Can someone explain...

Currently there are 144*25BTC mined each day, 3600 BTC.

The daily volume traded is far larger than that.

If a miner wants to sell his coins, he has to dump them at the current price even if he wants more - say because he spends more than that on his equipment.

There are many other users/non-miners also selling their coins. Drowning out the miner's coins in the 'ker-fuffle'..

How will the miners set the price floor, if other users are prepared to sell their coins for less ?

[everybody]

Yes - I know there have been far too many threads about whether - to double or not to double.. the Blocksize. DA-DA!

This is not a thread about that.

It's about this.

You can check my profile to see I've been around this forum a couple of years (and an extra year as a long time lurker before I joined.. )

I always have BTCTalk open on one of my browser tabs, and if I'm honest, must check it, almost religiously, every 30 mins.. Yep, I got it bad.

So I like to think I am up on current events. I'm a programmer, and have written a crypto exchange and so feel I can say I understand the tech', pretty well.

..

Which is why this whole "Keeping it to 1MB blocks' has me so perplexed..

I 'thought' everybody 'thought' that the blocksize was obviously going to increase. I never even questioned it really, nor was I aware of any disagreement on the matter.

And now that the time has come to do something about 'something', the Core team, the Ubers of Bitcoin, who have wholeheartedly earned my respect and, if I may, admiration, are saying : 

' NO! - this isn't for you. Step away. It's sidechains for you in the future.. ' .. 

More worrying, are they right !? Who knows more about this stuff than these guys ? Seriously, I'm going to tell them, '..errr.. Guys, I think you're wrong...'

Gavin is. And good on him. But is he right !?

And now, as I float around in confusion, I start to think :

IF it is the case, that Bitcoin cannot be used by me and my fellow humans in the future, as only super large Uber txns will be allowed/affordable, and the rest of us must use ANY third party for ANYTHING.. Hasn't it failed ?  ..

This has me feeling funny, about the 'Doubling'.

In Coins, there is a fee to pay for sending the TXN.

This not only incentivises the miner to add your TXN to a block, and pays for the upkeep of the network (in the long run), but also acts as a DDOS blocking system as SPAM costs money.

In Bitcoin, there is a heated debate going on at the moment about whether the block size should be increased.

With a larger block, there can be more TXN's and so the user thinks he should have cheaper fees per TXN.

This means that a larger block with more TXN's will not 'necessarily' mean that the miner makes more. A block that has twice as many TXN's with half the fee per TXN makes the same. This is not a clear incentive for the miner. I admit that normally more TXN's mean more for the miner but the correlation is not straight forward.

It seems to me this stems form having a 'fixed variable' fee for all. One size fits all.

IF instead the fee was, let's say for simplicity 1%, it would ALWAYS be the case that more TXN's would mean more fees for the miners ? (Assuming the same TXN set for both systems). Then the miners would be happy to have bigger blocks, although you would need some 'mechanism' to contain the pace of growth.

It would also fix coin destruction.. as a miner would obviously take his 1% cut of an aged coin, rather than let it all go back into the mix for ALL the miners to share.

..And micro TXN's are also back on the table.

Thoughts ?

We are about to reach 100,000 transactions per day average... I know..

That. is. a. lot..

If Satoshi were sitting opposite me.. lucky me.. I'd stand up, and propose a toast.

To SATOSHI! ... You crazy bastard - You've DONE IT!  You've only gone and changed the whole damn financial playing field for the betterment of ALL.. (Then we all stand up and laugh and drink and jump around and be merry)

Whatever 'else' is happening in Bitcoin, here it is, clear as day.. It works.

The Price doesn't matter. The regulation doesn't matter. The current difficulty-to-entry doesn't matter. The reports of people giving their coins to other people who then run off with them.. doesn't matter. 

None of it has had any effect on the slow, steady, build up of momentum.     
   
People are using it, for whatever they want, in a way that is so FREE, free as in FREEDOM, no-one really knows what to make of it.

I'll tell you what to make of it.

It's wonderful..

[WWW.LBCSE.COM]

WWW.LBCSE.COM - London BitCoin Secure Exchange

Hello Fellow Crypto-Coiners!

