DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)

[TPTB_need_war]

Inconsistency could be solved by progressive grouping and neutral "centralizing" algorithms

Incorrect.

[1714706204]

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[HCLivess]

Well, you covered yourself in denial of service attack rhetoric, that's quite difficult to combat. But if your code is better than that of your enemies, you get ahead in the rat race. Internet is just an open organism. I wish you spent as much time in coding as you do here in forums.

[HCLivess]

I hope you join in hacking once I create an open beta release for my project

[sockpuppet1]

Bitcoin is largest of the scams. It is pulling $1 million a day out of pockets and handing it to some corruption in China.

And you should really put more attention to what TPTB is saying.

Neither Smooth or I agree with AnonymintTPTB_need_war (aka sockpuppet1) about BTC mining having a predictable endgame.  It's entirely plausible that commoditization of sha256d could make most big mining farms extinct, with the only miners remaining being people that use the waste heat to power some other type of utility:  water heaters, central heating, industrial use, etc.

I destroyed this logic fail from smooth in the past. Did you miss it?

Electricity is nearly an order-of-magnitude less efficient way to create heat. No one is going to compete with nearly free electricity in China (due to corruption) by paying more to heat their homes.

Even if Chinese mining farms were not getting political favors in exchange for promising to follow the government's edicts on regulation of mining (which of course they will do as any rational person will do because if they don't someone else will avail of the offer from the government and of course the government of China wants to control Bitcoin, duh!), it would still be the case that Chinese mining farms will always have greater economies-of-scale which will make it impossible to compete with them by getting part of the electricity for heating your home for free, because again you could heat your home in much more efficient ways especially factoring in the capital cost of the latest generation competitive ASIC mining equipment, as compared to for example adding better insulation to your walls or double paned windows, etc..

You might risk the utility company diverting hash voting power for nefarious means in such a scenario, but what are the odds the utility companies of the US, North Korea, Iraq, Iceland, and whoever else all collude?

100%. We are headed into a top-down managed world. Take off your rosy spectacles and study the history of mankind and what happens at junctures like the one we are in now.

You're the only one I've read use the term commoditization for Bitcoin mining's future--what do you mean? And can you clarify how it fixes the centralization problem?

The usual term is commodification, meaning affordable and
efficient consumer-level ASICs

14nm fabs are only owned by Intel, Samsung, and TMSC. Intel will probably be the first to 10nm, perhaps up to a year ahead of the others. It takes years to ramp up production to meaningful volumes. Commodization doesn't mean that consumers can get the most efficient hardware at reasonable prices. The cutting edge will always belong to the mining farm which places large guaranteed orders years in advance.

[sockpuppet1]

We have a nice thread that proposes AnonyMint's view that Bitcoin IS in fact destroyed at the very moment, by Chinese mining operations.

The decentralization is destroyed because Satoshi designed it to do that failure, but the functionality/operation of the coin is not (yet) destroyed.

Please understand carefully the distinction.

Yes Bitcoin IS basically ALIVE if you are referring to the functioning of the coin. But the control of the block chain is becoming ever more centralized and controlled by a small group of mining farm owners. And with this control, they have already started to do their 51% attacks on Bitcoin in order to control the block size and drive transaction fees sky high.

But don't worry that they are raping us and will be raping us more in the future. We love when the banks rape us by getting QE from Bernanke. We love the miners to do the same thing to Bitcoin. We love to bend over and take it in our ass. That is why we are Bit(ret)ards.

[sockpuppet1]

Like clockwork, the truth is normally found at neither extreme but somewhere in the middle. I agree about doing nothing is not a solution.

Having said that, that the war is already started, doing nothing is not a solution.  Even if you actually believe this Armstrong guy is right, not everyone is a day trader.  It doesn't matter about chasing money left on the table.  All that matters is making sure you have something that has some type of fundamentals which isn't going to zero the day the great reset happens.  You know that day is coming soon.  You also know that Bitcoin will likely function perfectly fine when the day comes. 

1. I agree doing nothing is not a solution. I am trying to do something, but my design requires that there be very significant transactions since the unprofitable proof-of-work share (not a block solution!) is sent with each transaction. So if I launch the thing with nearly no adoption and just HODLers, then it can be easily attacked by botnets. Thus before I can make the CC, I need to first create something that could drive a lot of demand for the use of the CC. That is why I conceived JAMBOX. But then I realized that the concept of JAMBOX (which basically means replacing the web browser with a mobile app browser) is actually a better career choice for me to work on than a CC. It also enables me to work on creating a new programming language, which will bring me great respect+admiration amongst my peers and will also secure my finances at the tail end of my career (which I desperately need is some stability in my life at 51 and trying to recover from a 10 year illness which REKTed my life/career, 4 years acute and as well I need to pay back my meager angel investors with some gains for them if I don't create a CC or let them take investment share in JAMBOX corporation). Btw, @keean who I met recently at the Rust forum (and is now in my contacts list at my LinkedIn, so you can view his CV) is discussing with me in private collaborating on a new programming language. He has published research papers with the famous FP guru Oleg. He already has a prototype of a language he had designed and maybe we could reuse some of that for the 10 programming language features I have concisely enumerated as crucial for the next popular programming language that will eat all the others to a great extent in terms of popularity. That is an amazing accomplishment for me that a person as accomplished and well connected (in the UK!) has agreed with me that the features I listed are very much needed and not offered by any other programming language on earth. He also approves of my recent invention to solve the major computer science problem known as the Expression Problem. We agreed the best strategy is open source it and hope others will join to help us, which we think is likely given his pedigree and also the features we are targeting. So I am on a major positive upswing in my career (and also apparently/hopefully health), but this is still far away from implementing JAMBOX and then after that a CC.

