Looked to me if the boys shut up and listened to Jessy Kang they might have a good biz model. I don't grok how the porn industry makes money but if I were a customer I'd certainly prefer to avoid a paper trail.

Dude. What is the TITLE of this thread?

2 minutes means that at CURRENT network size about 10% of hashing power is wasted. It means that your 1/unconfirmed block is 10% likely to be invalid. As MoonShadow convincingly argues latency is likely to INCREASE not decrease. And no, I don't suggest we change the algorithm either. I'm just trying to point out why lowering it should not be considered at all. If you speed up confirmations but those confirmations are more likely invalid, they are no confirmation at all. 1% error is still pretty high!


worst case physical limit latency = 0.07 s = 20000 km Earth semi-circumference / 300000 km/s speed of light
typical point to point latency today 0.1 s
average bitcoin node latency 2.11 s

How much do you hope the bitcoin network will grow?

This thread's title states that "Dwolla was scammed", which implies Dwolla's ignorance. I might have worded it more accusingly, but perhaps Jered is only being diplomatic/open to the possibility that Dwolla just has some presentation errors. I would assume that the bank to Dwolla reversal could only occur if the bank or Dwolla account was stolen, otherwise the scammer must have presented a claim which I assume didn't happen.

This topic has forked into at least three... all fairly divergent from the OP. I'll inject my double-comment here.


And 99% would be better still. But 51% is fine enough. Maybe it fails sometimes, but you'll likely win most of the time. Wait for a new block, inject transaction, immediately crank out a block, maybe TWO before broadcasting your longer chain to the network. With 51% hashing power you're statistically guaranteed to beat the network most attempts. You'll know soon enough if you've lost.


Topic #2: That depends on the sale. It's similar to concerns over counterfeit fiat. If a child comes into the shop and text/SMS's 0.001 BTC for a gum drop, I'll accept without a blink. If someone is buying my car, I might invite him in for a coffee and wait for ten confirmations.

Topic #4: I've done a few trades on OTC and always look to the blockexplorer and send the transaction/address link to the counterparty. If a 0/confirmation floating transaction ticker service was provided (juiced directly into the mining circle), I'd accept small transactions as soon as it was seen by the network. That is of course, until splits and double-spending attacks were the norm. By then, I expect we'll have dozens of auxiliary services nullifying all of these concerns.

Given constant latency, waste increases EXPONENTIALLY as block generation time decreases until waste is greater than effect. Splitting DOES matter. Forget about the general users. Focus on the MINERS and the problems of latency and splitting will become clear.

Suppose splits represent 0.5% of blocks today and wasted cycles during latency 1%. If you divide the block generation time in half to 5 minutes, waste become 3%. 2:30 minutes 6%, 1:15 minutes 12%, 37.5 seconds 24%, 20 second blocks 50% waste, 10 second blocks 100% wasted cycles. The numbers might be off, but that's the general gist of the problem.

Now does a user care about waste? No not directly. Does he need confirmations? Not in most cases. Does the network care about waste? Absolutely. Does waste make the network less robust and insecure? YES.


Interesting. Thanks for the response. Would you expect miners will at least try to connect to the majority of big miners/pools? I do, because it will cut down on their wasted cycles the faster they hear about new blocks generated and each miner will want the network to begin hashing away at his newly awarded coins/fees. It should be in all miners best interest to connect to each other very tightly.

I'm not concerned about non-miners (in regard to block generation). They will get their confirmations soon enough. As long as users have the ability to inject their transactions in reasonable time, their latency is nearly irrelevant. I would love to receive confirmations within a second, but I value a robust network far more.

I get the whole Dwolla reversing charges after crediting TradeHill's account. But how does the scammer pull this off and how could Dwolla not be aware of it? The scammer transfers funds to Dwolla, transfers to TH, buys bitcoins, and reverses the original transaction from bank to Dwolla. Do I have that right? Is it assumed that the scammer stole access to the bank account?

MoonShadow are you claiming that latency increases dramatically with more nodes in the network? Rather than requiring more hops, shouldn't all nodes of the network attempt to increase its share of connections? While worst case latency should increase, I would expect best and average case latency to be reduced (or at least scale O(log)) with a larger network size.

Just curious, why not youtube?

While it is true that faster blocks would require a lower difficulty, the constant latency means that the wasted effort grows with block speed. If you can cut latency 50% across all nodes then you can cut block speed 50% with insignificant loss of efficiency (this excludes memory and bandwidth requirements which will obviously increase).


