So the price is steady around 30/31. What happens on Monday when the difficulty should be much higher and the banks are open to fund dollar accounts? Thursday-Friday the difficulty goes up. The fact that this price is holding even with the blocks coming out at around 8/hour I would consider to be a bullish signal.
Incidentally, the difficulty increase will be the biggest ever in terms of size of the increase in the number from one level to another. With block 133,056 is increased from 877,227 to 1,379,223, or 501,997 in one adjustment. This one will be over 700,000. - https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmcThe impact of what miners do with their they earn each day anymore (or do when no longer earning coins from mining) is becoming a smaller and smaller part of the bitcoin ecosystem. It's not a trivial amount, but at the same time it is not something that would impact the exchange rate a whole lot, at least not that I can see. But a 25% rise in the difficulty just offsets a 25% gain in the exchange rate that already occurred. If it were temporary, that wouldn't be that significant. Because ASICs will only be coming faster and stronger, that's probably going to be the death-knell for those who stuck with GPU mining since the halving (and pay average rates or higher for electricity). In other words, this is a significant jump in the difficulty for you as a struggling GPU miner. It is insignificant to everyone else. The difficulty has increased has increase over the last year by a factor of 4 while the price has increased by a factor of 8 or more. How is this hurting a struggling GPU miner? |
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I see a problem with this. Would not one dominant source of transactions effectively set the transaction fees? For example S.Dice would be able to set the transaction fee effectively at will in today’s market. http://blockchain.info/ |
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lets ask godaddy about bitcoin payment. tell them about namecheap!
It's true, GoDaddy got burned last time they let Namecheap out-net-credibility them, and they may be scared of it happening again. Yes Namecheap did very well with their SOPASucks promo code to take customers away from GoDaddy. http://venturebeat.com/2011/12/27/namecheap-offers-discount-for-domain-transfers/. The margins in this industry are very thin on single domain registrations so Bitcoin can allow Namecheap to be a fierce competitor against GoDaddy simply by eliminating credit card merchant fees and chargeback risk. |
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People will start adding fees into transactions.
How this resolves hardcoded limited block size versus growing transaction rate per time unit? +1 Speculators really need to take a good look at the debate raging on this issue in Development & Technical Discussion. My favourite thread is: https://bitcointalk.org/index.php?topic=1347.0;all |
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I find it strange why this has become such a big issue recently (is all the fuss just because of SD?) - the software has survived with the "mining" part of it basically being removed (was there the same amount of fuss when that occurred?) and I don't see why the large tx issues can't also be handled by other external means (whether it is done through other chains or through Ripple or off chain tx's or a combination of various methods).
Maybe I am wrong but I really think that the main point of Bitcoin is it being a decentralised *store of wealth* rather being a transaction system designed to replace all others (i.e. does "digital gold" really *need* to be transacted hundreds of times per second and if so then why have 10 minute confirmation times?).
Actually the real value in Bitcoin arises from its use as a transaction system. If I just wanted to store wealth precious metals do this very well and will likely continue to do so regardless of whether Bitcoin succeeds or fails. |
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One has a market where no matter what the increase in price the supply cannot increase, while the demand keeps increasing at an exponential rate. So in theory the price of transaction fees should rise to infinity. The more likely scenario is that Bitcoin would become a failed experiment and the market would "solve" the problem by making Bitcoin worthless.
The only thing which failed here was your logic. There will be an equilibrium between supply and demand for transaction volume. If bitcoin transactions become too expensive, people will react by making their transactions count - that means avoid unnecessary transactions or use other means to settle a payment. It's a DYNAMIC equilibrium, just like traffic on a road. People will choose the right vehicle for the right purpose. You don't take the airplane to go groceries shopping. Yet airplanes are a viable business. To use the air travel analogy. If the total worldwide airplane capacity were limited in perpetuity to the worldwide airplane capacity of 1908 (5 years after powered flight) people would not be using airplanes for domestic or international travel they would be using ships and trains instead, and airplanes would as a consequence not be a viable business. Of course the market will adapt to this artificial scarcity, by not using Bitcoin. |
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One has a market where no matter what the increase in price the supply cannot increase, while the demand keeps increasing at an exponential rate. So in theory the price of transaction fees should rise to infinity. The more likely scenario is that Bitcoin would become a failed experiment and the market would "solve" the problem by making Bitcoin worthless.
