Bitcoin Forum

Update: please read this post (https://bitcointalk.org/index.php?topic=455141.msg5292632#msg5292632) for a clarification of the meaning of this "OP" (opening post).

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(Doug) Casey Research's Alex Daley (a former high ranked executive at Microsoft) penned a myopic rebuttal (http://www.caseyresearch.com/cdd/failure-to-understand-bitcoin-could-cost-investors-billions) to internet pioneer, now venture capitalist Marc Andreessen's myopic fanboy regurgitation of the often repeated incorrect theories about Bitcoin's key innovation and future. It is important to read Alex's article first. These two and most of the Bitcoin community are far from understanding what is really going on. Thus expect the majority to vote "No" here, to reaffirm their myopia.

Daley essentially incorrectly argues that money can't exist without top-down corporate and government control (although he admits it could in a "wild west" mad max world which I think is to some extent where we are headed after 2016), yet correctly argues that Bitcoin has insurmountable (https://bitcointalk.org/index.php?topic=279650.msg3522750#msg3522750) (also (https://bitcointalk.org/index.php?topic=279650.msg3512888#msg3512888)) flaws for consumer payment without top-down take over while he failed to enumerate many of the reasons Bitcoin is vulnerable to top-down take over. Copying the myopia of most of the Bitcoin community, Andreessen fails to understand the reasons Bitcoin is doomed to a future of top-down control analogous to the top-down global money solutions being patented recently (http://www.zerohedge.com/news/2013-12-10/chasing-bitcoin-jpm-preparing-unveil-its-own-electronic-currency) by the major banks.

Before enumerating the specifics, I want to first address the factors driving interest and adoption of Bitcoin. Foremost is the desire to end the mismatch of the fact that the internet enables bottom-up, decentralized freedom (of speech and enterprise) yet payment being top-down controlled by a few large corporations which also translates to control by the various governments, e.g. AML and KYC laws since the false-flag farce of terrorism was foisted (https://bitcointalk.org/index.php?topic=365141.msg4810251#msg4810251) on the world to fool the sheep. Not only does this mean more layers of tsuris and parasites when starting up and maintaining enterprise on the internet and a fractured global internet payment system, e.g. many sellers in third world countries can't accept Paypal nor credit card payments or have severe limits, it also means we fundamentally don't have any individual freedom without relying on governments and society remaining functional and sane. Unfortunately history has shown that periodically throughout all recorded history since Mesopotamia ALL governments and society eventually go insane (https://bitcointalk.org/index.php?topic=365141.msg4245914#msg4245914) (more on that later).

Secondly, given this breathtaking potential to fundamentally bring payment into coherence with the decentralized freedom of the internet, there is immense investment demand for the killer crypto-currency. This sustains an investment boom until everyone that is going to use or be involved with that ecosystem is already fully invested. During that investment boom, the payment system doesn't need to be superior in every way to existing fiat solutions that Daley mentioned, because the investment demand along with the myopic dream of that breathtaking potential creates demand and interest. Daley is correct in another way which he did not mention. If the underlying payment capabilities are not superior (nor have a killer feature such as anonymity [2] to make them more compelling) thus not scaling with the investment demand (https://bitcointalk.org/index.php?topic=351712.msg3831758#msg3831758) then when that investment demand is saturated, there is a bubble that will burst (https://bitcointalk.org/index.php?topic=341594.0). Even CoinCube, Gary North (Ron Paul adviser), Henry Blodget, Peter Schiff, and others agree (https://bitcointalk.org/index.php?topic=341594.msg3671414#msg3671414).

Bitcoin Take Over Threats

• Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
• Selfish mining attack confirmed by skeptics (http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/#related)
• Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
• 51% attack because mining is concentrated in a few pools
• 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can (https://bitcointalk.org/index.php?topic=354573.msg3808112#msg3808112), i.e. each ASIC only works for a specific coin design.
• 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
• Non-zero transaction fees allows cartel take over via Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0) and Spiraling Transaction Fees (https://bitcointalk.org/index.php?topic=340686.msg3681159#msg3681159) tragedy of the commons.
• Lack of perpetual debasement means 51% attack gets less expensive (proportional to market cap) over time (https://bitcointalk.org/index.php?topic=455141.msg5075137#msg5075137).
• Pools can be attacked with Share Withholding Attack fixable with oblivious shares (http://arxiv.org/pdf/1112.4980v1.pdf#page=29)
• Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
• Superior altcoin

Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

• provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
• built-in anonymity (to minimize non-anonymous users)
• small, reasonable perpetual debasement
• zero transaction fees (with economic transaction spam resistance)
• economically limited pool sizes
• oblivious shares
• selfish-mining fix
• mini block-chain design
• faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

Note the argument of an absolute network effect advantage for Bitcoin is illogical (https://bitcointalk.org/index.php?topic=279650.msg3495695#msg3495695). The network effect can lead to more mass for Bitcoin but it can't entirely shut out altcoins, not in the way that for example an internet standard shuts out alternatives due to the inertia of modifying millions of servers (https://bitcointalk.org/index.php?topic=279650.msg3515394#msg3515394). For example, my coolpage.com was first in 1998 with a million users by 2001 (https://bitcointalk.org/index.php?topic=455141.0) (roughly 1% of the internet at the time), Friendster followed 2002 later peaking with 100+ million, Myspace 2006, and then Facebook 2008. Last year Bitcoin was only at an estimated 350,000 users. We have a long way to go to 7 billion.

Since the Knowledge Age is rising [3], socialism is peaking into an economic collapse soon (https://bitcointalk.org/index.php?topic=365141.msg4941493#msg4941493) (maybe to rise even higher in future), thus we headed into a crazy period where the governments will try to fund the $150 trillion global debt bubble [4] by hunting down all private capital (https://bitcointalk.org/index.php?topic=365141.0) (G20 announced a database (http://armstrongeconomics.com/2014/02/07/g20-to-cordinate-to-hunt-down-taxes-worldwide/) for this today, NSA will contribute (http://armstrongeconomics.com/2013/09/07/g20-agrees-on-worldwide-access-to-all-information-on-the-wealth-of-the-citizens-for-global-taxation/) and note this is the bankster business model (http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html) for them to own everything (http://www.silverbearcafe.com/private/06.11/owntheearth.html)), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector (https://bitcointalk.org/index.php?topic=365141.msg4943871#msg4943871). For this new virtual economy, e.g. downloaded 3D printing designs which we print at home instead of going to store (and 3D printers can print numerous materials on the same object), there are many cases that don't need the consumer protection charge backs. You won't likely be paying a high enough price for a download to justify the hassle of charging it back any way. A 7 billion person market is huge, prices will decrease while profits for individual designers will rise! Prosperity!

Also Alex Daley apparently isn't aware of the scripting capability in Bitcoin which enables multi-party contracts, off-chain activity a.k.a. colored coins, and thus escrows and other forms of consumer protection are also possible.

Near-term it pays to hold the crypto-currency as a store-of-value as investment demand rises over perhaps the next decade or more, and after that as I explained [3] that Knowledge Age workers will prefer to store their capital in knowledge, e.g. offering bounties to more developers than storing in money, so money will shift more to a unit-of-exchange and away from a store-of-value (because new knowledge can't be driven in large-scale by usury finance of large, dumb capital) and in fact only Dark Ages have been associated with non-debased, hard, money as a store-of-value, thus the crypto-currency can be our unit-of-account and we won't need to exchange it in real-time to the dollar or SDR socialism world currency (as many merchants currently do with Bitpay for Bitcoin to get paid in fiat instead of bitcoins). The Knowledge Age economy can find sufficient scale to keep commerce denominated in the crypto-currency and rarely exchange out to fiat for those rarer physical purchases as the physical industrial economy fades away.

Footnotes

[1] https://bitcointalk.org/index.php?topic=365141.msg4869474#msg4869474


[2] https://bitcointalk.org/index.php?topic=351712.msg3837816#msg3837816
https://bitcointalk.org/index.php?topic=351712.msg3845771#msg3845771
http://hackingdistributed.com/2013/11/19/why-da-man-loves-bitcoin/#untraceability-versus-anonymity
https://bitcointalk.org/index.php?topic=195275.msg3385368#msg3385368
https://bitcointalk.org/index.php?topic=365141.msg3944395#msg3944395
https://bitcointalk.org/index.php?topic=279650.msg3525312#msg3525312

Gonzalo Lira explains (http://www.blacklistednews.com/Guest_Post_-_Bitcoin%3A_Get_Out_While_The_Getting%27s_Good_/30803/0/0/0/Y/M.html) why anonymity is so important but Bitcoin doesn't make most users anonymous.


[3] https://bitcointalk.org/index.php?topic=365141.msg4926212#msg4926212
https://bitcointalk.org/index.php?topic=355212.0
https://www.google.com.ph/search?q=oxford+university+predicts+47%25+technological+unemployment
https://bitcointalk.org/index.php?topic=365141.msg4165741#msg4165741
https://bitcointalk.org/index.php?topic=365141.msg4192799#msg4192799

[4] https://bitcointalk.org/index.php?topic=365141.msg3902083#msg3902083

Errata

I am in the process of gathering links to my prior explanations of and math on why the people lose and wealth is concentrated under both deflation and inflation, and that debasement is not correlated to whether the people attain greater or less prosperity. Check back in this section later, as I will add them below.

https://bitcointalk.org/index.php?topic=365141.msg4379076#msg4379076
https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848 (math)
https://bitcointalk.org/index.php?topic=195275.msg3357270#msg3357270
http://armstrongeconomics.com/2013/01/10/why-hyperinflation-is-nonsense/

It is centralized control over debasement that is very detrimental to the people (because for example the Fed can make a hockey stick of the money supply chart at-will), whereas decentralized debasement is a boon to the people as explained in the above links. Unlike in the 1800s when we had more frequent bank runs and depressions, central banking has enabled delaying the debt defaults and write-downs so now even the IMF admits (https://bitcointalk.org/index.php?topic=365141.msg4291789#msg4291789) we are at a 200 year debt peak and thus is recommending that massive confiscation of wealth is required. Most people don't realize we had a depression in the USA in 1919, but we recovered in 2 years because the government did not delay the defaults. Whereas, the 1929 Great Depression lingered for decades and required a World War to resolve, because of FDR's New Deal and preventing the defaults and chaotic correction. Frequent defaults correct the economy before it gets "too big to fail" (TBTF). Now we potentially face an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) because we grew our debt to a 200 year high. My hope is that the better crypto-currency could help protect private capital from "socialism gone insane" so that the worst outcome can be avoided.

Yes votes are in the lead?

Bet that wont last long 8)

My answer: NO

Bitcoin is the the first cryptocurrency ever and it will continue to expand as long as its protocol is not compromised (which is very unlikely even in a distant future).

Do not underestimate the importance of network effect.
It's like VISA, which launched in 1950s as revolutionary payment service. Although now it's too primitive comparing to hundreds of new electronic payment systems, it still covers the most of the market.

Nice post.

Now I'd really like to get a discussion going on this alt crypto coin saver. Could it be zerocoin? What about Anonymint's own coin, how's that going? The sooner this coin hits the market the better.

Another question, couldn't precious metals be a good alternative for saving wealth anonymously out of reach from confiscation?

I have not yet read a competent technical rebuttal to the threats of Bitcoin becoming more centralized and losing coherence with the decentralized internet or perhaps even someone will argue that the internet giants will also succeed in centralizing the internet and we lose the freedoms that empowered the individual.

I am an engineer, programmer, mathematician, and logician. I want to see concrete technical arguments at the level of my OP. Frankly I am disappointed with the quality of the (rebuttal) posts thus far.

Update on Feb 20: Note I apparently deleted blablahblah's upthread rebuttal (or he deleted it, I can't remember), which I have quoted and replied to below.

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I provided specific technical attack threats. You have not refuted them.


The government regulation that must be hurdled to compete with VISA is why we don't see global competition. Any one who has tried to compete has been raided and shutdown by the government, e.g. e-gold, the Liberty Dollar, and other one in Panama I forget the name.

As far as I know, we don't need to break any law to create the alternative coin design outlined in the OP. The legalities will fall on the exchanges, but with a cpu-only proof-of-work coin with built-in anonymity, one can mine the coins if they want to anonymous. Imagine you are a European trapped behind the coming capital controls iron curtain and so you go buy some PCs and mine your way out. Unlike specialized ASICs, you are likely to find PCs for sale person-to-person locally.

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No.

• Validation is too slow, thus can't work technically.
• Might be back-doored (although this might be fixable)
• Unproven, very complex new crypto. Needs many years to become trusted and stable.
• Storage size needed for full clients is impractical if it is mandatory for all users
• Mixers, laundries, and exchanging between coins which are not mandatory fail for the ex post facto reason I provided in the 3rd item in the Threats section and footnote [2] of the OP
• Subject to timing attacks, i.e. timing when inputs go in and outputs come out
• Doesn't obscure the IP address of the participants, and Tor + VPN are inadequate, this will be explained further at the appropriate time

I hope you can appreciate why I would never want to be provably the KEY developer of a such an anonymous coin. One doesn't need to break any law to be a target for assasination (http://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinenko). The USA and Europe are not far behind in terms of having laws and executive orders to assassinate citizens (http://www.telegraph.co.uk/news/worldnews/barackobama/9913615/Barack-Obama-has-authority-to-use-drone-strikes-to-kill-Americans-on-US-soil.html) without a trial if they are categorized as a "terrorist". I could see myself publicly contributing in a minor refinement bounty work role on such an altcoin, for as long as I am not the creator.


Yes I expect them to locally, but more risky if you need to move them stealthy across a border or checkpoint.

And you can't send them as payment over the internet. Given my expectation of the Knowledge Age taking over the economy, then the global economy would implode if we can only use physical gold. This is what caused prior Dark Ages, the velocity of money plummets (already has fallen 50% since 2008) and gold coins get buried. We are still finding buried stashes from prior Dark Ages today.

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I shouldn't need to point out the blatantly obvious...

The premise of the OP is the internet is decentralized and their is a huge demand for a decentralized money to enable internet enterprise to be as freedom-oriented as the decentralized publishing of web pages and other internet activity.

If you prefer a centralized internet, then please feel free to continue to using Paypal, VISA and other centralized payment systems.


You conflate orthogonal issues. The premise of the OP has nothing to do with the irrational exuberance which caused the early Bitcoin price bubble to $30s then crash. This was due to the fact that early adopter geeks are not experienced investment speculators (technical analysis traders). They didn't understand the maturation and adoption cycle of new technologies.



I am not a wishy-washy, fence-straddling Libertarian who accomplishes nothing. I am an anarchist, who makes it happen by releasing software that enables individual freedom.

Specifically I am some what near to being a polymath (although I am a poor writer and communicator), e.g. I probably connect to all clusters on the Dark Enlightenment (http://esr.ibiblio.org/?p=5227&cpage=1#comment-423313) map (if following image doesn't display, then click that link to see it at top of page). Note for example I've exchanged communications on his blog with James A. Donald (who was the first person to communicate publicly with Satoshi! (https://bitcointalk.org/index.php?topic=354713.msg3796155#msg3796155)).

http://habitableworlds.files.wordpress.com/2013/04/darkenlightenment1.png


You have not technically refuted the Threats section of the OP which drive Bitcoin to a centralized control. If Bitcoin can be taken over by vested interests, then we are back in the same predicament, just a different set of slave masters.

Decentralized means the vested interests can't take control, only contribute in a decentralized competition. Centralized means it gets swept into the power vacuum of democracy (https://bitcointalk.org/index.php?topic=365141.msg4065040#msg4065040).


Eventually you run out of other people's money and productive lifespans. Then comes the outcome that has repeated throughout recorded human history, as linked (https://bitcointalk.org/index.php?topic=365141.msg4245914#msg4245914) in the OP.

That most people believe it is impossible for history to repeat, is why we are nearly doomed to an Apocalyptic or Mad Max outcome (https://bitcointalk.org/index.php?topic=365141.0) outcome. The people expect the government and the collective system can take care of them, but in fact it turns on itself like a cancer and eats itself because the money has to come from some where to continue to pay for all the entitled expectations of the people.


We are headed into massive deflation, and perhaps you fundamentally don't understand that hyperinflation only occurs in peripheral economics (https://www.google.com.ph/search?q=site:armstrongeconomics.com+hyperinflation), not in the core of the global economy.

http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/
http://armstrongeconomics.com/2014/01/14/hyperinflation-is-it-even-possible/
http://armstrongeconomics.com/2013/11/20/hyperinflation-all-just-hype/
http://armstrongeconomics.com/2014/01/14/hyperinflation-impossibility-in-private-sector/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2012/07/04/hyperinflation/
http://armstrongeconomics.com/2013/02/24/the-untold-truth-about-the-german-hyperinflation/
http://armstrongeconomics.com/2013/06/24/12703/
http://armstrongeconomics.com/2013/12/29/law-of-unintended-consequences/
http://armstrongeconomics.com/the-taxman-cometh/
http://armstrongeconomics.com/2013/10/30/world-trade-turning-negative-same-as-protectionism/
http://armstrongeconomics.com/2013/11/14/the-coming-deflation/
http://armstrongeconomics.com/2013/11/09/deflation-the-great-equalizer-now-greece-was-there-a-different-tested-response-in-history-yes/

My point in the Errata section of the OP about centralized control over debasement isn't that hyperinflation results. I never wrote the word hyperinflation. Rather my point is those who have captured the government gain the fruits of that debasement, or it is wasted by the poor fitness of top-down allocation of resources.


No other proof system (i.e. only proof-of-work a.k.a. "PoW") solves the Byzantine Generals Problem (http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/) which is necessary for decentralized trust over an untrusted network like the Internet. No other proof system distributes new coins to users to both avoid exchange AML and KYC laws, and redistribute capital from the wealthy (dumb, usury parasitic capital) to the masses which is the role socialism was formerly doing (https://bitcointalk.org/index.php?topic=365141.msg4906694#msg4906694).
 

I strongly posit proof-of-stake will be proven insecure. It lacks the expanding entropy of proof-of-work.

Trust via reputation (https://bitcointalk.org/index.php?topic=283513.msg3034710#msg3034710) (i.e. social capital) or stake (i.e. capital share) inherently degrades to centralization and low entropy outcomes.

I had written in more detail about this. I will try to find my old post, but it is getting extraordinarily difficult for me to find such posts as they are buried in 1000s of posts I have written.

Remember that in March 2013, I was researching the possibility of a proof-of-diskspace alternative, and did some discussion in the Decrits thread to learn more about the issues of how entropy relates (https://bitcointalk.org/index.php?topic=189239.msg2454969#msg2454969) to proof of trust in an untrusted network. That is when I had the epiphany that entropy is a critical factor. And I abandoned proof-of-diskspace.


You didn't comprehend thoroughly the 3rd item in the Threats section of the OP. Without widespread anonymity, the entire coin can be forced to be non-anonymous and thus take over by the government and right back to fiat again.


You are blind, see in the OP where I wrote "with economic transaction spam resistance".

And you ignored the other Threats that derive from non-zero transaction fees and declining debasement coin rewards.


Off-chain solutions don't entirely replace all on-chain use cases. (Novice readers, we are referring to transactions that occur on the coin's decentralized block chain which requires trusting no one i.e. Satoshi's new technology of proof-of-work, versus those that are done by "trusted" third parties i.e. right back to the fractional reserve private banking model of the 1800s)

Btw, that name Ethereum is not going to work. It is extremely difficult to select a name for the next currency of the world. I understand "it lives in the ether" but that isn't going to work for most people. It needs to sound like money, but not "coin".

Following.

Agreed with OP, too many people have invested not knowing of the many risks. It won't be long before a more comprehensive coin is released.

Anonymint, I'm disapointed you are letting the work with your coin go, although i understand you.

Couldn't you try to work together with a team (like zerocoin) and together work towards your goals?

I personally think you were just to active in these forums and should just have released your coin anonymously. As is now I see the problem in doing that.

Too bad nonetheless since it seems like not many appreciate what you are saying. We might never see a coin that has your requirements..

Indeed.  :(

However I am not as pessimistic on the possibility of the market need being fulfilled soon.   :)

Listen to this audio (http://armstrongeconomics.com/2014/02/06/us-state-department-says-fuck-eu-over-ukraine/) to see in their own words how totalitarian the US government has become behind the curtain. Wikipedia says (http://en.wikipedia.org/w/index.php?title=Victoria_Nuland&oldid=594712089#2012_Benghazi_attack) she was the prime suspect in the Benghazi fiasco which is part of (http://armstrongeconomics.com/2013/09/06/dirty-dealing-on-syria-in-washington/) this push Middle East towards the world currency (https://bitcointalk.org/index.php?topic=365141.msg5042295#msg5042295).

http://armstrongeconomics.com/2013/09/04/syria-benghazi-connection/

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I see no need to reply to blablahblah's latest (naive or intentional?) post. He has a preference for centralized outcomes. I am sure readers have enough information already to formulate an accurate appraisal.


Because no nation controls it, i.e. decentralized. And there are other freedoms that come from it being decentralized, e.g. free speech of self-publishing such as blogs. And many other decentralized freedoms. The rest of your post shows you still don't understand how centralization destroys freedom, fitness, and leads to horrific failure. We already had that debate in the Mad Max thread. I will not tolerate the redundancy (thus noise) of unnecessarily repeating the same debate in this thread.

So basically barring the first and the last, all the threats you are listing are related to the Proof of Work mining. Despiste what you are saying, I think Proof of Stake mining address these problems.

The first threat - government cooperation - is highly speculative and I prefer put my money on Bitcoin rather than on this eventually.

So it's boils down to: will Proof of Stake overtake Proof of Work. The market will decide. The only thing investors have to do is hedging by capturing the same portion of the PoS coin supply that they have in Bitcoin (Bitshares and NXT being the most serious PoS coins from my point of view)

I refuted (https://bitcointalk.org/index.php?topic=354573.msg3805394#msg3805394) the security of Bitshares.

PoS and proof-of-primes (e.g. Primecoin) do not solve the anonymity take over Threat. See the 3rd item.

Proof-of-primes can not be mathematically as secure (https://bitcointalk.org/index.php?topic=367965.msg4383462#msg4383462) as PoW. The entropy security issue (https://bitcointalk.org/index.php?topic=354573.msg3805632#msg3805632) always applies to all the non-PoW systems.

Proof systems which attempt to do useful computational work can not be secure (https://bitcointalk.org/index.php?topic=285701.msg3061431#msg3061431).

PoS can not redistribute new (https://bitcointalk.org/index.php?topic=354573.msg3805522#msg3805522) coin in way that rewards individual effort and ingenuity as proof-of-work can (https://bitcointalk.org/index.php?topic=285701.msg3061146#msg3061146). For example, I've explained that stream microhydropower (https://bitcointalk.org/index.php?topic=285701.msg3090924#msg3090924) is the least expensive electricity on the planet. Of course any non-PoW coin can redistribute coins equally or based on share, but that is just Communism (a very failed economic concept of course!). Thus we are right back to needing socialism to redistribute coin from slow large capital to faster smaller capital for us. Otherwise the wealthy accumulate all of the wealth. I covered this in great detail in the MadMax thread. See the links in Errata section of the OP and my first rebuttal to blablahblah.


PoS means the elite control the transaction processing, i.e. the 51% attack is built-in by design. We are right back to same problem again. Only proof-of-work solves the Byzantine Generals Problem. See my first rebuttal to blablahblah.

Sorry.

P.S. I am confident PoS is not secure (https://bitcointalk.org/index.php?topic=273197.msg2954801#msg2954801). If I put some time on that, I bet I can write down a proof. Will do at some point in future.

Note the following quoted posts were deleted only because I have retained all their comments in my reply. Keeping the thread concise as possible.


