What's the point of having a ULTRA secure useless thing? There is NONE.
Expect a good portion of the market to leave out if the value proposition is not keeping up. Myself included. Another system will prevail.
Bitcoin's value is derived from its use cases and every speculator with half of a brain understand that. There is no point of speculating on a coin that have no use case prospect unless you are shorting it to death.
Being useful does not necessary give something value, there are lots of useful air around you but they worth nothing Same, being valuable does not necessary mean useful, there are many financial instruments that do not have any practical use, their only use is to make the owner richer over time How could bitcoin make its owner richer? Because it has constantly shrinking supply and the fiat money have constantly expanding supply, so it will always appreciate against fiat money long term wise (in fact it will appreciate against anything, because they all have constantly expanding supply), if it is being used as a currency Why not xxxcoin? Because the deflative effect will be strongest when all of the people who understand the power of monetary deflation concentrate their effort and resource on a single most mature and popular cryptocurrency. Sure you can use a dozen of cryptocurrencies, but then the effect of monetary deflation will be magnitudes lower, thus any investment on other cryptocurrencies will have a high risk of ruin |
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The most secure place is the blockchain, but since it is publicly available, how to hide a key in the blockchain is tricky
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Regarding the third point, for bitcoin to be an analog to gold we must keep in mind that gold is universally known and valued. If bitcoin prematurely choked off its own growth and abandoned efforts to mainstream it, I suspect it would slowly wither and die as competing altcoins rose to take its place as an everyday, mainstream cryptocurrency.
The current price of bitcoin is based largely on expectations of future growth. Choke off that growth and I suspect a large portion of its current valuation will evaporate.
As a bitcoin broker, my statistics showing that most of the people are attracted by bitcoin because it has strong anti-inflation tendency, not because of its payment function Bitcoin does provide easy payment function, but for those people using web payment domestically and using credit card to do international shopping, bitcoin just bring more trouble than convenience (exchange at both ends and exchange rate risk). Bitcoin is just too late in the payment space. If bitcoin arrived before paypal, then it would have been used around the world by now. Unfortunately, today's payment market is almost fully occupied by credit cards. Being a little bit cheap is not enough convincing to persuade people to make the switch Besides, there are thousands of alt-coins all providing similar payment function, but they all have little value, because value must be time tested. Once upon a time I even spent some time in litecoin mining and trading; just after one month of practice, I realized that it is a community full of scammers and speculators, almost no one is doing meaningful development. This is a good example of the importance of being time tested Focusing on time tested anti-inflation property of bitcoin will make it into mainstream |
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The biggest problem of a drastic change in block size is its lacking of consistency. People trust banks because they are very consistent and stable over decades, they never make sudden moves. Money is all about trust, without time tested trust, the value of bitcoin will stay at game level
When you plan an IT infrastructure's capacity, you never use more than 30% of its planned capacity, because you must leave lots of room for emergencies. So if average home bandwidth limit allow you to run 8MB blocks, then 2MB blocks will leave you enough room to deal with emergency situation where bandwidth suddenly dropped due to unforeseeable events (I still remember that during 2007 under sea fiber optic cables incident, there was almost no way that you can connect to Taiwan and Chinese mainland network in any speed higher than 56k dial up)
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What a pitty, we lost the chance to do a thorough evaluation of bitcoin network's robustness  |
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In fact, the size of the block is not limited by either core devs or miners, but ISPs around the world. I believe without major upgrade of internet infrastructure, the bitcoin network can not handle 2MB blocks well, not even mention 8MB
When there was a talk about 20MB blocks, people calculated that they would barely fit into the "total bandwidth per month cap" imposed by ISPs. So, I assumed that 8MB should fit that situation better, provided that it is only a cap and not the actual block size for the next few years. Yes, people also calculated that they can do space travel to another galaxy through a worm hole  Until you have done a stress test under the real traffic, you would never know what kind of problem can arise. A small increase in the amount of the transaction might cause a total change in system's behavior. You can test the technical aspect of the network in a test lab, but you can never anticipate what real people would do when they detected there is a chance to clog and crash the network and greatly profit from it A possible failure scenario: After raising the block size to 8 MB, there is nothing wrong, people start to develop new solutions and new business around the new blockchain, but after another 5 years, there is a heavy increase of the network traffic but the internet infrastructure upgrading has totally stopped due to a new financial crisis and recession, ISPs start to cut off bandwidth and charge more on it, then at that stage, you can not reduce the block size to cope with the network change, the whole network are under traffic jam for another 5 years A service oriented mindset might not suitable for a monetary system, you should let people adopt to bitcoin, not let bitcoin adopt to people. Banks never adopt to people, but people worship them |
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Satoshi-dice was sort of the stress-test of it's day. It was annoying, but ultimately I think it was one of the best things that happened for the system since it spurred a range of developments (code and otherwise.) I said so at the time IIRC. Overcoming that challenge gave me and I suspect other people more confidence in the system.
