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201  Bitcoin / Bitcoin Discussion / Re: Bitcoin 20MB Fork on: February 07, 2015, 09:05:45 PM
If there is no hardfork, will even UTXOs with just 0.001 bitcoins (one millibit) become economically unspendable?

Let's say with blocks filling we have fees rising to about 0.001 per 1K of data (on average).   So with that you have fees totaling about 1 bitcoin per block.  That's about 144 bitcoins per day.  (in addition to the block reward subsidy of 3,600 bitcoins per day).   So even with fees of 0.001 per 1K miners are still earning less than 4% of total revenue from fees, with the rest of their income being the block reward subsidy.

But here's here I'm seeing the problem.  With space becoming scarce, the fees make a whole lot of UTXOs economically unspendable.  A 1K transaction might be something like six inputs and two outputs.  So with a fee of 0.001 means the marginal cost for each UTXO input is about 0.0001  (roughly 300 bytes for the trx and two outputs, and ~120 bytes for each input [Edit: rough guess, but in the ballpark I believe]).  That means the fee at  0.001 per 1K costs about 10% for each UTXO of one millibit.

This wasn't something that concerned me previously because fees had only been dropping over time.  If fees on those UTXOs were costly then you simply don't spend them and you could wait for the next drop in fees.  With blocks filling causing rising fees (to 0.001 bitcoin per 1K size) then the penalty for retaining UTXOs of one millibit or less can be 10% (or more!).

And that's only with the required fees rising 0.001 bitcoin per 1K.   What if it rises to 0.01 bitcoin per 1K size.  Now your marginal cost for each UTXO input is about 0.001 which means each and every UTXO of 0.001 or less has become completely worthless (i.e., it costs as much in fees to spend as it is worth).

The argument against Bitcoin value rising being a problem was that with divisibility we could just transact in smaller and smaller amounts.   We even saw a push to start using the term "bits" (0.000001 bitcoin).  But if any UTXO not significantly above 0.001 bitcoin becomes economically unspendable then "divisibility to 8 decimals" as being something that solves the deflationary problem is no longer rational counterargument.

I don't know what is worse -- monetary inflation causing a 4% devaluation per-year, or each year rising fees causing 4% of the funds in your wallet to become unspendable.
202  Bitcoin / Bitcoin Discussion / Re: Permanently keeping the 1MB (anti-spam) restriction is a great idea ... on: February 05, 2015, 11:57:00 AM
If I lose direct access to the blockchain then I am forced to hand over all my wealth (not just enough funds to cover trivial purchases) to a third party.

That's probably the best argument I've seen.  I think of how today I have many paper wallets, mobile wallets, and hosted (shared) E-Wallet services (i.e., custodial services) where I had a balance of a few millibits or less in them and won't (or can't) withdraw because the Bitcoin network transaction fee is prohibitive for that small amount of bitcoin.    Now as fees rise due to scarcity of empty space in blocks then I'll essentially have permanently abandoned those wallets with the small values (i.e., those funds become economically unspendable, ... worthless!).

I suppose for the paper wallets and mobile wallets where I have the private key I could combine them into a single transaction without incurring a higher fee, but that's possible only today because there's still some low-cost space left and the fee required doesn't rise linearly when the size of the transaction rises.   Without a fork then eventually we are essentially paying a fee for each additionally byte and the resul will likely be that millions of UTXOs with small amounts (e.g., sub-millibit -- less than 0.001 bitcoins) will become worthless.   Hey now,  that's some real money we're talking about discarding!  [Anyone care to crunch the numbers -- what is the sum total of bitcoins that exists in UTXOs under one millibit?)  

It makes me think back ... First they came for the dust, and I didn't speak out because I didn't play SatoshiDICE.    When this day comes (when the 1MB cap is reached, and no-hard fork), maybe a millibit becomes the new dust!   And then let's say the fee required rises even more, maybe UTXOs under 0.01 even become economically unspendable.    That becomes a real problem for most of us!

So what to do?
I'ld like a Bitcoin that can scale and grow with transaction demand.  I'ld also like my car to get 150 MPG.  The latter can't happen simply because a gallon of gasoline doesn't have the energy needed for an internal combustion engine to propel today's car for 150 miles.  Now I'm not entirely convinced the former can happen either.  That's because a hard fork that doesn't have the consent of the Economic Majority ( ) will fail.

