MtGox isn't the only entity that cares about network speed so they don't have to give up all their income. That's the point of the assurance contracts. It says "I agree to pay, if everybody pays". If not enough others agree to contribute, the people who were up for it lose nothing.
It may be that current speeds are too high. We haven't seen (as far as I know) any complaints about successful double spends. That implies to me that inflation is driving network security too high - we're effectively wasting energy. I'd expect to see occasionally successful double spends on a network funded entirely by fees, when people misjudge how much work an attacker is willing to do.
Ok, that was the part I was missing - that no one pays if not enough is contributed. But, what happens to Bitcoin if the assurance contract doesn't go through? Miners aren't paid, so transactions can't happen anymore (or at least happen VERY very slowly, as only the idealists who don't care if they lose money on mining would continue to mine). If that were the case, people who still believed in Bitcoin might up and donate some BTC themselves to the contract, but then we're right back to where we started - the people paying the mining fees. A successful double-spend would be disastrous, and cause most people to lose all confidence in Bitcoins. I don't think it is something we should be wishing for (though I do see where you are coming from on it). I do believe the network is over-secured by a vast amount, but that is why I also believe that, so long as the number of transactions per block picks up some and people are willing to accept higher fees in the $0.25/trans range, fees can pay for a sufficient number of miners to secure the network. Again though, I don't think we need to worry about fees sustaining the miner network until we reach the 6.25 BTC/block point, because I think even 1 TH/s is enough to secure the network if all BTCs are only worth $50M. And that's going to take a number of years yet, during which a number of miner-incentivising variables may change, such as transaction volume and BTC price. I really doubt fees need to be that high. Paypal for example is ~100 tps. That is ~ 3.2 billion transactions per second. At 1% of that volume (320M transactions per second) we are looking at a transaction cost on the order of 0.08 BTC to generate current annual block subsidies. If after 5 years Bitcoin can't even sustain 1% of the transaction volume of Paypal well it likely doesn't need much protecting. I mean, that's kind of my point - this is really a useless conversation until we get closer to the time of block rewards being potentially unsuitable for maintaining enough hashing power on their own. That said, I don't think it is safe to look at Paypal and how many transactions they process, then deduce future Bitcoin transactions based on that. Bitcoin could forever be a niche method of wealth exchange. But it really doesn't matter until we get closer to the 6.25 block reward (in my opinion, anyway). |
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I'm confused... what about all of the signs that businesses post up that say "We reserve the right to refuse service to anyone for any reason". Couldn't the Jewish owner post a similar sign, and simply refuse service to the guy while pointing at it?
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heading down to Venetian in a bit, really excited to meet the bit-pay guys.
I have been playing a little BTC poker on seals, and have just been fascinated by the entire BTC idea and consuming tons of information the past few months.
Seals is the best BTC poker site for sure.  |
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MtGox isn't the only entity that cares about network speed so they don't have to give up all their income. That's the point of the assurance contracts. It says "I agree to pay, if everybody pays". If not enough others agree to contribute, the people who were up for it lose nothing.
It may be that current speeds are too high. We haven't seen (as far as I know) any complaints about successful double spends. That implies to me that inflation is driving network security too high - we're effectively wasting energy. I'd expect to see occasionally successful double spends on a network funded entirely by fees, when people misjudge how much work an attacker is willing to do.
Ok, that was the part I was missing - that no one pays if not enough is contributed. But, what happens to Bitcoin if the assurance contract doesn't go through? Miners aren't paid, so transactions can't happen anymore (or at least happen VERY very slowly, as only the idealists who don't care if they lose money on mining would continue to mine). If that were the case, people who still believed in Bitcoin might up and donate some BTC themselves to the contract, but then we're right back to where we started - the people paying the mining fees. A successful double-spend would be disastrous, and cause most people to lose all confidence in Bitcoins. I don't think it is something we should be wishing for (though I do see where you are coming from on it). I do believe the network is over-secured by a vast amount, but that is why I also believe that, so long as the number of transactions per block picks up some and people are willing to accept higher fees in the $0.25/trans range, fees can pay for a sufficient number of miners to secure the network. Again though, I don't think we need to worry about fees sustaining the miner network until we reach the 6.25 BTC/block point, because I think even 1 TH/s is enough to secure the network if all BTCs are only worth $50M. And that's going to take a number of years yet, during which a number of miner-incentivising variables may change, such as transaction volume and BTC price. |
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Someone should mix it up a bit and go with 0.0124.
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Glad to hear things are going well so far!
Any direct sales of BTC to people at the show?
