Decentralization (or more correctly the ability to transaction without a trusted third party) is the core reason for Bitcoin. It still doesn't change the reality that transaction in gold was a complete pain in the ass. The first gold based banks didn't offer interest, depositors had to PAY to deposit gold. Gold back notes became a popular alternative to physical gold simply because gold was such a complete nightmare to use in transactions. Prior to 1933 one could at will convert US notes into physical gold at any bank. Almost nobody did. Why? It was a complete pain to conduct business in physical gold. Bitcoin has no such disadvantages. This isn't to say Bitcoin based bank won't be created but the massive drive for an alternative to heavy, hard to authenticate, hard to store, hard to transport gold won't exist.
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Another option would be to use a paper wallet for your cold storage and keep a client updated for daily spending. The simple answer is there is no issue sending coins to an offline address.
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Yes, I simply forsee Bitcoin's value skyrocketibg. In such a case, it would seem that more decimal places would be needed.
Skyrocketing how high. IF 1 BTC = $1,000,000 then 1 satoshi = $0.01. At $1M per BTC the value of the Bitcoin money supply would be $21 trillion USD. That is more money (M2) than the entire world currently uses combined.
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Bitpay doesn't even require a confirmation. The invoice will be considered paid pending confirmations if the tx is seen on the network before it expires. In other words you only need 0-confirm to avoid an invoice expiring.
Oh, learned something. Could a missing fee have prevented the TX from being relayed? Possibly but the default QT client will prevent you from sending tx without a fee if they will be dropped because they don't include a fee. High priority tx are always relayed even without a fee, low priority tx are never relayed unless they have a fee. Unless modified the QT client enforces no fee on high priority txs and does enforce the minimum fee on low priority txs. The more likely scenario is the OP client never broadcast a transaction for 15+ minutes.
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Why enforce minimums in code? Shouldn't this be a setting of some sort? The software can recommend a fee based on the rules, but if you choose not to include it, then your transaction will just take a very long time (or never) to confirm.
It is a denial of service prevention mechanism. You can however compile your own client and avoid this check. However most likely all your peers will simply drop the tx as not having the min fee for low priority txs. Just to be clear there is only a min fee on low priority txs and it is done to prevent someone from spamming the network at no cost, crashing nodes, filling the memory pool, and (although this is less of an issue now) filling blocks with worthless spam and massively bloating the blockchain to kill future adoption (imagine today having to download a 20 TB blockchain). The min mandatory fee to relay on low priority txs is simply a defense mechanism it wasn't intended to be a revenue generator. Miners are free to set their own fee requirements potentially higher than the min mandatory fee on both high and low priority txs.
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Plenty of room in the blocks.
Did you include a transaction fee?
Bitpay doesn't even require a confirmation to save the invoice. The invoice will be considered paid pending confirmations if the tx is seen on the network before it expires. In other words you only need 0-confirm to avoid an invoice expiring. Now most merchants* will still require 6 confirmations but as soon as the tx is seen on the network it stops the "expiration clock" and bitpay waits for 6 confirms before notifying the merchant that it has been paid and confirmed. * Merchants can set the level of confirmation they require (0-confirm, 1-confirm, or 6-confirm) but regardless the invoice will not expire once the tx is seen on the network it just will take longer to eventually be marked as confirmed.
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Simple version: a) Bitcoins in bank = losing purchasing power daily. b) Bitcoins not in bank = gaining purchasing power daily. Your conclusion: The vast majority of people will knowingly opt for "a".
If the bank doesn't fail you get your bitcoins back plus interest. Without a bank there you wouldn't get anything, just saved your bitcoins... Which increased in purchasing power. Oh noes. I only have the same number of Bitcoins but now they buy 10x as much stuff and I unlike my neighbor I didn't lose everything when the wildcat bank failed. What ever will I do with all this new found wealth.
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Also without a central bank able to print infinite amounts of money and be the lender of last resort many of those banks will fail and when they fail depositors will lose everything. This will further reduce the real return. Net change in purchasing power = interest - inflation - losses.
You could just enter "free banking era" in your favorite search engine and look for yourself. Not all banks failed and not all of them inflated their "dollars". As far as I remember, only one third of them went bankrupt... Wow only 1/3 went bankrupt and depositors lost everything. I am sure people will be flocking to put their money into Bitcoin banks which have a 1/3rd chance of failing.
