My take on explaining it:
Simplification: PublicKey = PrivateKey*AnotherNumber

So try to answer these questions, and hopefully you'll catch onto the concept real quick.

I multiplied 2 prime integers and got 21.
What two integers did I use?

I multiplied 2 prime integers and got 187.
What two integers did I use?

I multiplied 2 prime integers and got 1688063245889.
What two integers did I use?

ECDSA Public keys (used in bitcoin) are also the product of two large numbers...resulting in a huge product: 6013791818574714160321075769550160928403040221691660914916154278519966847051905 1547600040617210584736371110675553294866150136440087998368169814283413476604.
(Actual ECDSA pubkey I just made).
Factoring this would be tough!

(Thanks to casascius for pointing out my careless screwup that ECDSA are not 2 prime factors).

I freaking love Armory. Always people on the forums asking about features that Armory already has...why aren't people aware?

...
I love offline transactions!

I already answered this question but the short review is that, if it were the case that optimistically high BTC value made it so that .5 satoshi was indeed a mining incentive, by definition it would also be the case that transaction fees tolerable by users would be orders of magnitude beneath 1 satoshi. Ie insufficient mining incentive would only be a problem if it became a problem.

Currently the block reward and transaction fees stabilize each other.

Thanks again Moon, kjj, and retep.

Only on a quantity of transactions basis. If half a satoshi were to hypothetically constitute a mining incentive, then fees would need to be 1/100000 a satoshi or less to be affordable. Again, I hope enough people want to pay fees and it all works out fine as much as all of you do.


In saying '30 years from now' you did not read what I wrote carefully enough. I was claiming that in >150 years we could start to experience such a thing...150 years before 2012 the world's layperson did not even know what economic growth was, let alone experience it during their lifetime, and 150 years before that even the concept itself would have been met with ridicule.


Thanks for your information...although I enjoyed the latter half of your post I think that the logic you used here actually implies that GDP is the 'right' metric. If the money supply remains unchanged, but twice as much mining equipment is produce (implying such equipment is half as expensive), then the same block reward should buy more mining equipment and the mining subsidy has increased (it is twice as easy to conduct mining as before). If the money supply doubles, and output remains unchanged, then it DOES impact the real value of $0.05.

Although I now see how you did your calculation, the block reward will not drop to sub-satoshi for another 130 years, and do you not think that the TRANSACTION VOLUME and MONEY SUPPLY will increase over the next 130 years? Is that increase not relevant to the calculation?


Now I would like to thank MoonShadow and Rudd-O for answering my question, and koin for his counterquestion which actually seemed interesting but that everyone ignored...if it really is true that...


...then I consider my question to be answered (although I would like to learn more about the "+" in "24+", and about how impossible it would be to use koin's idea).

That being said, I'm happy to continue the conversation as it shifts the thread inevitably from technical to economics.

Yes.

I am struggling to replicate the $0.05 figure of TC.. most important of the problems is that it is highly sensitive to assumptions of growth in Gross World Product (which I think would probably work better) and/or the money supply of the world's countries over the next 130 years, which is pretty much an unforcastable nightmare. Also, economic output has lots of positive derivatives the rate of the rate of growth is increasing...were annual output growth to ever reach ~17% (seems possible to me) the block reward would start increasing relative to the purchasing power of those BTC (economic output more than doubling, reward halving), such that, after a period of possible irrelevance, as you suggest, eventually each block reward would buy more and more mining equipment and say 200 years from now the mining subsidy again becomes a huge incentive, and stays that way.



MoonShadow seems to think "my" proposal will actually just implement itself anyway. Sounds good to me.

(Thanks to MoonShadow for answering my technical question. Can anyone confirm/disagree with the answer?)

Re: MoonShadow

For starters I do not claim the ability to foresee the implications of a nonexistent block reward ("the right answer"). No one can honestly make such a statement, in any direction, about events 100+ years in the future. I am just saying "Why change anything?", and in fact the best part of this idea is that it ignores the impact of 0 BR, whether that impact be small, negligible, good, catastrophic, whatever, and just sidesteps it. I personally am just not comfortable saying that everything will be fine when 0 BR not only potentially fails to guarantee a secure hashrate but (worse) represents a change from the existing incentive-structure.

