it may even have been good. except that it is encouraging this non-verification scheme for tx's which as you say, may be gamed and has contributed to quite a perversion in analyzing this particular attack and was never visualized in Satoshi's original ideas. That isn't the problem. The problem is that there is no way to tell an SPV client that the chain they are following because it has the most proof of work is actually invalid and should be rejected.If that capability existed, then nobody would have to care whether or not miners choose to burn their own electricity mining invalid blocks or not. This seems to happen frequently in Bitcoin where bad behaviour by party A can negatively effect party B, and so everybody focuses exclusively on preventing party A's bad behaviour instead of making the system more robust by removing party A's ability to negatively impact party B to solve all current and future problems. I don't think I agree with the highlighted part. The structure of the blockchain's proof-of-work on minimal sized headers is itself the mechanism SPV clients use to determine if a chain is valid. Yes they do not verify the chain's contents themselves. Instead they rely on the fact that producing a false longest chain is prohibitly expensive and thus very unlikely. To effectively pull off a longest but invalid chain attack requires an attacker to spend more mining effort than the rest of the ecosystem, in order to produce a false chain that will never be acknowledged by the p2p network and can only be used to temporarily trick SPV users. In short, proof of work on headers is itself a form of validation. What you are describing is not a proof. At best, its a suggestion. If a majority of miners are building an invalid chains accidentally or intentionally, the problem will get sorted out eventually but in principle there's no upper bound on how long that process will require. On the other hands with some relatively simple new messages and protocol requirements the time required for SPV clients to get back on the valid chain can be reduced to the time needed to propagate a message across the network regardless of the hash power supporting the invalid chain. The odds of miners building accidentally on a false chain seem low. By definition they have to be able to download a block in less than 10 min (otherwise they couldn't keep up with the transactions themselves). Yes they might build on a false chain for a short period of time if blocks are randomly found fast, but the statistics works out that this won't last long and waiting x blocks solves the issue. You're better than me at the math but I'd bet that 6ish confirmations works out to good enough. If a majority of miners are intentionally doing this, then we have a 51% attack underway and lots of assumptions break down. I question the need for new messages to help SPV clients find the right path because 1) they seem exploitable to me and 2) all they need is the header chain to find the right path and headers are already short and fast to transmit. Waiting for x blocks again seems to protect them if you assume a majority of well connected miners. |
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Anyways, to really understand what happens when R->0 I think we need to make a new model that takes into account what we just learned from your chart above (that miners won't necessarily be hashing all the time). That seems to be an interesting point illustrating how the best interest of users and miners incentives could diverge. For users, an empty block is always better than no block because it adds work to the chain and increases the security of the previous transactions. Miners being financially motivated to shutdown for a period of time may not be an issue though. Let's say that coinbase rewards are zero and miners live on fees only, and given a difficulty level it does not make sense to spend electricity until X number of fees/transactions are published. In such a situation the difficulty will adjust/decrease until 10 minute blocks are restored. This might mean that after a block is found miners turn off for 5 minutes and only turn on after 5 minutes of fees are sent, but the difficulty will have adjusted so that miners are likely to find the next block 5 minutes after turning on. Yes this would also mean that if all miners keep running we would have 5 minute blocks, but they wouldn't be. And if they did then difficulty would adjust back up. Since these issues develop slowly, I believe we would see that difficulty will continue to adjust to maintain 10 min blocks regardless of the financial incentives of the time. i believe all these dynamics will make mining profits similar to a utility. just enough to keep them going but not outrageous. as it should be with banking. The banking industry represented roughly 2-3% of GDP throughout the 1800s and into the twentieth century. Then the FED was created and the industry has continuously grown and grown reaching the massive size today. This growth will continue until the average person walks away from fiat. |
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Anyways, to really understand what happens when R->0 I think we need to make a new model that takes into account what we just learned from your chart above (that miners won't necessarily be hashing all the time). That seems to be an interesting point illustrating how the best interest of users and miners incentives could diverge. For users, an empty block is always better than no block because it adds work to the chain and increases the security of the previous transactions. Miners being financially motivated to shutdown for a period of time may not be an issue though. Let's say that coinbase rewards are zero and miners live on fees only, and given a difficulty level it does not make sense to spend electricity until X number of fees/transactions are published. In such a situation the difficulty will adjust/decrease until 10 minute blocks are restored. This might mean that after a block is found miners turn off for 5 minutes and only turn on after 5 minutes of fees are sent, but the difficulty will have adjusted so that miners are likely to find the next block 5 minutes after turning on. Yes this would also mean that if all miners keep running we would have 5 minute blocks, but they wouldn't be. And if they did then difficulty would adjust back up. Since these issues develop slowly, I believe we would see that difficulty will continue to adjust to maintain 10 min blocks regardless of the financial incentives of the time. |
