At least people are learning their lesson.

I honestly can't believe how many people leave their crypto on exchange.

Also the number of crypto bros who still believe 'yield farming' is a legitimate way to make money.

Hahahaha had to laugh at this one.

We are in for a reckoning much worse than 2008.

We have been in an inflationary bubble this whole time and still are, hence why prices are (still) going up.

We are in a technical recession, but the actual recession hasn't hit yet.

I think we will see $7000 in 2023 when the recession hits.

Bitcoin's growth is heavily dependent on the availability of "easy money" within the global monetary system.

During inflationary periods, Bitcoin grows because there is excess cash floating around and everyone is scrambling for a place to invest their excess cash.

During recessionary periods, the opposite is true: people are short on cash, so they dump their risk assets to hold cash.

If you think that the low is in, or that the low will be 10-12k or whatever, the bet you are making is essentially USD hyperinflation.
Reality check: The Fed is stupid but they are not stupid enough to lead the Dollar into hyperinflation.

There will be a period of economic tightening, during which time Bitcoin will really tank.
Bitcoin has never experienced a major economic bubble bursting, so get ready.

Bitcoin's growth is heavily dependent on the availability of "easy money" within the global monetary system.

During inflationary periods, Bitcoin grows because there is excess cash floating around and everyone is scrambling for a place to invest their excess cash.

During recessionary periods, the opposite is true: people are short on cash, so they dump their risk assets to hold cash.

If you think that the low is in, or that the low will be 10-12k or whatever, the bet you are making is essentially USD hyperinflation.
Reality check: The Fed is stupid but they are not stupid enough to lead the Dollar into hyperinflation.

There will be a period of economic tightening, during which time Bitcoin will really tank.
Bitcoin has never experienced a major economic bubble bursting, so get ready.

But that's my point. It's a nothing feature. It's not part of the protocol so it's meaningless. It should be a checkbox in the UI.

I really don't understand how there could be so much debate over a feature that ISN'T EVEN PART OF BITCOIN.

If anything this debate just demonstrates that Bitcoin development is a monoculture.

Someone should release a "jailbroken" version of Bitcoin Core that allows you to have your node behave in any way you want.

The merchants who are crying about full RBF because it stops them from accepting zero-confs are idiots.

IMO having an option in your node software which gives the node operator the choice to obey/ignore the RBF flag should be uncontroversial.

It has nothing to do with consensus. It should be as controversial as giving node operators the ability to change the appearance of the Core GUI.

Except one would assume there is a good reason for wanting to change the Bitcoin protocol.
Does your idea require similar changes, or do you claim to be able to do the same thing but without the protocol changes?

Do you think IIDs are necessary for scaling - why or why not?

I can see how IIDs work, but I am unsure about the implications for scaling.

Hi guys,

In a previous thread (https://bitcointalk.org/index.php?topic=5414686.0), I discussed with people ways that Bitcoin might be able to scale to billions of users (which cannot be addressed by LN or similar L2s).

Since then, I've come across this paper "Scaling Bitcoin with Inherited IDs" (https://github.com/JohnLaw2/btc-iids/blob/main/iids14.pdf) by John Law, in which he describes a change to Bitcoin which he calls "Inherited IDs", which would in theory allow Bitcoin to scale effectively to many more users than currently.

I'm too silly to understand the theoretical impact of this idea, so I was hoping someone could elucidate it for me.

It seems like it might have merit, but I can't be certain if it's snake oil or not.

What do you guys think?

My 2c:

Full RBF is the only option that makes sense.

The RBF behaviour is not part of Bitcoin, it's just a node implementation detail.
Anything prior to consensus is not sacred. As long as a block follows consensus rules, it is valid, regardless of what transactions it includes from the mempool.

This is a key difference between Bitcoin and the shitcoins.
Bitcoin doesn't try to get fancy implementing all kind of "social consensus" rules and other such stupid non-deterministic things.

Users expect determinism and reliability out of the Bitcoin network. There should be no features which rely on the goodwill of node operators.
This would be akin to building an extension to your stone fortress out of paddlepop sticks.

The same goes for any feature which attempts to treat the mempool as sacred.
The mempool is a resource to be plundered in the greediest way possible. It is a Herbalife salesperson's phonebook.
Any implementation details which try to get nodes to treat mempool txns in a particular fashion is foolish.

Miners ought to order transactions by fee revenue and nothing else, otherwise they are in the wrong industry.
If there are 50 pending blocks, and I submit a transaction with a higher sats/vb than the rest, rational miners should include my transaction first before all the others even though my transaction is the newest.