Secondly, if you have a non-hard-fork way of adding decimal places, it sounds great to me. By all means, expand or contract that as required.

Lastly, though, I disagree with this 'we have years to figure it out' line of reasoning. People are interested in the endgame for obvious reasons: if it wont work in 2150, it will be worthless in 2150, making it a big risk in 2149, recursion, 2148, etc. However, I assume your 'simple solution', while very convenient, would not automatically allow for <1 satoshi block rewards? I thought the BR code just takes bitshift of some constant until it becomes an actual 0. Is that true? What, if anything, would let the BR continue to shift without a hard fork?

I just want the block reward to keep doing what its doing.

Well the 'why' is simple:
People ask "Where do they come from?" and, then ultimately, "What happens when they are all mined?" and I have to say "Well, even though this new thing will eventually happen (precedence of mining fees, decoupling of BTC value and security value), hopefully it will all still work out from then on."

Which is not really a great answer. I'd rather say "It will continue to work exactly the way it does, pretty much forever."

The "costs" you bring up:
Hard fork - if we ever want to add decimals, this would be required anyway. as it stands a human needs to constantly decide this update with more hard forks
Constant updating - not only do we already experience constant updating, but this one update would prevent subjective human-introduced future updates
Transaction size - likely to be a complete non-issue wrt to technology/hard drive size in the 2200's

Vs the "benefit":
Money supply - actually the money supply will not increase at all FROM 21m...in fact it would just more closely approximate this amount...depending on how you implemented it, it could even decrease the money supply (as Zeno's calendar never quite reaches xmas in the cartoon, all 21m coins will never be mined). Moreover, assuming log-growth of BTC value, even these tiny satoshi-cents would continue to finance vast quantities of computer hardware/electricity in the future (and maintain a very strong network hashrate), but more importantly there would always be a reliable source of financing for miners, and of hashrate for users. Thus future expectations can be a little more stable.

So, contrary to what you write, I believe that there are reasons to schedule a future increase in precision (not increase precision today, as you've straw-man'ed). Thus would be better done as soon as possible so we can lock it in and iron out the details.

Dear Technical Users,

Can we simply require that more decimal points be added if the block reward were to drop to 0 (or a few years in advance of), so instead reward eventually becomes .5 satoshi (0.000 000 005 BTC, at this point divisible to 9 digits), then .25 satoshi (BTC divisible to 10 digits), .125 (BTC divisible to 11 digits), etc?

http://xkcd.com/994/ (Happy Holidays everyone)

I know 'adding decimal places' is a hard fork, but if we forked it this way (to constantly expand on schedule) we might *only* need to fork it once.


...
Now tell me all about how you hate this idea.

I feel this needs to be bumped as of http://www.intrade.com/news/id/782

Ah, you are right. Even if he were convinced that SR was final demand, (and therefore that BTC had "Mosler-value"), this would likely not be enough to make him a BTC ally.


I would say that I am 'somewhat' about getting it to 'more' people...are the people of bitcointalk satisfied with reaching only the community of their own forum?

Still you raise a good point, that anyone with Google making an honest attempt to research Bitcoin would have found SR by themselves (there is even an old-school academic paper from Carnegie Mellon about both SR and BTC).

I would actually argue that:
1) There must be seed-value pre-speculation (ie, WHY will this thing retain or increase its value).
2) A "non-monetary use" would INCLUDE (a) taxes [and a solution to the network-effects-coordination problem (of which, again, one solution would be taxes)], making that somewhat redundant.
3) Therefore, money does require seed-value to become valued.

And, even though I agree with your insight, that the seed-value might need to be non-monetary, its pretty irrelevant because I completely forgot to mention silkroad.

In fact, in (subconscious?) conformity to the regression theorem, I personally thought bitcoins were a strange scam until I read the SR wired article, at which point my opinion changed completely.

I'd REALLY like to see someone bounce silkroad off of Mosler as a source of final demand. That would likely change his mind (and we would have a new ally). I'll do it if no one else will, but I've never been in contact with him.

Or you can all continue to make fun of someone via pseudo-anonymous internet post that no one will see. I has hear that help teh bitcoin.

