This is not my understanding. They can't see the transactions but they can create fake transactions (i.e. create coins out of thin air) in a way that can't ever be detected.

There appear to be at least a few thousand (over 5000 in my peer list) though nodes come and go constantly so it is hard to ever get an exact count.

This is not accurate for a successful platform that is used for a high volume of transactions in commerce. Since there will likely be substantial transaction fees in line with the processing cost of private transactions (higher than bitcoin's non-private transactions), such a Sybil attack would be prohibitively expensive.

It would not be enough to spend as much on transaction fees as everyone else combined, you would need to spend far, far more to dominate the output set on the network, because you need all of the mix outputs chosen for a transaction (other than the real one) to be yours.

If I use a mix factor of 3, then you need all 3 of the outputs I choose to mix to be yours. If you are 50% of the transactions on the network, your chance of success here is only 12.5%. To get even a 50% chance of success you need to be 80% of the transactions on the network (you are spending 4x the total everyone else is spending on transaction fees). To get to a 90% success rate, you need to control 96% of the outputs. At this point you are now spending 24 times as much as everyone else combined.

Since you can't control which outputs I pick, you need to do this constantly to maintain your share of the network outputs. You can't turn on and off the attack when needed.

This is already unlikely. However, it gets (much) worse for the attacker.

I've previously explained how extremely high mix factors for high risk transactions are readily achievable at modest cost using sequential transactions. For example, if I use a mix factor 3 five times sequentially (I need to be careful to avoid traffic analysis, but that is feasible), the ambiguity set is 1024 (with an increase in aggregate transactions size of only 20). Even a mix factor of 3 applied twice yields an ambiguity set of 16 with transaction size increase of only 8x.

To reach a 90% chance of success on your attack with an ambiguity set of 16 you need to control 99.3% of the outputs on the network (spending 141x as much as everyone else combined).

This is becoming implausible even for a state-level actor, and certainly for anyone else. Visa's revenues (almost entirely transaction fees) are about $10 billion. 141 times that is $1.41 trillion. (For comparison world GDP is something like $85 trillion.)

With an ambiguity set of 1024 (used for my hypothetical "high risk" transaction), you'd need 99.9897% of the network for 90% success, which means spending almost 10,000 times as much as everyone else. If you can't tolerate a 10% chance of failure for your attack, then your costs explode further. These numbers easily exceed world GDP.

The Sybil attack as described is not feasible.

It matters competitively. A clone or direct competitor without the persistent stigma of the illegitimate launch will outcompete the original. This has been demonstrated before with LTC, now more recently with XMR, and probably in other cases.

The original fraud is a time bomb ticking away at the base of DRK that will never go away until the coin eventually fails.

Furthermore DDOSing a single node accomplishes nothing. It is a symmetric peer-to-peer network and therefore naturally resistant to DDOS and other risks. There is no small set of "special" nodes that become a natural target.

Yes, I was not clear. What I mean is not the specific number (which as you say is arbitrarily scalable) but the fact that there is a fixed supply means that any curve with more issuance earlier means less issuance later and vice versa. These affect valuation in opposite directions, and I believe close to equally. While it may be harder to find investors to buy a coin with high immediate supply, at the same time, investors don't want to buy a coin that will be heavily diluted later. With any fixed supply the two must offset.

I think there are some cognitive biases that make certain numbers of coins somewhat preferable. It would not surprise me if these differed across cultures though, and perhaps dominate usage (large or small value transactions)

From a practical point of view, there is something to be said for the argument made by some in the Bitcoin proponents to move the decimal to 100 satoshis, so existing software that supports 2 decimal places can process satoshis natively.

It doesn't really even out over time, unless you mean very long term. The first successful developers of Bitcoin ASICs had a huge advantage, years after the coin launch. Even today, a year or so later, those with access to large supplies of Bitcoin ASICs still have a large advantage.

Technological arms races are built into the premise of mining. All miners optimize, that is what they do. If you don't optimize your operation in some way, you aren't a serious miner. At various times and places, someone within a large population of miners trying to optimize will advance the technology in such a way that they can optimize better than everyone else and get a large advantage. There is no way for any one core developer team to prevent this (it would require that one team to always be better at optimizing than everyone else in the world, and that is simply going to fail).

Trying to assure some kind of "fair" enforced level playing field for mining beyond the fact that everyone has an equal opportunity to optimize is silly and futile. I do agree that deliberately releasing horribly unoptimized or deoptimized miners is a scammy practice though, so this is really a question of degree, not absolutes.

Two years is an eternity for a quick pump and dump scheme. For a useful piece of open source technology with a real future with widespread adoption, two years is not a long time at all. The dev team for this coin is betting on the latter proposition. If you are looking for the former, you are in the wrong place.

