telepathetic,
not to mention that there is a (unknown and likely linear) relationship between intrinsic value of BTC and cost and presence of hashing power.
Somewhat. There was high correlation until the price crashed after gox. Now prices are half of what they were, yet hashing power has increased. that's because it was overpriced. -bm |
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telepathetic,
not to mention that there is a (unknown and likely linear) relationship between intrinsic value of BTC and cost and presence of hashing power. Thus this means that, at best we need to have a certain amount of hash power present and running in order to support what Color Coins wants to support. If this hash power fails to emerge, then you will have a huge catastrophe.
another point- why do we need to run an ASIC for every bond issued in the universe when models such as NXT remove this requirement? Then we can expand the economy indefinitely.
it goes back to the gold bug mentality. They insist that we must base our economy on gold because gold is valuable[1], however they ignore the fact that it is only valuable because we agree that it's valuable. How valuable is gold to a chimpanzee?
-bm
[1] we must base a cryptocoin on hashing because hashing is hard
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This is too bad that you're losing patience, because I was enjoying the
conversation
and he knows that- that's what's making him angry.-bm |
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Here you are admitting that Bitcoin as it stands has a significant weakness.
This kind of shit makes me just not want to post at all. No it isn't an admission like that. All security models involve assumptions. The assumption for Bitcoin is that the attacker will not gain 51% of the network hashrate and that gaining that would be prohibitively expensive. You will notice the words "I believe", it isn't "I know". An alternate security model will be a tradeoff. There is no guarantee the modified assumptions will make the network more secure. Security is ALWAYS about compromise. The system which is most secure from an attacker with significant resources would be where an absolute central authority that manages the network. No 51% is possible but you now need absolute trust in the central authority. Although it solves one problem it creates another and I wouldn't consider that an acceptable tradeoff.. tantrums aside, #1) It's been established that an attacker needs far less than 51% of the hashing power. #2) Hashing power is now a Liquid Commodity, as in it can readily trade hands. This also has the effect of reducing the price of said hashing power. Staging and executing an attack does not even require hardware procurement, the entire thing could be executed from a single internet connection anywhere in the world + a modest amount of capital. #3) the point I keep raising- the PAYOFF for such an attack is going to increase exponentially due to Color Coins, Counterparty, etc. it seems whenever anyone raises these points some people on this forum have a fit. -bm |
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An attacker with 10,000 BTC could hire enough hashing power to perform a double spend for lets say 1000BTC (probably a lot less than this in reality if miners didn't mind leasing you hashing power), the other 9,000 BTC can be double spent such that the attacker ends up with 9000BTC of cash/goods/services and 9000BTC of bitcoin. The attacker has increased in worth by 8000BTC, the miners on average have increased in worth by (1000BTC - work done producing orphaned blocks) and a lot of merchants/exchanges/service providers are out of pocket by 9000BTC.
this problem is compounded by the Color Coins technologies that carry asset notes on the BTC block chain. It's going to make such an attack practically inevitable. -bm |
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The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. more or less true. It's not just cash flows because the software also supports(and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations. When I say cash flows I mean money, not shares of Nxt. If the software "supports (and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations," then the Nxt network should earn money for that service and distribute it to its share holders. that's precisely what happens. The TX fees go to the owners of NXT in proportion to their holdings(roughly). It's a stochastic process. I suppose the way Nxt earns money is by people buying Nxt (with bitcoin for example) for the purpose of consuming their Nxt tokens to buy some service (rather than forging). This is what gives you the "E" in the P/E ratio. So if it costs $1 to issue a "virtual corporation" and that $1 gets used up (distributed across the network to forgers), then the network earned $1.
