Everyone wants to be a bitcoin parasite and make money off of the blockchain. You have full nodes trying to get paid. Developers creating fiefdoms (DASH/Lightning) and miners taking bribes to process transactions. In the same way that money in politics has corrupted democracy, money in Bitcoin has corrupted the technology.

The opposite needs to happen. The one place where the blockchain can be monetised needs to be removed and that will happen naturally over time with the halving. What then needs to happen is not for it to be replaced with higher bribes to maintain profits, but with clean nodes that include transactions for free to drive out the rent-seekers that have been paid handsomely already for establishing the network.

Hashes and encryption are extremely resistive to ASCII based compression algorithms so it is likely you are at best compressing the script and small transactions may actually get bigger. Have you reached out the the UPX developers for a look at binary compression?

Zero transaction fees would make it unprofitable when most of the coins have been found and you can say "so long and thanks for all the fish" to the farms. You just need to convince the devs to remove the fees.

This is great. Might I also suggest that if it was a prediction that came true or was debunked, that we also include the debunking/confirmation in the same post?

I'm off to find the posts that said the 51% attack was impossible 

You are conflating issues. Requiring good bandwidth and large amounts of storage is a technical implementation issue. It is a barrier because it is not optimised rather than set in stone. Again, not financial. The current requirement for a full node is simply that they can verify transactions to provide consensus. They don't need miners' levels of processing power, electrical or hardware. The issue here is that the current implementation is onerous on bandwidth and storage for small devices. They are addressing the storage and one way to address the bandwidth is by spreading the load over more nodes. If every client is a node, each node needs less bandwidth. If you only have two nodes, then just those two are required to have sufficient bandwidth to do all transactions on the network within 10 minutes. The solution, again, is to make every client a node thus forcing all participants to support the network.

No you haven't understood correctly. I'm saying that if the model behind the theory of what financial incentives would make a gazillion people start running nodes all of a sudden was true, then people would only buy the above mentioned stuff if it made them money.

What it will actually do is make money for a small number of people who know what a node is and already run them. It is rentier wannabes wanting to get in on the miner monopoly by creating their own little fiefdom and who can blame them? Why should miners get all the cash?

If you really want people to run nodes, then make running a node an inherent part of participating in the network-no full node, no access to bitcoin. That is the technical solution and doesn't rely on assumed greed or allow gaming of the system.

I wish people would stop peddling financial solutions to technical problems. We all buy the latest car, iPhone, laptop or TV because of the money it makes for us, right? We all update our OS, firmware and disks because the newer it is, the more money it makes for us, yes?

So who is in this research and development team then? There is a very small gene pool of people that understand the technology in its entirety, and even less that can interface to other disciplines required for these organisations, so who are they? Most dev teams I've met in the banking sector are just java coders who outsource fpga and the hard stuff.

I think they are a long way from making it easy because of Bitcoins heritage (in Linux). Until there is at least one permissive, standardised library in the vein of openssl, libssh2 and libtorrent you won't get adoption by developers that know how to write user friendly apps. You need application developers to create software in their favourite language and you need to bind to libraries for that (no, RPC is not good enough).

I think Linus Torvalds beautifully sums up the issue with all Linux software in general and Bitcoin is handicapped by this. Until you get the application developers involved, it will always be awkward for non-techies and to get them involved they need to be supplied with libraries that abstract away the really important hard stuff that probably 10 people truly understand.

The blockchain technology would be very useful for the shadow banking industry which is comprised of a large number of separate institutions that need to work together flawlessly to rip everyone off. Imagine if the libor rate or gold spot fix was obtained by consensus on a block chain instead of all the heads of the different banks meeting twice a day to fix a price. It would automate the fraudulent collusion.

My solution is not to optimise miners revenue. On the contrary, miners would resist, I think, because they would be dependant on being fed transactions so transaction propagation would play a part not just block propagation. Nodes are a different problem and one of static storage and incentive so yes. I did ignore them. I have mentioned alternatives for them in other threads for the storage. I have no answer currently for their incentive as I am one that has turned off my node.

I agree with most of your views but I think this is stretching the importance. If you remove political reasons there is basically one reason for the block debate and that is transactions per second. As much as someone may or may not see it as a scalability issue now or in the future, the block size is the [other] easy way to increase transactions per second if there is a limit imposed.



I think you can see that if the dream of 4000 tx/sec is ever to be realised then 1 or 8 MB is rather moot if you cannot change the 10 minute interval.

Where Peter comes in, this limit (whatever it may be) creates a market which he is attempting to analyse. That's fine. But it is an artificially created market due to a design decision. Where I sit (and I think you do to) is that we need to remove the temporary spam limit which would remove his market and a different analysis would come into play - one of optimum block size for best return (blocks size vs orphans). His analysis also covers that, I believe but the buzzword at the moment is the "fee market" which is artificial, to you and I, and more of a bug that needs to be fixed rather than exploited.

One way we might be able to remove the limit completely might be to not allow miners to increment the coinbase integer and instead they must include new transactions to change the hash. This would create a demand for any transaction, not just paid-for ones and make spam/dust/small transactions useful for miners to move forward. They would have to consume any and all transactions just to produce a new hash but can choose a strategy that fits their bandwidth, mining power and other physical and financial constraints but ultimately serving the network rather than the network serving them.

