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1  Bitcoin / Bitcoin Discussion / bitcoin and exponential growth on: March 21, 2013, 10:28:07 AM
Hi, I just made a graph of the data from for MtGox USD, taking all 6-hourly data since their records begin. Bitcoin seems to go through phases of exponential growth, which probably means that it spreads virally through a new class of user before saturating its presence in that group. I had a pet theory a while ago that each new phase of expansion of bitcoin would always be slower than the last, but this latest increase to $65 is actualy faster than the previous two. However it is significantly slower than the June 2011 bubble, which saw the price double almost 3 times as fast as it is doubling today.

For those that don't know, exponential expansion indicates that, on average, every entity participating in some network is bringing in another entity in some fixed time. It could be rabbits breeding, or cells dividing in a foetus. From 1 cell or rabbit, you get two. From 2, you get 4. From 4, 8. And so on. Each doubling occurs in the same time.

Right now, bitcoin price is doubling every 33 days or so. If this were to keep up (which it won't, I'm certain) until year end, bitcoins would be worth about $16k each, and market cap would be about $200 billion. However, each of the previous exponential expansions lasted typically about one or two months each. Which would suggesting we're near the end of this one, assuming no externalities to disrupt the trend (like global banking collapse).
2  Bitcoin / Development & Technical Discussion / blockchain improvement - speed up transaction verification on: February 22, 2013, 04:02:26 PM
Here's a suggestion - please bear in mind I don't know exactly how transactions are stored in the database, so it could be this is already incorporated. Also, I know 0.8 stores the data in a different container which I have not yet studied.

At the moment, in order to verify a transaction, a bitcoin client has to dereference the inputs, then trawl the whole blockchain making sure it has not already been redeemed. Is that correct?  If so, then: wouldn't it be clever to leave enough bytes (50 or so) inside each transaction output in the blockchain, to store the eventual redeeming transaction & vin?

So for example, at the moment, transactions are stored as (simplified):
       txid, (txid:vout, txid:vout, ...), (addr:value, addr:value, ...)
where the first parenthesis are the inputs, and the second the outputs.

I would change that to:
       txid, (txid:vout, txid:vout, ...), (addr:value:0x00000, addr:value:txid:vin, ....)

where the first output has not yet been redeemed and has 50 bytes of empty 0x0. The second output has been redeemed and the 50 bytes of 0x0 have been overwritten with the (txid,vin) with which this transaction output has been redeemed.  This would reduce verification on each transaction input to a single db lookup on a unique index (the txid).

edit: from, step 14 of verifying a transaction is:
"For each input, if the referenced output has already been spent by a transaction in the main branch, reject this transaction"
I suppose this is just one more database query, right? So maybe this suggestion is not so useful given that it would add 50 bytes or so for each tx output. ok, never mind.
3  Other / Politics & Society / Another take at intellectual property - what about bitcoin private keys? on: October 10, 2012, 05:51:03 PM

Inspired by Topic: Legal Research in which there is a debate about whether a bitcoin private key can be considered property which endows rights on the owner, specifically the right to compute some mathematical functions which transfer a perceived value to another individual.

Well, there was a previous, very long, thread about intellectual property here, in which many contributors rejected Intellectual Property Rights (call this the anti-IPR position) - for example, if one can somehow obtain a digital copy of a Hollywood blockbuster, then he is fully within his rights to view it and make additional copies at will; no-one can tell him how he should utilize his physical property (the computer). The information bits composing the film (or game or mp3) are not considered property.

Well, it seems perfectly clear that bitcoin private keys cannot ever be considered physical property. If they are to be considered property at all, it can only be as intellectual property - like an mp3, they are merely strings of bits.

This would seem to be a problem for anyone who holds anti-IPR pro-bitcoin positions. If someone, by manipulating his computer, manages to hack and obtain some bitcoin private keys (and, obviously, the associated bitcoins), then, according to anti-IPR, no theft has taken place and no anti-IPR judicial system will recognize a loss.  Any physical attempt to recover the bitcoins would thus be unlawful.

