So I assume that you are giving this backup to your friend for safekeeping, but you don't quite trust said friend to not attempt to crack your wallet.dat file.  Why on Earth would you give this friend your wallet.dat, encrypted or not?  I'd think that the only reason to give a copy of your wallet.dat file to anyone is to a trusted person, so that they could open it upon your death, you could even put the passphrase into your will so that it could be opened by your executor.  But otherwise, just put a copy on an older USB drive, rent a locker at a bowling alley, and put the USB drive and other things into the locker.  Cheaper than a safety deposit box, and also not registered with any government entity.

There is no way that this cartel starts with anything near 15% of the hashrate.

Just because you say it, does not make it so.


It may or may not reintroduce 3rd party risk.  Consumers may or may not be willing to invite government back into their economic activity.  Doesn't matter, it's their choice.  But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.


Reduced costs are free costs to someone.  Please respond to the effect that sero profit margin miners would have upon your theory.


They would do it for free, because it would still be cheaper at scale than their current "cost centers" for online commerce security, as well as the overhead with the handling and security with regard to both credit card transactions and cash transactions today.  Do you think that armored cars are costless?  That IT security gurus work cheap?  That Walmart puts cameras above every cash register because they trust their $7.50 per hour part time cashiers to be trustworthy with hundreds or thousands of cash dollars?


I'm not trying to stop you from fixing whatever you think is broken, just don't try to fis inside Bitcoin.  Go start an alt-chain, and if you're right about the problem, as well as how to fix it, then you will profit.  For that matter, considering your proposed fix, you don't even have to start a new coin, inflation coins without the block reward reductions already exist, and have for years.  Go have fun.

Because you don't know what you are doing.  You're welcome to start your own alt-coin, however, and see how it turns out.  Nothing is stopping you.

The merchant will care.  He will not get paid until the transaction is processed.  If the transaction is withheld from the majority of the miners, that opens an opprotunity for a double spend attack after product has been shipped.  This will harm merchants directly, and they will either not accept bitcoin transactions via Amazon at all (nullifying your trhoery altogether) or only accept bitcoin transactions with the added garantee from Amazon against double spend fraud.  This will hurt Amazon.

libbitcoin is a programming library for bitcoin client functions.  It's not a client unto itself, but makes the building of clients easier and more uniform.  Darkwallet is, indeed, based upon libbitcoin.

Offchain activity is irrelevant to my attack. You can't predict the future. If offchain becomes the dominant mode of commerce, then my attack will be less useful. But it doesn't make my attack not exist for as long as onchain activity is the norm. You can speculate all you want about the future being not on the blockchain, but I deal with the reality as it stands today. Please don't argue this point further because I will ignore it as it is not relevant. It is a strawman.
[/quote]

You can speculate as much as you like as well.  Once again, I don't need to disprove your theory.  You need to disprove my objections.  Thus far, you have failed to disprove any of them.  Not one, and I have provided at least 6 market forces that undermine your theory.  I have not even touched upon the technical/protocol reasons your theory is flawed. 


What part is nonsense?  First, show me that Amazon has control of 58,000 petaflops of computational power.  Then show me how they would be able to commit same to such a project without completely starving their existing businesses for resources.  I know that you can't show either, because while Amazon certainly has quite a network, they are actually using it for a great many other business functions.

Furthermore, the 33 petaflop supercomputer sits on more than 40 acres.  Amazon doesn't possess 40,000 acres of server farms.

I understand your attack better than you do, you just don't know it yet.  The percentage of global commerce that Amazon may control is what is irrelevant.  You don't know enough about the protocol for me to even explain why this is.


Won't work.  It's been tried already.  It didn't work for them either.


You've never actually stated anything of substance.  If you ever did, you'd have to admit failure when others ate out your substance.  Personally, I'd like to see it.


Prove it.


YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

Search this forum for the elusive "mystery miner" of yesteryear.

You have just verified my point.  Standard Oil wasn't a cartel/monopoly to start with, they were the market dominator due to efficiency.  So they were the market dominator before they changed their methods to dirty tricks, in order to maintain an untenuable market position.  The regulatory capture was critical to maintaining that position.  Regulatory capture is (probably) impossible within bitcoin, since bitcoin is, itself, resistant to regulation.


They didn't.  They had a dominate market position, as I stated.  During the 90's they used copyright law and dirty tricks of their own to maintain that market position, but in hindsight, we know that it was already be eroded by GNU/Linux.  You're using linux right now, and you do it everytime you do just about anything on the Internet.  More than half of all servers are some flavor of unix successor, that was already true when the US Department of Justice was sueing Microsoft for anti-trust (monopoly) violations.  It just took a while for the rest of the market to notice the quiet changes underway.

If you disagree, make an argument; rather than just a childish remark.

Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.


I have seen that news.  Strangely, my phone is still rooted.  If the simple fact that a law against it existed really worked, then the US doesn't have a drug war going on anymore either.


I'm the naive one?


