I thought difficulty was supposed to rise once every two weeks, or twice a month.
Didn't it just rise like 6 days ago ?
It rises every 2016 blocks. If 2016 blocks come sooner than in 14 days, it will be sooner. Actually the difficulty increase=14/days_for_the_last_2106_block_since_retarget so for a 70% increase, the retarget will come in about 8 days since the last one. |
|
|
|
I've been mining on the testnet for the last few days, had collected about BTC 1000 confirmed, but this evening suddenly all my transactions were gone again.
This also happened to someone else on IRC. He mined his coins last week, tried to send me some but today they were gone.
What happened on the testnet? Did it split/rejoin?
Likely chain reorganization. It is frequent in testnet. Stop your deamon, and run the following command (assuming Unix-like system): ./bitcoind -testnet -printblocktree
It will print the block tree and exit. You will see if your coins were in an orphaned chain. |
|
|
|
I remember a few weeks ago the queue was backlogged over 1000 transactions and it took 3 days to get some of my payments and transactions though.
It has less to do with rushing miners, and more with 0.3.21 version which restricted sending free transactions. Unless you modify the code or use older version (and then you'll still have problems with nodes refusing to relay them), you cannot send a series of spam transaction which were frequent a few weeks ago. Also, the Faucet and pools went to sendmany transaction which significantly reduce the network burden. |
|
|
|
The empirical reason to prefer the current implementation is that it's working. It seems to be working quite well.
I'm sure you can say it for any system that is working OK even though it is on a known collision course. I'm convinced the current implementation of Bitcoin is unsustainable.It's not going to work when the inflation incentive to the miners is gone. The inflation is what makes hoarders currently pay for the service and when it's gone, the transfer fees will not be enough to pay for a proper miners support. The equilibrium will be a network of amateur miners working non-profit just for fun. With BTC valuation that corresponds to this "for fun" part. I am yet to be convinced the system is fixable. And even if it is fixable, strong opposition to any changes is what makes me doubt it will be fixed. |
|
|
|
when the average people lose more than 1/3 of their life savings overnight, and bankers call it a "positive step", you know what kind of twisted world we are living in.
From the article
The dollar now buys 4,930 roubles at the official rate, up from 3,155 - but still well below the freely-traded interbank rate of about 7,000 roubles
I believe that recognizing (still not fully) the market reality can only be a good thing indeed. Conducting a monetary policy with inflation in mind is another story, though. |
|
|
|
if you need something "better" for mining- vait for 32nm/28nm AMD 79xx GPU's. hope, they switch back to VLIW5 atch from 58xx, backed by 69xx rendering back-end[further upscaled/updated, probably] with higher clocks/shaders count.
By the time anything new is available on the market, the difficulty will be a few (or more) times higher and any gains will be all but lost. And then many will upgrade to the 79xx series and difficulty will go up again. |
|
|
|
|
I'm not sure what the wattage of your whole setup is but if I understand it correctly, it is 10kW (50 boxes about 200W each). You will not cool it without AC. Even 1kW noticeably heats a room. And you will likely not cool it with ventilation only unless it's cold winter. Specific heat of air is 1.2 kJ/(m3*K) so assuming 10 K difference between incoming and exhausting air from the room, you need to move 10000/1200/10=0.8 m3 of air per second. This is a lot. You need to exchange all the air in the room in less than 1.5 minutes. Normal ventilation is exchanging all the air in 1-2 hours. Not only that but you need to make sure, the air is removed properly from the whole room and there are no hot spots. And you'll still have a room that is at least 10 K warmer than the outside temperature which even if not make throttling of the cards, it will make them degrade quicker.
Get an AC unit that is rated for the heat removal at least equal to the heat produced by the setup. Or start with a smaller installation if you have not enough knowledge.
|
|
|
|
Today for example, 7.4% of bitcoins were transferred. That means $3.3 million worth of BTC. In one year, assuming similar ratios as today (which I've looked through the data and it doesn't seem atypical), that comes to $1.215 billion worth of transactions. Keep in mind a lot these are international transfers which are typically much more costly in classical banking. The amount paid to miners comes to 2% of that, which replaces the cost of all the security that classic banks have to spend on when transferring money, and all of the other transaction costs as well.
