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The block size problem is just one of a number of problems that are coming bitcoins way. The biggest problem however is not block chain or any external government or regulation, as actually both the problems could be solved rather easily. It is the bitcoin foundation itself.
First of all, and this may seem like a rather extreme opinion, but I think that Gavin Andresen is a liability to bitcoin. If you read in the tehnical forum, you can see MANY complaints about him, his communication, the way he acts and deals with the community. You will notice a general dissatisfaction about Gavin Andresen that has been present for a while. Considering he is currently in full time employment effectively by bitcoin itself, and therefore really has no excuse, this is rather worrying. Is my opinion that his involvement as lead developer with the bitcoin project, effectively CEO of bitcoin, is going to cost investors a lot in the future. For this reason amongst others, I have sold many of my coins already for alternative currencies so I don't not have to worry about the things he and the rest of the bitcoin cartel have in store in the coming months.
All I can really add here, as i am not a member of the cartel and just look at things from the point of view of an outside investor: if you believe in the concept of crypto currencies that bitcoin has successfully communicated, but do not want to have to worry about the bitcoin foundation or 'satoshi', this mysterious guy who holds nearly 10% of the coins outstanding, and you do not want to continue to prop up the bank accounts of such individuals as Gavin Andresen and the bitcoin cartel, there is an alternative currency Litecoin that is actually technically better than bitcoin and avoids all of these problems.
The day the bitcoin foundation opened was the day that bitcoin died. I strongly advise anyone holding bitcoin to sell now and buy lite coin so they do not have to worry about this bunch of idiots. I also believe more people will be doing this in the coming months, as the incompetence of this bitcoin foundation makes itself clear, which makes this a pretty good time to be buying.
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Single core processor speed as well as hard drive sizes have not significantly improved through the recent years.
That isn't really true afik. Even so hard drive capacity grows faster than moores law. It is just that it has become unfeasible to use hard disks in the way they were used before. In the past it was possible to re-write and re-read hard disk many times in their lifetime. But since transfer speeds are increasing one exponent below that, mostly linear this becomes a bottleneck. The ultimate death of the hard drives will not be that they can't be produced with higher capacity but that they can't be filled and read back two times before they become unusable. SSD memory grows even faster still, but it too has some issues in that regard. It grows to the power of three where bandwidth grows to the power of two, not as bad as the 2:1 relationship with hard drives, but still. The other issue is that the rapid growth in capacity is facilitated by storing more information in a single capacitor which makes them less reliable. All in all increasing capacity should outperform the growth of the blockchain for quite some time. And after that I doubt that bitcoin will still be relevant. It should still be around but exponential growth should be over. And what sense does make a limited amount cryptocurrency make for sustained exponential growth? None, it has to either hit a ceiling or fade away. So ... SSD and bandwidth grow slower than bitcoin transactions? Or quicker? To all those people talking about pruning or any such optimizations: what we are considering here is growth rate not file size so please stop talking about pruning. My arguement is that the blockchain will grow faster than bandwidth / storage, making the P2P model invalid. Only people with valid arguements about growth should continue to post in this thread. The last time I checked it was lower, but that was a few months ago, before the rise in popularity in satoshi dice. What really bugs me though is that storing the blockchain isn't rewarded in any way, while a hard drive costs about the same as a gpu. All in all I do think that eventually Bitcoin will be superseeded by another cryptocurrency, not a fork like those altchains but a re-implementation from scratch, It just takes a few jokers like SDice to start adding transactions like crazy..... and things can get bad. I agree- there needs to be some fee for storage. For this reason anyway, I continue to think that bitcoin's scalability is an issue. |
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Single core processor speed as well as hard drive sizes have not significantly improved through the recent years.
