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1  Alternate cryptocurrencies / Altcoin Discussion / [StableCoin] Looking for inflationary cryptocurrency developer (3 btc bounty) on: April 28, 2013, 10:07:35 PM
I am willing to pay for the implementation of a very simple fork to the bitcoin protocol.

There are two difference that my fork and bitcoin will have.

1) Block discovery reward will not half, but remain constant at 50 until 2)
2) Once the annual rate of inflation is less than 2%, the block reward will adjust to fulfill a 2% annual inflation and the block reward adjustment will occur at an annual basis.

3 bitcoins if anyone is interested please PM me.


I created an extensive thread in Economics of why I believe deflation is bad for bitcoin.  The thread can be found here:
https://bitcointalk.org/index.php?topic=12109.0
2  Bitcoin / Bitcoin Discussion / MtGox should be arrested on: June 21, 2011, 01:57:46 AM
This is potentially a 5-10m heist.  No one knows what's going on. 

This should open up lawsuits and criminal proceedings.  We don't know if MtGox stole it or what his intentions were.  We don't know ANYTHING.

You guys are blind religious fanatics for trusting this idiot.  I hope he contacts the FBI.  He's at least negligent and worst, a criminal.
3  Economy / Economics / The deflationary problem on: June 04, 2011, 11:41:12 PM
I will introduce the concept of Sweft's Law and Sweft Attack below.

Sweft's Law:  The network hashrate of a proof of work cryptocurrency must rise at a rate at least equal to that of Moore's Law to provide minimal network security.

Sweft Attack:  A prolonged deflationary attack on a cryptocurrency network describing a situation in which a rogue miner processes transactions solely for the purpose of removing the fee of the transaction from circulation.  A necessary precondition for said attack is that the average transaction fee must exceeds the average rate of inflation.

Edit:  Originally titled the 2040 problem, a more apt title is the deflationary problem.  I use 2040 as a point where mining reward via block reward would be negligible.  I'm starting to believe this point where miners no longer profit enough to increase hash will come much sooner, perhaps by 2020.


Edit:  An explanation of Sweft's Law for those having trouble understanding it.

Moore's Law states that the number of transistors doubles every two years.
This means two years from now, the cost of the network (hash / ($ / hash)), given equivalent hash, will be half.
And half in another two years. And half in another 4 years.
That means in 6 years it will take 1/8th the amount of capital to replicate the original hash.
Thus, the network must grow at the rate of Moore's Law to sustain the value of its hash so that the value to replicate the original hash does not decrease.
That means that the network must double its hash every two years.
Every two years there has to be a capital investment equivalent to the cost of network hash / 2 to double the hash in accordance with Sweft's Law.


Edit:  I haven't posted in two years but i will provide an updated analysis below.

For BTC to to have value, miners must secure the network. If miners do not constantly increase hash, Moore's law will catch up to the network and it will become prone to attack. This should be easily accepted as fact. If you don't accept this premise i can't possibly help you understand the deflationary flaw in bitcoin.

If you don't understand, let me try to explain it again. If hash remains constant and doesn't increase for a number of years, technological advancements (Moore's Law) will make an 51% attack more likely.

Now what some people seem to argue is that tx fees will support mining growth.

This is true in two scenarios.

1) bitcoins are sent/received more frequently (velocity) 2) tx fees increase

I will addresses the problems with both scenarios.

The problem with #2 is that there is a cap on maximum fee the miners can charge, at 100%. So velocity remains constant, miners cannot increase profit beyond 100% tx fee. So this cannot create increasing profit.

The problem with #1 is that bicoins can be permanently lost, and there is a hard cap on the amount of bitcoins. That means that there will eventually be more bitcoin lost than are generated by block reward. This should be known as the 'Sweft point' where bitcoin turns into a deflationary currency from an inflationary one. Thus, to believe that transactions will increase as coins are lost, aka deflation, is not a sound proposition.

Another issue is that rogue miners can mine the network, charging tx fees and sending the coins to the trash. This would further exaggerate the deflationary tendency of the bitcoin design.

Thus it should be obvious to anyone that understands the issues to also understand that there exists a simple solution which will make the person who implements it rich.

Make an alt currency with a cap minimum 3% inflation. This will satisfy the profits of the miners and hash of the network.


Original:

In 2040 new block generation will be negligible, bitcoins will be fixed.  Miners will only be rewarded for transaction fees.  This may not seem like a problem, it IS.

The health of the network depends on constant hash growth.  Without constant hash growth, the network is prone to attack.  Why?

What protects the network right now is a high hashing rate.  This secures it from attack.  Without this, there is no security.  The price of bitcoins would fall.  The more hash, the more security, the higher the price will be.  Because it's impenetrable from exterior forces or supercomputers.  If a government were to be able to attack the network, 99% of the network, the system would fail.  If the system has the ability to fail, the price of bitcoins is worthless.

Thus, the whole network depends on hash.  The security and price, which is also reflective of hardware and electricity, and again, security.  The more hash the network has the more secure.

Thus, miners need incentive to increase hash.  They do this by generating new coins.  Thus you increase hash and create a more secure network.

The problem is that in 2040 new block generation will be negligible, and coins will be more or less fixed.  Now, people want to make you believe this is fine.  It's not.  It's stupid and beyond stupid.

The stupid part about is is that it removes an incentive for miners to increase hash.  It removes a revenue stream for miners.  New coin production is not BAD, it's GOOD.  Only a moron would think otherwise.

This is extremely important.

When you remove the reward for generation of new blocks, you remove a revenue stream for miners, hash will fall.  You say, who cares, hash falls.  

Hash secures the network.  It ensures that miners will profit and the miners ensure there is no double spending of coins.  If miners stop mining because intensives become smaller (loss of profit), hash goes down, the network is prone to attack.

Then the coin holders will be mining to protect their own money.  This will be an incentive of the richest members.  The problem is that every year hardware advances and you're no longer making as much money mining, maybe not even to cover the hardware costs to protect the network.  So now, the network is prone to attack.

This is irrespective of assuming whether or not transaction fees will support the network.  It's irrelevant.  The network will be weaker because you removed profit from miners.  Now, miners stop mining.  Thus, you decrease hash.

Bitcoins are only worth the hash(security) of the network.


R
4  Other / Off-topic / 5870 heat issues on: May 25, 2011, 04:34:42 AM
I just purchased a used ASUS 5870.  The issue i am seeing is that in GPU-Z there are three censors.

GPU Temperature - 81.0 C
GPU Temp. #1 - 81.0 C
GPU Temp. #2 - 102.5 C
GPU Temp. #3 - 86.0 C

I'm running the card at 889 gpu / 375 memory. I'm a little concerned about the 2nd gpu temperature.  Is it a faulty temperature reading or would it be the heatsink coming off?

I'm getting 370Mh/s with this setup.  The fan is on 44%.  I can push the fan to 100% and GPU to 920 and get about 400Mh/s.

I think i need more fans in my system.  I have an old dell.  Right now the side cover is exposed so i'm considering buying extra case fans to increase ventilation.

But that doesn't discount the fact that sensor #2 is almost 20 C higher than the GPU temperature.

Should i be concerned?

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