Two points. The amount displayed in, e.g., bitcoinwatch is completely bogus. A transaction contains a change. If you transfer $10 to a third party from an account that has $100000, the banking system transfers $10, not $10 + $99990, while Bitcoin does the latter. Wouldn't you be rather pissed off if Paypal charged you 2.9% on $100000 when you moved $10? So the percentage of the cost in Bitcoin is way higher than what you calculated. Secondly, there are so many transactions because they are mostly free. When the fees become a norm, the transaction volume will slow down. Also, a successful >50% attack would not lead to a complete security breach where all bitcoins can be stolen. It would only open the possibility of double spends by an attacker, so the value of such an attack does not equal the market value of bitcoins. This suggests the risks of lower difficulty/market-cap could be low.
I know that but a lot of people here downplay the consequences of the >50% attack. It is true that there is rather little to gain for the attacker compared to being honest. Therefore, I think we may never see a ">50% attack for profit". But for attackers that only want to make damage (for example a competition to Bitcoin), it can really make havoc. It's the mother of all DoS attacks. A >50% attacker can: 1. Completely halt all confirmations. 2. Reverse all transactions (so halt retroactively) and put them on hold. 3. Annihilate recently mined coins and all transactions where the coins were used (if the chain fork is longer than 120 blocks). 4. Double spend his coins. And the point that is frequently missed: 5. Allow anybody to double spend. When the chain is forked, all transactions go into a memory pool of the miners. The attacker can be "nice" enough to remove them from his memory pool and allow anybody to connect, submit a new double spend transaction and confirm it. It can allow some non-fraudulent transaction and you will not know what is right and what is wrong. If you think that it won't crash the BTC value, you are very optimistic. It would create such a mess that it will be very hard to untangle. And do it a few times and nobody will trust the Bitcoin blockchain for anything larger that a few dollar transactions and Bitcoin returns to its amateur status. Furthermore, operating profit margins right now are quite high for miners. It will decrease significantly once bitcoin inflation slows and the market stabilizes, approaching close to the cost of electricity, which I've seen that you've noted at the moment is $0.75 million a year. This is only about 0.06% of the market value of transactions. There will need to be some profit, so even if we triple that, to 0.2%, that's still very low cost.
As I wrote above, the value of transactions is bogus. The only think non-bogus is the total BTC value (money supply). Relatively to money supply, Bitcoin is expensive. |
|
|
|
I don't really believe that it's a near term problem, as this probably can't even become an issue until the block reward is pretty tiny. We are talking about 40 years at least. Still, by that time the system will be too entrenched to introduce any demurrage. I'm trying to predict a possible issue, long range.
It's going to be a problem much sooner than that. Would you buy gold now if you knew that it would likely turn into lead in 40 years? Even if we somehow collectively solve this problem, there is another one. Contrary to what Satoshi wrote at the beginning, Bitcoin is a quite expensive system to maintain. At the current difficulty and BTC price, miners are paid 25-30 million USD a year (by block inflation) to protect 40-45 million USD Bitcoin market value. The current BTC price/difficulty may be abnormally high but the electricity alone costs a cool 1-1.5 million USD a year and equipment depreciation is 2-3 times of that and it will rise when BTC price/difficulty drops. And Bitcoin is barely safe to an attack because Bictoin need to maintain this capacity constantly and attackers can just use short bursts. I'm not sure that the mainstream banking costs for transaction system and money supply are so high percentwise for the same amount of money supply and trading that Bitcoin offers. The bailouts (which were indeed expensive) went for fixing the lending hole which Bitcoin is not doing. Bitcoin will either be expensive or attack prone. Both outcomes are not good for the BTC value. |
|
|
|
I don't get what all the excitement is about. A coin that is held on for a long time is a coin that is not part of the market. As such, it increases the value of all the coins that are effectively in circulation. The logic behind hoarding is that the coins keep on valuating so they should be held on for as long as possible. And that on its own helps valuate the each other BTC in circulation even more. So stop panicking already.
