Sweft (OP)
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March 09, 2013, 01:07:13 AM |
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When more bitcoins are lost than created, reaching the 'Sweft point', bitcoin will become deflationary. Somewhere around the 'Sweft point' bitcoins value will approach 0 and become worthless. This can all be prevented with an inflationary cryptocurrency. I'm not a programmer so i don't really know how to develope an inflationary alt coin, but if i knew, surely i would.
This is just absurd. And this thread is non-sense. Transaction fees will be enough to guarantee mining activity. If you don't agree or if you believe differently, then don't use bitcoin, and stop writing such useless/irrational things. The guarantee of mining activity is irrelevant. If you read my posts you would understand that mining must continuously increase to secure the network. If hash doesn't keep up with Moore's Law then the network will be prone to attack.
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Sweft (OP)
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March 09, 2013, 01:23:02 AM |
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That's why the price goes up, in accordance to network hash, which secures the network. I don't believe you. Miners don't think, "Hey let's secure this worthless coin so the value goes up and people will buy it from us." Miners think, "Hey, people are buying this valuable coin, lets get paid for securing the network." If all it took to make a coin valuable was hashing power, all of the alt coins would be wildly successful as well. Coins which can be merged mined would be as valuable as Bitcoin. Yet they aren't. Why not? Because difficulty doesn't drive price. This can all be prevented with an inflationary cryptocurrency. I'm not a programmer so i don't really know how to develope an inflationary alt coin, but if i knew, surely i would.
Inflationary coins exist already. Enjoy. BTC is worth ZERO without a secure network. Does hash secure the network? Yes. Does a more secure network increase demand? Yes. Does increase demand drive prices up? Yes. There are various reasons why other alt currencies are valueless. They can be undervalued. The distributions of coins might make it less attractive. They may not have the developer ability bitcoin has. First and foremost, though, before any other factors are considered in price, the strength (hash) of the network must be considered.
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Sweft (OP)
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March 09, 2013, 01:33:28 AM |
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I will introduce a law which i believe is the fundamental law of securing the network of a cryptocurrency. This law will be known as Sweft's Law and is described below.
Sweft's Law: The network hashrate of a cryptocurrency must rise at a rate at least equal to that of the rate of Moore's Law to ensure minimum network security.
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Killdozer
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March 09, 2013, 01:40:39 AM Last edit: March 09, 2013, 01:55:32 AM by Killdozer |
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This is just absurd. And this thread is non-sense. Transaction fees will be enough to guarantee mining activity. If you don't agree or if you believe differently, then don't use bitcoin, and stop writing such useless/irrational things. Absurd.... Or... Genius? ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) Sweft's Law: The network hashrate of a cryptocurrency must rise at a rate at least equal to that of the rate of Moore's Law to ensure minimum network security. You have written this already 2 years ago, and in all that time you still don't see how this is utter rubbish? This still makes perfect sense to you, doesn't it? Amazing...
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Sweft (OP)
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March 09, 2013, 02:27:30 AM |
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This is just absurd. And this thread is non-sense. Transaction fees will be enough to guarantee mining activity. If you don't agree or if you believe differently, then don't use bitcoin, and stop writing such useless/irrational things. Absurd.... Or... Genius? ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) Sweft's Law: The network hashrate of a cryptocurrency must rise at a rate at least equal to that of the rate of Moore's Law to ensure minimum network security. You have written this already 2 years ago, and in all that time you still don't see how this is utter rubbish? This still makes perfect sense to you, doesn't it? Amazing... No, it makes perfect sense, especially considering Sweft's Law and diminishing mining profit.
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Sweft (OP)
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March 09, 2013, 01:11:33 PM |
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I will introduce a law which i believe is the fundamental law of securing the network of a cryptocurrency. This law will be known as Sweft's Law and is described below.
Sweft's Law: The network hashrate of a cryptocurrency must rise at a rate at least equal to that of the rate of Moore's Law to ensure minimum network security.
