After about 3 difficulty changes after block 24000, NMC and BTC will have the same difficulty it seems.
So what's the relative value of two coins that have exactly the same difficulty to produce?
You're looking at it from a strange perspective. After NMC block 24000 BTC will have their normal difficulty to produce and suddenly for a vast majority of namecoin miners NMC will have an effective difficulty of 0 -- they will be produced as a free side effect of existing BTC mining. Their value will be based purely on their utility (and demand), and should no longer have any bearing on their relative difficulty compared to BTC. Their relative value could go either way, of course. But I suspect the shift from current namecoin miners to bitcoin miners won't have a positive relative price impact in the short term. Long term depends heavily on whether 7200+ namecoins are consumed every 10 days or not. I'm just taking the other side of the trade out loud. Consider merged mining with Namecoin as a dilution of the new overall "Coin" market. Given the same difficulty and hash rate, miners are simply given twice as many coins. If you don't presume a bias towards either type of coin, then you've just diluted the market by adding twice as many coins over the long run. The ratio of Bitcoins to Namecoins will approach 1 to 1 in the long run. Both equally scarce. Both having required the 1/2 of the same investment to create. Using that admittedly incomplete analysis, then long term Namecoins are worth about the same as Bitcoins. Plus, both are worth half as much as one would have been before the dilution. If you are building a trade plan around this idea, then you are trading from the long side of the currently thin Namecoin market. This is assuming everyone mining bitcoins does submit hashes to the namecoin network. |
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It'll be interesting to see the value of namecoins in 2 months then. Since they are basically a bonus for anyone mining in a combined pool why would they keep any sort of a price relative to bitcoin difficulty?
I think anyone accumulating namecoins over the next 3 difficulties (whether through buying or mining) speculating based on an NMC difficulty runup and historical NMC to BTC price/difficulty parity may be in for a rude shock once block 24000 rolls around. I know I'll only be mining during the subsidized periods and selling as soon as the NMC are available.
What are you implying? |
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It'll be interesting to see the value of namecoins in 2 months then. Since they are basically a bonus for anyone mining in a combined pool why would they keep any sort of a price relative to bitcoin difficulty?
I think anyone accumulating namecoins over the next 3 difficulties (whether through buying or mining) speculating based on an NMC difficulty runup and historical NMC to BTC price/difficulty parity may be in for a rude shock once block 24000 rolls around. I know I'll only be mining during the subsidized periods and selling as soon as the NMC are available.
You thought Namecoins would immediately decrease in value, but instead they increased by 50% when the difficulty dropped. Your predictions aren't the most accurate. I agree. I was expecting a sell off too but it appears that those who mined NMC (the majority) have held on to them based on the price ratio. |
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*This isn't intended for security experts
**rant alert!
It was great in the beginning, the client was bitcoin's harbinger,
but now it's a completely new game that requires a level of security,
that isn't here or foreseeable yet. It's talked about, but it's still far away.
Out of maybe 20-40 issues I've seen since signing up to this forum the people with the most bitcoins lost due to theft, computer or even user failure was from running the client.
The real options right now that is not widely spread to new people, and is actually turning people away is not knowing to entrust your stake with an exchange or online wallet.
The people that run exchanges and online wallets have so much more to lose than you, so please use them.
If their site goes down, their business goes down, therefore the site being up and secure is of the utmost importance to them. This can be relied on, as trust and security is interdependent to them. If one is lost the other is taken for as long as the imbalance is happening.
Remember to do your own research into this.
If running the client is the most secure method for your situation, and you are not at Mensa level, I'm the only person telling you to reflect on this rant. I don't like seeing people pissed off, confused and just being kind of hateful and hugely skeptical toward and of one another.
So, if after all the research you have done, all of this is still becoming way to daunting for you, use an exchange or online wallet. You will feel so much better having that layer of detachment and you might even notice no transaction fees. After that all you have to really be mindful of is managing all of your passwords, and the computer you are using.
/end of line
OR just backup your damn wallet and sleep at peace. |
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I like how he decided to research it before taking any sort of stance on bitcoin. Way too many people criticize things without even trying to understand it first.
