Bitcoin Forum
May 25, 2019, 08:13:48 PM *
News: Latest Bitcoin Core release: 0.18.0 [Torrent] (New!)
 
  Home Help Search Login Register More  
  Show Posts
Pages: [1] 2 »
1  Other / Meta / How to deactive my Bitcointalk account? on: September 06, 2014, 02:50:46 AM
I have sent a private message to theymos asking him to deactive forum account, making it impossible for me to login to it and placing some sort of public message on it indicating that this is the case so that no one will expect that I will be able to reply to posts and private messages.

So far, he has not replied.

It is ridiculous that that there is not a standard feature to opt out of this forum.

I am sending theymos another private message now, asking him to deactive my account without further confirmation from me. I hope the next time I attempt to login to my account, that I am refused access.

Thank you.
2  Other / Politics & Society / Westerners don't know jack, but think they know everything on: August 05, 2014, 03:29:34 PM
http://whitedragonawa.wordpress.com/2014/04/10/filipina-punk-girls-anger-toward-white-privilege-and-anti-white-attitudes-in-the-philippines-by-the-privileged-filipino-class/#comment-1401

Quote from: AnonyMint
I'm an age 49 US citizen who has lived in the Philippines for the majority of the past 20 years.

You don't understand the filipina's very astute points, because you haven't sufficiently immersed yourself into the culture. Her point could perhaps be best summarized that you haven't endured their pain, thus you have no emotional basis from which to identify with their struggle. Until you've lived in a squalor area and suffer daily dysentery and amoebas, you are just an admired white guy.

You apparently are unaware that filipinos refuse pain medication even when dying of cancer. Filipinos desire struggle and pain as this is the way they display the sincerity of their emotions and their devotion to the Lord. For example, I mentioned to a pinay that the ebola virus might spread into a pandemic, and she said struggling in death was the decision of God and was her payment for passage to heaven.

Until you can endure the pain they endure, your armchair rants are embarrassing for me to read as a white male who has adopted and experienced their culture as in experiencing their pain.

Righteous young man, I hope this has been helpful to you. Matthew 7 applies in spades. God bless.
3  Other / Politics & Society / Russel Brand's MSM coup on: May 03, 2014, 10:11:17 AM
Amazing:

http://www.youtube.com/watch?v=Ff79iUBe9TY

Enjoy.

Comments?
4  Economy / Economics / Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat on: April 04, 2014, 10:57:05 PM
P.S. this thread is self-moderated, but I will only delete personal (meaning directed at a specific poster here) attacks, quoting the entire OP or other longish quote (noisy), or spam. I will not delete posts I disagree with, except for blablahblah who is so obnoxious that he is permanently banned from my life.

https://bitcointalk.org/index.php?topic=400235.msg6075905#msg6075905

I come across as overly self-important. It is because I tried to warn about the dangers of Bitcoin (while being fair to also praise its virtues) and in the process I had to shout over a lot of hurt feelings. And this hardened my resolve. Sorry this is not overconfidence, it is uber confidence because it is based in fact checking not in wishful careless arbitrary dreaming. Because when I spend a year digging into the details of something, I make many key insights and discoveries. And you all do not know what I discovered technologically because I haven't revealed it. Why should I give you my secret recipes when in fact you would piss on them any way. The only way forward is to prove you wrong. Sorry this is not a desire to be a jerk. It is a desire to do what is best for mankind, a desire to get wealthy doing it, and a desire to build a bigger ecosystem with more people like you profiting and smiling.

Now on to the analysis...

Well if this is the bottom it is U shaped, not V, which is what I predicted upthread.

The price action seems to be very quiet, so not much to talk about from a TA perspective.

First a math point about relating adoption rate to price. Peter R confirmed upthread with a chart that proxies for adoption, N, are tracking price = N x N. And if adoption is growing by rate R per year, then it grows R x R rate in two years. Thus we can say that the annual rate of price increases is proportional to the biannual rate of adoption. You see when our Y axis is logarithmic (e.g. log 10 on chart Risto shows) then exponentiation becomes additive and thus linearly proportional.

So I've been FA thinking about why Bitcoin adoption is likely declining, i.e. as I showed a log-logistic curve fit.

As I explained in that linked post, the slope of the price increase was 0.33 before July 2011, and has been 0.09 since January 2012 until now. So it had already declined. The question is was the early period an aberration or part of the trend?

SlipperySlope had been fitting a logistic curve to Bitcoin's price, because technology which spreads out to the masses typically has that S shape of exponential adoption. The key factor is that logistic adoption rate (slope) increases until the midway point, i.e. at 50% of the adoption before decreasing. Whereas, log-logistic adoption rate (slope) is maximum at the start and is always declining. This is a very important distinction because logistic means we can expect Bitcoin's price rate of increase to accelerate, whereas log-logistic we can expect the rate of price appreciation to slow further (as it already did slowing from 0.33 to 0.09 after July 2011).

I gave the explanation that money is power-law distributed and thus we should expect the greatest serious network effects on adoption at the beginning because the power investors come in the earliest. The log-logistic (cumulative distribution function) curve corresponds to the power-law distribution.

I had an epiphany in my dream last night that there is a simpler explanation which also corresponds to the power-law distribution of money as follows.

"Most people who learn about Bitcoin, don't adopt it".

Why? Because it doesn't fulfill a general need. The need it fulfills is very specific to a white male, hate central banking demographic. It doesn't have fast transactions, doesn't have consumer protection, the money is difficult to secure, it is technically challenging to use, etc..

A consumer adopted item such as a washing machine has logistic adoption curve because every person who hears about wants it. Thus maximum word-of-mouth is reached at 50% of adoption. Whereas, for Bitcoin maximum rate of effectiveness of word-of-mouth was when only the correct demographic was listening back before July 2011. Now as Bitcoin tries to speak to the masses, they mostly don't care.

Thus if you want to build a Bitcoin killer altcoin, you simply make sure it is something every person will want to do.

I have experience doing such things, as I created an application that had 1 million users and 1% of the internet back in late 1990s. Before that I was involved with what became Corel Painter and I helped bring it to 1 million global units and also the first $million milestone in Japan. The key thing is I sought out that company, not them finding me. I have always been attracted to paradigm shift technology and thinking about how to make it easier for people and thus increase adoption rates.

My reputation doesn't matter. I won't be using it any way. What matters here is determining what is really going on. Because an investor without the correct interpretation of reality is destined to lose money.