Let's go through the first hours of the hard-fork.  Let's say it happens at block 400,000 (a lttle over a year from now).  Everything was in place -- miners with the right nVersion indicating consent was well above the threshold (e.g., 80% of last 1,000 blocks had nVersion=4).     But ..., I'm not willing to believe that exchanges, merchants, merchant processors, etc. are going to themselves take on the full risk of double spending that would occur if the hard fork eventually fails (maybe a day or three later even).   The only way to prevent the double spending that would result would be to require that a transaction confirms on the block chains on both sides of the fork.  So these entities are going to watch both sides. Well, a transaction that has any taint from a coin generated on the side with the larger block size rule change (I hate calling them "gavincoins", but for the purpose of this argument that name is short and everyone here knows what it means) will not confirm on the other side of the fork where the 1MB limit is still followed.

So the market instantly realizes this difference between a Bitcoin and a GavinCoin.  So the value of a GavinCoin will drop relative to a Bitcoin.   Miners can't convert or spend these newly mined coins nearly anywhere, so all you have is buying from speculators.   Now those mining on the side which still recognizes the 1MB max limit are still mining blocks (albeit at a much slower rate because of the dramatic loss of hashing capacity) and some market for those newly mined coins exists -- again, thanks to speculators.    Things can flip quick.  Maybe a day goes by and all of a sudden a large amount of hashing capacity switches back to the 1MB max side due to the dropping exchange rate of GavinCoin, and it becomes quite possible (if not probable) that the 1MB limit will be with us for some time longer.

The exchanges and merchants that played both sides (i.e., required confirmations on both sides of the fork) lost nothing as either way they have confirmed transactions on what is eventually the sole winner.   If the hard fork fails then the losers are those who had E-Wallets (custodial accounts) and found their pre-fork bitcoins were spent and they only end up with tainted GavinCoins that can now never be spent (at least not anywhere near parity with a bitcoin).   Likely most every custodial service (e.g., exchanges, hosted/shared eWallets, etc.) that didn't require confirmations on both sides of the fork ends up bankrupt as a result of getting dumped on with GavinCoins while allowing withdrawals of untainted bitcoins.

I just don't see how a hard-fork succeeds.   There is risk of accepting GavinCoins.  There is no risk (excluding exchange rate risk) of putting your own pre-fork coins into storage for a (long) while and not letting them become tainted GavinCoins (as they can still be spent a year, two or ten later).

[Edited: A couple small readability changes.]
203  Bitcoin / Bitcoin Discussion / Re: Permanently keeping the 1MB (anti-spam) restriction is a great idea ... on: February 05, 2015, 11:56:29 AM
On edit: fixed some typos.

Possibly one more ...
"Have you ever thought about the fact that you send a bank wire yourself."
Did you mean to instead write "that you can't send a bank wire yourself."?
204  Economy / Services / Re: Monbux's FREE Escrow Services | Non-IPO's: FREE | IPO's: 2% | Security Upgrade on: February 03, 2015, 07:59:51 AM
I have just completed a transaction (sold domains) in which monbux performed the escrow.  The were no complications and when the buyer instructed that the escrowed funds be released they were, so this was a good trading experience.
205  Economy / Trading Discussion / Re: Help with good bussiness ideas for cool domain names. on: January 28, 2015, 02:24:58 AM
I wish I own

Now's your chance ... make an offer! [Update: Sold]
[WTS] Premium Bitcoin Domains
206  Bitcoin / Development & Technical Discussion / Re: Block size on: January 25, 2015, 05:49:23 PM
that consciousness is going to make the decisions, from now on.

Well, more specifically, it is the "economic majority" that decides.  This is the merchants and invest that buy the mined coins from the miners.   If they are willing to pay equal value for the coins generated in blocks mined using the changed protocol (with the larger block size) then the change happens.     If they aren't willing to buy those coins, then miners find a better deal (higher price) by sticking with protocol as it existed prior to the change.

When this happens (and I believe it probably will) it's going to be a nailbiter.  Will miners who had been running the code with the protocol changes (proven by including a new version number in the block header) get skittish if there is nobody will to pay full price for their mined coins (i.e., coins mined once the hard fork occurs)?  Since it is a possibility, they likely will be prepared to revert to the old code on-demand.

I wrote more on this possibility here:
207  Economy / Service Announcements / Re: [ANN] - a location-based bitcoin to cash marketplace on: January 17, 2015, 02:55:10 PM
Why 5 minutes. If they throttle the payout to every 10s, they could still get some transactions at times while no or just one transaction at other times. For a business of that scale it would just make sense.

