Thanks Peter, I forgot about the proof-of-propagation one.  I remember it sounding pretty slick.  Regarding miners publishing network addresses, Mike raised the issue of load balancing with something similar.  I guess that'd especially be a problem with most miners not even running full nodes.

All I was focusing on is a way to enable people to make bets with strangers with minimal trust.  After that, people can find each other via whatever channels they like.

But I agree with you that a decentralized exchange will be terrible for efficient high volume trading and price discovery - it would do best to rely on centralized transaction servers for this.  There I think the focus for improvement should be low-trust operation (e.g. Open-Transactions (I thought it did have functioning exchanges?  Haven't checked personally.), and MPC*).

* http://fc09.ifca.ai/papers/15_Secure_MPC_goes_live.pdf

As I understand it, the scenario we're dealing with here is: SPV + 0-conf tx + malicious sender + all peers controlled by sender.  People are focusing on ways to make the latter difficult via Tor + anti-sybil measures, but you appear to be suggesting that this isn't actually necessary.

The tools I'm aware of to perhaps help here are:

1) UTXO set commitments enable SPV nodes to fully verify the received tx, which is nice, but of course the tx won't actually reach the miners before being double spent, since the SPV node is surrounded by the sender's nodes.
2) Replace-by-fee can create an incentive for the sender not to double spend by enabling you to, before any confirmations have occurred, spend the full value to fees, where the sender has included a bit extra which would otherwise have been sent back to him.  But this also doesn't actually help if the sender has you surrounded in the network, since you'd be relying on him to broadcast the replacement in time.

Are there some other tools I'm missing?  What lines are you thinking along here?

Edit: This https://bitcointalk.org/index.php?topic=321085.0 is maybe another way I know of.

The oracle scheme I linked to is "m-of-n" compatible, and has O(1) scaling with the number of participants in a given bet.  It's just simple publishing of secrets and their hashes.  Furthermore, you could build a transaction based on this today using the rawtransactions API and Eligius to get it mined (it's currently non-standard).

You actually don't need any kind of clearing for the predictions market I mentioned; it can all be done with Bitcoin scripts, and one or more reliable oracles who don't even need to be active participants in transactions.  Here's a nice explanation: https://bitcointalk.org/index.php?topic=260898.msg2804469#msg2804469

Sure, a decentralized predictions market would rely on external infrastructure for actual price discovery of assets, but being able to gain financial exposure to these without needing verified accounts on centralized exchanges seems useful to me.

Here's a recent discussion on this: https://bitcointalk.org/index.php?topic=431513.0

I agree that the "Cryptocurrency 2.0" meme is a bit over the top.  Though if we get some reliable oracles operating and the relevant scripts made standard, then I can imagine a reasonably successful predictions market springing up.  Intrade showed there's demand for this, and it being rubbed out by USG has left a vacuum.  Incidentally, this could also be used to insure bitcoins against FX risk, provided volatility isn't too crazy.

I worry about too much misplaced hype coming from Ethereum, leading to the problem Adam mentioned, so it'd be nice to take the wind out of their sails with a script 2.0.  Adam said in the interview that Mark Friedenbach (maaku) was working on a good implementation.  I doubt it'll be Turing-complete, like Ethereum's, as that's likely overkill/window dressing.

Are miners choosing individual chains to mine on, or are they merged mined?  If the former, you just made any single chain 1000 times easier to attack.  This could in turn lead to fungibility issues.  If the latter, then you haven't made Bitcoin any more scalable for (full node running) miners, which is what's most important.

Also, in order to be able to accept coins from parallel chains, you'd at least need to keep track of all of their block headers.  With 1000 chains, that's about 350MB per month - too much for smart phone clients to have to deal with.

Typed ctrl-f sybil before reading, then decided not to read after nothing turned up...

Yes, SPV clients and micropayment channels are preposterous!  

Edit: I just heard that he's working on getting Tor on by default for Bitcoin wallets as well!  What a monster!

Thanks, I really enjoyed the talk!

I'm wondering what the devs thought of the beta chain idea?  Any objections beyond aesthetics?  (Of course there's the required hard fork, but these are going to have to happen in the future anyway.)

I've used it as collateral for a loan.  The deal was that if the exchange rate dropped below an agreed threshold, I'd top up the collateral and create a new lower threshold, otherwise he (the lender) could sell the coins (I gave him control of them).

Miners will have to struggle to remain profitable as things settle down, and this will require them to be creative with waste heat, putting it to good use.  But this environment will favour smaller, more versatile miners.  It's a situation of "diminishing returns to scale".

It takes a lot more than a majority of miners to agree to change the inflation schedule.  Any full node who doesn't agree to the change will end up on a different chain.  SPV nodes would currently follow the miners like sheep, but there are known upgrades to the system that would prevent this.

And in a way that can't be gamed, and requires no trusted third party.

A couple good recent articles on the volatility subject:

http://garzikrants.blogspot.ca/2013/11/solution-to-bitcoin-volatility.html
http://www.washingtonpost.com/blogs/the-switch/wp/2013/12/09/heres-why-volatility-isnt-a-big-problem-for-bitcoin/

Gold has a comparable market share to USD's M1, but people hold it for very different reasons than they hold USD.  If USG suddenly figured out a way to cheaply create new gold, but could keep the technique secret, and promised not to create "too much", would gold remain valuable?

Inherited wealth is usually squandered*, so initial distribution seems largely irrelevant in the long run.

*http://www.forbes.com/sites/carolynrosenblatt/2011/12/09/wealth-transfers-how-to-reverse-the-70-failure-rate/

A fixed supply currency, after achieving full market saturation, would provide a return equal to the growth rate of its economy, i.e. the risk-free interest rate.  To what degree do wealthy investors tend to look for better returns than the risk-free interest rate?  To what degree do relatively less wealthy people tend to diversify their holdings in order to minimize risk, e.g. for pension funds?  The supply of bitcoins will be held solely by the wealthy only if both of these are zero (obviously untrue).

I never suggested messing with the inflation schedule.  That would indeed be stupid.  I pointed out that miners could collectively discourage blocks that don't conform to some rough consensus on fee policy.  This would lead to a different equilibrium than the one you mentioned, which could potentially be more profitable for the miners.

Example: the block reward (measured in $) rises faster than block propagation/orphan rates can be lowered.  Fees become uncompetitive because they are determined by the expected revenue loss due to a transaction's marginal orphan probability.  Bitcoin begins losing market share to Altcoin.  Miners collectively realize that if they all agree to keep their fees competitive, then they can contain this loss of market share, and earn more revenue.  Cheating needs to be discouraged, so miners agree to not build directly on top of blocks that violate the consensus fee policy.  This raises the orphan rates of cheaters to the point where cheating lowers expected revenues.  Notice that no individual miner is at a relative disadvantage because the higher overall orphan rate is spread proportionally amongst them all, and difficulty has adjusted downward to compensate for the higher overall orphan rate, making blocks concomitantly easier to find (i.e. mining is a zero sum game).

That's pretty much what I expect as well, but you never know.