Woah woah don't freak out everyone...jeeze anyone who raises concerns about our project is insta-shunned, its madness I say.

He is actually just restating the Mises Regression Theorem (we all love Mises, right?)....the 'seed value' Mosler is looking for (ie the "final demand" or "the thing that you can only buy with BTC and nothing else"), exists in several places, namely low-cost/instant international payments, unfreezable accounts, inflation-proof, etc.

So the final demand would be for like a hypothetical "Bitcoin Co. International Payment Service Coupon" or whatever that is (somewhat confusingly) supplied BY Bitcoin (the software) and can ONLY be paid for with Bitcoin (the currency). He was even humble enough to say "which I've been unable to identify"...ie he would change his mind if he DID identify it.

I happen to think Mosler and his MMT are completely ridiculous, but the ridiculousness isn't expressed in the excerpt given here.

imho

Frequently, people have been complaining about a threat to Bitcoin without first reading existing posts/documentation about it. Responding to these posts is wasteful and annoying, but ignoring them makes it appear (to outsiders) that the treat is legitimate.

I propose a new forum category to catch these posts (possibly under 'Bitcoin Discussion'). We then sticky the key recurring topics ('price manipulation', 'tainted bitcoins', 'developers change source code', 'quantum computing', etc) so people know where to find the information they want (and don't make redundant and misleading new posts).

I know we have wiki pages for this, but sadly it does not stop lazy users from flooding the forum with garbage (garbage that falsely makes BTC look vulnerable). There are just too many posts to look through...I think this organization can help.

tl;dr Just like the 'deflation' sticky in the Econ section of the forums, but a catch-all category for all annoyingly recurring topics.

You may enjoy http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.73.4707
I believe he did real life empirical examples to prove it as well (or something).

Sad to see this topic up yet again...if I write a concise primer on basic economics can I get it pinned somewhere, I wonder?

The one sentence explanation: the words 'buy' and 'sell' actually mean the same thing (as the word 'trade').

Translated:
Now what if a group or government slowly sold a few million dollars for BTC, stabilizing the market wouldnt this be the opposite of..oh forget it reaching even the most unwilling dollar-buyers by saying "Ill give you any USD you want for your 1 BTC, please trade some to me!"....and then decided to buy dollars (with BTC) instead, reaching even the most unwilling dollar-sellers by saying "Ill give you any amount of BTC for 1 USD, please trade some to me!".

Hopefully this example clarifies: this is a get-poor-quick scheme for crazies.

Ah, but not an exclusive two-hour primetime special...you would want to market it in advance, and my understanding is that the hackers would just release the decryption-information to everyone. Thus fewer people could profit by the release of the returns, making it less likely that to pay for release, and consequently less likely either of the two will pay, no?

Its also possible that the tax returns contain nothing interesting...if people were making a big deal about my returns AND they were normal-enough, I'd allow the controversy to fester so that I could slay it in one stroke by releasing my own returns days before the election.

Agree...obligatory shoutout here as well.

Fast response to messages, deposit, emails etc. This is easily the cheapest and most convenient way to get BTC...simply cant beat a negative-fee, cash bank-deposit transaction. I will be using again in future.

There's a bit of strange strategy going on here, though. The hackers claim to be releasing it for free on Sept 28th, so why would you pay $1m? Your only reasons would be a) to have it earlier and/or b) to stop someone from making the converse-payment (thus preventing you from ever seeing the returns).

Knowing that team Romney would still lose by paying 1m to conceal the returns (saying "I don't feel like releasing something personal" is pretty different from "I payed 1m to someone who successfully blackmailed me"), making it unlikely, and with the possibility that some guy is just going to take the $ and run, I doubt either person will pay.

http://www.forbes.com/sites/jonmatonis/2012/09/06/blackmail-and-a-briefcase-of-bitcoin/

 

REALLY cool!

You misspelled "pictures" at the bottom of the FAQ, by the way.

IMHO, data visualization ideas to make it even better would be:
Map color to another variable ('distinct owner' being a logical choice for your sleuthing goal).
Make the size related to BTC balance...thick lines for large transactions, etc.

Very exciting work.

Prisoner's Dilemma!

Ants=Doomed