test:

http://unheresy.com/Essence%20of%20Genius.html

http://www.sigmasociety.com/sigma_teste/sigma_teste_eng.asp

Many IQ tests only test for example how fast your brain can process some limited pattern matching algorithms. E.g. raven's matrices. I won't be the fastest at any particular prewired algorithm (although I am fast enough to make it to Mensa level), yet what I am very good at is new algorithms. The above test is going to measure my IQ more accurately.

As demonstrated in this thread, on creativity and algorithms my IQ may even exceed the 150-160 IQ genius I am thinking of: Eric S Raymond. He is clearly superior to me in the language arts. That is not hard to do, I never tried to develop my language arts and even mostly ignored it by choice.

My language processing engine can not keep up with my "visual mathematics" (creativity, logic, and algorithms) brain which is why you will dropped words, numerous typos, and grammatical errors. I simply don't want to slow down for that linear output stream. Boring.

Every IQ test I take says I am strong in visual mathematics. My SAT and ACT both confirmed this, with my 85-90th percentile verbal score holding me back from being far above Mensa level. Besides I've always been a slacker at many times that are formal and highly structured, such as preparing for the SAT. I showed up with a hangover for the test. And the ACT I took after spending the entire summer locked inside my room with an Apple II and I took it immediately after a long travel.

Honestly, no one really gives a shit, Anonymint.

I do.

I judge AnonyMints intellect not by the above post because as they say talk is cheep but by the quality of his work. His economic writings are profound. (See my post titled Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0))

There is no denying he is one smart dude.

"People who boast about their IQ's are losers" - Stephen Hawking

I don't deny that he is smart, but he is still out of his depth here.  Really, no one cares what his credentials might be, true or false, only his arguments matter here.  So far, I find his arguments sorely lacking in substance or merit.  His economic writings are bullshit.

Why do you think they are bullshit? I read them multiple times and I came to the opposite conclusion.

Seems to me that he is not out of his league at all in fact I think he is holding his own rather well.

Not your own views? And I quote,


How can you say that the views that some races have low IQ and are predisposed to violence are views you agree with, but which at the same time are not yours? You either agree and hold the same views, or disagree and hold opposite ones.

And FYI, if you like logicky computery stuff, I started programming as soon as I got my first computer (BASIC on Tandy 1000), then on TI graphing calculators, then in school classes, where my final project surpassed my teacher's level of understanding. I then got a job doing software development and debugging in Java, C++, and PHP as soon as I turned 18. My last programming position was as the IT manager and project developer of McDonald's Corporation's east coast region, until the dot com bubble burst, my job was outsourced, and, seeing the looming threat of India, I switched to finance. I never really stopped programming though, mostly doing it in Second Life through my finance degree, and Perl for some personal projects more recently. Besides programming I also own a MAGLEV "company" that owns a few linear motor and magnetic levitation patents, which I am still improving with mechanical and electrical engineering skills. I don't have an affinity for language arts. It's just something I do along with my other hobbies, which even include flying planes and practicing Kendo and Iaido (Japanese sword based martial arts; hoping finally for black belt on the test this January).
By the way, I don't remember what I got on my SATs. It was something between 1,200 and 1,400, but I didn't care because it was a somewhat dark time of my life and I didn't plan on going to college then anyway. But I did nearly max out my GMAT scores, and got the highest score possible on the composition and writing comprehension section. In this case, knowing so many languages, and thus the roots, meanings, and alternatives to many words, did help. GMAT, if you don't know, is a Master's level SAT. And don't let the M for Management fool you, the math in it gets ridiculously difficult.

And, despite all this, I really don't care if you think I am a moron, a liar, or whatever else you might think of me. You are not that important. All my history is not that important, either. Frankly, I never told this to anyone, since I'm not one to brag (but since you started it, I figured it might be fun). Because, unlike you, I don't think who I am, or what I did or do, is anywhere as important on an anonymous forum as what you actually say, what you contribute, and how cordial you are when you are doing it. Reputation is everything, and your shit-brown Ignore button doesn't bode well for you. :P

I can't speak for MoonShadow, but for me they seemed like a combination of "difficult to digest" with "mediocre conclusions." Once I managed to process what his words were trying to say, the thing he was actually saying wasn't all that impressive, which only made it all that much more disappointing. Plus he still made some claims I find questionable. This is about his economic writings though.


