even smooth, who offers up decent stuff, was confusing me a while back before i found out he was a Monero core dev. i couldn't figure out why when i got skeptical about altcoins he'd always quickly negate anything i had to say on that. also when we got to talking about the 49%-51% attacks against Bitcoin he was posting highly frequently against Bitcoin. that's ok, he's smart and is entitled to his opinion. but it was never clear until someone mentioned his Monero connection what was happening. You're confusing cause and effect here. I'm involved with Monero specifically because I don't buy the Bitcoin maximalism argument, and Monero has technology that is actually interesting and actually adds something meaningful (unlikely dumb clones like Litecoin). At least, I don't buy the Bitcoin maximalism argument yet (at some point if Bitcoin continues to grow, perhaps after another 10x-100x, it will likely be correct). I consider Bitcoin to be a tiny pimple on the scale of global currencies and finances, so if anything the network effect is working very much against it, not for it. Cryptocurrencies have to succeed on the basis of compelling advantages that overcome a network effect, and if Bitcoin can do that, others can too. I see Bitcoin's lead now as being about as relevant as Novell's with Netware: By 1990, Novell had an almost monopolistic position in NOS for any business requiring a network.
Or perhaps in line with platforms that once had a hugely dominant market share and weren't even replaced, directly, by anything (example: Palm Pilot). But even that isn't right, because Bitcoin does't currently have a hugely dominant market share anywhere, outside of a few enthusiasts. (Don't misinterpret this as "Buy Monero instead" -- obviously Monero has even less of any kind of share.) Bitcoin can't scale to future economic activity. It is impossible. It doesn't have the correct scaling attributes. The existing financial systems can't scale either. The dying Industrial Age monetary and financial system is dying and "they" (society as a marriage of interests in collectivism) intend to apply expropriation and capital controls to any growth in the economy activity which can't be contained within this dying system which includes the End-to-end violating design of Bitcoin.  So I interpret your astute comment to mean that the actual network effects are out there in the Ends of the network and Bitcoin (in its current form) doesn't have a chance in hell of capturing them. I doubt you meant it that way though, but I am encouraging you to see my perspective. I suspect you favor complexity class arguments because they are more fundamental and compelling. |
|
|
|
Edit: I wrote the following before reading smooth's latest post above. He and I were apparently writing at the same time. Interesting to see how well I guessed his stance. this whole debate is consistent with my long held belief that all innovation should occur on the mainchain. if Bitcoin fails to do that as an open source project similar to linux, which was supposedly the great promise it made imo, then the whole concept of cryptocurrencies has failed and we'll just go back to fiat for the next hundred years.
Such underlined overly generalized grandiose black&white perspectives can usually be assumed to be false by applying Occam's Razor without any further analysis. You've assumed: 1. Bitcoin won't end up monopolized by the State (which is I assume what you mean by your and most everyone's imprecise use of the term 'fiat'). 2. Bitcoin is the only way to scale to masses (i.e. to compete with the fiats). 3. That the "whole purpose" of crypto-currency is to scale to the masses. I have explained in detail in this thread that Bitcoin can not scale to the masses without violating assumption #1. And I have argued that for those of us who want to protect ourselves from #1, we need to violate assumption #3 and create an anonymous coin that does scale decentralized for the "rest of us" to use. In other to achieve that goal, we need to identity a niche market for crypto-currency that is large enough to achieve monetary scale but doesn't depend on the diligence of the preoccupied masses. I have also explained in detail in this thread that the #2 assumption only applies if someone doesn't invent a design for crypto-currency that doesn't violate the End-to-end Principle and Principle of Least Power. i've always said i'd welcome more privacy in Bitcoin and it's possible Monero does that. i know there was a big technical issue months back but can't remember what it was. maybe someone could clarify. but that's beside the point. it is NOT innovating on top of Bitcoin which i quite frankly see as a problem for it. it is not leveraging upon the huge network effect already achieved by Bitcoin. does that necessarily mean it will fail? no. but i think we get one chance with this b/c the implications are so huge. if Bitcoin fails, they all fail. if it's not improved upon or upgraded, it will fail. if we all don't stick together as a group, it will fail. if that means the economic majority has to fork off and shed the likes of the Blockstream cabal, we have a chance. the more i think about it, the better i like the idea of getting rid of gmax and luke. i think they're toxic. yeah, gmax is a brilliant cryptographer but he can't be trusted with the keys or to run a company. he's a KNOWN Bitcoin bear and posts an XMR donation address. that's his prerogative but i think a core dev should be all out pushing and working on Bitcoin like Gavin does to advance the project forward. shedding those guys would be a good thing.