2. The reason I don't want to accelerate by jumping straight to the implementation of a CC, is because:

• I'm hedging my bets in terms of where I place my effort and thus my risks of failure.
• We have time, the collapse in earnest is not until 2018. Bitcoin will continue to function and not likely be regulated with capital controls before that, although 2018 will come very fast if measured in programmer man-hours needed to complete such ambitious projects.
• I don't want to put myself in a desperate position where I need to P&D in order to be financially stable.
• The LOC required will be immense over time, and I don't want to code it all the crappy languages we have now. It is like I am restarting or resetting my career, so it is time to do it right and with the right programming language.
• If I do a CC, I want it to be something truly different and adopted by millions and hopefully a billion users. My ambitions are very high. To match those ambitions, I need to do this development in a very high quality way and draw in these extremely smart people who are outside of CC.
• Smooth can't help me as much as someone who has a high, visible pedigree because he is anonymous (note I have my eye on Paul Phillips whom I have exchange some cordial messages on mailing lists in the past and because he wants to create the "perfect" programming language and he has the kind of extrovert personality that I love, as well as probably being raw IQ smarter than myself!). Also because he will consume most of the funding because his rate is very high. it doesn't help as much to raise more money in a crowdfund if the co-developer is anonymous. And fluffypony et al are already consumed/committed to their projects. There are so many talented developers out there, but most of them see no point in working in CC; whereas, with my programming language and app browser initiatives I may be able to pull in top developers from outside of CC. The @keean result is my first confirmation of my strategy. He also a very amicable person, as well as being extremely knowledgeable about programming, design patterns, and PL design.

3. About monsterer's criticisms of my unprofitable proof-of-work design, the salient refutations are there in the last few pages of the decentralization thread where I specifically rebutted him on his point about there being no proper incentives. I am too rushed (overloaded with tasks) to go dig up the link, you all can find it if you are really interested. Essentially monsterer's argument was that the profit from mining has to be greater than the potential profit from double-spending with a 51% attack. My refutation was that a) there is no level of maximum profit from double-spending attack, because there is no limit to the value that can be transacted in a block; and b) that motivation to supply the honest proof-of-work isn't driven by profit in my design but rather because it is mandatory. And btw, did monsterer disappear? The possible weakness in my design is that the spender will merely offload the computation of the proof-of-work to a server and thus the mining hashrate becomes concentrated. But even so there is a major distinction in the control and economics of that, which I will detail in a white paper. The problem with IOTA is not that the PoW is unprofitable, but rather that the structure of a DAG does not enable a single longest chain of truth, thus afaics the only way to force convergence to consensus is to use centralized servers and checkpoints. I will explain better the mathematical criticism of Iota in the future. I don't have time for the meticulous diversions right now.

[sockpuppet1]

Hey guys I have a question that just popped up in my mind. What if the price of Bitcoin doesn't increase much after the halving and with the cut in half block rewards and increasing difficulty, do you think the Chinese miners will go bankrupt or they will manage to break even and get a slight profit? Can the Chinese government offer the mining farms preferential electricity pricing lower than the average for the country?

The first to go bankrupt are the marginal miners, not the ones with the lowest electricity costs and the highest efficiencies due to very large economies-of-scale in mining farms.

The halving will INCREASE the centralization of Bitcoin's hashrate (to China's mining farms), not decrease it.

Satoshi designed the distribution curve this way. Who is your hero, who is your daddy who sold you to the banksters?

He doesn't understand the mathematics of emergence from chaos.

Bitcoin will eventually fix itself. I have as much faith in Bitcoin as I do in mathematics.

Too bad you didn't learn that the universe is composed of partial orders and not a total order. Then you'd understand why every consensus system will become centralized and thus a defacto a fiat.

[ABISprotocol]

Let's have a frank discussion about the technical realities of crypto-currency.

Apologies in advance to all those who have worked so hard on trying to advance crypto currency. I am not doing this to spite you. I don't want to waste more time. If we can convince ourselves we have a solution worth working on, then let's do it. Otherwise let's be honest with ourselves.


Edit: for those who want to jump straight to understanding how Iota's DAG works, click here and also here.

Upthread in my discussion with monsterer, I mentioned that I thought I could solve the problems Satoshi's Proof-of-Work by crediting all block solutions instead of the just the first one that arrives. When I went quiet on Jan 3, it was because I realized my design was faulty because there would still be an ambiguity around when the block solutions to be credited were propagated. I was trying to rush out a first iteration when while programming, I realized the detail that wasn't clear to me before.

I went off on several days of just thinking all day. I contemplated all the possible designs (including Iota's DAG, Lightning Networks, DPOS, Proof-of-Stake, Masternodes, Raiblocks/Blocklattice, etc), and I can't think of any design that uses a block chain or a DAG (or any other form of determining the longest chain of truth) which doesn't either centralize (factoring in society's ability to regulate the consistent partition) or diverge into inconsistent truths. Due to the CAP theorem it is fundamentally impossible for there to exist any block chain or consistent DAG design that won't centralize (even without regulation once you require scaling). Worse yet, it is impossible to attain any sort of end-to-end principled, decentralized scaling of transaction processing, because consistency is lost without centralization (even Proof-of-Work centralizes economically due to the Power Law distribution of capital).

