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941  Alternate cryptocurrencies / Altcoin Discussion / Re: Is mandatory transaction inclusion possible? on: April 17, 2012, 08:09:48 AM
Floating point doesn't matter and I question the logic of using floating point due to the variety of rounding errors that introduces.  Still  % fees are not possible on a Bitcoin derived system.

Bitcoin has no concept of the value of the "spend" just the total input and total output.

So 0.1% fee.  Paying merchant 1 BTC.  1000 BTC input. 
1 BTC -> merchant, 999 BTC -> change 
0.1% * 1000 = 1 BTC fee? 
1BTC fee on 1 BTC "spend"?

Your analysis is correct. I did not consider "change transactions", thank-you for the clarification. I initially thought (as Etlase2 apparently does) that change to the originating address can be exempt. However, this is not possible for two reasons:
  • Some transaction have multiple inputs. I suppose it can be assumed all inputs are in the same "wallet" (due to proof of ownership).
  • More importantly, with mandatory transactions, the transaction fees are an important anti-spam measure. If intra-wallet transactions were "free", somebody could use them to inject arbitrary data into the block-chain.

I have determined that transaction fees on change are probably not a problem for the alternate block-chain I am considering. I have also realized that transaction fees and explicit rounding errors are integral to the yet-to-be-proposed block-chain. I will have to go over the logic carefully, possibly with Satoshi paper-style diagrams. The real sticking point is that hosts with different block-chain resolutions may disagree what balance an address has. The protocol has to be designed such that hosts using the same resolution always agree.

Its no a question of IF.  You have given a direct financial incentive to ensure those edge cases come up.  The system will be gamed.  Large pools (or consortion of pools) can keep hidden tx and use them to invalidate blocks of miners who aren't part of the cartel (or unwilling to pay fees to gain knowledge of the hidden txs).  It doesn't matter what a miner thinks is valid if 51% of the hashing power disagrees.

You seem to be saying my proposal is vulnerable to a 51% attack. I will try to figure out what happens in the event of a net-split. The case were one half has at least 51% is actually more complicated Tongue

Because this discussion probably can't proceed without context:
I mis-read this MintChip Challenge Idea submission as sarcastically suggesting that digital (meaning in my mind having discrete values, like the penny) currency can be used to suppress more "analog" currencies: such as the given example of the Green Money Working Group.

After skimming that page, I decided that even though I did not like the idea, it can probably be implemented in a Bitcoin-style block chain. The high inflation (not sure if that is the correct term (devaluation?)) solves the hording problem that many (trolls?) complain about. It also solves the "early adopter" problem as well.

On the assumption that the "RkWhs as a monetary unit of value" was an analog unit, I started working though the implication of using floating point values as an approximation. I realized that I can solve the bandwidth and block-chain pruning problem at the same time: by having miners declare how much resolution they will process. Ironically, the small (P2P pool) miners on home Internet connections would only be able to process large transactions. Conversely, only large miners in well connected data-centers would be able to process small transactions. As a result, the larger transactions actually get more hashing power. Because both types of transaction share the same difficulty, the large transactions simply get processed faster on average. Note: I have not been careful to distinguish between large values and large bandwidth. By "large", I mean value.

If the money stored in the network is forgotten because it is not "large enough", that is rounding error. For the specific GMWG proposal, that should not be too much of a concern since the "money" devalues so rapidly. However, before posting a detailed "Green Money" alternate block-chain proposal, I want to make sure I properly understand the concept, so as not to mis-represent it.

Intuitively, I would say nobody would be interested in rapidly devaluing money. But what if those economists are correct that "bad money displaces good money"? If that is true, people may prefer to use the "green money" (over Bitcoin) as an intermediate currency. It would also provide a leverage-free hedge if you see a Bitcoin bubble forming (ie: the devaluing currency may out-perform Bitcoin in the shot-term).
942  Alternate cryptocurrencies / Altcoin Discussion / Re: Is mandatory transaction inclusion possible? on: April 16, 2012, 06:12:18 PM
The proposal will use floating point to store value (makes sense in context), so percentile fees are no problem.