A coin held reduces the velocity of money. Hence less fees for the miners (any increased BTC valuation does not help because due to competition with mainstream banking, the fees has to be competitive with mainstream banking and cannot go up in dollar terms). Therefore, less difficulty, with less difficulty Bitcoin network is more prone to attack, less stable and less valuable. No hoarder has any individual incentive to pay the fees and therefore, the fees will indeed be small, difficulty low, BTC valuation low, and everybody loses. This is known as tragedy of the commons. |
|
|
|
|
You touch only one aspect of this "storage fee" problem: disk space cost.
But there is subtle and much more important problem completely absent in commodity money. The BTC value depends on the safety of Bitcoin transaction system which depends mostly on difficulty. There is no analogy in gold. It's just like the value of gold depended on how well guarded are other's people gold.
A hoarder that nicely keeps all his coins in one place and costs the whole network just a few hundred bytes benefits from large difficulty. But pays nothing to keep this difficulty high enough. Without any mechanism for paying for this protection, the difficulty will be set on a level that is too low to protect this collective wealth. And since nobody has any motivation to voluntarily pay for this protection (because you cannot pay for protection of just your money, you can only pay for protection of everyone's money) the Nash equilibrium will be such that nobody pays and everybody expect everybody else to pay. And one cannot expect that a few billion worth of BTC (let's be optimistic) will be properly guarded by a difficulty level corresponding to a few million dollar compute system.
|
|
|
|
This used to be the largest wallet http://blockexplorer.com/address/1AYtnRppWM7tWQaVLpm7TvcHKrjKxgCRvXbut it was split 3X as much as anybody else, and such a round #. I wonder if it's an administrative account or something...
No, it's somebody who has simply a lot of coins. And likes to keep them in one place. There is a proof somewhere of somebody owning more than 300000 BTC so there are more of such large BTC owners. If you used Bitcoin since 2009, you'd probably also own that much because mining back then was much easier. |
|
|
|
I wear ear plugs when I mow the lawn, use a chainsaw, etc. I would certainly install a muffler without mandate. I want to protect my hearing. And I prefer to be able
to travel without drawing attention to myself.
Your noise is quite localized so much of the damage is indeed pointed at you. But you would not clean your sewage, pay for the police, you would overfish the ocean and do other things that have externalities. And avoid all the things that cost you a lot and bring only small benefit. Interesting suggestion on the old coins. I just wonder if not using your bitcoins is going to be as detrimental to the network as you suggest. I really think enough people will use them that it won't be an issue.
Please prove me wrong. I'm pretty sure the transaction volume would be not enough for protecting large Bitcoin market value (say billions of dollars). And fees cannot be arbitrary large because users would not use Bitcoins when alternatives are cheaper. And couldn't you just transfer your balance back and forth occasionally to defeat such a fee?
Yes, but you would then pay the regular fee and end up the same (or worse) than leaving the coins untouched. |
|
|
|
I'm not trying to argue, I'm trying to find examples that fit! I, like you, don't know if this will be a problem or not. I, like you, hope that it isn't.
I think the idea is that the more Bitcoins you hold (the more value you have) the more you would be willing to pay for securing your holdings. A side effect is that it helps secure the entire network. Being greedy is altruistic!
A new muffler on a Ferrari is more expensive than a new muffler on a Volkswagen. But everyone benefits from the reduction in noise.
No, it's a problem of externalities and market forces are very poor in dealing with externalities. Nobody would install mufflers if it was not mandated. Actually, I found a solution to this tragedy of commons. But I'm afraid it requires some (although enforced by consensus) force but I'm afraid solving all externalities requires some force. The fees has to be proportional to the coin age. This way a hoarder who does not spend coins will have to pay for their protection when he wants to spend them. Therefore, a hoarder would pay for their protection in the same way as a frequent spender who spends a lot and pays a lot of fees (hoarder can be forced to pay a bit less because transactions carries some extra overhead). However, such a solution is rather opposite to the current Bitcoin philosophy where fees are left to the miners only. If we wanted to introduce such a solution, the Bitcoin network would have to enforce the fees and would not accept the transactions where the fees for old coins are lower than a threshold. Since there will be very strong opposition to introduce such a rule when the fees are substantial, such rule would have to introduced early. Maybe even now. But I'm pretty sure there still will be a strong opposition to it. Because it acts like coin devaluation. But without it, the Bitcoin will probably fail. |
|
|
|
Even at a loss? Really? I personally would not lift my finger. And all rational members would not. This is the Nash equilibrium I'm talking about.