If there was a black budget team who designed Bitcoin, it appears they may have failed in their analysis. It appears they have no way to get the masses interested. But let's see if that changes as offchain services and fiat masks such as Bitpay and Coinbase proliferate.

Put Coinbase and Bitpay together and you have both the consumer and the merchant, you don't need the block chain any more. Also the mining is already centralized. How much more obvious could it be?

And during this time our core development team and Foundation have been doing what to ameliorate this outcome? Meeting with the CIA and CFR.

And then I wake up to see this at the top of the Google search for "Bitcoin price":

http://gigaom.com/2014/04/04/this-week-in-bitcoin-the-push-to-get-the-currency-in-the-hands-of-the-consumer/

And so again I will challenge Risto according to our original focuses when we first met each other back in 2007. What are you doing about this? I know what I am doing. And you know I warned you about this outcome from Day 1 when you shouted to me that Bitcoin was becoming very important.

5  Bitcoin / Bitcoin Discussion / Basic IQ test on Satoshi's identity on: March 07, 2014, 01:44:24 PM
All those people who vote "no" and have been posting in the recent threads about whether that Japanese guy in CA is the real Satoshi, took the blue pill (i.e. you are losing your sanity).

Those who vote "yes" are just dumb.
6  Other / Off-topic / AnonyMint; split from: Wired Magazine: The Inside Story of MtGox on: March 04, 2014, 09:22:53 AM
Great article.  Great insight into Mark Karpeles personality and strange behaviors...

-B-

What's frightening is that it's not uncommon. Operating a successful business involves doing a hell of a lot of tedious shit, more and more of it as the business gets bigger.  You can't just ignore that shit and you can only delegate so much of it to other people but the more you play the "successful entrepreneur" game the less likely it is that people will call you on your bullshit - or the more likely it is that you'll dismiss any criticism because you think you're smarter than everyone else.

A lot of people get hooked on "being a CEO" and all the trappings, which isn't the same thing as being a successful business person.

I feel bad saying this but all signs point to him being a Sociopath.

http://www.mcafee.cc/Bin/sb.html

Plain and simple.

-B-

Since lately some people have been insinuating that I might be a anti-social, I was happy to review those traits and see I don't possess them.

Quote
Glibness and Superficial Charm

It is quite evident from my posts I don't do that.

Quote
Manipulative and Conning
They never recognize the rights of others and see their self-serving behaviors as permissible. They appear to be charming, yet are covertly hostile and domineering, seeing their victim as merely an instrument to be used. They may dominate and humiliate their victims.

I prayed for the guys who gorged my right eye out, I had to fight with my ex because I wanted give my computer monitor to the artist who suffers from polio and did some of the artwork on my coolpage.com, etc....

Quote
Grandiose Sense of Self
Feels entitled to certain things as "their right."

My sense of self mirrors my actual accomplishments. I am not entitled, I live in a small shack in a third world country and eat rice and bitter melon. I don't have any toilet paper and wash my arse with my hand and soap. I don't have any furniture at the moment because I am too busy working so I only need my foam bed and this rotten wooden table (that I discovered outside) for my desk. Cripes I am running an Athlon 2 core CPU and a single 19 monitor with a cheap keyboard.

I can't remember the last time I took a day off. Shower maybe twice a month.

Quote
Pathological Lying
Has no problem lying coolly and easily and it is almost impossible for them to be truthful on a consistent basis. Can create, and get caught up in, a complex belief about their own powers and abilities. Extremely convincing and even able to pass lie detector tests.

I hate the pressure of being caught in a lie. It entangles you in an ever increasing web of lies. I'd rather deal with the mistake upfront as possible.

Quote
Lack of Remorse, Shame or Guilt
A deep seated rage, which is split off and repressed, is at their core. Does not see others around them as people, but only as targets and opportunities. Instead of friends, they have victims and accomplices who end up as victims. The end always justifies the means and they let nothing stand in their way.

I know very well the things I have done wrong in my life. And feel remorse, shame, and guilt. More importantly I do everything I can to make restitution.

Quote
Shallow Emotions
When they show what seems to be warmth, joy, love and compassion it is more feigned than experienced and serves an ulterior motive. Outraged by insignificant matters, yet remaining unmoved and cold by what would upset a normal person. Since they are not genuine, neither are their promises.

I love deeply+eternally and hate shallowly+ephemerally.

Quote
Incapacity for Love

I think i have too much capacity, even at 49 in June (and I mean both the physical and emotional aspects)  Wink

Quote
Need for Stimulation
Living on the edge. Verbal outbursts and physical punishments are normal. Promiscuity and gambling are common.

I hate gambling. Never do it. Don't smoke, don't drink, don't do drugs, but I don't have a hang up about sex with someone who feels the same with me. If that is promiscuous so be it. But I don't have time to be promiscuous any way.

Quote
Callousness/Lack of Empathy
Unable to empathize with the pain of their victims, having only contempt for others' feelings of distress and readily taking advantage of them.

I try to imagine the pain others feel. I remembered with I was hospitalized near death in 2012 with an acute peptic ulcer that was leaking acid into my body and causing my internal organs to tear and die, and I wasn't allow painkiller, that I became aware that we really don't know the pain others feel until we feel it ourselves. And I also had an idea what burning in perpetuity would feel like (and I can handle pain, I played an entire football game with a broken nose, I've been sewed and operated on without anesthesia but that burning pain is really the shit!).

Quote
Poor Behavioral Controls/Impulsive Nature
Rage and abuse, alternating with small expressions of love and approval produce an addictive cycle for abuser and abused, as well as creating hopelessness in the victim. Believe they are all-powerful, all-knowing, entitled to every wish, no sense of personal boundaries, no concern for their impact on others.

There are sometimes I feel I am not doing a good enough job disciplining myself, but nothing extreme. All of us have to check ourselves from time-to-time.

Quote
Early Behavior Problems/Juvenile Delinquency
Usually has a history of behavioral and academic difficulties, yet "gets by" by conning others. Problems in making and keeping friends; aberrant behaviors such as cruelty to people or animals, stealing, etc.

I had a difficult childhood but I thrived both in academics and sports and even my own hobbies and entrepreneurial pursuits at a very young age. I never let hardship stop me.

