The Ethereum Paradox

[generalizethis]

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

Neither Smooth or I agree with Anonymint 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.  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?  It's impossible for Anonymint to know what shape mining will take in the future.

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?

[1714148846]

1714148846

[1714148846]

1714148846

[1714148846]

1714148846

[Minecache]

Ethereum is hard to use for the average user. It will not go very far keep that in mind.

Posted in 2010:
Bitcoin is hard to use for the average user. It will not go very far keep that in mind

[YarkoL]

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

Interestingly just now Core devs have tossed up an idea
of changing the PoW algo to prevent a patented mining optimization.
So it is not totally clear if Bitcoin Core is a permissioned
ledger.

[sockpuppet1]

Its so obvious that the halving is already priced in.

I am not sure of that. I put it out there as a strong possibility. But we also have to factor in that the Euro is making a rally against the dollar, gold has been rallying also. We have a countertrend bounce right now. The wheels haven't fallen off the global economy yet.

Anyway, I agree with TPTB, long term both are SHIT as ETH is basically a scam and BTC is just digital fiat with potential worse controling outcomes that today fiat system

At least with monero we have a bit of financial privacy

But that doesn't mean BTC won't be pumped again to pull more money into that trap. Fundamentals of it as true hedge against fiat/governmment isn't necessarily correlated to its price performance.

I'm not playing your "move from one pump and dump to next pump and dump" scam game.  Better to just hold what actually has fundamentals.  I'm not buying garbage IPO scams issued by Eastern Europeans, issued for profit with no technical viability, whose entire purpose is to defraud people.  If I wanted to do that, I would just use fiat.

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.

[r0ach]

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

You did not because you insist China will always have some type of competitive edge over the "inferior" west due to ingenuity or corruption.  China is a logistics nightmare and maybe they have a hard landing never to be heard from again once the shit hits the fan.  China's main fear is domestic political dissent for a reason.  The top is all crooked and the bottom is eventually going to riot and send the country into chaos while all the leaders flee to Vancouver.  

Have you ever seen charts that show the wealth of a nation as a function of IQ?  It always shows higher IQ countries having more wealth, except in the case of authoritarian socialist regimes, then the IQ makes no difference and wealth of the nation plummets.  Due to China being a logistics nightmare, they will have to go more hardcore authoritarian than any other country on earth, and it will implode any type of ingenuity making it impossible for them to keep up.  The second we put up tariffs it's also game over for them.

If you're a Chinaman reading this, contrary to what Anonymint says, I promise you, your country is not going to be the new paradise golf course resort in the sky.  I'd probably flee to Vancouver like all the other Chinamen.

[sockpuppet1]

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

You did not because you insist China will always have some type of competitive edge over the "inferior" west due to ingenuity or corruption.

The centralization is due to economies-of-scale of mining farms. It doesn't matter where it happens. It just happens to be that China is very conducive thus it is happening there. But if China wasn't the low-cost leader on corrupt free electricity or cheap hydropower, then it would still be happening where ever it is. Because this is a fact of the INSOLUBLE economics of Satoshi's design.

Come on r0ach, you are smarter than this.

China is a logistics nightmare and maybe they have a hard landing never to be heard from again once the shit hits the fan.

Even if that were a possibility (and it is not), it still would be irrelevant.

China's main fear is domestic political dissent for a reason.  The top is all crooked and the bottom is eventually going to riot and send the country into chaos while all the leaders flee to Vancouver.

In your dreams. Even if that were plausible (and it is not), then still would be irrelevant.

The reason it is implausible is because China is an economic powerhouse that will reap huge economic growth as it allows its economy to diversify. They don't have the problems with huge number of retirees and people on social welfare and unemployment insurance. The West can't compete because of the burden of the cost of socialism.

China's economy will have a reset in 2020, but the Chinese are not going to abandon their culture. They will continue with the model of top-down organization. That is just the way Chinese people think. Do a little research on how their thinking about organization of society and capital differs from ours in the West.

