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1  Bitcoin / Bitcoin Discussion / Will the Developers support main-chain scaling as a guiding principle? on: September 02, 2015, 12:12:08 AM
The Developers have written an open letter to the community about Bitcoin scalability.

They have done a lot of work and describe it here:

Much work has already been done in this area, from substantial improvements in CPU bottlenecks, memory usage, network efficiency, and initial block download times, to algorithmic scaling in general. However, a number of key challenges still remain, each with many significant considerations and tradeoffs to evaluate. We have worked on Bitcoin scaling for years while safeguarding the network’s core features of decentralization, security, and permissionless innovation. We’re committed to ensuring the largest possible number of users benefit from Bitcoin, without eroding these fundamental values.

However, the real question for them is: Will they make a commitment to the principle of main-chain scaling?

Will they support volume handling on the main-chain as a preference to off-chain solutions?

1). Bitcoin should be scaled so that transactions are handled on its main-chain, as a first and guiding principle.

2). Bitcoin's main-chain capacity should be allowed to scale at a rate broadly in line with the general improvement in global computing technology.

How hard is it for them to publicly support 1&2 above? Unless they don't agree....?
2  Bitcoin / Development & Technical Discussion / An easy way to double or triple the 6000 Bitcoin active full nodes count? on: August 11, 2015, 04:26:43 AM
A *LOT* of technical people are not up with the nuances of peer-to-peer networking.
A *LOT* of savvy hard-money people do not have a clue about peer-to-peer networking.

These are typical Bitcoiners, and many of them download the reference client and fire it up thinking that they are helping the network. They know that as many people as possible running a full node is key to success for the network.

Yet, for many (most?) of them their router has port 8333 closed by default. Not doing as much as possible to help these full node users seems a real failing in the goal of maintaining decentralization.

Is there a reason why the reference client cannot perform a test on this port (after 1st peer handshake?), and have a pop-up and/or a clear message to advise the full node user that this needs attention? At present Core just sits there with a green tick regardless of whether the node is helping or leeching the network.

It might be obvious to developers that having just 8 connections indicates that port-forwarding is down, but not to many full node users.
3  Bitcoin / Bitcoin Discussion / Time to SHIFT the Sacred Cow! on: May 28, 2015, 03:14:43 AM

Q; What is a conservative course of action?
A: Conservative action (for a successful enterprise) is always to maintain the status quo as much as possible in the face of necessary change. Because Bitcoin has prospered for 6 years the status quo is to maintain the network as it is now.
Unfortunately, neither keeping the 1MB or increasing it can maintain the network how it is now!
This is a dilemma, but all enterprises face dilemmas at some time: necessity for change from competition, customers, technology or regulation. So, a conservative position is to adapt to an external change while maintaining the status quo as much as possible.

Q; Why isn’t “doing nothing” the best approach?
A: Because “doing nothing” has no real fall-back plan.
The fall-back plan for an increase to, say 20MB, is a later soft-fork down to 2 or 3MB. This may or may not become necessary, but at least it can be achieved smoothly. Think: duck paddling hard in a millpond.
If the 1MB limit is kept and causes mayhem to confirmation times, bad publicity etc, then the fall-back “plan” is a painful and panicked hard-fork. Think: duck going through the water-wheel.

Q: When is a hard-fork not a hard-fork?
A: When it is planned so long ahead that 100% of all software instances are upgraded before it takes effect.
In practice, this can’t be achieved but targeting 90+% is desirable and sufficient for a smooth transition.

Q: When is a hard-fork most painful?
A: When it is a rapid decision, forced by circumstances, and everyone has to upgrade in a very short time.
The more delay before acting causes a bigger downside when a fork becomes forced.

Q: What about keeping the 1MB to put upward pressure on fees?
A: That is “Blockchain Economics”. Applying to the blockchain a false economic model of reality, i.e. an economic model which has a hard limit such as the zero-bound in Central Bank interest rate targeting which attempts to set the price of money in a fiat system, but fails in a deflationary economy.
When the rubber hits the road of this reality the result will be a rapid plateau in total fees and then an inexorable decline as users abandon the use of Bitcoin in favour of alternatives, and new cryptocurrency users keen on the future of money are forced to use alternatives from the get-go.