Transactions don't have timestamps, blocks do. In my proposal, if a miner "saw" a transaction two blocks ago, it assumes all other well-connected miners have also seen it. This may lead to disagreement if some miners think a transaction was 2 blocks old, while others think it is only 1 block old. If all transactions are included anyway, it should not be a problem.

The difficulty of course, is what will happen if/when those edge cases come up.

Edit: for technical reasons related to the GMWG proposal (linked below), and my transaction resolution filtering not-yet-proposal: transactions do need block-based time stamps. The miners will not trust such time-stamps for "ought to have known" purposes.
943  Bitcoin / Bitcoin Discussion / Re: Mint Chip Technical Details on: April 16, 2012, 05:54:58 PM
Here's another: what happens to the Canadian dollars that the RCM or "trusted brokers" obtain in exchange for recharging MintChips with tokens? Do the dollars get deleted from their hard drives? Cool

I suspect that individual MintChips can be revoked (distinct from reversible). That would explain the 500 transaction limit (and record) before reset.

If I am correct, the $100 MicroSD cards in the dev kit will be worth $0 at the end of the contest period. It also makes counterfeit chips a very big problem. With the private key, you can transmit unlimited funds with no transaction limits. At least until 2 people get their mintchip reset (after 250 transactions on average) and the double spending is noticed. I assume businesses would be resetting their chips daily if not hourly.


Edit: "Those who do not understand Unix are condemned to reinvent it, poorly.
        -- Henry Spencer"

Remove Unix, insert Bitcoin Smiley
944  Alternate cryptocurrencies / Altcoin Discussion / Is mandatory transaction inclusion possible? on: April 16, 2012, 05:19:53 PM
I am considering starting an alternate block-chain that would be complementary to bitcoin (or possibly overtake it according to some economists Read: high, stable inflation).

However I had an idea that may kill the currency if poorly implemented, regardless of the actual merits of the core concept.

I want to make the inclusion of all transactions (meeting certain criteria) mandatory. Transaction fees would be fixed at 0.1%, so fees are not used to prioritzie transactions. Instead, transactions are prioritized by size. Miners would advertise a minimum Input/Output value(s) for transactions they process. Miners would be required to include all valid transactions they see meeting their advertised criteria.

The difficulty I see is that it would be difficult or impossible to prove a specific miner "ought to have known" about a valid transaction in a distributed way. One easy test is how old the orphan transaction is. For a well-connected miner, they "ought to know" about transactions at least two blocks old. However, if poorly connected miners face having their blocks invalidated by the network, that may provide an incentive for well-connected miners to keep transactions to themselves. On the other hand, that strategy may back-fire because the network, not knowing about this non-broadcasted transaction, may accept the block missing the transaction anyway. Edit: network splits would cause forking too.

I also see a potential loop-hole. Miners may advertize one value, but in practice, pose as another miner when publishing blocks. I don't think miners would have an incentive to do this in practice: miners will see bandwidth usage proportional to the minimum values they advertise. Similarly, the bandwidth usage of the final block should be proportional to transactions "seen". With fixed transactions fees, there is no incentive to drop transactions (that fit in the block).
 
Because the actual idea behind my (yet to be) proposed alternate block-chain is not my own, I need to read more about it before giving further details. I am also not sure when/if I will find time for coding. I still have not done much work for that Open Hardware FPGA board I was interested in Smiley

945  Bitcoin / Bitcoin Discussion / Re: The responses I from Bitcoin discussions. on: April 16, 2012, 04:30:25 PM
People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

IMO, even with your more precise definition of "backing", Bitcoin is still backed by "(statistical) proof of work" and a public transaction record. If all of the miners decide to stop offering this "proof of work" or "puiblic transaction record" when it becomes time to redeem your coins: they are worthless.  This worthlessness would be despite the past "proof of work" and "public transaction record" used to generate those coins. The advantage Bitcoin has over fiat in this case, is that a group of people can get together and start building the block-chain again; in the unlikely event that the network shuts down for an extended period of time.

Sorry, for the run-on sentances Tongue

946  Bitcoin / Bitcoin Discussion / Re: Email from Dwolla Regarding Reversals on: April 16, 2012, 04:04:43 PM
Quote
1) Connect a social network

Does diaspora count? What about non-computerized social networks?

I am an anti-social basement dweller. I don't live in the US, so the point is moot anyway.