It is implausible to put Monero's autonomous End-to-end Principle respecting anonymity onto the Bitcoin block chain. It would be a hard fork against numerous vested interests. It is technically impossible to achieve that End-to-end Principle respecting anonymity off-chain. Your conceptualization of a world of "all or nothing" flies in the face of the reason the internet scales, which is the autonomy and freedom of choice and freedom to have many different choices that is embodied in the End-to-end Principle. There isn't one flavor of Unix nor Linux. And there isn't one operating system on the internet. The internet doesn't care which operating system the END user chooses. Cypherdoc your simpleton myopia is going to be paradigm shifted and you'll be standing there dazed and confused and wondering what happened. this hasn't even been the greatest Bear, imo, which was from 32 to 1.98 in 2011.
$1000 to < $50 will make it so. (I didn't place 100% odds on that potential outcome) i've always said that the majority of ppl investing in cryptocurrencies will lose money.
SOBO (statement of the blatantly obvious) Bitcoin is like threading a needle; it needs to stay private enough to prevent all out war with TPTB. so far so good.
You meant stay non-private enough. This death by a 1000 papercuts future is acceptable to most people and one of the reasons Bitcoin must be accepted as reality. even smooth, who offers up decent stuff, was confusing me a while back before i found out he was a Monero core dev. i couldn't figure out why when i got skeptical about altcoins he'd always quickly negate anything i had to say on that. also when we got to talking about the 49%-51% attacks against Bitcoin he was posting highly frequently against Bitcoin. that's ok, he's smart and is entitled to his opinion. but it was never clear until someone mentioned his Monero connection what was happening. i like to focus on what ppl's motivations are, that should be clear. i won't let that cloud my judgment however.
I believe smooth would like to see maximum experimentation because he recognizes the potential for the death by 1000 papercuts future and in general I think he is interested in crypto-currency but isn't convinced we've hit on the best design yet. He may have a profit motive too in Monero, but I am not knowledgeable about to what degree that motivates him. My motivation is clear. I think Bitcoin is the death by 1000 papercuts NWO future. I accept it as reality and for the network effects it brings to crypto-currency, yet I would rather die trying than accept that 1000 papercuts NWO future. And I am certain Bitcoin does not have the scaling attributes of the internet. It violates the fundamental End-to-end principle for scaling. This guarantees that it is a dead-end (just as Facebook is a dead-end). But dead-ends can cause a lot of pain for a while. The salient quote is: Bitcoin can never scale as the internet did because it violates the two key scaling principles of the internet, End-to-end and Principle of Least Power. They might be able to scale it as they did Facebook to most people on earth, but it will never scale to most economic activity on earth (and note the distinction). The only way they win with Bitcoin (i.e. for it to encompass most economic activity) is by oppressing the economic freedom that will drive most of the future economic activity.
|
|
|
|
Basis for my comments about Gregory Maxwell also derives from this interaction (wherein surprisingly I made the same judgement that I stated in this thread about his personality) and also the interaction the On the Longest Chain Rule and CoinJoin threads. |
|
|
|
My prediction in 2013 for something like 21 Inc to arrive by 2016: http://bitcoin.stackexchange.com/questions/3111/will-bitcoin-suffer-from-a-mining-tragedy-of-the-commons-when-mining-fees-drop-t/8686#8686I now see a much more urgent and catastrophic threat vector potentially circa 2016.
Difficulty will tend to rise and fall such that the system-wide cost of mining is nearly the value of the coins mined (not perfectly but on a smoothed basis roughly true).
Thus the lowest-cost marginal miners will earn the highest profits and rates-of-return. Thus, as Satoshi Nakamoto anticipated, mining will become centralized among those with more capital who can buy the highest performance hardware.