Quote
Irresponsibility/Unreliability
Not concerned about wrecking others' lives and dreams. Oblivious or indifferent to the devastation they cause. Does not accept blame themselves, but blames others, even for acts they obviously committed.

I feel obligated to help those who are close to me. And I do.

Quote
Promiscuous Sexual Behavior/Infidelity
Promiscuity, child sexual abuse, rape and sexual acting out of all sorts.

I covered that already above. I see nothing wrong with sex between consenting adults.

Quote
Lack of Realistic Life Plan/Parasitic Lifestyle
Tends to move around a lot or makes all encompassing promises for the future, poor work ethic but exploits others effectively.

I have demonstrated accomplishments of goals throughout my life.

Quote
Criminal or Entrepreneurial Versatility
Changes their image as needed to avoid prosecution. Changes life story readily.

My story is still the same. Now working on the next big thing.
7  Other / Politics & Society / Dark Enlightenment on: March 02, 2014, 04:51:33 AM
Warning, this will exceed the intellectual capacity of most readers here. This is intended for the high IQ audience of Eric's blog.

https://bitcointalk.org/index.php?topic=355212.msg5457696#msg5457696




I voted "most of them". I agree with ESR's comments:

http://esr.ibiblio.org/?p=5238&cpage=1#comment-424645

Quote from: ESR
Quote
>Out of curiosity, why do you believe this ideology worthy of a lengthy series? Nothing against it, I’m just wondering what the trigger was.

Because they have a flavorful mix of dangerous truth-telling and utter bogosity going on.

http://esr.ibiblio.org/?p=5238&cpage=1#comment-424636
Quote from: ESR
...Furthermore, if it were actually true, the DE would be entirely a noisome fever-swamp of bad ideas, rather than just rotten in spots.

8  Bitcoin / Bitcoin Discussion / Most Bitcoin will be clawed back due to widespread theft on: February 27, 2014, 09:55:32 PM
Only a person who wants to end up destitute would obtain Bitcoins. Sending Bitcoin to someone is the antithesis of love, it is a kiss of trouble and woe in the future.

I am very sad about this. I had high hopes for decentralized currency. Unfortunately, unless we can perfect widespread anonymity then this entire decentralized currency concept is dead in the future.

https://bitcointalk.org/index.php?topic=486872.msg5413937#msg5413937

You should realize that this means all BTC you own and all the gains you accrue can be clawed back from you in the future.

Theft of BTC is very widespread even without the exchanges and with the Mt.Gox fiasco (and more to come because the government + banks can bankrupt all the exchanges with regulations, fines, placing holds on funds, etc, or even send in secret agencies to steal the keys).

For those readers trying to rationalize away the contract between accounts holders and Mt.Gox, you have no legal standing. Bitcoin is not legal tender. So many governments have spoken on this already and declared it to be a commodity. Clearly we are looking at a big legal mess with Bitcoin which the government is going to have to solve holistically. Now you see I was correct from the very beginning in Bitcoin : The Digital Kill Switch.


All you Bitcoin millionaires are going to be Bitcoin jailbirds and destitute.

For those who are rationalizing away the chain of ownership (I explained upthread) due to that the lack of physical nature to Bitcoin, you don't have any chance of winning that argument. If it wasn't owned, it wouldn't have value that can be exchanged. Even if we are trading fungible tokens in a pool, the tokens are still owned. Cripes, are you guys totally ingenuous or ignorant.


https://bitcointalk.org/index.php?topic=486872.msg5414095#msg5414095

Oh, bold and red font.. Must be legit.

Continue to ignore it please. I will be watching all Bitards fall into the abyss together when the mess comes to the point that you can't find any one to buy your coins, yet you are liable for all the clawback amount.

Mansions will be confiscated. Paddy rides to debtors prison will be ensue when you can't pay.




Failure to understand Bitcoin will indeed cost investors billions. 744,408 BTC stolen (nearly 7% of total mined coins to date) and some people seem to be cheering like this is a good thing because they don’t like (long despised) MtGox. This is far far from over.  Where did those stolen coins go? Well check your wallet because they were likely fed back to the markets. If you have been buying bitcoins on any exchange chances are you have some of the stolen loot yourself. These stolen coins can be traced back to their true owner in a direct chain of title thanks to the block chain. If you don’t think this matters you don’t understand the legal system and the principle of Nemo dat quod non habet

Under both American and English law the original owner of stolen property can demand ownership be returned to him if he can prove a chain of title (something the blockchain conveniently provides). The only recourse for an innocent buyer of stolen goods (and only in some jurisdictions) is to argue the exchange it was bought from had an implied warranty and he can try to sue the exchange after returning the coins to the true owner. MtGox is insolvent good luck there. BTC-e is run by anonymous folks think they will stick around in the face of massive lawsuits?

But cheer up there is still a chance most MtGox victims will get their coins back. The threat of massive unending lawsuits targeting innocent bitcoin buyers is an existential one for bitcoin. The 10-15 early adopters stand (by far) to lose the most if bitcoin goes down in flames. They might actually decide to buy out MtGox for the 744,408 bitcoins (an amount grossly exceeding the worth of the company) not because they are altruistic people, but because the chain of lawsuits that would follow if they don't act may hurt their holdings more than the loss of 744,408 bitcoins. It’s a lot of money, however, so its likely a difficult call for them. Regardless expect all future exchanges to require both rigorous identity checks prior to buying and selling as well as fine print stating that anyone who supplies coins to a market is ultimately responsible in the event those coins are determined to be “black” or stolen goods in the future.

Still think there is no need for truly anonymous cryptocurrency?

Serious problem for Bitcoin now:

https://bitcointalk.org/index.php?topic=486872.msg5407521#msg5407521


More:

https://bitcointalk.org/index.php?topic=486872.msg5408045#msg5408045

I hope readers can start to comprehend why coin taint is the most serious Achilles heel of Bitcoin.

On Friday, 2 BTC were stolen from me. I am considering reporting this to law enforcement. This means that anyone who receives BTC which derives from my stolen 2 BTC will be liable to return them back to me.

Perhaps the thief pushed them through a mixer such as Bigcoinfog.com

Thus that mixer will be liable to provide records. If it can't, then it will be liable for the 2 BTC.

So you can't you see you are playing with fire by mixing your coins through a centralized mixer.

And can't you see that without widespread anonymity (and decentralized mixers!), then crypto-currency is absolutely useless except to a government which wants a ledger from hell to track everything.