That isn't really true afik. Even so hard drive capacity grows faster than moores law. It is just that it has become unfeasible to use hard disks in the way they were used before. In the past it was possible to re-write and re-read hard disk many times in their lifetime. But since transfer speeds are increasing one exponent below that, mostly linear this becomes a bottleneck. The ultimate death of the hard drives will not be that they can't be produced with higher capacity but that they can't be filled and read back two times before they become unusable. SSD memory grows even faster still, but it too has some issues in that regard. It grows to the power of three where bandwidth grows to the power of two, not as bad as the 2:1 relationship with hard drives, but still. The other issue is that the rapid growth in capacity is facilitated by storing more information in a single capacitor which makes them less reliable. All in all increasing capacity should outperform the growth of the blockchain for quite some time. And after that I doubt that bitcoin will still be relevant. It should still be around but exponential growth should be over. And what sense does make a limited amount cryptocurrency make for sustained exponential growth? None, it has to either hit a ceiling or fade away. So ... SSD and bandwidth grow slower than bitcoin transactions? Or quicker? To all those people talking about pruning or any such optimizations: what we are considering here is growth rate not file size so please stop talking about pruning. My arguement is that the blockchain will grow faster than bandwidth / storage, making the P2P model invalid. Only people with valid arguements about growth should continue to post in this thread. |
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Once a simple method for truncating the block chain has been distributed, the storage argument won't even be valid anymore. Any simple method will not be able to stop the problem, that the size of the blockchain will increase exponentially over time. It will just be able to optimize it, or to provide some temporary relief. The fundamental design problem with bitcoin will still hold true, its in the design of the system. That is an absolutely absurd time line for the average user to run out of space for the block chain. I understand that you firmly believe the block chain growth will out pace the produced storage space (theoretically), but there already exists enough storage space on the average computer to hold the block chain for years to come (and you can quote me on that). Also, if large corporations were to come in to fill the void when the blockchain model becomes unviable..... that will result in bitcoin loosing its USP and becoming just like any other previous currency out there that required a central body to operate. The blockchain right now is about 5GB if I understand it? If bitcoin continues to experience exponential growth, providing trnasaction limit is lifted, my intuition tells me it wont be long until storage & bandwidth requirements exceed whats currently available. Understand VISA processes 11,000 tx per second. I will do the math later tonight. |
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I wrote in depth about Moore's law this year for English. And while it's true that it was "just an observation 40 years ago," people have done plot studies of exactly how accurate Moore's law has been (read: The Singularity is Near by Ray Kuzweil).
In addition to the astounding accuracy of Moore's law, the general implications of the axiom hold true for nearly every technology from the past to the future. Much before Moore's law (or even Gordon Moore himself) existed, there were various paradigms of technology (read: vacuum tubes, transistors, etc.). Because of the obvious path for technological innovation, new technologies will arise and continue to follow Moore's law.
In fact, HP already uses platinum latch technology for printer cartridges and is working on moving that technology over to IC's. And at the same time, companies like Intel and IBM are putting a ton of work into carbon nanotubes. The future is literally unfathomable. Following your closed-minded notions, it's easily understandable why people in the 80's thought computers would always be room-sized.