The CAP theorem is fundamental. There will be no way to solve it. You all can spend the next 1000 years fooling yourself will all sorts of designs, but they will also end up either inconsistent or centralized or unable to scale. PERIOD. PERIOD.

I realized that Bitcoin and everything else so far is destined for failure. We are only mining each other here. We are not producing any fundamental breakthrough on the problem of decentralized electronic money. I do not like to work on things that I feel are misdirected and destined for failure in the end. I don't want to get rich by fooling other people (or fooling myself). All of you including the core Bitcoin developers are fooling themselves. I've been through all the designs. It is fundamental. There won't be any solution in any of the directions being pursued by any of the current and upcoming crypto projects. It is all delusional bullshit.

I felt rather hopeless about this, and so spent a few days thinking about other potential directions for my life, work, etc..

After all that, I decided the only way to get a breakthrough on electronic money is to admit the CAP theorem and decide which of the three, Consistency, Access, Partitioning to forsake in a design. Bitcoin can't tolerate any Partitioning, thus Access is and will be centrally controlled. Iota allows Partitioning and thus forsakes Consistency (watch it blow up).

Specifically Iota forsakes Consistency in a very chaotic way, where there can be multiple Partitions of truths and so no one will know which truth is valid. Or they will have to centralize to force a consistent truth.

[...]

Edit: the idea I proposed as a solution is also flawed.

I will be starting a new unmoderated thread to discuss in detail all the flaws in crypto currency.

So this can be explained well so that everyone can understand what they are investing in.

I'm confused.

One second you're stating you have the holy grails, the next you are starting a thread to point out there aren't any? :|

As you wrote, temporary chargebacks (inconsistent channels a.k.a. partitions) can be allowed and resolved with a proof-of-work scheme. Any other schemes you are contemplating won't work and I will tear them apart once you detail them.

They can not be resolved in a DAG scheme (e.g. Iota) without some centralized control.

Proof-of-work is centralized at 51% control. This encourages the nation-states to organize into cooperation on regulation of the internet in order to regain control over money. Governments and society will not give up this control and will instead decide to cooperate so the system described below can control to move us towards the 666 system which is rapidly taking form. Bitcoin is designed to drive us towards a world governance.

Centralized control is loss of permissionless principle. It means the government takes control (because the Power law distribution of capital always drives a collusion amongst government and big capital in a winner take all paradigm).

There is no POW required to secure a CL (channeled ledger), nor is it a block chain, or a DAG. Neither are there any charge backs in a CL design because the state of truth never gets to a point where you have to revert to them to resolve inconsistencies...which also means the risk of any centralization required to resolve said issues is next to nil, the network can always resolve itself.  

If block chains or DAGs or Ripple style ledgers could do what a CL allows, well, I wouldn't of wasted 3 years reinventing the wheel and tearing it apart myself and starting over.

The truth of each channel still has to be a consensus. It doesn't change the fundamental issues of how to prove consensus about double-spends within the partition. Even there are chosen nodes who are signatories for determining the truth of the channel, this then not permissionless because the government can attack those specific nodes.

Detail your design and I will rip it to shreds.

Not intending to be unfriendly, but I am tired of bullshit (especially bullshitting myself because I don't want to waste any programming effort). I have done all these designs in my head.

If there is a design that can improve upon Bitcoin, then I want to work on programming it. If not, then I want to not waste effort. It would be better for me to make some fast transaction addon for Bitcoin than to waste effort on designs that won't improve upon what is.

You state that the CAP theorem is fundamental to all of what you are describing.  The CAP theorem is essentially this:

a statement that it is impossible for a distributed computer system to simultaneously provide all three of the following guarantees:

    Consistency (all nodes see the same data at the same time)
    Availability (a guarantee that every request receives a response about whether it succeeded or failed)
    Partition tolerance (the system continues to operate despite arbitrary partitioning due to network failures)

Let's start with an assumption that I agree with the CAP theorem, and further assume that this notion is actually correct.

In that case, let's say all nodes don't see the same data at the same time.  Seems reasonable, after all, how could they?
Availability - for the sake of argument, let's say every request receives a response about whether it succeeded or failed, or if it doesn't the first time, it is programmed to repeat the same request until it receives a reply, which it will receive within a reasonable period of time.
Partition tolerance - Let's say for the sake of argument the system continues to operate despite arbitrary partitioning. One example perhaps being a network failure leading to event like the 2013 Bitcoin fork - analyzed here by Arvind Narayanan, who interestingly poses arguments in favor of a certain degree of centralization within bitcoin development: https://freedom-to-tinker.com/blog/randomwalker/analyzing-the-2013-bitcoin-fork-centralized-decision-making-saved-the-day/

So under these conditions as described above, which I suggest are roughly representative of the actual condition of bitcoin (as an example) at most times, then it would seem to me that despite the presence of the CAP theorem, the system continues.  Why?  Because the system is dynamic, not static.  Possibly for systems that are very fragile or inflexible then I think that changes in these C-A-P conditions could cause them problems, of varying degrees of seriousness.  But even for highly centralized systems (e.g. corporation-states), which are highly resistant to change, they are curiously persistent.  This may be because of people's desire to perpetuate an institutional memory and cultural history of organizational (and national or tribal) ideology.  Belonging to a large group - identity which conveys a larger sense of belonging - has been, for good or for ill, branded into the human psyche.  War, government failures, economic disasters, mass murder - nothing seems to stop the bulk of people in society from falling into the trap of the state, again and again.  But I digress.  What about those decentralized systems?  Does the issue of the CAP theorem necessarily mean that they can't work?