So are you still saying that Bitcoin is doomed to failure or are you just declaring this law here? I can understand what you are saying regarding the increasing need for network security with the advance of technology, but my first thought is I'm wondering why it would mean a failure for Bitcoin? Surely if Bitcoin becomes so widely adopted and important to the world economy we'd find a solution. Groups of wealthy individuals/corporations would most definitely have an interest in paying miners for security. Yes, I believe that deflation is a flaw so fundamentally dangerous that BTC will fail once it becomes deflationary. I believe most of the protocol is sound, other than the 21,000,000 coins maximum. If there was an alt coin designed with 3% inflation, i believe that such a coin could exist for a longer period and avoid the deflationary doom that will make mining unprofitable. BTW every year 1.5% of the total gold ever mined is mined, or 2500 tonnes. That's hardly insignificant. In the past total mined gold a year was in the range or 2-3% of total gold ever mined. A 3% inflationary coin would satisfy miners and secure the network.
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Sweft (OP)
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March 09, 2013, 01:26:02 PM |
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There's 10,800,000 coins right now. 1,280,000 will be mined this year.
The inflation rate this year is 12%.
In December of 2016 block reward will be halved.
There will be 15,350,000 coins. 640,000 coins will be mined a year.
The inflation rate will be 4%.
In December of 2020 block reward will be halved.
There will be 17,900,000 coins. 320,000 coins will be mined each year.
The inflation rate will be 1.9%. This is the point that my protocol would redesign block reward to generate a 3% inflation.
I envision a problem around 2020 or even before where miners no longer profit at rate they did before, the hashrate remains stagnant or increases but does not comply with Sweft's Law, and thus the price of BTC is negatively impacted because the network is less secure.
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the joint
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March 09, 2013, 02:23:15 PM |
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Does your girlfriend have a Sweft point?
Edit: Thanks for the comedy gold on a sleepless night.
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Sweft (OP)
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March 09, 2013, 02:59:34 PM Last edit: March 09, 2013, 03:22:29 PM by Sweft |
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I will describe another flaw that can be exploited in a deflationary cryptocurrency. It will be known as a Sweft attack and is described below.
Sweft attack: A prolonged deflationary attack on a cryptocurrency network describing a situation in which a rogue miner processes transactions solely for the purpose of removing the fee of said transaction from circulation. A necessary precondition for said attack is that the average transaction fee must exceeds the average rate of cryptocurrency inflation.
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Sweft (OP)
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March 09, 2013, 03:19:33 PM |
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I will posit this explanation of a Sweft attack.
Once there's no longer inflation, the network is prone to deflation. Theoretically, bitcoins can deflate to 0, which would mean that every bitcoin mined would be lost. If a rogue miner solely mines transactions to remove the reward, given the miner has enough hash, he would eventually remove all bitcoins in circulation.
This is not possible with inflation, unless said miner has 100% of network hash.
Inflation in real world and bitcoin are not akin. Gold miners could stop mining and the gold they created still exists. If bitcoin miners stopped mining all bitcoins ever mined would become valueless.
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akspecs
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March 09, 2013, 04:16:56 PM |
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But it's very impractical to say "if all bitcoin miners stop mining" - is it not?
On a different note: I think people are over estimating their confidence by forgetting that this is still technically an experiment. No one has ever seen a deflationary currency like bitcoin - and therefore I don't think anyone can easily write off any theory provided with reason.
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drawingthesun
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March 09, 2013, 04:40:05 PM |
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I will posit this explanation of a Sweft attack.
Once there's no longer inflation, the network is prone to deflation. Theoretically, bitcoins can deflate to 0, which would mean that every bitcoin mined would be lost. If a rogue miner solely mines transactions to remove the reward, given the miner has enough hash, he would eventually remove all bitcoins in circulation.
This is not possible with inflation, unless said miner has 100% of network hash.
Inflation in real world and bitcoin are not akin. Gold miners could stop mining and the gold they created still exists. If bitcoin miners stopped mining all bitcoins ever mined would become valueless.
I'm really really tired at the moment, but this seems genius. Because i'm invested in Bitcoin I have tried to consider all possible attack vectors to the fundamentals. The things that I think about include the blockchain issues and a way to allow people with limited bandwidth participate as a fraction of a full node (swarm nodes I call them) instead of dumb lite clients only. But, the sweft attack is amazing. Like I said i'm tired and may have missed a flaw in your argument, but right now it seems sound. A person wants to destroy Bitcoin, they mine away and send all the transaction fee reward into oblivion. On a long enough time line this will destroy Bitcoin, with a absolute cap at 21 million this is a viable attack.
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akspecs
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March 09, 2013, 04:47:27 PM |
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Now everybody is plotting to be the rouge miner to bring down BTC!