Have you ever seen charts that show the wealth of a nation as a function of IQ?  It always shows higher IQ countries having more wealth, except in the case of authoritarian socialist regimes, then the IQ makes no difference and wealth of the nation plummets.  Due to China being a logistics nightmare, they will have to go more hardcore authoritarian than any other country on earth, and it will implode any type of ingenuity and it's impossible for them to keep up with other countries.  The second we put up tariffs it's over.

The sad reality is we are entering a new world order where even very great totalitarianism of China will be much more profitable than the abject failure of socialism in the West.

Get used to it. The ideals of our founding fathers are dead. They won't be coming back to the world for many decades from now. You and I will be dead by then.

Sorry to give you the bad news.

[generalizethis]

Global politics aside, there doesn't seem any demonstrable reason that Bitcoin won't continue down the centralism road. There needs to be some change in the way Bitcoin works, and as of yet, I haven't read anything that sounds like in a change in Bitcoin, but rather periphery effects that may or may not lead to decentralization.

Other than the proposal YarkoL mentioned, are there any other changes that have been proposed? Is that a serious consideration?

Counting on other technologies or global politics to work out a problem inherent in Bitcoin seems chimerical.

 

[sockpuppet1]

There is no way to prevent centralization of any block chain design based on profitable proof-of-work as it scales up significantly. Period. It will always centralize to economies-of-scale. Period. Full stop.

The only possible way I can envision overcoming this is to make mining unprofitable but mandatory for signers of transactions. Even I am not sure this won't also become centralized. I'll explain this in great detail if I ever get around to writing a white paper (I wrote some of it).

As of the moment, I am trying to diversify my options, because I am losing hope for crypto-currency. I'd prefer to work on something that is more sane. If I can justify working on a CC as part of a diversified project that can make profit even if the CC fails, then I'll probably take a stab at it, if my resources allow me to.

Monero is decentralized for the time being because it is small and its proof-of-work hash is moderately ASIC resistant. I have a design for increasing the ASIC resistance. That is another aspect I might actually develop and not just talk about it.

I am tired of talking and trying to do more programming work. As of the moment I am bogged down in programming language design research. I am not in CC design at the moment, which all has been set aside for the moment for me.

Bitcoin might be a good investment. I have no opinion on that really. I have no idea to what degree confiscation will occur in the coming down years after 2017. We are headed into a turbulent time and we will just have to wait to see how it turns out.

Bitcoin will be increasingly centralized. I have no doubt about that. The impacts and timing of impacts of being centralized is something I can't know.

[YarkoL]

China's economy will have a reset in 2020

How'd you come up with that year?

EDIT
oops, of course, never mind! 
I can't keep up with all your nicknames!

[sockpuppet1]

Re: The perfect coin waiting to come around? (mix of ether, lisk and bitcoin?)

How is it possible to create a perfect coin out of nonsense coins that have no use case and have fundamentally flawed Nash Equilibrium.

Stop with the smart contracts already. They are nonsense.

Or much better just ignore me, and I'll return the favor.

China's economy will have a reset in 2020

How'd you come up with that year?

EDIT
oops, of course, never mind!  
I can't keep up with all your nicknames!

I have a triangulation of three sources:

1. Martin Armstrong's computer and database.
2. Michael Pettis's (China expert, widely respected) calculations (and he has been correct several times already).
3. The charts showing China is nearing the Minsky Moment:

2018 Kaboom!

https://www.docdroid.net/file/download/i3f8uVF/stanley-druckenmiller-the-end-game.pdf (see page 7)

http://www.economist.com/news/leaders/21698240-it-question-when-not-if-real-trouble-will-hit-china-coming-debt-bust

The new username is temporarily forced by a 10 day ban.

[r0ach]

Anonymint, you don't seem to understand this is a war, and like Smooth said, pulling up the age old saying - you go to war with the army you have, not the one you want.  Your stance on everything is:  oh, of course fiat is a scam, don't buy fiat notes.  Gold?  Yea, don't buy gold either because some random Jew on the internet with his magical computer named Armstrong that looks like Jim Cramer's cousin said it's going to go down (while the most profitable hedge fund on earth, Horseman Global, simultaneously buys it).  Bitcoin?  Yea, don't buy that either because even though it actually functions, unlike Ethereum, it doesn't fulfill all of my metrics for perfection.

