did you accidentally lock that thread? I really don't understand why ad-sigs are allowed here. This is something very easy to ban, so if there are people spending any time at all moderating this forum, they could do it easily. It might be that historically tipping and micropayments was thought of as a nice feature of Bitcoin and ad-sigs were a way to foster that. But the result is clearly that the forum is drowned in crap.
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a simpler way to filter:
- switch off "hide signatures" option (if you had it in on) - Put on Ignore everyone with an advertisement in the signature (or at least everyone who's not advertising their own projects). - switch "hide signatures" back on
The reason is that these people are paid per post. So of course they post crap.
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nice tools, thanks! notable pools/farms that upgraded so far: BTCChina Pool (currently 7% of the network hashrate), KNCMiner (6%) Bitcoin Affiliate Network (2%), BitMinter (1%)
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want is interesting to monitor is how many of the latest 1001 blocks have v3 mark. here's the voting scheme: when 751 out of a sequence of 1001 blocks have version number 3 or higher, the new consensus rule becomes active for those blocks. When 951 out of a sequence of 1001 blocks have version number 3 or higher, it becomes mandatory for all blocks
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Or am I not understanding your concept of magical object transfer by physical burning?
There's no object transfer.
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If the dark market has enough capital they could, in theory hold a lot of money at a reputable exchange (like bitfinex) and sell bitcoin for fiat on the exchange when they would be "long" bitcoin based on hedges.
I don't think the idea of an exchange would work via dark markets because it would be difficult to get fiat in or out
did you actually read the post? Your first point is already addressed. For the second point, in the proposal it's not necessary to get fiat neither in nor out. That's the whole point.
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Short description:
Problem: declining BTC price makes escrowed markets too risky for vendors.
Imperfect/ broken solution: Hedging. The escrow (usually the market maker) sells the escrowed BTC on an exchange for USD. When the escrowed funds are to be released, he exchanges USD back to BTC.
Proposed solution: A BTC - BUSD exchange, where BUSD is a virtual unit tethered to USD as follows. To create a unit of BUSD the market maker must provably destroy either 1 USD bill (burn it on cam) or the corresponding amount of BTC. The escrow is then hedged on this exchange.
Long description: Problem Anonymous markets (the infamous SilkRoad and its lookalikes) rely on escrow heavily. The reason is that sellers are anonymous and thus it would be too easy for them to scam buyers. The escrow is released when the buyer has received the goods, which may be days or even weeks after the transaction. During this time, the BTC price may change significantly. If BTC declines, as has been happening a lot lately, the seller suffers a damage. In reality they either have to make prices a lot higher, which cripples the market.
Hedge: An imperfect solution, that was actually implemented by the original Silk Road, is hedging on an exchange. Thus the seller has an option to hedge his BTC for USD. The market owner has an account on an exchange, where he sells the BTC escrowed. When the escrow is released, he exchanges these USD back to BTC and give these to the seller, charging a small hedging fee. The problem - for dark markets - is that this exposes the market maker to a huge risk. In fact it is hard to imagine a large market operating like this without a possibility to be detected; whichever way they try to hide their activity, it'd be too different from a typical trader, and would stand out.
Proposed solution: What if there was a completely virtual exchange, but for fiat currency? While this is impossible, it is possible to get close enough to this for the hedging purposes. The market maker simply creates a virtual unit, let's call it BUSD, and opens an exchange BTC for USD. Like USD, BUSD is a centralized currency, which is issued by the market maker. However, unlike the USD issuer, we want the BUSD issuer not to be able to print as much BUSD as he wants, since otherwise it'd be hard for the market participants to trust him to keep the supply in check. In order to constrain the supply, the BUSD issuer is required to provably destroy a unit of USD for each unit of BUSD he issues on the market. This can be done either by burning the bills or by sending the corresponding amount (using the exchange rate at the time of sending) to a black-hole BTC address. He then creates as much as needed this way and sells it on the market for BTC. There will be buyers, since there is a need for the escrow hedging, and the supply can be as small as needed to keep the price in check. The price of BUSD will then be kept close (slightly above) to 1 USD for BUSD by the market: shall BUSD become too expensive, the market maker can issue more and sell (for a profit). Shall the price decline, he can buy back some with the BTC he has in reserve from having sold the BUSD. Clearly he can also charge fees
What remains to construct is a mechanism for auditing the exchange, that is, to proving that it is not selling more BUSD than he had issued. The simple way is what is already used in the BTC world: the market owner publishes the list of all balances. This should add up to the amount burnt (for which there's proof). If any participant notices that his balance amount is not in the list, he will shout out loudly, denouncing the fractional reserve.
Finally, several markets can unite to create a "burnt dollar" exchange, using colored bitcoins as a token for BUSD, and making the exchange independent from each individual market, thereby protecting the hedged funds from any of the markets getting shut.
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Except that if a single person is trying to buy ALL the available mining power, this would be a huge increase in DEMAND.
not all, but one half. The half that was switched off and that is not worth switching on, so its cost is near 0. Furthermore, the equipment that is available to purchase will be the most inefficient (and therefore most expensive to actually operate).
assuming the mining market was in a state of equilibrium, all the running equipment would be equally efficient You are mistaken. In order to successfully perform a 50%+1 attack, the attacker would receive 100% of the new blocks during the attack.
Therefore, the attacker would gain 1/2(2k)(BR) in revenue. Theoretically, if the attacker wasn't running inefficient equipment, this would exactly offset the 1/2(2k)(BR) in operating costs.
This is already accounted for in my calculations. I think what you are missing is that the cost of running the equipment is that from before the halving, but the rewards are halved. 50%+1 attacks are a common concept re-introduced by people that don't take the time to consider all the ramifications. It's been discussed in hundreds of ways. You made some mistakes in your calculations, and you made some very unlikely assumptions.