I already explained that if mixing is not mandatory for all, then all anonymity is destroyed. See footnote [2] in the OP. Please you are not knowledgeable enough and you need to do some reading first.

Most people don't realize what is coming, i.e. the market is currently wrong. Once they realize, they will run for the hills to save themselves.

=================AnonyMint==================

=================AnonyMint==================

For those who didn't click all the links in my OP, you probably missing this chart on what happened to the population of Rome:

http://i2.wp.com/armstrongeconomics.com/wp-content/uploads/2012/06/populationofrome.jpg?resize=584%2C542

Note that collapse was slower then because the government confiscation and citizenry fleeing was physical (http://armstrongeconomics.com/2014/01/15/civil-forefeiture-laws-are-funding-pensions/). Whereas now the G20 is planning digital confiscation of wealth, they will just zap your bank account. So the fleeing will be also nearly instantaneous digital actions.

Note the following quoted posts were deleted only because I have retained all their comments in my reply. Keeping the thread concise as possible.



If blablahblah makes me repeat this again, I will delete his post and not reply to it. You are repeating the same claim that we don't need decentralization. I already replied to you twice upthread as follows. Trust in centralization is precisely the power vacuum that leads to abuse of power that causes the individuals to lose their freedom, money, and lives. Thus it is synonymous with no (false sense of) security. I provided enough examples already in the Max Mad thread which is linked from the OP. We don't need to redo that debate you and I already did in the Mad Max thread. You like centralization. Understood. So you go that way, and those of us who want to bet on decentralization will go the other direction. We will see in a few years when we are on the rim of the cliff staring at you down in the abyss (if you are still discernible down there).

=================AnonyMint==================

=================AnonyMint==================


When the sheep are asleep, a 51% attack could also be insidious similar to the horrific power vacuum with "trusted" centralization outcome. The attack would be noticed by experts (https://bitcointalk.org/index.php?topic=285701.msg3074349#msg3074349), but the sheep might not care.


In decentralized PoW the majority chain has no coordinator. There is absolutely no trust. Any participant who doesn't follow the protocol is rejected by the protocol. All participants are competing for highly random entropy to be the chosen winner of the next block confirmation. Perhaps you need to read Satoshi's seminal Bitcoin whitepaper (https://bitcoin.org/bitcoin.pdf#page=3) again.

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This will be the only warning.

Posts such as the above which add no substantive reasoning, will be deleted. We can probably assume and attribute 2 of the "No" votes came from these two. This is not a thread for lazy "because we want it to be so regardless of logic and technical understanding" spammers and fanboys.

As usual, LaudaM's post have 0 information content (its usually more a feeling of empathy than angst, at least in a self-moderated thread where I can block him). I can assume that davidgdg is implying that anonymity should be up to each individual user and not mandatory, which I already explained in footnote [2] in the OP causes all anonymous users of and thus Bitcoin to be subject to easy control by the government (taxation and law enforcement). If he has another implied meaning, he needs to write it. I will not tolerate posts which are not a sincere attempt to convey information clearly.

Update davidgdg replied:


The "how much better", why Bitcoin can't "evolve" were specifically addressed in the OP (c.f. the links where it says "insurmountable (also) flaws" in the OP). Read again more carefully, read the linked threads, read and read and think. Sorry the OP has a very high information content and it is not for the lazy readers.

Those who vote "No" are going to miss an opportunity to attain massive fortunes. I am very happy if 99% vote "No". Leave more wealth for me  :-*

Note the following quoted post was deleted only because I have retained all the comments in my reply. Keeping the thread concise as possible.


I already explained in the linked threads in OP. Doesn't require takeover of internet. Totalitarian measures have already started. I proposed an altcoin that would not face the same doom.

I am not going to repeat all the discussion that is linked from the OP. Lazy readers are not important to me. And if I had to repeat every discussion I already did for every new reader that can't read the prior discussion, I would be a slave to lazy readers. I would never get any other productive work done. I would spend my entire life re-writing over and over again for each new lazy reader, because there are billions of them.

No single government controls all of the internet. The protocols of the internet are highly decentralized and self-repairing (https://bitcointalk.org/index.php?topic=285701.msg3141082#msg3141082). The government can not shut down the entire internet, because for one reason they rely on it to function. Not only their daily functions, but it is also the greatest data collection system on citizens they ever had. One week with the internet shutdown would result in total chaos for the western governments. They could try to filter certain traffic, but we can hide our traffic in HTTPS and SSL such that they can not discern which traffic should be filtered. If the governments push too hard, the youth will simply create a new internet and say "F U" to the boomers who are running the governments. The youth are addicted to internet and there is no way they will tolerate even a week without their connectivity.

From the Mad Max thread (https://bitcointalk.org/index.php?topic=365141.msg5050397#msg5050397)...

Sir kindly check your Messages. Our group is working on a similar design.

To show I am fair, I acknowledge that blahbermouth created an alternative noise thread (https://bitcointalk.org/index.php?topic=457105.msg5041054#msg5041054).



One last set of rebuttals from me to this jealous idiot. While he is masturbating with useless noise, self-moderated threads can be all about filtering spam to focus on serious discussion and work to actually release new software.


Indeed you did.


Oh the irony of you using decentralized freedom to circumvent my top-down managed thread. (don't you think I am smart enough to have done this on purpose so you would prove my point!) Yet upthread you claimed the internet is not about decentralization (i.e. individual independence) and you didn't understand why individual control is "freedom-oriented". Sigh.  ::)


For the love of Christy, just read what you wrote upthread.  ;)


And I explained upthread why only PoW allows decentralized trust of the protocol without needing to trust the reputation of the participants.

You are so fucking slow minded! Stay away from my threads. I am tired of your tiny brain wasting my time.


Don't conflate the trust of open source due to the Linus Law "given enough eyeballs, every bug is shallow", with the type of proof scheme chosen to remove the need to trust reputations of individual participants.

You fucking conflate everything. Your IQ is too low. I don't want your posts, and take your low IQ cohorts with you. Don't let the door hit you in the arse on the way out.

P.S. Your low IQ cohorts can repost their deleted spam posts in your thread. I have already provided a link to it above. Readers can follow that link to read posts which I deemed to be political grandstanding noise and not sincere discussion. Or repeating debates that were already made in other threads which are linked from the OP. If they want to continue those orthogonal debates, they can put their posts in those orthogonal threads which are already linked in the OP. For example, I deleted Rassah's political grandstanding re-posting his interpretation of the Transactions Withholding Attack (https://bitcointalk.org/index.php?topic=336350.0) here, because I would have to repost all my comments from that thread in this thread too which would be an inane duplication of effort and burying this thread. He already posted in that thread and I refuted him already in that linked thread. Readers can go read the entire thread if they want to see the debate.

I noticed before your name choice poll (https://bitcointalk.org/index.php?topic=458443.0), but I didn't like the choices much except perhaps silicoin. I like unigit because it isn't lost in the dozens of "coin" altcoins, but it is not obvious that it means money.


Ethereum is too difficult to pronounce and spell.

Another problem is the units of the currency, i.e. "I own 3 ethereums" because it is not clear that an etheruem is a unit, i.e. 3 ethers. Whereas "I own 3 bitcoins" is clearly 3 coins.

Some people might be tempted to pronounce it as "uni-get" instead of "uni-jet", yet that isn't the phonetics of the spelling in english words so they would be clearly in error except that I think people mispronounce github as "get-hub" instead of "jet-hub"?

https://bitcointalk.org/index.php?topic=365141.msg5075050#msg5075050


Let me expound on that math.

If tx fees increase proportional to the rise in the BTC price, then Bitcoin becomes uncompetitive with debit cards, ACH, Swift, and wire transfers, which all have a flat fee.

If tx fees don't scale porportional the rise in the BTC price, then because the annual rate of new coin rewards diminish over time, then the funding for mining is declining proportional to the rise of the Bitcoin market cap over time.

Thus Bitcoin is becoming less expensive to 51% attack over time relative to the market value of Bitcoin.

For an attacker such as the government, the market value of Bitcoin determines the value of taking control of it.

For miners, the revenue paid out for mining determines the amount of processing power they can apply to the security against a 51% attack.

https://bitcointalk.org/index.php?topic=365141.msg5087444#msg5087444

Altcoin and dogecoin alike will be created on weekly basis and will be modified further and further to correct possible anomalies. This is a gradual process which also involves human behavior.

We are not talking about the human behavior of one company and all stock owners/traders trading this company's stock. We are talking about world-wide computer user communities behavior that no genius can model and predict with math, physics, reasoning, explicit explanation, and such.

In worst case scenario, we can go back to 2010 when 10,000 BTC is worth $25 for a pizza.

That was less than 4 years ago.

 8)

I'll go on a limb there, and say something this community may not be ready to swallow, but the biggest flaw of bitcoin and cryptos so far is to want or aim for anonymity.

We've got enough shady dealings going on with banks, politicians and fiat cash transactions. Let's not fool ourselves: those that benefit from anonymity most are banksters, politicians, crooks and traffickers.

I didn't think about that until now.  Of course.  Like with PrimeCoin you could determine the next prime number after the next prime number and use that to snoop the blockchain and doublespend a million dollars or something ridiculous.  I see it now.  It is necessary to have random meaningless hashing after all.  Which is really disappointing. 

I received a private message from someone who claims to be inside the curtain with central banks, and he says that some inside already know the entire thing is going to come crashing down and they are now focused on what to do after the collapse.

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The crooks always own the government due to the power vacuum of democracy, which is explained in detail in my Mad Max thread (find a link to it upthread). So lack of anonymity is not stopping them. Whereas lack of anonymity allows the government to track down all the wealth and tax+confiscate it all to pay the $150 trillion global debt. Of course the global debt will grow larger as they tax+confiscate, because the entire pie of the productive economy will collapse. So this will be a death spiral into a Mad Max Dark Age.

The only way we avoid that horrific outcome is for private and productive capital to find a place to hide from the government. Gold won't work because you can't transact over distance nor internet anonymously. Check points stop that physical movement. Hoarding of gold coincides with an implosion of transactions and thus the velocity of money (which is already down -50% since 2008).

Anonymity of decentralized internet currency is the only solution I see. Or the people suddenly stop demanding socialism and rise up against the government, but that isn't going to happen because too many people suck the tit of socialism now and need it.

One positive thing about anonymity in terms of the crooks, is if it helps them to steal faster from the government, then sooner we can collapse the socialism (i.e. government) which is hunting down all private wealth.

We have to destroy the current system. The only possible option is whether we don't also destroy all private capital in the process of creative destruction of the current egregiously out-of-control socialism and government.

See also what I wrote in the past (https://bitcointalk.org/index.php?topic=342848.msg3789296#msg3789296) about this.

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True for things that must be known a priori as you say, e.g. solving supercomputing problems such a matrices. However, there is one slight mistake in your epiphany, at least how I interpreted your statement. PrimeCoin is secure until someone figures out a math to relate the way they are forming their prime chains, i.e. how the next prime relates to the prior block's prime. I do believe it can be insecure too because there may be a yet undiscovered mathematical order in primes which applies to the way they chain primes, but it is not a given at the moment until someone finds that ordered relationship and implements an attack. Whereas for Satoshi's proof-of-work, the hash of the next block can't be known until the hash of the current block is calculated, so it can never be known a priori unless you have more hashing power than the network (i.e. 50+% attack). And the next hash relates to the prior one in a cryptographically secure (random) way due to the confusion and diffusion in the design of the hash function. There is no expectation of mathematical order since the design of the cryptographic hash requires breaking linearity over all possible number spaces.

Do you not believe a bitcoin black market could be formed? Especially when the state becomes more pervasive perhaps imposing price controls when inflation gets out of control, people may turn to bitcoin because at the moment it's far better than any other cryptocurrency out there at the moment and when the economic situation gets worse dollars or SDRs or whatever we're using in the future just will be hated by the people because inequality will be so great and the poor will be really poor.

Black market won't function so well because anonymity is broken for all due to footnote [2] in the OP.  Due to the coin tainting by authorities explained in [2], then it will be very difficult to find someone to transact with you. Most will refuse. If you want the coin to function well, you have to prevent coin taint from fracturing the money system.

Coin taint is perhaps the most serious problem in Bitcoin. A core Bitcoin developer is trying to fix it with CoinJoin, but I explain in [2] why that won't work.

Also we are headed into massive deflation, not inflation. Please see the long list of armstrongeconomics.com links I provided which explain this upthread. As Armstrong has explained how it always happens throughout history, "you will pray they would just hyperinflate away the debts and destroy their governing power. That only happens for fringe a.k.a. peripheral nations or revolutionary governments. Instead what is coming is much more sinister, as the core nations will band together and hunt down all wealth SO THEY RETAIN THEIR POWER".

The way socialism collapses over and over again throughout human history is the people support the government to go tax+confiscate the rich. Eventually this is targeting the middle class, e.g. look at what Obama is doing and IMF is proposing a 10% confiscation of all bank accounts. By the time the system is eating itself, the people don't have any money. Thus they demand the government to do more to tax+confiscate. This is a downward spiral into the Mad Max abyss. It has happened many times in human history, e.g. the Wiemar Germany then Hitler. But that is not the only example, there are 100s.

So yes we need that anonymous cryptocurrency and thus black market. My hope is it becomes as mainstream as possible. Else everyone sinks with the Titantic.

When the IMF confiscation comes, there will be a mad rush into Bitcoin and also (by the more astute) into a more strongly anonymous coin that doesn't have coin taint. When the authorities start tracking down Bitcoins and pushing the coin taint to reality, then a mad rush (of the less astute) out of Bitcoin into the more strongly anonymous coin.

Zerocoin is soon to be released. Way better anonoymity than Bitcoin

Do you really believe the US government will choose deflation over inflation? Most academic economists want inflation at the moment and are not even worried about hyperinflation due to the low velocity of money, that's what the QE has been about hasn't it? They're trying to reach an escape velocity and increase consumer confidence before dialling back the QE and raising rates. Armstrong says it's impossible to maintain our reserve status and inflate our way out of this problem which is true but why then have they not started the deflationary measures already?

https://bitcointalk.org/index.php?topic=455450.msg5097190#msg5097190

I already explained upthread why it can't be Zerocoin. See the following upthread quote of myself:

Isn't this point going to be a problem with any new crypto? Better get this new coin out soon so there is sufficient time to test and debug it.

Anonymint what is your feeling at the moment. Is there any coin in the pipe that you feel could have the properties you want?

Don't forget the Quantity Theory of Money, M x V = P x Q. Thus if M increases but V (velocity of money) implodes (and it is already down -50% since 2008 in the USA), then you still have deflation, unless Q falls more than M x V does.

They are already starting the deflation. Don't you see Obama destroying the productive economy with Obamacare. Don't you see the NSA storing everything so they know where all the wealth is, as they prepare to share info with the tax authorities in every G20 nation (see my upthread link to that news story). Don't you see the plan to raise taxes. Don't you see the IMF calling for "financial repression" and confiscation of 10% of all bank accounts. Don't you see the Fed taper. Don't you see the 60% youth unemployment in southern Europe and preparing to spread to France and others, while ECB has no legal right to print:

http://armstrongeconomics.com/2014/02/11/ecb-structural-faults-switzerland-bail-out-of-banks/
http://armstrongeconomics.com/2014/02/08/europe-is-a-basket-case-just-turnout-the-lights-now-save-energy/

All the $trillions in QE ended up as dollar bond issues in the developing world a.k.a. peripheral economies. That is why you see the developing world booming in construction (e.g. the third-world Philippines has 14 of the 36 largest malls in the world [1]). This wasn't hyperinflation, it was inflating the developing world while deflating the western developed world. Note the Fed is tapering, so the developing world has peaked and is headed down (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927).

There is a massive deflationary wave underway. It has started at the periphery and by 2015.75 it will reach the USA when the very strong dollar (from capital fleeing the developing world back into the dollar again) will choke off the USA economy. Coincidentally the US govt is funded to Sept 2015 precisely to the day that Armstrong's computer model predicts the USA to peak and turn down into this massive deflationary wave that will run into the 2020s with final bottom of the global crisis in 2032.

Here follows is the relevant upthread quote of myself:

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[1]

The Fed is tapering because they want to keep confidence in the dollar, the markets were expecting a taper because the markets believe the economy is recovering so if the Fed didn't taper the markets would have responded badly, the taper was insignificant as well, they're still pumping money into the economy. The Fed have always maintained their decisions are based on the data and the data will show stunted growth and employment will be terrible, I expect the taper programme will be extended

Also it is suspected that China have been buying massive amounts of gold due to not reporting their gold stock since 2009, they do not want the US dollar as the reserve currency anymore, Russia has publicly stated that the US dollar will be a thing of the past. China does have a high corporate debt but they have real wealth as well, they have a strong manufacturing base and their citizens have a high savings rate, if they allow the Yuan to appreciate against the dollar the wealth of their citizens will increase dramatically and they will be able to import more, if they stop exporting their goods to the US for their worthless dollars they can start consuming what they produce and increase their wealth further.

Yes Obama has been destroying the economy with Obamacare but that doesn't mean we won't have inflation, in fact a contracting supply of real wealth will only make whatever remains more expensive. High tax rates and bail-ins does not mean we will have deflation, they will only destroy what is left of the productive economy, who will want to hold the dollar then if they cannot buy anything with it?

You don't understand relative size. The USA is still the driver of the global economy. The Yuan does not have enough size and liquidity to replace the dollar during the cycle. China will first significantly correct because their corporate debts are the highest in the world now, their economy is incredibly unbalanced and dependent on exports and fixed capital investment (no worse example in human history). Later in the 2020s or by 2032 after it has rebalanced towards domestic consumption with a decade long severe correction, then China will start growing again and find that it is becoming the financial center of the world.

But first, we go to a strong dollar and massive global deflation. The USA and the NSA will thus be in the driver's seat of the default of $150 trillion in debt. They will not give up this power (thus they will not hyperinflate away their power). They plan to charge to all of us. This is massive deflation.

No major nation in the world has ever hyperinflated away their power. They always self-destruct by attacking their own citizens. Study Rome. Study Germany, etc....

You don't sniff this yet, but Armstrong and I do. Later when you do finally capitulate and realize, that is when the others have also figured it out and it will be mad rush into the dollar and away from all other economies. Then we move into the peak for the USA Sept. 2015, then the USA goes over the cliff and total chaos will ensue. It will be much worse than 2008 and the central banks will be powerless this time. In fact, the Fed has been warning the banks they will not be bailed out again. This is why all the G7 have official bail-in plans (seen on their government websites) to take the money from the depositors instead.

You also don't understand that $150 trillion global debt means every one has been doing the wrong activities and everything is uneconomic.

You don't understand that debt is not just a ledger item, it also reflects real waste of human years, wrong skills acquired, wrong decisions made, etc.. These real problems are not corrected just by changing a line on the financial ledger.

This frustration is why riots and global unrest (and the war cycle) is increasing all over the world right now (https://bitcointalk.org/index.php?topic=365141.msg5043927#msg5043927). There is no way to avoid the global deflation contagion.

Total hell is about to hits us in 2 years or less.

I'd rather not comment on my backdoor communications with moolaching's group.

I already stated that someone who claims to be connected with central banks has contacted me and I have referred him to moolaching's group.

I don't want to be the primary leader on the development of such an altcoin for the reason I stated to you upthread. I can provide some assistance but I will not allow it to be totally dependent on me.

If anyone raises this question again, I won't answer. I suggest you keep an eye on moolaching's posts too.

I am hopeful that Ethereum's talented group could join forces with moolaching at the appropriate time. I'd prefer not to comment further on that as well. Stay tuned...

ADD: you assume that the altcoin proposed in the OP would use radically new crypto, but that may not necessarily be true.

Can you explain to me though the mechanism by which deflation occurs? Perhaps a hypothetical walkthrough.

This is Gold.


Just in time with the Bitcoin exponential increase hitting 1-10% of the general population. Cause or effect?

Also didn't the Romans suffer from inflation when they diluted the silver content of their coins in 3rd century to fund the wars and bloated Roman government. Wasn't this the reason for the fall of the Roman Empire?


Also I don't believe the US drives the world economy, the US profits at the expense of the other world nations by importing their goods in exchange for their paper. Yes the US has caused many bubbles in foreign markets but the biggest bubble is in Washington and I'm not saying China or any other country will come out of this good but the US are going to suffer the most.

Essentially do you expect the controllers of USA to print away their global reserve hegemony, when instead they can confiscate the wealth and cause a massive dollar short rally? Never had happened the way you expect. It is always the way Armstrong and I are explaining to you.

Why do you think Homelove "hands down your pants" Security will be procuring 2714 tank-like vehicles and 10 billion hollow point bullets (illegal in war by Hague Convention due to being so gruesome), deputized non-federal police as federal, we have FEMA detention camps constructed all over the country, Obama destroying gun rights by executive orders, NSA tracking everything Americans do on the internet and telecommunications, etc..

Here are links explaining why the world will beg for the dollar, the opposite of discarding it as you would expect in hyperinflation:

http://armstrongeconomics.com/693-2/2013-2/can-the-world-really-abandon-the-dollar-as-a-reserve-currency/
http://armstrongeconomics.com/2013/05/08/dollar-trade-reserves/
http://armstrongeconomics.com/693-2/2012-2/where-do-empires-go-to-die-and-when-they-do-die-how-do-empires-die/
http://armstrongeconomics.com/2013/08/11/defining-hyperinflation-the-coming-new-currency/
http://armstrongeconomics.com/2013/03/05/beware-the-dollar-rally/
http://armstrongeconomics.com/2013/03/29/the-short-dollar-the-debt-bubble/
http://armstrongeconomics.com/2013/03/29/latin-america-dollar-loans/
http://armstrongeconomics.com/2013/03/29/cyprus-confiscation-of-assets-is-global-plan/
http://armstrongeconomics.com/2013/03/28/russia-also-attacking-private-groups/


There was only a very brief hyperinflation (no silver coinage at all!) in Rome in 3rd century as you will see on the silver price chart (http://armstrongeconomics.com/2013/03/27/are-we-head-to-a-mad-max-scenario/). That chart cost Armstrong $21 million to produce. Rather it was a gradual debasement for 100s of years.

Rather major core governments never go willingly to destroy their power. Instead they do what ever is necessary to maintain it. You did not read all the hyperinflation links I already gave you as follows.

http://armstrongeconomics.com/2013/03/17/what-are-the-odds-the-us-defaults/
http://armstrongeconomics.com/2013/01/28/here-we-go-again-hypreinflation/



No. It was debt that misallocated all the resources, just as we have now with $150 trillion in global debt, i.e. $25,000 per human including babies, elderly and billions of poor earning less than $10 per day (how can they pay their $25,000 share!).

http://esr.ibiblio.org/?p=4946&cpage=1#comment-402900




What you emotionally like to think (bad boy USA will be thwarted) is irrelevant. The core economy is the core because it has the most technology, the strongest military, the most highly developed financial systems and social capital. And I am very sorry that don't have time to argue with you and teach you this macro economics.

China is extremely corrupt with the elite taking out most of the profits, please go read my mpettis.com links. Note I wrote the following recently which somewhat agrees with your caveat above.

I am more pessimistic than you (https://bitcointalk.org/index.php?topic=322058.msg3583996#msg3583996). I wish I wasn't. However one of my main points is the very low entropy of assuming Bitcoin will be more important than the internet (https://bitcointalk.org/index.php?topic=322058.msg3718779#msg3718779), which is actually a very optimistic perspective.


More so the dollar. Gold will go to roughly $5000 - $8000 only, so will only retire about $25 - 40 trillion of the $150 trillion in global debt.