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it may even have been good. except that it is encouraging this non-verification scheme for tx's which as you say, may be gamed and has contributed to quite a perversion in analyzing this particular attack and was never visualized in Satoshi's original ideas. That isn't the problem. The problem is that there is no way to tell an SPV client that the chain they are following because it has the most proof of work is actually invalid and should be rejected.If that capability existed, then nobody would have to care whether or not miners choose to burn their own electricity mining invalid blocks or not. This seems to happen frequently in Bitcoin where bad behaviour by party A can negatively effect party B, and so everybody focuses exclusively on preventing party A's bad behaviour instead of making the system more robust by removing party A's ability to negatively impact party B to solve all current and future problems. I don't think I agree with the highlighted part. The structure of the blockchain's proof-of-work on minimal sized headers is itself the mechanism SPV clients use to determine if a chain is valid. Yes they do not verify the chain's contents themselves. Instead they rely on the fact that producing a false longest chain is prohibitly expensive and thus very unlikely. To effectively pull off a longest but invalid chain attack requires an attacker to spend more mining effort than the rest of the ecosystem, in order to produce a false chain that will never be acknowledged by the p2p network and can only be used to temporarily trick SPV users. In short, proof of work on headers is itself a form of validation. |
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That post you included above is utter nonsense as a reply. Thermos being downvoted into the ground is valid to point out because it demonstrates just how much the community disagrees.
And that is the thing you don't seem to understand, bitcoin is a community defined construct, it is whatever its users want it to be. Is is not defined by a FOMC like entity.
poor guy.. you are even more naive than I thought. the point YOU (and quite a few here) dont seem to understand is that the reddit mob in no way, shape or form defines "the community". if there is a consensus amongst anyone with half a brain it is that no sane discussions on the topic of the block size debate can be had over there. The post I included explain exactly while it is so. now you can keep fooling yourself with delusions of community consensus or get a grip and realise that no amount of upvotes or downvotes will shift the balance in the outcome of this issue. What is Bitcoin if not a community of individuals independently deciding to use and ascribe value to something other than government fiat money and to create their own construct for money. Yours and the other dev's view of BitcoinXT, is no different from Krugman's and Yellen's view of Bitcoin. i.e. "You people can't define what is money because we already said it is this and anyone who disagrees is delusional". Well guess what, you are as delusional as Krugman and Yellen. And yes, reddit is a more accurate view of the total bitcoin ecosystem then the dev's mailing list. And if not, that doesn't matter either, the whole point of Bitcoin is that I can make my own choices, and me and others are free to leave the current Bitcoin and choose our own path. If you don't want to transact on my chain, then fine, that is your choice, but I've already decided to not transact on yours. |
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Thermos has been down voted into the ground on reddit for his behavior. https://www.reddit.com/r/Bitcoin/comments/3gdad5/meta_on_hardforking_if_bitcoin_is_so_vulnerable/ctx6rgsIn another post he claims that consensus has not been achieved simply because Greg Peter and luke Jr do not agree and that is enough to out vote Gavin and mike. How seriously fucked up is that view. I say XT should do away with waiting for 75% now, and simply fork at some block 3 months out and let people pick the vision they want to support. In the end the ecosystem will gravitate to one winner. After checking he actually says "Wladamir, Greg, and Pieter are opposed to it". But yeah nice try of you to throw LukeJr in there  PS. I expected you to be above the all too common argumentum ad populum found amongst Gavinistas. For future reference here's a post I digged up from reddit today that sums up well the idiocy behind juvenile comments such as "Thermos has been down voted into the ground on reddit"  Oh and btw good luck and have fun with your XTcoin OK my memory on the names was wrong, who cares, that doesn't change the point that his fundamental sentiment is that bitcoin is decided by a small group of people, which is horrible. That post you included above is utter nonsense as a reply. Thermos being downvoted into the ground is valid to point out because it demonstrates just how much the community disagrees. And that is the thing you don't seem to understand, bitcoin is a community defined construct, it is whatever its users want it to be. Is is not defined by a FOMC like entity. Thank you I will enjoy my bitcoin with millions of other users, you enjoy you blockstream fork away from satoshi's vision that we all signed up for. |
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Thermos has been down voted into the ground on reddit for his behavior. https://www.reddit.com/r/Bitcoin/comments/3gdad5/meta_on_hardforking_if_bitcoin_is_so_vulnerable/ctx6rgsIn another post he claims that consensus has not been achieved simply because Greg Peter and luke Jr do not agree and that is enough to out vote Gavin and mike. How seriously fucked up is that view. I say XT should do away with waiting for 75% now, and simply fork at some block 3 months out and let people pick the vision they want to support. In the end the ecosystem will gravitate to one winner. |
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From: https://www.reddit.com/r/Bitcoin/comments/3gdj7j/a_better_way_to_govern_bitcoin_block_size_open/ctxb53sYou are really going all out on the attack FUD on this one aren't you?