Well spotted. You are absolutely right. I missed that.   It's a clustered topology which is a form of centralised network.

What on earth are you talking about?

I pointed out that decentralisation isn't synonymous with distributed which is what the network images imply. The byte size of anything was never mentioned. Not even tangentially or incidentally.

Except there is a conflation with those definitions that I think was intentional so as to simplify.
A) is certainly centralised.
B) is certainly decentralised.
C) is also decentralised but just a different organisation.

B) is a Hierarchical decentralisation - commonly used in military communications and c) is a Mesh decentralisation commonly used in ad-hoc wireless.

So where does distributed come in to it?
Distributed is used to describe how work or computation is partitioned within a network. Things like BOINC are distributed and it is quite possible to have decentralised and distributed as well as centralised and distributed (where BOINC is the latter).

In a nutshell. Decentralised != Distributed in the same way a Road != a Car

As an example, lets take a mining pool. So in a mining pool,  the mining *work* is distributed to the participants but the network architecture is B) hierarchical decentralisation (around the work coordinator/ provider). All communications within the pool are worker to and from the admin and the admin communicates the results to the wider network and relays any benefits back to the workers. In the early days of Bitcoin, each client was a miner and was its own admin where block mining was distributed rather than distributed mining of a block. It was distributed computation within a mesh network.

The issue we have at present is there is that full node clients are mesh networked to create their view of the block chain but all mining is Hierarchically decentralised and as the number of full nodes (required for acceptance of the miners' blocks) decreases, miners will start up their own botnets to propagate their blocks faster. Therefore they will own the means of production and the means of distribution; centralisation will be complete and you will have large mining corporations sitting in Google Data-centers with everyone using webs wallets.

Because mining is no longer "distributed" as originally envisioned, a decentralised network is counter-productive to mining efficiency. In the old days, a client was a miner and thus all mining was distributed and decentralised and until that is the case again, we will see more and more centralisation unless its already too late.

This is another pressure to centrlisation (they will own the production and consensus infrastructure). The issue is not to propagate faster since any solutions there will just cause them to co-locate further to reduce propagation times - don't forget that it is relative (to other miners)  propagation they are interested in; not absolute times. UDP vastly improves propagation (also improves anonymity and almost completely mitigates DDOS threats) but unless you can convince internet services to open up their UDP multicast routes, only huge farms with their own infrastructure will benefit - and benefit hugely at the expense of pools who will be wiped out! All these roads lead to colo datacenters and web wallets!

But I totally agree that bigger block sizes is a distraction. Then again. I think most people now realise it was always political argument rather than a technical one.

As you state. The block limit was imposed to combat "spam". In fact. I don't agree with the term "spam" since they are still valid transactions but the system cannot cope so they were marginalised to protect the integrity of the system. I expect the limit to be removed once the system has been developed to cope with any number of large or small transactions and see that as the main design goal.

Anyway. The introduction was a hack. A band-aid to sort out properly later. I view it as a temporary technical limitation being exploited by economists  in an attempt to monetise the block chain directly. I take a very dim view of that in the same way I take a dim view of those alt-coins that attempt to pay the developers with the protocol. It's like gamblers finding something to bet on after they had their cards, coins and dice taken away. They have found a chink in the system that allows a market and are now trying to open it up for further exploitation.

.....and/or if blocks were held on NNTP servers, I2P nodes, Tor servers etc you could download from there when peers don't have what you want

I think  Just-In-Time Block Requesting is an obvious step. The debate would be around if we want the clients/nodes/miners to keep track of  blocks to ensure full coverage or whether to use existing remote storage systems but the first step would use the latter.

I was extremely invigorated by the talks. I was pleasantly surprised that many of my concerns were not only voiced but actively being discussed although was somewhat frustrated that the more obvious existing solutions to some concerns were not being considered. (Is Anysource, Multicast UDP being talked about?)

 I particularly resonated with Eric Lombrozo's talk which, to me, was pretty much the précis of all the issues of Bitcoin and encompassed all the the subjects of the two days. I think many people are very heavily focused on their narrow domain passion and it needs people to sometimes pop their head up, look around and also back to see where we've been.

It was also a confirmation for me because after the two days of listening to some great talks, my conviction that pretty much all the ills of Bitcoin start and end with the miners' human component in a system originally designed to not be reliant on human rationalities; is stronger than ever.

I'm not as pessimistic as that.......yet. My stance is that network integrity needs to be reliant on numbers (of clients) rather than resources and that is the key to preventing the coalescing of power structures. The unfortunate situation we currently find ourselves in is because we give too much credence to game theory and commercial interest instead of nullifying their corruptions with technology and maths.

I too think that non-outsourceable puzzles have a desirable aspect but just haven't seen any proposals that prevent the inevitable mining co-location centers. I find them uninteresting unless they can address both. I think I see where we will end up if things continue as is; just not sure what or how to change the software to prevent it right now.Most energy seems to be with this block size nonsense which I tend to view as how many fingers do we want broken rather than how do we de-claw the miners (pools and commercial) and re-claw the users. The answer to my quest also answers the mining pools and hosted mining, I believe and my intuition tells me that if there is an answer, it probably lies in non-outsourceable puzzles.