There is a lot of talk about how Bitcoin mining incentivises the creation of cheaper energy, but what is not often talked about is how it also incentivises the creation of cheaper computation.

I've been thinking a lot about theoretical limits to the efficiency of computation as it relates to Bitcoin.

I had assumed that Bitcoin miners would soon approach theoretical limits of computational efficiency in the context of hash power.
Maybe within an order of magnitude I thought.

As it turns out, we are nowhere near the theoretical limit of computational efficiency:
https://en.wikipedia.org/wiki/Landauer%27s_principle


I'm sure there are practical limits I am not aware of - e.g. lower limits of feature size of semiconductors probably impose a relatively hard limit on computational efficiency.
Someone here probably knows the calcs for the practical limits of computational efficiency with conventional semiconductor technology.

In any case, it is reassuring to know that we have a long way to go yet.

To think that Bitcoin could be a strong driving force to improve the efficiency of computer hardware is very exciting to me.

Just a thought I wanted to share with you folks.

Right so how does this proof happen?
Does the user have to post on-chain (L1)?

It sounds like an interesting idea nonetheless. It makes sense that a decentralised L2 that allows user scaling will have to rely on some kind of off-chain voting system, because otherwise the problem seems intractable.

I think they'd have thought of this contingency.
As n0nce said, you need to re-request to be a validator, and there is some kind of timelock on your staked ETH as well.
I assume this is for the express purpose of allowing some time for a new fork to get started, and make it difficult for new validators - e.g. the malicious validators who mixed their previously staked coins to allow them to double-stake - to subvert the new fork.
So, the trick they are using to simulate the functions of PoW is basically a democratic consensus system. It's not a bad idea, but IMO still not as good as PoW, which is much simpler, and with no such attack vector. You cannot kill a fork in PoW, only not contribute to it.

That's a great analogy.

PoS really is a PoS haha.
Although see tromp's reply below. I didn't realise, but it seems like Casper might address this?
But then you could still mix your staked coins and start again? (as pointed out by n0nce)

Right so they in fact do have some mechanism to allow for this.
If it actually works then some of my faith in Ethereum is restored.

But what if you unstake your coins on one fork, mix them, and begin staking again with the mixed coins? (as pointed out by n0nce)


Forkability is necessary. How do you know which fork is the better one? Answer: you don't.
The ability to fork, and allow users to choose where to move their funds (through exchange) is what makes the chain resilient.

Someone could grab your signature from the other chain (which includes the block height), and post it as evidence that you submitted two votes for the same block height, resulting in your balance being slashed.
You can use - as in, make payment with - both the ETH-old and ETH-new, but you can't stake with ETH-old and ETH-new twice for the same block height without risk of slashing.


AFAIK, staking on the not "good-boy Vitalik chain" is not a slashable offence by itself, but staking twice for the same block height is.
Or are you saying that Vitalik will just implore everyone to slash your coins by posting on Twitter asking for social consensus? *shudder*

Agreed.
That's something I didn't think of. I have to think about that a bit more.
In any case, I'm officially coining the term Lightning² haha.
For sure, agreed that it would be ridiculous to open such a small Lightning channel especially if an on-chain txn is 100,000 sats.
And yes, I think you might be right about L2 being only used by higher-level users, a la Lightning²  
Agreed.


Are you saying if a settlement pool goes down, that *every user* from that settlement must create an on-chain transaction, or only one user from that pool?
If the former, then we are back to square one. If the latter, then I need more time to wrap my head around this.


The point of bitcoin is decentralisation, and throughput scales only linearly with block size (obviously).
As block size limit is increased, the number of node operators must decrease - i.e. everyone running a node on a Raspberry Pi and 1TB external hard drive will have to buy 10 or 100x the storage.

Actually it's a bit of a catch 22. If we:
a) keep the block size the same, this necessitates the use of Bitcoin banks. If you are storing all your funds in a Bitcoin bank, then running your own node is pointless, because the bank has ultimate control over your BTC.
b) increase the block size 100x say, this would permit individuals to continue transacting on-chain in a hyperbitcoinised world, but it would also drastically increase the hardware requirement to run your own node, making it much more difficult for the average person to run their own node.

I think ultimately Bitcoin banks are the future. The vast majority of people will never run their own node, regardless of the barrier to entry. Sure, you will have to trust the bank with your coins, but I think that is fine. If a bitcoin bank tries to run off with 100,000 customer's coins, there are not many places in the world they would be able to hide from the 100,000 strong angry mob that would form.