RE: BitCloud I am just thinking about it logically, ignoring any historical precedents. "The past doesnt predict the future." Correct logic predicts the future. If someone invented a new mechanism of storage that was more efficient than magnetic or flash in memory storage, it still wouldnt change the logical premise that there is a hard limit to how much data can be stored on a chip or, lets just say, 'storage device', and therefore bitcoin is theoretically flawed, because the size of the blockchain will never stop growing over time. Of course there may be some 'out of this world' technology that comes along which cannot be even imagined right now, that makes storage unlimited and therefore bitcoin feasible. Maybe a bit like nuclear fusion supposedly makes energy unlimited. That is a big , crazy assumption. Practically, if the blockchain keeps growing at the current rate, i think we're going to see some real problems with scalability of bitcoin in the much more closer future - before flash or magnetic storage is superseeded - i'm talking about in the next 6 months. |
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Bitcoin relies on distributing a file with unlimited size to every single node in the network in order to function. Bitcoin therefore would theoretically succeed if the resources required for storing and transmitting such an unlimited file size were also unlimited. However, its clear that for the foreseeable future, storage is not unlimited, and also bandwidth is not unlimited. The unlimited size of the blockchain; the fact that anybody can add transactions for no cost, eg. SDice. The overhead with distributing an unlimited sized file to every node. Moore's law is cited in Satoshi's paper as being a fundamental tenet on how the bitcoin system works. Quoting from Satoshi's paper: If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in
memory
However, "Moore's law" is not a law at all. It was just an observation made 40 years ago that the price of storage would decrease for the foreseeable future - that we were entering an era of microcomputing. It cannot hold true forever. There is a hard limit to how much information can be stored on a chip. Its just we haven't reached it. Therefore the concept of distributing an unlimited sized file to every node on the network is fundamentally not sustainable or economical - READ: flawed. Storage will not be getting cheaper forever but the principle underlying bitcoin is for the filesize of the blockchain to be getting bigger forever. Let's not also forget the bandwidth usage requirement as well, which will also be getting bigger forever. |
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Man I cant wait to see apple disappear forever.
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Having been involved in some OTC deals in south america, i can confirm there is a very bullish mood on the ground right now, contrasting whats going on at MtGox
Still a very bullish mood on the ground despite the sell off online
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Dont usually bump... but anyone want to comment?  ? come on, even just 1 criticism?? There must be something there worth commenting The more I think about it, the more I was probably too negative. The advantages seem greater than the disadvantages....... anyone? |
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DISCLAIMER: Below post is my opinion only posted for the benefit / interest of any speculators or investors in Bitcoin
Well the crash is behind us. The price went from around 40 - 260 ithen back to 100. Now it seems to be falling slowly, hitting 90 today, with the potential to fall more based on short term negative sentiment. There is no doubt that the last week has been messy. I'd like to also raise the validity of DDoS and whether it actually existed, or whether it was just MtGox trying to delay the inevitable price crash that occurred.
Whilst the hysteria in the media has blazed in the past week, the bitcoin network has continued to run steadily on, processing transactions as it has since it was first created. The fundamental value of the network has not changed during the last few months.
Legally, it also seems nothing has changed. No governments have commented further on bitcoin. It seems they might be adapting a 'wait and see' attitude before formally introducing any (more) regulation.
What has changed is the public perception. Bitcoin is now very well known. However most of the media coverage I've seen has become very cynical about it. Those same journalists who began by describing it as a passing fad back in February, have now morphed into describing how (1) it is inevitably going to be illegal, (2) how it is deflationary ("imagine what would happen if you had a mortgage in bitcoin"), (3) how it cannot scale, (4) how it is a scam orchestrated by 'hackers' who lack any credibility (this argument still continues) (5) lacks any (military) backing from western governments; we cannot pay our taxes in it; (6) exhibits some technical flaws which make it worthless.
There is no doubt that the media has swung full circle from talking about how bitcoin could be a 'threat to the Euro' and change the world, to now how it is worthless scam item that is worthless. It is difficult to find a single article that talks about anything more than the value of bitcoin being worthless.
The main arguments for bitcoin have been proposed many times on these boards. Just to reiterate: fungible, digital currency that cannot be double spent and does not depend on any 3rd party. The cheapest and most technically secure way to transfer monetary value between two people in the world.
I'll discuss the 6 main arguments which are appearing in the press against bitcoin here as I see them.
(1) The US government has already adopted a libertarian view on bitcoin in the initial stages, through its formal FinCEN notice released in February. It has not made it explicitly illegal as yet, and will probably only do so if enough traction is gained to make it worthwhile making it illegal. At this point, it may be difficult to ban - due to the decentralized nature. However, let's be in no doubt that it would make bitcoin unfeasible for use as a currency in a country to say compete with the USD if a nation's government banned it.