Not necessarily.  If a system is dynamic enough, and is managed well by its community (however that needs to happen with a distributed system in order for some degree of balance to be attained between a "centralized" development structure and a "decentralized" system, as no system is ever 100% "decentralized," then a well-cared for decentralized, distributed system can be continuously propagated (or re-propagated, much like a plant's seeds are used to regrow the fields).  

Interesting discussion though!

Coming back for a bit (just a bit!) to add onto this discussion, I wanted to throw some flames onto the fire, for example, things like the bankruptcy or other forms of failure of certain firms (like for example KnC Miner, a recent bankruptcy example) which results in more centralization (and thus more China concerns) - stuff which I brought up before in 2015 on a dev list here:

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-August/009861.html

As pointed out in my earlier comment in this thread,

"even for highly centralized systems (e.g. corporation-states), which are highly resistant to change, they are curiously persistent.  This may be because of people's desire to perpetuate an institutional memory and cultural history of organizational (and national or tribal) ideology.  Belonging to a large group - identity which conveys a larger sense of belonging - has been, for good or for ill, branded into the human psyche.  War, government failures, economic disasters, mass murder - nothing seems to stop the bulk of people in society from falling into the trap of the state, again and again."

Anyway, as I suggested, regarding Partition tolerance - " Let's say for the sake of argument the system continues to operate despite arbitrary partitioning. One example perhaps being a network failure leading to event like the 2013 Bitcoin fork - analyzed here by Arvind Narayanan, who interestingly poses arguments in favor of a certain degree of centralization within bitcoin development: https://freedom-to-tinker.com/blog/randomwalker/analyzing-the-2013-bitcoin-fork-centralized-decision-making-saved-the-day/ "

It may be that the system thrives despite this condition not because of the presence of bitcoin but rather because of the emergence of new systems (some of which may be found amongst the at least 700+ decentralized and / or distributed virtual currencies commonly known or in use today) which are actually more distributed and / or decentralized than bitcoin is itself or because of exchange behaviors in the global economy which result in resilience of system(s) even where the distributed system does not meet C-A-P (here I will not enter into an argument over whether or not it is completely impossible for a distributed system to meet the C-A-P condition(s) / guarantees because it is possible that one might, so I won't completely rule it out even if it seems unlikely).  But in contemplating these new systems (including ones that don't provide all three of the guarantees / conditions under C-A-P) then I have to consider things like Bitsquare and OpenBazaar, for without such systems I think that no system of decentralized virtual currency would be truly useful.  Ultimately examining the declining profitability of mining in the context of PoW issues and so forth, for most currencies the issue then becomes not so much how will one continue on generating it but rather, how will it be exchanged and used, and can it be sustained.

Here is another thing I'm not sure has been contemplated in this post.  A large number of coin systems have been developed -- see mapofcoins.com -- and not all of these will succeed, but it's also probable that over time more will be initiated that have not yet been seen.  Over time these will consume energy, resources, and talent (development, programming, maintenance energies, etc).  It is difficult to say how sustainable that is, but I think that overall as people orient themselves to a smaller set of currencies, at least some of which have privacy or strong anonymity, then this will be preferable to a larger number, and more sustainable as well.

[BitcoinNational]

@sockpuppet1

hitting some solid points;

The solution are the ALT coins;

1. ultimately it will all boil down to ... $cost/$transaction (+min. Liquidity) ... and that can be broken down into strata ... obviously B E & L are the top tier ... but $cost/$trans has thus been ignored ... smart money will find the cheapest channels to move in.

2. everyone is going to have their own alt coin, much like 'the banked' all have credit scores and hence trade stock ... no one mentions this fact in the real world of money/banking  it ain't gonna be any diff. here in crypt0.  avatars will issue bonds.  and crypto banks will buy them.

[iamnotback]

...

Perhaps more interesting (well at least very interesting to me and my prospective work) and less arguable is the agreement that adoption is what is needed to drive Bitcoin to the moonshot:

http://foundersgrid.com/bitcoin-adoption/

Adoption is going to be arduous for Bitcoin, because it wasn't designed to scale decentralized; and without at least an illusion of decentration it loses its raison d'être. The duck tape bandaids such as Lightning Networks are fraught with complexity that will take time to work through.

Recently I wrote about how we need to handle security with physical credit card sized NFC hardware wallets to make crypto-currency mainstream.

[iamnotback]

The statement bitcoin is destroyed is not at all true and not gonna come true in the future. Most could have known in this seven years time how many interruptions were faced to reach this growth. So if its a failed one already it could have happened.

That is what they all thought at the peak in 1929.

It is not dumb that n00bs don't know the technology and game theory economics. What is dumb is when n00bs (such as the Bitcoin maximalist comments in this thread) think they know something about an issue that is far too complex for them to be comprehend without deep research that they are unwilling or incapable of doing. This is known as the Dunning-Kruger effect.

