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6221  Economy / Economics / Re: demurrage instead of fees on: February 24, 2011, 03:21:17 PM
In a highly competitive market, transaction fees, and more worryingly, the network's hash/s, will converge towards zero. 

This is because a miner who discovers a new block only has to pay for the cost of proof-of-work, not for the cost of bandwidth and storage associated with that block. 

That cost is carried collectively by the rest of the network. Including transactions with zero or near-zero fees incurs practically no additional cost to the individual miner. 

So far, I don't think anyone has come up with a solution for this tragedy of the commons. 


I don't agree with your viewpoints here.  Transaction fees are and will be a market.  Currently the market price is zero, pricely because network data volume is relatively low, and therefore the cost to the network is almost zero.  There are some limiting factors on the growth of the blocks, however; both intentionally in software as well natural limits due to scale of the network.  As the transaction volumes increase, the average fee will also increase dynamicly.  Some people will be trading in a manner that requires that they get rapid verifications for the transactions, and they will need to provide higher average fees to encourage miners to include their transactions.  Others will be trading or donating in a manner that does not need quick verifications, such as a trade with mutually trusting parties, donations to a charity, or very small purchases; these transactions will not pay transaction fees nearly as high, or not any fee at all, due to the fact that they can wait for days, even weeks, for inclusion into a block.

Nor do I agree that this is a commons situation.  If it were a commons, there would be a resource that can be extracted, without additional costs to the node, without any practical limits; which is not the case here.  Every node must contribute to the overall network just to participate, but not at an equal amount.  In the future, some nodes will be 'lightweight' clients that receive full blocks, but then trim their blockchains for their own needs, keeping only the 80 byte headers to verify transactions that relate to their own trading activities, but neither generating nor maintaining full time network connections.  Also, 'ultra-light' clients that keep no blockchain of their own at all, and depend upon network connectivity to a trusted provider capable of verifying transactions on their behalf.   Neither of these two types of nodes contribute much to the network, nor do they require much; but they give what they get.  Most users will likely use such lighter clients in everyday life, and the majority of the network will be supported almost entirely by the generating clients and other full clients whose owners have their own reasons to participate in the network as a full node, such as bitcoin 'banks' like Mybitcoin.com and verification services for the 'ultra-light' clients.
6222  Economy / Economics / Re: demurrage instead of fees on: February 24, 2011, 02:57:40 PM
If the demurrage rate was small enough, then it might work, but it would be no different in practice than the fees system.  Either way, the over-parity bitcoins end up in the possession of the miner who found the block hash.  Without looking into it further, one possible problem that I can see is that demurrage rates would be detached from actual block creation, so it's possible that they could occur at significantly different rates, resulting in an unbounded monetary base.  Also, demurrage would also make free transactions impossible, and that would be bad for shifting funds around personal wallets, donations and such.
6223  Bitcoin / Development & Technical Discussion / Bitcoind & ncurses on: February 24, 2011, 06:18:27 AM
Is there an Ncurses frontend to bitcoind?  If not, could one be made?  That's what I really need.
6224  Economy / Economics / Re: Distribution of Wealth on: February 24, 2011, 04:41:23 AM
So what? The current selling orders are highly relevant to the current price. To hide the biggest chunks of it, means to decieve normal users, as they will think Bitcoins are worth much more.

Also, Mt.Gox just happens to be the biggest exchange place for this. The others do not matter so much, at least until now.

As dark pools are currently done at MtGox, trade data is public after the trades occur, so the pricing metrics are not affected.  The fact that orders can exist without public knowledge is not any different than if those same orders had been placed just before completion.  A script could perform the same function, waiting until the right offers hit the open pool before issuing counter-orders automaticly.  There isn't really anything special about dark pools other than anyone can use them without needing a script to do it.
6225  Economy / Economics / Re: Distribution of Wealth on: February 24, 2011, 04:37:22 AM
imanikin’s right.

No he is not.  He has a right to his opinion, but that is all that it is.  Apparently both of you need some remedial economics education.
6226  Economy / Economics / Re: Distribution of Wealth on: February 24, 2011, 04:33:31 AM

That's udder nonsense.  Transparency is not equatable to freedom, in fact, privacy in private exchanges is the definition of freedom.  Dark pools are just a formal manner of private trading,


What i think best reveals that dark pools are free-market forces avoidance and market manipulation tools for hypocritical free-marketeers is that there is an arbitrary lower limit set on participation in them.

If they were really for the purposes of trading privacy, that limit wouldn't exist. Let's all trade privately then, rather than just those above a certain arbitrary level of means. That would be great!  Cheesy

The fact that dark pools are only available to large traders, really shows the privacy argument to be the red herring that it is...  Wink

Why would that be?  The owner of Mt.Gox doesn't want to deal with the additional work for dark pools for small trades, that doesn't prevent anyone else from setting up dark pools without those conditions.
6227  Bitcoin / Bitcoin Discussion / Re: A question about the recent crash... on: February 23, 2011, 04:27:01 PM
Still an order of magnitude higher than 8 months ago.  The year-over-year percentage increase probably measures well over 2000%.
6228  Economy / Economics / Re: Distribution of Wealth on: February 23, 2011, 03:55:52 PM

When dark pools were implemented on the main Bitcoin exchanges, the Bitcoin markets stopped being free by definition, because they ceased being transparent to all. It's the same Wall Street scams for avoiding the "free market forces"   to benefit wealthy insiders, rigged under the guise of "stabilizing the markets for everyone..."