Why don't they just ask for a credit check while they are at it? Or is that what point 4 is really for?

Edit: even if I did live in the US, I wouldn't use them: I don't see the point of trying to use an intermediate "vitual currency" to buy Bitcoin (but that is OT).
947  Bitcoin / Bitcoin Discussion / Re: [Poll] Would you use a decentralized bitcoin exchange? on: April 07, 2012, 05:42:35 PM
A (mostly) decentralized exchange already exists: Bitcoin-otc. The only problem is that the "Web of trust" is stored on a central server.

The MintChip will be cracked wide open by the end of the year; possibly during the contest period. It simply can not work. The attacker (the user) has physical access. The chip must store the private key that will allow arbitrary funds to be spent.
948  Bitcoin / Bitcoin Discussion / Re: [ANN] A public company will build a huge Bitcoin Mining Operation (ASIC). on: April 07, 2012, 05:20:49 AM

As far as I understood it there is a risk for Asic owners. Asics are highly specialized chips and therefore not very adaptable. Much less adaptable to different ways of computing hashes than GPUs or FPGAs. Besides, it was already discussed in the forum that if quantum computing becomes ever a reality the protocol might need to be changed in order to protect bitcoin's security.

If tho protocol is changed to screw people who invested in specialized hardware, Bitcoin is dead. Quantum computing is not likely to be a threat either. Each hash corresponds to an infinite number of possible inputs. You would have to structure your question for the quantum computer very carefully to get a valid response.

I don't think this move is bad for Bitcoin. If taking over a large portion of the network with ASICs is profitable (even with the up-front costs), it means mining has stagnated and it is time to move on. If Vladimir is doing this, I would not be surprised if 3 and 4 letter agencies/banks are considering the same thing. They won't be announcing their plans for Bitcoin 6-12 months ahead of time. With lead times the way they are, this may turn out to be foresight on Vladimir's part.

Are we to believe this this can't be programed to screw with Bitcoin?
JP Morgan supercomputer offers risk analysis in near real-time
Quote
The (end of day) risk calculation time has now been reduced to about 238 seconds, with an FPGA time of 12 seconds.
What is that computer doing for the other 23 hours, 56 minutes of the day?
949  Bitcoin / Bitcoin Discussion / Re: The Royal Canadian Mint just announced a new alternative to BitCoin on: April 06, 2012, 08:31:18 PM
This is no threat to bitcoin. I have been told on IRC that I am straying into speculation territory, so take this with a grain of salt.

Quote from: 2012 Royal Canadian MintChip Challenge Official Rules
2.6 In addition, any individuals, teams, Organizations or Large Organizations with the intention of reverse engineering the SDK, the MintChips and/or the Remote MintChips are expressly excluded from Competition. The Sponsor and the Administrator reserve the right to exclude such individuals, teams, Organizations or Large Organizations at their sole discretion and at any time, whether the risk of reverse engineering is real or perceived.
- http://mintchipchallenge.com/rules

Not only do they not publish a protocol specification or source code: they prohibit third parties form doing the same. That (IMO) can mean only one thing: Security relies on "Copy Protection" Built into the SD card. In this case, CPRM with device revocation.

If CPRM has not been cracked already, it is probably because nobody actually uses it. This initiative will make cracking profitable. If it is true they are trying to use "copy protection" to prevent double-spending, this project has failed before it has even started by trying to fight the law of entropy. Maybe that is why they keep introducing draconian copyright legislation: the future of fiat relies on it.

The person on IRC informs me that the SD standard supports things other than block devices. These may be real "smart cards" in a micro-SD form-factor.
950  Bitcoin / Bitcoin Discussion / Re: payment with a message on: March 30, 2012, 05:55:49 PM
  • This does not belong in the block-chain.
  • Money Service business Guidelines Require information about the sender (including "name, address and, if any, the account number or reference number") to be included in the transaction. International SWIFT MT 103 message transfers are excluded. It is not clear (to me) if simply relaying transactions on the network makes you a MSB.
  • Including the above information in the public block-chain would likely violate Canadain Privacy legislation.
  • Given that Bitcoin may be considered illegal in many jurisdictions at some point in the future, we should keep it technically infeasible to include such information in the block-chain.
951  Bitcoin / Bitcoin Discussion / Re: If Bitcoin is an experiment,... on: March 30, 2012, 05:07:36 PM
If Bitcoin is an experiment, as Satoshi Nakamoto has advocated, then what are the real chances of it--Bitcoin proper (not some other crypto-currency)--truly becoming mainstream?

