There is a massive wealth transfer opportunity with bitcoin today and that is being recognized by more and more people, greed will protect the project. Bitcoin has the capability to introduce a wedge between the individuals who make up the ruling institutions and the institutions themselves. Those institutions are only as powerful as their ability to promise the people who work for them a better deal than they could get anywhere else. The name is intentional, DarkWallet is created to be radical.
Something which draws less attention probably would have been wise....too late now. Actually quite the opposite. Radical is the winning strategy. Remember that "government" is just a word - there is no monolithic entity with that name. Instead, there are a large number of individuals who all have their own individual goals and motivations. The extent to which they cooperate to enforce certain policies on the rest of the population is a function of how well their individual goals and motivations align with the goals of the organization itself.Regulators can't stop Bitcoin any more than the RIAA could stop P2P file sharing, so there's no need for Bitcoin users to self-censor out of a misplaced hope that doing so will protect them. Every time regulators attempt to stifle Bitcoin and are unsuccessful, Bitcoin will gain more credibility and more users - and very importantly many of those users will be "defectors" from the government side. As governments are finding themselves unable to stop Bitcoin, their organizations will slowly start to fill up with Bitcoin users. Identifying the positive feedback loop in this scenario is left as an exercise for the reader.Provoking conflict with the regulators is, in fact, the best thing that can happen for Bitcoin in the long term. |
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and if the transaction fees decrease (as a result of block size increasing) The average block size has been increasing for six years. Has the average transaction fee revenue increased or decreased over the same period? Is there anyone in favour of small blocks who has the slightest bit of intellectual integrity whatsoever?  |
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Doesn't matter anyway. I'm going to release 250KB coin and blow everyone out the water. If 1MB is better than 20MB, then logic says 250KB must be better than 1MB, right?
Brace yourself, 0.5tps here we come...
Ah, so it's like homeopathy. I should've known better. If fewer transactions is better than more transactions, the why allow transactions at all? Just mine coins and let them sit in the same address forever, like Yap stones. Bitcoin can just be a perfect store of value due to its inherent... um.... bitcoininess. No need to actually transact with it at all. |
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All it takes for transaction fees to go down to ~zero is a benevolent or a malevolent miner occasionally accepting 0 fee transactions. ...and we know this is true because transaction fees have already gone down to zero. I mean, if we had objective empirical evidence that transaction fee revenue was positively correlated with transaction volume over a six year period that might be a different story... |
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I see. The 1MB and 20MB nodes will still be connected, not separate. I don't like the sound of that.
I guess the bet would be just hold tight and not send anything till it all settles down. What it means is that the odds of a speculative attack on the large chain has a low probability of success. Also, due to the nature of the attack, somebody who starts one and fails suddenly ends up poor. It's a trigger the attacker can only be sure of pulling once. |
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If you had say 100 coins before the fork, afterwards you will have 100 in the 1MB chain and 100 coins in the 20MB chain.
They will be separate chains but not compatible. For example, I cannot send bitcoin to the litecoin chain they are incompatible.
It will not be trivial to end up with separately-spendable coins on both chains. At first, every transaction broadcast on the 1MB network will be a valid transaction on the 20 MB network. In fact, there would most likely be many nodes listening to both and intentionally relaying transactions from the 1 MB network to the 20 MB network to make sure they get included in both. In order to double your coins, you need to get one transaction mined in the small chain and a conflicting transaction mined in the large chain. It's a race with a low probability of success. |
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Part 2. Comments welcome.
So what you're saying is that the burden of proof is on the people citing that paper to prove its applicability to Bitcoin, since the authors didn't do it for you. |
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Good paper.. The Economics of Bitcoin Transaction Fees: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519We study the economics of Bitcoin transaction fees in a simple static partial
equilibrium model with the specificity that the system security is directly linked to
the total computational power of miners. We show that any situation with a fixed
fee is equivalent to another situation with a limited block size. In both cases, we
give the optimal value of the transaction fee or of the block size. We also show that
making the block size a non binding constraint and, in the same time, letting the fee
be fixed as the outcome of a decentralized competitive market cannot guarantee the
very existence of Bitcoin in the long-term... Which part of the paper validates whether or not the model they chose to examine is an accurate of the present or future operation of the Bitcoin network? |
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So, if it catches on as a proper currency, rather than as a store of value, then, by definition, the rate of increase in the quantity of goods and services purchased will outpace the rate of increase in the supply of Bitcoins. Thus, the available quantity of Bitcoins per each unit of output will be falling causing deflation. And why is this a problem? Because even if all prices fall at once, people’s debt will not and a chain reaction of insolvencies will hit us, causing the worst fate of any market economy: Debt Deflation. Think Great Depression here in the United States, or Greece today The more the thieves and parasites hate on Bitcoin, the more we know it's the right solution. |
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That's an interesting line of reasoning.