It is my great pleasure to announce a new Alt-Coin exchange I am working on.  

It is still in semi-BETA (Everything works and last bug was a week ago), so would love some feedback.

To make things easier, we give you a FREE Coin Pack of ALL the coins we currently support just for signing up (IF you use a referrer), so you can test it for free immediately  

Use my link to start trading right away :  https://www.lbcse.com/public/freecoins.php?ref=VTEMWR

We have a VERY generous referral program, and will give you up to 40% of the commissions from users you bring to the site. So, should you wish to post about us on another forum, Reddit, FaceBook etc etc.. be sure to use YOUR OWN referral link. (In your Account section)

Obviously, I have tried to make the best exchange possible, and we have some UNIQUE features which I think you will like.

    1) Publicly auditable coin addresses, where all the various coins are stored, so you can verify that we have what we say we have. You can see this at https://www.lbcse.com/support/siteinfo.php

    2) Fully load-balanced HTML servers with SQL cluster backend.

    3) Secure OFFLINE cold wallet, for the bulk of coins, with smaller ONLINE hot wallet for fast withdrawals of small amounts. Again, all fully auditable.
 
    4) We have an original and powerful interface.

    5) TFA (2 Factor Authentication) for complete security.

    6) VERY low commissions. 0.1% for market makers, 0.2% for market takers.

    7) Full API to interface with the site.
 
And more..
 
If you find a BUG, please let me know, as well as any other comments or criticisms you may have. Useless abuse, not so much..  

Thanks.

Enjoy.


 

In the current POW system, you have the blockheader and a nonce you can change. Then you SHA256 the lot.

This is obviously a task that can be run in parallel.

This way an ASIC can crunch through a 'Gazillion' different nonce values simultaneously. Using pipelines etc..

And, once a nonce that satisfies certain criteria is found, maybe more than one actually, the proof-of-work is still just a simple hash away.

Is there a construction that only works 'Sequentially', so that the task cannot be run in parallel, and yet STILL only a hash away from the proof ?

I know that Scrypt uses a memory hard function, so you would need a different block of memory per attempt, but you could still do this in parallel. As the GPU implementations do.

You could say that the hash is the Hash(prevHash + Blockheader), but this is then not provable in a single hash check as you would need to do all the work again running back through the previous hash values..

Is there a construction that does this ?  

Hello!

Let's imagine a NEW economic paradigm.

Crypto currencies give us the ability to create ANY mathematically based currency, so I was wondering about a new type of coin.
 
Lets say, you want a coin that grows AND SHRINKS in number. One that if possible, responds to market forces.

Also - before anyone jumps in with the Inflation/Deflation is Theft Tirade.. If the growth is done FOR EVERYONE.. so that ALL coins grow and shrink, so that proportionally, your amount of coins remains the SAME, I don't think it is theft any longer. Printing and then giving it to a bank to redistribute, as they see fit, is Obviously, not cool.
(ie Alice has 1 coin, Bob has 10, Alice has 10% of Bob. Then 10% inflation. Alice has 1.1 coins, Bob has 11, Alice has 10% of Bob, still.. And Alice also retains her 1/11 stake in the entire coin, in both cases.)

I know there is an economic theory that says that the Money Supply should grow in line with Economic growth, and that this in turn would result in price stability. Unfortunately, measuring economic growth is harder done than said.

What I am wondering if there are any Market Driven Money Supply equations ?
 
For instance..

You could link the Money Supply growth to the Hash rate of the network.. ? (Don't like it..)

You could link Money Supply to the amount of TXN fees paid ? (Hmm.. still not into it..)

You could link it to the number of active accounts ? (Too easy to manipulate.. )

You could let the miners VOTE, in the coinbase (or somewhere) TXN as to whether there should be growth or demurrage ? (Not sooo bad..)

Does any one have any ideas as to how you might regulate the Money Supply Growth of a Crypto Coin in some pre-determined maths way ?

Oh &..Merry Xmas!

A few ideas..

Combining hash functions, so that that the resulting hash retains the strengths of the strongest link is not straight forward.

When concatenating hashes, the collision resistance is the strongest link, but first pre-image resistance is lost, or equal to the weakest link. The hash is also LONGER than the original.