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7 tps can be raised, it is an artificial limit which didn't exist in the original client. It was added after the fact as a denial of service prevention mechanism.
BitPay times out if the TX IS NOT SEEN IN 15 MINUTES. This means 0-confirm. My guess is you used a client which wasn't synced to the blockchain and your tx was never sent until >15 minutes after the invoice was created. You probably shouldn't use the QT client it really isn't designed for "users". I would recommend using a lite client like multibit or electrum which handles all the "hard stuff" (like keeping synced with blockchain) for you.
Still keep fudding. You probably should sell all your Bitcoins now, you know it is going to fail so sell while you still can.
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I did explain the problem with your logic.
GOLD IS HARD TO USE IN TRANSACTIONS. It has significant disadvantages and cost. This is what lead to the usage of gold backed notes. Bitcoin suffer no such disadvantages. Bitcoin banks using Bitcoins as a reserve to issue private script are unlikely to be popular as simply holding real Bitcoins is easier and less risky. Unlike gold there isn't a compelling reason to take on the additional counterparty risk.
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Personally (and I really believe block size is a completely different issue) I think the best option would be to raise the block limit once it becomes a bottleneck to a higher static limit. The reason is that Bitcoin is very hard to undo and going from 1MB static to 10 MB static is a simple and well understood change. Other systems while they may be more future proof are more complex and need more time for discussion, analysis, and testing. I project the 1MB limit will become an issue within a year (or 18 months on the outside) and I wouldn't be confident with any radical change in the block system in a short period of time.
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OpenCXP does nothing and can do nothing to prevent a double-spend with higher fees from replacing the transaction you agreed upon once you walk out that door.
No the client already handles that very well. Every node will simply drop the double spend. Nodes do not and can-not drop blocks with the double-spend, which is what matters. Also ironically the double-spend warning feature proposed for 0.9 will make it trivial for individual miners to choose to adopt replace-by-fee rules, because there is currently no way to prove that a double-spend exists other than by broadcasting the entire double-spend transaction. Well that is why I said tx not block. Can miners conspire to defraud merchants and thus kill Bitcoin adoption and value and indirectly reduce the very value of the coins they are mining? Of course. Will they? It remains to be seen but on low value txs I don't see the merits. All forms of commerce CAN involve fraud. One could counterfeit $1 bills just to steal a lifetime of sodas from soda machines. It probably isn't worth the cost and risk though. One could get free coffee from this hypothetical scenario by putting a gun in the face of the cashier and demanding not the money in the till but a free large espresso. I don't see that happening either. In time merchants will adopt the level of security vs convenience that they see necessary. Much like how soda machines are wide open to attack by stolen credit cards and counterfeit bills yet have not taken more expensive and intrusive countermeasures there will be a place for 0-confirm transactions. Note: nothing I said should be taken that all merchants should rush into accepting 0-confirm txs in all scenarios without understanding the risks.
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Or you could just keep your gold and were immune to the inflationary effect. Of course paying with gold was difficult, keeping your gold safe was also difficult. Bitcoin however makes paying direct with Bitcoin easy. There is no need to put you Bitcoins in some bank which will issue fiat currency using it as a reserve. Of course you are free to CHOOSE to do so but others are free to not. If these fiat issued currencies end up inflationary well it will make people less likely to choose that option.
You're right, but in this case you were losing interest which you could potentially earn by depositing your gold in the bank. The same holds true for Bitcoin... But you just said there would be inflation and the inflation would be higher than the interest. I would simply keep my real Bitcoins and while the nominal number won't change the purchasing power of it will. Your system assumes everyone is stupid and opt for inflationary non-Bitcoin tokens instead of the "real thing". Even if people temporarily did that, the scenario requires them to be stupid over an extended period of time. They would need to see that year in and year out they have a decline in real purchasing power and continue to not act by taking the very easy step of taking their coins out of the bank. Simple version: a) Bitcoins in bank = losing purchasing power daily. b) Bitcoins not in bank = gaining purchasing power daily. Your conclusion: The vast majority of people will knowingly opt for "a". Also without a central bank able to print infinite amounts of money and be the lender of last resort many of those banks will fail and when they fail depositors will lose everything. This will further reduce the real return. Net change in purchasing power = interest - inflation - losses. People didn't opt to deposit gold in banks for interest. People opted to put gold in banks and use gold notes because .... GOLD IS HEAVY. GOLD IS HARD TO AUTHENTICATE. GOLD IS EASILY STOLEN. GOLD IS HARD TO TRANSPORT SAFELY. The benefits of secure storage outweighed the cost. Bitcoin significantly mitigates those concerns. The "need" for Bitcoin based fractional reserve banks is less and people have a VERY EASY way to "opt out" ... don't deposit your coins.