This is more accentuated by the designed volatility in the price of Bitcoins, because a) marginal cost producers can go through periods of negative profits or no production, and b) more capital means more inertial reserve, economy-of-scale access to capital funding markets, and access to debt to delay insolvency so as to smooth volatility in market conditions.
So to capture a majority or maybe even most of the mining, an entity probably merely needs to subsidize on a large-scale.
The government or powerful elite has the funds to do this, either in public view using taxes (or deposit insurance on P2P currencies) or in documented black budgets.
Is there a scenario where the public would clamor for the government to fix a problem by doing this?
Imagine the public became heavily invested in wild "dot.com 2.0" run of Bitcoin price appreciation to say $1000, $10000, or $100000 (as some people expect). All bubbles eventually crash. Tangentially, the creator of Bitcoin would probably be a $billionaire.
So with an exponential crash in price, there could be a drastic reduction in miners, joined with a public wanting to blame something or someone. The government could probably find massive support for deposit insurance.
Thus I conclude that the computational Proof-of-Work design of Bitcoin is a serious threat to anyone who views Bitcoin as being independent of the control of the government. Noting that correlation isn't proof yet via Occam's Razor it is ostensibly designed for this outcome and thus to fall into the lap of the government.
And we are not talking about 2040. The pricing froth is building now so this could happen soon. And we also have another halving of the debasement payout rate in late 2016.
Which Btw, is when the repeating-throughout-all-recorded-history Economic Confidence Model expects this current bounce of capital flows into the USA dollar economy to turn hard down again a la 2008— exactly when we will need a P2P currency to help us avoid chaos of capital controls and liquidity collapse. Bitcoin could fail at precisely the time when we will need it most. That is what concerns me so much.
I would very, very much appreciate if any downvoters sign with a comment, in case this answer becomes prophetic we will be able to know how prescient you were.
https://bitcointalk.org/index.php?topic=158111.msg1684553#msg1684553 |
|
|
|
Seems Etlase2 incorporated my 2013 " Topic: "Spiraling Transaction Fees Destruction" of bitcoin (Read 6785 times)" into his white paper. http://www.decrits.net/decrits-consensus.pdfNovember 4, 2014
In the future when Bitcoin mining is no longer as heavily subsidized as it
is today, the problem is compounded by the fact that the network’s security is
relative to the amount of transaction fees assessed. If transaction fees are low,
the comparative network security must be low. If transaction fees are high,
it is likely that fewer transactions will be performed on-chain14 which would
also contribute to lower network security and an easier opportunity to attack.
It may very well be the case that older, less efficient pieces of silicon known as
ASICs that can only perform Bitcoin POW may find new life and profitability
in attacking the Bitcoin network.
I finally had a spare moment to contemplate the variables.
A key factor is the block size. If the block size is unlimited (and bandwidth is an insignificant cost), then unless miners have a monopoly they will accept transactions with fees as low as don't constitute a DoS attack, in order to maximize revenue.
In other words, they would have no pricing power at all (a Tragedy of the Commons) and the system would devolve into a partial-monopoly in order to gain pricing power.
A partial-monopoly in this case is enough % of the network hashrate to delay transactions (by that % of blocks) which do not include a sufficient fee.
If we limit block size, then the system doesn't scale.
If we let the Bitcoin foundation decide when to increase block size, then they control the economic market function, i.e. we've centralized Bitcoin.
Let us assume unlimited block size and partial-monopolies. Thus the transaction fee can always be forced higher in order to generate more revenue for the miners. Thus Bitcoin devolves (as coin rewards diminish) to a system that presents spenders with a choice between include a very high transaction fee or accept an ever increasing delay for confirmation. This will exacerbate as coin rewards diminish and volume of transactions increase.
If we instead assume limited block size, then the Bitcoin foundation will set the transaction fees, not the market.
Bitcoin is a broken design.
And from my account on Bitcoin StackExchange wherein they banned me for several months in 2013... http://bitcoin.stackexchange.com/questions/876/how-much-will-transaction-fees-eventually-be/8749#8749In any P2P currency, there are only 3 choices, or combination of them.
You fund miners from savers.
You fund miners from spenders.
You let the government provide the mining. A public need so the economy doesn't stop.
1 is not available to Bitcoin long-term, because debasement is halving every four years.