I agree. So many skeptics that do not even know the facts are speaking out against it as if they are experts on bitcoin. I love how people also take what other critics say as truth without actually doing their research or looking into the actual software for answers. Good job Alex! |
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I guess the next important question is who gets the 50 namecoins for the proof of work that is generated on the bitcoin network? Where do those coins end up residing?  The person who mined them gets them, of course. The coins are not generated "on the bitcoin network" nor do they reside there. They reside completely in the Namecoin block chain. The only thing is that the block is in a different format that keeps it compatible with being submitted to Bitcoin if it also happens to satisfy the Bitcoin difficulty. Think of it another way - instead of thinking of "dual mining", think of mining for Namecoins with a special block format that happens to be compatible with Bitcoin. This is what I originally did not understand. I believed that Namecoin proof of work would be stored in the Bitcoin block chain and that the namecoin client would need to consult both chains just to follow all Namecoin proof of work. I was wrong. The point of this change is to come up with a new format of a block that is 100% backwards compatible with Bitcoin but which also benefits the Namecoin network, the same way when they invented color analog TV, they did it with a signal that was 100% compatible with black-and-white TV's which simply ignored the color portion of the signal. Okay so then that would imply that both the bitcoin and namecoin clients would have to updated the code to submit the proof of work to both block chains or no? I guess for bitcoin since 95% generally pool mine, only the pools need to update their software to submit proof of work to the namecoin network in order to capture the majority for merged mining. So then what will likely happen when this does take place is that since the namecoin difficulty is like 1/17th of that of the bitcoin network the difficulty will likely catch up to the bitcoin network and likely come to parity at some point in the near future. And lastly if someone creates a proof of work that satisfies both bitcoin and namecoin at that moment they get 50 BTC and 50 NMC? Does this sound right? |
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Summary:
Basically, they hide the namecoin block hash in the coinbase transaction of the bitcoin block, and if a hash is found for the bitcoin header that meets the namecoin difficulty standard, the namecoin chain can use the entire bitcoin header to extend the namecoin chain, even if the bitcoin difficulty target was not met. It does not extend the header size, but it does extend the coinbase script field, which isn't a very big deal because it wasn't a fixed size to begin with.
OK, I suppose I will consider myself sold on it. This summary belongs in the Wiki, because I couldn't gather this from what was there. Essentially what you are saying is that reference to the BTC block chain isn't ever needed, and that there is no dependency, but rather, that NMC will accept a "proof of work" formatted for Bitcoin as a Namecoin proof of work - and tack it onto the Namecoin block chain - so long as that Bitcoin proof of work contains a reference to the most recent Namecoin block. And that NMC will look for the merkle root not in the merkle root field (since that's reserved for Bitcoin compatibility), but in the coinbase. As a purely abstract argument, I assume this would mean one doesn't actually need to be mining real Bitcoins, the Bitcoin block chain will never be consulted by any non-mining Namecoin client, and that a block that ends up becoming stale or rejected off the Bitcoin block chain can still remain valid on Namecoins, and in fact never need to become part of the Bitcoin block chain, if they meet the Namecoin difficulty but not Bitcoin. If I have understood this correctly, then I hereby do a 180 and endorse the idea and apologizing for not seeing the greatness (though the documentation could have been better). In this case, why wait till block 24000? That could be a while, especially at the low end of this manic-depressive mining cycle. If the Namecoin exchange, the Namecoin block explorer, the Name DNS servers, and other critical infrastructure convert, the conversion can happen pretty much any time, because there will be no functional tools or any reason for anyone to stay on the old system. |
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The funny thing to note is that yes it initially dropped in NMC ratio to BTC but overall the price is positive. I am guessing the miners decided to keep their NMC they mined for a longer term investment.
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Yea I just bought some on a beta exchange. Seems to be a large variation in price though atm - on the exchange they were selling for as little as 0.05 but in lots of 5000 + up to 0.40 each for single units? Is the price suddenly going up because of the slowdown in Bitcoin atm?
Edit: nm I just realised thats 0.05BTC not $$ lol
Wow you got ripped off! The market rate was 0.022BTC per NMC when you bought. LOL |
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I mined for 3 days at 4GH/s and found 7 blocks.
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Yup party is over. The current block is taking more than 25 minutes. LOL! The next difficulty adjustment may be a while from now unless price goes over 0.0556 or the ratio at the time.
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what else is there to say?
Quite a lot, if you're implying that that bitcoin is currently enjoying a more stable valuation than USD. The 10-day moving average (10MA) for bitcoin has fluctuated from 14.3USD to 12.8USD. That's about an 11% fluctuation. Compare that to something like the USD -> Euro exchange for the same period, 0.713 to .7028. That's about a 0.9% fluctuation. I'm not going to say it's bad or good, right or wrong, all I am saying is consider a 10-fold difference in pricing volatility. Look at the long term value of the dollar. It has lost most of its purchasing power since inception. That's like comparing bitcoin to a pile of dog shit. |
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I'm very sorry to hear about your troubles. I was more fortunate and was able to obtain all of my BTC and USD back after jumping through about 7 hoops they put in place following the week of the hack.
The whole "Yubikey" crap is ridiculous.