When nesting hash functions, using the output from one hash as the input for another, gives strongest link for first pre-image resistance, but you loose the collision resistance, as in it's the weakest link. The hash is the same length.

This seems an issue, but i was wondering.

The MINING part of bitcoin, requires first pre-image resistance. Collisions don't actually matter. An attacker has a hash, which satisfies the difficulty target you are aiming for, and he wishes to find a message that hashes to that, given the block header he has.

The TXN hashing, block hashing, which proves no tampering of the messages has gone on requires target collision resistance/ collision resistance. You have a TXN and the hash of that TXN and an attacker would like to find another TXN that hashes to that same hash. Then he could change the TXN in some nefarious way, and keep the hashes the same.

Therefore, would I be write in thinking, that if you wanted a more secure hash strategy for bitcoin/crypto-currency you could :-

a) Use a nested hash of multiple hashes, say the SHA-3 finalists and SHA2, for the mining algorithm. First pre-image resistance would be strongest link.
b) Use a concatenated hash, with the same hash functions as in a), for the TXN and block hashes. Collision resistance would be strongest link

You would then need to break ALL the hashes before you could break bitcoin.. And if one or 2 of the hash functions were broken you could then think about switching to new hash functions all together..

Is this a correct line of thought ?

VGER..

A lot of people are working on new coins..

I would like to say that a MASSIVE PRE-MINE or an unfair/bias coin distribution (say 10x in the first few weeks) - unless for very VERY GOOD/explained reason, seems only to inspire despair in us users..

Also - For the creators of coins, there is this looming dread, that if they take ANY, they will be flamed to a cinder in the forums. And all the hard work they put into it, will be ignored.

I certainly feel that the creator of a coin should be allowed to keep some of the coin stock back. For a very good and simple reason.

Incentive.

Knowing that your initially WORTHLESS stake MAY some day be worth something, gives the creators of a coin an incentive to stick with it. To work out the issues that will definitely arise in the early stages of a new-coins infant life.

I would suggest 1%.

Too small to be considered a massive pre-mine, and really only of any value if your coin should become valuable someday.

When Bitcoin kicked off, 1% was 210,000 coins, which at $0.01, would be $2100. Hardly a fortune. But now, with effort, sweat and time.. it certainly is a king's ransom.

You could also pledge to not dump the lot, or keep them for the first year of a coin's existence.. So as to show you're not a 'Pump and Dump Scheme'.

I wish all the new Coin Creator's Success!

(But if you have any desire to keep us Users sweet, don't be 'too' greedy, initially.. ;-p)
 

I am looking into the GMSS - Generalized Merkle Signature Scheme.

There is an implementation in the BouncyCastle Libs and in FlexiProvider http://www.flexiprovider.de/. Both very similar / the same.

I am using the FlexiProvider implementation and hacking my own version that can be initiated with a seed.

It seems that your Private key changes after every time you use it. The Public key stays the same. You have to do this for security reasons.

What I am wondering is how to jump to the correct private key after you have turned the machine off/on..?

I do not want to have to save the key, as everything must be re-settable from your 'seed key' and the number of previous signings..

What i mean is that currently, and looking through the code, the only way is to run next() on the private key until you reach the key you are currently on. (This effectively traverses a merkle tree of hashes creating your new private key) If you use the key 1000 times, you'll need to use next() 1000 times. Takes about 10s for 1000 on my mac book air...

Is it possible to jump to the ACTUAL key, say 1000 in, in one go ? (I'm not sure as the construction of the key 'may' require the incremental hash of the tree..)

Does anyone know if this is possible ?

The P2POOL PPLNS (Pay per Last N Shares) system is really nice..

Am I right in thinking Miners CAN, if they want, make their block target even harder, thus finding less blocks, but get rewarded correctly given their hash power. They would do this to allow more miners to get on the chain, which is better for the health of the system.

The reason most don't do this is that the VARIANCE of when they get payed goes up, but they still only make the same amount as if they hadn't gone for the harder block.

So - 2 blocks at difficulty 1, say, reap the same rewards as 1 block at difficulty 2. ?

What I was thinking, was what if you paid MORE proportionally to a miner that goes for a harder block ?