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Would a "sorry this code is out of date" shutdown for nodes that fail to update in time be "a trainwreck" or just get such nodes out of the way so those that do upgrade in time can smoothly synch in whatever the new system turns out, by then, to be?
...
-MarkM-
This depends on the time-frame. One a six month time-frame a major this could lead to serious problems. One a two year time-frame it would likely not be an issue at all. Was there not recently a time-out on a delayed change that had been implemented by Satoshi that made certain old clients obsolete. The key here is that delay could cause very serious problems because we will need to implement this with at least a 12 month delay or even better an 18 month delay or longer. |
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A good question here is what percentage of nodes are currently running versions of Bitcoin software that are a year old? Six months old?
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I just checked. We're currently at 0.7 transactions per second. If it can scale to 7 transactions per second, well, we still have a long way to go before we even start to have truly crowded blocks.
As important as this issue will eventually be, it's not worth it to get too heated about it at this point. Even when the blocks start getting crowded it's not an immediate issue, fees will simply go up a bit which is not a big deal since the transactions are currently almost free.
Based on the 10x growth of the number of Bitcoin transactions over the last year that places the issue under a year away. The problem is that it can take a year to do a hard fork properly. |
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I think I'm drifting toward the opinion that we should postpone this discussion until after we have actually hit the limit and until the spam transactions have been weeded out by rising fees.
Excellent! Hopefully we will succeed in convincing the "something must be done" crowd that actually that isn't really the case yet, but nonethess have the discussion anyway so that when it is the case the discussion will be behind us so we'll know exactly what to do. If/When fees get to $10/transaction level I think more people will agree that keeping the 1M limit forever is not going to be sustainable. Okay, that might actually never happen, since I think even $1/transaction mandatory fees will drive many users away from Bitcoin.
There would be more money available then for upgrading infrastructure, although I continue to hope that by then exchange rates will be so much higher again than they are now that sheer increase in the buying-power of bitcoins will cause no one who is mining them now and not stupid enough to dump them to have any hesitation* upgrading their infrastructure if they planned to continue mining. Those who just mine to dump are basically "shorting" bitcoins against fiat anyway so if they quit that might be a net good for us rather than any loss at all. (Bulls might be able to pick up their gear even.) I've become more and more pessimistic over time about Bitcoin's future prospects. It's not well suited for e-commerce, transactions are inherently expensive (they need huge amounts of storage capacity and bandwidth) and the anonymity aspect is debatable.
It is well suited to final settlement. Most e-commerce actually wants, maybe even "needs", to delay finality of settlement for quite some time, That might not be a trivial factor in what differentiates final settlement systems from consumer retail sales/purchase systems. Heck from time to time there is even talk of eliminating or deprecating cash even in meatspace, especially for decent-sized transactions. Come to think of it its not just talk lately, isn't cash being outlawed even in some places? It might be appropriate to get more and more pessimistic over time about cash's future - and, already, present - prospects. So I guess I can to an extent feel for you on this one but more so really re cash than re bitcoins, since bitcoins might help get us out from the crunch/attack cash is being subjected to. * Other than "spend them while they are skyrocketing in value!?!?! Woe is me!"  -MarkM- How does this address a critical part of Satoshi's post namely that this be implemented "... in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete"? |
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Isn't a huge huge amount of the increase in transactions so far attributed to what seems to be basically an app designed expressly for the purpose of artifically/frivolously spamming the blockchain with frivolous/trivial, even "dust spam", transactions?