2 penalizes economic activity, which is more important than burying money, ahem saving. Also it doesn't scale, unless it is uniform in the protocol. Gavin wrote making it uniform won't work in the market.
3 is thus the outcome for Bitcoin. (as designed by Satoshi)
|
|
|
|
This is the most fascinating post I've perhaps ever seen from Armstrong. Amazing that his Trading Array model has INDEPENDENTLY picked up on the ECM 2015.75 Big Bang: http://armstrongeconomics.com/archives/31361Looks like the timing for the capitulation low in private assets (gold, bitcoin, and now the USA stock market too) will be in October. Again I reiterate my 80% expectation for < $1050 and < $150 for the final bottom (price independent of timing). I assign 50% odds of a bottom < $850 and <$100. Ideally would be a bottom in the mid-$600s and < $50, as that would clear out all the dumb money. As in 2008, the private assets will rally hard after the initial margin call selling has caused them to crater. Remember when safe haven panic contagion strikes, people are forced to sell their most liquid assets. I was buying 1000oz silver bars at $9/tr.oz. |
|
|
|
This is the most fascinating post I've perhaps ever seen from Armstrong. Amazing that his Trading Array model has INDEPENDENTLY picked up on the ECM 2015.75 Big Bang: http://armstrongeconomics.com/archives/31361Looks like the timing for the capitulation low in private assets (gold, bitcoin, and now the USA stock market too) will be in October. Again I reiterate my 80% expectation for < $1050 and < $150 for the final bottom (price independent of timing). I assign 50% odds of a bottom < $850 and <$100. Ideally would be a bottom in the mid-$600s and < $50, as that would clear out all the dumb money. As in 2008, the private assets will rally hard after the initial margin call selling has caused them to crater. Remember when safe haven panic contagion strikes, people are forced to sell their most liquid assets. I was buying 1000oz silver bars at $9/tr.oz. |
|
|
|
Except for the fact that there is a big drop coming. Unless there isn't? Who knows? I don't, and I don't care, either =D
I need you to say that to confirm the piss-in-your-pants capitulation bottom is not yet in. It's the network not the bla-coins. No alt can hold a candle to btc network right now.
Until the network hashrate becomes irrelevant in some alt. |
|
|
|
The Blockstream white paper mentions interoperability, but afaics gives no details other than to say the chains share the same BTC unit.
I assume this means each side chain's money supply will fluctuate according to spending from one chain to the other and presumably not passing back through the Bitcoin blockchain as I had assumed. I suppose this is viable and what remains of my criticism is there is no investment model possible for the side chains unless there is some fee service that can be sold. So I guess the devs of a side chain would need seek their ROI by charging transaction fees but ongoing payment is a form of centralization.
I guess one could view moving BTC from the Bitcoin blockchain to a side chain as an investment in an ecosystem driving the value of BTC higher. Appreciation of the particular side chain will not be possible to capture.
The investment model concerns I think strongly disfavor side chains for any ubiquitous features. Thus side chains don't appear to do anything for the scaling problem of Bitcoin.
Side chains would be useful for isolating blockchain scripting where user programmability is the priority and not investment ROI.
Also I think my interoperability concern remains valid in at least one way. For example Monero as a side chain would presumably have different anonymity properties when spending to another chain than spending within the Monero side chain. Thus the interoperability doesn't scale the same as a single chain with ubiquitous features.
I potentially like side chains as a way of achieving hard forks democratically, i.e. anyone can stay with the old chain or spend off to the new chain (and come back anytime), but this could encourage fragmentation which could retard value appreciation.
I just don't think side chains address scaling and Gregory should either justify how they do or accept that isn't the market he needs to defend with this block size debate.
Edit: there is one way side chains enable scaling. That is the side chain is a centralized ledger. So if the masses can be enticed to spend their BTC into the Coinbase+Paypal+Circle cartel side chain, then it can scale easily. And then the hashrate of the Bitcoin blockchain will wane and can be attacked by the cartel.
Yeah a cartel side chain is great sell out to TPTB. Go! Good job!
Blockstream is (unwittingly?) enabling an easy path for the cartel to fork Bitcoin.
|
|
|
|
In 2011 I predicted that result for Europe. See my syndicated essay linked from the opening post in the Economic Devastation thread.
|
|
|
|
|
The Blockstream white paper mentions interoperability, but afaics gives no details other than to say the chains share the same BTC unit.