(2) Many different theses exist regarding the feasibility of a deflationary currency vs inflationary, and the differences between them. For example, stuff has been written about the difficulty of borrowing money with a deflationary currency. However I do not think there would be any difficulty using a deflationary currency in theory. The truth is that no western world has ever operated on a deflationary currency, so it is impossible to say if it would be feasible. Whilst in an inflationary environment money lenders use positive interest rates on loans, could it be possible to use the opposite in a deflationary environment? Example: I take a loan for BTC 100, I *receive* money from the bank after the loan is taken out to compensate for the fact that when I have to pay back the 100 BTC, the intrinsic value of the 100 BTC will be a lot higher than when I took out the loan. The difference between the bank's 'interest' payment to me and the 100 BTC I pay to the bank is their profit on the loan. Lets not forget also that such discussions over deflation are very far out, right now Bitcoin is an inflationary currency.
(3) This could be the primary problem for bitcoin that is really not discussed enough, in my opinion. The fact is that in its current design, Bitcoin cannot scale to the level of the VISA network. However, some simple modifications would allow Bitcoin to scale (an adjustment in the block size limit). The difficulty is whether agreement can be reached within bitcoin to allow this adjustment (I would speculate: Yes). After this, there is the question of whether the ever increasing storage size, which allows bitcoin to keep an infinitely sized block chain on every client can be possible. Storage is not infinitely available; there is no reason why storage size should ever increase at the same rate as transactions are added into the block chain. Unless this problem can be solved, this seems to me to be the number one future problem that faces bitcoin.
(4) Bitcoins roots are unconventional, however its important for a completely different reason to what is cited in the media. Its no coincidence that Bitcoin was released into the wild at the same time as the world was in the middle of a financial crisis. Maybe Satoshi anticipated that the financial crisis could play right into the minds of speculators and could create an investment rush, just like we've seen recently. Maybe for this reason, he invented bitcoin. Technically however maybe the timing of bit coin's release could be off. Perhaps the internet infrastructure is just not ready right now for Bitcoin (because of the scalability issues - the bandwidth and storage technologies available are/may just not be good enough for Bitcoin to be feasible at the same level as VISA in the current era).
(5) I do not see how this argument could affect adoption of bitcoin. I don't think anybody (excluding speculators who hopefully may be leaving the market after the recent crash) is buying it right now because they will use it to replace their fiat currencies. They are buying it because it has complimentary uses. My feeling is that such uses will grow and continue to grow over time. Let me repeat for the time being: nobody is claiming that bitcoin will be replacing fiat. To claim this is ridiculous; funnily enough this is what the media were writing in the run up to the crash.
(6) It seems that alternative crypto currencies are gaining some attention now that more people are writing about Bitcoin. Litecoin in particular seems to have a block rate of 2.5mins vs 10mins. There is no doubt that bitcoin may lack some features of newer currencies. However my opinion is that is could be 70% fit for purpose. The remaining problems that need to be ironed out, in the form of for example shorter block rates, could be incorporated to the bitcoin software in the future. The risk with this is in the form of agreement between all parties that do business in the bitcoin community on any future changes to the protocol. Certainly a block size limit for one would be simple to change. The one thing bitcoin has that litecoin does not is a user base and public recognition. It retains a 'first mover' advantage in the crypto currency space. These things have got to be worth something.
I will now refresh the advantages and disadvantages of Bitcoin as a method of transfer of monetary value.
ADVANTAGES
- Decentralised digital payment network that does not depend on any single 3rd party; the cheapest way of transferring monetary value digitally with the highest level of current adoption that currently exists worldwide
- Thoroughly secure; has been operating globally for 4 years and 'hacked to death'
- Publicly known and acknowledged by main media (albeit with a lot of skepticism/current bad press)
DISADVANTAGES
- Operates in a legally sensitive area; vulnerable to government regulation or restriction
- Scaling challenges are present in immediate future
- Requires 'exchanges' to operate: a way to convert fiat into Bitcoin
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They could be either people willing to bring USD to the site to buy coins, or they could be all the people holding the 10 million of passive coins wanting to sell them. The second seems more likely to me.