I did some quick calculations and at a 10% cost of capital (cryptos are risky), the Nxt network would need to consume about $10,400 / day in fees (for transactions, issuing virtual companies and assets, etc.) to support it's current $38,000,000 market cap.
you are quite confused sir. When we speak of P/E in NXT we're talking about how much TX fees you earn per NXT. What you just mentioned here is APPRECIATION or Capital Gains, that's not P/E. -bm |
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It is generally accepted that the market value of a commodity and the cost to produce that commodity tend to the same price in a free and competitive market. these are not concrete economics ideas, sorry. This is the gold bug mindset and as the story has been told countless times this ignores the effects of credit, innovation and imho the entire premise of civilization itself. Is man just a resource extractor? What does this have to do with gold other than gold being an example of a commodity? The cost to produce corn tends to the market price of corn, the cost to produce aluminum tends to the market price for aluminum, the cost to produce canola oil tends to the market price for canola oil. The reason is very simple: if the market price for corn is significantly greater than the cost of production, farmers will plant more corn and less potatoes to earn a greater profit. This action will increase the supply of corn, which will tend to reduce its market price, and eventually bring the profit margin for growing corn in line with other produce that could be produced on the same farm. Peter, is the market for microchips related to the cost of sand? after all microchips are made out of silicon right? do you have any more pulp fiction economics to share with us? -bm ps.  |
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I'll stick with SHA256 coins that are merge mined with bitcoins, if I'm gonna stick with with any altcoins at all. Stable blockchain is priority #1, and most alt chains are pretty iffy in that regard. (in regards to the discussion on DOGE)
I like your forum signature! -bm |
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I believe PoS could be used to raise the cost for an attacker further. To date all the concepts I have sketched out have limitations I a find unacceptable but I believe there is a solution. Imagine if someday the hardware cost to attack the network was $5B but it also required another $50B in stake as well.
Here you are admitting that Bitcoin as it stands has a significant weakness. -bm |
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That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins. The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).
how does that work? the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin. Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid. What would happen? A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit. This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly). Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800. This is what happens in a competitive free market. The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate). youre ignoring a very important point. Is a troy ounce of silver more valuable than a 5000 dollar bill? simply because it's shiny and heavy? if we can establish this balance of power without the hashing gear, then is performs the same function and thus has the same value. Ergo, NXT is valuable. QED. It is generally accepted that the market value of a commodity and the cost to produce that commodity tend to the same price in a free and competitive market. This rule doesn't apply to US dollars because US dollars are not commodities and producing them isn't a competitive free market. Nxt tokens, on the other hand, are more like shares in a p2p company than commodities. The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. What do you think the P/E ratio for the Nxt network would be today? actually that was recently discussed. Someone calculated the value at something comparable to an American savings account(cant confirm that though). It is generally accepted these are not concrete economics ideas, sorry. This is the gold bug mindset and as the story has been told countless times this ignores the effects of credit, innovation and imho the entire premise of civilization itself. Is man just a resource extractor? The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. more or less true. It's not just cash flows because the software also supports(and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations. -bm |
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The fifth most valuable by crypto by marketcap right now. Which is something.
most of the cryptocoins are pump and dump schemes. The market cap is measured by some weak function of sales, but the owners could be holding onto 95%+ of the coin. NXT is not in the above category. -bm |
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That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins. The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).
how does that work? the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin. Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid. What would happen? A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit. This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly). Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800. This is what happens in a competitive free market. The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate). youre ignoring a very important point. Is a troy ounce of silver more valuable than a 5000 dollar bill? simply because it's shiny and heavy? if we can establish this balance of power without the hashing gear, then is performs the same function and thus has the same value. Ergo, NXT is valuable. QED. -bm |
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That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins. The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).
how does that work? the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin. -bm |
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Each blockreward is 25BTC=$11,000
It would cost at least $55,000 for someone to unspend a txs that is buried 5 blocks deep.
What if Satoshi decided to move $1,000,0000,000 of coins at once?
It would take 90,909 blocks of confirmations before we could trust the blockchain again, 631 whole days.
Before then, it would still be profitable for satoshi to buy massive amounts of computers, and to build a fake chain from before he spent the money.
If satoshi did build this fake chain, it would undo every transaction.