He may not be out of his league in economics, but you can't become and expert in economics, and then just claim that you are an expert in Bitcoin. The technology, and the way bitcoin actually works, is clearly out of his league. But instead of recognizing that, taking other's information into consideration, and actually learning about it, he seems convinced that, because he is so smart and is an expert in one field, that he is an expert in Bitcoin and understands it better after two weeks than the people who have discussed it for over two years. Note, this is the same mistake that a lot of economists have been making when they were writing news articles bashing Bitcoin.

I would advise reading it again (the posts on economics) since we are talking about IQ in this thread I was a Mensa member for 3 years before letting my membership expire. Despite that I think I had to read them both four or five times. I absolutely agree that they are very Difficult to digest.

I think much of the anger directed at AnonyMint is because he is challenging something people cherish Bitcoin.
Honestly, however, nothing any of us say or do in this forum will change what happens with bitcoin. Bitcoin will succeed or fail based on its merits.

The only impact this forum has is to help us few individuals who bother to read it make wise choices.

I wasn't boasting. You quoted me out-of-context. Rassah first boasted that he had 160 IQ and then that spawned a discussion about what 160 IQ would really entail.

The lack of reading comprehension here is stifling.

Even further upthread I corrected someone who said I claimed to have 160 IQ and said I never claimed that and that my IQ was probably some where between 125 and 150 and that IQ measurements don't capture all aspect of intelligence.

So you have just proven that either you didn't read the thread entirely or that you are not capable to always remember everything you read.

The average IQ of blacks and American natives (other than those who migrated from Europe, e.g. the 5% Cherokee of which I am) is in fact lower than whites.

Also they commit more violence.

That is undeniable fact. It doesn't mean I agree with James' racism. Note the difference between discriminating illogically on race and forming logical decisions about race based in fact.

I would not assume every black man is not intelligent. I would look at each person individually. Yet it is a fact, that if you want to drive socialism, then filling up the country with lower IQ races is a reasonable strategy.

In fact, I grew up in inner-city Baton Rouge and New Orleans and was in schools where my sister and I were the only white kids, and my hair was always oily because every student wanted to feel my fine hair as they had never touched a white person before. I watched my cousin get her ear lopped off by a black attacker on the porch of my grandmother's house, and I couldn't get outside to help because I was looking through the bedroom window. So to accuse me of being rascist is ludicrous. I have had innumerable friends of all races.

So my view is much more nuanced than James' and is closer to Eric S Raymond's views on racism (https://www.google.com/search?q=site%3Aesr.ibiblio.org+racism).

How you conflate my objectivism and not conflating issues that most people conflate, to eugenics is another example of dumb or insolent people conflating everything.

I wrote an email to the guy who claims to have the highest IQ ever measured (http://en.wikipedia.org/wiki/Christopher_Langan) and told him that sterilizing the low IQ as he was proposing would be a disaster, for numerous reasons including but not limited to:

1. knowledge is not exclusively generated by those who inherit from high IQ parents
2. IQ is not a sole determinant of how mankind remains resilient.
3. Knowledge anneals from accretive processes which are path dependent and chaotic, i.e. non-deterministic and serendipity
4. Lopping off the lower half of the IQ bell curve would create a new bell curve in the upper half and shift the same conceptual issues to it.
5. IQ is not the sole determinant of intelligence, which is a more diverse phenomenon than 'g'.
6. IQ is not the only way humans adapt to challenges.



It is difficult to discern from that short description your level of expertise. Please I don't want to turn this thread into a discussion that is way off-topic.


Of course there is so much material out there to learn, perhaps only a polymath can really consume any where close to a majority of it.


I still can't correlate your description of your abilities to your entire lack of comprehension of this thread.

However, there is a very plausible explanation. Your feeling of animosity towards me (or anyone who challenges Bitcoin your God) shut down your desire to read and consider it carefully. You were predisposed to flying off the handle and prejudging it, because you've encountered so many crackpots over the years in various forums, etc.

It could also my slacker style of communication where I don't carefully construct my prose and OP to make it more comprehensible in small morsels.

That's because my IQ is only a low 63.

Even that low I understand how the blockchain works. You don't.

Economics is inherently difficult to falsify thus contention can reign.