I assume this means each side chain's money supply will fluctuate according to spending from one chain to the other and presumably not passing back through the Bitcoin blockchain as I had assumed. I suppose this is viable and what remains of my criticism is there is no investment model possible for the side chains unless there is some fee service that can be sold. So I guess the devs of a side chain would need seek their ROI by charging transaction fees but ongoing payment is a form of centralization.
I guess one could view moving BTC from the Bitcoin blockchain to a side chain as an investment in an ecosystem driving the value of BTC higher. Appreciation of the particular side chain will not be possible to capture.
The investment model concerns I think strongly disfavor side chains for any ubiquitous features. Thus side chains don't appear to do anything for the scaling problem of Bitcoin.
Side chains would be useful for isolating blockchain scripting where user programmability is the priority and not investment ROI.
Also I think my interoperability concern remains valid in at least one way. For example Monero as a side chain would presumably have different anonymity properties when spending to another chain than spending within the Monero side chain. Thus the interoperability doesn't scale the same as a single chain with ubiquitous features.
I potentially like side chains as a way of achieving hard forks democratically, i.e. anyone can stay with the old chain or spend off to the new chain (and come back anytime), but this could encourage fragmentation which could retard value appreciation.
I just don't think side chains address scaling and Gregory should either justify how they do or accept that isn't the market he needs to defend with this block size debate.
Edit: there is one way side chains enable scaling. That is the side chain is a centralized ledger. So if the masses can be enticed to spend their BTC into the Coinbase+Paypal+Circle cartel side chain, then it can scale easily. And then the hashrate of the Bitcoin blockchain will wane and can be attacked by the cartel.
Yeah a cartel side chain is great sell out to TPTB. Go! Good job!
Blockstream is (unwittingly?) enabling an easy path for the cartel to fork Bitcoin.
|
|
|
|
XMR is a complement, not competition, for BTC. One provides transparency, the other opacity. Salt & Pepper.  If it is competition at least there's a remote chance for xmr, otherwise it is doomed -- people that need it will not hold the units; they will make use and those units will be exchanged for btc units ASAP in the other end. It might survive as a sidechain though. Where is the evidence for these naked assertions? When money is forced to compete, Thiers' law takes effect. "in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. However, if not given the choice, and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their possession, and pass on the bad money to someone else. In short, in the absence of legal tender laws, the seller will not accept anything but money of certain value (good money), while the existence of legal tender laws will cause the buyer to offer only money with the lowest commodity value (bad money) as the creditor must accept such money at face value." http://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham.27s_Law_.28Thiers.27_Law.29Armstrong noted that throughout history, peripheral markets counterfeit the reserve currency's coins because these are the widest accepted. I view Gresham's law as basically saying that the most widely recognized money drives the other money out-of-circulation. I think it applies regardless of legal tender laws as we see throughout history where for example Roman coins circulated even where they weren't required to by law. Your argument should instead be that Bitcoin is the most widely recognized and accepted crypto money. |
|
|
|
Now, if Monero or pretty much any total shitcoin was a sidechain and I could have the proper level of confidence that I could, autonomously, shift my holdings back to BTC, I'd be all over it. If XMR is as great for privacy as iCEBREAKER claims (again and again and again), fantastic! I'd happily use it whenever I have that need.
This is the only retort I've seen in support of pegged side chains. The pegged attribute means the BTC is actually reserved on the Bitcoin chain so that no matter what happens to the side chain, the value can always be recovered back to BTC. You are not using scaling[1] as the basis of your desire for side chains. Rather you are using the insurance of value relative to BTC. The difference between a peg on the Bitcoin blockchain and a hedging instrument are the zero cost and reservation guarantee of the former. But I don't see why we need Blockstream to do that. Afaics, any altcoin could offer the feature where its coin supply is the number of BTC on specified reserve on the Bitcoin blockchain (using the methods devised by Blockstream). But there is no incentive for the altcoin developer because their work doesn't get valued nor monetarily remunerated in terms of coin appreciation. No ICO can be done, because the coins are still reserved on the Bitcoin blockchain. A risk-free investment does not exist. You are asking to take away all ROI to enable a guarantee but with nothing in return offered to incentivize the market and development. You also remove your ability to profit on HODLing the altcoin. In short, you don't want to invest and you don't want to profit (in anything other than Bitcoin). [1] Which I argue is not aided by and probably harmed by side chains, because the only way scaling (and thus network effects) are solved by side chains is an unlimited numbers of side chains, else the complexity class is the same as needing to solve how to scale Bitcoin's blockchain. But innumerable side chains kills interoperability and thus the scaling of network effects. "Why go out for hamburger when one has steak at home?"