It's not clear to me, though, what the anti-IPR position on hacking is. I mean, a hacker is merely issuing instructions to his own hardware which make it transmit certain bits of information, right? No-one can deny him that...  Huh  And the hacked party is free to program his own hardware to act, or not to act, on receipt of those bits of information... Huh
4  Bitcoin / Development & Technical Discussion / Do embedded devices have enough entropy? on: October 08, 2012, 10:15:11 AM
Inspired by Topic: Physical device to generate public/private key pairs and Topic: Proposal: Hardware wallet.

In short, these topics' starters are thinking about how to create a simple hardware wallet, maybe USB driven, with a simple API that (obviously) doesn't include anything like exportprivatekey(), but does include such things as signtransaction(), and a hardware button to approve the transaction. Such a thing could also work over NearFieldComm, wifi, bluetooth, etc, for day-to-day use when buying cigarettes.

Well, I got to thinking about random number generators.  Wouldn't a feasible attack be to reverse engineer one of these devices, find out how it generates random numbers, and capture its factory-initialised entropy state.  From there, you could try to work out probable values for the random number sequence it might generate, and so derive a series of probable private keys. Then scan the block chain and profit!!!

The only way to eliminate this threat would be to include a real random number generator on board. e.g. a sensor that measures thermal fluctuations (or any physical variable) at a high frequency to a high precision but with low accuracy. Or, even better, a sensor that measures the polarization state of single photons. Yeah quantum RNG rules.

edit: Hah! It's already a noted problem: Weak RSA Keys Plague Embedded Devices, But Experts Caution Against Panic
5  Bitcoin / Bitcoin Discussion / Some timely advice on: October 07, 2012, 02:28:20 PM

Seems that every second week there's another bitcoin scandal - pirateat40, bitcoinica, now glbse. Is it never going to end?

So I have some advice for everyone. Now, one of bitcoin's great advantages is, it's like cash because transactions cannot be reversed, it's (not really) anonymous, it's fungible blah blah blah.

So, if it's like cash, then treat it like cash.

What I mean is, if some dude approaches you on the street and asks for a $100 loan with 5% compounding monthly, would you give it to him?

So, whatever investment interests you, think first "Would I put cash in an envelope and mail it to their untraceable anonymous PO box?"

And before you tell me about trust ratings, well, just don't bother.
6  Bitcoin / Bitcoin Discussion / Looking for a bitcoin research article on: September 23, 2012, 08:05:29 PM
A few months ago, maybe a year, I remember reading a research article about embedding messages into the blockchain. The method was not simply sending ASCII binary transactions (e.g. 0.01101101BTC). As I remember, the process involved something like:

1. Alice sends a transaction to some carefully sculpted keypair, and notifies Bob of that address. Alice redeems the coins so the public key is visible.
2. Bob performs some operations on the public key and derives an additional keypair, and sends coins there. Alice, knowing which operations Bob would be doing, watches the blockchain until she identifies Bob's transaction.
3. Somehow, with this info, Alice and Bob can communicate securely, but maybe also anonymously.

I've scoured the forum, and I've repeatedly asked google, but no dice. Can anyone remember the article? At the time, it was presented as a real problem because, while the ASCII transaction above could be detected and maybe discouraged, this method was completely undetectable.

7  Other / Politics & Society / Any pro-NAP and anti-NAP members want to try a debate... with a difference? on: July 07, 2012, 09:46:45 PM
Well, I happened to be debating religion, atheism, agnosticism with a religious friend a while ago.  I remembered something I learned in debating classes a while ago which is, in a real debate, you do not necessarily hold the views you are debating for.  So I challenged my friend to swap sides and debate the pro-atheism case while I debated pro-religion. It was very interesting, and both of us learned something.