Economists can say what ever they want, because it is very difficult to prove them wrong in a way that shuts them up. They will always find believers for their snake oil.

Yet Bitcoin is different...


Two weeks? Six months at least.

And it doesn't matter what you think. The proof will be clear soon.

Sorry for the delay in replying to this sincere post. I got inundated with noise as you can surely see above.


Nice try, but this is technically incorrect.

The orphan rate only affects a very tiny % of the blocks found by necessity otherwise the network would diverge into forks.

If you are arguing that Amazon doesn't have the connectivity to propagate its blocks to pools where the hash rate is concentrated, I think not many would agree with you.

Thus most of the time Amazon's (the cartel's) blocks will propagate.

If you said Bitcoin would alter the protocol to refuse to process Amazon's customers payments by refusing Amazon's blocks (any block where they hadn't seen already many or most of the transactions in the block), I think it would harm Bitcoin immensely. The crypto-currency needs to be all inclusive otherwise the potential for strong competitors and forking arise. The protection against this attack is simple! Zero transaction fees and perpetual coin rewards. So simple.

Who wouldn't love a zero transaction fee coin! The main use of Bitcoin other than speculation is money transfers.

The rest of what you wrote thus doesn't apply.

See this is yet another example of why people think I don't understand, when in fact their technical knowledge is too limited to realize that I understand and they have missed something that causes them to be overconfident in their analysis.

The proof in the real world will come soon. Enough of this talk!

Indeed it is :)
I'm guessing you won't see the humour in that, though :)

I expounded on this:

AnonyMint is not out of his league in economics.  That is to say, that he is obviously capable of understanding, and seems to have some kind of professional education in the topic.  However, he spends a great deal of time restating commonly held economic myths in a somewhat novel way.  It seems to me that he is either self-taught and young, or his professional education in Economics is incomplete.  He understands it like a promising student. 

That said, I agree with Rassah on his overall assessment.  Even mastery of Economics (which AnonyMint has not acheived, imo) is not enough to understand Bitcoin.  It's not even close.  I had to learn a great deal about subjects that I was little better than a layman; including but not limited to, cryptography and other high math, psychology and programming.  I am far from a master of these topics even now, but I am far better than a layman in each; and at a minimum understand the roles they play in Bitcoin.  Also, I was here when Satoshi was still posting.  I know some other things that aren't even mentioned in the white paper regarding security, some that are already in the main client, others that are not; that complicate (although don't render impossible) the execution of several general methods of attacking the blockchain or the network.  I know, personally, that Satoshi foresaw much more than most of us understood.  Bitcoin's elegant design was not luck.  Personally, I came to the conclusion that the Satoshi on this forum was only a front man for a team of pros; because even thought a true polymath could do this, he often had some rather large delays between the asking of hard questions and their associated responses, implying to me that he was consulting someone out of view.  Redardless, Satoshi (& company) did not expect that mining nodes would remain fair and trustworthy with one another.  He/She/They fully expected that some major nodes would try to game the system to their own advantage, and that they can be expected some measure of success; but since these activities can be detected over time, that those nodes would be retaliated against in various ways.  This is one reason that I, personally, have real doubts that Proof of Stake has any real future in cryptocurrency, since staking by it's nature assumes that nodes with high stakes won't turn malicious, and thus there is some level of trust placed on those 'supernodes'.  Bitcoin does not have supernodes.

And it's in the retaliation aspect, not his analysis of (limited in scope) economic incentives that his attack vector collapses.  He makes too many assumptions about how other nodes will respond.  He assumes that all (non-negligible) nodes will react in what he considers to be the highest profit seeking manner; thus completely ignoring the fact that many nodes have economic incentives to resist the formation of a cartel, that many nodes have economic incentives to try to outcompete and otherwise undermine the primary cartel membership (in this case Amazon, and because Amazon has real competitors, just not direct ones) and that many nodes have no significant economic incentive in either case, but do have a vested interest in the network's 'status quo'.  While he can present his attack, he doesn't respond to objections to his attack with any arguments, only insults and implications that he has already addressed such objections earlier.  I've read the thread, he's done no such thing; at least not in a rational and non-hostile manner.  Many of us have grown tired of his childish trolling masked as a somewhat intellectual debate.

I am glad you noticed he was delaying replies. That was also one of the factors I used to determine he was not likely one person.