Because you might meet the waitress of your dreams. Nothing ventured, nothing gained. No investigation, no knowledge. Ignorance is bliss. Home eating, boring men don't often capture the (attention of the) Playboy bunny and don't stay abreast of current trends outside. |
|
|
|
XMR is a complement, not competition, for BTC. One provides transparency, the other opacity. Salt & Pepper. If it is competition at least there's a remote chance for xmr, otherwise it is doomed -- people that need it will not hold the units; they will make use and those units will be exchanged for btc units ASAP in the other end. It must carve out a market that Bitcoin doesn't have or it is doomed. That is not necessary the same as competition. New markets means they are not competing. I hope the Monero folks aren't angered by this opinion. I do believe they think they can carve out a market in the anonymity space. It might survive as a sidechain though.
I refuted pegged side chains and no one has retorted. |
|
|
|
If you mix off-chain, you are merely obfuscating and therefore Doing It Wrong.
That articulation is incorrect and implies you don't have solid technological comprehension. The generative difference with off-chain mixing is it doesn't scale because it is not autonomous and thus violates the End-to-end principle. There is no difference in the level of anonymity for any given anonymity set (all other factors equal which they may not be, such as IP address correlation in off-chain because the parties must coordinate). All mix-nets are a form of "obfuscation". There is no such thing as 100% anonymity. It is always a measure of the anonymity set size. Obfuscation though is usually differentiated from anonymity sets such that obfuscation is a mixing of itself (e.g. a mangling of JavaScript code), whereas the latter is a mixing of numerous entities. |
|
|
|
...while the technology for genuine orthogonal scaling is developed.
The semi-veiled Blockstream infection (attempted takeover) of Bitcoin is so obvious. You don't even try to obscure it well. And you still haven't refuted my assertion that pegged side chains break interoperability (and have to transfer back through the Bitcoin blockchain thus don't solve scaling if maximum network effects and interoperability is desired), thus can't scale and lose network effects. $21 million down a hole. Seems Adam's former company is a source of many of the key members of Blockstream and that former startup accomplished what? There might be a pattern of failure. This is often what happens when you put academics and inexperienced venture capital together (the seed capitalist made his fortune by creating an ISP in Canada and selling it back in the boom of the dot.com era). Gregory is an extremely talented cryptographer (who several times has reused hash trees for compression) but who apparently often doesn't raise his scope of vision over the tree trunks to reason about the forest. CoinJoin? Heuristic spaghetti for Sybil attacks? (or maybe he was just trying to make the best out of the worst?) |
|
|
|
Will be amazing if she is right, maybe she just hopes she is as it definitely makes a good speech. To say with that certainty that blockchain transactions will be part of all public financing and as ground breaking as the internet is quite a statement if we consider just how much trade is done by the markets every day. Blythe worked for JP Morgan and the banksters. I'm sure she wishes it would be so, since they plan to track and control us with public ledgers which are only decentralized in name but actually monopolized. Bitcoin can never scale as the internet did because it violates the two key scaling principles of the internet, End-to-end and Principle of Least Power. They might be able to scale it as they did Facebook to most people on earth, but it will never scale to most economic activity on earth (and note the distinction). The only way they win with Bitcoin (i.e. for it to encompass most economic activity) is by oppressing the economic freedom that will drive most of the future economic activity. Bitcoin is a (planted) ruse to entice people to agree to give up the anonymity of cash. It is leverage against governments and financial institutions that resist takeover by the NWO. |
|
|
|
again as long as mining remains decentralized (and if it isn't then all bets are off)
That was my point. |
|
|
|
That and ordering.
 I did expect smooth would identify the key word. |
|
|
|
|
Show Posts