~Bruno~


Implied in your question is the assumption (hinted at in braces) that a crytocurrency can become mainstream at this point in human history. I don't think technology that a crypto-currency will rely one will mature for at least 7 generations (150 years or so). One thing that worries me almost as much as the possibility of hardware and software back-doors is bandwidth caps. Data and storage used by bitcoin is expected to increase at least geometrically for a long time. The average person many be excluded from caching the block-chain on that alone.

However, even if current technology is "good enough" to work in practice, it will be an experiment. There is always a risk that the big mining pools will get together and implement protocol changes that are detrimental to the currency. Even "bugfix" protocol changes are experimental. How far ahead such changes should be planned is an open question, factoring in the severity of the problem and whether existing transactions can still be trusted in the future.

This is also a political experiment. Governments around the world are increasingly cracking down on "annonymous" financial transactions. For example, the Bank of Canada has removed the $1000 bill from circulation because it is too easy to move around. Businesses dealing with Money are required to record who is sending money to whom. Bitcoin is (deliberately?) ambiguous. It is not really "virtual money" because there is no central issuer backing it. It also acts a lot like a commodity, which may have tax implications in many countries.

If space travel becomes possible, bitcoin will likely become obsolete. The protocol assumes that every node has a latency of less than 10 minutes (2 minutes if TCP is used). This can be violated on Earth as well if your Internet is cut off by the govenrment (or your ISP) and data must be smuggled out on foot. For the largest "island" of processing power, this is not a big problem. However, smaller islands of processing power face having their blockchain history re-written by malicous entites on the larger processing island.
952  Bitcoin / Bitcoin Discussion / Re: Bitcoin DRM behind price increase? on: February 07, 2012, 07:27:57 AM
The short answer is "no."

I am so tempted to just post a donation address. Depending on how many "shares" you buy from me, I could send you a postcard, letter, or feasibility study explaining why it won't work.

To start, carefully read the posts numbered 35 and 37. Both posters seem to know of what they speak. I am not just saying that because they agree with me. My own post was more of a rant that didn't explain anything.
953  Bitcoin / Bitcoin Discussion / Re: This will change Bitcoin as you know it. on: January 26, 2012, 04:23:40 AM

I'm looking into this right now. Last I checked, selling something on the Kindle for example required that no other digital copy be available. I need to see if simply offering different 'versions' of our magazine would suffice.


That was exactly what I was trying to get at: If you use DRM, you aren't the publisher anymore; you are the author. The DRM vendor wants to lock your readers into their proprietary platform. Of course they don't want you releasing a superior product at the same time!
954  Bitcoin / Bitcoin Discussion / Re: This will change Bitcoin as you know it. on: January 26, 2012, 12:36:51 AM
The fact is, I don't understand enough what "DRM" actually is. If you consider releasing the magazine as a downloadable app "DRM" just because Apple and Android could potentially control it, then I don't really know what to say, and I'll gladly stop commenting on it and let our Marketing manager Mihai Alisie give his thoughts.

If however we are talking about an issue where someone wants to download the PDF and only the PDF, and no other form will suffice, I think I'd have to give them a warm "No thank you" to their business at this particular moment. We're barely 2 weeks old as a business and I'd hate to crush us before we even start.

Everyone already knows my viewpoints, but more important than viewpoints, they know that I am willing to meet needs, adapt and adopt new strategies. I just need in put into a way that makes sense to me. As someone who just bought an Android app and an iPhone app, as well as some stock images the other day, I don't really the arguments and I am clearly in a different school of thought.

Anyone want to help me on this wild and wacky transition?

The problem is that "Digital Restrictions Management" is not a well-defined term. In general, e-books on the Apple or Kindle platform will have some kind of DRM. I don't even know if it is possible for the publisher author to opt-out. DRM is used to force device lock-in, so that the publisher can make money on other titles sold through the same platform.

An open format such as an older, DRM free, version of PDF will allow the file to be read in any e-reader.