The rest will come from deflating the net worth of western world much via confiscations. I think the G20 will manage to track down most of the offshore real estate purchases too given the NSA listening to everything, etc.. The dollar will become very strong internationally because these confiscations will keep the USA solvent, while the USA is becoming the #1 producer of oil and gas in the world, as well the technology leader with the Knowledge Age upon us and 47% of all existing jobs to be replaced by automation within 19 years (i.e. by 2033) according to Oxford University. The developing world is massively short the dollar by about $10 trillion and there will be a massive capital flight of institutional money from emerging markets in 2015.


Effect. IMO, Bitcoin can not replace the dollar hegemony as I explained in the OP. We might get to roughly $1 - $10 trillion market cap at most, before NSA, G20, and tax authorities step in as I explained in footnote [2] in the OP to effectively take over Bitcoin.

Neither will the altcoin I proposed replace the dollar any time soon, because we don't have enough time to grow it. Rather it is hoped to be a way to protect from confiscation perhaps at most a few $trillion in private capital (hopefully including the smartest technologists who we critically need going forward to avoid a Dark Age and build out the Knowledge Age for maximum employment). Of course I have no qualms if very wealthy want to pile in too. If we can take it to $10s of trillion, that would probably help balance the rabid dollar hegemony that is staring us down into the abyss right now.

This is all very interresting and I like the blog you keep referring to. Going to read all the way through it.

May I ask what your own personal strategy for the coming years ahead are?

All of this is quite technical, caustic and full of assumptions that do not have to happen.

For example, there's an implied foregone conclusion that BTC's price is going much, much higher before "being taken over". This is a total fallcy. There's absolutely no reason or even indication price of BTC is going much higher... if higher at all. BTC is a side-show of the present world economy that has no significance or importance at all to the financial powers of the world that quickly dismiss it because, no matter what kind of extrapolations are made, even the totally wild one, BTC will only represent, in best case scenarios, an extremely minimal (insignificant, really), part of that financial system.

Doomsday scenarios for the world economy notwithstanding, which I will not even enter, from a working perspective I see a very imminent threat to the "BTC system" that, in my layman's opinion, forecast it's possible doom WITHIN THE YEAR. And here, probably, I lack a lot of answers that I would like explained, of course.

Here's the conundrum: The new tech, 20nm-based mining rigs will be fully delivered, en masse,  by Summer thus making the block chain more efficient than ever and the rewards more spread than ever... to the point that, using any calculator and assuming a level of increased difficulty of 50% a month, it will not be cost effective to mine for anyone (the new rigs will never make roi, and they will lose money after costs from day one). Therefore, when difficulty reached 30 million roughly by September, who will pay the pied piper? who will do the mining? who will maintain the block chain itself? Oh the answer that more efficient/cheap machines will come out is simply absurd because they will not be -even if technology would allow it- cost effective to manufacture.

Furthermore, there's no guarantee not even a reason for the BTC price to go higher. As a matter of fact, as we have seen the effect of recent developments, reasons abound to justify the price to remain stagnant or go significantly lower. Even before the Gox/Bitstamp debacle, the price had stayed barely above the level of the previous (China) debacle, for almost 3 months at or closely around $800 per BTC, so it is pretty safe to assume that price of BTC itself in the market will not influence any of that scenario that is pretty imminent.

Food for thought?

Failure to understand Bitcoin ALREADY 'cost Investors Billions'.

But that's cool.  More $$$ for me and I started to capitalize on my 2011 speculation in a relatively big way at the beginning part of 2014.

Nice. Nxt needs only anonymity... We r working on that.

Note I added two items (Spiraling Transactions Fees tragedy of the commons and 51% attack gets proportionally less expensive over time) to the Threats section of the OP.


I mentioned (https://bitcointalk.org/index.php?topic=322058.msg3580502#msg3580502) back in November, the shocking disruptive effect of Bitcoin taking over the world's wealth thus being unlikely that society (governments) won't fight back by attacking Bitcoin. If the projections below are correct then the government MUST attack Bitcoin to bring it into taxation (and confiscation) compliance. Bitcoin could continue to grow as a top-down controlled currency with no anonymity and a public ledger of all financial transactions.  :o  :'( Note Bitcoin is essentially top-down controlled now, with a few pools controlling most mining power and tx fees being set top-down to avoid the problems I've mentioned about tx fees in the OP.

A least squares fit projection line (https://bitcointalk.org/index.php?topic=322058.msg3522033#msg3522033) puts the price at $100,000 in 2016, which will be in excess of $1.5 trillion (https://en.bitcoin.it/wiki/Controlled_supply#Projected_Bitcoins_Long_Term) market cap. At 10X price appreciation every 13 months, the projection is $1 million price and $18+ trillion market cap in 2017.

However there are other possible technical interpretations:

https://bitcointalk.org/index.php?topic=322058.msg3469380#msg3469380
https://bitcointalk.org/index.php?topic=322058.msg3560319#msg3560319
https://bitcointalk.org/index.php?topic=322058.msg3584735#msg3584735
https://bitcointalk.org/index.php?topic=322058.msg3916390#msg3916390
https://bitcointalk.org/index.php?topic=322058.msg3932761#msg3932761

Note global net worth is roughly $241 trillion (https://bitcointalk.org/index.php?topic=322058.msg3919517#msg3919517) - $150 trillion debt = $91 trillion actual net worth when the debt is written down, and much of that is concentration in the upper %1 of the wealthy and not liquid, e.g. real estate.


Why would anyone invest in new 20nm rigs that don't make ROI?


See the least squares fit chart link above. The price has languished before after corrections, yet it moves up after falling below the trend line after sufficient delay.

I think most people would agree with you that we need more anonymity and more ASIC resistance and more scalability. But that's why we have alt coins to solve these problems. All 3 of those problems are already solved and being developed as we speak. But that does not mean the resulting coins which incorporate these ideas will "kill" bitcoin. Bitcoin is the original cryptocurrency designed by Satoshi and will never be killed so long as the network remains secure. It has too big of a foothold in the market to ever be killed by an alt coin regardless of how "perfect" that alt coin is.

There are also some things in your list of suggestions which are subjective "improvements" which conform to specific monetary theories and not purely technical theories. For example these two points:

I don't know how long you're going to argue about this perpetual debasement nonsense. It has to get old at some point. There are already several coins with perpetual debasement built into them, what more do you want? Bitcoin will never change to  match your concept of how money should work. And your suggestion about zero transaction fees is completely socialist imo, there is no reasonable way to separate a spam transaction from a real transaction without fees. People who are willing to pay get what they want faster than those who cannot pay, it's as simple as that and you're concern over spiraling fees is completely irrational imo.

Nxtcoin is proof-of-stake correct? Which means top-down controlled not decentralized. See below...


I have already explained upthread that Proof-of-Stake is not secure (https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780) because essentially you must trust those with the largest stake (and it can't distribute new coin out to the people through mining in a competitive manner). Yet we also see the design of Bitcoin has pushed it to be top-down controlled also. So essentially Bitcoin and and PoS are moving towards the same endpoint, but Bitcoin has the market lead. So we can expect in the future, the Bitcoin pools will just cartel and do away with paying for PoW and simply add the transactions round-robin in a fully top-down controlled system that is of course fully compliant with G20 edicts. They can then keep flat transaction fees without affecting mining security. Then all the Threats disappear (and we lose anonymity and submit to the G20 control) including the bubble burst threat disappears.


As it looks right now, Bitcoin is going to win and it will be the corporate top-down controlled fully compliant government's coin.

The very first thread I started on this forum is looking to be the accurate final outcome. Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0). The technical details have become more clear to me since that thread, yet the broad premise remains true in my mind.


The proposed altcoin would attempt to remain decentralized (not top-down controlled), anonymous, and keep mining among the people. In other words, congruent with the freedom internet (e.g. self-published websites, running your own server, etc), not the Google, Facebook, Yahoo, NSA, G20, dollar hegemony corporate-fascist top-down controlled internet.

It would not kill Bitcoin (any time soon). It would be the alternative economy. If the alternative economy will play a key role in this coming Knowledge Age with 47% of existing jobs to be replaced by computer automation according to an Oxford study, then over time it might grow to be larger than the mainstream economy which will be diminishing. I assume the Knowledge Age will be significantly decentralized, e.g. 3D printing objects at home instead of going to a store to buy manufactured goods.

In other words, Bitcoin might grow very fast over next several years and become unified with the mainstream economy. Yet there would be this smaller thing growing faster that eventually overtakes the mainstream economy by 2032.

I am becoming more and more convinced of this bifurcated future (https://bitcointalk.org/index.php?topic=355212.0).

Refer to all my posts in this thread (https://bitcointalk.org/index.php?topic=355532.msg3803606#msg3803606) and this one (https://bitsharestalk.org/index.php?PHPSESSID=a05a23b97bb5a714196d44b1a872509f&topic=22.msg1250#msg1250) and this one (https://bitcointalk.org/index.php?topic=379601.msg4383473#msg4383473) and this one (https://bitcointalk.org/index.php?topic=64239.msg2944298#msg2944298) (which is not the solution, but lead to my epiphany).

I've replied (https://bitcointalk.org/index.php?topic=355532.msg5112752#msg5112752) about your Cuckoo Cycle. Are you available to work on an altcoin?

Of course I don't reveal the secret.

---

Per my prior post, one way they are solved is Bitcoin will be run by large pools with ASICs. Later the carteled pools can discard the ASICs and process transactions without any proof-of-work. Solution is already occuring in Bitcoin as long as you agree to accept G20 edicts, such as the coming 10% confiscation (net worth tax). Of course that won't be the last confiscation, because each confiscation will further implode the global economy and the G20 will need to come back for sloppy seconds, thirds, etc..


The other way they are solved is if a popular enough truly decentralized altcoin solves all the issues. I have yet to see any such altcoin. And yes per my prior post, this will not kill Bitcoin any time soon. Only if the top-down, mainstream, non-anonymous economy withers relative to the new Knowledge Age economy can such an altcoin kill Bitcoin.


Decentralized mining can't be funded without perpetual debasement. Period. See this...


It is possible to stop spam transactions while also having 0 tx fees. I will not tell you how now. It is a secret.

---

P.S. perpetual debasement also has very important monetary theory benefits. These are explained in the links from the Errata section of the OP. But even if you don't agree, you can not refute the above point that you must have perpetual debasement else you can't have a decentralized PoW that is secure against 51% attack. Thus if you don't like perpetual debasement, then your only choice will be a corporate top-down controlled fully compliant government's coin. Period. I believe that Impaler and myself are philosophically correct (see links below in addition to those in the Errata section) that we can't have freedom without diluting the money supply. Selfish savers want their past efforts to be a perpetual friction on the backs of those new innovators. Rather a small, reasonable debasement (or demurrage) provides a balance to neutralize the parasitic rent that usury has on society.

https://bitcointalk.org/index.php?topic=354573.msg3816209#msg3816209
https://bitcointalk.org/index.php?topic=342848.msg3788809#msg3788809
https://bitcointalk.org/index.php?topic=342007.msg3788782#msg3788782


Why are you so selfish as a saver that you don't want to pay 2.5% - 5% per year to fund the security of mining to keep it decentralized so the government can't come tax + confiscate 50+% of your savings? You know that even gold is debased at 2 - 2.5% per year.

The new coin goes out to the people who are the miners, especially with a provably cpu-only coin.

The increased value of the coin and the increased productivity gains (Q in the Quantity Theory of Money) in the society due to not having the government meddling will far exceed that 2.5% - 5% per year cost.

Selfish people deserve the corporate top-down controlled fully compliant government's coin. ;)

I also think a bifurcated future is likely.

One currency for the physical economy (government coin) that is not anonymous (pseudo-anonymity the government can easily breach will be tolerated).
Another currency for the knowledge economy (crypto coin) anonymous and untraceable.

There is likely only to be one big winner in each category. Both of these winners look poised to do incredibly well.  Remember to keep you records in order if you invest in the bank coin. The taxman will be along shortly to take his huge chunk.

My question for any developer of an altcoin (especially one with new and innovative features like anonymity) is why not try to capture both markets? Why not release a government coin version and a crypto coin version. Just because bitcoin is first does not guarantee it status as the official bank coin of the future.


I imaging we will all need some government coin.
Government coin may be the better short term play. Crypto coin the superior long term investment.

I argue in the OP that network effects can not stop a decentralized altcoin, because we don't need to go change all the servers on the internet. The network effects for financial institutions adopting Bitcoin is real and probably already insurmountable. So I think the door is wide open for a decentralized altcoin, but it is already closed for a centralized competitor to Bitcoin. Rpietila has been correct on every point, except that he doesn't appear to acknowledge that Bitcoin will be the centralized coin. I hope we can get his response.


Agree we do. I don't think we can conclude that about investment. The smaller altcoin will be more volatile but probably appreciate faster overall if you invest in the correct altcoin that is the winner yet you could lose it all if it fails or you invest in the wrong one. And the tax you pay on Bitcoin capital gains and net worth could approach 90% if we return the tax rates we saw during the Great Depression. The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.  :'(

In the past one could argue that sticking with the mainstream was the most conservative and safest option. Safety at this point doesn't exist any more. Massive risks on the horizon. Choose your poison. I prefer freedom.

Interesting. Will read.

Fair enough. We both agree that both the government coin and the crypto coin should do well. Exactly how well and for how long is not that relevant to the topic at hand.
  

I choose both. Hard to know exactly how fast the knowledge economy will grow or exactly how hard the crash from the debt bubble will be. Best to hedge and invest in both.

I am not yet convinced that bitcoin's network effects (while real) are insurmountable. Its status as top centralized coin is vulnerable from the ground up, via, a significantly more nimble competitor, (perhaps a CPU only coin without anonymity). It is also vulnerable from top down via a cryptosystem rolled out by the banks/governments/corporations.  Nevertheless, it is definitely a serious contender to take the position of top centralized/government coin. If it become clear that bitcoin will take this role I will buy a few.  


 

You do know that there is a finite amount of gold on the Earth and that eventually all of it will be mined?

I don't necessarily have anything against a coin with perpetual debasement, as long as the cost of creating the new currency is equal to or more than the value of the new currency, and it happens in a decentralized fashion. Like you said, the main problem is centralized debasement, and it's because it costs them very little to generate the new currency and because they hand it out to a small group of banks instead of to the average joe. I don't necessarily care if my savings go up in value or not, what I care about is that my savings HOLD THEIR VALUE. The reason people save their wealth in gold is because they trust gold to be a secure store of value, and the reason they trust it is because they know gold cannot be created out of thin air. The same thing essentially applies to Bitcoin, I know that bitcoins are very difficult to create and it requires a lot of electrical energy to generate them.

The stone money used on the island of Yap is a good example of why it's important for a currency to be hard to create, but it's also an example of why perpetual debasement can work so long as the currency is hard to create. It was extremely difficult for them to create those huge donut shaped stones, so every time a new stone coin was created the market didn't freak out because the market knew a lot of energy was burnt up in their creation. And there was essentially no limit to how many coins they could create, so long as they didn't find an easy and cheap way to craft the stones into a donut shape then they could keep making them and adding new coins into circulation without worrying about price inflation. You can even have an increasing money supply while the value of the currency is increasing at the same time, in fact that's exactly what has been happening with Bitcoin for the last few years.

The problem with government fiat money is not necessarily the fact that they debase it, it's that they can cheaply and easily put new currency into circulation and they don't have to hand it out in a decentralized fashion, they simply hand it out to large member banks. And they create so much that they not only prevent price deflation, they debase the money supply to such an extreme degree that they cause consistent price inflation. That is the type of perpetual debasement I dislike, excessive and stupid debasement used to fund wars and other nonsense that no one wants. Bitcoin was designed precisely to make that sort of thing impossible, it was supposed to be a finite resource in a digital form, like digital gold in other words. That is the fundamental philosophy behind the way Bitcoin is designed.

Fundamentally I agree with you that perpetual debasement can be a good thing, what I don't agree with you about is that a finite money supply is a bad thing. They both have their advantages, gold will always be trusted so long as the amount on this planet always remains finite. Bitcoin will always remain relevant for the same reason. Obviously there are things which make a better currency than gold, just as there may be cryptocurrencies better for use as a currency. But that doesn't mean gold or bitcoin cannot be used to conduct trade, and the finite nature of gold and bitcoin doesn't make them some sort of evil "corporate top-down controlled fully compliant government's money". How you reach such an absurd conclusion is beyond me. The centralized nature of mining could take away some of the decentralization of Bitcoin, but that's just about the limit of it.

But that's not a "flaw", the people with the most resources will always have the most power, that's just a simple rule of the world and it will aways exist. Of course we can attempt to minimize the effectiveness of their resources but they will always have an advantage by having more resources at their disposal. People will always be attracted to Bitcoin because of its features, but there's no reason Bitcoin can't coexist with other cryptocurrencies which improve upon the basic design. You need to learn that there is a place for everything, stop looking at things with such a black and white perspective. Bitcoin is not flawed, it simply is what it is, and if you want something different then build it and prove to us how much better it is.

Edit: added extra paragraph to expand on my explanation.

Pedantic and irrelevant part of our discussion don't you agree? There is gold throughout the universe. And we are not close to tapping all the gold on earth. Mankind's technology for tapping gold on earth and throughout the universe will continue to improve. Malthusians always annoy me (http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo), because throughout the history of the world they have never been correct.


Then you and I are very much in agreement.


A few pools control more than 51% of the hash processing power. A cartel of them could eliminate the requirement to use Proof-of-Work (PoW) and so then we are right back to fiat again (even if controlled by corporations, those corporations are beholden to the government and can be "nationalized"). I am confident that this is the coming outcome for Bitcoin. How could it go any other way given the facts presented in the OP?


Great example! And I'm giddy to see you write that, since you were disagreeing a few months ago when we debated in your mini block chain thread. I really admire people can refine their philosophies. Very few people can do that. I expected you might be one, since your mini block design is excellent.


It is impossible to have a finite supply of anything without a top-down controller stealing the thing. Ponder that. You would essentially have to steal human innovation, e.g. to stop technological progress at mining gold.


Gold is not trusted because the total is not finite. It is trusted because it takes real effort to mine it, thus the supply can't be debased egregiously in corrupt ways, i.e. it won't go hockey stick tomorrow as Bernanke did. And the mining of gold is thus competitively available to everyone. Humans want a fair game of competitive opportunities not a corrupt one of top-down slavery. Actually many humans want socialism where they get everything equally without competition, but this is a failed economic system (The government and society is $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate.  :'( )


Once you centralize the mining, then you centralize which transactions will be blocked (by the full clients), and everything else in the protocol can be changed by the top-down controllers at-will. (perhaps you will next argue that the users running simple clients have the power to vote on which protocol they will support so see below)

You are right back to democracy and fiat again. They can then debase at-will as well.


Democracy = the majority force their will on the minority. Or actually all the minorities force their will on the majority. Democracy binds everyone together in a monolithic outcome and a power vacuum.


The difference is that with decentralization, the small guy always can compete for part of the pie (no one is bound together in a monolithic outcome). With centralization, the winner takes all.

Rich hate decentralization, because they can't possibly invest in all those small opportunities that can double capital in a month. In decentralization, the small guy grows his capital at a faster percentage rate than the rich guys.


With the altcoin design proposed in the OP, the rich can not take it over and it will remain decentralized.


Did I say Bitcoin can't exist also? Please read the entire thread more carefully. I wrote that Bitcoin's decentralized premise is threatened and flawed.

No I think it's very relevant to this discussion. Even if we get the ability to move gold to earth from other planets at a cost less than the worth of the gold, there's still a finite limit to how much we can bring to earth because there's a limit to how much we can increase the mass of the Earth before we risk destabilizing the orbit. It doesn't matter how large that limit is, the fact is there's a limit. Of course there's always a risk that we learn of a method to turn stone into gold, and that is why cryptocurrency is so amazing, we can use mathematics to ensure that the limit will never be undermined.

And yes, I meant to say centralized debasement is is the problem, I have corrected that mistake in my original post.

And the moment they attempted to change any such critical aspects of the system would be the moment everyone lost faith in Bitcoin and then those pools would have doomed their entire business to failure. But I don't think that will happen because when ever a pool gets near 50% of the hashing power we always see a rebalancing of power by concerned parties. The network seems to have a natural tendency to ensure that no one entity will ever gain the majority of the hashing power. And now that we have decentralized pool software it's even less likely that one entity will ever gain more than 50% of the hashing power.

Why, explain to me the exact reason why that would be true.

How so? I surely cannot afford to buy the mining equipment required to mine gold. I might be able to sift out a few flakes of gold worth a few dollars if I spend hours panning down at a river, but I doubt anyone would be willing to buy a few specks of gold from me. Gold mining is a highly centralized industry which requires large and expensive machinery. So why is it ok when gold mining is so centralized but when it happens to Bitcoin its the end of the world? I designed the mini-blockchain scheme because I was worried about the centralized mining og Bitcoin, but that doesn't mean I think it will lead to the downfall of Bitcoin and it doesn't mean I've lost my faith in Bitcoin. I accept Bitcoin for what it is.

It seems to me that the creator of Nxt fixed PoS by adding Transparent Mining (https://bitcointalk.org/index.php?topic=364218.0). He also invented another "mining" algo that doesn't use "coin-days".

You see they tried to solve it by invoking trust and reputation "knowing who all the miners are", but I already explained upthread that is just another low entropy (i.e. low security) result:


Only Satoshi's Proof-of-Work can solve the entropy security issue and remain decentralized. Period. I have thought about this deeply.

Oh, I thought u were an open-minded person. Sorry for disturbing u.

It is a fundamental mathematical insight. Someday I need to write a whitepaper on this. (Any mathematician readers who have some time to do this now?)

I am open-minded to that which isn't already evidently mathematically irrefutable.

Essentially proof-of-stake requires you to move to trust and reputation and call that "security". But that is not the type of security I want, because it ends up as "winner takes all". It is just democracy and fiat again. I want decentralized security which does not have the power vacuum. Only Satoshi's Proof-of-Work has that.

I sent a private message to Adam Back (https://bitcointalk.org/index.php?action=profile;u=101601) (inventor of Hashcash the precursor to Satoshi's insight) and ask if he can assist.

Adam Back discusses centralization due to pools at 25 min, regulation at 30min, and non-anonymity coin taint fungibility at 49 min:
http://letstalkbitcoin.com/e77-the-adam-back-interview/#.UuK0zWTTnrk

http://en.wikipedia.org/wiki/Adam_Back
http://www.cypherspace.org/adam/

OP forgot to add one of Bitcoins and almost all cryptocurrencies' flaw. There is no way of incentivising running a full node. With the blockchain growing larger, less people are willing to run a full node and so in the future, we would have a very large market cap but only a few full nodes. This could become a target and a point of failure of Bitcoin. There are 2 originally coded altcoins I know that incentivises running a full node but I'm not going to promote them.

That's not a possible scenario it is a reality: They have been ordered and PAID FOR many months in advance (and are sold out) so, from now to mid-June, they all will be mining ... at an incremental loss. It is a FACT from which inevitably derives the consequence that mining will not be profitable any longer and no one will do it after the initial period of realization. What happens then to the block chain and Bitcoin?

As for the projections on that chart, sorry but that just makes no sense other than a line in a "chart". FACT is that the price hasn't moved (except significantly down of late) at all since the rebound from the China debacle. FACT, not absurd projections -in which you obviously choose to believe for absolutely no reason at all-.

As for Bitcoin being anonymous and non-taxable, that simply wouldn't be viable. You cannot have it both ways: Amply accepted as currency and unregulated. You can't. You won't. There are legal requirements for any institution that deals with currency, called reserves. I'm sure you have heard of the "stress tests" bank all over the world are subject to since the big crisis of 2007? You cannot sell or loan "air" as currency (banks have done that long enough and we all know the potential consequences). BTC, like any other currency, will have to comply with those requirements to protect society against insolvency... or worse. So yes, it IS ALREADY regulated AND yes you already have to pay taxes on any gains, just like any other business or investment... and what is this, Bitcoin -or any other cryptocurrency- should be OK to avoid taxes? Taxes are bad? who pays for social security, medicare, infrastructure, government? Is this supposed to advance us towards a more fair, responsible society or is it a wild west, everyone for his own kind of initiative? Boggles the mind, really.

http://www.links.org/files/decentralised-currencies.pdf states that currencies based on PoW can't be decentralized because

So a whitepaper that proves that "only Satoshi's Proof-of-Work has that" is very welcome. Looking forward to read it...