Exactly the opposite. I make far fewer assumptions about the choices of nodes. See the Cracking the Code thread in the Bitcoin discussion subforum where they assume that 100% of the nodes will run a centralized designed client software. And where they assume that the convergence of nodes will be to the attacked chain. I make no assumptions. I call it a risk.

Since when did 100% become more likely than a range of possibilities? That defies a fundamental comprehension of entropy, chaos and nature.


Rather I assume that miners can't continue if their electricity costs more than the income they receive. That seems to be a basic accepted economic fact.

And he will again I am sure try to argue the same non-point he made upthread, which I refuted already upthread. Not every miner is running cheaper electricity (i.e. getting it for lower cost by extracting heat, etc), and those who aren't will be first to go bankrupt. Then later when only those with the cheapest electricity are still mining, then ditto them. Don't assume that Amazon can't run the same efficiencies. And then my point applies which is they drive the difficulty higher, but they parasite their % of the transactions.

MoonShadow continues to miss the point that if the cartel can withhold its share of the transactions for the mining, while factoring this into its profit on mining, then the rest of the miners have to compete with a higher difficulty yet they don't receive the extra income for doing so. Thus assuming Amazon can run their mining at the same efficiency as other miners, those other miners will be mining at a return-on-investment loss w.r.t. to their hardware and electricity costs. MoonShadow assumes that some miners can leverage clever means to obtain net lower cost energy that Amazon (the cartel) would not be able to. The only way this could be true is if that energy was obtained in low economy-of-scale that would be too small for Amazon to pursue, e.g. searching out small streams for micro-hydropower. So by definition, these small economies-of-scale wouldn't comprise most of the mining. If anything, ASICs are raising the economies-of-scale (https://bitcointalk.org/index.php?topic=355532.msg3809132#msg3809132).

He still won't understand that basic math. So he will repeat his same non-point.


Noise sounds good. But is completely devoid of relevant information content. I will not explain.


If I am so out-of-my league then how come I keep dissecting the technical analysis within minutes of reading a white paper:

Here I identified the flaws in BitShares proof-of-stake proposal within 5 minutes:

https://bitcointalk.org/index.php?topic=354573.msg3805394#msg3805394

Here I showed the P2Pool is vulnerable to a share withholding attack:

https://bitcointalk.org/index.php?topic=339902.msg3715641#msg3715641

Here I solved the selfish-mining problem that has been plastered all over the news lately:

http://hackingdistributed.com/2013/11/09/no-you-dint/#comment-1136318528

CoinCube my suggestion is shut up. Because if they can't turn you against me, I expect they will then try to discredit you.

The reason I don't repeat what is written already upthread is because fact is that most people can't process a complex model in their mind. So they try to section off parts of the model and address it piecemeal. This is what the continued postings have been about. And that is why they can't understand the model.

And it doesn't matter how much of my time they waste, they will never get the model until they are ready to.

I WILL NOT ALLOW THEM TO FILIBUSTER MY PROGRAMMING TIME ANY MORE.

THERE WILL BE NO MORE REPLIES FROM ME IN THIS THREAD.

It is time to kick ass. Enough talk.

---

Edit: anth0ny, is this you acting like an inane fool over at hackingdistributed?

http://hackingdistributed.com/2013/11/25/block-propagation-speeds/#comment-1140084768

---

And we will continue to have idiots who don't understand the profit model of a cartel, which was clearly explained in the thread.

A lot of people do that. None of their Ignore buttons are so dark. No, the reason for so much anger is because Anonymint rehashes the old stuff that was discussed, debated, and settles two+ years ago, then when people point out to him that this stuff is no longer an issue, or that he doesn't understand something and that his claims are false, he resorts to telling people how he is so very smart and that everyone should listen to him, and that anyone who points out the flaws in his claims is stupid. Then it just gets worse, when any new fault that people find in his claims are just replied to with links that don't really lead anywhere or say anything othen than the original claim being disputed.

In short, AnonyMint is an uninformed egotistical douchebag. That's why the hate.