If so it seems more to show desperation on the part of some bigger bigger bigger agenda than any real need. Especially the dust, that is pretty much an attack really, even if intended to highlight a problem existing with tiny value transactions so it can maybe be addressed.
-MarkM-
Satoshi Dice is currently paying 0.001 BTC in fees per transaction which translates into 0.03 USD per transaction. I would not call this "dust spam". What we have here is exponential growth pushing against a hard limit. This is a prescription for disaster. Arguing whether the disaster happens in four months or sixteen months is beside the point. |
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off-topic and I am sorry but I could not help myself. Why did satoshi ever stop posting visiting us?
There are many theories of this. One of them is can Bitcoin continue to function without centralized control? By leaving us he in effect left Bitcoin leaderless and that is by design. This block size issue is likely to be the perfect test since the community has no choice but to implement a hard fork. If Bitcoin survives this it will come out way stronger, there is however also a significant chance that block size issue will turn Bitcoin into a failed experiment. By the way I would not consider your post off topic at all. |
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http://blockchain.info/charts/n-transactions With a 10x increase in the number of transactions over the last year it is reasonable to say that we can reach the 1MB limit in well under a year. The point is that in order to roll out a hard fork one has to delay its implementation way into the future in order to avoid chaos in the network. It we reach the limit before anything is done it will be way too late and a massive loss in confidence will result.
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It can be phased in, like:
if (blocknumber > 115000)
maxblocksize = largerlimit
It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete.
When we're near the cutoff block number, I can put an alert to old versions to make sure they know they have to upgrade.
It is time to revive this old thread since this should serve as a wakeup call to the Bitcoin community. My question is this: What will happen first? 1) Bitcoin transaction volume increases by a factor of 4 2) Current Bitcoin clients become obsolete. |
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It has everything to do with whether the OS is proprietary or Free Software / Open Source. First RedHat Enterprise Linux is not proprietary. Ever heard of CentOS, http://en.wikipedia.org/wiki/CentOS? One of the key differences between proprietary (for example Windows) and Free Software / Open Source Operating Systems (for example GNU/Linux and this includes commercial distributions such as RedHat Enterprise Linux, those that are both commercial and community such as Ubuntu, and those that are community such as Debian, Arch, Trisquel) is that the source code is available for any to to examine and test for vulnerabilities. This places the black hats and white hats on an even footing and consequently gives the white hats a huge advantage. With Windows on the other hand certain Black hats such as the security agencies of many countries have been given access by Microsoft to the Windows source code while most of those trying to defend themselves from cyberattacks do not have have any access. The recent news reports about alleged hacking by Chinese Government Agencies or for that matter the Stuxnet Incident, http://en.wikipedia.org/wiki/Stuxnet, involving the security agencies of the United States and Israel should serve as a stark warning to anyone who uses Microsoft Windows and is concerned in even the very slightest about excessive state power and control. If you think Microsoft are going to bet their reputation on the secrecy a highly illegal agreement with the US Government to install backdoors in Windows, you sir, are losing it. Also, if you REALLY care about testing for vulnerabilities, there are things called fuzzers, plus debuggers and disassemblers to help you. No need for Microsoft to give away trade secrets just to ensure security. Software will always have bugs, and while I'd trust open source software somewhat more that proprietary software, it's not by a huge amount. I actually do not believe that Microsoft has installed back doors into Windows at the behest of the US or any other government. What they have done is to provide the source code to the security services of many countries. For example the FSB (the successor to the KGB) in Russia. http://www.zdnet.com/microsoft-opens-source-code-to-russian-secret-service-3040089481/ With this knowledge a security service can then write malware to attack companies and organizations in other countries. This creates an asymmetry where the attacker has access to the source code but the defender does not. In addition since Windows