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The reason central banks exist is to allow fractional reserve banking to "work", with the "beneficial" side-effect of giving governments great "control" over their respective economies.
The words in quotes above are applied very loosely indeed. FRB works only because central banks can prevent bank runs by printing money (robbing savers and taxpayers). A billion words have been written about how government control of an economy tends to wreck it, rather than help it.
Bitcoin OTOH has an inelastic monetary base, making FRB honest and CBs powerless. Capitalism and living standards, freedom and personal wealth can only thrive without the cancers of riskless FRB and CBs.
For the specific problem of instant confirms companies could act as intermediaries for account holders they know and verify, charging a fee which covers the odd case when a customer defaults by double-spending with a merchant. On-line, instant confirms are not so necessary as shipping can wait.
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Is it really likely they would be able to get 200,000 computers (presumably using 99% of CPU) actually working (presumably undetected) for that to work?
See the historical list of botnets on wikipedia. Tens of millions of computers were compromised. And don't forget that the coins mined are literally free for the operator (besides the legal risk). If they are successful, even $20/day is an extra $600/month for doing nothing. Does it matter? As long as the blocks are not empty, then the botnets just add to the Bitcoin network. Shows how powerful the model is. New headline: Botnets enslaved by Bitcoin! |
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right! if you like to test the platform, check my sig  Any chance that etoro would help pressure the SIX standards agency to assign an ISO code to Bitcoin? BTC is fine for unofficial use, but it needs something like XBT in the background, preferably equal to 1 microbitcoin (100 satoshi) so that bitcoin amounts can be easily held in all the world's accounting systems. |
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Isn't this great to hear? 9flats CEO Stephan Uhrenbacher says that “interest in Bitcoin is soaring like crazy” and that the company had a number of requests from customers in parts of the world where online payment is a hassle. He also says the company was surprised by the ease of integration. “When you pay online with Bitcoin on 9flats, you can see the transaction live, it is even faster and more seamless than other forms of online payments.”
Candidly, however, Uhrenbacher adds: “Nobody knows if Bitcoin is the new future currency or just a gigantic bubble. Nevertheless it is amazing how well the concept works in practice."
http://techcrunch.com/2013/04/04/9flats-bitcoin/Much more interesting to read this article than many of the recent general news pieces on Bitcoin. |
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Thanks Peter for the detailed explanation of your position. I do understand the thrust of your arguments but disagree over a number of areas... There isn't going to be a single service that does this, that's my whole point: if you achieve scalability by just raising the blocksize, you wind up with all your trust is in a tiny number of validating nodes and mining pools. If you achieve scalability through off-chain transactions, you will have many choices and options.
...
On the other hand, if the blocksize is raised and it leads to centralization, Bitcoin as a decentralized currency will be destroyed forever.
I am already concerned about the centralization seen in mining. Only a handful of pools are mining most of the blocks, so decentralization is already being lost there. Work is needed in two areas before the argument for off-chain solutions becomes strong: first blockchain pruning, secondly, initial propagation of headers (presumably with associated utxo) so that hashing can begin immediately while the last block is propagated and its verification done in parallel. These would help greatly to preserve decentralization. MtGox and other sites are not a good place for people to leave their holdings permanently. As has been pointed out, most people will not run nodes to support the blockchain if their own transactions are forced or priced away from it. Bitcoin cannot be a store of value without being a payment system as well. The two are inseparable. It might not be sexy and exciting, but like it or not leaving the 1MB limit in place for the foreseeable future is the sane, sober and conservative approach.
Unfortunately, this is the riskiest approach at the present time. The conservative approach is to steadily increase it ahead of demand, which maintains the status quo as much as market forces permit. The dead puppy transaction sources have forced this issue much earlier than would otherwise be the case. You mention your background in passing, so I will just mention mine. I spent many years at the heart of one of the largest TBTF banks working on its equities proprietary trading system. For a while 1% of the shares traded globally (by value) was our execution flow. On average every three months we encountered limitations of one sort or another (software, hardware, network, satellite systems), yet every one of them was solved by scaling, rewriting or upgrading. We could not stand still as the never-ending arms race for market-share meant that to accept a limitation was to throw in the towel. The block limit here is typical of default/preset software limits that have to be frequently reviewed, revised or even changed automatically. The plane that temporarily choked on 700 passengers may now be able to carry 20,000. Bitcoin's capacity while maintaining a desired level of decentralization may be far higher than we think, especially if a lot of companies start to run nodes. It just needs the chance to evidence this. |
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Keiser? Bullish on Bitcoins? What is this world coming to?!  Max has a holding of 25,000 so he can be forgiven for his continued exuberance! |
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what did you expect?
