This fee is needed because of something unusual about the situation in which you have placed yourself. It is possible to have no compulsory fees, but it's also possible to create a mess and have to pay someone to clean it up.

Your argument, "bad security is better than no security" is not generally accepted.

http://selberg.org/2006/09/11/only-thing-worse-than-no-security-bad-security/
http://dotfuturemanifesto.blogspot.com/2006/05/bad-security-is-worse-than-no-security.html
http://www.secure-itnet.com/security.html
http://www.securityspot.info/node/9

There have also been quite a few posts in the forum explaining specifically why bad wallet security is much worse than no wallet security.

The whole point of bitcoins is that there is no central authority. If you're looking for a solution inside the bitcoin system, there is none. That is the whole point.

If you're looking for a solution outside of the bitcoin system, there may be one. For example, you always sue the person who ripped you off. You can expose them as a scammer in public. You can warn others.

But if you sent someone bitcoins, there is no mechanism to dispute or undo that transaction. This is what makes bitcoins useful.

I made that argument about 10 places in this very thread. But just in case you somehow missed them all, I'll repeat some of them for you:

"A pool hopper does benefit at the expense of other miners."

"That is nothing like a mining pool where many miners believe their interests are aligned."

"If you left the pool because you want to shift a disproportionate share of the work to the other miners, only to re-enter it when you claim a disproportionate share of the profit, that's bad faith. That's abusing the system to get a share greater than your fair share at the expense of your fellow miners."

"Pool hoppers see it as a competition to get the most from the cake. Other miners believe that it's a cooperative. That's the problem. If everyone understands it's a competition, that's fine. But otherwise, you expect that the guys on the same team as you are playing for the team, not themselves."

"Entering a profit-making cooperative with others when times are good, taking a disproportionate share of the profit earned by the work of others, only to desert the cooperative as soon as hard work is necessary to make more profit, with the intent of re-joining the cooperative as soon as the hard work is done in time to get another disproportionate share of the profit is an inherently unethical practice."

It is not the hopper's fault that there are miners who submit shares with low EV. It is, however, the hopper's fault that there are miners who submit a disproportionate number of shares with low EV. That wouldn't happen if there were no hoppers. (Unless you had some kind of crazy reverse hopper who specifically chose to disproportionately submit shares with low EV.)

They are forcing you, because someone has to sell shares to the pool for cheap or the pool will stall. And the hoppers aren't doing it. They don't force any one particular person to do it, but they force someone to do it. (Or the pool dies.)

Every agreement between two human beings has an implied component that the two people are dealing with each other in good faith. If two people enter into an agreement, there is no need for them to say, "By the way, are you okay with me ripping you off and lying and cheating? Is that cool?" Of course they implicitly agree that this is not cool That's how agreements work.

No, that is not true. They exist and they are legally and morally enforceable.

I don't know what you're talking about. Are you saying that you don't think contracts include an agreement to act in good faith and deal fairly?

I'll keep saying it as long as people actually don't understand that every agreement includes an implicit agreement that one is dealing fairly with the other party. This is recognized by pretty much every legal and moral system on the planet.

If this was not the case, every single agreement or contract would have a phase where people say "do you agree that you are negotiating in good faith, dealing fairly with me, and intend to comply with the agreements and not find some technical way to weasel out of them" and the other person would say "yes". That would be a pointless waste of time. (And otherwise, people would have to carefully read every page of every agreement lest some dishonest person sneak a word or two into a harmless-looking phrase that destroys the entire point of a contract. That would also be both inefficient and intolerable in civil society.)

Please take the five minutes to actually read this:
http://en.wikipedia.org/wiki/Implied_covenant_of_good_faith_and_fair_dealing

As I explained, pool hopping breaches the implied covenant of good faith and fair dealing between miners.

That is incorrect. The pool really does offer less for a share because of hoppers.

The expected payout per share is based on how many shares have already been accumulated towards the current block. The lower that number, the higher the payout per share. Now, consider a pool's hash rate. The more pool hoppers the pool has, the more the pool's hash rate will go up when there are fewer shares accumulated and will go down when there are more shares. The share count resets to zero when the pool finds a block, which is determined only by the average hashing power. So more pool hoppers means more of that average hashing power comes out at low share counts and less at high counts. This means the pool spends more time at high share counts than it does at low share counts.

For a non-hopping miner, the average payout per block is solely depending on the average share count. This goes up with more pool hoppers because the hash rate goes down when the share count is high, leading to more time spent at the higher count.

I do see a lot of defense of pool hoppers based on misunderstandings of the mathematics. The analogy to coal miners sharing a vein is apt. The more mine hoppers in this case, the less time the miners spend mining a vein (because there are more people mining then, so it goes faster) and the more time the miners spend trying to expose a new vein (because there are fewer people mining then).

I guess it depends on what the meaning of the word "is" is.

Supply is only half of what determines price.

If the point of your analogy was to show that it's possible to make arguments that are similar to mine that are invalid, congratulations, you did that.