So what if you pay a miner an extra percentage for accepting the higher variance. And not a tiny amount, an amount that would make the miner DEFINITELY go for it.

Say if you go for a 1000 times harder block, you get 100% more ? (That would be the limit, there would be no point going for an even harder block as the reward would only be 100%)

So that 1000 blocks at difficulty 1, pays X.
1 Block at 1000, pays 2X.

If you went for a 500 times harder block you would only make 50% more.. etc..

This would mean that more miners would be able to find blocks, and the successful miner would have to go for the Harder blocks as they make more money.

The truly successful miner would find 1 block in every PPLNS group, but as hard a block as possible. Thus maximising revenue and always being paid.

Would this work ? (Or is this implemented already somewhere ? )
 

Asking humans to come up with a random sentence doesn't seem to create very random sentences..

The idea of using mnemonic phrases to encode 128bit random entropic keys, for use with Brain Wallets for instance, is a nice solution.

This brings on the questions -

What is the Best Mnemonic Generator for storing such 128bit numbers ? (In terms of how easy it is to remember / length of string)

Can it be used for storing larger 196/256bit numbers ?

Can a human sentence ever be long enough/entropic enough to be used ? How long would it need to be ?

Currently electrum uses 12 words to encode 128bits, which is great, but I find the sentences a little 'un-sentence-y'.

I have seen a few systems, but would really like one that comes up with a grammatically correct sentence.. That can of course still seem like total gibberish (Digital Apes With Blue Fish Gills etc..). They seem much easier for the mind to remember than random word lists.

Maybe a system that picks a noun, verb, object, (maybe an adverb) then an 'and/but/or' and repeat...

Any ideas ?
 

Hello Friends! It's good to have the forum back..  

Now - to business.

I am trying to get my head around the ZEROCOIN protocol. It's mathematical workings.. Not how it is integrated with bitcoin, this I get.

I can see that the accumulator works on the principal that

f(x,y)n = (x^y) mod n

Is a quasi-commutative hash function.

eg

For any n

f(f(f(4,5),6),7) = f(f(f(4,7),5),6) = Accumulated-Value = AV

This is great, and I understand that you can then prove that your number was used in the construction by summing all the other numbers and leaving your number till last..

So that IF 6 was the number that you added in the previous example..

f(f(f(4,5),6),7) = AV

we can show that if

f(f(4,7),5) = DELTA

then

f(DELTA, 6) = AV

Thus showing that 6 was indeed used to construct AV in the first place.. Since as a HASH function calculating DELTA afterwards is very hard.. (Almost Impossible..)

Obviously MUCH BIGGER numbers are used in practice..

As you can see though, you need to show your value of 6, to prove your membership.. How to do this without giving that away is the zero proof bit.

What I need to know is how the ZERO PROOF bit at the end works. I have read the papers OVER and OVER and all though I am sure my maths CAN handle it, the notation it is described in is just a bit beyond what I can understand.. :-p

I can see that the number you add is the HASH of some concatenated values.. but what, where, how and why still eludes me..

Can some one explain in SIMPLE terms what the number you would add to the accumulator would need to be, how it is constructed, and how you would show with ZERO KNOWLEDGE that your number was part of the accumulated value ?

I hope this makes sense..

Hello,

I am brain storming about a coin that doesn't have a fixed limit on it's production..

I am wondering what techniques could be used to find a vale to use for the Monetary Expansion of a coin.

Freidman had a very simple rule, that he believed was better than leaving this to the discretion of central banks. A rule that was set in stone.

Judging by recent events, I'm not sure central banks can be trusted, or their discretion considered, well.. Good.

If you launched a coin, that had a monetary supply growth policy, what options are there other than 'pick a number', say 4%, and grow at that ?

Basically, getting information, about the outside world, into the chain is difficult.. maybe impossible.

I was thinking that maybe you could use the price of a fixed coin, say Bitcoins, in this new coin, as a marker for how much to expand the money supply..

Maybe the price of Gold as a factor ? (if you could somehow tell the chain..)

Any ideas ?

Is the K percent rule OK or has it been debunked.. ?