You still haven't read all there is to read on this topic.  You probably haven't even read all that I've personally written on this topic.  I wouldn't want to read all that myself.


Just because you say it, does not make it so.


One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins. 


Only if regulatory capture is an option.  There has never been an exception.  There is no evidence that regulatory capture is possible in bitcoin mining.


I already addressed this one.


That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.


My point is that there is an alternative, even for Amazon's vendors.  You just seem to be blind to the alternatives.


Doesn't matter if they do.

Nope.  This is where your theory falls apart.  Out-of-band transactions exist, and they exist because fee-less transactions are permitted.  The cartel can't grow, because it needs to have a dominate position among miners to start with.  It can't happen.  Currently, the bitcoin network is more than a 1000 times faster than the fastest unclassified supercomputer on Earth.  It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.  Even the NSA couldn't pull this one off, and they tried it more than a year ago.  You can't bankrupt the independent miners, there is simply no way to undercut the guy who's mining rig heats his flat.


You refuted nothing of the sort.  What you are describing is an intentional network split, although asyncronous.  The small side of the split always loses, there is no exceptions.  No cartel would be willing to commit the resources to acheive this end, because it would be a money pit until they hit 51% of the hashing.  Over 58,000 Petaflops.  The fastest supercomputer on Earth is 33 Petaflops.  And that is now, what will it be in 20 years?


Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.


That happens now.  No mystery there either.

Historicly, cartels rise as a form of regulatory capture.  Said another way, cartels form functional monopolies in a regulated industry, within a country, because governments exist.  What influence any particular govenrment, or all of them together (unlikley), can have upon the bitcoin economy remains to be seen.  However, it cannot rationally be assumed that cartels will rise in an unregulated environment.  They never have before today.

And before you start spouting about Railroad Robber Barons or Standard Oil; the railroads were a government project from the start and Standard Oil was no more of a monopoly than Microsoft was during the 1990's.  They were simply market dominators who had not yet been out innovated by new competitors.


I could prove it, with great effort, but (once again) I don't need to do any such thing.  It's your theory.  In the long run, you could make a fortune betting your side of the theory if you are correct.  I'll stick with my side, and we will see who goes broke first.


You just talked yourself into a circle.  I can easily prove that a mining cartel cannot be the most efficient.  I can prove it with existing examples, and have literally done this more than once over the past three years with nearly identical claims of cartel/monopoly based theories.  The key you're missing is that the protocol doesn't require that miners be paid within the system itself, or even at all.  Fee less transactions exist, and they can be paid for out-of-network.  Beyond that, off-network transactions are not only possible, they already occur quite regularly; even if they remain a small minority of the total economy.  On-network transactions are the high-mark of trustless security, but Satoshi undrstood that not everyone would really require such a high degree of security, nor trustless interactions.  In fact, he was counting on parrallel networks (such as Stratum) to develop without his own help that would handle less perfect transactions among parties that trust one another well enough, and thus remove a significant amount of network traffic from the main bitcoin network.  By the time your attack could even be tested, the majority of transactions wouldn't even be using the bitcoin network at all, and the main network would be more akin to the ATM network banks use today.  More of a backbone of the most risky or sensitive international transactions than what Joe Six Pack uses to order an ebook for his kindle.


Motivation alone is not enough.  There also must be a credible regulatory path.  I don't see one.  If there is one, than government regulation is a greater risk than the rise of a single mining cartel.


Dude, that's not even possible.  Reading all of that, I mean.


I might be clear to you, but you don't understand the system yet.  Amazon can't withhold funding from the network.  They can only delay processing of their own transactions.  Time is definately money, and there is a hidden cost to Amazon to do this under any conditions.  They also open themselves up to a double spend attack if they do this in any significant capacity, and someone is going to use that against them eventually.  If you think that Amazon holding their own transactions so that other miners can't get their transaction fees is a problem, why not just issue fee-less transactions?  The fees would just be going back to Amazon otherwise.  You have not discovered something new here, AnonyMint.  Just because Amazon might refuse to pay other miners a mining fee, doesn't mean that they are denying funding for the network.  Other miners are just as able to ignore Amazon's transactions, and just as able to refuse to forward transactions to them.  In fact, I'm fairly sure that games like this already occur.  I'd be surprised to discover that no miners refuse to process free transactions, except for those who are on some kind of whitelist.  Miner favoritism is expected, but in the aggregate, has zero effect upon the network as a whole.  On the aggregate, the network is, and will remain, impartial towards fee paying transactions.  And fee-less transactions are expected to be ignored by a large portion of the professional mining class.  Why would it be any other way?  


I've already explained two conditions wherein miners can literally "afford" to lose money on mining.  You didn't even bother to respond to them.

Two or more competing cartels is an outcome that functionally prohibits the complete takeover of the currency, which was the endgame of your attack theory.  I can't think of one reason that a consumer should care about any cartels, if the currency continues to function as far as he is concerned.  Cartels aren't the risk, a monopoly is the risk, and that is impossible.