9  Bitcoin / Bitcoin Discussion / "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws) on: February 08, 2014, 11:18:27 AM
Update: please read this post for a clarification of the meaning of this "OP" (opening post).


(Doug) Casey Research's Alex Daley (a former high ranked executive at Microsoft) penned a myopic rebuttal to internet pioneer, now venture capitalist Marc Andreessen's myopic fanboy regurgitation of the often repeated incorrect theories about Bitcoin's key innovation and future. It is important to read Alex's article first. These two and most of the Bitcoin community are far from understanding what is really going on. Thus expect the majority to vote "No" here, to reaffirm their myopia.

Daley essentially incorrectly argues that money can't exist without top-down corporate and government control (although he admits it could in a "wild west" mad max world which I think is to some extent where we are headed after 2016), yet correctly argues that Bitcoin has insurmountable (also) flaws for consumer payment without top-down take over while he failed to enumerate many of the reasons Bitcoin is vulnerable to top-down take over. Copying the myopia of most of the Bitcoin community, Andreessen fails to understand the reasons Bitcoin is doomed to a future of top-down control analogous to the top-down global money solutions being patented recently by the major banks.

Before enumerating the specifics, I want to first address the factors driving interest and adoption of Bitcoin. Foremost is the desire to end the mismatch of the fact that the internet enables bottom-up, decentralized freedom (of speech and enterprise) yet payment being top-down controlled by a few large corporations which also translates to control by the various governments, e.g. AML and KYC laws since the false-flag farce of terrorism was foisted on the world to fool the sheep. Not only does this mean more layers of tsuris and parasites when starting up and maintaining enterprise on the internet and a fractured global internet payment system, e.g. many sellers in third world countries can't accept Paypal nor credit card payments or have severe limits, it also means we fundamentally don't have any individual freedom without relying on governments and society remaining functional and sane. Unfortunately history has shown that periodically throughout all recorded history since Mesopotamia ALL governments and society eventually go insane (more on that later).

Secondly, given this breathtaking potential to fundamentally bring payment into coherence with the decentralized freedom of the internet, there is immense investment demand for the killer crypto-currency. This sustains an investment boom until everyone that is going to use or be involved with that ecosystem is already fully invested. During that investment boom, the payment system doesn't need to be superior in every way to existing fiat solutions that Daley mentioned, because the investment demand along with the myopic dream of that breathtaking potential creates demand and interest. Daley is correct in another way which he did not mention. If the underlying payment capabilities are not superior (nor have a killer feature such as anonymity [2] to make them more compelling) thus not scaling with the investment demand then when that investment demand is saturated, there is a bubble that will burst. Even CoinCube, Gary North (Ron Paul adviser), Henry Blodget, Peter Schiff, and others agree.

Bitcoin Take Over Threats

  • Coming $Trillion(s) bubble burst will demand world government intervention & cooperation [1] (Bernie Madoff is so much smaller)
  • Selfish mining attack confirmed by skeptics
  • Those who were anonymous lose it ex post facto, when tax & law enforcement attack a.k.a. "coin taint" the numerous non-anonymous [2]
  • 51% attack because mining is concentrated in a few pools
  • 51% attack because mining is ASICs concentrated and ASICs foundries could be purchased with unlimited fiat. Note also ASICs can't be re-purposed as PCs can, i.e. each ASIC only works for a specific coin design.
  • 51% attack because mining is not funded with perpetual debasement (new coins) to remain proportional to market value, instead transaction fees can not scale to market cap because even debit cards & ACH charge a flat-fee not a percentage of transaction value. Thus the world's rich (denominated in coin) grow more wealthy relative to the income of the miners.
  • Non-zero transaction fees allows cartel take over via Transactions Withholding Attack and Spiraling Transaction Fees tragedy of the commons.
  • Lack of perpetual debasement means 51% attack gets less expensive (proportional to market cap) over time.
  • Pools can be attacked with Share Withholding Attack fixable with oblivious shares
  • Blockchain requires increasingly powerful full clients as scale to billions of transaction, thus more centralization and vulnerability to 51% attack.
  • Superior altcoin

Bitcoin Killer Altcoin

The Bitcoin killer will thus have at least the following features.

  • provably cpu-only mining with botnet resistance (current proof-of-stake can't redistribute new coins to masses & I posit it isn't secure)
  • built-in anonymity (to minimize non-anonymous users)
  • small, reasonable perpetual debasement
  • zero transaction fees (with economic transaction spam resistance)
  • economically limited pool sizes
  • oblivious shares
  • selfish-mining fix
  • mini block-chain design
  • faster 1-confirmation block chain, e.g. 1 minute instead of Bitcoin's 10 min delay, if the orphan rate can be contained

Note the argument of an absolute network effect advantage for Bitcoin is illogical. The network effect can lead to more mass for Bitcoin but it can't entirely shut out altcoins, not in the way that for example an internet standard shuts out alternatives due to the inertia of modifying millions of servers. For example, my coolpage.com was first in 1998 with a million users by 2001 (roughly 1% of the internet at the time), Friendster followed 2002 later peaking with 100+ million, Myspace 2006, and then Facebook 2008. Last year Bitcoin was only at an estimated 350,000 users. We have a long way to go to 7 billion.

Since the Knowledge Age is rising [3], socialism is peaking into an economic collapse soon (maybe to rise even higher in future), thus we headed into a crazy period where the governments will try to fund the $150 trillion global debt bubble [4] by hunting down all private capital (G20 announced a database for this today, NSA will contribute and note this is the bankster business model for them to own everything), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector. For this new virtual economy, e.g. downloaded 3D printing designs which we print at home instead of going to store (and 3D printers can print numerous materials on the same object), there are many cases that don't need the consumer protection charge backs. You won't likely be paying a high enough price for a download to justify the hassle of charging it back any way. A 7 billion person market is huge, prices will decrease while profits for individual designers will rise! Prosperity!

Also Alex Daley apparently isn't aware of the scripting capability in Bitcoin which enables multi-party contracts, off-chain activity a.k.a. colored coins, and thus escrows and other forms of consumer protection are also possible.