I kind of expected this, because I know that even skeptics will come to appreciate how brilliant Bitcoin is when they bother to learn in detail about it. personally I'm starting to doubt bitcoin abit because it requires someone to pay for Energy forever and in increasing amounts to keep it alive Energy will become cheaper and cheaper though, so I dont think this is a problem  Energy is becoming very cheap in terms of Bitcoin. Interesting that both Oil and Bitcoin peaked at $147. Now that's  |
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Quite likely. I am really impressed too about how measly the 2011 "blip" looks now |
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..I have met with plenty of hedge fund managers and other asset managers about bitcoins over the years. A few of my favorites I go out of my way to rub their nose in it by reminding them of how much their investment would be worth if they had put $25k when I first offered them the opportunity. Currently, that figure is around $65m. And I keep giving updates on the state of the network, mining technology, Bitcoin economy, etc.
There is huge money coming into this space of financial innovation. Everyone around the valley knows financial innovation is extremely ripe for making a ton of money. Why do you think Square recently raised another $200m?
There are a ton of Silicon Valley VCs who have bought a ton of bitcoins. With the FinCEN guidance they are now investing or looking to invest in a lot of bitcoin startups and mostly in a very quiet way. I know of at least 5 startups that have received $500k+ funding within the past two months.
Wow. Fascinating insight! ..But still development is really slow. I mean when will we see major breakthoughs like trading across chains and build tools to create customs cryptos. such technologies will facilitate the development of decentralized exchanges and promotes the creation of many block-chain-tech-based software! Now this is how you guarantee Max Keiser estimations of 100k$-1m$ a coin! Don't you agree?
I am sure that $100 was a trigger for a lot of firms to get more involved. Software development by many teams will be underway for all sorts of 3rd-party services (examples above). $100k coins is 10 or even 20 years away, but a vast amount of software will support Bitcoin by then. |
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Facepalm  , Greedy people will KILL Bitcoin adoption rate. Everyone is investing in the currency and no one is investing in adopting the system . We needs shops and more development in the Tech..... sigh..... lophie, the businesses are signing up. 1300 with bitpay last month alone! http://eon.businesswire.com/news/eon/20130402006123/en/bitcoin/BitPay |
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The solution that allows for the most number of connected nodes must be the preferred one.
Whether those nodes are mining or not seems immaterial at this point as mining is already a highly specialised endeavour. There are already 'pooled' blockchain storage solutions like electrum available.
It seems to me that the blockchain storage that your average commodity desktop/laptop PC can tolerate for the foreseeable future must be the over-riding determiner of maximum block size so that the most number of transaction transmitting, relaying nodes can realistically remain connected to the network.
Miners obtain revenue from the block reward and fees. Non-mining nodes benefit indirectly: by owning a long-term bitcoin holding. No one can complain if they are left behind when they freeload. If a non-mining node wants to stay fully connected then they should be prepared to spend a tiny amount of their holding on computer hardware to achieve it. https://www.bitcoinstore.com/fantom-greendrive-2-tb-external-hard-drive.html1.2 BTC to store a Bitcoin blockchain which has 690 days of 20MB blocks in it! Not much of an obligation. |
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I just watched the video above it give a good outlines on where to improve efficiency.
It looks like Paper Money consumes just less than 1% of total GDP energy consumption. (coins obviously more) and HFT's data centers even more.
Bitcoin is less efficient that paper money when:
1) You need to scale the BTC network transactions at its current energy efficiency to that of a big states current transactions to make the claim.
2) You need to assume Moore's law doesn't apply to Bitcoin hashing (Asics won't replace GPU's and Asics won't become more efficient in the future)
3) you have to not account for the future number of transaction per block increasing. (we will always be limited to 250K or whatever it is)
4) you have to amortise your E-waist every year - (my mining rigs only lose fans so my e-waist is a lot less than the example given.)