Q: OK, but I’m a determined fan of Blockchain Economics. When is it safe to try it?
A: It’s never safe because of the Trade-Off, but the best time is trying a soft-limit while the hard-limit is higher (safety valve), and when the network is small but viable, and no one is paying attention, such as the situation in 2012, Unfortunately, the time for this has gone because the Bitcoin market capitalisation is in the billions of dollars and the world’s press is closely watching.

Q: What is the Trade-Off?
A: A fundamental of Bitcoin is its confirmation cycle which averages 10 minutes.
When blocks have extra space the transaction counts per block are highly variable, but any given unconfirmed  transaction may expect confirmation in 10 minutes.  
When blocks are full transaction counts per block are stable, but the expected confirmation time for a unconfirmed transaction becomes highly variable.

Q: Is the benefit of very stable block sizes worth the cost of highly variable confirmation times?
A: No!

Q; When is a flooding or spamming attack on Bitcoin most effective and cheapest to execute?
A: When blocks are nearly always full. It is least effective and most expensive when blocks normally have lots of unused space.

Q: Can Bitcoin be a reserve / settlement currency with high-value users, primarily a store of value like an electronic gold?
A: Yes, but not when it can only handle 0.01% (a ten-thousandth) of the world’s transactions. Not when another cryptocurrency is handling even 1%, let alone 10%, 50% or 99.99% of the world’s transactions. Bitcoin can only become a true reserve currency and electronic gold when it scales. Otherwise this remains a dream, a mirage.

Q: What about bandwidth considerations?
A: Satoshi put the 1MB in place when there were no lightweight nodes and all users had to run a full node. That time is nearly five years ago. Global improvements in bandwidth mean that the overhead he allowed for, by selecting 1MB in 2010, is more like 4MB in 2015.

Q: What about technical concerns such as growth of the UTXO set?
A: The smartest way to meet a challenge is to leverage it as an opportunity.
Example : Aligning the demand for blocks larger than 1MB with an incentive to maintain a cleaner UTXO set.
The complexity of this change needs to be weighed against the simplicity of a fixed limit (e.g. 20MB). Sometimes simplicity outweighs a leveraged gain.
Also, the UTXO set could be kept cleaner, as a stand-alone change: allowing free transaction space based upon reducing utxo (negative delta) instead of being based upon the number of days destroyed, which was to encourage old coins being spent, something less important.

Q. What are the implications for decentralisation, particularly: full node counts?
A. Full node counts have been in decline for several years, mostly because of the growth in SPV wallets and lightweight nodes, and mining pools (for minimizing variance), also the increase in blockchain size for users who won’t spend a few $100 on TB disks.
Many node owners are long-term investors and believers in Bitcoin as a major currency and payment system of the future. That is why they hang in there. They are waiting to see it scale and will run non-mining, non-commercial nodes to do it. If the status quo is destabilized (e.g. unstable confirmation times) then full node owners will switch off faster.
Full node counts would be improved by greater adoption and the future use of node payment services where non-mining nodes get micro-payments via off-chain channels for servicing the network.
Keeping the 1MB, because it is the least conservative action, will accelerate the decline in full node counts.

Q: What if someone makes a load of gigablocks?
A: They can’t. If the 1MB disappeared, the message size limit of about 32MB means that this is the maximum block size. Gigablocks are not possible until all nodes support set reconciliation ("bandwidth reduction scheme") such as in IBLT, and block segmentation software.

Q: Why not wait for off-chain solutions which can handle 100x the on-chain volume, like Lightning Networks?
A: There is no time for that, LN is still in the documentation and technical specification stages, also the LN opinion is that 1MB is too small for them in the event that a lot of payment channels need to be closed quickly. 32MB or even 20MB would be sufficient for a long time.
4  Bitcoin / Bitcoin Discussion / ONE Minute Blocks! Bitcoin as fast as Dogecoin, faster than Litecoin? VOTE on: May 11, 2015, 06:32:46 AM
On reddit, Gavin has responded favorably to cryptodude1's proposal that Bitcoin's 10 minute block interval be reduced to 1 minute.
If it is done at the next block reward halving (about July 2016) the block reward would drop from 25 BTC to 1.25 BTC in order to maintain the 21 million BTC limit. Difficulty would be reduced by 10x.

I think 1-minute blocks is a good idea. The best time to roll that out would be the next subsidy halving (makes the code much simpler).
We still need a bigger max block size, though.