Near-term it pays to hold the crypto-currency as a store-of-value as investment demand rises over perhaps the next decade or more, and after that as I explained [3] that Knowledge Age workers will prefer to store their capital in knowledge, e.g. offering bounties to more developers than storing in money, so money will shift more to a unit-of-exchange and away from a store-of-value (because new knowledge can't be driven in large-scale by usury finance of large, dumb capital) and in fact only Dark Ages have been associated with non-debased, hard, money as a store-of-value, thus the crypto-currency can be our unit-of-account and we won't need to exchange it in real-time to the dollar or SDR socialism world currency (as many merchants currently do with Bitpay for Bitcoin to get paid in fiat instead of bitcoins). The Knowledge Age economy can find sufficient scale to keep commerce denominated in the crypto-currency and rarely exchange out to fiat for those rarer physical purchases as the physical industrial economy fades away.

Footnotes

[1] https://bitcointalk.org/index.php?topic=365141.msg4869474#msg4869474

4. What other solution can you propose for Europeans to hide their wealth from the coming IMF suggestion "financial repression" of confiscating money from Euro bank accounts? Sure they are busy buying land in the USA and else where to hide this money, but of course the G20 is planning to cooperate to track down all of this and confiscate it together (the formation of world governance).

[2] https://bitcointalk.org/index.php?topic=351712.msg3837816#msg3837816
https://bitcointalk.org/index.php?topic=351712.msg3845771#msg3845771
http://hackingdistributed.com/2013/11/19/why-da-man-loves-bitcoin/#untraceability-versus-anonymity
https://bitcointalk.org/index.php?topic=195275.msg3385368#msg3385368
https://bitcointalk.org/index.php?topic=365141.msg3944395#msg3944395
https://bitcointalk.org/index.php?topic=279650.msg3525312#msg3525312

Gonzalo Lira explains why anonymity is so important but Bitcoin doesn't make most users anonymous.

Quote
Also, actually acquiring bitcoins is remarkably complex—and completely negates the supposed anonymity of bitcoin. Here’s a Reddit editor discussing how tough it was for him to get bitcoins, which is fairly typical of retail customers: A whole lot of hassles, and he still couldn’t buy any. And for all the talk of “bitcoin’s anonymity”, you need a whole truckload of verifiable documents making clear who you are in order to buy your first bitcoin. So the bitcoin-anonymity argument is a chimera.

The failure to meet that condition—“buy or sell exclusively and necessarily with bitcoin”—is what makes bitcoin essentially useless.

[3] https://bitcointalk.org/index.php?topic=365141.msg4926212#msg4926212
https://bitcointalk.org/index.php?topic=355212.0
https://www.google.com.ph/search?q=oxford+university+predicts+47%25+technological+unemployment
https://bitcointalk.org/index.php?topic=365141.msg4165741#msg4165741
https://bitcointalk.org/index.php?topic=365141.msg4192799#msg4192799

[4] https://bitcointalk.org/index.php?topic=365141.msg3902083#msg3902083

Errata

I am in the process of gathering links to my prior explanations of and math on why the people lose and wealth is concentrated under both deflation and inflation, and that debasement is not correlated to whether the people attain greater or less prosperity. Check back in this section later, as I will add them below.

https://bitcointalk.org/index.php?topic=365141.msg4379076#msg4379076
https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848 (math)
https://bitcointalk.org/index.php?topic=195275.msg3357270#msg3357270
http://armstrongeconomics.com/2013/01/10/why-hyperinflation-is-nonsense/

It is centralized control over debasement that is very detrimental to the people (because for example the Fed can make a hockey stick of the money supply chart at-will), whereas decentralized debasement is a boon to the people as explained in the above links. Unlike in the 1800s when we had more frequent bank runs and depressions, central banking has enabled delaying the debt defaults and write-downs so now even the IMF admits we are at a 200 year debt peak and thus is recommending that massive confiscation of wealth is required. Most people don't realize we had a depression in the USA in 1919, but we recovered in 2 years because the government did not delay the defaults. Whereas, the 1929 Great Depression lingered for decades and required a World War to resolve, because of FDR's New Deal and preventing the defaults and chaotic correction. Frequent defaults correct the economy before it gets "too big to fail" (TBTF). Now we potentially face an Apocalyptic or Mad Max outcome because we grew our debt to a 200 year high. My hope is that the better crypto-currency could help protect private capital from "socialism gone insane" so that the worst outcome can be avoided.
10  Bitcoin / Project Development / New official open source term for explorimenting or prodspecting code bases? on: January 07, 2014, 09:21:18 AM
Remember Eric S Raymond is the person who coined the term "open source", Linus' Law "given enough eyeballs, all bugs are shallow", founded the OSI, wrote the seminal The Cathedral and the Bazaar, so his choice carries substantial influence.

I attempted to post the following comment but it will never appear because Eric banned me 3 times. If you like my suggestion for 'prodspect', please feel free to (even anonymously) post my (or any portion of my) comment at the following linked blog page so they will see it, since they are trying to choose a name we will all use for this open source function. Or post your own ideas and feedback there. Note I could find a way to post my comment there anonymously using a VPN and/or Tor, but I find it more rewarding if someone else finds my idea (or rewards my contribution to this forum with some appreciation) worth posting there on my behalf.

http://esr.ibiblio.org/?p=5178&cpage=1#comment-421250

Quote
I like exploriment.

I have used delve naturally, "I will need to first delve into the code". However, I prefer to retain delve to mean when I am not necessarily implicating [experimental] modification.

My best alternative idea thus far is prodspect.

Other brainstorming:
edispect
editspect
experispect
modilyze
modelyze
twgeek
twerk
11  Other / Politics & Society / Is a Madmax outcome coming before 2020? Thus do we need anonymity? on: December 09, 2013, 11:36:45 PM
If we go into a Madmax world where the governments are bailing-in all the bank deposits, they are instituting negative interest rates to charge you money every month for having money, and the IMF's proposed net worth tax, etc...

Then all those who have wealth will want anonymity. And all those who don't have wealth and suck the tit of government, will not want anonymity.

Which one of those categories applies to you?

Do you think that Madmax outcome is not coming before 2020?
12  Bitcoin / Bitcoin Discussion / Did China just legalize Bitcoin, clarify regulation, for its free market use? on: December 07, 2013, 06:45:18 AM
Is my interpretation correct?

(note the vote doesn't apply to my speculation about Baidu having manipulative intentions)

Note I am not saying they legalized it as a currency. I am saying "for its free market use". Please understand the distinction.

However, general public may trade bitcoin on the internet by taking their own risk.
How is that not uber-bullish?