My analysis of the situation says that actually, K percent rule works well in most cases..

http://economics.no/Friedman.pdf

http://pages.uoregon.edu/gevans/SJPE_05005004.PDF

I am looking at zero-coin and there is something that doesn't seem clear.

I can see that you can do a zerocoin txn and send the coins to the zerocoin mint. Then you can spend that coin but starting from a fresh txn output.

Then your coins are effectively laundered as they have no History. I hope my understanding is correct ?

What I can't see is how do you send the coins to someone ELSE who has no zerocoin txn he has made that he can spend ? The person you are sending to has no money.

Is zerocoin a launder system but not an anonymous transfer system ?

I have been reading about 'The Gold Standard' and there seem to be quite a few variants..

Obviously there is the 1-to-1 standard where the gold IS the money. Or the paper money is linked 1-to-1 to the gold reserves. The pure version. It's basically bitcoin, but with a tiny amount of inflation as new gold is mined..

The one that interests me more, seems more flexible. I think its called the Gold Price Rule, but don't quote me. It allows for cash to be injected when there is a demand for it, as people sell their gold, and vice versa.

Anyway, the gold price is pseudo-fixed, say to $1000 per ounce(or whatever), and traded on the market. If the price drops below $1000, the bank can inject money into the system, driving the price back up, and if it goes above $1000 the bank can remove money from the system, driving the price back down.

In this hypothetical example, a computer works this out and it is not left to the discretion of fallible humans.. 

There are a coule of things I don't understand..

(1) What incentive is there to buy and sell gold if you know that the price will always be pushed up/down to the fixed-ish level ? (I can see that you could buy low and sell high, but it'll never rocket/tank..  Is $1000 not just as good a hedge ?)

(2) Can/Should the desired gold price be fixed to the MOVING price of total cash / total gold ? (So that when you print money the desired fixed price would actually go up, and vice versa. Assume we have total transparency and know exactly how much of both cash and gold are in the system. Then I can see an incentive for my question (1). )

A 'moving' desired price, that goes up as more cash is injected, seems more sensible to me.. rather than an actual fixed price plucked from the air..

Is that possible ?

Thanks!

ps 20 Years from now they may call it 'The Bitcoin Standard'.. fingers crossed..

Hello,

I was wondering something..

What would happen, in a hypothetical setting, if you had a new coin, you pre-mined 1 Billion coins, then you sold those coins at a 'known' rate ?

The 2 options I mean are

1) You sell them for $1 each. All the way to 1 Billion coins.

2) You sell the first 100 million for 0.1cents, the next 100 million for 1cent, the next 100 million for 0.1$ (10 cents).. etc.. x10 every 100 million. (or some other predetermined geometric rate)

I was thinking this would 'somehow' peg the value of the currency to a known amount?

I think I like (1), all the coins are sold at $1, and once all the coins are sold, THEN, the exchanges would take over. Not that you could stop them of course, but who would pay more than $1 when you could buy it for that.

Option (2) seems very similar to the mining concept as the early adopters would get their coins cheaper.

The reason I like it is that the coins can be introduced at whatever speed is required, as the economy grows AND a price for the coins would be much easier to determine. Especially in option (1). Psychologically you would be able to price things much better if you thought 1BTC = 1USD (or whatever).

In general, I would hope this would lead to economic stability while the coin matures and grows past the Billion dollar mark.. ?

There would be no mining rewards for miners, just a 0.1% txn fee or some other established amount.. and there may/may not be inflation in the coin.

Economically, is this viable/stupid/interesting/bollox ?

Hi,

I understand technically how p2pool operates, and that it is HOP proof and DOS proof.

BUT - can someone explain, technically, why it mitigates the 51% attack.. ?

Is it the fact that since the sharechain used is so much faster, you would need to have 99% of the Hashrate to overrun the sharechain ?

So instead of a 51% attack - you need 99% for a successful attack ?

Hi,

Not sure if anyone else has noticed/experienced this, but when I click the NOTIFY me button on a topic I am interested in, I never get notified..

My email is correct.

Am I doing something wrong ?

I had to add the line

109.201.133.65 bitcointalk.org

to my /etc/hosts file to access this website ?

Is something wrong with the DNS entries ?