Irrelevant to the trust in gold today. Gold is not trusted because it might be finite someday in the distant future (we will all be dead and we won't be stuck to living on earth, who said we have to store it all on earth). I will quote myself again.



Nope. The masses will love the centralized coin, because fees will be more stable and lower, transactions will be approved in seconds instead of 10 minutes, anonymity will gone so they can hunt down all the illegal activities to remove tainted coin threats to users, etc.. Remember the majority loves socialism and the government. And thus the value of Bitcoin will be rising, and no one will want to cause a fracturing of that ecosystem and lose that rising value. So the colluding (carteled) pools can make the changes slowly and the frogs will boil in the pot happily agreeing to these changes.

Welcome to the power vacuum of democracy. The leaders win and take all.


Your fantasies aside, that in fact is not what is happening in reality today. It is fact that hashing power is becoming concentrated in a few major pools.


I already did. Because there is nothing finite. The Second Law of Thermodynamics assures us the trend of entropy is always towards maximum. You just try to find one finite bound of anything in the universe. You won't be able to find it. Even if you count the number of a certain species, you can't guarantee with 100% certainty it will remain less than some bound (e.g. changes that you can't predict such finding another planet which can host).


Actually there are people making a decent living mining gold individually in Alaska now. Ditto here in Mindanao where I am. I was offered to buy gold that is locally refined from the small miners.

Already mentioned in the OP:


Thanks for articulating the issue in more detail.

Nonsense. If the new 20nm ASICs are not profitable, then eventually they will quit being used and users will continue mining with the older technology. Either the old or the new will be profitable, because the unprofitable will eventually be forced to quit.

Organize your point better or you may find your next post is deleted. I don't want this thread filled with nonsense posts.


FACT is that the same thing happened twice already and the price continued to stay on the trend line. I am repeating what I already wrote in my prior reply to you. You can't say it makes no sense. You could say that no one knows the future for sure. You are treading very close to getting banned from this thread with such an illogical use of the very ad hominem "no sense". I am trying to be patient with you, because I want to address all view points.


You have not read all the linked threads in footnote [2] in the OP.

The virtual economy coming in the Knowledge Age is not physical, e.g. downloading a design and printing it at home on your 3D printer. Just as the government can't tax you when you make copy of something on a DVD. There is no place for the authorities to physically go and find out who bought what from whom.


Yes Bitcoin will be taxed + confiscated because it can't remain even partially anonymous due to for example footnote [2] in the OP.

I already explained in the linked Mad Max thread (https://bitcointalk.org/index.php?topic=365141.0) why socialism can lead to a Mad Max Dark Age. That is bad. Go reply in that thread if you want to argue that point. Don't move that debate over here in this thread.

Also refer to the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) thread.

OK, this will surely not see the light because, well, you will delete it, of course, but.... what a load of crap! Of course the government can -and actually DO, have been doing it for years- tax you when you make a copy of something on a DVD. It does already, for example, by taxing the physical DVD. But also the internet providers are and will be watching your activities. And any goods that are transacted will be taxed -just like they are now- whether you choose to sell it for bitcoins, sex, or give them away for free. Knowledge age of whatever. And you do know that everything online leaves a trail, don't you? Or what you mean is that you can break the law and hope the government doesn't catch up with it? Oh well, enough of this crap, really.

That is not taxing the value of the content that was put on the DVD. The price of the DVD at a few pennies is only a small fraction of the value of the content, such as a movie which sells for $19 in your local store.


Not when we are anonymous. That is one of the main points of this proposed altcoin to provide stronger, mandatory anonymity that defeats any trail.

Not because we want to cheat, but because without it, we very likely go into a Mad Max Dark Age as the society owes $150 trillion in global total debt and I estimated upthread only $241 trillion in global net worth but much of that $91 trillion balance is concentrated among the upper 1% and much illiquid such as real estate. So the socialism is going to tax + confiscate itself into the abyss.

And there are other legitimate reasons to be anonymous, such as I don't want to be discriminated against for my political views, my eating habits, etc..

There will come a day in a Mad Max world where you have to break the laws in order to survive. Go ask those people in history who survived the repeating failures of socialism.

Disclaimer: I am not advocating any specific activity, nor I am giving tax or law advice. Consult your own professional advisor. I am merely sharing my opinions.

I see FUD errors in this whitepaper:

http://www.links.org/files/decentralised-currencies.pdf#page=3


In Satoshi's PoW the miners don't have to reach any centralized census. They ALL agree to use the same protocol (else they are not making Bitcoin block chain). But there is no centralized collection of a vote. They are all free to disagree about which block solution was found first. The longest chain wins, but this concensus is completely decentralized.

http://www.links.org/files/decentralised-currencies.pdf#page=4


We know exactly how much power exists that will mine at the current difficulty and market price, and it is precisely the amount that was mining. To go backwards and rewrite the entire blockchain takes not just 51% of the hash rate, but takes asymptotically 100% of the hashrate as the blockchain goes asymptotically to infinite length.

The author set up this strawman to support the requirement of knowing who all the miners are in his Proof-of-stake (PoS) proposal. Then he commits the entropy error that I said will always occur for non-PoW, in that he requires to randomize the order of the PoS miners ("participants") but of course he can't do it without a centralized vote thus it isn't random at all.

Fail. Sorry.

I really wish people would grow up. Liberating ourselves of the onerous obligations and !imitations induced on our economy by our forced participation in the Federal Reserve's monetary monopoly is at hand, and tards want to allow the federal government to regulate it! Ha! The Bitcoin network is the single largest concentration of computing power on Earth. It's "owners" are everyone involved in mining and transacting in Bitcoin. Therefore everyone else (including any governments that think they have a right to regulate it)  can go pound sand as far as I am concerned. Bitcoin has thus far endured at least 3 major similar challenges, and has come back better, stronger, and more secure every time!  It is also worth noting that the detection, assessment and resolution of ALL SUCH PREVIOUS EVENTS, TOOK PLACE SANS ANY INVOLVEMENT OF A FEDERAL OR STATE AGENCY!

The members of the network have a vested interest in the proper function of Bitcoin and other cryptocurrencies. If left to us many of the useless governing bodies we employ just to justify taxing yourselves will lose their meaning and purpose.....Boohoo. I think the private market can figure out better uses for those funds...Don't you?

-Oz

Ok. Waiting for the whitepaper.

Thank you for prompting me to explain a bit. I am very much overloaded with tasks but it is was important to explain what I meant enough that you have a taste of what I would put in such a white paper.

I agree except Bitcoin is failing to protect against regulation, taxation, centralization, and thus eventually complete control by the government.

That is why I proposed an altcoin without Bitcoin's flaws.

That day is already here.  In the USA it is estimated that a person commits approximately three felonies a day.

Hi again, AnonyMint.

I'd like to reiterate that scattershot is weak strategy: people see the weakest arguments among your volley (51% attack, selfish mining) and assume (rightly or wrongly) that you're in the business of building paper tigers.

Do you have any idea how exhausting it is to deal with these sort of posts that are not focused on technical facts? Your intentions may or may not be a sincere attempt to raise the point about the way sheep Bitards (don't) think or it may also be a propaganda ploy.

I come from the world of programming and working with enthused co-developers where we spend our time being happy and enjoying our work. Slogging through discussion on this forum really challenges my peace-of-mind and patience. I will relish the day after which I no longer need to speak or write about this.


There is a much easier way for the government to take over Bitcoin than 51% attack and selfish mining. Simply tax the coin and per footnote [2] all coin is tainted regardless if you used Tor or not, so in effect regulate every pool and exchange. Regulation can accomplish much of the same goals as takeover. Then later (ramp up the regulation to drive the independents bankrupt and) the large corporations beholden to the government buyout the pools and exchanges, and then the drift towards cartels and corporate-fascism.

The lack of a feature in Bitcoin to limit the concentration of mining in a few large pools is an egregious flaw. But this was planned from the beginning as Satoshi predicted takeover of mining by large corporates and the core developers also reiterated that in this forum in the past. It is not very hard to gain a picture that Bitcoin was planned from the outset to not be a hacker-like decentralized internet paradigm but rather a mainstream integration into the taxaholic socialism. I used to target my business to that paradigm too. The problem with that socialism is peaking and heading for the cancer death syndrome where it taxes itself to death. We are no longer in 1999, and now is it 2014.

It is very simple. When the governments start confiscating nearly all of the wealth especially targeting millionaires, people will decide they need anonymity. I don't have to convince anybody of anything. Some of those with significant net worth will run scared from Bitcoin.

Those who have big gains in Bitcoin, will instead perhaps comply with the government and give up most of their gains (to tax + confiscation) in return for a nice profit (e.g. give up 90% of the gains and still have 10 bagger).

Yet the easiest marketing advantage is cpu-only mining. There is really nothing that needs to be said. People will mine cpu-only especially the mining client is very easy to run!  ;) Now all the Bitards get off my fucking lawn. You are dealing now with real commercial programmers who have experience in making popular commercial software. All of the underhanded propaganda tactics I am seeing from fanboys are not going to work in this case. You can see the vote on the poll can't you.

P.S. the Bitards who want to think they are smart, much better they miss out on early mining opportunity. Perfect. I hope I read their never ending excuses about security of Java, etc.. Meanwhile the people of the world will be chugging along mining and mining, since the opportunity for the average person to download a client and instantly mine Bitcoin with their PC went "poof its gone" (http://www.youtube.com/watch?v=-DT7bX-B1Mg).

Don't you think that P2P mining pool can solve the problem of regulation or big corporations takeover?

Definitely not since it is so easy for the centralized pools to have their miners compute shares for a competing P2Ppool but withhold block solutions from the P2Ppool (and submit them for themselves) thus parasiting the P2Ppools of revenue while not impacting the revenue of the centralized pool. So centralized pools which wanted to eliminate P2Ppools could do so (in theory).

I will quote myself where I answered this in the past.

https://bitcointalk.org/index.php?topic=339902.msg3715641#msg3715641



After making those posts, I remember I eventually studied P2Ppool in more detail and don't remember changing my opinion. I think I posted about it again with additional details, but I can't find the latter post.

Let me add the oblivious shares fix I mentioned in the OP can not be applied to a pool which is decentralized. Many readers may not understand well this very technical issue. Try reading the link I provided in the OP to Meni Rosenfeld's white paper. Perhaps at some point in the future I can take some time to write a layman's explanation of this issue.

Note I have deleted the original post because he continues to write very noisy and illogical sentences. To be fair, I have quoted and responded to the meat of his argument.


Irrelevant. That wasn't my point. I was providing an example of activity at homes (versus store fronts) that the government couldn't tax even if it wanted to. When we download software or coming designs to be printed in our homes on 3D printers, the government can't tax it if the vendors choose to be anonymous with an anonymous currency. Right now that is not an option because there does not exist a reliably anonymous payment option.


Again that is irrelevant to the point I made. Now you are trying to argue that anonymity is bad because you think prosecution of content theft is more important than preventing the horrifically peaking socialism (200 year debt high, most western nations taxing over the Laffer limit, etc) from taxing us into another Dark Age as has happened numerous times throughout human history.

Fact is that if you provide content at low enough price, people will rarely bother to go out of their way to steal it. They want the official content. And there is a 7 billion person market on the internet, no need to charge $19 for a movie. Make it 50 cents. You will still get rich.


Bullshit. You are ignorant of what is technically possible.


Total bullshit. So I guess you hated paper cash too, because it enabled many anonymous activities.

That is freedom dumbass. And when you lose your freedom like they did until Stalin, Mao, Hitler, etc.. then you will learn the hard way not to trust the end game of peaking socialism and collectivism.

I suppose you are not aware that Obama can declare any citizen a terrorist and without proof they can take away all your due process and kill you with a drone. Yet you claim the government will respect my political views, etc.. No way. The Constitution is dead. The socialism has taken over and we are headed into totalitarianism.


For the love of Christ, you are one clueless example of why we need anonymity. Frogs like you will boil in the pot all the while singing the praises of the next totalitarian (perhaps it is Obama, we need to see how it progresses).


Did anyone force you to buy and use that altcoin?

Mandatory only for that altcoin dumbass.

Also 'mandatory' is not entirely accurate. Any user can reveal his identity there is no technological way to stop that. Rather I am proposing the anonymity is automatically on by default.


Bullshit. Those figures are accurate. Did you even bother to check my sources?

Just go along your merry way to blissful pot boiling. You are done here in this thread. You made your point. I strongly disagree with you. You don't need this altcoin. It isn't for boiling frogs like you. It is for the 33% who voted yes.

Evidently. And if 1 in 3 (even in this minimal and quite partial environment) makes you happy, count us both as VERY happy... dumb ass.

Why are you so scared that some people want their privacy that you must put your FUD spin on the poll results to try to create discouragement?

Because socialists are never satisfied if they don't control everything. Control freaks. People like you scare the shit out of me. And you outnumber us freedom lovers. And that is why the world is headed into totalitarianism. Remember I told you so when it gets really bad in 2017 to 2020.


FUD. I already explained you are not required to buy the coin. You can use Bitcoin if you want optional anonymity (which means no anonymity as explained in footnote [2] in the OP, anonymity is a nearly all or nothing proposition).

Also 'mandatory' is not entirely accurate. Any user can reveal his identity there is no technological way to stop that. Rather I am proposing the anonymity is automatically on by default.

And democracy is a lie. So many people are going to have to relearn the painful lesson that democracy always ends up back at totalitarianism. I linked to the power vacuum of democracy (https://bitcointalk.org/index.php?topic=365141.msg4065040#msg4065040) upthread.


The bolded text displays your disdain for hackers and people who love freedom. The hacker people who created the internet by lying to the government (http://esr.ibiblio.org/?p=3335) which has provided all the prosperity and advancement you are benefiting from today on the internet. I was one of those people who helped create decentralized publishing on the internet. Yet you disrespect us and piss on us, and that is exactly what socialism does. It destroys itself.

Amazingly FUD way to characterize the vast research and technical acumen I have displayed in this thread.

I don't scare you because I am not a socialist trying to control you. And you believe your government can crush us (but you are subconsciously worried else you wouldn't be wasting your time in this thread). You scare me, because you are not satisfied unless you can FUD everything and have everything your way. You can't just leave us alone and let us make our coin and you use Bitcoin because in democracy everyone has to share and share equally. No person can be allowed to go his own way.


Democracy leads to totalitarianism at the end game where the debt peaks. You didn't read the power vacuum link I provided to you. If you are not going to do your homework and study, how can I teach you anything new.

We created the internet to function decentralized (i.e. anarchism = freedom) not top-down votes (i.e. democracy = debt slavery).

Analogously see the upthread technical explanation I made comparing Bitcoin's PoW (decentralized) to PoS (top-down control) (https://bitcointalk.org/index.php?topic=455141.msg5115441#msg5115441).


Again you show complete disrespect (and probably due to a lack of understanding) for the people who created the internet.

And you characterize as "nutcases" people who have studied throughout history the repeated failure of socialism and just want their privacy. This is precisely the kind of voracious, pit-bull attitude that prevails in totalitarianism. Look at what former POTUS Bush said, "you are with us, or against us". Look at the way Hitler worked the population into a frenzy to attack those who were "not the same as us".


Thank you. Best wishes for you as well.

Hey "No" voters, what is the point of Bitcoin if it ends up a top-down currency? We could have just used Paypal instead.

Either you disagree with my logic that it is already nearing top-down control (https://bitcointalk.org/index.php?topic=455141.msg5118212#msg5118212), or you ignore reality (forsake the ideals of a decentralized currency) because you want to earn money on Bitcoin's appreciation.

I have a feeling it won't work out well for you because socialism gets very destructive at its end game cycle.

That doesn't sound right at all.  A solution with a different payout address would no longer be valid.  Also they are spending hash power so it's not parasiting.  At most it will cause the pools luck to appear to be bad but since P2P users have altruistic reasons it isn't likely to cause them to switch.  51% attack is an overblown problem anyways.  As you stated yourself government actors have better tools to combat bitcoin  and for private attackers it is simply not economically viable.

I appreciate very much the fact checking peer review.

Perhaps you do not understand well the "Share Withholding Attack" which is called Block Withholding (http://arxiv.org/pdf/1112.4980v1.pdf#page=27) in Meni Rosenfeld's whitepaper in the context of the decentralized pool case. And Rosenfeld's says "Sabotage" gives no benefit to the attacker. That is not correct in the decentralized case, because there is no way to hide the transactions and block details from the attacker for a decentralized pool (because there is no centrally trusted entity to hold the secret until the block solution is found), thus the attacker can submit the block solutions as his own (never giving them to the P2Ppool) and receive all the coin rewards instead of sharing them with the P2Ppool. In the decentralized P2Ppool case, each peer must adds its payout address thus the block has being calculated is different for each peer. The attacker will give to the P2Ppool the shares that are not block solutions, thus parasiting by receiving a portion of the coin rewards gained from the hash rate of the other peers in the pool when the block solution is found by other peers, but not reciprocating because the attacker keeps the coin rewards for block solutions he finds all to himself.

Please let me know if that caused you to understand, or if you still disagree?

A very thorough explanation which layman could grasp would take me a day or days to produce. I would need graphical illustrations as well.


Perhaps so for Bitcoin because the government has an easier way to attack, yet if Bitcoin's coin taint anonymity is ever fix (see upthread the interview with Adam Back (https://bitcointalk.org/index.php?topic=455141.msg5114084#msg5114084)) the 50+% attack comes back to prominence. And for the proposed altcoin, the 50+% attack needs to be analyzed because the government loses some (most or all?) of its ability to attack with regulation due to the strong anonymity.

Adam admitted that Bitcoin's fungibility model is fundamentally flawed and broken!

He mentioned some potential forthcoming research on zerocoin improvements but (in agreement with what I wrote upthread) that zerocoin was not practical now and probably not any time soon.

Adam explained that the 'mutable' option of Getblocktemplate (https://en.bitcoin.it/wiki/Getblocktemplate) allows pool miners to configure their own blocks thus claiming this reduces some centralization risk. However, mutable transaction blocks is not compatible with the oblivious shares fix for Share Withholding (Block Withholding) attack. Thus this feature can be defeated by those who want to force centralization. Rather my altcoin proposal is strong IP anonymity on by default which allows including the oblivious shares fix.

Adam claimed blind commits (https://bitcointalk.org/index.php?topic=206303.0) could help reduce centralization risks, but I found his argument to be flawed in several ways, some of which he admitted.

My analysis thus far is that "strong IP anonymity on by default" is a holistic solution with much fewer caveats.

Adam fears a strong altcoin because he said this will destroy the principle of limited supply of coins. I think he should accept a free market result, because a fundamental theorem of Coasian economics is that resisting the free market will only make a worse outcome later. I don't share his fear of an exploding supply of crypto-coins, because there are only a few (or maybe only one) design that can really be serious and overwhelming better. The market will recognize that the supply of truly better designs is limited.

I don't see how verifiable CPU-only mining solves the processing power advantage in mining.  Pools, farms, and botnets can still be used get an advantage.

Don't you need to enforce a "one connection per person please" policy somehow?  If there's a mathematically rigorous way to do this of course that's the way to go.

I was thinking that the network might require a user to solve a capcha to connect and timing out the connection after a few hours (probably already has been proposed).  I know, this is terrible idea but it might be effective at keeping the mining egalitarian, which I think is what you are aiming at.

It would not even need to an Altcoin because it just a different mutation of the original Bitcoin when you get down to the core. There is already a digital currency that does all this, but you won't hear about it outside the bitcoin bubble unfortunately.  :(

Also, I think you are using the terms 'socialist', 'collectivist', etc. improperly.  There are anarchic forms of these political philosophies, which many believe are the ligit ones.

What you are referring to are the centralized, statist forms.  'State capitalism' is the preferred term for the system practiced in the former soviet union. 

Crony capitalism, what many believe we are now suffering from, is very closely related to state capitalism.  It masquerades as a 'free market', but is composed of what are essentially state-sponsored monopolies.

I studied Timekoin and concluded that the order of selection of the peers is not secure. It is the same entropy issue that I mentioned upthread for PoS. If you have a better whitepaper now than when I researched it Spring 2013, I will read to see if it deals with that question of randomized ordering in a way that satisfies my concerns?

Botnets can be muted significantly by requiring 16GB of memory. One tradeoff is that makes mining not instantly accessible to users who don't have that much memory installed.

Another strategy is to require say 4GB memory and hope this causes those whose computers are in a botnet to notice their computer is running slow and paging virtual memory to disk.

Botnets become less of a problem as the number of legitimate cpu miners increases, because the botnets are being sourced from the same supply of total PCs in the world. Eventually legitimate cpu miners will far outweigh the botnets, so can gradually relax the memory requirements to fit the average PC.

I wrote in the OP that pool sizes must be limited. I am not going to tell you now the secret way to do it.


Impaler and I discussed that. I decided it is untenable basically because it requires top-down control in order to generate and verify the captchas.

The variations in terminology are attempt by academics to classify different symptoms and manifestations of what I believe to be the same underlying disease. I want to go to root disease which is the power vacuum created by the fact that society demands leaders and can't find an equilibrium that is decentralized and leaderless.

I believe if you take away the ability of leaders to tax, they won't be able to give society what society demands they give them. And I believe this will be check on the power of the power vacuum. The tax will be voluntary, so they can't go exceeding the Laffer limit and voting will be done decentralized opt-out rather than "winner takes all" elections. I believe local communities can be more fair (people know each other personally) and work together on community funded projects.

I am very sleepy so the above is not my best possible prose and explanation.

Also I am running out of time to be sitting always in this thread to answer. Will eventually need to let it go.

Hopefully I've made my main points clear enough.

Here on links on the IMF plans for confiscation:

http://www.globalresearch.ca/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/5354553
http://www.zerohedge.com/news/2014-02-12/europe-considers-wholesale-savings-confiscation-enforced-redistribution

I hope you can achieve this, it's sorely needed.


Also, I didn't know about TimeKoin.  I was investigating cryptocoins that eliminate mining and was thinking it might be a good idea simply to allow a randomly selected user to create the next block.

There is also Emunie, which works by rewarding prior work with newly minted coins, i.e, it pays wages.  It also attempts to peg the price of the coin to the US$ or basket of commodities.  It's also closed-source, so its not really an option for adoption, but I found it interesting.

You are likely correct that if an altcoin has stronger anonymity then perhaps governmental actors may want to consider a 50%+ attack.  The solution is PoS.  I'm not sure what you mean by "current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure"  The security aspect seems to be currently working ok for Nxt.  The distribution issue is purely an economics problem and since any crypto is easily copied what's the problem with distribution?

I don't believe PoS (proof-of-stake) is secure and it is inherently top-down control not decentralized crypto-currency. See my upthread explanations linked as follows. I have deleted your post, because you quoted the entire OP and only wrote the one sentence above.

https://bitcointalk.org/index.php?topic=455141.msg5033780#msg5033780
https://bitcointalk.org/index.php?topic=455141.msg5111679#msg5111679
https://bitcointalk.org/index.php?topic=455141.msg5114040#msg5114040
https://bitcointalk.org/index.php?topic=455141.msg5114084#msg5114084
https://bitcointalk.org/index.php?topic=455141.msg5115441#msg5115441
https://bitcointalk.org/index.php?topic=455141.msg5115547#msg5115547

---

The problem is where does the entropy for the randomness of sequence come from in non-PoW schemes?