Because if merchants aren't allowed to accept it as currency then that is a major blow for bitcoin adoption in China.  However it's not clear to me if that is the case.
Who said merchants were not allowed to accept it as currency?

From the 'human translation' on reddit: http://www.reddit.com/r/Bitcoin/comments/1s5hzl/my_human_translation_of_the_china_regulation/

"Bitcoin is a specified virtual commodity, it does not have equal legal status with money currency, and it cannot and should not be used as money currency on the market."

Note the important correction.

That could be interpreted to mean that any Chinese business should not treat bitcoin as money currency i.e. not accept it as payment like they would if it were a currency.

My father is a former West Coast division head attorney for Exxon. I appear to have inherited some of his high IQ ability to interpret the law.

I can't find anything in this document that specifically bans the bolded assumption.

This document is merely stating that Bitcoin will not be allowed to circulate widely as a currency to compete with RMB, because all volatility risk will remain outside the financial sector in the private parties and exchanges. It is very free market way of saying Bitcoin will not be backed by the government's system. There is nothing stopping businesses from accepting it, and converting it to RMB via a registered exchange.

The government will not likely clamp down on small scale acceptance, as it presents no credible threat to RMB. As we all see now, businesses are forced to convert to fiat immediately if they have significant expenses in fiat, i.e. Bitcoin presents no threat to fiat at the moment because of its volatility and the need for businesses to have fiat to pay their employees and operating expenses, etc..

Note small scale in China is big scale relative to current Bitcoin market size given the large population. Bitcoin is only in the tens of $billion range of market cap. Fiat finance is in the hundreds of $trillions. Bitcoin can grow immensely while still being small scale relative to fiat finance market size.

Whereas, (small) businesses could keep their profits in BTC, as easydns did (PenAndPaper username). Of course big businesses can't because the Bitcoin market cap is too small any way, besides big businesses are not into such risk.

The document is saying that non-financial entities must accept risk of holding BTC.

So this does not to stop the trajectory of Bitcoin in China. Exchanges can still operate and are not prevented from having a bank account to operate with. The document only bans financial institutions (and payment providers) from being market makers, underwriting, insurance, etc. In other words, all the risk and market making must be done by individuals and exchanges.

What they have done is simply kept Bitcoin in the free market-- the wild west.

This is an extremely bullish outcome. They have clarified that Bitcoin is legal for its small scale free market functions.

The Baidu thing is very suspicious. They accepted for a very small portion of their business which was misunderstood and caused a euphoria, then they dump when people misunderstand the ruling above, in order to create panic. Looks like some manipulators are getting rich on BTC pump & dump & rebuy on the dump.
13  Economy / Speculation / Impact of Greenspan's comments? on: December 07, 2013, 03:51:51 AM
Just woke and ready to convert to pesos, but the price is $770.

Any one willing to offer a trading opinion? Should I rush to convert now or wait it out?

Googling Bitcoin price, shows Greenspace said something about it being a bubble and no intrinsic value. Does this remove some resolve of the bulls or should I just wait for them to scoop up the panic sells of the weak hands?

I guess we should pay attention to the volume on the exchanges? If volume slows down that would be a sign of declining number of panic sellers?

Technical analysis traders please comment.
14  Bitcoin / Bitcoin Discussion / Our experience on this forum will be worth more than our Bitcoin on: December 01, 2013, 07:10:22 AM
This forum reminds me of the wild and crazy periods of my younger programming life.

I remember my co-author and I taking axes to the desks when I decided to close my first company. Several years of stress taken out on those poor desks.

We will probably look back on this time and remember all the zany, humorous discussions we had. Good times indeed.

Call this the posterity thread. Any topic is allowed. Let 'er rip...

Edit: suggestion, you can quote to the most zany posts or threads and collect them here for humor or effect. This is not a self-moderated thread.
15  Economy / Economics / Economics of transactions in Bitcoin is a fail on: November 25, 2013, 11:45:51 PM
Sending medium size transactions from localbitcoins to a bitpay invoice are timing out on bitpay's 15 minute invoice expiration. I assume localbitcoins is propagating the transactions widely and with a non-zero transaction fee.

After some hour or hours the transaction shows up in the public ledger, then either bitpay or the merchant has to take FX exchange risk since so much time has elapsed. Most merchants don't want to hold BTC, they want to receive the number of dollars they expect to receive, because their expenses are paid in dollars, not BTC. With small enough periods between the quote of FX price and the actual FX transactions, the variance will probably average out over enough transactions. Yet larger delay periods increase variance and risk.

Also there is immense and unbearable delay and confusion for the customer.

Both the merchant and customer lose far more in lost time (emails back and forth, delays, etc) than any credit card transaction fee and chargeback rate.

This is a fail. It is going no where like this. Never can this be widely adopted. And as merchants are gaining experience with this, they will become discouraged about accepting Bitcoin payments. As a merchants' tolerance reaches the breaking point, they will finally dump Bitcoin and never come back (nor to any altcoin).

Ditto customers! No circumstance under which I would waste a couple of hours of my day on a transaction that would take less than a minute with a credit card, except maybe if I needed to be anonymous and was expert enough to jump through the VPN and Tor proxy hoops (thus not a mainstream transaction).

Businessmen don't have time to waste; that their most precious resource!

I don't know why Bitpay is not accepting 0-confirmation transactions in this case, at least to the point of telling the customer that the transaction was seen but not yet in the public ledger. So perhaps Bitpay could do FX immediately, while the merchant would withhold final delivery of goods or services until at least 1-confirmation. This may be poor integration between Bitpay and the merchant and this wouldn't surprise given how braindead the Bitpay invoice web page is, e.g. there is a button to pay and it links to a "bitcoin:" protocol which the browser doesn't understand. So the customer is left completely clueless after clicking that and thinks Bitpay is broken.

What is causing this technical problem with localbitcoin spends being delayed into the public ledger?

I suspect it is a contagion of issues:

1. Slow 10 minute block period.

2. Variable transaction fees with finite block size means during intense speculation, the higher bidders would go first. I did not verify whether blocks are overflowing with transactions.

3. Denial-of-service (even double-spend) attacks on miners perhaps means they reject many of the transactions with low transaction fees.

4. Miners with low processing power (all dedicated to winning a block solution) and bandwidth perhaps means they reject many of the transactions with low transaction fees or many transactions with any transaction fee.

