Just wondering, rizzlarolla... if you don't like Neucoin so much, why are you putting so much work into analyzing it (ie. re-assessing TX expenses)? Does this mean you see some glimmer of hope for it?... or maybe you just like analyzing things, as a hobby.

Except that, with 100% daily compounded interest per annum (I know it's not exactly daily, but for simplification lets assume it is), the investors will have gained 171% by the end of the first year. Therefore, after the first year, they'd being able to sell 63% of the total neucoins they own just from the interest alone.

Look at NomadBR's activity. The only post I see that is even slightly critical of Neucoin is one where he writes that they shouldn't have banned Gecko because he brought up some interesting discussion. 

http://forum.neucoin.org/users/NomadBR/activity

I have no idea why they'd ban gurkin:

http://forum.neucoin.org/users/gurkin/activity

Couldn't the client just check whether the current block given by the pool for it to work on is chained from the latest block on the publicly available block chain? This would prevent the double spend scenario as well as prevent a pool owner from attempting to revert a transaction that was already added to the block chain. It would also seem easier then trying to search through the block chain for double spends.

I'm kind of confused by these replies. In case this isn't understood, I'm proposing a change to the bitcoin protocol. That is why I have to "invent my own protocol", it's so I can communicate these ideas. Maybe I didn't explain in enough detail the issues that I see with bitcoin, even with multi signature addresses. I tried to give an explanation as to the problem I see with bitcoin in the first paragraph of my very first post.

As far as the proposed solutions, I didn't see any that seemed satisfactory to me. Using multiple wallets would involve constantly reaching into the cold storage wallet anytime new funds are needed. It would be like having a vault that your constantly opening and closing every few days. Logistically, this would be a nightmare.

In addition, using multi signature addresses gives third parties much more control over your funds than is desirable. If their key is needed to unlock the wallet, a third party can withhold it, and freeze your funds. If enough third parties hold keys to unlock your wallet, they can collude together to steal your funds.

The idea I thought of, having different types of keys with different privileges, should solve these issues and provide much more security than can be achieved right now. I thought it was a novel idea, which is why shared it. I apologize if, in your opinion, it is not.

Is it easier, then, to create a one time use key? With a set of one time use keys, that had a time restriction, you could produce a set of 3650 keys for the next year (365 days x 10 keys per day). Each one of these keys could have a limit of say $30 worth of bitcoin, and only work on a given day. So you'd have 10 $30 keys that would work on January 1st, 2015, 10 more on January 2nd, 2015, etc.

On another note, I don't like the idea of using a standard multi-sig and having a bank as a trusted party, because what if the bank decides to freeze you out? They don't get to spend your funds, but they can still stop you from spending it.

With a master key and a bunch of companion keys, this wouldn't be an issue, because you could give out companion keys to many "trusted" third parties (who you may not trust too much), who are all independent of each other. So for example, you could set up the address so 1 master key and 1 companion key would unlock the funds, but 2 companion keys could not and hand out companion keys to a USA institution, one in Japan, a trusted relative, etc.

One big issue with bitcoin is its not as safe as a bank in that a bank imposes limits on how much you can withdraw a day (usually around $300 or so). So regardless if you have a brain wallet, a set of encrypted keys with several backups, etc. all it takes to steal your entire fortune is for a robber to coerce you to give up your credentials and, then, bam!, he has your entire fortune. A bank has an advantage here in that a thief may be able to grab your ATM card and coerce you to hand over the pin, but he still can't get much money from doing that.

So, I was thinking what if a single address could have several keys with different rules attached to them:
* A low security key, with a withdrawal limit of XXX BTC within a certain period of time
* A master key, and a set of companion keys that can withdrawal more or all of the BTC associated with the address. The master key, along with a certain number of companion keys would be needed to unlock the funds and initiate a large transfer (for example, 3 out of 5 of the companion keys). In addition, using this combination of keys, one could create or revoke companion keys, and low security keys.