Just in case his reddit account was used while his back was turned and the comment is changed, here is a poll in the meantime. Vote away!

Edit3: FWIW, I think that it is right that people should be encouraged to provide ideas, and not be stamped on for it. The technical arguments lean against 1 min blocks and interestingly the "wisdom of the crowd" is playing out in this poll. The vote so far confirming the technical view that this change is undesirable.

As people comment in this thread I will update the PROS and CONS list....


Dogecoin has 1 minute blocks, Litecoin 2.5 minute blocks, and their users think this is a user-friendly advantage for these coins.
The 1MB max block increase can be delayed a couple/few more years as the network will theoretically be capable of 30tps instead of the existing 3tps throughput.
Edit1: Not much of a pro because confirmation delays will likely occur in early 2016 which means the max block size needs addressing before the next halving.


Increase in block orphan risk for miners.
Edit2: Centralization of mining to well connected (large) miners & pools.
Significant increase in wasted hashpower.
5  Bitcoin / Development & Technical Discussion / Dev & Tech Opinion on Mike Hearn's "Crash Landing" scenario on: May 08, 2015, 07:19:35 AM
This sub-forum is intended for debate about technical matters concerning Bitcoin, specifically, for the purpose of improving it.
Bitcoin expert Mike Hearn has written an article "Crash Landing" where he describes what will happen if ecosystem growth continues and only normal maintenance and enhancement work is performed by developers. It paints a very serious picture, which is pretty much what I imagined when I learned about the max block size in January 2013.

This article was written in the context of vigorous debate about the block size. But what I want to do here is to take a step back and find out the opinion of the technically informed community on Bitcointalk.

I urge people to read it and then vote according to their considered opinion.

If there is a majority view that what is described is a problem, then maybe consensus can be achieved on mitigation of the risk of it coming to pass.

edit: adding the average block size chart, 2 years, 7-day smoothed,
6  Bitcoin / Bitcoin Discussion / 1MBCON Advisory System Status: Yellow Alert ELEVATED on: April 02, 2015, 08:50:45 PM

Introducing the 1MBCON Advisory System which gives a quick overview of the risk conditions against timely transaction confirmations into the blockchain.

The debate has been thorough and extensive. Now the status of the risk needs to be tracked: average size of 1000 blocks (7 days) as a percentage of 1MB

End of Q1, 2015

7  Bitcoin / Bitcoin Discussion / POLL: Is Bitcoin for EVERYONE or just a new ELITE? Vote! on: February 18, 2015, 04:12:58 AM
Simple poll.

Assuming technology keeps up, should Bitcoin be usable by everyone who wants to use it at a reasonable cost, which might be a few cents per transaction, or a new elite, where most people are priced away to 3rd-party services?

Who are "Everyone"?

This means people from all parts of the world, Mali in Africa to Bali in Indonesia, all walks of life, in developed or developing countries.

What is the "new Elite"?

It is not one of the old fiat elites, like the NWO, or banksters, it is part of the new broom to sweep all that away, a Bitcoin-elite, such as found at Bitcoin-Assets #bitcoin-assets, An elite who have a core principle that it does not matter if ordinary bitcoiners can't use the blockchain where fees might be $5 or $10 per transaction.
Bitcoin isn't for everybody.

What do YOU think? Please VOTE!
8  Bitcoin / Bitcoin Discussion / Just what is a FAIR fee to send a Bitcoin transaction? on: October 18, 2014, 07:24:15 AM
Simple poll to find out just what most people think is a fair fee for sending a transaction on the Bitcoin network, long-term.

Paying a bill; buying a car, computer or coffee; making a donation, or whatever...
In 2014 US dollars please choose the amount that you think is closest to what the BTC equivalent mining fee should be for a standard transaction.

Assuming also that a standard transaction is on-chain, not a micro-transaction,  it is for something that is usually paid for with fiat.

What is the fairest fee?
9  Other / Off-topic / The journey or the destination? on: September 29, 2014, 10:37:59 AM

10  Bitcoin / Bitcoin Discussion / Is financial blogger Karl Denninger censoring his own anti-Bitcoin articles?? on: June 13, 2014, 09:52:48 AM
Karl Denninger, the multi-millionaire blogger on matters economic and political normally turns his polemic style onto Wall Street and Washington DC corruption, but he fully unleashed the flamethrowers onto Bitcoin last year.

