Bitcoin IS basically DESTROYED

[PsursV]

i think it is not destroying. even if its value come to 1 then it will not destroy. i think its value is increasing day by day more and more people in interig in bitcoin form. so how can se way that bitcoin is destroying.

[LoyceV]

So there masterplan is to invest millions of dollars into a mining farm, collaborate with other farms that have done the same, destroy bitcoin and lose everything?/ sounds like a solid business model...

No. But they do have different interests than regular users like you and me. For instance, they need higher fees, not only now, but especially in the far future when block rewards get much lower.
While as a user I like low fees and large blocks, so my transactions are confirmed faster, the miners benefit from small full blocks, as users have to compete by increasing fees.

If you are really concerned about chinese bitcoin miners and china's greed in general, you can try to stop using chinese made stuff.

That won't change the fact that miners go where power is cheapest.

I'm curious now what electricity costs in China.
First hit on Google:

I'd say India has potential here. Or any location with a very big hydro power lake with very cheap electricity in a remote location.

Well, if it ain't China then those white devils look like they'll do a pretty good job too - https://www.reddit.com/r/Bitcoin/comments/4isxjr/petition_to_protect_satoshis_coins/d30we6f

Wouldn't this be a serious possibility if the majority of miners agrees to do so? What stops them from saying: "from now on, the first 1 million bitcoins mined will be added to miners fees in the next 100,000 blocks?

There's another downside of it. Chinese gov could easily take control over (vast) majority of hashing power (or shut just shut it down) if they only wanted to for whatever reason. It would require minor operations and, unlike western countries, they wouldn't even have to justify it (search for legal grounds etc).

Say 75% of mining power is gone tomorrow. That means blocks take 40 minutes on average, after a while difficulty goes down, and all goes back to normal. Nothing lost there!
I would more worry about China disconnecting the internet for a while. When it comes back online, they have the longest chain and all transactions confirmed outside of China in that time are gone.

[sockpuppet1]

Say 75% of mining power is gone tomorrow. That means blocks take 40 minutes on average, after a while difficulty goes down, and all goes back to normal. Nothing lost there!
I would more worry about China disconnecting the internet for a while. When it comes back online, they have the longest chain and all transactions confirmed outside of China in that time are gone.

Someone who understands Bitcoin 101 has thankfully arrived on the scene.

I think the rest of your comment is rather shortsighted (or careless?) though if you don't mind me saying. There is a very good reason why I personally like to "spell out" every point I try to put across. By limiting my audience to only a few "learned scholars" who would be able to understand abstract comments, I would be limiting my own scope and reach. It would be a little like in-breeding amongst snobs  really    
By having everything "spelled out" in plain English, you'd be able to gather a lot more data, ideas and experiences from people with a variety of different backgrounds. More data/input  means higher probability that you come across something unexpected that helps you expand your own sphere of knowledge. You're shortsighted if you think you can only learn from 'intelligent' people. Knowledge is devoid of bias.
I hope I don't come across as harsh. And this is certainly not a personal attack.
BTW I don't consider myself intelligent by any stretch of the word. I've failed way too many exams to even toy with the idea 

What you don't understand is that no matter how much effort I put into explaining every last detail in layman's terms, I would end up with more misunderstanding and more verbiage. And it extends out into numerous threads when people comment or quote on something I wrote in a different thread. And then I get blamed for being confusing, when I am trying to have a conversation across 12 threads simultaneously. There is no end to the misunderstandings. I am 1 person. You are all are 1000 people. How can 1 person communicate effectively with 1000 people without having 1000 different genres of misunderstandings. Alas, I have to choose to write to those who can understand what I intend, and then hope some others can explain for the rest. If I wanted to explain to layman, I would pick only very simple topics that don't have many variables and thus can't be easily misunderstood.

Btw, on the IQ issue upthread, perhaps some of you remember Mencius Moldbug and he recently did an AMA:

Amusingly, my "one offensive comment" was actually me repeating something my wife (not at all a "shitlady") learned in her MFA program at SF State (not at all a Hitler Youth academy). (This is the observation that the conquistadors began the slave trade with Africa because Native Americans didn't thrive as slaves, which is not at all controversial history.) I figured that this wasn't exactly the sort of thing I'd say, but coming from her it was probably okay.

Perhaps oddly, if anything I thought of this as a negative observation about Native Americans (I probably wouldn't do super well in the sugarcane fields either). Similarly, if I said that Greek Jews were more likely to survive in Auschwitz than Western European Jews (which is also true), this would strike me as a positive comment on the toughness of Greek Jews, not an opinion that they should be sent to the ovens first.

Somehow, which shouldn't have surprised me, this commonplace historical observation metamorphosed into "everyone of African descent is best suited to cutting sugarcane for the Noble White Man." I don't have a problem with "rescinding" that, since I never said it.