Are you serious? That's not even a debatable scenario, that's categorically untrue. Do you think the massive amount of largely stagnant coins (mostly held by early adopters and big investors like our friend the Reptilian Overlord  ) is held by THAT many people? Enough people to fuel a 20,000 account PER DAY sign-up rate? Not to mention that the queue for $1000+ deposits is well over 16,000... There weren't even 20,000 people TOTAL involved in the early days of bitcoin. Even if you consider that a portion of the passive 10 mil is recent small holders, there STILL aren't anywhere near enough to fuel the recent boom in accounts and deposits. You, my friend, are not paying attention  1) There are not anywhere near enough early adopters/big holders/small holders to fuel a 20,000 account-per-day sign-up rate that's been going on for quite some time (you are wrong by many, many orders of magnitude) 2) Queue indicates that people are verifying for large deposits at record rates. QED: The second option (people holding passive coins logging on to sell and causing the ridiculous number of signups) is not in any way, shape, or form "more likely." Would like to see some one take another look at those locations/addresses where satoshi is alleged to have stashed all his coins, to see if there are still there or have been moved to gox. IMO someone caused this crash by selling a huge amount of coins all the way down (maybe a million or so). Gox will know, but we should be able to work it out from the BC |
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The price rise has forced a lot of media attention onto bitcoin. This in turn has led to it to be critiqued and studied a lot more. Now its strengths are more known, as well as its weaknesses. Investors will be investing based on a renewed analysis of their position in light of the better analysis of Bitcoin that have been made in the last week (its no longer just being seen as a ponzi scheme by most newspapers like it was when it was first covered)
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Just like to present an alternative thesis for what is happening today/yesterday with MtGox. There are a few addresses that can be identified using the blockchain that had accumulated a huge amount of coins, and that if they were dumped on the market it could cause chaos. Could that be what we are seeing now?
It is interested that apparently an 'unknown entity' has commanded 3 million BTCs distributed across 78,000 addresses. Im not sure if the entity still owns this many BTCs however. It would be interested to identity this person.
Similar anonymous entities (ex Mt Gox & identified mining pools) have processed: (just copying from the paper here)
940,000 BTC
870,000
690,000
660,000
630,000
580,000
514,066
500,000
479,000
442,000
...
with a further 5 entities processed amounts of over 400,000 BTC.
Source: http://eprint.iacr.org/2012/584.pdfLet me speculate that it is possible that one of these holders has decided to cash out now to reduce his risk? Maybe he could forsee future problems with bitcoin and decided to take advantage of the strong demand right now. Could the DDoS be a smokescreen for a massive dumping of bitcoin? Maybe we can look if there have been any large transactions occurring in recent days, signs of someone moving coins to the exchanges. http://blockchain.info/tx/5d9ef693d41cb3bb4c6d98e70ea8b2cc91be29a804245a06ec8761d9cddc103c |
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Well they claim they are being DDoS'd
Whether its true or not, who knows
Maybe they just saw the market crashing and decided to take the exchange offline. Then later they make up this 'DDoS' excuse.
Either way they need to sort things out soon. People are already angry....... Im sure it wont be long until law suits start appearing.
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Kevin O'Leary is the best |
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I had a SELL order at $150
I had a BUY order at $100 for 1.5 times as many coins.
Where are the coins?
GONE.
Where is the USD?
GONE.
WTF??
This is why you shouldnt use LIMIT or STOP LOSS orders or any other automated order system. Make the trades yourself |
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AAAAAAAAH PRICE CRASH!!!!!!
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Hehe. Just had to bump this thread, because i love it. SCREW YOU, BANKERS!!!!!! WATCH THIS BITCOIN PRICE RISE EVERY DAY, AND FEEL THE PAIN!! /end brief period of acting a child Damn that felt good. |
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