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I still don't understand why anyone would contribute. I understand that exchanges have incentives to continue operations, but if they can't cover the whole reward amount themselves, they may as well give up. Trying to get a bunch of companies contributing in shares more or less equal to their marginal benefit from miners protecting the network is just going to be a mess. Besides, you'd get stuck with a bunch of freeloaders who didn't contribute anything.
Also, even with 200k BTC/day volume, MtGox only makes 2,600 BTC/day in commissions. That's less than 1/2 of the current block reward. No way they're going to give up even close to that amount in "rewards" to the miners.
Sorry, I just don't see your theory working well. It is still a bit confusing to imagine exactly how it would work to begin with though, so maybe I am missing some key details.
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Do you know if those will automatically convert to USD upon application to a US iTunes account? Or can the two currencies not intermingle?
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I'm interested in the iTunes... how small of an increment can you sell?
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I'll just agree to disagree with you FlipPro. We have different political views, and that's ok.
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For what it's worth though, I will vote for RP if he's on the ballot as the Republican candidate. But it's not right to say that anyone who doesn't vote for him shouldn't be using Bitcoin.  RP is a clown SGT, and his supporters haven't done much to change that. They just make it worse... He's better than any of the other politicians running. Agree about the supporters... there's extremist supporters no matter what candidate you look at, but RP's are of a special variety.  |
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For what it's worth though, I will vote for RP if he's on the ballot as the Republican candidate. But it's not right to say that anyone who doesn't vote for him shouldn't be using Bitcoin. |
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I like coinpaks myself. Simple name, simple domain, kind of get a free ride off the moneypak name... it's good all around.
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No twitter here... unless there's a way to tweet without a twitter account?
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Then you should stop using bitcoins. You are a hypocrite statist who believes in anti-freedom. You have no business using market evolved money based on freedom and decentralization. This is what Ron Paul stands for, and this what bitcoiners should stand for aswell.
Isn't telling people what to do the opposite of freedom? Just checking. |
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All those models assume a system whereby fees are attached directly to transactions.
In the assurance contract model, people with an interest in network security club together to directly incentivize mining by creating transactions with nLockTime set to a future block number that contain only fees (output values of zero). For example, exchanges have an interest in secure, irreversible transactions because they could lose a lot of fiat money if a Bitcoin transaction is reversed. But MtGox/Tradehill/etc don't want to be the sucker who funds network security for everyone. By forming an assurance contract, the mining incentives only kick in once everyone has contributed. There are some nice contract protocols that allow you to do this in a zero-trust manner.
At that point, all you need to be included in a block is a fee that is slightly higher than the cost of verification, which is so close to zero that I doubt any miners will seriously bother to enforce it.
The level of network security would stabilize at whatever level the participants who care about security need.
Can you explain more about how this would work? What do you mean by "everyone" contributing? How is it determined who has to contribute and how much? |
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Next year miners should rise prices twice because of 25 bitcoins per block. Explain your reasoning here. Why would miners minting fewer bitcoins per block (not per effort - that's insulated from price by the Difficulty) drive prices up? It's kind of a risky assumption to make, but given that price is based on supply and demand, a cut in supply will increase the price. But you're right - the difficulty, and the fact that miners can stop mining whenever they feel it is no longer worthwhile, keeps the price from rising solely due to the cost of mining. I want to see someone with $100M guarantee to buy Bitcoins at $4.50/each forever. I wonder what sort of confidence would be given if such a guarantee was in place?
Price floors have their own disadvantages. Such as? If the real world utility of bitcoins places their value at something like $3, then a $4.50 floor price supported by one individual is harmful to bitcoin. No one except the $4.50 supporter would want to buy one. All new bitcoins end up in one person's hands, who obviously won't be happy to sell them off cheaper to someone else. It all depends on how the market reacts. Will it think 'great, someone is supporting at $4.50, so I'm confident to use bitcoin' or 'there's some sucker out there willing to pay a lot more than everyone else. Sell!' It's ironic that some people are dreaming of benevolent price manipulation when the whole point of bitcoin was that no one entity can grab control of bitcoin. This forum is littered with old posts such as 'BTC can't fall below $X because mining cost is $Y', and the market has provided follow up proof that such assertions are always false. Ok, fair enough. |
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I would argue the value of the clicks from DailyBitcoins is no where near the value of the clicks from these forums. The mindset of the userbase is completely different.
That's what I was thinking. For a comparison, one would need a highly comparable website in terms of numbers. ...except that while using my iPhone, I have accidentally clicked on those ads dozens of times with my big fingers so I think we can assume not every click was legit. I think that most ad clicks are accidental Hehe, +1 to this! EDIT: BTW Macintosh, thank you much for posting your results! |
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