This could be a bug in a modified mining code's transaction verification code, or (more likely) a malicious player.  Either way, I don't think responding is necessarily the best course of action.  If it's bad code, it's not really our problem to solve, and the developers are going to notice eventually.  If it's a malicious miner, then with 15% of the network it's no small attacker; and getting us to respond in some fashion is as likely the goal as would be adding more power in the future.  Empty mining blocks were always going to be an issue, we knew this from the start, so this problem has been mentally hammered for two years.  There is nothing that we need do about it as a group (such as change the code) because by rejecting fee paying transactions they are harming themselves.  We don't wan't to alter the code to respond to this, because then we would be the reactionary group, responding to the attack vectors of an unknown malicious agent by potentially adding new attack vectors.

What we could do is publish the bitcoin addresses of the null block offenders, and both try to identify them as best we can, and (as individuals, not as a community) choose to delay transactions & blocks produced by that address.  Because the decision making process is based upon the propagation of a new block, even a short transmission delay in a majority of nodes will result in this malicious attacker's effective hashrate being reduced.  Which can function as a punishment for failing to respond to the social rules of the network, but does not require widespread code changes to deal with a particular attacker.  Users can choose whether to participate in the sanctions or not; just like they technically can already do if they have the coding skills to make the local changes.

Wow, they spent a lot of effort to collect the criticisms of various persons, but none of the rebuttals.

How balanced and unbiased they are!

Just got back from the midnight showing of Hunger Games.  Good movie, but falls way short of the book.

Most of us expect that the annual velocity of bitcoin to be much higher than fiat currencies, due to the relatively quick settlement rate of the bitcoin network.  Although most people get paid for their work weekly, with about a week delay on average, before they can again spend those funds themselves; it's actually possible for employees in a bitcoin economy to be paid daily and spend those same coins an hour later.  The higher velocity capable with bitcoin also means  that the bitcoin price is likely to be suppressed compared to a currency with a much lower velocity due to technical constraints.

For those who don't understand what I'm talking about; although cash is an instant form of settlement of trades, most transactions in modern economies are credit transactions.  Although such transactions are 'completed' instantly (based upon the credit of the buyer) they take up to 45 days or longer to be 'settled', during which time any real funds involved in the transactions are not available for further transactions.  Think about sending a paper check in the mail to pay a bill; the funds to pay the bill are supposed to be in your account before you write the check (otherwise it's "kiting" which is fraud) and mail the check.  The check must travel via mail to the company, then back to the bank, before the transaction is completed.  This is true even if the company credits your payment upon arrival or not.  But the company cannot use those funds when they credit you with the payment, they must wait until the check clears your bank and is on account at their bank.  As you can imagine, just a paper check can take weeks.  Businesses with merchant accounts at the credit card companies can get access to those funds faster (as in a couple of hours) because the credit card company can credit the merchant's account for an (assumed) valid CC transaction; however, such credit based transactions are not final for much longer due to rules and laws governing consumer credit protection.  So a merchant could re-spend his new funds pretty quickly, but if it turns out that he was burned he loses those funds after the fact, (chargebacks) and then finds himself in the debt of the CC company.  It doesn't take long before merchants start to maintain a standing reserve balance, just like one would do for a checking account.  The aggregate result of all these reserve accounts is a drop in velocity/increase in cash demand/increase in relative fiat currency value.  (Yes, the suppression of velocity can result in the increase in value of the currency, so long as the issuing institution is expected to still be able to follow through).

Since bitcoin is truly settled (as fast as) in one hour, those funds really can be re-spent without fear of chargebacks.  Thus reserve accounts are less necessary under bitcoin than under a credit based fiat economy, which was the only way to do online transactions up until this point. 

The price of the bitcoin going up isn't quite the same as deflation.  Bitcoin won't experience deflation until the block reward is reduced to near zero, which isn't going to be a real problem for at least a generation.  If the whole world is using bitcoins in thirty years, the value of a single bitcoin is going to be pretty high, but the actual deflation rate would likely be less than 0.5% annually.  Perhaps far less, if effective safeguards against lost address keypairs are developed.