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drawingthesun
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March 09, 2013, 04:52:05 PM |
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Now everybody is plotting to be the rouge miner to bring down BTC!
Haha, well it would probably take a hundred years to actually have an effect. I might try working it out in a bit. Shame though, as it stands Bitcoin might not last for a thousand years. ![Sad](https://bitcointalk.org/Smileys/default/sad.gif) (Yes I was naive and thought Bitcoin could be an immortal currency for all time)
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drawingthesun
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March 09, 2013, 05:02:29 PM |
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If each block contains 1 Bitcoin worth of transaction fees, lets assume our rogue miner aims for 10% of the hashing power.
1 Bitcoin per block, 144 blocks per day. So after a day the rouge miner could have destroyed about 15 Bitcoins, and after a year that would be almost 5,500 Bitcoins, so it would take 1000 years to reduce the amount of Bitcoins in existence to 15,500,000 (minus 5,500,000)
These calculations assume each block will only have 1 Bitcoin worth of transactions, of course as we know this will increase a lot over time and shorten the time to remove almost a quarter of all Bitcoins.
I can't see this being a problem in the next 50 years though. But it is a real issue and marks a definite end to the Bitcoin network in the far future.
This opens up a place in the market for a new alt-coin, probably called ImmortalCoin. (that has at least 1% inflation) :p
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drawingthesun
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March 09, 2013, 05:07:34 PM |
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Also, the entire Bitcoin economy can run on a single satoshi, with a hard fork.
If they allow a satoshi to be divided or even some type of infinite division, then yes the sweft attack will never be able to remove enough coins. Finally, everyone reading this thread will be dead before all the Bitcoins are mined.
Don't be so sure about that! Its likely people reading this thread, if rich enough and at the right time, may gain life extension. (Just in time perhaps) **Bitcoin billionaire first to get brain upload into new body** <--- news headline in 20 years. :p
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drawingthesun
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March 09, 2013, 05:16:41 PM |
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MoonShadow
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March 09, 2013, 10:17:53 PM |
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Also, the entire Bitcoin economy can run on a single satoshi, with a hard fork.
If they allow a satoshi to be divided or even some type of infinite division, then yes the sweft attack will never be able to remove enough coins. A satoshi can still be divided without significant changes to the running code, by the use of a digitial token in the big end of the 64 bit integer. Even with all 21million BTC in a single transaction output, not all of the bits would be in use. There would be several on the large end that could be used as a digital marker to identify the output as a 'sub-satoshi' value. Alternately, a new kind of bitcoin address could be developed to specificly identify very small values with sub-satoshi amounts included. Yes, this too has long been considered. This is a non-issue, and even if it was, it's not pressing. If any of you newbies can come up with a "flaw" that has not already been discussed to death in this forum before you have 300 posts, I'll give you a bit-nickel myself.
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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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marcus_of_augustus
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Eadem mutata resurgo
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March 09, 2013, 10:33:10 PM |
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I find it interesting that this topic seem to get dragged out on weekends.
It is like the old football that a kid gets out to play with on a Saturday ... kicks it around, pretends to be an all star, etc ... then Monday rolls around.
There is no deflationary problem, but it is fun to wonder what it would be like if there was one?
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Sweft (OP)
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March 10, 2013, 06:10:59 AM |
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Also, the entire Bitcoin economy can run on a single satoshi, with a hard fork.
If they allow a satoshi to be divided or even some type of infinite division, then yes the sweft attack will never be able to remove enough coins. A satoshi can still be divided without significant changes to the running code, by the use of a digitial token in the big end of the 64 bit integer. Even with all 21million BTC in a single transaction output, not all of the bits would be in use. There would be several on the large end that could be used as a digital marker to identify the output as a 'sub-satoshi' value. Alternately, a new kind of bitcoin address could be developed to specificly identify very small values with sub-satoshi amounts included. Yes, this too has long been considered. This is a non-issue, and even if it was, it's not pressing. If any of you newbies can come up with a "flaw" that has not already been discussed to death in this forum before you have 300 posts, I'll give you a bit-nickel myself. You can divide bitcoins any way you want it doesn't change the fact that bitcoin is a deflationary currency. If I have an ounce of gold, and I cut it up into smaller pieces, I'm still left with an ounce of good. I really do not understand how diving satoshi has any meaning to the discussion and flaws that I found in deflationary cryptocurrencies.
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