None of that is a solution for anything.  In a war you either lead, follow, or get out of the way.  Anonymintcoin doesn't exist, and even if it did, I do not believe unprofitable PoW is a valid answer to the problem.  I know you think Monsterer is stupid, but he's smart enough to get the jist of the situation and he doesn't think it's viable either.  Fluffypony and Smooth haven't said anything about it, but I'd guess they probably agree.

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.  

You can nitpick about random metrics of Bitcoin if you manage to survive past that date.  Bitcoin will either be very valuable when the day comes, or people will all be killing each other in the street over slim jims and no currency will have value.  I do not care about anything beyond that at this point, and likely neither does anyone else.  There is nothing else to discuss.  Doing nothing is not a solution.  Ethereum is a scam, so to war with Bitcoin we go:

http://www.youtube.com/watch?v=Pvxpv_fycl8

[smooth]

we go:

http://www.youtube.com/watch?v=Pvxpv_fycl8

When the great reset happens, we're all going to watch TV?

I have no opinion on unprofitable PoW. IOTA will very likely never turn off the checkpoints (but will continue to promise to do so "in the future" as Peercoin has for years) and will work well enough for what it is, which is a type-ICO altcoin-MMO gambling token, and TPTB's thing is nebulous vaporware that can't be evaluated.

Ethereum sort of functions. It doesn't do anything at all useful as far as I can tell, beyond being another altcoin-MMO gambling token, granted one that reaches a somewhat wider and likely richer set of gamblers.

[freshman777]

You can nitpick about random metrics of Bitcoin if you manage to survive past that date.  Bitcoin will either be very valuable when the day comes, or people will all be killing each other in the street over slim jims and no currency will have value.  I do not care about anything beyond that at this point, and likely neither does anyone else.  There is nothing else to discuss.  Doing nothing is not a solution.  Ethereum is a scam, so to war with Bitcoin we go:

http://www.youtube.com/watch?v=Pvxpv_fycl8

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

[generalizethis]

You can nitpick about random metrics of Bitcoin if you manage to survive past that date.  Bitcoin will either be very valuable when the day comes, or people will all be killing each other in the street over slim jims and no currency will have value.  I do not care about anything beyond that at this point, and likely neither does anyone else.  There is nothing else to discuss.  Doing nothing is not a solution.  Ethereum is a scam, so to war with Bitcoin we go:

http://www.youtube.com/watch?v=Pvxpv_fycl8

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

Bitcoin isn't even a good weapon in that war--there's a reason it's being embraced by TPTB: it isn't private and it is getting more centralized by the day. If Ethereum and Bitcoin both trend towards centralization to achieve their stated goals, how is anyone criticizing one while holding up the other as mankind's salvation?

Maybe instead of looking at the first iteration of weaponry to fight centralized trust systems, we should be looking at the best weaponry currently available. Just a thought.

[sockpuppet1]

There's no single entity with 51% of the hash rate, so there's only a problem if you're working under the assumption that mining pools must be colluding because they happen to reside within the same arbitrary borders and communists made them do it... or something like that, anyway.   

Here's the state of the network over the last 24 hours:
http://www.teamhellspawn.com/hashdist.png

I remain unconcerned.

You are disingenuously spreading lies and you know it.

It has been explained to you numerous times that it is not the pools that are the only point of centralization but also the mining farms. There is one cattle farmer in China who is investing in a mining farm large enough to mine 30% of all BTC that is stolen from us via printing-coins-out-of-thin-air (aka coinbase block reward) to pay miners.