If someone spends a massive amount of money, it leaves bitcoin in an unsecure state for a long time.
consider also that platforms like Color Coins and Counterparty can potentially make transactions that are worth more than all the Bitcoins in existence! not to mention that these are TRADES and it's possible to reverse market rallies and collapses. we're discussing this here: https://bitcointalk.org/index.php?topic=613643.msg6824824#msg6824824add to this the fact that hashing power is now a commodity that is brokered and transfered very quickly, and I don't even need to procure hardware, just rent the hashing power for a day or so(thus the estimate to execute an attack is even lower). -bm |
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These new features may seriously threaten the basic functions of Bitcoin. Disagree. what is stopping these sorts of initiatives from abusing the network? -bm |
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the payoff of an attack becomes exponentially higher. The chain could be carrying trillions of dollars in securities and such. Therefore the payoff of reversing transactions are similarly increased. This creates greater incentives, and in this age where hashing power is brokered and transferred to different hands instantly- an attack starts to appear more immanent. If NXT provides better security for assets then assets will be transacted on that network. So what is the problem again? problem for who? this would be a problem for Color Coins and Counterparty and certainly anyone who chose to invest in assets on those networks. I predict there will be a tension between those who maintain the core features of Bitcoin(and it's status as the reserve cryptocurrency) and those who are attempting to overlay new features. These new features may seriously threaten the basic functions of Bitcoin. -bm |
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to further back up my point, here are some trading stats from the NYSE. http://www.allcountries.org/uscensus/835_volume_of_trading_on_new_york.htmlso in 1999, we had daily highs of several billion trades a day. Since 2000 this has increased considerably. now keep in mind that under the current schedule for ie. Color Coins, *creating* a new ticker costs a few cents. Thus it's reasonable to expect even more than 1 billion transactions a day. I think you're ignoring the problem because you would rather attention not be going to alternatives like NXT that do have the possibility of supporting this sort of volume ... I am not ignoring the "problem". Volume on NYSE is in the billions of shares because fees are insanely low, less than $0.00004 USD (88 satoshis) per share. Any assets traded on the blockchain would need to compete with bitcoin transactions and fees will probably not be that low. If NXT is more economical for colored coins then the assets will move there so I don't see a problem either way. the payoff of an attack becomes exponentially higher. The chain could be carrying trillions of dollars in securities and such. Therefore the payoff of reversing transactions are similarly increased. This creates greater incentives, and in this age where hashing power is brokered and transfered to different hands instantly- an attack starts to appear more immanent. if the chain were suddenly thought to be inviable, what would happen to the holders of these assets? it would be an utter disaster. this problem doesn't exist in NXT because the cost of an attack scales perfectly in ratio to the cost of NXT, whereas in Bitcoin it scales to the cost of hashing power. -bm |
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to further back up my point, here are some trading stats from the NYSE. http://www.allcountries.org/uscensus/835_volume_of_trading_on_new_york.htmlso in 1999, we had daily highs of several billion trades a day. Since 2000 this has increased considerably. now keep in mind that under the current schedule for ie. Color Coins, *creating* a new ticker costs a few cents. Thus it's reasonable to expect even more than 1 billion transactions a day. I think you're ignoring the problem because you would rather attention not be going to alternatives like NXT that do have the possibility of supporting this sort of volume. Volume, network character, and processing seem to be completely ignored by Ethereum altogether. -bm |
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Actually I don't. What happened?
(And if whatever it was doing was done on bitcoin, you didn't answer my original question about ethereum)
too much transaction which bloated the chain. as many try martingale wth dice sites i think this would happen with this contract. Well there is no such thing as too many transactions. surely there must be SOME limit there. We can't be sending terabytes of transactions data to all nodes at all times. The problem may seem remote until you start to see transactions multiply by number of coin colors + whatever other sorts of trading applications and the like emerge. You can't just stick anything you want on the blockchain. This poses a systemic risk to Bitcoin. transactions don't require a limit for so long as they reflect the value of the currency. These other 'rider' networks like Color Coins don't necessarily have any relationship to the price of BTC at all and that's going to be the basic problem from which many technological issues will emerge. -bm |
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also related to the COIN_DUST episode. It raises the basic question of - what is *clever use* of Bitcoin and what is *abuse* of Bitcoin.
we're about to explore that territory and I dont think some parties are going to like the answer.
-bm
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