Spam from Satoshi-dice and other onchain gambling sites are easy to filter. Miners can easily change their code such that the transactions orginating or going to their known address would effectively not be included in the block. However, the main problem with such stress test attacks is that the coins can be sent from different address and end up in different address. Without a huge amount of fees per transaction, they cannot cripple the entire system and it would be quite expensive. Currently, many attacks are just slowing down the confirmation timing for transactions with very low fees. The most viable way of stopping this kind of spam is to increase block size, thus increasing the cost for attackers to fill the block with spams. A rich attacker can always fill the blocks with spams regardless of the cost, especially when he has other larger short positions opened on exchanges waiting for the panic to strike. Users must rely on much more hard measures to be sure that the system is robust against any kind of attack, not praying that some hedge fund don't strike like Soros If we are using 8MB block right now, if the attacker successfully filled every blocks, then the problem is not only delayed confirmation, but the total chaos of the network: segmented nodes disagreeing with each other, confirmed transactions get cancelled due to the whole chain become orphaned 3 blocks later, double spends, many forks on different part of the network. In one word, no transaction can be reliable at all |
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That's good, just like the bank stress test, some of the banks will fail the test and have to improve their liquidity, if we could periodically have this kind of test, then we can have a good estimate of each node's capability in case a sudden surge in transaction volume hit (non-spaming, during price rally or crash)
Don't compare a bank stress test with the current Bitcoin stress test. During a bank stress test the customers of the bank will not notice any difference in their interaction with the bank. They don't pay more tx fees, they don't find longer queues in cashiers or ATMs. They don't even know that the bank is under an ongoing stress test. And finally the definition of bank stress test is: "An analysis or simulation designed to determine the ability of a given financial instrument or financial institution to deal with an economic crisis". The key words are analysis or simulation, not destructive activities that can block bank customers to interact with their accounts. The current Bitcoin stress test is not an analysis or simulation using the testnet as it ought to be and finally will not produce any new results that we don't know yet. My bank's mobile payment system constantly crashes (at least twice this month) for hours and they only "apologize for the inconvenience" on their website and customer support. So we definitely know the bank's system technically is unstable from time to time, but who cares, as soon as it back online, everyone happily trading again. But bitcoin holds much more stability than banks, even during the stress test, you can pay enough fee and make sure your transactions will be confirmed in time. It never stops working. However the other aspects of the network will be more interesting to observe, like block orphan rate and CPU memory usage |
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This recent passage from the bitcoin-wizards channel is worthy of mention here: CodeShark the blockchain is there to protect you in the event of an uncooperative counterparty
gmaxwell A more useful mental model for the system is that the network is a trustworthy AI Judge that makes sure you complied with the contracts specified in your contracts. Now, it's possible to transact by taking every contract to the judge, but this is inefficient.
CodeShark right, the blockchain is like a court
CodeShark you don't go to court over every contract you enter
CodeShark only the ones where there's a breach When there is a breach of the contract, the Judge must be able to enforce the court ruling. A court without violence power backing have no authority. The blockchain is trustworthy, but that's only part of the picture, law enforcement must follow the judgement given by the blockchain, that's the difficult part. In stead of reading the contract written by hand, police must first acquire computer science degree to understand what is the precise meaning of a blockchain contract  |
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No worries. Hearn says that miners whose bandwidth is too limited can create their own altcoin and leave bitcoin.