It suggests that Bitcoin can only succeed if no such attackers exist. Bitcoin can only succeed by growing larger than all attackers. "Growing" implies a stage of being smaller, at which point such attackers can and will destroy it. How can anything grow if it is already destroyed? I thought I already answered that. http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/The good news is that the largest and most dangerous attackers tend to be slow (compared to the pace of software development) to believe that a threat exists, decide on the correct response to neutralize the threat, and effectively execute the response.
The bad news is that Bitcoin’s inherent speed advantage is diluted by people who oppose growth based on the mistaken belief that smallness is an effective defense. |
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That's an interesting line of reasoning.
It suggests that Bitcoin can only succeed if no such attackers exist. Bitcoin can only succeed by growing larger than all attackers. |
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If there exist entities that both care about Bitcoin and want to end it (and have sufficient motivation and resources) ...then they will succeed, and there's no technological solution we can implement that will stop them. There is no substitute for growth as a defence against such attackers. |
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If this limit increases faster than than the interest in spending money for transactions then it will kill Bitcoin. Bitcoin has survived for 6 years without the block size limit effectively constraining the block size, why will this established pattern suddenly reverse if the limit is maintained high enough to not constrain the block size (or removed entirely?) It has to cost quite a lot to do transactions. If it doesn't there will be too little interest in mining, and a 50% attack will be cheap. That would certainly be the case, if multiplication didn't exist. Fee revenue is (number of transactions) * (transaction fee) Because of the magic of multiplication, having high transaction fees isn't the only way to have high fee revenue. As a matter of fact, the producers of every product and service in the economy (except a few minor corner cases) maximize their revenue by increasing volume, not price. The reason they do this is because competition works to drive prices lower over time. Bitcoin is subject to competition, therefore attempts to maximize fee revenue by restricting supply will fail. |
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well, a hard fork new chain gets started with x hashing rate. blocks are 10 min apart, just like they were with Bitcoin back in 2009. any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty. we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes? At the point of the fork, the difficulty has already been set based on the entire network's hash rate. Miners have to choose one fork to mine. If half of them go one way, and the other half goes to the other fork, then both forks are mining at with difficulty at double the value it should be, so both forks will experience 20 minute block times until the next difficulty adjustment. If the split is 70/25, then the smaller chain will experience 40 minute block times and the larger chain will get 13 minute block times. |
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Thanks for writing that. It finally clears up what you've been talking about. Just curious, what are your thoughts about how price discovery will deal with Bitcoin price fluctuation?
Bitcoin exchange rate fluctuation would be no different than any other factor which will affect the price of various services on a day-to-day basis. Suppliers of services will not do so very long at a loss, so they'll only accept prices that don't work out to be a loss for them. That basically means that fees would adjust automatically to exchange rate changes. |
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I was already assuming a perfectly idealized p2p network that had no overhead or sub-linear scaling. I've done as much to explore the space of efficiency gains in this kind of system as any two other people combined here, come on. Please don't try to play off that I don't know how the system works. What I mean is that your perfectly idealized p2p network is still wrong. A more detained explanation is forthcoming. This is the explanation to which I was referring: http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/ |
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Tim Swanson (@ofnumbers) is particularly bad about taking these absurdly narrow views and spitting out blog posts full of "analysis". You misspelled "concern trolling". |
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Cyprus did not cause the April 2013 rally. I don't know why everyone thinks that... Also, Greece isn't going to impact bitcoins price.
correct. I keep pointing it out myself, but people don't listen to reason a lot these days. Why do people call it an April rally? It started in January and ended in April. |
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