I think the analogy to the Fed's FOMC is fairly accurate. Part of the ideology behind central banking is that a group of educated men can make better decisions for what is best for the economy (by choosing the interest rate that balances "inflation expectations" with "employment") than allowing the free market to solve the same problem. This is similar to the block size debate. Part of the ideology behind limiting the block size is that a group of talented coders can make better decisions for what is best for Bitcoin, by choosing a limit that produces what they see as a better balance between "decentralization" and "blockchain access," than what would happen if the limit were slowly removed according to Gavin's BIP101 proposal. Isn't this what the debate really comes down to now? The technical debate is over; It's ideology at this point. Do we want a Bitcoin that has a dual mandate of balancing decentralization with blockchain access? Or do we want a permissionless Bitcoin where blockspace is governed by the fee market? The debate is really just about ideology at this point, and that's why we're no longer making progress. The technical debate is over. Some people want Bitcoin to be free to grow, while others want to control the growth process to attempt to balance "decentralization" with "block space access." Well said, BTW great paper last week. |
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You of all people would idolize Luke jr You of all ungrateful people here need to show a little more respect for the work of the devs, especially LukeJr. The devs represent probably less than 0.01% of the effort spent getting bitcoin to where it is today.heck they didnt even come up with the original concept, and more and more don't even seem to understand it. |
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the sweet smell of deflation:  Don't worry, if you thought Bennie's helicopter drop was large you haven't seen anything yet. The FED will panic print to dig out of the debt depression hole they've created and the only things that will survive are real assets and real money. XOM owns real assets and will still exist on the other size of the FED's crash and still pay out cash flow from operations, in whatever unit is used as currency at the time. |
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How would this work if you issue (say) one txn per day on average? I mean, wouldn't it take a month or even a year before the SPV client summed up enough use to make it worth committing the txn? Are there risks to having a payment channel or LN connection open for these durations? To me the economic incentives for full nodes have always been obvious. In the end full nodes will be services that charge a fee for SPV clients to access. i.e. if you want to connect to the network as a leacher (which is fine) the only peers you will be able to access will charge nominal small amounts to do so. In this model it is likely that we would have a variety of full nodes types a) Private business nodes - i.e. Nodes run by entities such as coinbase, bitpay, amazon, etc as a method to verify transactions themselves. After certain bandwidth limits it is likely these nodes will not provide data upload to just anyone b) P2P services - i.e. Nodes that are run as for profit services that charge some market based amount for SPV clients. c) NGO type nodes - i.e. Nodes run by non-profits for the general community (MIT node, EFF node, etc). The incentive structure does not need to be put into the protocol, market dynamics on their own will create the proper incentive structure. In other words if it becomes too difficult for your average person to run a node or if there are not enough nodes to provide data upload for free, then a market will create on its own to fulfill this need. The ignorance of Bitcoin's current crop of "board of director" types regarding the nature of free markets is both highly ironic and sad. |
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CNBC: Bitcoin's 'war' could threaten its survivalBitcoin, the digital currency technology with an ecosystem attracting hundreds of millions of dollars in investment, is struggling through an existential crisis. And what may to outsiders seem like petty squabbling about a single number actually has major financial implications and could even threaten the very survival of the cryptocurrency. The argument—which is pitting Chinese constituencies against largely Western developers, the business community against the often ideological early adopters, and programmer against programmer—centers on a simple number in the global bitcoin system. But if the various parties can't come to an agreement, the whole network could splinter, wrecking its major selling points of security and decentralization. "There is literally a war going on right now in the bitcoin world," Marco Streng, CEO of Genesis Mining, told CNBC last month. What's the issue? There are two major questions facing the technology: Who is bitcoin for? And who gets to decide? Most of the early adopters saw appeal in bitcoin as a decentralized digital currency—(to over-simplify the promise) a sort of virtual gold that could not be touched by