But a faster confirmation will be more than proportionally less robust. With a doubled block speed competing forked block chain rates will more than double. As an extreme example, if the block speed were a few seconds (about the same as latency), then the network would thrash with the majority of 'confirmation' blocks being invalid. Less than a minute and the miners will spend twice as much energy producing the same number of hashes (with maybe 15% of all 'confirmations' invalid).

Miners could (and probably should) make direct connections to each other. However such a protocol requirement would make the network less robust. Indeed malicious miners would simply isolate the honest nodes.

I'm glad SgtSpike called BS on the claims that lost gains are not losses. I happen to disagree with the comments about deflationary currency.

Bitcoins are undeniably inflating monetarily (about 30% annually). The deflation is based on current demand. Despite rapid monetary inflation, demand is high and prices are relatively stable or declining. Bitcoin is strong. Too strong?

The majority of people who are currently buying bitcoins do so because they believe in a its future value, otherwise the prices would fall. (I admit its more complicated than this as miners do not nec. sell and exchange markets represent only a fraction of the total economy).

But within a few years, the inflation rate will be lower than any national central bank's current targets. Because the population of the Earth is finite, the popularity growth will necessarily slow down as well. So, I don't see any deflation at all, except that produced by real demand, which is not a bad thing and will slow down eventually.

I asked this same question today.

I haven't had my scribble calculations confirmed, but it seems to me that the weighted average latency between miners is 2.11 seconds. Miners waste 2 seconds hashing away the previous block every time a new block is awarded as well as waste at least an entire block if they happen to be on the loosing end of forked block chain (~0.5% chance every ten min block). The chance of forks is directly related to latency/generation-rate.

The latency is the same no matter the block generation rate. If you double the rate, waste should be halved (and then a little). I estimate that the system is entirely broken with a generation rate less than 5 seconds. If the rate were every minute the waste might be around 15%. Ten minutes puts us in the ballpark of 99% efficiency.

I am content with Jered's response. I don't mind that Bruce's show is used for announcements. Just that as a customer it should not be "the news" as I can not rely on it as my primary or even tertiary source.

As for Dwolla reversals, this might be very good for Bitcoin, going long. Another 'incident' that is only making bitcoin stronger. In this case, presenting bitcoin's advantage. I hope the exchanges don't suffer losses (I'm still not clear on what exactly happened).

Hi Jered, As a TradeHill customer I have generally appreciated your openness in the past. As for what ever is going on regarding Dwolla, I'm not cool with your stance to let Bruce Wagner speak on your behalf (whether you are on the show or not). I believe we deserve clear, immediate information in writing on your site from the horses mouth. I hope you will agree.

Hi Bruce, Dwolla news sounds like big news. Which episode number and at what minute does it start? I've just tried to search for this and coming up with hours of material I'm frankly not interested - sorry but video isn't free over sat link.

When prices are volatile, I tend to stay up late trading until I can buy in low, until then I get hungry and raid the fridge. I have recently noticed an inverse relationship between the quantity of munchies in my apartment and bitcoin volatility and a less extreme inverse correlation with trend direction. I am now on a starvation diet and expect the market to respond. If anyone calls me a moron, I'll consider that a reinforcing signal.

Thanks Kjj,

If we assume (given sufficiently numerous non-malicious nodes ignoring rare 2, 3.. block reorgs) that forks occur during the latent time between a new block is broadcast and receipt, then average weighted latency is much longer than I would have guessed:

Latency/GenerationTime = 1/284
Latency = 2.11 seconds

I also assume that waste is not only due to reorg but occurs with all but one node during latent time after every block generation. So my suggested ten seconds is in the ballpark of 50% efficiency. I wouldn't have expected that. Thanks for the lesson.

Thank you all. I've just read the FAQ. It's interesting to note that the FAQ suggests reading the bitcoin.pdf for more details, which I have done more than once, and see no further rational except the RAM limits posted earlier. The latency I thunked up meself. From the FAQ:


Kudos as always to Satoshi for predicting variables quite wisely before bootstrapping the entire block chain. After two years, do we have any statistics on the frequency and duration of chain splits, the network latency between the majority of miners? Ten minutes does seem like a fine choice, though I would guess now with data we could calculate the optimal choice and how that optimal changes over time.

Hey joulesbeef, I received a meaningful inflation chart out of this discussion. I'm a satisfied poster.