I am of the opinion that the shape of the curve doesn't really matter, within reason (instamines and premines excluded). What matters more is the total supply. More issuance earlier causes greater immediate dilution, but it also means you are buying into a coin with lower future issuance. Slower issuance earlier means more issuance later. These effects offset each other to a large extent, if not entirely.

I'm at a loss as to what you think that chart shows. The difficulty started lower, then increased later as adoption (at least adoption of mining) increased, just like almost every other coin in existence.

dga is right, neither coin had an instamine at all, because the difficulty adjustment algorithm (both use the same one) works pretty well, preventing a large number of coins from being mined in a short period of time.

This is a more informative chart: http://monerochain.info/charts/blocktime

There was never a time when the block time fell much below the target because a huge amount of mining was brought online before the difficulty could adjust. In fact at the very beginning the block time was much higher than the target (so fewer coins were being mined, not more), although I'm not sure why would have happened (it could be an error in the chart calculation).

This seems not to be true for BTC or even other traditional forms of payment. Many merchants accept cash or credit cards. Some people use one or some use the other. One particular method doesn't need to be the only form of payment accepted for people to use it.

Likewise, Overstock and others have gotten significant usage of BTC even though they accept other methods.

Bitcoin ASICs are a good example of a case where many vendors have indeed only accepted BTC, but that has been the exception not the rule.

That falls squarely within the described enthusiast category. If you are a large scale miner running a major operation, it is your business to know these things.

It seems plausible and consistent with the evidence that XMR has attracted and retained a large base of small scale hobby/enthusiast/casual miners for whom their individual level of mining income isn't enough to warrant frequent monitoring and short term optimizing (i.e. constantly jumping around to each day's most profitable coin). They are happy to simply be mining a coin they perceive to have a bright future.

Combined, the number of people who have posted here about problems with pool dust (indicative of a small hash rate prior to the pool software fix) and solo mining in the wallet is small but significant. Since the vast majority of people who do anything never post about it, it is likely the number of people doing this is quite large. I have no basis to estimate a number though.

This is exactly the opposite of what the "its all botnets" (previously "its all cloud miners" and "its all secret optimized miners") anti-XMR FUDsters and sock puppets are constantly repeating.

EC2 always has been and always will be a very expensive (generally not competitive) way of doing mining, as has been explained multiple times by dga and myself. It is only workable during short periods of time when a coin is highly valued or fast growing, allowing miners to deploy a large number of instances very quickly and for a relatively short period of time.

The difference does not equal botnets, only potential botnets. In addition, there are both private pools and solo miners, both of which I know to exist on a significant scale. We don't even know the number of end users who simply solo mine on their computers using the wallet. Obviously they are individually small scale, but we have no idea how many of them there are. People mention doing this on the Monero thread regularly, but the vast majority of such people will never post.

Let me be clear, I believe there are botnets mining XMR, although I don't think its the most profitable opportunity for botnets (even among coin mining), so their scope is likely somewhat limited. However, the above calculation is of no use in measuring them.

Please limit discussion on this thread to comments or questions about Monero. 

+1

Build applications.

Use your imagination. Okay maybe you (not you personally) have no imagination. Look at the first few successful applications for bitcoin and build those.

Right now we have ZERO applications. Anything would be an improvement.

The dumps and the price going down are exactly the same thing, viewed from a slightly different perspective. It is like saying that the rain drops falling are causing wet weather.

People are both buying and selling (in exactly the same quantity). They happen to be agreeing to do so at lower prices than they were a week ago. This is not the fault of the sellers exclusively, it is equally the result of the decisions of the buyers to step back a bit and offer only lower prices. Bring in more buyers with the exact same sellers and the price goes up, and vice versa.

Also, there is an even closer connection. When you say that someone "dumps" 700, that means there were 700 worth of buy orders on the book to even make that possible. Without that many buy orders, the same seller might sell his 700, but he'd have to do so over a period of time as a sequence of separate trades. You wouldn't see a 700 dump, but the seller would still be selling. The block sale of 700 is as much evidence of buying interest for 700 as it is selling interest.

I think there are competitors who want to trash XMR and have nothing to do with wanting to buy low. But either way the trolls and sock puppet accounts are not to be taken at face value.

And this matters why? I have traded on exchanges and I have often placed sell orders (i.e. the ask) when I wanted to sell reduce my holdings (but not necessarily at this immediate second) or placed buy orders when I wanted to buy.

You have a warped view of how exchanges work where market orders are somehow more important or more real than listed orders. That is false.

In the immediate short term, what is causing it is declining speculative interest in buying.

In the slightly longer term, what is causing it is nothing useful to do with the coin other than speculate, so 100% of the buyers are currently speculators (and as above, fewer of them want to buy).

If actual applications can be found and/or developed for the coin, then the load carried by speculators can be reduced, and in turn this will also likely increase speculative interest.