No worries, miners whose bandwidth is almost unlimited can create their own altcoin and leave bitcoin  A faster bandwidth coped with large blocks will separate you from majority of nodes, because majority of the nodes will not receive your block before they mined the next block (each relay of the block between two nodes will add 3-30 seconds delay depends on the network bandwidth, and there are many hops for a block to reach majority of nodes), so your block is always orphaned by the rest of the network, means your only choice is to fork your own coin In fact, the size of the block is not limited by either core devs or miners, but ISPs around the world. I believe without major upgrade of internet infrastructure, the bitcoin network can not handle 2MB blocks well, not even mention 8MB |
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The problem I see with Ethereum is its lacking of incentive. There are so many interesting technologies that no one cares about because of no incentive, such kind of technology would not direct benefit the participants, it must be driven by a centralized organization who have lots of resources to invest and make some products that can be accepted by market
For bitcoin the incentive for participants are very intuitive: You mine the coins and sell it for profit, you accept bitcoin payment thus make bitcoin more valuable
How could an average Joe to benefit from Ethereum? I think the Ethereum from its very establishing is just to prevent normal people from participating:
"What Ethereum intends to provide is a blockchain with a built-in fully fledged Turing-complete programming language that can be used to create "contracts" that can be used to encode arbitrary state transition functions, allowing users to create any of the systems described above, as well as many others that we have not yet imagined, simply by writing up the logic in a few lines of code."
You need a doctor degree in computer science to understand what is the meaning of all these buzz. And still, the concept of "contracts" are not solid due to the fact that it need centralized authorities to enforce
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I think the basic landscape of bitcoin is almost clear. Although there are other ideas like smart contract, colored coin, Ethereum etc... even so called 1 million of applications on blockchain, they all share similar problem: The infrastructure is not as sound/simple/time tested as bitcoin. So they have not reached mass adoption
The essence of bitcoin is an idea to transfer ownership on internet without middle man. Because money is the most interested target of ownership, bitcoin naturally becomes something that represents money
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I can tie the solar system to my bitcoin address, but that does not mean that I own the solar system The key is to enforce this tie, bitcoin's tie with fiat money is enforced by the market force on exchanges, you put bitcoin on exchange and you will receive fiat money as return. But where should I put a string from the blockchain and receive the solar system as return? No because there is no exchange that lists or enforces the solar system as a sellable good. But if you put a pair of shoes or a lamp for sale in bitcoin, the exchange can enforce that by providing a civilized dispute resolution system, a trust system, escrows and even private detectives (maybe in the future, to track down scammers more effectively that the police). So you know exactly that you get a pair of shoes if you give bitcoins. The risk is only of scammers, but that can be resolved with the earlier written suggestions. Of course there is no physical tie between these, but they are done via contracts, agreements, both verbal and written. Contracts are the only civilized and efficient way to govern society. And the technical side can be handled by blockchain (perhaps smart-contracts)! That's trading things with bitcoin, not using blockchain to register property ownership |
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see,im from alabama and cex.io wont sell to me do to a licence problem, the closest local bitcoin guy is like 100 miles away, there is no BTC ATM's, i dont wnt to get scammed by someone i dont know and the rest wants so much data on me it scares me since i am using the darknet with the funds... what to do.....  Well, with localbitcoin, you don't always have to meet, or even be in the same state. Like I said, I'm thinking of using moneygram. There are some people that ask for cash deposits ( https://localbitcoins.com/buy-bitcoins-online/cash-deposit/), you can look for a bank in the US that works for you (though for that, I suggest you browse into those options, rather than using my link, cause then, you'd get more useful listings. i tried local bitcoins and entered my password in 3 times wrong and the tried to reset and they banned my ip for an hour then i reset my password and it said it will take 2 weeks because i had 2nd password google authenticator on months ago and got new phone so im locked out of local coins until then Just register another account in localbitcoins, forget about the frozen one BTW, it is not so easy to make so many mistakes in a row, I guess you must be a non-IT guy, then better do not touch bitcoin before you have done further research, otherwise you might lose your coin soon and you will never figure out why |
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A research paper from Bank of England said, you don't really always need trust-less model. Sometimes a trusted third party will make life much easier