Also it is entirely illogical to claim that cartels and oligarchies do not cooperate with each other, when in fact all throughout history of mankind they always do, because it is the only way they can control the pricing and reap more profit for themselves. It has already been explained to you numerous times that the Chinese mining cartel prevented the timely increase of the block size by refusing to mine on Bitcoin Classic or XT. This is because they prefer to support Blockstream's Segregated Witness which will provide much smaller and delayed block size increases, so that they can drive transaction fees sky high. Also they support Blockstream's SegWit, because it changes the Bitcoin block chain protocol in such a way (insidious soft fork versioning) as it will make it virtually impossible for anyone to stop the mining cartel from changing the protocol in the future at-will.

Thus the Chinese mining cartel is already speaking and acting as a cooperating oligarchy and they have already 51% attacked Bitcoin's protocol, when they blocked the block size increases which would have kept our transaction fees low.

This is very dangerous for our future, because it means in the future when the Chinese government says to these mining farms in China (which control more than 50% of Bitcoin's network hashrate) that they must change the protocol to require that every transaction include a signed government issued identification number or that every signed transaction must include a tax contribution to China or the world government, then the miners will have no choice but to comply because otherwise they will find their $100 millions investment in mining equipment padlocked and confiscated by the government.

What kind of delusional fantasy world do you live in DooMAD.

[r0ach]

This is very dangerous for our future, because it means in the future when the Chinese government says to these mining farms in China (which control more than 50% of Bitcoin's network hashrate) that they must change the protocol to require that every transaction include a signed government issued identification number or that every signed transaction must include a tax contribution to China or the world government

This doomsday prophecy changes nothing.  This is just reiterating what everyone already knew from day one before getting into Bitcoin, that governments have a monopoly on violence and can do things like nuke us all to death with missiles if they want to.  If they can kill everyone on the planet for fun or sport, of course they can stop any cryptocurrency that exists or will ever exist, just like they can attempt to ban or confiscate gold.

If they ban gold, you bury it in the backyard.  If they attempt to co-opt Bitcoin, you fork to new algo or let them play whack-a-mole against Bitcoin, Litecoin, Dogecoin, Monero, Vertcoin, Myriadcoin, and if all else fails....maxcoin.

[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.

[smooth]

There is one cattle farmer in China who said he is investing in a mining farm large enough to mine 30% of all BTC

FTFY

If someone who is well known to be mining say 10% of Bitcoins says he's going to expand and mine 30%, that might be pretty credible, but when someone is supposedly mining 1% and claims his new mine is going to mine 30%, be skeptical. Is he soliciting investors by any chance, selling cloud mining contracts, etc.?

[freshman777]

The truth is in the middle.
r0ach with his superbull Bitcoin to the moon as the only coin rhetoric is one extreme POV.
Anonymint with his "all your coins are crap, only mine will work" is another extreme POV.

One probable outcome in the middle - in 2020 Bitcoin will be valuable, a bunch of other cryptocoins will have half the market share, various degrees of centralization. Gold and silver will be valuable, cryptocoins will not surpass gold and silver as a store of value but will surpass them as cross border value transfer vehicles. Fiat will be less valuable than today, in various degrees depending on the country. Fiat will not disappear as long as there are bodies of people who assume governmental powers and can declare pieces of paper money. Forget one world currency and government, human nature is power struggle. A couple big secessions will happen. Taxes will be raised, inflation will be higher. A lot of this can't happen if there is a nuclear conflict, then all bets are off.

[sockpuppet1]

There is one cattle farmer in China who said he is investing in a mining farm large enough to mine 30% of all BTC

FTFY

If someone who is well known to be mining say 10% of Bitcoins says he's going to expand and mine 30%, that might be pretty credible, but when someone is supposedly mining 1% and claims his new mine is going to mine 30%, be skeptical. Is he soliciting investors by any chance, selling cloud mining contracts, etc.?

Agreed but irrelevant. If not him, then the next guy, because it is quite profitable for the corrupt to charge electricity to the collective and take profits from raping our BTC for themselves. It is just a matter of organizing the various power players such as those who authorize discounts on electricity for factories. You scratch my back, I'll scratch yours, is precisely how everything is organized in China. The Chinese are masters of top-down organization.

No one here can argue that flies won't eat honey. The opportunity exists, and so it will be availed of.