governments, banks or corporations. But in seeking to create the perfect system for such a currency, bitcoin's early creators also created a technology that has wide-ranging applications. That technology is called the "blockchain" (CNBC has gone in depth into how it works), and this is basically what it does: It can record any information in a secure way, and make that information both public and unchangeable—doing this without relying on any central authority. Banks, stock exchanges, payment companies and others have already begun exploring how this can be used in their own businesses. The issue at hand is about the structure of bitcoin's blockchain (which is composed of "blocks" of data with each block referring back to the preceding chunk of information—thereby creating a chain). The community is arguing about how big the maximum block size should be: The current max is one megabyte, which only allows for about seven transactions per second—far too few for most businesses currently investing in the technology. This speed is a "roadblock to bitcoin growth," Jeff Garzik, one of five bitcoin core developers who have taken over maintenance of the technology, wrote in a recent paper. (Visa, for comparison, says its network can handle more than 24,000 transactions per second.) "Any responsible business projecting capacity usage into the future sees the system reaching an absolute maximum capacity, with this speed limit in place," he wrote. "Increasing or removing this limit will encourage businesses to view bitcoin as scalable and capable of supporting millions of new users." ... http://www.cnbc.com/2015/07/23/bitcoins-war-could-threaten-its-survival.htmlJeffy G for president dictator. What is going to be fabulous is when this issue is eventually resolved (either way) and a majority consensus is achieved among independent individuals, all without having government experts (such as a FED Board of Directors) or rulers decide on a direction by fiat. That will be powerful and have wider implications than I think many realize. It will be a model to be repeated in many other areas beyond money. |
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One payment processor, Bitpay, has said they don't sell their coins on the open market. They have private buyers for them. Bitpay partners with Bitwage, who provides Bitcoins to anyone receiving a paycheck via direct deposit. Simply setup your direct deposit to send a percentage to Bitwage's deposit account and you receive Bitcoins to your wallet address every pay cycle. No action is required to withdraw your Bitcoins. They are sent to your actual on-chain Bitcoin address immediately. It is essentially Bitcoin direct deposit. It circumvents hostile banks that might try to keep their customers from sending funds to Bitcoin exchanges. This allows for a complete cycle wherein Bitcoins spent at merchants who do not wish to keep them are then sent to Bitwage's customers rather than being converted to fiat currency at an exchange. I never really understood the reason for doing this. If you want to convert a certain amount of pay into BTC every month simply setting up an account with an exchange and sending the $ amount you want to buy over every month, works out to be the exact same. The only thing I can think of is the Bitwage path is automatic, but manually buying on an exchange isn't exactly hard and probably results in less fees. Both paths require you to provide your banking and personal information so there isn't an advantage for either one. |
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LOL, the Gavinistas are furiously scribbling their little manifesto. This gonna be good.  Exactly like the Peoples' Front of Judea (or was it the Judean Peoples' Front?) "What have the core devs ever done for us?" I'm grateful to the developers, but this is not about them, I'm also happy that not everyone at central control is part of the heard, everything in this post is good news. if you read that tweet again, it looks like a critique of the mainstream circle jerk. Ah, but BitcoinSX is about the developers. Specifically, SX's lack of them and predictable GFY response from Team Core when larger blocks break something Gavin failed to account for (like upstream bandwidth being ~order-of-magnitude less than down, or catastrophic consensus failure). XT could be an interesting pseudo-test of the thought experiment i've made a coupla times about perhaps Bitcoin needing nothing more than a big enough block size increase with built in upgrades from now until eternity. or at least until an emergency patch is needed for an extraordinary event. What we need are multiple different cores, that yes might provide different visions for Bitcoin. That enables the users/miners to choose the right path and not a small set of devs. |
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Wall Street is also going to need a tad more than 3 tps as well. |
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Is a full working version of coinshuffle being developed? The research site says the current version was just a proof of concept for testing and not usable for real coins.
Amir says it's being worked on for Dark Wallet.