Dont trust them. They'll always tell this lie to you to have their upperhand in your wealth. For quick settlement and other advantages you are talking about here, centralized systems are doing fine. Bitcoin does not need to go that way. Does not hurt to trust them with some small amount of bitcoin. The moment you send your bitcoin/fiat to an exchange, you are using some centralized service The design of the blockchain requires that every transaction has to be written into thousands of blockchains around the world in 10 minutes. The delay caused by the network relay makes it impossible to compete with those high frequency transaction solutions that all the transactions are recorded into the same database on the same server Decentralized does not necessary mean fully distributed. I like the Bitfury CEO's vision that there will be a group of super nodes that have superior bandwidth and hardware to make sure a friction-less block transfer between major nodes like mining pools, payment processors, exchanges and web wallet providers. And those large actors could establish their internal clearing process to dramatically reduce the amount of transactions on blockchain |
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Interesting idea. Unfortunately it gives an incentive to depend more on third party services...  It is kind of trade off, you can rely on third party services to get better day to day user experience, but you can not rely on them to do mission critical transactions. However, it is the day to day small casual spending that created most amount of transactions, so settlement based design will dramatically reduce those transactions on blockchain There are many brilliant idea from traditional financial systems, not every thing is bad. If you avoid taking too much risk on them, they still can provide better service. You only need to avoid two things from legacy financial system: fiat money and fractional reserve banking. In this case, centralized service platform indeed have the ability to do fractional reserve banking (like MTGOX), so it is important only put small amount of bitcoin there Why should I take this trade off? To unload the blockchain? I'm just a drop in the ocean... What guarantees others will also take this trade off? Sorry being so skeptical. But although this is a good idea in theory I think it wouldn't work in practice. I don't see myself stop relying on my online wallets to start relying on third party services to hold my coins. We can avoid taking risks... But the risk is still there. Even with small amounts. Small amounts from many of us make quite a big cake  Suppose that 95% of your coins are in cold storage and the rest 5% is in web wallets, that does not pose a too big risk if there is any. But those 5% coins might generate over 95% of your transactions, thus incur a huge fee on your end (In case that nodes can not handle large blocks very well, the transaction fee will become so high that micro transaction just become impractical) The stress test is coming, we will have a good estimation about whether nodes can handle even a 2MB block at today's network infrastructure world wide. If that is not possible then we might be forced to use small blocks for years until the world wide internet infrastructure is upgraded, and the fee will rise to make microtransactions to be very expensive If you pay $1 to send $10 on blockchain, while you pay 1 cent to send $10 on a web wallet, would you make the switch (especially when the web wallet's cold storage is secured by multi-sig)? |
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Good. I want more attacks. Especially from friendly BTC supporters, because we have to get ready in case of some real bad guys (Islamic State, Russia...) organizing a real attack to destroy western economies.
True. But friendly bitcoin supporters would never do things that harm the network and disrupt the entire economy. Everyone already knows that the 1MB block size needs to be increased, so this is just an attack exploiting an already known vulnerability. Finding a new weakness is one thing, but this attack is not helping bitcoin. It's unnecessary and counterproductive. The recent tests/demonstrations/attacks have already shown weaknesses in various bitcoin implementations. For example, they have shown that the existing Electrum server code will be unable to keep up with higher network throughput possible once the block size has been expanded, even on very fast processors. As a result, there is (finally) serious effort to upgrade this software. I'm sure there are other examples, but this is the only one that I am personally familiar with. That's good, just like the bank stress test, some of the banks will fail the test and have to improve their liquidity, if we could periodically have this kind of test, then we can have a good estimate of each node's capability in case a sudden surge in transaction volume hit (non-spaming, during price rally or crash) |
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The only asset I'm always avoiding is cash, e.g. always go debt in cash instead of having positive exposure in cash I have noticed that anything's value is rising faster than cash after massive amount of QE everywhere in the world, even if you store some cans of motor oil you will find it appreciates much faster than your money market account Basically anything that is being constantly consumed appreciate very fast, unfortunately many of the fresh food can not be stored for a long time, otherwise I will be stocking on future 10 years' high quality food like shrimps and fishes too |
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Difficulty just jumped by almost 5%  |
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OPEC like mining equipment maker alliance, they decide bitcoin's lowest production cost |
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