Now, however, is he taking a lesson from the dirty play-book of the Chinese Communist Party which wants to erase the Tiananmen Square massacre from the pages of history?

A search for "Bitcoin" on reveals zero matches, even though he published three or four articles like this one:

The Mt.Gox and Bitstamp debacles prove that Bitcoin is not a perfectly secure currency and that the “Bitcoin ecosystem” is quite dangerous. True or false?
It is true but not because of these problems. Bitcoin has never been a currency, because in order to be a currency it needs to be two things. First, it needs to be a medium of exchange... [etc etc]

Today (July 13th, 2014) this Market Ticker article is missing, showing "Post Not Available" with a  baby-pink background.

Has he got the guts to publicly admit that he was wrong, and take a proper look at Bitcoin technology, and finally write a balanced article? One that will permanently remain on his website?
11  Other / Off-topic / 400 million of terrorist financing in the world's most anonymous form of money on: June 11, 2014, 09:26:11 PM

12  Other / Politics & Society / Corrosion of the principles which underpin Western civilization on: June 04, 2014, 10:31:57 PM
I start every day with a quick scan of the news, and then move on. However, today two items really stand out showing how freedom of speech and the rule of law which are fundamental to modern society are being aggressively corroded by governments and companies:

UK secret trial
A major terrorism trial is to be heard entirely in secret in a “totally unprecedented departure” from centuries of open justice, it can be disclosed.
For the first time in British legal history, two men charged with serious terrorism offences will be kept anonymous and the press and public will be excluded from their trial, the Court of Appeal heard.

MPs and civil rights campaigners said it was an “outrageous assault” on the principles of open justice and set a “very dangerous precedent”.
Prosecutors have successfully applied for the case to be heard in private on grounds of national security but media organisations are trying to overturn the decision.
Journalists have up until now even been banned from reporting the fact that a trial was to be heard in secret.

The move has fuelled concerns over the growth of secret justice in British courts, which has already spread to civil cases and celebrity privacy challenges.
But a major criminal case being heard entirely behind closed doors risks ripping up the very tradition of open justice in the UK, which dates back to the Magna Carta of 1215.

LinkedIn censorship and collusion
A major international social networking company is being criticized for assisting with China’s aggressive censorship of matters concerning the 25th anniversary of the Tiananmen Square protests.
At the request of Chinese authorities, the professional connection site LinkedIn is removing content from member’s sites that reference the protests or their subsequent violent suppression.
The content, which can take the form of posts, messages or other comments, is being removed without the members’ permission.

Is anyone else sickened by these?
13  Bitcoin / Bitcoin Discussion / 1,000,000 bits = 1 bitcoin. Future-proofing Bitcoin for common usage? VOTE on: May 02, 2014, 06:38:22 AM
21 million bitcoins FOREVER!

Satoshi recognized that 21 million currency units are not enough for a global currency. His solution was to support eight decimal places on amounts, which also allows the reward halving process to continue for about 140 years. Internally the Bitcoin software recognizes 2,100 million million currency units (now known as satoshis) but they are divided by 100 million before presentation to users. So the block reward is currently 2,500 million satoshis or 25 bitcoins. Bitcoin units were fine for the first few years, but during the last 12 months the question keeps arising "Is another unit best for common usage?"

Inertia of existing systems

All modern fiat currencies have a major currency unit which has 100 minor units: e.g. $1 = 100 cents.
Everyone is used to this system from childhood. Many people are not comfortable with scientific notation or with small decimals such as 0.001234 which will be seen more and more often as the unit value of 1 bitcoin rises. Most people are happier dealing with 100,000 than 0.00001

Further, 99.99% of the world's financial and accounting systems do not support more than 2 decimal places on currencies, let alone as many as eight. It is arguable that Bitcoin has a very real handicap upon its growth by disregarding modern conventions in currencies.

Enter the "bit"

1 bitcoin = 1,000,000 bits
1 bit = 100 satoshis

User 101111 on reddit recommended this mock-up wallet. The current Bitcoin Core wallet does allow the selection of millibitcoins and microbitcoins but not with such a user friendly presentation, and not by default.

Is it time to consider using "bits" as standard? All balances become 1 million times larger, the block reward as 25 million bits, the exchange rate as 0.04 cents to a bit, a cup of coffee as 7000 bits instead of 0.007 BTC
Is this an improvement?  If the bitcoin value increases into the thousands of dollars which unit is easiest to use for pricing goods and services?