So many dumb comments in this thread by Bitcoin maximalists who will invent any excuse possible to remain in denial of the fact that highly centralized systems fall into the abyss of turf battles morass and BitCON is becoming the TrojanHorse coin with centralized mining control enabling the coming capital controls and expropriation of wealth by the G20:

LN ... doesn't scale well decentralized (but we may eventually get there with Bitcoin highly centralized, although being that this is fighting for who will control it, it will not come without battles as we've seen with Bitcoin Classic and XT versus Blockstream and the Chinese mining cartel):

Now all we have to do is wait countless months for segwit which no doubt'll be batted around by the various parties too. Whoopee.

...

The mass use case of Bitcoin is very weak because the technology doesn't scale decentralized and decentralization and permissionless qualities were the original reason to want CC instead of digital fiat, and Bitcoin is a very tiny, miniscule market right now.

The less decentralized Bitcoin is, the slower its network effects will grow. Because turf battles turn it into a morass.

YouI don't understand how Lightning protocol works to claim it's decentralized.

ftfy

Thanks for your feedback. Hope you don't get offended if I correct your misunderstanding.

LN requires orders-of-magnitude more block chain transaction bandwidth for peak garbage collection phases, than it consumes normally. Thus you need Bitcoin to scale massively before LN can scale massively. Bitcoin can't scale without being centralized for validation and mining. That is fact well known to experts such as myself. Many people may deny it and I have no desire to argue with them.

LN also requires a few numbers of centralized servers cooperating for it to function reasonably well:

It uses a decentralised method of routing by everyone knowing the topology. In the future we will implement RP routing, which dramatically decreases the requirement to know the full topology of the network down to only the 24/7 online nodes.

...

Yes correct. In my simulations routing with ten thousands of nodes was carried out in <1s.

That works fine with RP-Routing, because then you exclude all active participants from the routing problem and only concentrate on the passive nodes. I agree that if you take into account millions of wallets, it does get much more difficult.

LN can't send a payment from Bitcoin address to any Bitcoin address. It requires users establish accounts in the LN before they can be eligible, i.e. it is an opt-in system and it is not persistent.

LN is an incredibly complex Rube Goldberg kludge patched on top of an inadequate block chain design and there IS a better solution coming. You have to discard the Bitcoin block chain and Satoshi's design and start over.

In general, Bitcoin is moving towards centralization over the control of which nodes validate and thus which can do capital controls and KYC enforcement on transactions:

https://bitslog.wordpress.com/2016/01/08/spv-mining-is-the-solution-not-the-problem/
http://www.bitcoinunlimited.info/1txn/

[Spoetnik]

Misc thoughts i had after catching up a bit here.

I have a hard time choking back the assertion Bitcoin was designed to fail at a certain point.
I just can't wrap my head around that concept..

I don't deny a Chinese conspiracy because who knows there may be one.

But driven by the Chinese government top down to the Chinese people ?
Hmm.. i dunno  
Because i think well what would be the difference between the people of the USA then ?
People over here.. and people over there (different groups)
Who ALL want to make money and dominate and WIN !
Conspiracy or Hidden Agenda ? ..or just common sense and the way of life?

Know what springs to mind about Chinese dominance in Bitcoin mining ?
For one thing i am surprised people are not screaming racism (i don't think it is)

What strikes me is this..
What if Chinese dominance is simply an issue of capability.
Take two groups for example both started out equally..
But in time one group demonstrated a higher level of skill & resources and took the lead.
Do you then claim the winning team as evil conspiracy laden manipulators etc ?
Like didn't the USA or any other group have the same ability at Bitcoins launch ?

Lastly,
i thing BitcoinNational saying every guy will have their own currency is silly nonsense !
Even if that DID happen it would be something else ..NOT a "currency" then.
But i sure as hell don't see that happening.

Look up the meaning of "Currency" guys.. currency does not mean "Bank"
In order for something to be considered a currency it must be used as such as per definition.
No more nor less.. that is just reality vs. Altcoin delusional fantasy pipe dreams LOL

[iamnotback]

I have a hard time choking back the assertion Bitcoin was designed to fail at a certain point.
I just can't wrap my head around that concept..

Define "fail"?

If you define fail as the coin stops functioning or double-spending is so pervasive via 51% attack that no one will accept it, then I agree it is a ludicrous proposition that isn't very likely to happen.

Rather the designed failure of Bitcoin is to become centralized so that the elite are able to control who can transact (which is another symptom of a 51% attack) so they can implement capital controls, expropriation, and taxation, while also tracking every transaction we make so we are 666 slaves.

Bitcoin is not failing but it is failing to scale to mass adoption, and BitCON (the Trojan Horse) is failing in that it will be more oppressive+totalitarian than cash and fiat were. Why do you people have such a difficult time to understand this distinction, even I have repeated it so many times.

[btcusury]

I have a hard time choking back the assertion Bitcoin was designed to fail at a certain point.
I just can't wrap my head around that concept..

Define "fail"?

If you define fail as the coin stops functioning or double-spending is so pervasive via 51% attack that no one will accept it, then I agree it is a ludicrous proposition that isn't very likely to happen.

Rather the designed failure of Bitcoin is to become centralized so that the elite are able to control who can transact (which is another symptom of a 51% attack) so they can implement capital controls, expropriation, and taxation, while also tracking every transaction we make so we are 666 slaves.

Yes, right, and let's make it open source so that it can be cloned and potentially improved upon to the point where our original plan fails.

Bitcoin is not failing but it is failing to scale to mass adoption, and BitCON (the Trojan Horse) is failing in that it will be more oppressive+totalitarian than cash and fiat were. Why do you people have such a difficult time to understand this distinction, even I have repeated it so many times.