5. Huh
16  Economy / Economics / Ideas for more efficient distribution of money? on: November 22, 2013, 08:17:26 AM
How can we improve upon Bitcoin's highly concentrated coin distribution?

Only the top 3% should be power-law concentrated, the rest distributed with diffuse gas random concentrations:

"Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States" by A. A. Dragulescu and V. M. Yakovenko

We shouldn't give coins away to the lazy who do nothing to earn them, because Risto explained that in Russia the recipients just squandered the gifts.

Ideas thus far:

1. Decentralized CPU-only proof-of-work, but the threat are botnets

2. Centralized premine then distributed with a faucet first-come, first-served until depleted.

3. Centralized premine then distributed to merchants every month or quarter evaluated to be bonafide. So this really requires hiring staff, which should be paid either from premine or a foundation with membership fees.

Hit me with ideas please!

I will keep self-moderation to an absolute minimum but please try to stay on topic and no ego battles.


This is my fundamental insight.

http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html

http://www.coolpage.com/commentary/economic/shelby/Understand%20Everything%20Fundamentally.html

http://unheresy.com/Information%20Is%20Alive.html
17  Economy / Economics / Is Bitcoin a Pyramid or Ponzi scheme & what are the ramifications? on: November 21, 2013, 04:01:47 AM
Lets do a little simple math as follows.

Joe invests $100 to buy all the BTC from Satoshi on day 1, all of BTC is worth $100
Sally invests $1000 to buy 10% of BTC from Joe, all of BTC is worth $10,000

Joe wants to withdraw his $9000, but there is only $1100 invested in BTC.

You see if they can't spend it as BTC, then it is never worth the level of cash that was brought in.

You see most people can't do math in their head. They need to see it.

So now you see it.


I would really like to get to the bottom of this question in an objective debate.

I have added a poll so that readers can express their subjective opinion without my censorship. The objective answer to this question is in the objective logic debated in this thread. Objectively the poll is a measurement of the level of delusion and mania, as to whether it agrees with the objective arguments made in the thread. Those who can't make objective arguments will vote only. This level of measured delusion and mania can serve as further evidence of the ponzi scheme, e.g. for the authorities.

Since this is a self-moderated thread, please review what I think it is the objective difference between objectivity and subjectivity.

http://en.wikipedia.org/wiki/Ponzi_scheme

Quote
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

The only aspects of the above definition that could possibly be argued to not fit to Bitcoin are the words "fraudulent" and "operators". I will objectively argue that the early adopters are the "operators" and also that the operation is no less "fraudulent" than any other typical ponzi scheme.

The gains of earlier investors come from the investment of later investors, because the Bitcoin operation generates no cash flow nor profit for investors. There are threads devoted to charting and promoting the very high (12x per year?) exponential trendline price gains of Bitcoin. The perpetuation of high returns requires an ever-increasing flow of money from new investors to sustain the scheme.



The fraudulence arises from the realization that the large investors in Bitcoin can not deny the facts of this post. It is implausible they don't realize the true qualities of what they are promoting to later investors.

http://www.sec.gov/answers/ponzi.htm

Quote
What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business.

Why do Ponzi schemes collapse?

With little or no legitimate earnings, Ponzi schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.

If we equate "organizers" with "operators", the characteristics added by the SEC definition are "with little or no risk". I can cite numerous comments throughout the bitcointalk threads where owners of Bitcoin claim the infallibility of the Bitcoin model for growth.

Bitcoin is amalgamation of some characteristics of a pyramid aka multi-level marketing scheme and all characteristics of a ponzi scheme. Specifically the earlier owners of the Bitcoin, promote the low-risk or no-risk and high-gains benefits to later investors.

I don't objectively see how this can possibly be refuted. I am interested to see what others can say.



I have presented some detailed logic for why for as long as Bitcoin is not widespread in the population, it can not function effectively as a currency. And the chicken-and-egg dilemma conclusion of that presented logic is that it will be ponzi scheme for as long as it is not a currency, and it will not be a currency for as long as it is a ponzi scheme.

We all love the concept of a decentralized currency and we all want it to succeed.

So what is the actual problem here?

If you work out the above linked logic in your mind, then objectively the problem is that in order for investors to exit without converting to fiat and thus driving the exchange price down in a stampede, the coin needs to be a widespread currency so that the investor can exit by investing the coin directly without ever converting it to a fiat.

See the problem is that when you invest in a company, that company needs to pay its costs in a currency and people in general can only use a currency that is accepted by all merchants. And I am not just talking about esoteric merchants applicable to our current demographics, but everything down to the fish vendor carrying a bucket outside my nipa hut in the mountain in this third world country where I reside. Okay maybe actually we would be fine if our coin was merely accepted by a significant minority or simple majority of developed country merchants, assuming most investors in bitcoin reside or invest only in developed markets.

The problem is that in order for merchants to accept bitcoin, there needs to be a demand from their customers. And thus we need our coin to be distributed to significant portion of the world's population.

But Bitcoin is highly concentrated among the wealthy investors, probably controlling 90+% of the coins. Note when analyzing the linked data, please don't argue that offchain services storing everything in one coin distorts the data, because I see for example that localbitcoins provides a separate address for each user and some users have wallets with 100s or 1000s of addresses, so if anything the data is skewed towards making the concentration appear to be less worse than it is.

98% of humanity won't have any bitcoins when it enters a bubble and this is a problem, since these are already the laggards, and by buying at the bubble, they make their situation worse, not better. Any thoughts?

Have you seen dukong's bitcoin ranking search? http://btc.ondn.net/search

The current blockchain holdings by address yield this distribution ....

Code:
Balance        Rank
1 BTC       195,629
10 BTC       91,885
100 BTC      10,128
1,000 BTC     1,127
10,000 BTC       95
100,000 BTC       3

Total     2,062,380

At full adoption, one could reasonably expect the same ratios of large to small holdings, with large growth below 1 BTC. Addressing your point, let's think about when the 98% of humanity acquires bitcoins.

How can that concentration possibly be resolved. If the investors sell for fiat it plummets in price, and if they try to use it as a currency, they can't possibly get enough economy-of-scale to divest more than a sprinkling of coins, because Bitcoin is not a widespread currency. But it can't become a widespread currency until it is widely distribution. Again another catch-22 or chicken-and-egg dilemma.