In PoW, the decentralized entropy is coming from the DECENTRALIZED hashrate that is randomly selecting nonces to compute as trialed block solutions until one is found. There is no need to invoke trust nor reputation.

Unfortunately non-PoW schemes have no way to generate that randomness, e.g. the seed for the pseudorandom generator will always derive from some top-down vote or reputation factor. The ordering will always be low-entropy, top-down voting, trust, and reputation. This is inherently top-down and centralized. This will put us right back at fiat again.

Sorry.


No matter how much these non-PoW designs obfuscate the lack of entropy in very complex design specifications, they will never solve the fundamental mathematical issue. Because there is no mechanism for the decentralized entropy to be generated.

I thought very deeply about this and it is why I abandoned my own proof-of-diskspace design.

I need some expert mathematicians to work on proving this assertion more formally.

I am very sorry to have to spill the bad news on this. It means many people are going to be angry at me. Sorry.

PoW is the genius of Satoshi's contribution. That is the one aspect we can't discard.

---

Security by top-down control and reputation is fiat. That isn't the type of security that I want. I want security from decentralized high entropy where no one can take control of the system.

Without competition in mining, there is no way to select who to give new coins (or demurrage in Freicoin) to that isn't inherently controlled top-down, i.e. fiat. Then you still need socialism to take from the rich and give to the poor. Because the fact of life is that wealth is power-law distributed [1] because the wealthy spend only a small fraction on their personal expenses. So eventually with usury the wealthy own 100%. Thus you need a way to redistribute wealth else society fails into a Dark Age. The socialism way of redistribution can be gamed by the wealthy who buy the government. Thus decentralized competition through PoW mining is the only way to fix the problem that has been plaguing society during the entire history of mankind since Mesopotamia.

[1] Dragulescu & Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States

Excellent reply. If someone disagrees, he does not understand the issue.

Is the anything that can be done, except that the value of the liberty-loving people descends to a maze of altcoins, which are constantly changing and whose conversions are trustless with p&p exchanges?

How about Zerocoin? Soon to be released

http://spar.isi.jhu.edu/~mgreen/ZerocoinOakland.pdf

Someone way more versed in crypto than me will have to be judge of that

This does not contribute to the topic, but as my first post, I want to say that I'm truly amazed of the quality of this community. In fact, I think many contributers here are more serious than the players of the world economy. It's incredible that people like rpietila puts such an effort into the bitcoin economy, maybe even more than what they really need to earn money. What you are doing here is building the foundation for the future of the whole world economy, which will hopefully be much more fair and legit than what it is today. Bitcoin might not be the right cryptocurrenciy, but it will probably stay in use for a couple of years till this community has settled upon what to do next.

Thank you all for doing what you're doing!

When the price increase there is a huge selling pressure on those who have the largest stakes. That can be seen with Bitcoin where there is a 17% dishoarding rate every doubling and also with NXT for instance (https://bitcointalk.org/index.php?topic=345619.msg5098747#msg5098747).

Basically the more adoption, the more the stakes are decentralized, the less trust is needed. Price increase (i.e time) is a force of decentralization.

And I don't see how the fact that you cannot distribute new coins is relevant to the security issue.

Readers can find my rebuttal to you at your thread (linked above).

The one point he made that I think is worthy of responding to here, is the often heard assertion that PoW wastes electricity for nothing.

(Orders-of-magnitude more electricity will be wasted if I am correct that non-PoW systems such as PoS put us right back at fiat again.)

Even in the worst possible case if the entire value of all new coins was burned as electricity with no profit to miners thus providing no utility for redistribution to deconcentrate wealth, still we need to burn some resources to keep the block chain decentralized. Else someone needs to refute my assertion that non-PoW schemes are not sufficiently decentralized to not end up being fiat again. (and see below how much electricity fiat societies waste because government capture allows debt to run amok)

I wonder if readers have comprehended my upthread posts wherein I explained that democracy = fiat. We can't eliminate fiat if we retain voting (tallied by and to create a top-down authority) and reputation systems of control, because top-down control over money is the definition of fiat. A top-down controlled digital fiat can be technically secure, but the security is vacuous in the sense it is not protecting us from the power vacuum boogeyman that we were trying to eliminate in the first place. We might as well just continue to use Paypal, VISA, and Mastercard.

And even in that improbable worst case where miners earn no profit, we gain the utility of distributing new virgin coins anonymously. This is for example a way that people trapped behind totalitarian borders can generate coin from within. It is a way for individuals to convert fiat cash into anonymous coin, by spending the fiat for PC hardware instead of via an exchange.

If we assume miners are making some profit (i.e. not worst case), then we also gain the utility of deconcentrating wealth. If we don't deconcentrate wealth then wealth will concentrate until the velocity of money collapses (as it has by 50% since 2008 while Gini coefficients are skyrocketing globally), then welcome to potentially another feudal Dark Age.

---

With cpu-only mining, I envision that economies-of-scale with huge rigs located in cooled data centers will earn less ROI than carting some PCs to a stream and running microhydropower, because I estimate the by-far lowest cost energy (micro-hydropower) will outweigh the very minimal cost-scaling advantages of a tower of PCs. Thus I see the (small, reasonable, annual rate of new coins or Freicoin's demurrage) redistribution of wealth going to the smaller guys with the most initiative, who are driving new technologies for harvesting renewable energy, i.e. the antithesis of waste.

And who says that when I drive an hour to work this is waste. It isn't wasteful if being there instead of here, is more efficient in terms of the face-to-face interaction and production achieved at work.

It is far more wasteful for a human mind to sit idle. The energy that the human mind can devise ways to more efficiently harvest isn't factored in by those who think human activity is wasteful. These (idiot, broken-record, never been correct every in history) Malthusians annoy the fuck out of me (https://bitcointalk.org/index.php?topic=355212.msg5150169#msg5150169). It is as if they can't fathom that the human mind is capable of producing more energy than humans consume. Duh!

http://armstrongeconomics.com/2014/02/13/global-warming-why-it-is-nonsense/


http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo

Human activity can be egregiously wasteful when it is top-down funded by debt (usury), because the lenders don't care if you default, because there is a central bank to bail out the banksters and socialize the costs of the wasteful investment. We have $150 trillion of debt in this world today. That is the waste Malthusians see (e.g. people who didn't earn it, doing debt-driven strip-mall-mayonnaise conspicuous consumption and adding no productive knowledge) but they misapply that observation to all forms of human activity. What needs to be removed is not all human activity, rather the top-down power vacuum (i.e. lack of decentralization) that enables the socialism and the wealthy to over concentrate wealth with usury backed by socialism.

---

An economics thought experiment. Lets assume we possessed an oilfield that can pump out new oil for $5 per bbl in total costs including amortization of the capital infrastructure. Lets assume we can pump out at a higher rate than demand. What happens to the price of oil? It drops to $5 so that we stop pumping oil at a faster rate than demand.

You see aggregate (non-debt-driven) demand for energy is never wasteful, because by definition it costs less to produce energy than it is worth. That is unless you believe some (Rothschild-funded top-down generated propaganda) Malthusian nonsense such as Peak Oil or Global Warming which tries to fool you into believing that anything in this universe is finite. Please define the edge of the universe? I did (http://unheresy.com/The%20Universe.html#Edge_of_the_universe).

Widespread debt can cause humans to take on uneconomic activities which are not based on knowledge and maximization of profit. That would then be wasteful, and it would be reflected in demand exhausting supply. This is why Rome collapsed.

I have already explained three times upthread that Zerocoin can not work and unlikely to work efficiently and with sufficient confidence any time soon.

https://bitcointalk.org/index.php?topic=455141.msg5097342#msg5097342
https://bitcointalk.org/index.php?topic=455141.msg5128980#msg5128980

It is not soon to be released. If someone releases in an altcoin as it currently stands, it will have egregious efficiency and confidence issues. Nobody has yet figured out how to make it efficient enough to work.

It doesn't appear to be a trivial problem that will be solved any time soon. And even if so, the crypto is too new and exotic to trust for at least another 5 - 10 years of cryptographers trying to crack it.

Whereas, the always-on-by-default anonymity that I have envisioned is based on a well known information theoretic security model (a hint about my secrets).

---

Edit: Adam Beck mentioned some related new work coming soon, and I believe it might this yet to be published Zerocash (http://www.scipr-lab.org/). In that linked list of prior publications appear to be work related to CoinWitness (https://bitcointalk.org/index.php?topic=428589.msg5275633#msg5275633).

I really appreciate challenges of this quality. Thank you.

A fundamental tenet of investing is buy low, sell high. So if we view these coins as investments, we would expect the larger holders to cash out on price rises, and buy back in on dips. And generally to lighten holdings as price trends higher. Because the wealthy could get trapped in an illiquid investment if they end up owning most of it at a very high valuation.

Also if we view these coins as cash, we would expect the wealthy would not hold most of their wealth in cash.

However, if we view a coin as the money system of society and we view control over the coin akin to control of a central bank, then we can expect the wealthy to obtain the majority of the shares of the central bank. As far as I know, this is in fact what they did in the Bank of England and the creation of the U.S. Federal Reserve.

If there was some profit to be made from processing blocks in PoS, then there would be a profit motive for obtaining more shares in the currency. Otherwise, the interest in monopolizing PoS shares will only come when the currency is a dominant political and economic factor in the real economy. At that point, the wealthy buy up say 50 - 80% of the shares, then the remaining shares become the cash in the economy and the wealthy hold their shares as if they are shares in a central bank. The point is that nobody will sell off the currency at this point because it is the dominant one. At that point, you are right back to a fiat system. Buying up that 50 - 80% share would likely drive the price higher, thus further cementing the dominant role in the economy and the lust to hold it. If they do this as a transfer of dollars to the coin, i.e. hyperinflation of the dollar, then there is no dollar to return to any more.

I rather think they will long before that take control of these PoS systems with the much easier (less drastic) route of tax and regulation. Since I am looking at the design of how anonymity is achieved by integration with PoW mining (and that is a hint about my secrets), I am doubting that PoS anonymity can be made as strong. Thus PoS will be more susceptible to this form of government takeover.

Also I think PoS will be insecure at all times, because the ordering of who is selected to process a block can be gamed, e.g. who selects the initial seed of the pseudo-random generator and who selects the ids of the shares.


How do you dilute the shares of the wealthy who will otherwise own all wealth due to guaranteed ROI of usury backstopped by their control of government and that they don't spend their wealth on consumption?

Additionally I have explained above how I think PoS devolves to a fiat which I explained is a vacuous form of security if the threat is the boogeyman of fiat (thus Paypal, VISA, and Mastercard), thus only PoW is decentralized. And I also explained upthread why I think funding PoW from transaction fees destroys its decentralization. Thus only perpetual new coins will sustain PoW.

But the really big marketing problem with PoS is how to distribute the new currency in the startup phase to maximize interest and adoption? Adam Beck discussed that towards the end of this interview:


By distributing new coins via mining, miners are motivated because they can compete to gain a more competitive ranking in the coin ownership. If the PoW is cpu-only as Bitcoin was when half of its coins were mined, can potentially get the entire population excited about mining.

How can PoS attain similar marketing and adoption?

Thank you for the appreciation.

It appears to me that Bitcoin will be around and growing for a long time, assuming that all the exchanges and miners can be brought into control of the government, which appears to be what is occurring now. After these controls are in place, then it can be allowed to go out to the masses. I believe this pause in the price rise coincides with the time needed to make this transformation.

For as long as Bitcoin is really just a dollar (http://armstrongeconomics.com/2014/02/14/understanding-the-unit-of-account/) (e.g. most merchants use something like Bitpay instead of receiving Bitcoins they receive fiat), then control over the exchanges (including localbitcoins which I noticed is ramping up KYC compliance) is sufficient control to tax everyone.

How else would you cash out anonymously?

All the anonymity I could add to a coin wouldn't stop the government from knowing if you still cashed out via an exchange which is required to report to the government your identity. There would still be other uses of the anonymity, such as government and others wouldn't necessarily know all the details of your coin spends that were to entities that don't know your identity.

Thus we need to aim for a coin that becomes the unit-of-account for its sub-economy, i.e. I am suggesting the Knowledge Age may produce a bifurcated economy-- the physical and the virtual commerce. If we keep our coins and used them to spend in the virtual economy instead of exchanging them for dollars, then we would create this bifurcated economy with a unit-of-account which is not the dollar.

The coming confiscations in the physical economy will motivate the virtual economy to break away, since it is a much more productive sector and doesn't want to be retarded by the dying industrial age (e.g. massive manufacturing overcapacity in China).

I don't think Bitcoin is best suited to match the needs of this virtual economy. Bitcoin lacks ZERO transaction fees. Why should we pay for transactions in this new virtual economy when we don't need to and it is actually detrimental as I explained upthread. Bitcoin lacks always-on-by-default strong anonymity. Bitcoin doesn't keep pools small to keep transaction processing highly decentralized. Etc...........

ASIC resistant coins like Protoshares for example just end up with people running server farms of hyperthreaded multicore CPUs.  In the end you end up with the same problem though perhaps not as stark.

I don't agree (https://bitcointalk.org/index.php?topic=379601.msg4383473#msg4383473) that Protoshares is ASIC resistant. It is compute bound and thus it can be implemented to run more efficiently on an ASIC. The cpu-only PoW can not be compute bound (and that is yet another hint of my secrets).

But your point isn't that Protoshares will remain cpu-only, rather you are claiming that while a coin can be mined with a cpu (ASICs not yet developed for it), then server farms will dominate the mining.

I have a solid logic as to why I don't agree.

For the moment the masses are not interested in mining Protoshares because a) it isn't popular enough yet, b) the mining client isn't something Grandma could download and operate, c) Protoshares development was funded by the Chinese so they were ready from way before release to mine it with server farms.

Once the masses are mining they will mine at a loss, because their electricity costs will exceed the value of the coin. They won't care, because the coin value is rising, they won't notice the change to their electric bill, and the virgin anonymous coin is intrinsically worth more (even if sells for same price) than a coin obtained via an exchange. I think it has been established that the cost of mining determines the price of the coin, so this will push the price of the coin higher and higher much faster than Bitcoin (because the hardware is already owned, i.e. the value of all the PCs in the world gets moved into the marketcap of the cpu-only altcoin).

Thus server farms won't be profitable. Perhaps only micro-hydropower stream driven mining will be profitable. This was really a major epiphany when it hit me, I said "A ha!, this is it!".

Name new altcoin Digitoin, Masscoin, PCcoin, Silicoin, Ubiqoin, or Unigit ...?

Requesting your vote (https://bitcointalk.org/index.php?topic=458443.0).

Broken fungibility could destroy Bitcoin, as Bitcoin would not longer have just one price.

So, I am left wondering why this requirement is listed for the killer alt coin in the OP;

"provably cpu-only mining"

It seems to me that now that SHA 256 ASICs exit that are much less electricity hungry, that they would get pointed to the alt coin as BTC becomes too hard to mine.  That hardware can ONLY mine coins.  As BTC gets too difficult, owners of older ASICs will simply point them at other SHA 256 coins.  That is my theory.  Am I missing something?

Are you thinking that a SHA 256 ASIC could be used to mine the proposed altcoin? The "provably cpu-only mining" means never could any ASIC nor GPU profitably mine the proposed altcoin.

From private message (I do speak behind the scenes with those who disagree with me):


In the Adam Beck interview he says that drastic changes can not be made to Bitcoin until they've been heavily tested by an altcoin, because the risk to Bitcoin of an error is far too great. But by the time they've been heavily tested in altcoin, it is very possible for that altcoin to have established itself.

And there is one thing that Bitcoin will never implement, and that is always-on-by-default strong IP address anonymity. The vested interests (pools, exchanges, payment providers such as Bitpay) would never allow this, because they would fear government retribution. There is already too much inertia in Bitcoin being non-anonymous and thus amenable to the government KYC and AML laws.

The killer feature is cpu-only PoW, and no one knows how to do it.

The reason Bitcoin can't reliably lower the block confirmation time is because the network latency between full nodes can not be known to be below some value. As well the validation delay can be significant for some full clients, because we don't know the hardware they are running.

Here is the discussion (https://bitcointalk.org/index.php?topic=260180) of and the equation (https://bitcointalk.org/index.php?topic=250735.msg2666847#msg2666847) for the orphan (i.e. transactions stall) rate.

This problem is theoretically solved in the holistic altcoin design I have proposed in the OP because fast network propagation and validation is assured by the design of the new hash, mini block chain account balances, mining only in pools to achieve the required anonymity while pools are prevented from being too large. I chose 1 minute to be conservative. I think this design could work reliably at 30 seconds or less. It could be lowered after extensive testing to confirm my calculations.

Also it may not be necessary (https://bitcointalk.org/index.php?topic=88302.msg971693#msg971693) to resend all transactions or separate the send from PoW header.

Edit to insert a followup:

:)

The important thing here is the stakeholders perception. Empirical observation shows that stakeholders are viewing their stake as an investment, not as a stake of the future money system.

During the ascension of the coin, they don't make theirs decisions as if they had a stake in the money system of the society, they make their decision as if they had a normal investment. So they sell when the price increase. And by the time a cryptocoin will become the money system of society, the bigger stakeholders will be vastly diluted by their own profit taking and risk managing.

Central banking was not instaured because the wealthy has most of the money supply but because of political coercition. The wealthy were not wealthy enough to control the money supply by themselves, so they use coercition to obtain that control.

Neither NXT or Bitshare will be profitable for miners, see this thread for NXT https://bitcointalk.org/index.php?topic=458036.0. The ROI for NXT "mining" will be something like 0,05% per year, no incentive to hoard here. I don't understand the technical detail but I know Bitshares will implement also something that will make mining unprofitable.

By the time the currency become the dominant one, the wealthy will not be able to acquire a significant stake in it. Again, even the wealthiest aren't wealthy enough to have a significant stake in fiat.
For instance the distribution of PTS is done by POW mining, and PTS give a stake in Bitshares, which is PoS. So with Bitshares you have a PoS coin where coin distribution is done by mining. The best of both world.

Also when Bitcoin was mineable with a CPU, only a tiny fraction of the population was aware of what's going on. I think it's quite possible that today more people have the possibility to have a stake in a PoS coin via an IPO, than people had the possibility to mine Bitcoin in 2009/2010.
Recently roughly 2m$ were burnt for the distribution of XCP. I think a lot less than 2 millions $ were spend in BTC mining materiel in 2009. Furthermore we can except that several dozen m$ will be dedicated for the acquistion of Etherium coins.

Today if more ressources are devoted to coins acquisition than before, it's because there is more awareness among the crowd. More ressources devoted to coin acquisition mean today's coin (included PoS coins) start with a level of marketing/adoption which is way higher that the first PoW coins had.

They control all the fiat and credit of the world via the Central Banks. I surmise they can surely buy up a PoS system, transferring their control from existing fiat to this new fiat PoS system.


Tragedy of the Commons. These systems won't be secure. Their designers are Communists disguised in Austrian economics facade, i.e. wolves in sheepskin.


Sorry this is not the "best of both worlds". This is a Frankenstein combo. The perpetual security of mining and ongoing (small, reasonable, annual percentage akin to gold's debasement rate) redistribution of wealth from the upper 1% to those who apply their ingenuity, risk, and effort to provide the security is replaced with a Tragedy of the Commons which is precisely the power vacuum chaos that will demand a leader step in and take control, i.e. fiat.

Bitcoin has similar Tragedy of the Commons problem, because new coin rewards decline and are replaced by transaction fees. I have explained this exhaustively already, so I won't repeat the argument.


A one time event, like a land rush for money. Brilliant.  ::)  :'(

They have no clue about the Austrian theory of how money comes to be adopted (https://bitcointalk.org/index.php?topic=342007.msg3788271#msg3788271), nor any sane logic about how to make a coin that sustains adoption and security growth ongoing.


Scams abound now.


I thought it was a PoW coin. Are they doing a land rush sale of a pre-mine? Or do you mean invested in mining it at launch?


Agreed. But this should be done through competitive mining, as this is a decentralized security and money model ongoing.

Addressing only this point.  This is Adam Beck's perspective on this only.  He is likely correct, but if the alt-coin killer feature is obvious after implementation, Bitcoiners will quickly choose to either migrate to the new coin (selling their stake in Bitcoin, and therefore losing interest in the outcome) or advocate for the change to be completed quickly.  Or both at the same time.  In the long run, it doesn't really matter which is true, or whether or not Bitcoin remains the cryptocurrency of choice.

I wrote upthread (https://bitcointalk.org/index.php?topic=455141.msg5128980#msg5128980) that I am not that fearful of hyperinflation due to a proliferation of altcoins. To expound a bit, I doubt very much the market will choose to give equal weighting to numerous xerox coins. I think the market will focus in on one winner, or possibly two for example if one coin needs to be 90+% anonymous and the other needs to be compliant with government oversight. Perhaps someone can think of another market segmentation for why we might need 3 dominant coins. And the market may invest in a few best alternatives at lower market caps to keep the leading coin(s) honest, e.g. analogous to the bimetallic gold and silver standard. This should stabilize and not spiral off into hyperinflation, due the value of network effects, the market cost of changing brands (a.k.a. good will ... see how much difficulty moolaching has in finding a good alternative brand name (https://bitcointalk.org/index.php?topic=458443.0)), and the fact that the variables for a better design are limited (eventually we will stabilize and not be able to find a much better design any more). I agree with Adam Beck that we should try to find the minimum set of features that need to be in the coin protocol, so that extra features can be built orthogonally on top of that base protocol.

Also currency is not a store-of-value. It never has been due to Gresham's Law. The purpose of the dominant currency is unit-of-exchange. If you make the currency too finite (Impaler uses the word too "hard"), the bad (more debased) currency drives it out-of-circulation. Just look what happened to silver coinage in the 1960s all over the world it disappeared into private hoards. Note Gresham's Law requires the force of legal tender, i.e. the bad currency must be the one sanctioned by society.

So if we really want to build a dominant currency, we need perpetual debasement (or Impaler's Freicoin demurrage). And Bitcoin is never going to change to that because there are people who don't understand what I have written in this thread about perpetual debasement, and they will not change their (I assert is incorrect) logic any time soon. To change that in Bitcoin would fork the coin.

---

Edit: https://bitcointalk.org/index.php?topic=483989.msg5346113#msg5346113

I have likewise been very impressed by the community.

I first came across some of the concepts discussed up-thread in a few months back.
https://bitcointalk.org/index.php?topic=342007.0

Since then the OP has managed to convert about a third of the audience to his point of view.
That is impressive considering that the initial reception was so poor and he was battling against entrenched views.

Regardless of the OP plans for his own alt coin. I think a critical mass has been obtained and market has is now primed. I know that I personally will be taking a very close look all upcoming alt-coins with strong built in anonymity.

I too am interested if any group can implement some or all of the proposed ideas. Also I am interested to study some of the orthogonal ideas (not mining security design nor anonymity) coming out of the Etherium project.

I too appreciate the quality of the community and especially that you did not get put-off by our discussion about AGW in the other thread to emotionally change your views on this issue.

Note cpu-only may be as or more important than stronger anonymity, as well the economic implications of the design to fund mining security not from transaction fees.

I am very appreciative of the rationality of the debate thus far in this thread. For example, rationally there was no falsifiable proof made on PoW vs. PoS, rather readers will have to form their own opinion from the debate. For non-falsifiable issues, the market must decide.

Completely separate issues it would not be rational to conflate them.
In fact one could even argue that to do so would have made me a myopic dimwit and insane.