Cash and fiat is not intrinsically oppressive+totalitarian, it depends on who/what controls the issuance. What would stop us from simply decentralizing away from "BitCON" if it becomes centralized and controllable like you are saying was the plan all along?

[Thenoticer]

Question 1, Are you of the opinion that it isn't possible for bitcoin crypto currencies to not be centralized and they inevitably become control systems?

Question 2. There have been many many hacks of bitcoin and many attempts to track these coins. Have the hackers been successful in covering their tracks?

I have a hard time choking back the assertion Bitcoin was designed to fail at a certain point.
I just can't wrap my head around that concept..

Define "fail"?

If you define fail as the coin stops functioning or double-spending is so pervasive via 51% attack that no one will accept it, then I agree it is a ludicrous proposition that isn't very likely to happen.

Rather the designed failure of Bitcoin is to become centralized so that the elite are able to control who can transact (which is another symptom of a 51% attack) so they can implement capital controls, expropriation, and taxation, while also tracking every transaction we make so we are 666 slaves.

Bitcoin is not failing but it is failing to scale to mass adoption, and BitCON (the Trojan Horse) is failing in that it will be more oppressive+totalitarian than cash and fiat were. Why do you people have such a difficult time to understand this distinction, even I have repeated it so many times.

[iamnotback]

Question 1, Are you of the opinion that it isn't possible for bitcoin crypto currencies to not be centralized and they inevitably become control systems?

Up until a few weeks ago, I still had some doubts about my design, but now I realized how to make sure it remains decentralized. I see no hope for Bitcoin remaining decentralized.

I will try to make stronger claims in a white paper at the opportune time in the future.

Question 2. There have been many many hacks of bitcoin and many attempts to track these coins. Have the hackers been successful in covering their tracks?

The criminals can find a way to be anonymous if they are very, very careful about all their meta data and they only do this one shot, not on a regular basis.

Your typical user can't remain anonymous with Bitcoin. Meta data leaks all over the place. Even just using the same computer for activities and the browser fingerprint, etc, etc, etc..

Remember TPTB want a monopoly on crime, thus they want that anonymity is available to them, but not to us.

[iamnotback]

1. Since the chosen single node for each block is deterministic, then in theory it could be very vulnerable to botnet DDoS attack. More generally it lacks fault tolerance, which is critically needed in real world systems. A redesign to have simultaneous disjoint blocks from multiple delegates can't be allowed because there could be double-spends in the presumed disjoint blocks.

2. For DPOS, this is not decentralized control, because the minority has to accept the will of the majority on the election of delegate DPOS nodes, i.e. the permissionless attribute can be lost such as ChainAnchor being planned for ButtCON. No one can just standup a full node at-will. This also means there isn't really competition in terms of a free market rate for transaction fees.

Btw, Bitcoin-NG accomplishes basically the same deterministic node per block and with decentralized control over the selection of the delegate in real-time employing PoW, yet with chain reorganization issues.

3. The maximum speed (minimum delay) of confirmations is lower bounded by the slowest latency of block propagation to every DPOS node, because otherwise some nodes can't keep up. This can be reasonably fast say several seconds if you've got a very organized set of delegate nodes (but then you really don't have decentralized control), but this is not fast enough for some types of instant microtransactions.

4. Zero-confirmation double-spend transactions (aka Finney Attack) are even more plausible, because a colluding delegate node knows deterministically when it will win the block. Note block periods can be reasonably fast in DPOS, so 0-conf is probably not needed although not fast enough for some types of instant microtransactions, although such probably wouldn't be Finney attacked due to their small values.

5. Proof-of-stake is not a secure consensus algorithm, because for example the nothing-at-stake problem. We compiled a laundry list of flaws in proof-of-stake. Note I recently made a suggestion to jl777 and we mutually designed how to record check points for DPoS coins in a PoW block chain.

I am glad you are back youarenotback! Mostly I don't understand all you're saying, but at least your posts challenge me to try to learn new things. Thanx!

Let me try to unpack those points a bit for laymen:

1. Full nodes in DPOS are elected delegates. With Satoshi's PoW, we don't know which node will win the next block. So an attacker wouldn't know which node to jam with a DDoS attack. Any node attacked would simply not participate in competing to produce the next block, but this wouldn't harm the system at all. Whereas, when we designate the node that will decide what goes into the next block, then an attacker knows which node to attack. As well, a node knows when it will control the next block, and thus it can attack the network by withholding (although it would probably get voted out of being a delegate node soon, although it might be difficult to prove when it was a legitimate network hiccup or when it was intentional). I believe Bitcoin-NG may have an analogous weakness.

2. For me, this is the other huge weakness. With DPOS, the set of nodes which process blocks is static until the next voting. And even after voting, standing up a full node is not something an individual can choose to do by himself. There is always politics and centralization involved. The ideologically great thing about Satoshi's design is that anyone at any time can go standup a full node and process his/her transactions on any block he/she wins. The problems of course with Satoshi's design is that it doesn't scale and also that PoW economics of SHA256 means an individual can no longer win a block nor prevent the centralization of mining over time due to it being 100 to 1000X more profitable for the ASIC farms and because scaling can't work without centralization. So DPOS doesn't really gain anything that we can't get by centralizing Satoshi's design other than saving electricity.