So I propose that the pro-NAP members elect one (or at most two) representatives who will debate AGAINST NAP, while the anti-NAP people will choose one or two representatives who will debate FOR NAP.  All chosen debaters of the discussion will be honor-bound to debate as effectively, elegantly, persuasively AND correctly as they can and NEVER NEVER within that thread post any message against their assigned side of the debate.

I personally would love to hold the honor of being one of the anti-NAP reps (and therefore debating pro-NAP), but I'm only intermittently online and there are many far better anti-NAPsters than me on this forum.

This raises a question for Theymos - is it possible for SMF to restrict a thread to just certain members?  It would be most unfortunate if something enlightening came of the discussion but the message got lost in the noise. If not we'll just have to precede each message with a header that goes something like: "Please do not reply here - to discuss this thread please post here [link to another discussion thread]" and ask the mods to remove any unwanted posts.

What do ye think?  Is it a good idea?
8  Other / Politics & Society / What's so special about the NAP? on: June 17, 2012, 04:32:53 PM
So I started a discussion about what I perceive as profiteering in another thread, and realized that there is a comparison with libertarianism and the Non Agression Pact.  I define profiteering as selling at the maximum price you think your customers will pay; as a genuine free market would fully endorse. One forum user, evoorhees, states:

It is natural, moral, legitimate, efficient, and productive to seek the highest profit one can obtain, so long as one doesn't resort to fraud, deception, trickery, or theft in order to obtain it.

So I wondered, why stop at profiteering? Why should fraud, deception or trickery somehow not be permitted?  Please read that thread for more info there.  Here I just want to discuss the analogy with NAP which, hopefully, is fairly obvious as follows.

Libertarians want there to be a minimum of laws, in fact, as I understand, there should be only one: do no violence unto others (where violence is understood to include such things as theft or damage, which implicitly defines such a thing as private property).

Well, why no agression? Life is violent by nature - just ask any lion or gazelle; each and every one of us should be obliged to take adequate steps to defend ourselves and those who do not... well... too bad, they were warned. The thief cannot be blamed if that ferrari happened to be there, with the keys in the ignition; the bandit cannot be blamed if the rich man was travelling dark lonely streets without bodyguards; the large-scale farmer cannot be blamed if his small-scale neighbor left his farm unguarded while he was ill.  And so on.

A society could have lots of laws, or a few laws, or none. What's so special about having just one law, the NAP? Like I say, life is violent, so people should all be prepared for violence. You can't defend the NAP by appealing to civilisation or that mankind has subjugated its violent nature, because then you're implicitly justifying any other laws that civilisation chooses to enact, or any other behaviors that mankind chooses to subjugate.

Indeed, a violent person should be praised for helping the society learn how to defend itself and become even more resilient to external agression.  A bit like hackers getting paid to show banks where their weaknesses are.

If you want people to be as free as possible, then stopping at "no agression" seems a bit arbitrary.  It's certainly not written in the stars or the rocks.  What gives?
9  Bitcoin / Bitcoin Discussion / Bitcoin: low transaction fees, I don't think so on: June 15, 2012, 07:31:05 PM
[rant warning]

Well, everywhere you see bitcoin promoted or advertised, they'll give you the selling points - rapid transactions (hours instead of days), pseudonymous, secure, inflation-proof, and, not least, near-zero transaction fees.

This last, the near-zero fees, might be true of the protocol, but it is absolutely not true for all the services that have sprung up.  There are, to my knowledge, very few services that offer less than 0.5% fee, most would be around 2-3% - roughly a credit card transaction fee.

What got me started on this was TorWallet's announcement of a mixing service  Now, that seems like a wonderful service, but it charges 3% for mixing your coins, while a similar competing service, BitcoinFog, charges 2%.  Let's think about that.  BitcoinFog says he gets "thousands of bitcoins per day" moving through his service (see above thread, msg 17).  2% of thousands is, let's say, 50 bitcoins per day or about $300 per day, or $9000 per month.  Now that is way more than anything you might need to run the server.  A low-cost server might be $10 per month, a high-end might be, what, $50 per month?  So, assuming a high-end server (BTC 0.2 per day) handling 3000 bitcoins per day and an admin costing BTC 4 per day on average, a reasonable fee might be 0.2/3000 ~ 0.005% for server costs, 4/3000 ~ 0.1% for admin.