XP Microsoft has installed a "self destruct" mechanism into Windows in an attempt prevent software piracy. It is called Windows activation. Most people approach Windows activation from the perspective of the attacker "the pirate" turning Windows from a "pirated" state to a "genuine" state. But consider the reverse where an attacker "the terrorist" turns Windows from a "genuine" state to a "pirated" state as a form of cyber-terrorism against critical infrastructure. What Microsoft had done with the DRM in product activation is to create a massive single point of failure. Just ask one question how much critical infrastructure worldwide is controlled by computers running Microsoft Windows? I am not into doomsday prepping; however the most credible doomsday scenario I can see is the massive worldwide deactivation of Microsoft Windows. By the way it is not just governments one has to be worried about. http://www.microsoft.com/en-us/sharedsource/default.aspx |
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Not exactly. Windows OSs are FAR more likely that unix-based ones to become hijacked. This, however, has less to do with how it is developed and everything to do with market share. Because most people run Windows, most malware targets Windows. Additionally, many people who use computers have no computer knowledge whatsoever, and therefore don't know how to configure their OS to be secure. Most of those people run Windows. Unix-based OSs have less idiots using them, and therefore the average unix-based system is more secure than the average Windows system. +1. Exactly, it has nothing to do with OS being stolen or open source or proprietary. (Well perhaps in sense that Microsoft has used those monies made off Windows to actually make it easy to use so that more people would do it.) For example Red Hat is proprietary, and yet there aren't many viruses for it either. Nevertheless, a claim that a windows OS would contain a spambot or DDOS software, be it bought for legitimately or pirated is just nonsense. It has everything to do with whether the OS is proprietary or Free Software / Open Source. First RedHat Enterprise Linux is not proprietary. Ever heard of CentOS, http://en.wikipedia.org/wiki/CentOS? One of the key differences between proprietary (for example Windows) and Free Software / Open Source Operating Systems (for example GNU/Linux and this includes commercial distributions such as RedHat Enterprise Linux, those that are both commercial and community such as Ubuntu, and those that are community such as Debian, Arch, Trisquel) is that the source code is available for any to to examine and test for vulnerabilities. This places the black hats and white hats on an even footing and consequently gives the white hats a huge advantage. With Windows on the other hand certain Black hats such as the security agencies of many countries have been given access by Microsoft to the Windows source code while most of those trying to defend themselves from cyberattacks do not have have any access. The recent news reports about alleged hacking by Chinese Government Agencies or for that matter the Stuxnet Incident, http://en.wikipedia.org/wiki/Stuxnet, involving the security agencies of the United States and Israel should serve as a stark warning to anyone who uses Microsoft Windows and is concerned in even the very slightest about excessive state power and control. |
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To put things in perspective, this is what was happening in february 2011. Amazingly, if you multiply by 30, it looks very familiar, even the runup is at the same levels... Then broke psychological $1, consolidated for a month or so, and nobody ever saw $1 since. http://bitcoincharts.com/charts/mtgoxUSD#czsg2010-05-24zeg2011-04-25ztgSzm1g10zm2g25zvPS hope the smart guy who bought 200k coins at 0.1 is still holding. That got to be the best 20k investment ever We all know what happened in 2011. A 45% drop in the bear market followed by a 5000% rise in the bull market. So by this metric we drop to 16 USD and then climb to 800 USD. |
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The attacker better dot all the i's and cross all the t's with the MIT license otherwise the DMCA in the United States can be a very useful take-down tool. It is possible to pirate software under the MIT license and there is already a case of a successful DMCA take-down of involving software under the MIT license. The software was Bitcoin-Qt and the take-down was served against Solidcoin. https://bitcointalk.org/index.php?topic=57437.0;all This is not the first case involving of a DMCA take-down involving pirated Free Libre Open Source Software. I am aware of a case involving pirated Free Libre Open Source Software four years earlier. Having said this the GPL does provide much more protection against this kind of attack than the MIT license. |
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