14  Bitcoin / Bitcoin Discussion / Bitcoin software development visualized on: March 08, 2014, 10:14:08 PM

Awesome video by Zwoelfenbein

Shows the incredible level of re-engineering and enhancements behind the Bitcoin software suite.
15  Bitcoin / Press / 2014-02-04 Coinfirma: Bitcoin Now Accepted at Every 7-Eleven in Mexico on: February 05, 2014, 08:51:16 AM

Bitcoins can now be spent at 7-Elevens indirectly via the Pademobile service funded through Coinbase. In theory a huge number of remittance payments from the US to Mexico could go though this process. Less fees and faster than dollar/peso exchanges, but presumably recipients would have to spend their money on 7-Eleven products.

This is very disruptive to existing remittance services.
16  Economy / Speculation / Bitcoin posts record annual gain: 5,317% in 2013 on: January 01, 2014, 12:02:56 AM
Bitcoin has posted a record annual gain, measured in USD.

At the start of Jan 1st, 2013, Mt Gox had a bid/ask of 13.45-55, or mid-price of $13.50
At the close of Dec 31st Bitstamp and BTC-E have 730.4-732 & 730-733, or mid-price of $731.35
(Mt Gox is not comparable because its US$ withdrawals do not take < 1 week, hence its bitcoin price is biased upwards).

Trace Mayer's statistics for previous years, now with 2013 completed:

2009  4,867% (uncertain price discovery period)
2010     387%
2011  1,320%
2012     170%
2013  5,317%

One observation is that, so far, odd-numbered years exhibit high-growth, while even-numbered years are consolidation/growth periods.

Even 170% gains in 2014 will be stellar. Happy New Year to all Bitcoin holders!
17  Bitcoin / Press / 2013-12-05 Zerohedge: Citi: Bitcoin May Be A Complement To Gold on: December 06, 2013, 03:43:24 AM
After BoA it is Citi's turn to write nice things:

"Reserve managers are likely wondering whether Bitcoin is the answer to their most perplexing problem – where to find a pure store of value"

Citi: Bitcoin Could Look Attractive To Reserve Managers As A Complement To Gold

The $1000 mark has brought out the big bank analysts, and to give them credit, they sure do their homework, unlike so many economics/blogger journos.
18  Bitcoin / Bitcoin Discussion / Gonzalo Lira "Strolling along the shores of the mainstream" Falls in, can't swim on: November 30, 2013, 09:52:42 PM
Epic fail by a top blogosphere economics writer.

"Bitcoins don’t serve any useful purpose."

Gonzalo Lira has long been happy to point out in detail the disastrous meltdown that is fiat money, central banks, the bankster complex. Yet the most powerful solution to this mess passes straight over his head. He can't see that an incorruptible store of value has any purpose, that sending money point-to-point anywhere in the world has any purpose, that all the advanced escrow/mutisig features which could revolutionize commerce have any purpose. He can't see that transferring $147 million in the blink of an eye without intermediaries or counterparty risk, with negligible fees, has any purpose!

He has been predicting hyperinflation of the US dollar year after year, and yet he can't see that money pouring into Bitcoin is the market predicting the ultimate hyperinflation of many currencies.

He needs to totally rethink cryptocurrency, or drown in ignominy.
19  Bitcoin / Press / 2013-11-29 Financial Times: Alderney to cash in on Bitcoins with Royal Mint on: November 29, 2013, 09:52:23 PM
This is HUGE. UK Channel Island (tax haven) Alderney plans to produce physical bitcoins in partnership with the Royal Mint (which produces UK coinage)

Alderney looks to cash in on virtual Bitcoins with Royal Mint reality

An unbelievable vote of confidence in Bitcoin. Might not happen, but they are looking at providing exchange services too.
20  Bitcoin / Bitcoin Discussion / Jiangsu Telecom, division of China Telecom, accepting bitcoin for misc products on: November 29, 2013, 09:04:27 AM
xPost from reddit:

"they accept Bitcoins for the reservation of the latest samsung phone.
I think it's just a trial or promotion so far, but they're trying it out for some other things, too. Holidays, jewelry, gifts, and tickets"

Any thoughts about this..?
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