 :D

thanks :-[

(I am so tired of hearing from self-important, do-gooders who want to stomp on the free market. I was in California too long I guess. Now they want to tax breathing, i.e. carbon, so they can protect their perfect suburban habitat of manicured lawns. Spain even taxes sunlight. Efficiency and conservation? It is always the other guy. I program from a Nipa Hut and there is no lawn nor sidewalk rather chaotic natural weeds and mud. So please don't tell me about conservation. Do it. Instead they always want to spend other people's money. Guard your wallet! That is what this thread is about accomplishing.)

P.S. I further refuted (https://bitcointalk.org/index.php?topic=355212.msg5175958#msg5175958) the myopia that says electricity consumption with PoW is a problem.

I think by the time a PoS system become big, it will be too expansive to buy it, even for the wealthiest. Therefore they will need to buy it somewhere in its ascent, and that will deter the market to use it and another PoS system will win the adoption race.

And all of that is assuming there will be only one dominant currency. Which will probably not be the case. A lot of the socialist thinking come from the false premise that free market lead to monopolies. In the same manner that there is not one corporation which address each human wish, there will be no unique money. And if the wealthiest will not be able to even capture one succesful PoS system, a fortiori they won't be able to capture all the succesful PoS system.

I need to do some research to see what incentives are planned fo "miners". I would be surprised if there were not.
It was not a rush for money, it was a rush for a highly speculative investment.

There is no money here and now in the cryptos landscape, only speculative investments. In your reasoning you can't treat something that is only a speculative investment as if it was already the money system of the society. It's a logical fallacy.
A lot of Austrian economists have no clue either. How many of them disdain Bitcoin because it doesn't fit Mises' regression theorem?

See Hayek for the competition in money. He did understand Austrian economics and his views on money are more relevant than the all of the Austrian crowd together imo.
XCP is the antithesis of a scam. It was distributed by proof of burn, even the developpers had to burn their BTC to get some. It's arguably the fairest coin distribution since Bitcoin.
They are doing both. They will issue X ether via an IPO and then 0.4*X ether will be distributed each year via PoW.

I don't claim to be omniscient, so everyone should proceed with what they want to experiment with. Let's see how it ends up.


I am confident that if it reached 10% of the dollar's reach, the USA government would act to protect the dollar's hegemony well before it had destroyed the dollar.

Besides they can tax it at will, especially since there is no strong anonymity in these PoS systems. I believe they can't build in the anonymity, because the only way I could contemplate to do this was via the pool mining (and PoS doesn't have pool mining).  ;)

Thus they can drain value from it back to dollar.

The NSA is tasked to pay attention to security threats to the hegemony. I doubt they are oblivious.


The current plan of the globalist elite is for a single global base currency, tentatively called "SDR", then the regional and national currencies will float against.

W.r.t. to the physical economy which government will always be able to tax and thus control, they will make sure the crypto-currencies float against this global reserve unit.

I don't propose to challenge that plan. I don't think anyone can.

Rather I propose that if we successfully make a crypto-currency strongly anonymous that can withstand the NSA, then we also have to protect the other means to controlling it, because (I assume) the government's plan is to control the cryto-currencies through taxation, giving them an unfavorable tax rate relative to the SDR. So if they are faced with a currency they can't tax in the virtual economy, I think they would attack it any other way, such as 51% attack for PoW or buying up a majority shares for PoS.

Thus I conclude PoS is unworkable as the strongly anonymous coin. If I have a failure in my logic or have stated something subjective, please point it out.


They will try to obfuscate and confuse you (and themselves) on this issue by employing much complex discussion and design, but in the end they can't avoid this because this was the genius of the PoW invention.


My (and the Austrian) point is that money has to gain adoption over a period of time, so we need a system that provides continuous competitive distribution, not a one-shot affair.

The PoS IPO is the antithesis of currency distribution, because the wealthy spend a fraction of their wealth on consumption. So you won't be distributing this coin from wealthy to merchants, rather from wealthy to the greater fool investor. The mechanism isn't there to create a currency. The greater fool investor isn't buying it to spend as a currency, rather buying in frenzy, then a collapse in price. There is no mechanism to adopt the use as a currency. Whereas with cpu-only PoW, the currency gets pushed out via home-scale mining to anyone with PC. The home-scale miner is selling it to the wealthy. This is night and day in terms of currency distribution.

Whereas with cpu-only PoW, we are continuously diluting the wealthy (at a small, reasonable annual debasement) to get the coin into consumer's hands.

Do the wealthy play an important role? Yes indeed. They invest after the early adopters (another reason you don't want the IPO at the very start). Balance. Balance. Balance. PoS doesn't have it.


Ditto logic I wrote above. Thus they are not currency distributions. It appears they are some genre of pyramid scheme (for a lack of a better term to describe greater fool selling of what can't be a currency to people who think it can be).


Maybe they should read this post of mine.

Any way, I think there comes a time for me to stop arguing with words (https://bitcointalk.org/index.php?topic=465474.msg5188103#msg5188103).

Auroracoin (http://auroracoin.org/) is an interesting approach of provably giving most of the the coins away equitably for free in a non-wasteful procedure.

Last time I checked it was trading at $40M post-airdrop marketcap.

I have never agreed with giving coins away for free. Jason Hommel ingrained into my mind (https://web.archive.org/web/20130401040049/http://forum.bittorrent.org/viewtopic.php?id=28), "you can't give away something for free which isn't free". I am writing about distribution efficiency for currency.

Perhaps you are writing this in support of my argument and not still thinking that I am proposing giving anything away for free? I don't think you are arguing Auroracoin will be a positive outcome, because you explained to me in the past how when the former Soviets distributed formerly collectively owned land back to the individuals, the recipients promptly sold it and consumed the revenues (on Vodka, etc). The poorest of the Icelanders will promptly sell the Auroracoin driving the price down or retarding its price growth! I have no qualms about home-PC miners spending their recently mined coins at a net-loss[1] if they so desire, as this increases the velocity of money and is totally different as they have recent electric bill cost to factor in.

Miners compete to earn a profit. The only socialist aspect is the perpetual coin rewards (debasement). As I have explained upthread, this is necessary (and it is why socialism exists), because otherwise the wealthy will destroy themselves (and society) because usury (backstopped by purchasing the government) eventually accumulates 100% of the wealth and then we collapse the velocity of money[2] (because wealthy consume very small % of their wealth) into another feudal (lords) Dark Age.

Those (hard-on money tin foil hats) who advocate no debasement at all will actually force socialism to create a central bank. It is unavoidable that we have to dilute the usurists. It is how we go about it that is new. Now we can do it decentralized so the usurists are not in the driver's seat of the attempts to rebalance their overconcentrated wealth. And the rate of debasement is very subtle, perhaps 2 - 5% per year which is insignificant to the fast-moving entrepreneurs who are increasing their wealth much faster.

Essentially this redistributes wealth away from usurists who (inject very little new knowledge (https://bitcointalk.org/index.php?topic=355212.0) and) are a drag on the economy to fast-moving entrepreneurs who are a boon to capitalist risk and prosperity. Usurists don't take any risk at all, they buy the government backstop[3]. Thus they don't care who they loan to.

An argument which claims we can just stop the usurists from capturing the government is unrealistic. The power vacuum of democracy can't be eliminated entirely. Thus view the perpetual coin rewards more in terms of their importance for mining security, i.e. anarchistic-leaning-contentionism (https://bitcointalk.org/index.php?topic=355212.msg5202870#msg5202870) (click that link!), than for the impossible dream of eliminating all centralized wealth redistribution a.k.a. socialism.

[1] I posited upthread that the home miners will be mining at a loss (electricity will cost more than the value of the coin), and that this will drive the price of the coin higher faster than Bitcoin. I pointed out this will move the value of the existing PCs into the value of Bitcoin. Unlike with ASICs, there is nothing to buy, that capital is already idle and being wasted every night when they sleep. Thus this will skyrocket past Bitcoin! ;)

[2] V in the Quantity Theory of Money

[3] Even long-term private insurance, e.g. life or bank deposit insurance (but not insuring a package delivery), is ultimately backstopped at the government because it forces capital to be managed by a central fund manager, thus the fund manager can't lose for some and gain for others and all are locked into a single outcome, i.e. no risk allowed. Thus insurance is usury, i.e. invested in bonds.

You are right to point out that it was me who showed that such has never worked in the past. But now we have much improved technology, so I am interested to see what happens this time.

If the society of Iceland is homogeneous in its appreciation of the importance of crypto-currency, nationalism, and replacing their central bank, perhaps we could see a different outcome. But I am extremely skeptical that the distribution concept of Auroracoin would work where the population is not so aware, for the reason I stated in my prior post.

The big picture. Where we are headed. Why this is important. Why only PoW is decentralized, positive-scaling, enforceable structure.

https://bitcointalk.org/index.php?topic=355212.msg5208846#msg5208846

Adios forum. I need a break.

I disagree with your premise that flaws will cost investors "billions".

The bitcoins aren't going to disappear, and in order for governments (really the people behind them) to want to have them they have a vested interest in making sure they have value.

You are missing the point that the only reason governments would want bitcoin is because it has value. No value = no interest from the government.

If your argument is that some investors will lose a lot of money, then congratulations you've described just about every investment instrument that there is.

Some will lose a lot, others will gain a lot.  This isn't anything new.

Quote from the OP:


Appears the number of Bitcoin users is still below 1 million (https://bitcointalk.org/index.php?topic=316297.msg5226879#msg5226879).

---

That wasn't my premise in the OP. That was the premise of Alex Daley (this thread's title quotes his article's title), and I stated his understanding is myopic and incomplete.

I suppose that was you that just voted "No" increasing the total votes from 106 to 107.


No where in this thread did I assert that Bitcoin will have no value any time soon.

I have argued that if Bitcoin can't scale its transactions as fast as its price growth, then it will have a collapse in price when the investors leave and it collapses to its currency use value (https://bitcointalk.org/index.php?topic=316297.msg5227481#msg5227481). But that won't happen soon and it is not certain that transactions might start scaling faster than price. I linked to a chart which shows transactions are currently growing much slower (and much of that might be SatoshiDice dust then much of the rest investment trading, coin mixers, etc).

I am uber excited. I owe my gratitude to rpietila, for it is he who woke me up out of my slumber about Bitcoin March 2013. He had mentioned a couple of times before that going back I think to 2011, but it was early 2013 when he pounded the table to me in a private chat session. This demonstrates the value of the Supernodes.

I had noticed Bitcoin early on, like many of us I ignored it.

I had been working from 2008 onwards on trying to figure out how payment systems could work backed by gold and silver. I eventually came to the conclusion that they couldn't work because the physical gold and silver always has to be stored some where, and thus it is a centralized paradigm. I tried to think of ways to decentralize it, but the problem was always the transfer of the physical metal for transactions.

For some reason I didn't connect this problem to the solution of Satoshi's proof-of-work. (I think the reason was primarily emotional) I didn't have the epiphany until mid-2013 when I realized the key insight that only PoW had this expansive entropy which I have explained upthread.

When I started to look at Bitcoin in March, I realized immediately that the declining coin rewards was a fundamental weakness, that had been marketed as a strength.

As I dug deeper, I realized all the issues which culminated in the OP.

So now, it is time to sign off.

Funny how no one metions that you referenced your own opinions about the numbers of users.  Coinbase alone has almost 1 million accounts, not addresses.  Truthfully, we can't know how many users there are, which is kinda the point.

This quote is attributed to Einstein:

"“Two things are infinite, the universe and human stupidity, and I am not yet completely sure about the universe.”"

No I referenced and clarified the logic and data of others from the thread and clarified that there is less basis for concluding with great confidence that the number of users is greater than 1 million (an account is not a user for the reasons I stated in the linked post).

The likely number of users was 1 million or below based on the data I quoted in the linked post. The original figure used was 488,000 Coinbase accounts. I have posted (https://bitcointalk.org/index.php?topic=316297.msg5273076#msg5273076) your claim and some analysis to that thread.

Unlike yourself, I didn't claim to know of any relationship between any particular claims and the real number of bitcoin users.  I honestly don't know if there are more or less than 1 Million users.  I mentioned it to highlight your lack of evidence.  Referencing the logic and "data" of others, who don't have any evidience of their own, doesn't constitute evidence either.  You do this a lot, make grand arguments that you cannot support.  I'm surprised you're not either a lawyer, a politician or a preacher.

I have sent a post (https://bitcointalk.org/index.php?topic=428589.msg5275633#msg5275633) to Ethereum (not Etherium the game) summarizing my concerns with their technical design, and praising their vision.

MoonShadow, precisely my point is we don't know if there are 2 million "Bitcoin users"[1] and so we shouldn't cite that as a certain fact. Note your claim about a doubling in Coinbase accounts has been added to that thread so that could alter the speculation.

[1] What is a Bitcoin user? A Facebook user is someone who creates an account and returns to use it 1x per day, per month, per year, or never?

The thread which I started in October, includes most of the data and reasoning behind the 2.0 million number. As perhaps the person who has put the most energy and talent to finding this out (over the last 4 months anyway), I am open to answer your questions for example if you want to define "user" in a different way, how it would affect the total.

Definition used there is "Person who directly or knowingly beneficially owns at least BTC0.001 at the time of census."

If Mt.Gox never pays out, there will be a dent in # of owners...

Is this guy serious? He sets up a pattern of facebook succeeding all the other social websites before it, and then blasts bitcoin with the assignment of "We have a long way to go to 7 billion." So we need to go to 7 billion? What currency is used by 7 billion people, and why do we have to exceed that number in order to be the next standard? Bitcoin will surpass a billion users within five years, and something tells me the value might go up during that time.

You've attributed accusations to me which I did not state. My position is that the number of serious (i.e. frequent use or maintaining a level of balance worth remembering) Bitcoin users may still be below 1 million, i.e. 1 in 7000 people, which lends some credence to the notion that it is still (if only remotely) possible for an alternative to overtake Bitcoin or at least establish a lower but significant market share, and notwithstanding yet especially if the market bifurcates to a government-compliant coin (i.e. trending towards fiat) and an anonymous darknet coin (i.e. maintaining decentralized currency).

No where did I state that Bitcoin had to reach 7 billion users in order to succeed or go up in price. And no where have I stated—in fact I emphatically warned the opposite last year—that Bitcoin's adoption curve allows a lot of time for altcoins to catch up. I doubt altcoins even have 5 years to make their move.

I enumerated Bitcoin flaws which did not include "a lack of users".

Yes:  There is a lot of improvement that needs to be done to the protocol and the ability to use it that will allow for increased use.

No:  The op-ed piece's fundamental underpinning seems to be based on the supposition that government simply won't allow it.  While I can see the logic behind that, it is a far from settled issue.  We'll see regulation, yes, but outright quashing?  I doubt it, except for a handful of places like China, Russia, where you'd kind of expect it in the first place.

Perhaps this OP did not make my position clear enough. I am not arguing that Bitcoin will be shut down.


The government and the financial powers-that-be (who own the government) are not going to allow any decentralized crypto-currency that they can't tax and effectively control.

The powers-that-be will allow Bitcoin because they are already taking control of it (and some of us speculate they even created it). I explained in the OP that they can take control with regulations such as AML and KYC laws, which enable them to identify all (even formerly anonymous) users and tax them. The mining is centralized in a few mining pools thus the financial powers-that-be can eventually take control of the mining.

The point of my OP is that Bitcoin will end up essentially analogous to another VISA, i.e. a fiat compatible system that is top-down controlled a.k.a. centralized.

Ok, I'm not going to debate what the powers that be may do or not do, but Visa is still worth something, yes? 

If Bitcoin, in any form, effects the sort of large scale change on the financial system that it is capable of, even to the point of grabbing  any substantial market share whatsoever from traditional payments people, Visa, PayPal et al, that is still going to be worth a good pile of cabbage.

The above is what I have been sort of thinking about.  If bitcoin reaches astronomical prices (which I assume most of us hope), so does the incentive for the 51% attack.   I believe I heard Andreas talking about when the market cap goes up, so does the cost of the equipment and networking power needed to actually accomplish the attack.   I guess in theory, it would be idiotic to spend that kind of money just to disrupt a network and squash their own investment.  Wouldn't put it past the US government to throw away tax payer dollars like that...

I am not arguing that Bitcoin won't go up in price (although it is remotely possible it could be entirely defeated by an altcoin, the more likely future is Bitcoin prospers while an altcoin might also due to a bifurcation on the principle of strong anonymity).

I am arguing that we will lose our decentralized currency and anonymity.

Bitcoin : The Digital Kill Switch (https://bitcointalk.org/index.php?topic=160612.0)

You might accrue large capital gains, but I am also arguing the government is going to confiscate our gains any way. See this post (https://bitcointalk.org/index.php?topic=195275.msg3385368#msg3385368), the Mad Max (https://bitcointalk.org/index.php?topic=365141.0) and the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) threads.

In my opinion our biggest problem is financial survival going into a coming horrific global sovereign debt implosion (2016ish running for a decade or more of hell) that will force the governments to confiscate everything they can get their hands on.

And we need decentralized currency and payment in order to prevent (https://bitcointalk.org/index.php?topic=349028.msg3737847#msg3737847) the internet from being dominated by an advertising funding paradigm and few large corporations. See the MtGox demise as a prime example (https://bitcointalk.org/index.php?topic=470154.msg5294657#msg5294657) of how centralization leads to failure and/or government control.

In short, I argue we are threatened with losing freedoms we gained with the internet and worse...

And I am not going to let that happen.

For example did you know there is a government push towards mandatory (https://bitcointalk.org/index.php?topic=316297.msg3818219#msg3818219) Facebook accounts, and that Facebook is even recording your pattern of typing (https://bitcointalk.org/index.php?topic=363852.msg3889591#msg3889591) so they can identify you even when you are not logged in!

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We concluded in upthread discussion that for Bitcoin the easier attack vectors are regulation (since anonymity can easily be universally broken ex post facto with coin taint) and taking control over the few large pools.

Designing defenses against the 51% attacks is more relevant to the proposed altcoin that would be more impervious to regulation and pool centralization.

Bitards either don't understand or wish to sweep under the rug how grave the threat from centralization is.

https://bitcointalk.org/index.php?topic=470154.msg5305055#msg5305055

Well I can't disagree.  They have the tools, and they'll use them, no doubt.

And I agree it's utter bullshit, although I do not see anything whatsoever that can be done about it.

Not adhering to laws results in bitcoin going underground.  If that happens, people may think it will still retain value/use, but I am not one of them.  If it is not an accepted medium of exchange now it is no more likely to be so after some financial meltdown or Mad Max situation.

If bitcoin is not widely adopted, and the financial system melts down, it isn't worth anything.  Then it's gold, silver, the normal things.  Stuff.  If it is widely adopted it may well be a great hedge against exactly that sort of thing; and on a financial level and with enough ease of access, that a lot of people could afford to squirrel away some amount, but only if they know it exists, know how to use it and have a realistic expectation that it will have value that will be portable and insulated from fiat meltdown.

Widespread adoption is basic to use in any future scenario, including a global meltdown, which I'm not going to argue isn't going to happen, as I'm as amazed as anyone with what I see going on in that department.  To allow for adoption that you have to follow the law, even if it sucks because you know damn well half of it was written so governments can stick their noses in places it doesn't belong, behind the guise of the greater good, whatever the hell that means anyhow. 

It's not a matter of not understanding anything, I don't think, it's a difference of opinion on what actually has the better chance at any sort of real success. 

Why The Only Solution is Technological

By the time you realize I am correct, you will be behind the others who realized earlier. Most people are still on the Titantic rearranging the deck chairs (see quote of Hoover (http://armstrongeconomics.com/2013/11/21/capital-flows-the-key-to-everything/)). This is why the USA is actually booming until 2015.75, because capital is now fleeing into the USA (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+capital+moving+to+USA) from the emerging (peripheral) markets where the riots first manifest. But this ends up at the core reserve currency at the end game 2016ish. We can see how regulation appears to be a very loving and correct direction (https://bitcointalk.org/index.php?topic=481213.0) (listen to her charming speach). She is head of the IMF that is proposing 10% confiscation (termed "financial repression") of bank account balances across the EU to bring debt back to 2007 levels (i.e. not a solution and they will have to come back for more and more).

My opinion is that anything that does not circumvent law (which can be a legal activity, e.g. see the "Don't follow me, I'm the 5th car" (http://armstrongeconomics.com/2014/02/21/ukrainian-govt-is-fracturing-the-debt-default-contagion-is-likely-to-unfold/)) is going to end up destroyed just like that dramatic upthread chart (https://bitcointalk.org/index.php?topic=455141.msg5033950#msg5033950) of the population of Rome falling from 1.3 million to 30,000 (because everyone fled the government). Apparently the-powers-that-be in the USA government are moving towards totalitarian allegiance (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) analogous to recent events in the Ukraine. The entire premise of the Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) thread is that the Ineptacracy (https://bitcointalk.org/index.php?topic=355212.msg5246253#msg5246253) of socialism can't stop (https://bitcointalk.org/index.php?topic=355212.msg5274282#msg5274282) until it kills everything or until one of the following occurs:

• A new technology renders the government impotent.
• A Benevolent dictator like Caesar crosses the Rubicon (https://www.google.com/search?q=site%3Aarmstrongeconomics.com+Caesar+crossed+the+rubicon) to restore sanity

Note the people rising up as in Ukraine (http://armstrongeconomics.com/2014/02/22/ukraine-the-need-to-always-blame-someone-govts-are-all-the-same-wake-up/) is not a solution, because they have no economically viable technology to remain decentralized. They will fall right back into the power vacuum of democracy with escalating chaos with Egypt as a recent example, because the fundamental problem is economic bankruptcy due to peaking socialism and debt (the people are not ready to embrace the decentralized Knowledge Age and the end of a public welfare and retirements system). Only a dictator or a technological solution to the power vacuum is a solution at this time (the contentionism has swung to anarchy because the time to make new social constitutions is not now for reasons stated).

And the benevolent dictator is also not sustainable, e.g. Rome continued to destroy itself after the vested interests of socialism killed Caesar. This is why only technology is responsible for sustainable gains in the lives of the people. Note CoinCube and I have postulated that in the theory of contentionism (a new term we invented) the top-down order (with socialism being one form) plays a role in the organization necessary to spawn new entropy, e.g. decentralizing technology.

Thus the only popular thing left standing will be the one that is impervious to government.

Gold and silver hoarding leads to a feudal Dark Age (which historically typically have long durations, e.g. 600 years), because the velocity-of-money (V in the Quantity Theory of Money) collapses. V is already down -50% since 2008. Capital is already running and disappearing into hoards. This will accelerate (as more frogs wake up from their blissful ignorance of what is going on and jump out of the boiling pot) if we don't have technological solution very soon.

And I have good news for you. I've had an additional epiphany recently that I have not written about publicly. I am becoming uber confident that Bitcoin is not the future of commerce, finance, and business. And become more confident I see (all the economic and algorithmic details of) the future technology in my mind's eye. Stay tuned, it won't be too long now. Commerce, finance, and business will never go back to centralized again. This changes the order that had existed since Mesopotamia.

So this isn't about crossing a crisis and coming back to the same notions of the way things are today. This is leaving the old ways behind forever.

P.S. Three prominent forecasters (with not such stellar prediction performance as Martin Armstrong who predicts the same (http://armstrongeconomics.com/armstrong_economics_blog/), yet all with a correct model) are predicting "economic devastation" ahead (http://usatoday30.usatoday.com/money/perfi/stocks/story/2012-02-26/stock-market-bears-doomsayers/53259742/1). CoinCube do you think they read your thread (https://bitcointalk.org/index.php?topic=355212.0) and got that quoted term from you? (your thread in in the top 3 listings at Google for that quoted term)

P.S.S. W.r.t. to Bitcoin becoming government compliant, there is this problem that there isn't just one global government (yet), so its global fungibility will be pecked away by the discordant nation-state vultures. And as the recent Mt.Gox fiasco (https://bitcointalk.org/index.php?topic=455141.msg5305367#msg5305367) exemplifies, there isn't anything the government touches that doesn't get bloated and less efficient.