And FYI,


The ONLY reason I even mentioned my IQ to begin with was because when AnonyMint first started posting, and then first started to get counterarguments explaining to him that he may be wrong, he was the one who brought up the whole "I am so smart, and I know people with high IQ, and I am so smart, and you are wrong" shtick. The first time I mentioned anything about IQ was in a reply to him, saying, "btw, you're not the only one with a high IQ here, *hint-hint*  ;)"

Or it could simply be because your claims were flawed, I, knowing the ins and outs of bitcoin, understood that you're wrong, but every time I try to come up with examples to demonstrate why you are wrong, you shut them down with either claims that what I point out has already been discussed (it wasn't), links to other posts that repeat the same thing I'm claiming is wrong, or just outright adhominem attacks. And I'm not the only one, either.

Cutting out noise to address a particular point.


Except that I demostrated several reasons why that is not an economic fact; and that it's long been understood that there will be institutions willing to mine zero margin or less for other economic reasons.  One of which I actually do, wchich is use the heat for zone heating in winter (roughly 15% of the network hash power is "other unknown" which I would be part of) another being the competing cartels (Walmart&McDonalds versus Target & Burger King) mining for major players in competing industries, for which finance is not tehir primary business, but is already a cost center.


And that is the point Rassah & I have been making.  You don't respond to critisisms of your theory.  If you can't manage my objections to your theory, then you don't have a theory.

Ignoring Mr. Mint's concerns for a bit, I woonder, do you, or others, believe that part of the mining sincentive will also be for wealthy establishments to simply secure their wealth? E.G. if I am rich without Bitcoin, I pay large fees to my bank and security to keep my money, gold, and other wealth safe. If I am rich with bitcoin (or even if I am a wealthy corporation that has a lot of bitcoin) and want to hedge against mining attacks and help maintain the status quo, I pay to run my own mining hardware, even if it is a small portion of the whole network, and even if I have to do it at a loss.

I'm sure we discussed this point two+ years ago, and likely every year this discussion has come up since, but what are people's opinions on this, now that mining has moved from complex GPU rigs, to simple and compact ASIC appliances?

When AnonyMint isn't churning out god-tier code, acing trigonometry tests because the principal likes him, winning Pulitzer prizes for his groundbreaking blogspam or deigning to speak to us, does he spray his Fortress of Solitude with solid gold Casacius coins he spontaneously shit into existence from the sheer inertia of his own magnificence?

But but but, the Amazon Cartel is going to deploy a yottaflop mining core to capture a percentage of txn fees! REFUTED REFUTED REFUTED!

Actually, we did discuss this exact thing in detail about two years ago, RAssah.  My short answer is, of course any very well heeled individual and/or bitcoin based finance institution is going to go to great lengths to secure their own miing operations.  For comparision, most consumer bank branches have very large, very expensive valut systems; even though in our modern digital age such an expense is no longer neccessary for their primary business.  Bitcoin 'banking' institutions are going to compete in many different ways, and touting their hashing capacity is as much a psycological benefit for an online bitcoin bank as a time-lock safety deposit box safe is for a brick & mortor institution.  Also, I expect such banks to compete by advertising their ability to offer free transactions.  One might be able to offer those free transactions because the bank itself has recepriprocity agreements with major retailers such as Walmart, or they might just e able to do so by sponoring some significant mining operations of their own, similar to my Walmart example.  While Walmart would do it to process their own "free" transactions at their own meatspace counters in a timely manner, actual bitcoin based financial institutions would do it as a benefit to their membership.  While free transactions can be sent by anyone, only a bank with their own mining under contract can promise that those same transactions will be processed for "free" within any time frame.  It thus becomes a comparative advantage over a bank that just offered basic bitcoin banking services, and didn't sponsor their own mining gear.

Bitcoin banks offering free transactions, for their own reasons, would by itself undermine AnonyMint's transactions withholding attack theory.  If numerous institutions are offering free transactions within their own limited scopes, then no cartel can develop with the premise that free transactions processing is an advantage that only a cartel member would have access to.

This supposes that hardware wallets will be offline and not communicating with the public network that far in the future.   Every wallet should have this feature, such that two individual parties (that do not trust each other) could transfer coin between two wallets (otherwise it's a race to see who can get online first to double-spend or claim).

All posts since my last one in this thread are incorrect.

Is amazon really such a threat to everyone. At some point this will lead to different kind of arrangement.

It's this intuitive insight that Anonymint overlooks.  The basic fact that any such actions by malicious actors will, eventually, expose themselves; and other actors will act in a different manner.  It's basic Praxeology.