Well, do you secure / protect your other valuables at a loss to yourself? I do. Do you fix a hole in your roof when it leaks? Do you change the oil in your car when it become ineffective at lubrication? Do you change a fan on your computer when it stops spinning? Oh, come on. I would gladly pay for protecting my coins. But mining at a loss or paying fees pays for protection of mostly somebody's else coins. Only number_of_your_coins/number_of_ALL_coins fraction goes for protecting your coins. Everything else goes for protecting other coins. I don't care about protecting your coins, sorry. Would you voluntarily pay for fixing holes in the roofs of all houses in your town? If you know that only a small fraction would go for fixing your roof? Or would you rather let somebody else pay for it? You are not suggesting introducing taxation for protecting the network, do you?  |
|
|
|
If I were holding Bitcoins, I would invest in processing and securing the transactions to protect my holdings. It has the added benefit that I can earn more by processing transactions for others.
Even at a loss? Really? I personally would not lift my finger. And all rational members would not. This is the Nash equilibrium I'm talking about. Time will tell if the Bitcoin economy is large enough to make processing and securing the transactions valuable enough to sustain itself. I think that it will answer the question on its own. The more valuable the Bitcoin, the more people who want Bitcoin, the more transactions we see, the more profitable mining becomes, the stronger the network grows, the more secure the network becomes.
But this is all tautology. The problem I'm suggesting at my original post is that transaction fees would have to be very large to adequately protect the network. And large fees are opposite to popularity of Bitcoin as a payment system. I think Satoshi was brilliant in all technical Bitcoin details. But I'm not sure he thought about of all economic ramification of Bitcoin. Please, prove me wrong because I would like Bitcoin to succeed but I'm afraid the Nash equilibrium is very bad for the network as a whole. |
|
|
|
You can either secure your house with a $10,000 steel vault door, or a $20 plywood door that anybody can kick in. Pick your option.
This isn't a binary choice, you know. There are in-betweens that are reasonably priced and reasonably secure.
The problem is that first of all it is not the house that the lock protects. The lock protects your TV and maybe sofa from theft. Not the house itself. Even if somebody enters and burns the house down, you still have the land. Moreover, you need only to worry about local thieves. For the Bitcoin network, the danger is the the whole world. In case of the house, it's the law system that gives you most of the protection. I'm not sure if it will work for Bitcoin. In my opinion, given Bitcoin rules, malicious block reorganizations would probably be perfectly legal. I do agree though that Bitcoin transaction fees suffer from a tragedy of the commons situation that hasn't been resolved yet. However, it will take decades before this becomes a serious problem, and it won't become a problem overnight, so this will give us plenty of time to think of a solution.
I'm not sure what you mean by "tragedy of the commons" but I understand that fee problem is such that miners protects the whole Bitcoin value. But fees are paid only by those who make transactions. Hoarders who gain most from this protection do not have to pay a dime. Why hoarders gain? Because BTC value is related to the stability of the payment system. If the system gets unreliable, there are double spends, unconfirmed transactions and all kind of mess due to >50% attacks, the value of BTC will drop and drop hard if it becomes the norm. And there is no easy (or probably any) solution to this problem. Do you really think that hoarders will voluntarily start to pay fees to keep it running? If I were a hoarder I would sit and relax and let others pay my share. A statement "free market will sort it out" is true but it will sort it out probably simply by driving the Bitcoin value to the ground. And then nobody will care about bringing down the Bitcoin network. Knowing ahead of this problem will not help if the Bitcoin Nash equilibrium is for Bitcoin to bite the dust. |
|
|
|
|
Show Posts