I agree that "digital" formats are scary for publishers. They allow lossless copying; sometimes with forward error correction, negating the need for re-transmission. That is why I suggested the compromise of having only back-issues available in a machine readable format.
955  Bitcoin / Bitcoin Discussion / Re: This will change Bitcoin as you know it. on: January 26, 2012, 12:09:23 AM
I personally think that if we have a magazine that is easily stealable, then it deserves to be stolen. We're not going to be giving out a pdf file for example.

Somebody else already pointed out that DRM doesn't work and only harms paying customers. Copyright infringement is not the same as "stealing." It also appears you don't support copyright law at all, by suggesting that "unprotected" works do not deserve copyright protection. By that logic, it is Okay for me to buy a copy, scan it at high resolution, and post it on the Internet.

There is a dangerous line between print and digital though, and I want to make sure that the actions of digital release never complicate the print release. I have no problem with giving the digital away for absolutely free-- it's the fact that we'd have no revenue to print the physical issues that would be the problem.

Whatever we decide, everyone will find out at the same time as we're planning on Android, iPhone and general Web releases as well. I am also very open to suggestions for how to handle it (please, nothing like "Pay with a Tweet") and still keep the magazine alive.

You sound like you may be willing to release back-issues under a Creative Commons Attribution Non-commercial license. Getting the magazine in a timely manner may be enough incentive to encourage purchases of the print edition.

You also seem to be falling into the same trap as my local newspaper's parent company (On a "digital first" strategy). The text is digital information already. Only the graphics are analog. By partnering with e-distributers, you are no longer the publisher. For example, Apple takes a 30% cut and exercises editorial discretion. In the future, they may even inject their own advertisements over your magazine.

956  Other / Off-topic / Re: paypal sucks on: January 18, 2012, 10:31:27 PM
Sending to an unsused address does not unambigously destrory bitcoin. You need to create a transaction that provably can not be redeemed (like requiring a SHA-256 hash of 0).
957  Bitcoin / Bitcoin Discussion / Re: Bitcoin's first industrial purpose on: January 18, 2012, 10:23:58 PM
I am skeptical this would work. I fail to see how they can gaurantee each code corresponds to exactly one voter.

Since the voters are unlikely to compare codes, the is little risk in assinging duplicates if you vote for the "wrong" candidate, and extras for the "right" candidate.

Computers are too insecure for e-voting, and likely will be for generations.
958  Bitcoin / Bitcoin Discussion / Re: Pirate friendly VPS provider? on: January 18, 2012, 09:55:55 PM
I am also a member of the Pirate Party, who tries to follow the letter of the law (which means most my file sharing is with permission from the copyright holder). I also find the restrictions on the Bittorrent protocol annoying. Incidentally, many webhosting companies prohibit IRC servers as well.

I also hate the restrictions on sharing copyrighted material, but for another reason: Most creative works automatically fall under copyright. It should be permissible to share copyrighted materials with permission (a license) from the copryright holder. Sometimes they will specify "commercial copyrighted work", but that will still exclude most GNU/Linux distributions, despite the free (as in freedom) license.

The fact that the Internet is evolving to a point where most users are passive "consumers" concerns me greatly. Most home Internet connections (at least in North America), prohibit hosting servers (or sharing with your neighbours). That was why I was looking at webhosting for my personal website in the first place. But then, when you shop for webhosting services, you learn that they are often just as or more restrictive than ISPs.

TL;DR I joined the Pirate Party for the same reason, even though I don't "Pirate."

Edit: to answer your question: have you considered commercial Internet Access? It is not cheap, but then, 1 hour of lawyer time won't kill their profitability for the year.
959  Bitcoin / Bitcoin Discussion / Re: Death of Bitcoin? "Here Comes the National Internet" on: January 14, 2012, 07:54:46 PM
SOPA just needs better formulation and due process established.

SOPA is designed from the start to circumvent due process. Why do you think the revised version exempts domestic websites? Foreign websites typically don't have to follow US law because they are not located in the United States.
960  Other / Meta / Re: Diablo labels thread in off-topic "inappropriate" for the forum - high five! on: January 14, 2012, 07:26:26 PM
I may have to rethink my decision to stay in bitcointalk.

Maybe I will investigate that P2P forum thing.
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