5) you also need to assume the latent wasted heat is not used by the miners, ( this winter my heating bill was $0 as my rigs kept me warm - I have seen setups where Bitcoin rigs are used to power under flour heating.) so 50% of excess energy is not wasted just repurposed.
ASICs are already working, from at least 3 different manufacturers! Want to consider the basis for a future generation ASIC which will have extremely low heat loss and low power usage? Check out Reversible Logic Gateshttp://ieeexplore.ieee.org/xpl/login.jsp?tp=&arnumber=5715155&url=http%3A%2F%2Fieeexplore.ieee.org%2Fxpls%2Fabs_all.jsp%3Farnumber%3D5715155or http://en.wikipedia.org/wiki/Reversible_computing |
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Caller 2 was me who tried to keep talking to get as much in as I could first explaining physical bitcoins was what he was talking about was just one minor means of storing bitcoins, other options being wallets on pcs, on smartphones, on a printed piece of paper and as a brain wallet which could be carried anywhere in the world. Also (although I don't recollect using any full stops!) ...
I heard you! Listened to the LBC online feed and your points were well said. Lots of useful info for listeners except from the idiot going on about a roast-beef sandwich :-) |
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PS: this statement has nothing to do with the bitcoin price, could go up, could go down. just saying Bitcoin needs someone to pay Energy inflow continously to stay alive
 It probably takes more energy to send this across the Pacific than to keep the Bitcoin network running for a year, and there are thousands of these ships needed to keep world trade alive. |
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Assuming equivalent UIs, what theoretical advantages to your third party off-chain service provide have that zero confirmation Bitcoin transactions don't already provide?
Privacy, and the best way to achieve that, chaum signatures, is inherently irreversible and instant as well. Accepting this as true, for which you present a strong case in your thread on trusted banks, then this is indeed a complementary service which may well attract a significant user base in the future. It may even succeed in handling 90% of the transaction volume which would otherwise hit the main blockchain. Is that your optimistic scenario? However, and correct me if I am wrong, but such a trusted banking service does not exist yet. Not even in a prototype form, let alone one that can rapidly substitute for blockchain transactions. Acceptance of new services like this will take some time, at least a few years, surely. The people on this forum are ahead of the masses on bitcoin usage, yet they universally appreciate that their holding is stored on thousands of nodes worldwide. How many of us would quickly and permanently move our bitcoin holding to one single service instead of having it stored directly on the main chain? You use the word "trust", but it takes time to earn it. It has taken Bitcoin four years to earn the trust that is fueling its success today. I argue that there is not enough time left for that level of trust to be earned by complementary services before the 1MB arbitrary constant becomes as effective as any ddos attack in the history of bitcoin. Please consider this chart and let us know, in your considered opinion, whether trusted banks will be fully ready, with a proven track record, before its blue line reaches 345,600. https://blockchain.info/charts/n-transactions?showDataPoints=false&show_header=true&daysAverageString=7×pan=&scale=1&address= |
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I'll believe it when I see it. The logistics would make it extraordinarily difficult.
Only at current prices. Yes. Ironically. When Bitcoin is trading at, say $1000, and it is crazily expensive to load up, then it becomes attractive to huge funds who appreciate the liquidity of the marketplace! |
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WTF is going on with the price??? Drops to 110 and pops up to 125 every few seconds.
78.6 78.5568 117.00000 79.4 0.7999 115.11000 93.5 14.1085 115.00000 93.5 0.0500 114.25020 93.5 0.0009 114.12193 93.7 0.1500 114.00020 93.7 0.0685 114.00000 113.7 20.0000 113.75508 113.9 0.1500 113.75020 114.0 0.1500 113.50020 114.1 0.0277 113.25020 114.6 0.5000 113.01000 144.8 30.2227 113.00000 147.0 2.2300 112.11000 149.8 2.7400 112.00112 149.8 0.0011 110.95000 150.6 0.8704 110.93543 151.6 1.0000 110.50000 266.3 114.6693 110.00100 366.3 100.0000 110.00010 1189.7 823.3632 110.00000 1190.7 1.0000 109.99000 Bids are thin |
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RETURNING TO NORMAL  Peak 147, dip 110, new normal 125?? |
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