By taking the set of companion keys and handing them out to friends and neighbors (while keeping at least one for himself), a person can reasonably protect his BTC funds from coercion. If an individual doesn't have many trustworthy contacts, he could use some sort of institution to hold on to his keys (except for the one he personally has, obviously).

Since no one has the master key but himself, he prevents people from colluding to steal his funds. With the low priority keys, he now can use his wallet without worrying about carrying too much virtual BTC on his person. And no one has the power to confiscate his funds.

Does this sound like a good idea? Is there something planned in the coming versions of bitcoin which addresses this problem?

A wealthy scammer would make both himself and the other person both more poorer is not rational behavior on the part of the wealthy scammer. Since the money held by both is so small compared to the combined wealth of everyone else, they both become poorer relative to the rest of the world.

Besides which, the money isn't actually destroyed, but instead transferred to whoever mines the block. So in essence, from the wealthy scammers point of view, they are receiving "x" BTC from party A (the scammee), then giving "2*x" BTC to party B (the miner). This kind of arraignment may work for the government, but as anyone in private industry would know, this is not a very good business model.

I agree that nashx is a really interesting concept. But why do we need to change the mining reward, and why increase the blockchain size to add messages?

Why not simply add a transaction type that allows both the buyer and seller to fund to an "mutually assured destruction" account with a condition that within a stipulated time frame (for example two weeks), either party can issue a destroy command and have the funds become part of the mining reward of its containing block. Otherwise, if both parties issue a "I'm satisfied" transaction, the funds are released to both parties in the amounts they initially funded.

What's also interesting is that this feature can be used for trading anything. In other words, just because both buyer and seller fund the MAD fund, "C" in bitcoin, and the two parties are trading "A" for "B", doesn't necessarily mean that "A" nor "B" must be in bitcoin at all, but could be anything.

Edit: After re-reading your comment, I think I now understand why you want to store messages in the blockchain. I still don't see this as necessary, because as long as the buyer and seller can communicate, over any channel, they can reach an agreement. And since they are the only ones that can do anything in the event of a dispute, then why do we need to publish any communication between the two?

Personally, if I get audited, and didn't report this, I wouldn't want to have to explain a bunch of mysterious deposits coming from dwolla due to sales of bitcoin. I figured there may be other people with similar concerns.

Besides, it's free.

Yes, it's just from the dos prompt. You'll need to install perl to use it: http://www.perl.org/

I just created a program to help convert mtgox history files to usable format for entering in the Schedule D Form 8949 format. It even handles wash sales.

It's a little rough, but it works.

Take a look: http://www.rareventure.com/bitcoin-tax-calculator.html

Questions, comments welcome. If you want to tip, you can do so here: 18KdqGFvAqGgLxAL9KxjC8LWiUhs8Kbim9

Please post when you've received your ripples

rKQ2Db6JmHF6PBoy7u9uBpn7geQDA4pQrM

Made my day!

The problem with that idea is that any miner that requires a minimum fee higher than the others will eventually lose most transaction revenue.

Suppose that miners did start to reject transactions if the fee was too small. Consider the top 1% of miners in this scenario who set the minimum fee to a greater amount than all the others. Only the traders that wanted their transactions to get through as quickly as possible would pay enough for 100% vs 99% of miners to process them. Lets be generous and say that 5% of all transactions are those that are so important they need absolutely top priority. This means that the top 1 percentile are only getting 5% of the fee per block discovered that the rest of miners regularly receive.

If we leave out the subsidy, these miners would be very hard pressed to compete against the rest of the 99% if they're earning 1/20th of the revenue. So, either they would lower their minimum fee amount, or close up shop. Either way, the new highest minimum fee drops by 1%, and the process repeats.


I concede this point. But, I do think that fees need to be reworked at some time, since in their current form, they won't be able to replace the subsidy.

Your block chain would be immediately accepted by the other nodes as the correct one. It's still a mystery to me what you are getting at with this..