That's udder nonsense.  Transparency is not equatable to freedom, in fact, privacy in private exchanges is the definition of freedom.  If gay porn were legal in Arabia, but everyone had to register with a publicly accessible website to do so, how free would they really be?  Dark pools are just a formal manner of private trading, I've done the exact same thing via pm, email and cash in the mail.  None of those trades are recorded on any exchange metric either.
6229  Economy / Economics / Re: Sniff ... do you smell smoke? on: February 22, 2011, 08:00:38 AM
Selling oil for dollar and for dollar only is the only thing, that is keeping that currency from hyperinflating.
I hear this all the time, but I don't understand it.

There's a free exchange market between dollars and Euros. So if Iran sells oil for dollars and immediately exchanges those for Euros, how is that any different from Iran selling oil for Euros directly? (Apart from the currency exchange costs, of course).

Simple.

All countries have to hold certain amounts of dollars on their accounts, as they will always need it to buy Oil. Because they are holding it, they need to buy it from time to time, which creates demand for dollar. And demand rises dollar price and keeps it from falling and keeps it in the market.

With Euro-based oil exchange, nobody would need dollar at all, so no country would hold it, so nobody (outside USA) would buy it, so it would have a small fraction of today's value. Hyperinflation.


Wouldn't they do better to hold oil futures?

edit: and can't they buy those with any major currency?

Yes, and basicly everyone does this to some degree, but there remains a limit as to how well hedged any single nation can really be because ultimately the contracts have to be settled in US currency per international treaties.  This is a *major* part of the artificial demand that supports the value of the US dollar, but this will not ultimately prevent the US dollar from collapse.
6230  Bitcoin / Bitcoin Technical Support / Re: No window on Linux Mint 9 Fluxbox on: February 20, 2011, 06:06:56 AM
Fluxbox is quite an exotic window manager.

Have you tried with an other WM ?  xfce or Gnome for instance ?


I have not.  This is my first attempt at Fluxbox, but that is because I prefer Blackbox 0.65.x.  Unfortunately, there is no more maintance of blackbox, and I really don't have the time to tweak everything anymore.  I used to use Blackbox on Gentoo, starting back around 1997 on a 486-66.  First those silly people at the phone company tried to tell me that anything slower than a P166 couldn't connect to their ADSL, and later others told me that it was impossible to play episodes of Stargate-SG1 on a 486.  Not with Gnome or KDE running on anything, but Blackbox on Gentoo, and nothing else running, I sure as hell could.  This computer is new to me, and is probably about four years old, but is still the fastest hardware that has ever entered my home.  It could barely move with Windoze XP running on it, but that didn't survive long in my home.
6231  Bitcoin / Bitcoin Technical Support / No window on Linux Mint 9 Fluxbox on: February 20, 2011, 05:33:46 AM
I don't know if this is a Fluxbox issue or not, but I downloaded the .3.19 linux version onto my new Linux Mint 9 Fluxbox setup and started it.  I know it's running, I think that it's downloading the blockchain, but it does not produce a window.  Nor is there a process tile in the dock bar.  It's causing some serious 'thrashing', and I don't know if it's going to attempt to generate against my will when it's done with the blockchain.  It's bogged down my system so much it's now almost as slow at a Windoze 7 machine.  Anyone else experience this?
6232  Other / Off-topic / Re: FreedomBox on: February 19, 2011, 04:08:18 PM
so for social networking, it would be like having thousands of facebook nodes, with every friend's data on their own plug servers?

Not quite.  The freedombox idea is about getting private data off the "cloud", but still accessible, with or without the Internet.  Part of the concept is that the freedomboxes could mesh in the absence of Internet, forming a citywide ad-hoc network even if the Internet 'kill-switch' is thrown.
6233  Bitcoin / Development & Technical Discussion / Re: Getting the foundations of bitcoin looked at by Bruce Schneier on: February 19, 2011, 04:03:35 PM
I sent Bruce just such an email a couple of months ago.  He never responded.

For all we know, Satoshi could be Bruce's alter ego, but if he actually reads his emails, he is aware of Bitcoin.
6234  Bitcoin / Project Development / Re: Hold Sign "Stop the FED! Use Bitcoins!!!" Bitcoin Bounty! [BOUNTY PAID] on: February 19, 2011, 04:01:21 PM
Would anyone still pay to see someone do something along these lines? Because I'll do it as a star wars storm trooper, and have a friend take a video.