"An elephant is a mouse built to government specifications." - Lazarus Long.

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Disclaimer: I am not providing legal nor tax advice. I am not a professional adviser, please consult your own. I am merely sharing my thoughts and anything you do after reading my thoughts is your own responsibility.

---

Update: there is a new thread on anonymity (https://bitcointalk.org/index.php?topic=475574.msg5308941#msg5308941) which is quite astute and exemplifies the evolving improvement in the knowledge of the community.

and that's where we part ways.  nothing that circumvents the law, or makes any attempt to do so will survive.  period.

the answer is not to circumvent, the answer is to change the law or to see that the laws we want to protect bitcoin are passed.  to change the system, you have to work within it, like it or not.

we need lobbies and lawyers just like any other interest group if we want to do that, otherwise, you're right, this will be defanged, beaten down and ultimately destroyed.

This is the bifurcation mentioned upthread and Pentax is on the losing side where no finance survives.


I think people fail to comprehend that the $150 trillion debt, means $25,000 for every living human, including babies, elderly, and those billions who live in countries where the average person doesn't generate even $5000 income per year (not to mention basic needs such as food comprising a large portion of their income). When the IMF says this is a 200-year debt high, that doesn't seem to register in the mind of people can only think in terms of life in western nations during their and their parents lifetime.

The law and the system behind it is entirely bankrupt and it will be confiscating everything. Finances will not survive. Changing the law won't make it not bankrupt because the people are unable to accept a non-corrupt system because they themselves are already corrupted by the system as explained below.

Whether you like it or not, the only way to survive is anarchy. Peaking (collapsing) socialism will devolve to every man for himself either in total Mad Max chaos or in a decentralized trust system of organized anarchy, i.e. mutually agreeable rules for freedom that don't devolve into centralization (socialism).

You better pray I succeed in the latter outcome, otherwise there is only megadeath and destruction ahead.

CoinCube this genre of post is another evidence that socialism can't abort. You see my theories in action. The people can't comprehend that their system is bankrupt and that there is no possible top-down solution. Laws can't turn 60-year old people into 20-year expert computer programmers, biotech experts, nanotech experts, etc.. The socialism destroyed (appropriate to the Knowledge Age) education, reproduction, and has set up a massive failure. You've got a society with mostly the wrong skills, the wrong understanding of what is possible, etc.. Instead the people have been busy creating that $150 trillion global debt by learning and doing vocations that are useless in the coming Knowledge Age. This is what debt does. It misallocates human capital (lifespans) by allowing them to do uneconomic activities.


To see why the peaking socialism will tax itself into megadeath as it has repeatedly done throughout all human history since Mesopotamia...

Just look at the glossy eyes of the women in this Q&A debate on man-made, global warming (AGW) (https://bitcointalk.org/index.php?topic=374873.msg5309216#msg5309216). You can see they really believe (the "good salesman vs. bad salesman" Hegelian dialectic that has been programmed into their brains by TV and the state-school system) there are "carbon bullies" and totally fail to comprehend the truth (https://bitcointalk.org/index.php?topic=355212.msg5228609#msg5228609).

And you can see practicaldreamer over there in the Anonymity thread (https://bitcointalk.org/index.php?topic=475574.0), continuing to conflate orthogonal concepts (https://bitcointalk.org/index.php?topic=355212.msg5274282#msg5274282).

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please repost without quoting
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Repost your reply without quoting my entire message. For one thing, I edited my message significantly since you quoted it.

Secondly, it is making the thread hard to read when you only write one sentence below my very long quote. No need to quote me, just kindly repost your one sentence reply.



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A reply of yours, quoted below, was deleted by the starter of a self-moderated topic. There are no rules of self-moderation, so this deletion cannot be appealed. Do not continue posting in this topic if the topic-starter has requested that you leave.

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You do realize that you are asking people to adhere to a narrow set of rules while running a self moderated thread proposing anarchy.  Quoting what one is replying to is pretty standard.

Anyway, no big deal.

We can agree to disagree on the basic fundamental arguments of the thread.  While the debate is interesting, and I don't totally disagree with you about some of this, I'm not going to be handed a rule card and asked to toe the line as you see fit, or have posts deleted if you don't like my formatting, of all things, so I'll thank you for some interesting debate and move on out of here.

Ha ha that is funny. I never expected to make the first page of Google when I started that thread.

From what I can tell from the article those forecasters have correctly identified the proximate cause of the coming Economic Devastation (https://bitcointalk.org/index.php?topic=355212.0) but have not yet seen past that to the more ultimate cause.  

As far as I am aware the insights of Contentionism (https://bitcointalk.org/index.php?topic=355212.msg5210378#msg5210378) are unique. Google has spent considerable effort developing algorithms to sort filter and identify unique content. Perhaps that is why it has made the first page.

  

 

Contentionism posits that some top down control is needed to restrain anarchy. It also posits that all such top down control has a tendency to grow without restraint.
When top-down control becomes problematic (limits free discourse or prosperity) a counter-force is needed to circumvent (https://bitcointalk.org/index.php?topic=457105.0) the top down control.  

It is the existence of the counter-force that is important. It provides an outlet or escape hatch which acts as a soft restraint on the top-down controller. The top-down controller knows that if the authority is abused people with circumvent and undermine the control.

This is also why a truly anonymous decentralized currency is needed despite the fact that such a currency can be used to circumvent laws and be used for criminal behavior. Its very existence will act as a check on government and may allow for more efficient but less secure non-anonymous cryptocurrency to escape government capture. For the physical economy cryptocurrency can never be truly anonymous. Thus it will never be completely safe from a government gone insane. The ability of individuals to flee from government control acts as a needed sanity check and (hopefully) will keep the top-down controller from acting irrationally.  ;D    




 

Who decides when it has become problematic?  Then they institute control and become the thing they so despise. and so it goes.

all of this is theoretical.  I think it falls apart early on in that there is no way anything is simply going to circumvent the law.  Unless you're the current president of the US, of course, but that's another argument.

It dies in the crib if it is intentionally set up for government circumvention.  I just don't think it's practical to base an ideological argument for an eventuality such as an operational financial system in lieu of current fiat systems, on a foundation that is so critically flawed.  

The amount of time and effort put into circumventing would be better spent trying to work within the system.  We'll disagree, I know, but that is the only practical mechanism I see, while any attempt at circumvention that drifts outside the law, or espouses that in any way, is most likely wasted energy.

Pentax, (I appreciate your points and) the problem is precisely that everyone is trying to work within the system. Thus there is no check & balance on the system. Have you forgotten the Boston Tea Party (http://en.wikipedia.org/wiki/Boston_Tea_Party) (which was about circumventing England's Tea Act and the colonists had fled England to circumvent the severe oppression there (http://www.bbc.co.uk/history/british/tudors/human_reformation_01.shtml)) from your high school U.S. History class or are you not from U.S.A. This freedom lead to the U.S.A. becoming the most productive economy in the world.

Today it is very difficult to physically escape to a physical place where there will be no "financial repression" (term proposed recently by the IMF) because the G20 has laid out plans to cooperate to track down all wealth (with the NSA agreeing to provide the information, this is documented by a link in my Mad Max thread). The developing countries are dependent on the G20 and are implementing its edicts such as compliance with the FATCA law (http://www.nestmann.com/finally-some-good-news-about-fatca).

By implication you argue that the system can be braked by working within it to maintain some sanity, but you apparently ignore the Iron Law of Political Economics (http://esr.ibiblio.org/?p=984), which insures that the system will spend more than it can produce until it has destroyed all production. The only way to destroy all production is to kill the people. Thus megadeath is always the end game of unbraked governance a.k.a. socialism or collectivism. This is not just a philosophical ideology. It has happened over and over again throughout human history. It is science, because it is measured fact. Even God warns about it (http://www.biblegateway.com/passage/?search=1+Samuel+8%3A6-21&version=CEV) in the Bible and even the megadeath outcomes (http://www.biblegateway.com/passage/?search=1+Samuel+15%3A1-3&version=CEV) we've seen repeat throughout history, so obviously man knew about this phenomenon for over two millennia.

Some think that the $150 trillion in debt can be restructured (i.e. longer payout terms for the lenders and bond holders, some debt forgiven), but the problem with this is that it is essentially taking away money from the lenders thus there will be less lending and thus the global economy will implode. The amount of debt is simply too large to do a restructuring as the world did with the $billions of Latin American debt in the 1990s. If we instead take money (bail-ins, raising taxes) from the savers and producers (which is the currently announced plan of the IMF, Obama, Merkel, etc), then again the global economy will implode. But only the part of the global economy which requires capital, i.e. the industrial economy. The Knowledge Age doesn't require stored monetary capital (https://www.google.com/search?q=site%3Abitcointalk.org+AnonyMint+knowledge+fungible).

This is why the governments had decided to borrow more and double the global debt from $75 trillion since 2008, because there is no way out.

What that additional borrowing did was delay the adjustment and pumped up the developing countries (http://www.forbes.com/sites/jessecolombo/2014/01/23/why-southeast-asias-economy-is-a-giant-bubble-waiting-to-pop/) with dollar bonds debt. Thus now the developing countries are short the dollar (owe dollars) and thus we will see a massive dollar rally as the USA economy will boom as capital rushes out of the developing world into the dollar from 2014 to 2015.75. Then the strong dollar and loss of developing export markets will strangle the USA economy.

So what does the required (unavoidable) adjustment look like? All those whose incomes in some way derive from that ever expanding debt will become destitute. This basically means everyone except the high-tech workers who are forming the new Knowledge Age economy which is very profitable and doesn't depend on the debt (because the way to become more efficient as the debt implosion proceeds is to utilize more high-tech and remember the Knowledge Age doesn't require stored monetary capital).

Thus most all future profit will be earned in the high-tech economy. The industrial economy will die even more rapidly once the debt bubble stops growing (which is must because we've already saturated the developing world with debt,, e.g. the third-world country of the Philippines has 9 of the 38 (http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/2/) largest shopping malls in the world and the 11th largest mall in the world (http://en.wikipedia.org/wiki/SM_Mall_of_Asia) at more than 100 football fields in size, but SM North Edsa is even larger (http://prudentinvestornewsletters.blogspot.com/2013/01/philippine-economys-achilles-heels.html)!). For example, there is probably an order-of-magnitude of oversupply of industrial manufacturing capacity in Asia (mostly China). And the 3D printer will within 20 years render most of the factories useless.

The government will not be able to tax this high-tech economy. There won't be any physical location to go investigate or monitor. It will be very distributed, not large corporations rather dominated by small companies often of 1 individual. So the future will be the anonymous crypto-currency. This is where all the future economic activity will be.

As this accelerates, you will see the top-down G20 system implode with all pensions nationalized into worthless, healthcare systems that kill you, etc.. You will see people scamper to try to find a way to be part of this new decentralized economy. Approximately 50% of the global population will be unemployed. It is going to massive upheaval. But as we come out the other side by 2032, the world will be a much different place where the decentralized economy has won and taken over.

If not, we will be in a Dark Age with megadeath.

There is no other possibility due to the fact that the $150 trillion debt is not just some accounting ledger entry. Rather as I explained above, it is a reality of (the current vocations of) most people being not needed, i.e. uneconomic and not profitable. The accumulated size of the unprofitable vocations is $150 trillion. That is a huge 200 year high. We are headed for massive train wreck.

P.S. Here you can see why cpu-only mining clearly subverts (https://bitcointalk.org/index.php?topic=470154.msg5326347#msg5326347) the government.

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Disclaimer: I am not advocating any one do any illegal activities. My use of the word "circumvent" means avoid a law's applicability and/or jurisdiction, not commit a crime. I am not providing legal nor tax advice. I am not a professional adviser, please consult your own. I am merely sharing my thoughts and anything you do after reading my thoughts is your own responsibility.

This post is to pre-empt those who are sending me private messages asking which projects do I recommend.

I like the conceptual directions that are exemplified in anoncoin, ethereum, memorycoin, but so far no one has put it all together in one. And IMO the economics design, algorithms, and some technical details of those 3 efforts are lacking.

Thus at this time, I can't recommend a project. I am hopeful that the right project will appear soon.

Ethereum is doing some important foundation experimentation on decentralized contracts. I think it is important to pay attention to that as well as the features I enumerated in the OP. I think everyone knows by now that I had been in contact with Charles Hoskinson about my altcoin efforts before and during when he decided to join Ethereum. My problem (especially as a U.S.A. citizen in an Obama+NSA world) is I don't want to be the known lead developer on a coin that builds the new economy that replaces the government to a large extent. So I am looking to play a side role and donate the algorithms I have developed at this point. Unfortunately I don't like the priorities at the Ethereum (and I have not shared my thoughts on this with them), so I've decided not to give them my algorithms at this time. I am observing first. I will not detail further as it would reveal strategy that I wish to keep secret. So please don't ask me. My suggestion is observe the market place of altcoins over 2014. Hopefully I will have passed on my algorithms to a capable project, and it is possible it could end up being Ethereum at some point. But I am not in any discussions with them at this time. They need to first prove their scripting design is the correct one. I don't like project development arguments. In that case, the market is quickly the decider.

In The Future of Cryptocurrency (https://bitcointalk.org/index.php?topic=483989.0) I posit that the existence of decentralized anonymous cryptocurrency is needed to protect weaker forms of non-anonymous cryptocurrency from government capture and centralization.

Armstrong admits we need to eliminate taxation at the nation-state level, but he doesn't provide a way to accomplish that!

http://armstrongeconomics.com/2014/02/24/the-fourth-branch-deep-state-in-plaint-sight/


Readers must listen to Bill Moyer's interview (http://billmoyers.com/episode/the-deep-state-hiding-in-plain-sight/) about the DEEP STATE that has taken over the U.S.A. government.

To all those who say that anonymity will enable illegal activities, I remind them that so did cash. So should we eliminate physical cash and move to a state controlled digital currency in order to eliminate all crime? But my prior post about the DEEP STATE (https://bitcointalk.org/index.php?topic=455141.msg5347903#msg5347903), shows that the criminals control the state! Ukraine is another evidence (http://armstrongeconomics.com/2014/02/23/yanukovych-captured/) that all nation-states are corrupt. Come on Statistards, admit you are wrong!

I am pleased to see how the forum responded to the idiotic OP about "How do we prevent money laundering and assasinations? (https://bitcointalk.org/index.php?topic=6413.0)".

The bigger the cheese, the more mice who come to feed on it. If we put control of all the money in the hands of the state, the incentive is much larger for the criminals to go capture the state. This is why we have a DEEP STATE. There is no way to legislate or make a democracy that prevents this. You have to eliminate the cheese using a decentralized technology, so there is nothing for the criminals to go after.

https://bitcointalk.org/index.php?topic=439357.msg5355485#msg5355485

https://bitcointalk.org/index.php?topic=453984.msg5363483#msg5363483

https://bitcointalk.org/index.php?topic=316297.msg5374142#msg5374142

https://bitcointalk.org/index.php?topic=439357.msg5377702#msg5377702

https://bitcointalk.org/index.php?topic=316297.msg5379359#msg5379359

I wonder if the current system that we have for innovating in the cryptocurrency space is the most efficient if we are going to address the concerns the OP has about Bitcoin.  Instead of starting a new altcoin everytime their is an idea for a new feature it would be interesting to have an alt-coin evolve new features over time.  An alt-coin would be more able to do this than Bitcoin because the market cap would be lower and so would the overall risk of screwing it up.  It could be called EvoCoin.

Failure to understand Bitcoin will indeed cost investors billions. 744,408 BTC stolen (http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft) (nearly 7% of total mined coins to date) and some people seem to be cheering like this is a good thing because they don’t like (long despised) MtGox. This is far far from over.  Where did those stolen coins go? Well check your wallet because they were likely fed back to the markets. If you have been buying bitcoins on any exchange chances are you have some of the stolen loot yourself. These stolen coins can be traced back to their true owner in a direct chain of title thanks to the block chain. If you don’t think this matters you don’t understand the legal system and the principle of Nemo dat quod non habet (http://en.wikipedia.org/wiki/Nemo_dat_quod_non_habet)

Under both American and English law the original owner of stolen property can demand ownership be returned to him if he can prove a chain of title (something the blockchain conveniently provides). The only recourse for an innocent buyer of stolen goods (and only in some jurisdictions) is to argue the exchange it was bought from had an implied warranty and he can try to sue the exchange after returning the coins to the true owner. MtGox is insolvent good luck there. BTC-e is run by anonymous folks think they will stick around in the face of massive lawsuits?

But cheer up there is still a chance most MtGox victims will get their coins back. The threat of massive unending lawsuits targeting innocent bitcoin buyers is an existential one for bitcoin. The 10-15 early adopters stand (by far) to lose the most if bitcoin goes down in flames. They might actually decide to buy out MtGox for the 744,408 bitcoins (an amount grossly exceeding the worth of the company) not because they are altruistic people, but because the chain of lawsuits that would follow if they don't act may hurt their holdings more than the loss of 744,408 bitcoins. It’s a lot of money, however, so its likely a difficult call for them. Regardless expect all future exchanges to require both rigorous identity checks prior to buying and selling as well as fine print stating that anyone who supplies coins to a market is ultimately responsible in the event those coins are determined to be “black” or stolen goods in the future.

Still think there is no need for truly anonymous cryptocurrency?

:-* This isn't my sockpuppet.

How Bitcoin could become its antithesis

https://bitcointalk.org/index.php?topic=488682.msg5384562#msg5384562

In addition to following advantages of small, reasonable perpetual rate of annual debasement of the base money supply (M0) explained in detail upthread:

• Mining isn't securely funded with transaction fees
• Wealth is power-law distributed, upper 1% will aggregate all wealth via usury if we don't redistribute some to competitive mining.
• Small capital can seek ROI that doubles investment in short-time, e.g. a guy selling mineral water on a hot day can get 300% daily ROI, whereas the upper 1% can't double their wealth in 5 years via usury (only if they steal by capturing the government and the central bank).
• Small debasement rate doesn't impact appreciation of the coin price, because it is also dependent on velocity of (thus demand for) money V in the Quantity Theory of Money.
• Means of obtaining virgin (untainted) coin.
• Increase the velocity of money V.

I add that:

• Also raises the minimum level of profitable interest rate in the economy, thus discouraging the kind of easy money, debt bubble we have now.

---

Edit: add another:

• Provides virgin coins free from coin taint clawback and prevents all coins from being stolen multiple times eventually (https://bitcointalk.org/index.php?topic=491181.msg5415520#msg5415520).

https://bitcointalk.org/index.php?topic=316297.msg5388395#msg5388395

It takes a very alert person to combine all the points of OP, and come out with a correct picture. There are other things that might come about that will completely throw this whole scenario out the window. One of these things might be MaidSafe, or something like it. There are, also, acts of nature - it seems that portions of the world (Brazil) are in deep drought right now. Even U.S. crops are failing somewhat.

:)

Thank you for the compliment and for raising my awareness of MaidSafe.

I don't know how you expect climate drought to lessen the severity of the implosion from the $150 trillion debt bubble.

MaidSafe is charging a 1% royalty-fee thus it can never become the next internet. If they were really serious, they would make it free then develop applications on top of it to generate their ROI.

I see no white paper on their website. I was working on DHT and distributed file serving back in 2006 through 2008.

---

---

I thought of these ideas too and am aware of the issues such as denial-of-service resistance lowers performance (http://maidsafe.net/faqs#compromise-or-disruption) and the problem of who pays for the asymmetric bandwidth & uptime case where the client is slower and more intermittent than the server (which apparently MaidSafe doesn't solve, it just forces the client to get slow service (http://maidsafe.net/faqs#connection) which is entirely unaccepted for popular websites). There isn't absolute anonymity because just like Tor, it can be analyzed with timing analysis for an entity such as the NSA which can see all traffic (even if it is encrypted). To get absolute anonymity requires drastically lowering the performance, thus it can't be applied to file serving where performance is very important to end users who are browsing websites. This will be explained in my coming white paper.

I posted the following comment at MaidSafe's blog:

http://blog.maidsafe.net/2014/02/18/token-on-maidsafe-network/comment-page-1/#comment-35


I'd be interested to see DHT running on long-lived servers to strive for some of the benefits MaidSafe mentions in the video on their homepage. This is something I'd want to explore after fixing this current problem with Bitcoin.

https://bitcointalk.org/index.php?topic=316297.msg5402853#msg5402853

Serious problem for Bitcoin now:

https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521

---

More:

https://bitcointalk.org/index.php?topic=486872.msg5408045#msg5408045

Most Bitcoin will be clawed back due to widespread theft (https://bitcointalk.org/index.php?topic=491181.0)

Only a person who wants to end up destitute would obtain Bitcoins. Sending Bitcoin to someone is the antithesis of love, it is a kiss of trouble and woe in the future.

I am very sad about this. I had high hopes for decentralized currency. Unfortunately, unless we can perfect widespread anonymity then this entire decentralized currency concept is dead in the future.

https://bitcointalk.org/index.php?topic=486872.msg5413937#msg5413937

---

https://bitcointalk.org/index.php?topic=486872.msg5414095#msg5414095

How can the masses be so clueless?

The Bitcoin Foundation board controls and regulates Bitcoin, every little aspect of the protocol, even the hardcap which is a joke to call hard or permanent cause it's nothing more than the carrot in this entire scheme.

In under 30 days 2 of the board seats have been vacated through outside force and influence.

How many more seats would need to be replaced to completely take control of Bitcoin and the entire protocol?

Did all these Bitcoin millionaire clowns really think the NSA, the Fed and everyone else with power were just gonna let them run the next global monetary system?  Lol, what clueless clowns - watch the next board seat come up for "vote" in little time - 30-60 days, like dominoes.

No need for a 51% attack, no need for even massive legislation, the Fed will own Bitcoin from the inside out before Christmas and none of these idiot techies will even realize it until it's way too late and the great currency swap of 2015 is underway.

Is anybody getting this?

No, they don't.  They have almost as much say in the protocol as you do.

Ahahaaaa.  This is what I mean by totally clueless.


You haven't read the SEC filing from the Winklevoss ETF application, have you?

I have and that's exactly the case and it is printed in black and white in the application for the ETF.  But you have to actually think for yourself and do research to understand anything not being spoon-fed to you by the mainstream media.  

And who wants to do all that hard work, eh?

Unless of course, you think you know more about the Bitcoin rules and protocol than the Winklevoss twins and their lawyers and the Board members they worked with and helped fund (ie. Charlie Shrem).

This is why this diabolical plan will work so well and why I'm invested in cryptos, not even the morons who have been here since day one have any idea what's really going on.

It actually makes me wanna laugh even though I know the tragedy that is to follow.

LOL!  Ya, one would have to be a world-class simp to believe that TBF writes Gavin's checks and have no influence on what he does.  Moonshadow may very well be 'patient zero' here.

At this point the people who want centralization to facilitate surveillance and control include:

 - The regulators
 - Law enforcement
 - The Bitcoin Foundation
 - The VC's
 - The exchange type businesses
 - Half the core developers
 - A rapidly increasing percentage of users.

It seems pretty unlikely that the motley crew who is left are going to be able to achieve much in terms of decentralization and privacy.  Certainly that is not where my money is (though they otherwise have my 'spiritual' support), and I'm planning to try to find a 'sweet spot' where the values are high before people realize how worthless the solution has become.

The VC money is green and abundant and I've already started putting a good bit of it into my own pocket.  They can have my BTC but they have to blow me to get it such is my reward for being one of the earlier people in the hood.

Thanks for the spiritual love bro,  :-*

I agree the deck appears to be stacked against us. Did the Colonists lose against Great Britain.