As I mentioned in my previous post, if you have a lot of wealth invested in bitcoin, you may decide to diversify once you notice the network security has gone down too much and/or the apparent interest of would-be attackers has gone up too much.

Setting up and maintaining a big enough mining operation for an ordinary speculator would be a big pain in the ass. Also, due to Moore's Law, it would be have to be an ongoing process of buying and installing the latest hardware to be effective. Why would you go through all this trouble when you could invest your funds directly in something else?

I think that a 51% attack would shaken the faith in bitcoin, because once it happens, people would constantly worried that it may happen again. It's unlike a DDoS because merchants would be really losing money.

Furthermore, the FUD would lead to a drop in bitcoin price, making mining less profitable, causing more miners to quit and reducing the size of the network even further, which would make the 51% attack even easier. Seeing success, the attacker would just do it again, until it becomes drilled into peoples heads that bitcoin is unsafe.

A successful chain of attacks like this would greatly reduce the chances of bitcoin, or any variant of it rising again, without a robust solution to this issue

It wouldn't matter that your funds in the system are safe, if the faith in the system has been destroyed.


Sure, and I'm sure some people will mine just to support the network. Keep in mind though, that as soon as someone starts doing this and makes a large enough impact to make mining unprofitable, then all the miners-for-profit people will have to close up shop.

Suppose this does happen, and many people start working together and mine to keep the bitcoin security high. There are several problems with this:

• It may simply not work. What people say they'll do and what they do when time, money and effort are required are two different things. There may be a token attempt. There may be the situation where most people don't bother and hope others do enough to support it. Many of those people with millions invested in bitcoin might think that diversifying is a better solution than trying to prop up the network with the will of the willing. Besides, I am guessing it's a poorly understood issue. What is an acceptable network size? How much money needs to be poured in to support that network? I don't think these questions are answerable.
  
• A few big players, with knowledge and understanding, and the will to do it, could indeed step up to do the mining. And as I stated before, in this case, those big players would then practically "own" the network. If they decide join up, and then change the rules to block out other players, and impose exorbitant fees, and get most merchants to go along with it, there is not much anyone could do to stop them.
  
• Finally, even if it did work and the above problems avoided, if there is even a slight hiccup in size of the network... it could be enough for a 51% attacker to be successful.
  

I also want to mention that what I would like to see is a minimum transaction fee. Maybe we could tie it to the days that money has been resting in an account, in the same way as bitcoin days destroyed works, so that simply transferring money to different addresses immediately after a transaction would have a much lower or eliminated minimum fee.

The minimum fee could be as low as 0.5% and I think it would be much more secure than the current system. Just a disclaimer, I am not a miner! 

I'm not sure what you're getting at here..

The block chain proves the transactions within it are valid given the assumption that over 50% of nodes in the network are honest nodes. Confirmations are important because an attacker with less cpu power than the honest nodes may discover a winning hash through random chance. With each confirmation, the chance that an attacker with less cpu power could do so becomes less and less exponentially.

Verification of the block chain is not the same as mining. All an in in-house mining operation would do is give businesses a chance to receive mining revenue, but this revenue eventually won't be enough to support much mining at all.


I think the only revenue received from mining will be from the bounty, because the transaction fee will become practically zero. As I wrote in an earlier post, the transaction fee is paid only to rebroadcast the transaction to the rest of the nodes. The cost of doing that is practically zero. Eventually the mining fee will also drop to practically zero, so there is no direct benefit anymore to mining. So, there is no way to undercut when your paying out more to mine than you're pulling in. Because so, there is no reason to leave a consortium. Why pay for mining without getting the benefit of using your muscle to impose high fees?


Mining doesn't affect the speed that a transaction is processed. There could be one lonely miner out there doing 1 Hash / sec, and the speed of transactions through this network would be the same as a network with millions of nodes and 10 Terra Hashes / sec. It would just be a lot less secure against a 51% attack.