An annual increase of the bitcoin value of 30%+ is indicative of a rapid growth in the bitcoin economy, exceeding the current inflation rate by at least that much.  Although the rigid nature of the bitcoin monetary base could act as a brake on economic growth, it's literally impossible for rapid growth to be "deadly" to the economy.

<sigh>

Another newbie who believes he actually understands how money works.

I feel the need to warn you, unless you plan on moving to Iceland, it's impossible for mining to be profitable for you in Germany with an electric rate of .23 Euro per KWh.  That is, unless you already live in a flat where electric heat is the only option.

If that were anywhere close to the reality, mining would be insanely profitable right now and we'd have dozens of well heeled players trying to jump into the game.  The fact that it is not so is evidence enough that your assumptions are wrong.  Even if ASIC mining drives mining costs down to less than 50 cents per MH, the end result is that the total hashing power of the PoW network increases to match or exceed the value of the network, not that the cost of overtaking the network goes down.

This is a false dictonomy.  I did not claim that absolute control was the result, nor is it necessary.  A dominant investment does grant the investor the power to undermine the network with less than 50% of the processing power.


This is based upon what?  For a PoW miner to gain majority control over the network right now would require significantly more processing power than is available to all of the top 50 unclassified supercomputers on Earth, while a PoS system based upon the current Bitcoin economy would take no more than the current Market Cap of $46 million in order to gain a solid majority stake.

He's talking about pool miners.

This is not a requirement with proof-of-work, merely a convience for pool mining.


There is, but I'm not willing to argue that point.  It's secondary really, anyway.


Speak for yourself.

Anyway, I've made these kind of arguments many times over the past two years, quite literally on both sides of this issue.  What it all comes down to is that PoS doesn't offer an advantage over PoW, but attempts to solve a presumed future problem that I (no longer) agree exists.  I also do see potential problems in it's practical implementations, although those may not be insurmountable.  However, the very biggest problem with PoS is that a major entity could literally come in and buy it out and become a new central bank, as the requirement for having more than the processing power of the whole of the honest network no longer applies to a PoS miner with a large enough of a stake.  Your not going to solve a problem here.

And the current proof-of-work system isn't a tragedy of the commons, it's actually the reverse of same.  I was thinking along these lines early on, and made some of those same very arguments about a year ago, but I accept my error now.  A tragedy of the commons requires that a common resource be consumed by self interested players, but what is really happening is that a common resource (the security of the blockchain) is actually being aggregated.  I've made many counter arguments to my prior position on this since then, particularly centered around the incentive for major future entities in competition investing in exclusive mining agreements.  Think Wal-Mart & McDonalds agreeing to partner on a mining center that makes every effort to exclude the transactions intended for the Target & Burger King alliance.  I.E., companies in different industries have an incentive to work together, but exclude their competitors, as far as that is realistic in order to avoid transaction fees & processing delays.  This adversarial situation benefits the bitcoin consumers collectively, regardless of how each set of mining alliances should treat each other.

Brick & Morter banks would have similar reciprocal processing agreements; in order to get the other bank to process their customers' transactions without a fee & relatively fast, they would have to do the same for their customers.  Such an agreement would benefit both banking institutions, regardless of their relative size.  For example, MEGABitCoinBAnk in NYC has 100,000 customers and a 1000 GPU data center, while LittleFarmersBitcoinTrust near Cincinnati only has 10,000 customers and a 50 gpu data center.  Both banking institutions stand to benefit to some degree, so long as they are not competing in the same local markets, so the agreement happens.  MEGABitCoinBAnk is likely to make dozens of such agreements, leveraging the gpus of those dozens of local banks, even if some of them do compete with each other in the same market.

Indeed, this is already true without the proof part.

Proof-of-stake is a flawed voting mechanism for bitcoin or an alt-coin.  It would, at a minimum, require associations between the addresses within a major stake claim; breaking many types of anoniminty that existed prior to the claim of stake.

For the right price, they could be heating my garage next season

Valve Games

RMS?  He's the guy who invented root-mean-square, right?

Oh, Yeah!  That's why I bother, the POWER!

looks pretty serious

Now this is a newbie post with some quality to it.  It doesn't really matter what your opinionof our methods are, of course; but at least you have one.