I have another solution which I think is a better compromise than both of those. But I won't describe it, because surely others will start to figure out my design if I describe it further. I need to release it asap, so the discussion of its merits can be open sourced.

3. If one full node's block period is say 5 seconds, but the propagation to another of the full nodes is 10 seconds, that latter node will not be able to receive the new block from the former and produce another new block within its 5 second allocation. Thus the block period has a lower bound which is dictated by the slowest propagation on the network of full nodes. And 5 seconds confirmation is too slow for certain types of microtransactions. Imagine you want to start listening to a song, and you have it set to pay a microtransaction automatically, but you have to wait 5+ seconds everytime you want to click to listen to a new song you have not yet paid for. Or similarly when using microtransactions instead of a CAPTCHA. Even 1 second might be too slow! Vcash's Zerotime can't even get close to being fast enough. Probably Lightning Networks won't be fast enough either, not to mention it doesn't scale well.

5. DPOS (delegated proof-of-stake) is still POS with all its flaws. My desire is to attain Satoshi's security model, but with 100% decentralization, massive scaling, 1 second confirmed transactions, and no economic trend towards centralization!


Edit: Steemit is pioneering combining PoW and DPOS in another way, and do take note that this doesn't seem to fix the issues I enumerated above although it mitigates somewhat issue #2 except doesn't solve the economics of centralization of PoW issue:

Consensus in Steem

...

With Steem, block production is done in rounds. Each round 21 witnesses are selected to
create and sign blocks of transactions. Nineteen (19) of these witnesses are selected by
approval voting, one is selected by a computational proof-of-work, and one is timeshared
by every witness that didn’t make it into the top 19 proportional to their total votes. The 21
active witnesses are shuffled every round to prevent any one witness from constantly
ignoring blocks produced by the same witness placed before.

This process is designed to provide the best reliability while ensuring that everyone has the
potential to participate in block production regardless of whether they are popular enough
to get voted to the top. People have three options to overcome censorship by the top 19
elected witnesses: patiently wait in line with everyone else not in the top 19, purchase
enough computational power to solve a proof of work faster than others, or purchase more
SP to improve voting power. Generally speaking, applying censorship is a good way for
elected witnesses to lose their job and therefore, it is unlikely to be a real problem on the
Steem network.

Because the active witnesses are known in advance, Steem is able to schedule witnesses to
produce blocks every 3 seconds. Witnesses synchronize their block production via the NTP
protocol. A variation of this algorithm has been in use by the BitShares network for over a
year where it has been proven to be reliable.

Mining in Steem

Traditional proof of work blockchains combine block production with the solving of a proof
of work. Because the process of solving a proof of work takes an unpredictable amount of
time, the result is unpredictable block production times. Steem aims to have consistent and
reliable block production every 3 seconds with almost no potential for forks.
To achieve this Steem separates block production from solving of proof of work. When a
miner solves a proof of work for Steem, they broadcast a transaction containing the work.
The next scheduled witness includes the transaction into the blockchain. When the
transaction is included the miner is added to the queue of miners scheduled to produce

blocks. Each round one miner is popped from the queue and included in the active set of
witnesses. The miner gets paid when they produce a block at the time they are scheduled.
The difficulty of the proof of work doubles every time the queue length grows by 4. Because
one miner is popped from the queue every round, and each round takes 21 * 3 = 63 seconds,
the difficulty automatically halves if no proof of work is found in no more than 21 * 3 * 4 =
252 seconds.

[iamnotback]

None of the posts in this thread so far have really explained the problem.

Bitcoin's 0-confirmation transactions have three major flaws:

1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource. No one wants to wait 5+ seconds every time they click the mouse. The reliability against a double-spend increases as propagation of the transactions across the full node network completes. This depends on the weighted average of hashrate and the slowest latency on the network. Thus the way to improve this speed is to centralize mining, which is probably why ButtCON has been getting faster as mining has essentially become entirely centralized and only an illusion of decentralization remains.

One might argue that no one will bother to double-spend such small valued instant microtransactions, but in fact these are the most vulnerable to double-spending because the the payee can't delay the access for many seconds, the payer can't get caught in the virtual act unlike retail and because there might be an incentive to sabotage an Internet merchant or service (e.g. competing social networks attacking each other covertly, politically/religiously motivated attack, etc).

Some references:

https://www.reddit.com/r/btc/comments/3ze0sz/why_bitcoin_0_confirmation_transactions_are_safe/
https://chrispacia.wordpress.com/2015/11/29/on-zero-confirmation-transactions/
https://blog.blockcypher.com/from-zero-to-hero-bitcoin-transactions-in-8-seconds-7c9edcb3b734

2. The Bitcoin block chain can't scale to handle the level of transaction rate that microtransactions would require without being centralized.

3. It seems the core developers may be intent on implementing Replace-by-Fee and destroying 0-confirmations, although RBF will apparently be opt-in so it wouldn't destroy all 0-confirmations. Although RBF seems to have a legitimate use-case for being able to prevent transactions from getting stuck if the fee ends up being too low in a free market competition for setting transaction fees:

https://bitcoinmagazine.com/articles/bitcoin-core-developer-jonas-schnelli-explains-controversial-transaction-replace-by-fee-feature-1454343556

Also the collusion between Blockstream and the Chinese mining cartel potentially breaks 0-confirmations by not increasing the block size sufficiently to handle all transactions that have a sufficient fee, which by definition is not spam. Which btw may incentivize payers to use RBF. Perhaps Blockstream may be trying to push towards Lightning Networks, which is also flawed and can't scale decentralized either.


Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.

BCT Staff replied:

Bitcoin's 0-confirmation transactions have three major flaws:

1. They are too slow for certain types of microtransactions such as clicking the mouse to access some Internet resource.
...

Note many people may think that instant microtransactions are irrelevant, but when that ends up being the future economy of the Knowledge Age and displaces the retail and tangible economy by several orders-of-magnitude, then the dinosaur (Model T) will be Bitcoin.

Bitcoin was never meant for these types of microtransactions. That's where alt coins and lightning and other off-chain transactions come in. Or giant online wallets. Or whatever.

So you've answered the OP's question about do we need another coin.

Follow up:

"Just pay a higher fee" isn't a proper solution though, if we would all pay the recommended fee, than that fee would keep on increasing, because there can only be so many transactions in a block, eventually the fee will become high enough that people will start to move over to other blockchains with proper scaling solutions.

You can't fix a capacity problem with fees. If there are only 20 seats on the bus and 25 people that want to ride there is no ticket price where everyone gets a seat. You don't even know how much you have to over pay to get a seat. This is a bus business where customers are going to leave... especially when they discover there are many alt-bus companies that do the same thing better and for less and without capacity restraints.

Thanks. How hard to understand that can that be?

And to think this was "planned" by Core. This is Cores dynamic fee market. It is not some f*** up!
And it will get worse and worse every day, until segwit is rushed out.

More likely, with the ensuing loss of faith in Core, a sudden hard fork to bigger blocks.
(For the median transaction size of 333 bytes, this results in a fee of 26,640 satoshis (0.17$).

If something doesn't make sense, follow the money to find the motivation.

I had linked to this in my first post in this thread, but here is the relevant quote:

It appears the Chinese mining cartel and Blockstream are in bed together because you can note that the Chinese cartel used the lame and technically incorrect excuse that the Great Firewall of China prevented them from approving larger block size increases of Bitcoin XT and Classic. But what is really going on, is as explained in my discussion with Professor Jorge Stolfi, that the Chinese cartel wants to be able to control the block size increase so as to maximize the equation for transaction fees.

How do you calculate that Blockstream is for small blocks  

Blockstream is for making sure they and the Chinese mining cartel control how fast the block size increases, so they can squeeze maximum transactions fees that the market will bear. You could read the Reddit discussion between Professor Jorge Stolfi and TPTB_need_war, which explained this.

[iamnotback]

Steemit's PoW has a novel idea to incorporate signing into the PoW for the public key that will receive the coinbase block reward, so as to force the miner to have real-time access to the private key for each nonce attempted.

Daniel Larimer/Bitshares et. al claim some benefits which are explained at the following references:

https://steem.io/documentation/consensus/#mining-algorithm
https://steem.io/SteemWhitePaper.pdf#page=23

This is perhaps the first technical idea I've seen from the Dan Larimer group that I must frankly state is very good and I will likely adopt it for my own project. However, I would structure it differently to avoid the security caveats they noted. I would have the miner sign the hash(H, nonce), the use that as input to the PoW, e.g. PoW = hash(H,nonce,SIGN(hash(H, nonce))).

They think one of the benefits is that it will encourage the development of an ASIC which can perform faster elliptic curve signing and validation, and I presume this is so that they hope to be able to validate more transactions per second with more efficient hardware. But I don't claim that is a realistic expectation for a benefit, because well I expect to popularize unprofitable mining and thus the end of ASICs for mining forever.

The benefits I think are realistic are no botnets and no pools. Excellent. I had already eliminated farming out mining with another method (farming out can't be resistant to DDoS), and this idea from Dan's group completes attributes I'd like mining to have.

So for the first time, I need to tip my hat to Dan and kudos.

[hv_]

Steemit's PoW has a novel idea to incorporate signing into the PoW for the public key that will receive the coinbase block reward, so as to force the miner to have real-time access to the private key for each nonce attempted.

Daniel Larimer/Bitshares et. al claim some benefits which are explained at the following references:

https://steem.io/documentation/consensus/#mining-algorithm
https://steem.io/SteemWhitePaper.pdf#page=23

This is perhaps the first technical idea I've seen from the Dan Larimer group that I must frankly state is very good and I will likely adopt it for my own project. However, I would structure it differently to avoid the security caveats they noted. I would have the miner sign the hash(H, nonce), the use that as input to the PoW, e.g. PoW = hash(H,nonce,SIGN(hash(H, nonce))).

They think one of the benefits is that it will encourage the development of an ASIC which can perform faster elliptic curve signing and validation, and I presume this is so that they hope to be able to validate more transactions per second with more efficient hardware. But I don't claim that is a realistic expectation for a benefit, because well I expect to popularize unprofitable mining and thus the end of ASICs for mining forever.

The benefits I think are realistic are no botnets and no pools. Excellent. I had already eliminated farming out mining with another method (farming out can't be resistant to DDoS), and this idea from Dan's group completes attributes I'd like mining to have.

So for the first time, I need to tip my hat to Dan and kudos.

That sounds really strong!

And I found recently CIYAM speaking about a new 'proof-of-storage' here where I wonder if you could force now the miners also to have the entire blockchain stored locally for real:

https://bitcointalk.org/index.php?topic=1323657.msg15091671#msg15091671

Those mixed together is the holy grail ...