They already charge the user for the withdrawal.   Therefore, it wouldn't be fair to the user to have to wait for delivery because the service wants to earn a little profit on the fees by batching them up.   I doubt they'ld have more than one withdrawal per minute, but I don't know their volume levels so I could be wrong.

I just did a transaction minutes ago and do not recall a huge delay. The transaction was exclusively made for me though.

Same here ... my "send bitcoin" transaction had already hit the blockchain when I checked just a matter of seconds later.
208  Economy / Service Announcements / Re: [ANN] - a location-based bitcoin to cash marketplace on: January 14, 2015, 12:52:31 PM
Recently, I processed a withdrawl from localbitcoins.
Here is the txid for it:
One of the receiving addresses is mine.

I remember withdrawals from LocalBitcoins being pretty instantaneous.  If they were batching them (combining multiple withdrawals together) then it would not be instantaneous (e.g., maybe one trx every 5 minutes).   

So does localbitcoins charge a transaction fees from everyone separately?

The fees stated in the FAQ are reasonable (0.0001 to 0.0004 bitcoins).
209  Alternate cryptocurrencies / Altcoin Discussion / Re: Why did Roger Ver invest in Ripple? on: January 14, 2015, 09:31:02 AM
I don't really see it as a competitor to Bitcoin,

Ripple provides a unique form of gateways from Bitcoin to fiat and other assets.  Thus it is complementary to Bitcoin.   Now I suppose you could argue that XRPs compete against Bitcoin in that those investments might have gone towards Bitcoin instead (i.e., displacement) but that's a pretty weak argument -- they might have gone to gold, silver, NASDAQ, etc.,  too.

Disclaimer: Holds no XRPs and haven't since I sold the freebie handout ones given out to all BitcoinTalk users.
210  Other / Off-topic / Re: Sorry, y'all: Game Over. I'm about to buy all the bitcoin. on: January 13, 2015, 02:34:36 PM
Stlll going .... now

Previous scams (in chronological order) likely by the same scammer:


Please report this scammer for phishing:

211  Bitcoin / Bitcoin Discussion / Re: Fork off on: January 12, 2015, 12:51:16 PM
The fork will not happen without miners' explicitly signaling consensus by updating the version number in the blocks they create.

But a miner can rollback to running a node that does not implement the hard-fork in just seconds, should there be any doubt that the hard fork might not succeed.  So just like in March 2013 when v0.8 blocks were ahead by a wide margin that didn't mean that side would ultimately continue as the longest chain.

Firstly it assumes that miners are driven to much by economics and to little by politics than is probably true.  I'm sure that most of the miners who count these days have every likelihoods of looking out days or weeks into the future and taking a monetary hit for a future enduring reward.

If that were true, p2Pool would be among the top 3.
212  Bitcoin / Bitcoin Discussion / Re: Fork off on: January 11, 2015, 11:08:43 PM
I have a few Qs...

1. Even If all miners accept the fork, can it sustain unless majority of nodes do not update themselves ?

On the technical side, you only need enough nodes using the software that implements the hard-fork to ensure that post-fork blocks get propagated.  But even if *nearly* all miners accept the fork, even if you only had something like 10% still hashing without the changes implemented you'ld still get a block every two hours -- frequently enough to include most high-value and high-fee transactions.   [Edit: (i.e., sustainable for anyone using a node without the hard-fork changes).]

2. If all miners do not accept the fork, then there will probably be 2 blockchains for some time. At that period of time, wont all coins be spendable twice on 2 different chain ?

Yes, that's why it will be so dangerous to accept payments from anyone that includes coins tainted with post-fork coinbases.    I personallly will not have a single millibit remaining on any exchange or e-wallet at the time of the fork if there is any hint of dissent like this.  I will only accept payment transactions that confirm on both sides, ... which can only happen if the transaction had no UTXOs tainted with post-fork coinbases.   Maybe after a week or two and there's essentially nobody remaining mining the original side of the fork will I be willing to accept post-fork coins.
213  Bitcoin / Bitcoin Discussion / Re: Fork off on: January 11, 2015, 10:37:09 PM
Control of Bitcoin rests in the hands of miners when you're talking about a chain fork.

And miners are essentially paid employees/contractors.

The Economic Majority is who the miners work for:

Now what isn't being appreciated is exactly how risky it is to miners to adopt changes that have the potential to put them mining on the wrong side of a fork.