The only way I see for a coin to solve this dilemma is to be widely distributed from mining. And Bitcoin can't do this, because it is dominated by ASICs (no one with a PC can mine effectively) and it stops asymptotically at 21M coins. In fact, half the coins were awarded in the first 4 years, and 75% in the first 8 years, and 87.5% in the first 12 years, and 93.75% in the first 16 years.

Let the discussion begin.


Edit: Not limiting the supply of coins to 21M has no downsides and has other benefits too:

I certainly could not make this case for Bitcoin, because the marketing demographic is based significantly on the asymptotic limit of 21M coins.

And the only fix I currently see is to not diminish coin rewards asymptotically towards 0.

But crypto-currencies are a broader topic than Bitcoin. And an altcoin could offer the proposed fix, c.f. my upthread reply to MoonShadow where I claim that an inflatacoin with no other compelling improvements over Bitcoin would not succeed in the market place.

Also inflatacoin is entirely the wrong connotation, since non-excessive coin rewards have no algebraic correlation to inflation, even Mises admitted that. Even at the current 12.5% per annum (monotonically decreasing) debasement of Bitcoin, the coin is deflationary (ahem, well not the past couple of days with the fall in price).
18  Economy / Economics / "Spiraling Transaction Fees Destruction" of bitcoin on: November 20, 2013, 04:43:25 PM
Here is a new vulnerability I just realized exists in Bitcoin. This is pretty fucking bad news unless someone can refute it. I am very surprised no one thought of this before, or did they?

Note I am very sleepy (been awake 24 hours) and I just thought of this, so I could possibly be mistaken.

This goes in the Economics thread, because it an economically driven attack, not a protocol attack.

This is going to be counter-intuitive to your instincts, so stop and think deeply rather than rashly posting some nonsense that I will easily refute.

This is basically a Tragedy of the Commons effect, or perhaps Tragedy of the Anticommons.

The problem is that as more people buy mining hardware they increase the difficulty. This dilutes the profitability of everyone. At some point, any miner can become unprofitable and they must decide to continue losing money or quit.

But they have another option. They can see the available transactions and fees offered for the block before they start computing the proof-of-work solution. So they could optionally only attempt to compute it when the fees are high enough to make them profitable. In other words, they idly listen and filter the transactions by fees and only burn big electricity when fees are adequate.

Thus the collective difficulty is not a barrier to buying more mining hardware. If the miner sees that percentage of blocks of transactions are sometimes sufficient to mine, they have an incentive to add more network difficulty and mine part-time as explained above.

This effect is exasperated by the exponentially rising value of Bitcoin, which makes ROI very high even if part-time, because of future expectation of rising returns on mining. But the price drops, then miners have to stay alive until it gets back up to expected exponential trendline again.

So this is a spiral upwards. The customers can't choose to not pay transaction fees, they will offer fees high enough to get their transactions processed. But the percentage of the network which will process for any fee will always be falling off due to the asymmetric relationship between the collective difficulty and the individual part-time miner's incentive of when to add more mining hardware.

Thus transactions fees will perpetually rise as a percentage until eventually it becomes too costly to do any transactions.

And then Bitcoin dies.

End of story.

P.S. There may be evidence this is happening already. Coin rewards are still high at 12.5% per year, so the transaction fee effect is only just minimal so far, but this will worsen as coin rewards decline in 3 more years, if I am correct in my theory above.

P.S.S. The basic problem is that there is no limit on mining hardware, and no limit on transactions fees. Customers don't have a choice. And the miner's individual profit calculation is not symmetric with the overall difficulty scaling. And the adding of hardware is a one-way function, you can't return it after you already bought it. So much better to part-time mine and filter on fees. The Bitcoin prices sometimes drop below trend too. But the hardware can't be returned.

I guess a rebuttal could be that as they part-time mine the difficulty drops but not immediately, and still more will add hardware when the difficulty drops since that is the new level and fees have increased due to the filtering before the difficulty dropped, which drives demand for more hardware.

See the basic problem is the asymmetry both in the collective difficulty versus individual part-time, and the irreversible (coinductive) function of buying new hardware. And the oscillations always push up the hardware on the upside, but can't remove the hardware on the downside. So miners filter mine once they realize what I have written if they are not already doing it. They may not be doing this yet, because of the still high coin rewards.
19  Bitcoin / Bitcoin Discussion / Everyone who profits on Bitcoin is going to jail (split from Mike's blacklist) on: November 19, 2013, 12:58:44 AM
I don't know if Coin Validation was mentioned on this thread. Mike Melon is a $4.5 billionaire.

Any way, I think Bitcoin is fucked because we don't have any anonymity any way, and everyone who profits on Bitcoin is going to jail. Read my posts at the following thread to entertain my logic. Yeah it sounds ludicrous, but read and ye shall be rewarded with new insight and truth:

https://bitcointalk.org/index.php?topic=323988.msg3625475#msg3625475
20  Economy / Economics / Transactions Withholding Attack on: November 17, 2013, 07:22:44 AM
I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.

I think it is an economic attack, so I place it in the Economics forum. Also because I don't get good reception from Bitcoin developers when I try to post in the developers forums. Lets see if they ignore this thread or come post to refute it. I doubt they will.

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.

That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.

Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. Once they adopt one, they will stay with that one due to inertia and network effects.

Thus I see Bitcoin is doomed and it is not a solution to anything long-term, although short-term it shows us what might be possible with decentralized currencies if we were to improve them.

http://hackingdistributed.com/2013/11/08/fairweather-mining/#comment-1126378553

Quote from: AnonyMint
Quote from: cunicula
1) declining block reward and constant gains from monopoly fees

I believe I am the first person to raise that in my Bitcoin : The Digital Kill Switch article? I am naming it the "transactions withholding attack" since it means not forwarding transactions in order to monopolize transaction fees, as coin rewards diminish.

Do you know of any prior art to mine? Do you know of any discussion on this attack other myself constantly mentioning it and no one seemingly willing to discuss it? (because the only solution I see is to change Bitcoin's diminishing coin rewards supply curve)

Other recent discussion:

https://bitcointalk.org/index.php?topic=318001.msg3607709#msg3607709



Related. I have shown there is no economic advantage to a money supply that is constant:

https://bitcointalk.org/index.php?topic=13035.msg3609132#msg3609132
https://bitcointalk.org/index.php?topic=222998.msg3607535#msg3607535
Pages: [1] 2 »
Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!