Now you might well say, STFU, go do your own.  Well, I would.  But let me tell you another story.  Where I live, the govt built a nice new bridge over the river.  It cost a lot of money, so there was a toll to go over it.  Now, 30 years or so later, the bridge has gathered enough tolls to be fully paid off many many times over, but the toll keeps getting more and more expensive.  I realise that there are maintenance costs, but they'd be far less than the tolls.

Same with bitcoin services - the devs have to be paid for the initial investment.  But if that were all, then you'd expect the fee for a service to reduce over time, and to reduce as more people use the service.  That hasn't happened with any bitcoin service that I'm aware of yet, leading me to think that service ops just want to milk the pundits as much as possible.

So - is it possible to use bitcoins with "near-zero" fees?  I don't think so.

10  Economy / Economics / Suppose you wanted to start a geographically localised bitcoin economy on: April 13, 2012, 01:39:14 PM
I've been thinking about this, in the context of the European crisis, Greek local currencies, Argentinean peso collapse, etc.  My question is: suppose you wanted to convince your locality to begin trade in bitcoins, eventually hoping that bitcoin would dominate the incumbent currency (e.g. you're a politician in Greece, or a popular businessman in Somalia etc.).

Well, here's a problem.  As soon as bitcoins start to be accepted somewhere (let's say... Athens!), well then, there would be a large influx of bitcoins to the Athens area from all over the world as people order Athenian products, causing a general inflation.  The effect on sellers would be negative, and the initial failure might even cause people to reject bitcoins.

So perhaps a better way to do it would be to create "The Athenian Bitcoin Bank" TABB.  This bank would obtain a reserve of bitcoins and issue a (paper?) currency, let's call it Tabbies, fully backed by their bitcoin reserve.  Anyone wishing to trade, then, would have to go to that bank, cash in their bitcoins and obtain Tabbies.  That way TABB could regulate the number of tabbies in the economy.  As long as the bitcoins at TABB's public address don't go missing, then everyone's tabbies have a fixed bitcoin-backed value.

Ok, so it's clear that it might not work out that way.  Even if you think the bank is unnecessary, is it possible that initial localised adoption might trigger increased localised bitcoin velocity and therefore inflation?  i.e. bitcoin has to be adopted everywhere simultaneously, or nowhere?

Just thinking.
11  Other / Meta / Bitcoin forum is terrible on: June 23, 2011, 06:34:53 AM
The bitcoin forum used to be a place of lively discussion of political and economic theories and practices.  Now it has descended into a junk name-calling forum full of irrelevant and ridiculous topics, each topic full of irrelevant and ridiculous posts.  Can anyone suggest an alternative bitcoin forum for me to join?  Is there any?
12  Bitcoin / Development & Technical Discussion / base58 offline transaction generator on: June 18, 2011, 08:48:30 PM
Inspired by the Isosceles's post linked below, I thought it would make an *excellent* addition to bitcoin - the ability to generate and export a transaction from an offline machine, then import that transaction to a networked machine which would broadcast it.

So suppose you have your offline savings wallet.dat, and your online one for spending.  By shifting entire .bitcoin directories around on USB keys, and running two instances of bitcoin simultaneously on the offline machine (one with -nolisten, and with different RPC ports,  not for the faint-hearted), the offline wallet could come to know about its balance.