I still think their security system should be TOTALLY FREE and 100% safe from outside hack attempts. Charging users to have a "more" secure method of logging into their site is absolute crap and thus lies on the same level of how they have not been that helpful in sending you the funds you lost.
If I am not mistaken on the Bitcoin Show Mark said that all BTC/USD losses would be at their expense and not the users.
Anyway...hope you are able to get your BTC back in tact.
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I think merging them is a mistake. Keeping them separate will allow for more flexibility with both. Namecoin's block chain will become secure enough as it gets used for more and more important things.
One of the FEW drawbacks of BitCoin is the size of the block chain. It already interferes (though I know there are workarounds) with mobile applications. Why would you want to make it bigger?
Merging the two block chains does not add as much value as it takes away from both projects.
The size of the Bitcoin blockchain is not getting bigger. Educate yourselves before giving opinions guys. Then tell me how it is not getting bigger if the number of blocks in the bitcoin blockchain increases every 10 minutes or so? |
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My vote is against merged mining. If a pool wants to offer a service to allow their users to mine NMC or BTC that is fine but anything where the two block chains are inter-weaved or inter-dependent or whatever-dependent word I can use is similar to pegging the Yuan to the Dollar.
I would rather namecoin grow on its own and become successful on its own without depending upon bitcoin aside from the basic principles built into the code that are alike.
The other thing I don't see is what problem(s) does merged mining solve that need to be solved for BOTH block chains? So far I don't see any problems with bitcoin's network or blockchain. I do see a need for the namecoin network to grow, but not at the reliance on bitcoin's resources, information, or anything for that matter.
After the recent revelation of the explanation of what merged mining really is. I do support it.
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I have to admit these Mt. Gox clowns are good. I mean really. They have a major flaw in their system that leads to bitcoins being hijacked everywhere then they use that to pitch a $29.95 product called the "yubikey" LOL'd ... probably costs $4.95 to ship and $1.00 to make making a $20 profit per key .... you can't make this shit up! welcome to the world of we fuck it up and make money!  Hey, go research before you make your nonsense claims. I'll pay you 20 Bitcoins if you can tell me where to get those $1 YubiKeys. YubiKeys aren't something 'made up' by Mt. Gox, they are used by many services that require 2 levels of authentication. But that's just the point. Any sane institution would not charge for a security feature on their site given we pay for each transaction we make on their system. They should be providing the security at NO COST! That's like a bank saying I'm going to charge you a fee to have added security to your money because there is a possibility someone could hack into your account and take all the funds. If they see a flaw they should fix it or enforce policies to users to adhere to that make using their system safe, not charge them for a security feature that should be in place already. That is Bullsh*t. |
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These are two statement from the same post... The long term trend for bitcoin value is contraction, not expansion.
This is not a thread about the speculation of bitcoin's future, these are the facts.
my question: Aren't these two statements mutually exclusive? edit: after rereading my post.. I should have said: Aren't these two statements contradictory? Yes he seems to make a point but then contradict it later on in his own statement. Not at all. I offered ample evidence that can easily be verified by hard sources and simple logical reasoning to back up my thesis. Therefore, no contradiction. Facts follow formula, and I provided the requisite references. Dude you nor anyone else can predict the future with 100%accuracy. Thus your claim although you cited sources is still S  P  E  C U  L  A  T  I  O  N. It's actually a well educated hypothesis; One that in all likely-hood will continue to bare out as I've laid forth. Look, even since I started posting BTC has lost 9.5% of it's 24hr value. There will of course be a bump, but then another gradual slow burn fall as has been happening ever since the Gox recovery. The signs are there for anyone to see. This market isn't really as volatile as the speculators would love it to be, at all. At it's been predictable since the bubble began. It's really not a mystery to anyone that understands these basic truths. It's called volatility. You are talking in such short terms. Come back and talk to us all when a year has gone by and you've let your hypothesis play out over the long term and not in such a short term period of 24hours. |
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There are many unanswered questions to these changes at block 24,000. These concerns need to be answered soon and get attention widely on the major discussion threads of the bitcoin forum.
I would hate to see this merged mining go south and people who had namecoins not be able to use their namecoins because of a possible screw up on the block chain with the merged mining development/implementation.
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Okay wait. So then that would mean the hashing would include namecoin transactions into the bitcoin block chain and vice versa. How is this going to work when they are two separate networks?
Am I missing something?
I do get the idea of finding a hash that fits Namecoin and Bitcoin or just Namecoin.
Since namecoins difficulty value is less than bitcoin, the only case would exist where it would benefit you is you could get a hash that is less than both namecoin's threshold and bitcoin's threshold but not the other way around unless namecoin's difficulty goes above bitcoin's or they some how become equal someday.
Still a little unclear...
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