Let's say you run an exchange (e.g., BitStamp), hosted (shared) E-Wallet (e.g., Coinapult), or merchant processor (e.g., BitPay).    If you start accepting bitcoins from miners (which become spendable after 100 confirmations) then you are taking on the entire risk of loss if the proposed fork fails to maintain the lead.   So maybe to protect against that risk you reject any deposits or purchases that include coins that are tainted from post-fork coinbases.  That immediately kills fungibility.  The miners won't want to take on the full risk themselves and begin to dump their newly mined post-fork coins at a discount.  Pretty soon the unchanged side of the blockchain fork gains hashing power and begins to snowball.  The writing is then on the wall.  Maybe 24 or 48 hours later, the proposed fork that initially had "wide support" is no longer the longest chain.

Now when that happens you have havoc wreaked because certainly this was an outcome that some fraudsters were hoping for and the two sides look nothing alike -- with many, many coins spent differently between the two sides of the fork.

I'm not saying I wouldn't like to see a bigger blocksize.  I'm just pointing out that a hard fork will require a huge collective leap of faith -- and even this sole promise of dissent might be sufficient to torpedo that forking effort.
214  Bitcoin / Bitcoin Discussion / Re: Bitstamp hack. A real life test of anonymity in Bitcoin on: January 11, 2015, 06:26:41 PM
There isn't even any proof that Bitstamp was ever hacked.

Exactly.  If we were to start treating these coins different from any others (e.g., by blacklisting them) then that provides an opening for all kinds of abuses (by those who might falsely claim "hack!" in an attempt to get the funds back or drive some other outcome.)
215  Other / Bitcoin Wiki / Re: Have a suggestion or problem? on: January 03, 2015, 12:27:08 AM
Having trouble logging in.   I know I am using the right password because if I try using an invalid password I get a warning.  After entering username and password I am brought to whatever page I was at when I wanted to log in, but the "Log in" link at the top right is still there -- meaning there was no authentication.

[Edit: marking the checkbox "Keep me logged in" resolves the problem for me.]
216  Bitcoin / Meetups / Re: Bitcoin Kenya Meetup (Nairobi) on: December 01, 2014, 09:50:16 AM
Meetup today (Monday, December 1st, 2014, 5pm) at iHub (Bishop Magua Centre on Ngong Road) Nairobi

217  Bitcoin / Project Development / Re: Bringing Bitcoin to the world-competing with Western Union on: November 29, 2014, 12:10:35 PM
Some recent developments ....

218  Bitcoin / Project Development / Re: #BitcoinAfrica -- your help required! on: November 15, 2014, 01:56:06 PM
Maybe, but for Bitcoin to be succesful in many parts of Africa it will have to be able to operate on USSD/sms level mobile phones.  I would imagine this would be centralised wallets operated by a mobile service operator or similar.

Safaricom is partly owned by the government (Kenya).  I would bet hell would freeze over before Safaricom would give  a Bitcoin wallet provider access to their local USSD gateways (which are required for secure communication of mobile-originated requests.)

Right now most new phones sold are smartphones.   This still means only a small segment of the population ... (like less than 20%) has a smartphone today but that's not as huge a hurdle as it may seem.  Families and neighbors are used to sharing resources.  Those that don't have a feature phone even yet today might have their own SIM card though.  With this SIM card one can borrow a phone to use M-Pesa, for example.   With an inexpensive hardware 2FA device a person without a smartphone can safely borrow someone else's smartphone to make a Bitcoin transaction.  Even paper-based wallet using BIP-38 might be useful with a borrowed phone (one that is provided by the merchant even), presuming the password is single-use (i.e., spend all funds in that wallet and the wallet is not re-used).
219  Economy / Services / Re: 1 Bitcoin BOUNTY for info on Michael Moriarty. Owner of 50+ bitcoin sites. on: November 07, 2014, 05:53:43 PM
The amount of spam I'm receiving from this dude's operations is growing steadily ... he's the "meetup organizer" for meetup groups in more than a half dozen cities (including L.A., San Francisco, and .... Vancouver ... that's a red flag), and I see nonstop spam/announcements from his other sites I joined to monitor.   This is getting worrisome ... is he pulling a long con?  

Do you know Dr. Michael Moriarty with a PhD from Stanford?

A CHALLENGE to: Dr. Michael Moriarty
220  Other / Archival / Re: MTGOX lost Bitcoins found by a Japan researcher on: November 06, 2014, 10:59:30 AM

Incidentally, that goes to

which is meant to deceive the user into thinking the page is from the site, but it is obviously not.
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