Now get ready for the concrete solution to materialize in front of your eyes.  :-X

The Winklevi are trying very hard to convince the feds that Bitcoin is as controlable as they wish it to be, and that they can help them do it.

You've got my vote as well but a new coin or protocol is not the real challenge, getting people to see it and embrace it is the real challenge.

And if the powers that be are behind BTC then you're facing much more than sheer mass ignorance, which in and of itself, is the Everest of probabilities.


Expect mass sabotage and make sure your taxes are all up to code.  No Joke; Shrem and Karpeles were just the beginning.

Too easy.  :-X

Really these Bitcoin developers suck (not in technical ability but in terms of knowing which features and third party apps to create). It is like taking candy from a baby to compete with them.

Agreed on getting one's taxes in order. And trading all your Bitcoin for newly mined coins is probably another good precaution.

Oh but you need an ASIC. Now you start to see the wisdom of my OP, e.g. cpu-only mining, perpetual debasement, etc..

Count me as one of those world class simps.  Gavin doesn't have any more influence than we give him.  Just ask MtGOX, who chose to ignore Gavin's rational pleas to fix the mallibility bug in 2011.  As that inicident should point out; even when it's a good idea, and the fix is available, no one must comply.

For good for for bad, Gavin does not control Bitcoin.  He can only make recommendations, and he must justify those recommendations.  Granted, he has more sway with the base than you or I, but if he's not convincing changes don't occur.  Even if he's willing to make those changes himself.

Regardless, the winklevii lawyers have, by law, stated facts about the bitcoin rules and protocol which include the FACT that the board controls every aspect of the protocol INCLUDING the hard cap.  If fact this is written as a potential RISK to the future of the ETF and not a benefit as it lends uncertainty.

Unless you really think the Winklevoss twins and their lawyers just made that up and the SEC and their team of lawyers are just too stupid to see it.  Let's get real here - the Bitcoin protocol and all its clones were designed from the ground up to be taken over and controlled by banks, govts and Multinationals.

Well, I hope your confidence isn't unfounded.  I look forward to seeing what coin you come up with and what kind of traction it receives.

They stated things they claim are facts.  That doesn't change the reality of the matter at all.  Yes, I really think the Winklevi lawyers made that up and that the SEC & their own lawyers are too stupid to see it.  They very much want to believe that Bitcoin can be regulated.  They know nothing of merit about cryptography, programming, decentralization or (for that matter) even economics.  They are lawyers; nothing more, nothing less.  If the Winklevi can make up convincing bullshit, let them.  It might work or it might not.  I don't care.  Unlike the both of you, I actually DO understand cryptography, economics and the Bitcoin protocol.

Honestly, so am I.

Another agreement vis-a-vis taxes.  I've been suggesting this for a while, and of course I personally am dotting all my 'i's and crossing all my 't's.  Beyond that, I think it might be advisable to be prepared to declare and document one's BTC holdings.  Do these simple things (while holding one's nose) and one might walk away quite well off.  A bit disappointed perhaps, but tempered with the thought that Bitcoin is mostly an important early proof-of-concept and has already achieved way more than it could have.

I think that if one can document buying BTC from an exchange that will be sufficient to un-taint them.  This because if coins that were legally acquired in this manner were tainted it would be to obvious to early how useless the solution is.

I, for one, am not about to go swapping out my holdings, which are deep in the blockchain, for newly mined BTC.  It could well be that miners who don't 'register', 'certify', get a 'bitcoin license', or whatever, and play along with the tainting protocol and transaction discrimination will have their own mined coins tainted from the start anyway.

I'm missing something.  Why is it wise to trade out for new coins?

Because in theory only new minted coins can't have been stolen in the past (https://bitcointalk.org/index.php?topic=491181.0).

As for tvbcof's theory that AML, KYC exchange sourced coins are more amenable to the authorities than self-mined coins, as far as I can see there is nothing tainted about mining your own coins for as long as you declare and can document the activity to the authorities, e.g. on your tax return when you create a taxable event.

I don't see how purchasing on an exchange stops the law from trying to obtain the stolen coins for the victim. As I covered in detail at the link above (dig to find my quotes of the Mt.Gox Terms of Service (https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521)), an exchange is not a bank and your coin ownership was not transferred to the exchange when you deposited them.

So sorry I have to strongly disagree with you on that point. Sorry to give you bad news and cause you to have a headache. Better you face reality now and trade now for self-mined coins. Thus you would need a cpu-only coin probably.

You can clearly see the feature set for a new altcoin will drive its adoption in spades.

P.S. The Yes has risen from 33% to 38%.

Disclaimer: my usual disclaimer (seen upthread) applies to all my posts.

Ah, I see.


I've never made the claim that courts won't attempt to recover stolen value.  I also know, for a fact, that my own coins have never touched any exchange since at least October of 2010.


It might, actually, but that won't be because of some inherent flaw of bitcoin or it's protocol.  Bad image isssues are more difficult to argue against.

My argument that AML/KYC coins won't be tainted is not that it cannot be done.  It's that it won't because it would destroy an otherwise very useful system (and spur on the development of others which are not so convenient.)

I honestly don't know what you are talking about vis-a-vis 'self-mined coins'.  'self-mined coins' are ancient history.  A handful of pools mine most coins and get the block reward at this point.

I cannot take credit for the theory as Mike Hearn anticipated it way back in 2011, but a method to control Bitcoin would be to discriminate transactions at the mining level.  He theorized that mining would become so specialized and expensive, and thus centralized, that it would be practical to discriminate 'bad' transactions (from political enemies like the Persians to use an example) that it would be a practical choke-point.  Mike was dead right in this, and as best I can tell he considered it a good thing.

I expand this theory slightly based on the very real threat of tainting, or {color}listing if one prefers.  That is to say, induce not only transacting parties to honor a taint authority's output, but also mining pools and do so by simply tainting their newly minted coins.  As I anticipated years ago, no sovereign nation is going to welcome Bitcoin since it is a universal threat to all but failed states.  A trans-national effort to control Bitcoin is very likely which will leave pool operators nowhere to rest in peace unless they choose to cooperate (and hell, in that case they might even get free power!)

Once taint is established (initially for 'terrorists' and such) it will also be fairly easy to simply ratchet it up and taint coins for anything desired.  A good example would be coins which are not registered to a known owner in addition to ones which are not mined by a 'licensed' and cooperative miner.

===

Anything resembling Bitcoin and it's persistent ledger is stupid for exchange currencies for scalability and privacy reasons.  Some sort of a limited life tokens system makes the most sense here.

As for the niche which can be served by a Bitcoin-like system (reserved storage and account balancing) a system which pays more attention to the transfer nodes makes a lot more sense.  The thought I had was to l had was to link transfer and mining such that mining rewards are proportional to the degree of demonstrable decentralization an individual brings to the game.  It should be blindingly obvious to all at this point that either CPU mining or non-predictable algorithm shifting regime (or both) are the way to go.

I would not rule out the use of sha256 hashing to periodically (say, once per quarter or once per version release) optimize a block-chain.  This would put the existing ASIC gear to work.  We'd just choose the winner as whoever had the best result when a re-org was needed for instance.

Oh I agreed. See where I posted in that related thread that it would be most economical to go after the Bitcoin millionaires to recover some value in a class action by the government (or G20 in concerted effort...the beginnings of the world government cooperation), so the gubermint can appear to be protecting the public-at-large and they can keep their NWO coin going.

Basically I see the Bitcoin millionaires and billionaires playing ball with the gubermint in order to keep some portion of their gains. Those who resist will lose it all and possibly thrown into debtor's prison when they can pay obligations after the confiscation of stolen property and very high taxes on the wealthy (capital gains, VAT, and a wealth tax in addition to bail-ins and other forms of crazy IMF "financial repression"). Take this in the context of a Mad Max $150 trillion global debt implosion wealth hunt from the G20,which I expect to start ratcheting up 2016ish.

So the Bitcoin paupers will be cheering on this outcome! Jealousy, greed, and self-preservation at-any-cost are root qualities of human nature.


Yeah I know as I stated upthread.

Thus I was implying we would need to mine and hold an altcoin ;)


I wrote similarly in my March 2013, Bitcoin : The Digital Kill Switch, and I think it is a bad thing.

Transactions are not coin base rewards. Are we talking about the same thing?


Well if you are saying that newly minted coins don't pass the AML, KYC regulation and thus will tainted by default unless they were mined by the "approved" pools, then simply mine for an approved pool. Or buy from an approved pool.

Are you saying no minted coins will be untainted? Then all coins are tainted. Obviously you don't mean that.


Agreed on the G20 concerted effort. They are already announcing edicts on cooperation against tax avoidance.

Put your pool in a failed state or behind an anonymous proxy (that you control) in one ;)

One of the key design points from my OP is the better altcoin needs to limit the size of pools, so there will be 1000s of them.

One of the key points of my design is the pools don't have to be trusted at all!


This only works if the gubermint can control the pools or otherwise destroy anonymity of users. That is a critical point.


There is no problem with scalability given a correct design. See the mini block chain design for example.

Limited life tokens have no value.

Have you ever seen money that goes poof become widely accepted?


You haven't seen my design yet.  :-X

Yes.  Ever been to a laundromat or an arcade?

Things which someone will exchange for something else have value by definition.  I'd actually be delighted to buy a months worth of tokens using a part of my BTC hoard and a single transaction as long as it was reasonably easy and cheap to recycle the balance if I didn't use them all.  This would be especially the case if it assisted in maintaining some degree of financial privacy and the mild inconvenience contributed to facilitating a durable solution.

It pains me to admit it, but I'm looking forward to critiquing your design.  I expect that I'll see the same neglect toward persistent and growing data management issues that I see from about 98% of the developers I've worked with over the year (and even some damn good ones!)  But I'm always happy to be pleasantly surprised.

Those are not widely accepted. Because they don't have the economy-of-scale of not timing out.


But if they can be recycled, then you've accomplished nothing for privacy.

All you've done is given your privacy to the issuer of the token, who doesn't care if it expires because he has already been paid for the tokens.


I assume you mean transaction data and not source code control?

https://bitcointalk.org/index.php?topic=491452.msg5420480#msg5420480

AnonyMint,

You sound so confident about your programming skills and I have no reason to doubt you but would you share your background so we can have an idea what we can expect as far as quality and depth of your upcoming coin design?  I for one appreciate such things.

Thanks!

No TX fees would be ok if you're going to add some inflation but there would be no mass adoption as banks, Multinationals and the govt would get behind a different coin [and kill yours] which was designed for massive fees (i.e. Bitcoin) so they can charge 7 billion sheep ridiculous fees and not just the 3 billion they're currently raping.  

Rock solid anonymity would be a dream but it's naive to think that would ever leave the crib for the same reasons listed above.  Banks, Multinationals and governments are not into giving up power and control over the information they gather about their citizens/customers, they're in the business of growing that power and control.

So once again, it would be you alone against the powers of the world with 7 billion sheep not understanding what you're really trying to do and not even caring - parroting instead what the media says while mocking your efforts.

This is why ZeroCoin, Ethereum, etc., will never see any real adoption - and will only ever be used by the CIA to anonymously transfer billions of dollars to their drug cartels cause it's cheaper and more efficient than using 18 wheelers and airplanes for transferring all those tons of cash.

As for the 15-30 second confirmations - I don't think there's issue there for BTC.  I've read that once BTC goes mainstream it can have instant transactions although I'm not a techie and don't know the details enough to properly explain it.

But let's say a 30 second block time is better than 10 minutes, that's an easy fix for Bitcoin (Easy Fork -Client/Protocol update) which would leave your coin with no real competitive advantages.

So the only advantages your coin will have are the first 2 which would make your coin a true people's coin and we all know the people forfeited control over their lives and destiny some 10 years ago and hence, such a coin would never gain any traction as the media and all the power and manipulation behind it would kill it quick and perhaps even expose you to some real personal risks.

Other than that your heart and mind are in the right place, brother!

If the tokens were widely used they would be widely accepted.  The time-out thing (among others) makes this an imperfect analog, I admit, but generally speaking there is no economic reason why tokens won't work.  In fact that is all that cash is and arguably even gold in a way.  Or even Bitcoin for that matter.  It's all just an accounting system to me, and like many things in nature they all just seek their natural (low energy) state which makes pure systems self-adjusting.


I've not even described the system so you cannot make a judgement on how privacy is or is not accomplished.  The reason I've not described it is because I've not thought about it much.  Exchange currencies are not as interesting to me as reserve systems (the former needs a solid implementation of the latter to act as a foundation.)

In fact a situation with numerous limited life tokens which are fungible and only trivially distinct, and of which a fraction need to be renewed occasionally to preserve usability is kind of cries out 'mixing service' which is an important element of many anonymity schemes.

Just now I conceived of scalability in terms of budding as many 'mints' as needed such that each would have a nice ratio of overall load which kept it manageable by enthusiasts while being able to scale simply by forming more.  Tokens from the wrong mint could be passed to the right one through the network, and that in itself speaks to a ready-made proxy system.  Another feature of a privacy enhancing solution.

I'm probably dredging up some of my limited understanding of Chaum token stuff here.  Or at least that is how I'm conceiving of the actual token units insofar as they consist of data wrapped in routing/responsibility layers.

Ha!  Both actually :)  More the former is what I meant though.

Essentially my stance is that as Bitcoin becomes more popular, the will of the increasing number of naive users will be supersede the idealism of the early adopters. The way a representative democracy (as opposed to direct voting on each issue which is impractical except for perhaps a townhall format) functions is that the government regulators (and a whole other echelon at the covert agencies level) have an obligation to appease that majority will.

Bitcoin being global provides a majority will demand for the governments to cooperate globally.

Although idealistic early adopters would like for Bitcoin to be a system which lacks repudiation the way credit cards and even wire transfers do in the case of theft, this would mean all liability falls on the shoulders of naive users. The will of the majority will demand consumer protection. The government has the power to force this on Bitcoin, because it is not anonymous and the users have a physical presence and identity. Now it is just a matter of time for the will of the majority to dominate and the governments to get organized on doing their obligation.

Idealistic users may prefer to use a different system. We will see.

Then some naive users may realize that different system is the one they need too. In short, some people learn, especially when they are being oppressed by the fall of society into the $150 trillion debt collapse coming.

With 7 billion people in this world, an alternative system only needs 1 in 7,000 people to use it in order to be widely accepted.

Let the majority have their NWO coin. Let's make the coin we want for ourselves.

No need to discuss my programming career. It is already on the forum any way if you want to dig for it. And in any case, there are many talented programmers if they are offered bounties and provided white papers with some oversight on design.

I think I've said enough, actually too much.

I'll support any and all serious efforts to make a secure and totaly anonymous coin. Now, I'm not a programmer by any stretch of the imagination, nor do I know enugh of the ins and outs and pitfalls to know what to ask for in a coin.

How can I help?

Mine it and may I suggest don't trade it for Bitcoin, otherwise you taint yourself (with potentially dire ramifications for claw-backs).

Instead exchange to fiat as needed via a decentralized exchange. I already know the design of a decentralized exchange. Thus there will be no AML nor KYC applied.

Essentially blacklist Bitcoin entirely, otherwise you taint yourself. Use fiat where you need to use Bitcoin. And push for merchants to accept your new coin. If enough people do this, then it will happen. You need to be passionate about it, just as the Bitcoiners were/are.

If you need to pay and only Bitcoin is accepted, then feel free to send your payment to an entity takes ownership of your coin, converts it to Bitcoin, and pays your intended merchant. Make sure the Terms of Service clearly state they take ownership of your coins, so that you are not tainted with liability of holding Bitcoins even for a millisecond.

If you have Bitcoin you would like to trade for this new coin, may I suggest you convert first to fiat. Then untaint that fiat (https://bitcointalk.org/index.php?topic=491181.msg5422422#msg5422422) somehow (e.g. get cash from an ATM), then use a decentralized exchange to trade for the new coin, i.e. in the USA mail a money order or do a meet up or deposit a (post office or convenience store, not a bank) money order (not the cash) to a bank account. Or better go buy more computers to mine it with but please untaint the fiat first, because claw-backs from Bitcoin will trace through to fiat (https://bitcointalk.org/index.php?topic=491181.msg5422422#msg5422422)!

By decentralized exchange, I do not mean localbitcoins, because they keep centralized records. I mean a peer-to-peer system that will be built in by default in the mining and transaction client!

Actively educate users to blacklist centralized exchanges and any coins that were processed through them. Support development of tools to do blockchain analysis and list coins which have become tainted by centralized exchange.

---

Edit: tvbcof, on your "many currencies" idea, the problem is economy-of-scale to get merchants to accept them all. It seems like a last ditch futile sort of experiment. Might be willing to go there if all else fails. I'd rather fight first on a unified alternative to Bitcoin.

Are you in the process of making this coin a reality? If so, any expected timeline?

"No" (http://www.youtube.com/watch?v=dGMPDBITApQ).

Bitshares is supposed to be like a decenrralized bank via BitUSD or Bitxxx is this similar to your understanding of a decentralized exchange?

I not understand your link.  So when do you plan work on your coin?


Here's an idea.  Lots of new coins pop up everyday and most are burried in the process so it's getting harder to launch a new coin and have it noticed.  This is why I launched Nuggets when I didn't even know what a blockchain was.

So maybe it's a better idea for you to take over an existing coin, preferably and older coin with an already time tested protocol and an already secure network and then update the code to make it just like you want.

This would give you some advantages over launching a new coin.  I suggest i0Coin, it's an abandoned coin,  it it's been around almost 3 years, has a strong network and has been updated to work well via merge mining.

You can easily change the 21 million hardcap to reflect the slight inflation of gold and get rod of fees and you'd pretty much have your coin.

Also, I'd change the name, i0Coin has never sounded like a good name.

And it's already listed on good exchanges like Vircurex and Cryptsy I believe.

Good luck!

Perfect.


No because it attempts to do market clearing of bids and asks at the miner. And it has no mechanism to move fiat in the system and depends on their unproven faith that BitUSD will track the value of fiat (which I think I refuted in the thread of discussion on that, yet they are welcome to try it and see what happens).

I am thinking something like a P2P decentralized localbitcoins, with decentralized 3rd parties (with multi-signature) chosen for escrow when escrow is needed. Third parties would compete to gain reputation, but need not be their true identity. If you are not doing meetups where no third party is needed for escrow (maybe only a timeout lockup on the coins), then identity of the holder of the bank account isn't anonymous any way. And the depositor of the fiat need not provide identity, only bank receipt that deposit was made.  Apparently others are working on a similar concept for Bitcoin (https://bitcointalk.org/index.php?topic=488934.msg5415307#msg5415307), but not built-in by default in the official wallet and mining client (note those are the same in a cpu-only coin).

Add:

https://bitcointalk.org/index.php?topic=488148.msg5378912#msg5378912

https://bitcointalk.org/index.php?topic=471355.0

I know the MyCelium bitcoin wallet has a localbitcoins thing builtin where it would creates a sort of marketplace for people local to you, and you would meet up with them and only transfer coins after receiving fiat... its not far off from using multi-sig and bank receipts but it does handle trader feedback for reputation and signature signing in future release...  what you are saying should  not be that far off from current implementation.

See: https://bitcointalk.org/index.php?topic=293472.msg5104823#msg5104823

https://bitcointalk.org/index.php?topic=493115.msg5454129#msg5454129

https://bitcointalk.org/index.php?topic=493115.msg5454588#msg5454588

https://bitcointalk.org/index.php?topic=493115.msg5455202#msg5455202

https://bitcointalk.org/index.php?topic=493115.msg5455800#msg5455800

https://bitcointalk.org/index.php?topic=493115.msg5456994#msg5456994

https://bitcointalk.org/index.php?topic=491181.msg5458015#msg5458015

Nice Denver Airport Pics.


I'm sure they don't mean anything.  lol.

DarkCoin isn't anonymous (https://bitcointalk.org/index.php?topic=421615.msg5458409#msg5458409).

Edit: follow-up (https://bitcointalk.org/index.php?topic=421615.msg5464454#msg5464454).

Edit#2: Another followup (https://bitcointalk.org/index.php?topic=421615.msg5499170#msg5499170).

Nothing out there will be truly anonymous and if anything actually gets created it will be snuffed out in its crib in the name of National Security and your own safety.

Don't give up before you've seen the white paper.  ;)

And don't ask me when and where you will see it.  :-X

Remember what we said as kids, "That's for me to know and for you to find out".

Also factor in that the NWO coin will be much more widespread, and the government has limited resources, especially as the sovereign debt bubble bursts 2016ish. They know they can't get 100% perfection, or if they don't, they will soon realize that as their resources are finite.

As I said, let them have their NWO coin and their dying industrial age economy, with 6 billion members. We only need a million or so (10 or 100 million is fine too) for it to be sufficiently widely available.

And guess who will come out the other side of this global crisis with their capital intact and with a much larger valued economy? The 6 billion zombies or the 100 million Knowledge Age winners?

Do you realize how fast we can innovate as compared to the NWO coin.

Well, I own NWOcoin dot com, so they'll need to find a new name.

Bhahahahaaaa.  Always one step ahead.  lol.

https://bitcointalk.org/index.php?topic=491181.msg5459843#msg5459843

https://bitcointalk.org/index.php?topic=491181.msg5461032#msg5461032

https://bitcointalk.org/index.php?topic=491181.msg5461622#msg5461622

https://bitcointalk.org/index.php?topic=491181.msg5463449#msg5463449

AnonyMint, how did you become a senior member here?

Dating back, March 14th 2013, when you first joined, your very first post was about a flaw in Bitcoin.

What gives?

Why do you fight Bitcoin so much?

Who is your employers?
You are spending too much time trying to get people away from Bitcoin so obviously there is something else behind it.

Wanna share with us?

https://bitcointalk.org/index.php?topic=493115.msg5463544#msg5463544


https://bitcointalk.org/index.php?topic=491181.msg5462012#msg5462012


Okay it is quite clear now to me what is going on. If for example you study the linked website from DooMAD's signature and study his posts in that thread where he is debating me and factor in comments such as above, it is quite clear that the beta-males think they discovered the Holy Grail that can empower them to fight back (while getting rich at the same time!) and they are very butthurt when any one tries to tell them:

"Wait, the concept of decentralized crypto is great, but Bitcoin has serious flaws which render it incapable of giving you that win that you think you are getting".

I am here to make the decentralized cypto that will win.

I am not here to hang out with beta-male losers who can't comprehend.

Guys decide whether you want to follow the losers or the winners.

Be astute.

Signing off now. See ya at the winning coin. It will be up to you to find it in that sea of altcoin announcements. I won't be posting it here.

Ah have to sneak back in to say, looks like I am winning the information war:

https://bitcointalk.org/index.php?topic=441414.msg5466479#msg5466479



https://bitcointalk.org/index.php?topic=441414.msg5467500#msg5467500

https://bitcointalk.org/index.php?topic=491181.msg5474716#msg5474716

The information war has been won. Really time to sign off now. See ya on the other side.

https://bitcointalk.org/index.php?topic=441414.msg5475723#msg5475723

Back one more time for sloppy seconds...  :-[

https://bitcointalk.org/index.php?topic=500994.msg5518821#msg5518821

We see here the true nature of man. When someone is trying his best to fix and improve what we human kind need the jealous mofos have nothing better to do but try to mock and sabotage.

They won't succeed.

Welcome to Bitcointalk but I'll say this: you're doing a lot of talking for a full year now with nothing to show for it.

You can clone Bitcoin and add your changes in a single day.  If you're good enough you can code an entire new coin in a month so my questions is:  What are you waiting for, 3,000 alt coins to burry your idea?

Seriously, if you're that good and you have a great idea then get to it.  

Just do it!

Ahahahaaa.  There may be some truth in that.

That's pretty good stuff really.  Wise and sad.

+1