But in order to transact it must be connected to the network.  So... how about you could generate a base58 transaction from the offline client, save it on USB (or write it down if you're really paranoid) and import it to the online wallet which would then broadcast.
13  Other / Politics & Society / Is bitcoin just for criminals and terrorists? on: June 01, 2011, 08:22:36 PM

There have been several articles about bitcoin in mainstream press lately.  I'm too lazy to type them out, but one of the arguments is that bitcoin will probably be used by criminal and terrorist organizations (C&TO).

Now, I quite like bitcoin even though I'm a bit nervous about the unbridled capitalism it might usher in, but I'd hope that'd be better than the unbridled, what, fascism? that's taking over the western hemisphere.  So, in short, I'm kind of hoping that bitcoin will succeed and governments will cede some economic power to the public.  That means I hope bitcoin doesn't get branded as money for criminals and terrorists and so become outlawed.  That means we need to find an argument as to why bitcoin won't be useful for such organizations.  Here's a first try.

As things stand,  C&TO have to 'clean' their money.  They have to recycle it through... damned if I know, fake shops, stuff like that. Whatever the core of their wealth is, it's something physical or traceable - banknotes, jewellery, electronics, bank accounts, whatever.  Bitcoins are neither physical nor traceable, so... C&TO's wet dream, right...?  Wrong.

Anyone wishing to destroy C&TOs need to attack on multiple fronts and destroy or remove the source of wealth.  Right now, with physical & traceable things, that's difficult, and whoever does it becomes a target for retribution.

With bitcoin, a geeky teenager in a city on the other side of the world could hack a C&TO's computer and steal their wallet.dat.  Once word gets out that the C&TO can no longer pay it's henchmen, it would silently evaporate.  Alternatively, an informant could steal the wallet.dat, or maybe even an insider who decides to cross his mates.  And no-one would ever know who it was.  The anonymous geeky teenager or whoever does it would have to be careful about spending those bitcoins so as not to expose himself, but that's easily done with a few passes through an anonymizer.

Therefore: C&TO's won't be so interested in bitcoins.  You can't protect them easily enough.

14  Bitcoin / Development & Technical Discussion / Time for to move to the cloud? on: June 01, 2011, 07:19:20 PM
Howdy, I downloaded the list of users on the forum today, page-by-page, and sorted according to the join date.  Surprise, surprise, the number of members on the forum is growing exponentially, doubling every 52 days or so, and has been doing so since the start of 2010, with a couple of faster growth periods.  See the attached graph.

At that rate the forum will reach a million people in just under a year.  Can SMF handle that load?  Can bitcoin's servers?  We can presume that the number of people running the client is *at least* equal to the number of people on the forum.  Can the BTC P2P protocol handle a million clients?

Oh, the "upload folder" is still full.  Can an admin please look into that.  You can find the graph at   It just shows an exponential growth in users.
15  Other / Off-topic / Government regulation always a bad thing? on: March 11, 2011, 06:13:31 PM

Here's the discussion on reddit, titled "The headline you won't be reading...":

16  Bitcoin / Bitcoin Discussion / Bad probabilistic news for small-time miners on: November 24, 2010, 07:56:46 PM
Hiya folks, I've done a bit of calculation and there's bad news.  If you're still generating on your CPU, you'll probably never get to generate another block.  I have 26Mhps, and there's a 6.5% chance that I'll never get to generate a block again.  And, of course, as the difficulty increases, it's gonna get worse.  See the attached pdf for details.  The bones is that you calculate the probability of generating in each window of difficulty adjustments.  Since the difficulty is exponentially increasing, your chances of getting blocks are exponentially decreasing.

For those who don't want to read the details, the bottom line is:
1. The expected number of blocks you can generate is about 0.0007 h/D, where h is your hashes-per-second, and D is the difficulty (currently 6867).
2. The probability that you'll never ever generate another block is about exp(-0.0007 h/D).

The calculation relies on some assumptions, one of which is certainly flawed.  But maybe not so flawed as to materially affect the conclusion.  Who can spot the bad assumptions?