There is a fixed supply of block space. Supply of block space is completely inelastic.
The math is very simple.
For a billion users, that would be one channel open/close txn per person per ~4 years.
That is not enough.

The kind of scaling achieved by Lightning is only good for scaling the number of payments possible for the same size set of users, but it DOES NOT address user scaling.
The whole point I'm making is that I don't believe it is possible to scale the number of users without changes to L1 and even then I don't think it is possible without a 100-1000x block size increase, or some cryptographic black magic fuckery.

Except as everyone has pointed out, Bitcoin will be dumped by a lot of people when they are forced to tighten their belts, and as they try to derisk themselves - bitcoin is seen as a risk asset by a lot of people.

Bitcoin has not seen a major recession yet. So a major global recession is uncharted territory for bitcoin.

I am also worried about my local currency (A U D), although we managed to mostly avoid the 2008 recession.

So folks,

If we are headed for a major recession, what’s the play?

If I’m to diversify my portfolio away from holding BTC, what should I hold in its stead?

Should I be holding USD, gold or something else?

But the chains become independent once they split. The hashes would be different for different blocks, so you'd either have to choose to point your miners at the new or the old chain.
The miners that believe they can make more out of the new chain would point their miners at the new chain, and miners who think they can make more out of the old chain would stay on the old chain.
The new chain would have different consensus parameters, which could not be subverted without significant cost to the miners who wish to subvert it.

Under PoS, this is not the case.
Since the staked amount persists on both tails, stakers could just stake the same way on both tails, and subvert the new chain, and its consensus parameters would end up being the same as the old chain.

Yep, that's what I thought, but I was hoping to find out if there was any theoretical way of achieving such scaling, or any such development in that area.
As far as I'm aware, there is also no trustless off-chain scaling solution that exists yet.
The closest you might come to this would be FediMint, which requires you to trust your guardians. Lightning addresses payment scaling, but not user scaling.


I'd posit that it is not possible to implement user scaling (to say 1 billion users) off-chain in a trustless fashion with the current bitcoin protocol, since any 1-of-N fallback (e.g. the ability to close an LN channel) relies on the assumption that on-chain transactions are not cost prohibitive for most individuals, which they will be when there are 1 billion users.
For example, if your life savings are 1,000,000 sats - say $10,000 in today's money - and a single on-chain transaction is 100,000 sats - $1,000 in today's money - then using LN is basically untenable.
I suppose for LN to work in this context, there would basically have to be huge penalties in LN for unresponsiveness or dishonesty to mitigate the need for cost-prohibitive on-chain transactions, and then all channel operators would be essentially required to have no more than a few days downtime over a timespan of many years, and never slip up in terms of sending outdated transactions. This is especially difficult for people who live in places with poor internet or no guarantee of internet access. Imagine your internet goes down for a week and you lose $2000 as a result.

Addendum:
For anyone who thinks that an on-chain transaction will never cost 100,000 sats, don't forget that the supply of block space is highly inelastic. You cannot easily create more space on-chain to match demand.
At the moment, BTC transactions are cheap because the network is not yet saturated. When the demand for block space surpasses available block space, then we will see a significant increase in transaction cost.
If we see a hundredfold increase in monthly users, then the increase in transaction cost will be very steep.


Noted. Thank you.



Again, this 1-of-N fallback option is irrelevant when it's cost-prohibitive for individuals to transact on chain.
For the purposes of this thought experiment, assume a single transaction on chain is more than the net worth of most individuals.
The 1-of-N may as well not exist.



These are all only incremental improvements though. Even if block size increases by a factor of 5 - which I know almost no one on here would support - and signature aggregation techniques further improve transaction density by a factor of 5, assuming we have a billion users, each user would still only be able to transact on-chain - e.g. to perform a channel open/close - once every 80 days, which is still very tough.
We really need a 1000x improvement.

The only thing I can contribute to this thread is the following question (for PoSers):

How does PoS support chain splits?

The ability to fork the chain is fundamental for resilience.

Without this, you might as well just have an Excel spreadsheet on somebody's laptop IMO.

To my understanding, in a PoS chain, both forks of a chain retain the staking balances on both sides, and it would only make sense for the stakers to validate the same blocks on both chains.
This would end with two chains with the same parameters, which defeats the point of a split.

In a PoW chain, whenever a chain split occurs, miners have to pick which fork to continue mining on, so you would be left with two competing chains of different parameters, of which one would eventually win out as the coins on one chain slowly devalue relative to the other as people sell their coins on one chain to buy coins on the other (as it should be).

Am I wrong? Is there some mechanism by which PoS supports chain splits in a robust way?