I thought they were implementing CoinJoin instead. EDIT: true, Amir confirmed that: https://www.reddit.com/r/Bitcoin/comments/2ijsw1/the_coming_of_darkwallet/cl2qow6On the other hand, I see a problem with CoinShuffle. The participants are supposed to sign their messages "with their addresses"; this assumes that the inputs they provide were paid to standard P2PH addresses, but they cannot use outputs sent to P2SH (those starting with a 3, e.g., "multi sig" addresses). Participants could still be required to reveal their script and then sign their handshaking rounds with a key contained there (if there is any). Darkwallet's webpage still lists coinjoin as their shuffling method. Anyone know the status of Dark Wallet's coinshuffle implementation or any other implementations? https://www.darkwallet.is/ |
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+1. Justus, I've been reading some of your work and I really like your push to clearly and precisely define the cryptocurrency terms we're using. Here's what I had jotted down yesterday, which sort of jives with the two points you made above:
Bitcoin is decentralized if no entity exists with the ability to costlessly double-spend or bar valid transactions from the blockchain.
Thoughts? I honestly think the term "decentralized" has been ruined and I'd rather avoid it as much as possible. I'd rather express Bitcoin security in terms of: - What are the adverse behaviors a user might experience?
- How does an attacker benefit from bringing about those adverse behaviors, and how much does it cost them to perform the attack?
- What actions can users take to reduce their risk?
...then express hypothetical changes to Bitcoin in terms of how they affect the answers to the following three questions. I think of Bitcoin security as being successful if it can guarantee the following - 1 - Are transactions irreversible - Meaning once received is the transaction immutable on the network.
- 2 - Can anyone, anywhere interact directly with the network to spend or receive funds - Meaning it is censorship resilient and people cannot have their activity suppressed (regardless of legality)
- 3 - Can individuals maintain sole control over their funds - Meaning mechanisms exist that enable people store and control BTC with zero intermediary risk
Decentralization and everything else is a means to those ends. What is so frustrating is many of the core devs positions are against these outcomes. For example: A) Artificially limited transaction volume reduces property 2 above (i.e. it limits the # of people who can interact directly with the network. B) Peter Todd's full-RBF proposal reduces property 1 above by largely eliminating the zero-confirm guarantees the P2P network provides today. C) Sidechains reduce property 1 above if they pull transaction fees off the main chain (which reduces the effort required for a miner attack) |
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From the perspective of a Bitcoin user, every possible thing that can go wrong with Bitcoin can be categorized into one of two failure modes:- A payment you belive to be valid, isn't (double spend)
- You are unable to perform a payment that you want to perform (denial of service)
Exactly, great way to put it. +1. Justus, I've been reading some of your work and I really like your push to clearly and precisely define the cryptocurrency terms we're using. Here's what I had jotted down yesterday, which sort of jives with the two points you made above: Bitcoin is decentralized if no entity exists with the ability to costlessly double-spend or bar valid transactions from the blockchain. Thoughts? I like your approach to clearly define terms but i don't like your approach of effectively redefining decentralized as a binary term when it has been generally understood to be fuzzy. This sort of redefining of terms can easily lead to confusion or deliberate obfuscation. For example, by your definition, there being a miner or pool with 50%-1GH of the hash rate would still be considered a decentralized system, but in practice such a miner could trivially increase his hash rate or collude with any other miner and then costlessly double spend or block. Likewise, a 50%+1GH pool that attempts to block might find that some miners leave and the ability to block is lost. By your definition this would not be decentralized but in practice it would be since ability is so fragile. i prefer to view decentralization more along the lines of a continuous metric such as https://en.wikipedia.org/wiki/Shapley%2dShubik_power_indexThe entities with the highest scores not only indicate whether the system is decentralized (your usage) if <1 but also how decentralized (common usage). The approach is not perfect here since there are different kinds of votes. Pool operators control important infrastructure and have some influence but their votes are not measured directly in hash rate. Further, one can likely construct a single metric along the lines of https://en.wikipedia.org/wiki/Herfindahl_index (but not exactly that) which would characterize the presence of entities with relatively high Shapley-Shubik scores. I like the approach, but a lot depends on how you value various metrics. For example with mining pools, how few is too few where it starts to be a problem? Is going from 30 major pools to 20 major pools a reduction in Bitcoin's decentralization? I'd argue no because as long as miners have a range of pools to choose from, they will be able to select a pool that reflects their preferences. But when does this start to become an issue and how much of an issue? i.e. Does going from 20 major pools to 10 represent a significant issue or a slight one? When does it start to become a red flag issue? 5? 3? Personally I think 10 is probably enough, 5 is problem and 3 is a real problem. But that's just opinion and we can all make our own models to support various opinions. So metrics are useful, but I think defining the objectives, as justusranvier did above, are key. The objectives at least puts a framework around what is an opinion based discussion. |
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