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We don't have 7tps right now more like <0.5 tps. The current protocol rules are limited to 1Mb blocks which is a cap of 7tps. Many believe that will be raised eventually.
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So the "attack" is simply describing the creation of an alt coin - let's call it the AnnoyCoin. So yes, anyone that wants to can/has/will create an alt coin. This is nothing new at all. It is then up to the market to decide which coin to use. Upon the creation of this new alt coin some may follow it others will not. Exactly but the AnnoyCoin created has such a flawed understanding of Bitcoin he seems to think the creation of this altcoin will somehow stop the existing Bitcoin. There are now two coins: Bitcoin and AnnoyCoin
And lets take this a step further. AnnoyCoin has no advantages over Bitcoin, it also has a massive inflation rate which benefits the dishonest miners at the core of it. The additional monetary inflation is a wealth transfer from anyone using it to the miners. Add to that it is centrally controlled by a cartel which has shown itself to be williing to destroy the benefits of Bitcoin for selfish greed. So it is a free market and people can choose the vastly superior Bitcoin or the AnnoyCoin. It pretty much is a no brainer. People would sell off the AnnoyCoin in masses to transfer their wealth to the superior system. In reality the default choice is Bitcoin as anyone who doesn't download and install the AnnoyCoin client would remain on the real Bitcoin network. Users on the Bitcoin client would never even SEE the AnnoyCoin blocks, other than a temporary increase in block time there would be no effect on them at all. So AnnoyCoin will never exist outside of the annoying brain of its creator.
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I think that nothing life-changing is actually going to happen. We have already been there.
While what you say sounds logical can you point out where in your "been there logic" things were decentralized? Actually, they were completely decentralized "there". When it all started back then, any bank could issue their own "money". Bills of exchange, bank notes, certificates, depositary receipts, etc ad nausea are all examples of "private" money. So you had many options open how to lose your gold to pick up from.. Or you could just keep your gold and were immune to the inflationary effect. Of course paying with gold was difficult, keeping your gold safe was also difficult. Bitcoin however makes paying direct with Bitcoin easy. There is no need to put you Bitcoins in some bank which will issue fiat currency using it as a reserve. Of course you are free to CHOOSE to do so but others are free to not. If these fiat issued currencies end up inflationary well it will make people less likely to choose that option.
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OpenCXP does nothing and can do nothing to prevent a double-spend with higher fees from replacing the transaction you agreed upon once you walk out that door.
No the client already handles that very well. Every node will simply drop the double spend.
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The min fee has been lowered three times in the history of Bitcoin. From 0.1 to 0.01 to 0.0005 to 0.0001. It can and will be lowered in the future. Generally the devs of the reference client have lowered the min fee to keep the cost in the range of a few US pennies.
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Well, this morning, Mt.Gox informed us that they will require a 0.001 BTC transaction fee to "increase the speed of transactions in the network." At current prices, that is over a dollar (US). That's getting expensive.
You sure it wasn't 0.00 01. If it is then it is more like $0.10 not a dollar. If it isn't then you should ask MtGox why they are charging fees 10x what is required by the network.
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Is there any chance of just storing blocks as list of txid's, list of destroyed txouts, list of new txouts, without telling which txins/txouts go with which tx? No or as a miner I could simply modify your txs keeping your tx inputs and making the outputs to me. The security model of Bitcoin involves three layers. 1) Senders digitally sign the entire* tx to ensure it is immutable. 2) All nodes (not just miners) verify all txs and blocks are valid. 3) Miners place tx in blocks to create a consensus history. *well a simplified form
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