I think the only new part in my post was to consider the 50% attack near block reward halving. The rest is indeed well-discussed
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bumping this.
any news? bitcoin-24.com now redirects to some online gaming site.
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This is quite hard to answer, and easy to be biased as well. I think the word "gold" may be a bit confusing. I mean, "cash" is already in the title so some variant of "hmm it's virtual cash" was in the mind of everyone who read it. Probably a clearer would be "did it cross your mind that hashcash has an advantage over actual cash, which is in its decentralized issuance." Then I'd answer "no," because I don't remember thinking about problems with fiat currencies at that time. (I did know about hashcash before bitcoin though.)
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...
In an inefficient market, the mining rental cost becomes the same as mining revenue, so this scheme almost doubles the attacker's money.
...
I think this is and interestin idea. However, while I find it easy to agree with the quoted assumption when we are speaking about small amounts of hash power, once it's about half the network it becomes dubious. No matter how efficient the market is, if you want to buy half of all the supply you'd be moving the price a lot. That's why my original argument involves a mojor external event: block reward halving.
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nice story, good usage examples.
Last august I got stranded in Rio with my CC blocked. I couldn't find a localbitcoin contact to exchange some BTC quickly enough. I had to ask someone to send me a WesternUnion transfer, which resulted in a ~50USD markup on a 500USD transfer. *And* I had to spend like 40 minutes queueing for that: there are lots of people receiving WU in Rio. A large audience still to cover for bitcoin.
Anyway, bitcoin would be so much better, but, in my experience, the penetration level is not enough to make it reliable for travel. Yet.
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reminds me of bitcoinmonitor (if I rmember correctly the site's name). That one was also showing trades on major exchanges (or may be there was only one at the time), pulled from their API.
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[not sure if this is technical enough, but I find this subforum more sensible. If the mods find it too light, please feel free to move to the general discussion]
Assume that, close to the block reward halving, the following conditions hold: 1) mining technology is saturated, so that no significantly improvement in efficiency happens nor is expected to happen soon 2) the price is relatively "stable" and no major jumps are expected soon 3) tx fees make for but a small part of the block reward
As a consequence, miners operate on a very small margin, spending most of the reward on electricity.
Then after the block halving, mining profitability nearly halves, and many miners have to switch off their equipment. The equilibrium is reached when half the miners switch off.
The market of mining equipment is over-supplied, the prices drop to almost zero. Thus one can buy all those switch-off miners - that represent half the network hash power- for a very small cost. I don't know what's "very small" (there are always at least shipping or acquisition expenses to consider), but let's just call it N for now.
Assume an attacker acquires all this equipment. Now that he has 50% hashing power, what's the cost of running the attack?
Let's say he wants to mine k consecutive blocks. With 50% power he should expect to wait 2^k blocks before he gets these. Running half the network for that long costs (since we assumed miners operated on low margin before the halving) 1/2 2^k BR in electricity where BR is the block reward before halving. Since during this time he also gets half of the new block rewards, the total cost is 3/4 2^(k-1) BR + N
Putting some numbers here: current BR=25 BTC; we can take k=6 (now some big exchanges accept as little as 3 confirmations, I guess all the big ones accept less than 6), we get 3/4 * 800 BTC + N. Now given the discussion above I think it's not unreasonable to assume N<200BTC, bringing the total to 800BTC.
Note that the last time the block reward halved, assumptions 1 and 2 were not satisfied, while 3 was. Next time 1 and 2 are quite likely to be satisfied, and 3 is satisfied currenlty. One can also calculate waht is the effect of the tx fees; but it's easy to see that for it has to be of the same order as block reward to be significant.
what do you guys think? Did I make any major mistake in this calculation? Has this been discussed and dismissed before?
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you could also just use a traditional laundering site such as bitmixer.io, bitlaunder.com (my site), or bitcoin fog .. why bother with anything else?
In the meantime it is probably safer to simply exchange ones coins back and forth between different alts on a trusted exchange to mix them if needed. funny that people keep mentioning this. You don't have to exchange your coins to alts to use the mixing "feature" of exchanges. All you have to do is to deposit .... and then withdraw. This is all. This is also why you don't need any of those specialised mixing services; besides, those have smaller volume and, on average, are more likely to be scams. (Of course the latter remark does not apply to Darkwallet or any multisig mixers; only to "collective wallet" mixers that rely on trust.)
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the address 1JEC8vYP9cEDSu6N6DXkkYd3RaeWAdsCqN, that provides most of the input to this tx, has itself recieved many inputs marked as "bitstamp audit" on blockchain.info
So this is most likely bitstamp moving its funds around [spoiler] or their cold storage being hacked [/spoiler]
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why not swap on tera exchange?
can you give some more information about this? That's the first time I hear about this exchange. The only sane conclusion is that OKcoin itself and a few big friends are able to offer swaps. BTC/LTC being loaned are probably clients assets and part of CNY might be clients fund. That is how they make big money...
Right, that makes sense. After all, they have to be making money *somehow* - and with 0 fees it seems difficult.
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its about who lends the money/btc. on bitfinex the traders/users lend out money/btc.
exactly. Saying that I have lent coins out for some time on finex this year but took them off recently when the rates fell below a useful level.
That's what I did as well. Now I'm looking for other platforms to lend coins on.
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bump? c'mon, speculators, I'm sure some of you know.
more investigation from me: BTCChina allows you to "loan" funds, but does not (as far as I see) allow you to lend funds. This means they are lending out themselves. Weird (or rather: smells of fractional reserve).
Interesting, they could be pumping the price with fake fiat. Thank you for the information. as far as I understand, they are lending both fiat and BTC, so the argument works both ways. I agree that it makes one thinkg of fractional reserve though/
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