Of course, it's been clear for a long time, and it was the idea from the start, that small-timers would eventually be pushed aside.  But it's an interesting calculation anyway.
17  Bitcoin / Bitcoin Discussion / A possible bitcoin (sort-of) attack on: November 16, 2010, 09:06:46 AM
It seems we already have a large proportion of bitcoin generation being controlled by few people with server farms, and there's no reason to think that should change.  It may even get worse.  So, suppose the Men In Black decide they want to control bitcoin.  They make a *really* big server farm, so big that all the other server farms seem small in comparison.  Eventually all transactions will be verified and inserted into the block chain by only a few farms with most going to the MiB's farm.

At this point, the Men in Black could disconnect from all other block generators, and the chain would fork.  By the time anyone figured out what had happened, the new mega-server farm would be established, and reverting would require the distribution of a new bitcoin client to *all* users programmed specifically to avoid MiB's farm, and a roll-back to the pre-fork state, with consequent loss of many transactions.  More importantly, loss of confidence in BTC.

Or alternatively, the network could accept that the MiB now control the world's only block generator, who would now see *all* transactions, and could impose any arbitrary tax on each - a situation even better for the government than with today's paper currency.  At that point it would be easy for them to issue BTC identities and ignore all transactions going to non-approved addresses so anonymity vanishes.  Although, since they directly tax each transaction, maybe they wouldn't be interested in the actual identities of the parties in each transaction.

Hey, there's an idea.  Maybe Satoshi is *really* a government agent, and bitcoin is *actually* Big Government's latest attempt to regulate and control the world's trading.  Shoot me down folks!

*EDIT: Just in case it ain't clear from the tone, I'm not actually a conspiracy theorist.  It just seems that Bitcoin could go really, horribly wrong, giving unprecedented monetary influence to whoever has the biggest server farm, diametrically opposite to what it aims to achieve - a decentralised anonymous currency.  Has anyone thought about that?
18  Bitcoin / Bitcoin Discussion / Starting a new proof-of-work chain on: April 15, 2010, 08:55:53 AM

So I remember there was some discussion a while ago about how eventually some bitcoins will dissappear (people's computers crashing, people dropping out of bitcoin, MenInBlack collecting as many BTC as possible to drain them out of the system etc).  And it's still not clear to me if this will eventually be a problem or not.  Clearly, if the number of bitcoins will stabilise at close to 21 million, no problem, but if BTC loss is serious, then it may impact the economy.

So, one of the counter-arguments was that a new proof-of-work chain could be trivially started, with a whole new economy.  "BTCv2" let's say.  Well, there are a couple of problems.  First of all, everyone who has BTCs will be really pissed off that suddenly their BTCs are valueless because everyone wants only BTCv2s.  Second is, I think, a more serious problem, but then maybe I just haven't understood the coin generation process correctly, and it goes like this: bitcoin is a once off experiment.  If you decide to start a new proof-of-work chain for BTCv2, then all I have to do is get all the old BTC proofs-of-work, and add them to the new chain, and I'll instantly have lots of BTCv2s to my credit.

19  Bitcoin / Bitcoin Technical Support / bitcoin auto-renice-ing on: March 08, 2010, 09:29:56 AM
Hi, I run bitcoin at a nice level of 20 so as not to interfere with other tasks.  Every now and then, however, it seems to auto-adjust itself to nice level 2, or even 0.  It this by design?  Frankly, such a thing should be illegal for a linux application... it's a bit odd to say the least.
20  Economy / Economics / How stable will bitcoin be? on: February 14, 2010, 04:51:50 PM
So, supposing bitcoin, or some variant, manages to completely replace the world's currencies.  This will certainly make some governments unstable, some might well collapse - see

But, there's a big problem here, bitcoin requires electricity and global internet to function well, and these kinds of services probably won't be so stable without working government.

So... bitcoin substitutes currency, government is destabilized, society descends (or ascends?) into anarcy, electricity & internet become unstable, society descends into the next dark age.  Has anyone thought about that?
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