I'll pledge 5 bitcoin for a video of you in a stormtropper outfit, on a public street, with pedestrian traffic, for at least 10 minutes, promoting bitcoin in whatever manner you feel is most appropriate.
6235  Economy / Economics / Re: Mises on BitCoin on: February 19, 2011, 03:58:02 PM

If I made a fake bitcoin client, with proof of work already done for thousands of blocks (performed by servers as I am writing my fake bitcoin software) and longer chains than the honest nodes.

If I distributed my fake bitcoin and reach 50% + 1 and some time, how would the honest nodes know to reject my blocks? If my proof of work is longer and the blocks I fake are recent?

And if I already had the proof of work, doesn't the need for computing power go away, since verification is fast and easy?

(Apologies if this has been answered before, and I am somewhat new to crypto.)

First off, the scenario of 50% of the network power being able to create a false blockchain with a greater proof-of-work is practically impossible, as the attacker would need vastly more than 50% in order to gain enough on the honest network in order to perform any kind of attack.  50% would just let an attacker maintain a chainsplit for as long as he could maintain 50% of the network, shortly after he dropped to 49.9%, his false chain would be obliterated by the rest of the network. 

Second, it's a strange thing to say "fake" bitcoins in this context.  If you had a modified client that could pre-calculate the proof-of-work (let's call it a magical client, since part of the design of the blockchain makes pre-calculations of blocks, if not actually impossible, astronomicly unlikely sans a shortcut error in sha-256, and if you found an error in sha-256 you would be famous) then your client would functionally represent itself as a much more powerful node than it really is, resulting in the honest processing of blocks being your least risky and most profitable activity, neutering similar efforts by unknown attackers.  Even honest generation takes 100 blocks before the owner can spend them, and a dishonest node is going to have a hard time maintaining a chainsplit for 100 blocks even if he precalculated some of them, and is otherwise limited to the same number of coins per block as if he came by them in the honest manner, because other nodes will immediately reject blocks that tried to create more than the proper reward, or any blocks that the transaction signatures didn't match.
6236  Economy / Marketplace / Re: Drugstore.com & Beauty.com with 5% discount for bitcoin (Limited time offer) on: February 18, 2011, 02:24:39 PM
#1. Nah, this sucks - i don't want to get a discount for bitcoin, I want to actually BUY something for bitcoin.

#2. I don't like this offer for some other reason of which I am not sure , I just can't put my finger on it.

You are a perpetual pessimist, Shadow.
6237  Economy / Economics / Re: Mises on BitCoin on: February 18, 2011, 02:20:57 PM
[Maybe, but don't compare currencies with drugs... the latter have a very "hard" demand, in the sense that, if it becomes more scarce, people will stop consuming other stuff in order to continue consuming drugs, that's what pushes their prices so high.

This is false.  The demand for drugs is not as hard as energy.  The price of drugs is a ratio with respect to it's supply versus it's demand.  The legality of drugs effects the risks of production and importation, resulting in a lower supply, increasing the price.  The risk premium of drugs is so high, that it is not unreasonable for the street price to be half or less if all drugs were decriminilized.  This is why, even though tobacco is not yet illegal, that Illinois can only raise their sin taxes so high before there are cases of otherwise normal Americans getting caught "smuggling" a station wagon full of tobacco products from Kentucky.
6238  Economy / Economics / Re: Sniff ... do you smell smoke? on: February 17, 2011, 02:15:27 PM
Where can I trade Bitcoins for Crude oil?

Nowhere.  Even Europeans have to buy oil inUS$ due to the Bretton Woods Treaty.  The Russians & Chinese would buy/sell oil in gold or their own currencies in a heartbeat if that wouldn't get them sideways with the US fed.
6239  Other / Off-topic / Re: I have nowhere else to turn.. on: February 14, 2011, 04:37:06 AM
I voted yes, but am particularly interested in the modern geek on the streets angle.  What tricks do you use to gain Internet access?  How do you keep your devices charged?(mintyboost?)  Are there any apps that are particularly helpful?  These kinds of things.  Yes, I would be willing to contribute a small sum in bitcoins for useful information; but I'm looking for info, not storytelling.

I see hobos with laptops all the time in my city.


That's interesting.  Imagining a homeless vagabond with a MacBook makes me laugh.  Of course, in the city that I grew up in, and returned to, homelessness is (almost) a myth.  I grew up a urban child, and only encountered such in posters and on television.  When I lived in Ohio, Illinois or California; it was not such a myth.
6240  Economy / Economics / Re: Mises on BitCoin on: February 13, 2011, 05:19:08 AM
The value of BitCoins will be limited to:

1. The future infrastructure to deal with the massive number of potential transactions.
2. The security of personal computers.

If these two things can be overcome, BitCoins could theoretically replace the current currencies.  If not, BitCoin will be relegated to the fringe.



Another newbie with the sole insight into the great bitcoin flaw.  Seriously guys, this gets old.  Don't you guys ever think that we've already considered all this before you arrived?  Search the forum history before opening mouth/insert foot.  We get tired of explaining this stuff repeatedly.
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