What do you think they will do if it's no longer efficient?  Do you think they will just sit back and take it?  Or do you think that they will contrive to come up with other solutions, with or without Amazon's explict permission?


So?

Ha!  I knew we'd get here eventually.  

Again, Standard Oil was not a monopoly, or even a cartel.  Standard Oil was a temporary market dominator, and could only remain such as long as it was the most efficient provider of services.  As for the dirty tricks, Microsoft, Coca-Cola and Ford have all been caught playing dirty trying to maintain a dominate market position that would eventually fall anyway.  No one still considers Coca-Cola to be a monopoly on soft drinks, if they ever did.  I don't know anyone who still buys the meme that Microsoft is, or ever really was, a monopoly for operating system software.

Generally speaking, POS implies that the higher the number of coins that any particular miner has in savings, and is willing to 'stake' (i.e. freeze for a term, in order to gain a mining advantage without interest paid) than that miner can gain a bias advantage towards either mining in general, or towards special numbered blocks.  So Amazon, under your theory, would be able to magnify their advantage somewhat by staking their bitcoin earnings, and make their odds of finding the next block even higher.  POS throws the 51% mining rule off a bit, making it more into a 66%/33% rule (lessor versus major stakers).  However, POS in practice means different things to different people, so it also matters in detail how it might be implimented.  POS has been attempted by several alt-coins in different fashions, but none have amounted to much as of yet.  So far, the market doesn't put as much faith into POS as do the founders of these alt-coins.  I contributed to the destruction of one such alt-coin, because the particular version of POS permitted an attack wherein a trusted node turns malicious. (pure POW such as Bitcoin uses doesn't have trusted nodes, all nodes are untrustworthy)  I just framed how such an attack could occur, and someone else actually performed said attack about a month later.  Now I can't even remember what it was called.

Sure I can.  I'm doing it right now.  It's 33 degrees outside, my electric rate is 7.5 cents per KWH, and my basement needs supplemental heat anyway.  I also mine solo, and haven't caught a block in over a year, but so what?  If I ever catch another, that's just free money.  The need for heat pays for my electric consumption, and my mining rig is already a sunk cost.  If you think I'm unique, you're deluding yourself.


Go ahead and raise anything you like with moderators.  It's yourself who seems immune to reason.

BTW, coinbase rewards don't diminsh to near zero until around 2130.  So I doubt that either of us will live to see resolution here.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.  As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.  Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

Bitcoin might adopt proof of stake in the future, as the protocol does permit it to be spliced into the blockchain with some effort.  However, proof of stake is a much more complicated security model that has yet to prove itself.  Proof of work certainly works, even if it is computationally expensive.  However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly. 

Oh, I know when I've been beaten.  I also know when that is not the case.  I've been bested by several of the older forum members, just search the archives and you will find many examples of people who know how to structure a premise and present an argument.  You might learn something while your there that will serve you well when you're old enough for college.

Dude, you're publicly failing in two threads at the same time.

You seem to enjoy using big words, but it's still not different however you say it.  An Amazon.com vendor may or may not be compelled to use the Amazon.com POS; but that is no garantee that the transaction can be kept within house, but even if it can....


Saying that Amazon can have it's own mining servers isn't remotely sthe same as saying that they can lockout the vendors from the bitcoin network.  You seem to lack a basic understanding of how the p2p netowrk actually functions.


This is a dodge.  Any native English speaker would know that my posing of the question above was retorical.  Either show how Amazon could prevent progagation of transactions across the main bitcoin network, or admit that you don't know how this part of your thory would actually occur.


All I see is that you had no point that was visable.  Again, it's your theory.  It's not mine to prove your theory wrong, it's yours' to prove my objections wrong.  You havent' even tried to do that.  You're the one that stated it as an economic attack.  I simply preesented four simple counter forces to your theory.  If you cannot address those counter points, then you have no theory.  Your back in class, son.


But how does the idea tha tAmazon can mine it's own transactions lead to this conclusion?  It's a stretch by any metric.  I've seen no argument that they can, economic or otherwise; and I personally know of several effects in the protocol that would undermine any such efforts, economic incetives notwithstanding.  I haven't even touched on those points yet.


Thus?  You've just made a conclusio without an argumetn.  You are presuming your conclusion, really.


Nope.  I'm not the one who missed something there.  BTW, I do agree that a major player can delay[/b] the procesing of bitcoin transactions under certain conditions.  The obvious problem with this is that delays are part of the protocol, and thus delays are not, into themselves, an issue.  Your premise depends upon Amazon preventing competitors from mining on fee paying transactions outside of their own network scope.  This is not possible.  If you disagree, show me how] such a mechaism would work.  With details, not vague statements.


You have done no such thing.  


Baseless?

Look whose acting all professional now.  You get one forum member who's been around long enough to have seen this crap before, and you just fall to bits.  This is why the developers don't pay you any mind, they know you're full of shit.

If they are provablely false, then prove it.  It's your theory.

You are a sad, sad man.