They're the same as every other implied agreement, good faith and fair dealing.
The implied agreement is always the same -- good faith and fair dealing.

http://en.wikipedia.org/wiki/Implied_covenant_of_good_faith_and_fair_dealing

The value of these coins is so close to zero, it's really not worth fighting over. If you're bummed you didn't get as many as you expect, wait until an exchange opens, spend $1,000, and buy a buttload of 'em.

When the Ixcoin exchange opened, someone bought 230,000 coins for around $1,100.

Suppose there are a group of real miners, say coal miners. And they have a bonus system, people get paid not just a flat fee for hours worked, but they get extra money based on how much coal is found.

Now suppose you have a guy who discovers that a mine has just found a big coal vein. They'll mine lots of coal and it's easy work. He joins the miners and mines alongside them, reaping a share of the rewards. As soon as the vein is mined out, and the other miners get ready for the hard work to expose a new vein, he quits. He joins up with another group of miners who found a vein. More importantly, this was his plan from the beginning -- to join when profits were high, and leave as soon as the hard work had to be done.

He gets a higher share of the bonuses relative to the work the other miners have done. And, more importantly, he is supposed to be on the same side as the miners. They're supposed to be cooperating workers working the same mine with aligned interests, not predators taking advantage of each other. That is, he breaches the implied agreement to mine in good faith and contribute fairly to the group but instead exploits the group to earn himself a greater than fair share, leaving the group in the lurch when times are tough.

Now, tell me, do you not see anything unethical about that? And, if you really don't, how can I be sure to avoid dealing with you?

The block rate is approximate and will be *way* off if the total network hash rate is changing rapidly.

I think you're solving the wrong problem. Most of the time is not spend downloading the block chain but processing it. Take a look at your CPU usage.

For the record, the scam has *nothing* to do with the pre-mined coins. That's a ridiculous red herring. At one time, you could have had ixcoins equal to the total number of pre-mined coins for under $1,000. The ixcoin founders probably spent that much hiding their identity and buying ixcoins to make a market. (In fact, I'm pretty sure I watched them do that.)

The early adopter argument doesn't apply to ixcoins. If you assume ixcoins won't succeed, then it makes no difference who adopted them early -- a large number of worthless coins is only slightly less worthless. If you assume they will succeed, then you can still be an early adopter. You can purchase 100,000 Ixcoins for about $1,000 right now. So if you believe the initial miners or early adopters got an unfairly good deal, you can have that same deal. Not interested? I didn't think so.

The scam is that they add *no* value to bitcoins whatsoever. Ixcoins have no conceivable value beyond speculation. There is no realistic reason anyone would ever adopt them as a currency over bitcoins. Or at least, if there is one, I sure as heck can't figure it out.

That is, the *only* conceivable reason to value Ixcoins is that hope that others will value them more greatly in the future. And the only reason they would ever do that is that someone might value them even more highly further in the future. This progressively increasing value is borderline inconceivable. On the other hand, bitcoins are gradually acquiring value as a medium of exchange, and if a cryptocurrency does become mainstream, the most likely candidate right now is bitcoins. So there's a realistic prospect of real future value anchoring the speculation.

The whole purpose of mining is to secure the transactions. Any algorithm that didn't secure the transactions, including the coinbase transaction, would be useless.

Factoring a number could be used for proof of work, but the number would have to be based on the previous block's hash and the hash of the transaction tree. So the point is, you could use factoring for your proof of work, but you couldn't choose what numbers you had to factor -- the transactions and the chain would have to do that.

In that case, the difficulty would be how big the smallest factor had to be -- otherwise, you could just work to get an even number and divide it by 2. In fact, you could drop in factoring as a replacement PoW algorithm. You'd hash just the same as you do now, but instead of looking for a low hash output, you'd look for a hash output you could factor but such that the smaller factor exceeded the difficulty. Verifying the proof of work would include making sure that neither factor was smaller than the difficulty and that the smaller factor was prime. (Otherwise, it's too easy.)

It's not worth the effort of educating you on the relationships between words and concepts just to make a point about pollution and the free market. Should you at any time stop pretending not to understand how language works, I'll be happy to try to have an intelligent conversation with you.

No, not at all. This is not a refutation of any one particular claim. Let me clarify, I am not saying this:

There is a very specific definition of "pollution" and a very specific definition of "worse", and for those definitions, a free market will not make pollution worse.

That would be an incredibly weak claim, that would not respond to the very point I was trying to respond to when I made that claim. In fact, I am making a much stronger claim. More specifically, it goes something like this:

For any sensible definition of "pollution" and for any sensible definition of "worse", a free market does not make pollution worse.

Now, this is the ordinary meaning of words anyway. This should be default interpretation. Normally people do not make claims that rely on ultra-specific definitions of words. They apply broadly to the cluster of concepts the word indicates. I am here using those terms in the normal way. By "pollution", I mean the entire cluster of concepts pointed to by that word. By "worse", I too mean the entire cluster of concepts pointed to by that word.