I said "character and intelligence." One thing that's hard for the 20th century to understand is that the ability to survive as an agricultural slave is a talent -- just like the ability to survive in Auschwitz. (Read Primo Levi.)

It was not necessarily the best, the worst, the smartest or the dumbest who survived in Auschwitz. Auschwitz selected for a very different set of talents than the normal, sane world, in which being nice and smart is better than being mean and dumb. Similarly, early American slavery selected for talents that Africans had and Indians lacked.

(It's not militarily hard to enslave people in their native land when you're as ruthless as a medieval Spaniard -- guerrilla war in Latin America is a postcolonial phenomenon, not a colonial one) As I understood and understand the matter, the complaint of the conquistadors about their Indian captives was that they too easily refused to work and eat, and essentially just died. This is similar to the fate of the last of the Tasmanians. Hunter-gatherer peoples don't do well when forced into inactivity/drudgery. Intellectuals also don't do well with drudgery, although we're just fine with inactivity. So the conquistadors imported agricultural peoples to do agricultural labor.

I would make a terrible agricultural laborer and an awful agricultural slave. (I am also not very good at being a master, though for different reasons.) Am I praising myself for this lack of talent?

Yes, it may have something to do with my high intelligence. (It also has something to do with my poor character.) Intelligence can be a liability. You don't have to be an agricultural slave to realize this -- all you need to do is go to an American high school.

What I learned in an American high school was that intelligence does not make me special or better. I agree that if I thought smarter people were better people, given the fact that no magic process has distributed the smarts equally, I would be a racist in the classic sense. (I also don't agree that the talent to be a master, or the talent to be a slave, makes a person better or worse.)

It's hard, especially for smart people, to give up the idea that smart people are better than stupid people. The ancient Greeks lent similar prestige to athletics; they believed a fast runner was spiritually better than a slow runner. They fought a lot of wars, so athletics mattered a lot to them; we write a lot of code, so problem-solving ability matters a lot to us. But one is a muscular talent, the other is a neurological talent. Neither has any mystical significance.

Once you stop believing in the mystical importance of intelligence, I think it's very easy to accept that it's unequally distributed (as athletic talent certainly is). I understand that this is very hard for our society, and especially for people like me who grew up believing that good grades were holy and professors were gods.

All I can say is: they're not. Or at least, so I believe. I hope this helps you understand the context of my remarks a little better.

[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.

[HeroCat]

If China is mining almost all BTC, it is just fact and nothing more. From China mining Bitcoin can not be destroyed. 

[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.

[raphma]

China control almost everything nowadays

Pretty much that. and what they cant control they just do a copy
Anyway,
Their economy is starting to weaken, the energy there might start to become more expensive. If that happens the problem might be solved.

It's no like all farms there are from chinese people. A few miners moved to china just to have cheaper energy, workers, link and etc. less cost more profit.

[sockpuppet1]

Their economy is starting to weaken, the energy there might start to become more expensive.

Why? The hydroelectric dams are already constructed. The government isn't going to overthrown and replaced by a junta.

If that happens the problem might be solved.

The centralization due to mining farms would just continue where ever the cheapest electricity can be sourced. Satoshi's design naturally centralizes to economies-of-scale. It can't remain decentralized under ANY CIRCUMSTANCES.

Bitcoin is a flawed design. Period.

Hopefully this will be my last comment on this:

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.

[twunkle]

what if difficulty also increases on previous profits per instance and time or # of transactions done without mining reward before being able to mine for new nodes

[Ultrafinery]

Their economy is starting to weaken, the energy there might start to become more expensive.

Why? The hydroelectric dams are already constructed. The government isn't going to overthrown and replaced by a junta.

"Hydroelectric dams" are almost irrelevant here. China's main source of electricity is coal.
"China's installed coal-based electrical capacity was 907 GW, or 77% of the total electrical capacity, in 2014." --wikip

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.

Respective GDP of economic powerhouses

China 7,590.0
US:    54,629.5

http://data.worldbank.org/indicator/NY.GDP.PCAP.CD <==source of bankster lies!

[RodeoX]

Bitcoin is about rewarding actual work and investment. China has gone big and now will be rewarded. It's that simple. If you thought ass sitting was a way to be successful with bitcoin then you don't understand bitcoin's complex set of rewards and incentives. Any country, business, or individual is free to compete in mining and no entity has the authority to stop that.

[Ultrafinery]

Bitcoin is about rewarding actual work and investment. China has gone big and now will be rewarded. It's that simple. If you thought ass sitting was a way to be successful with bitcoin then you don't understand bitcoin's complex set of rewards and incentives. Any country, business, or individual is free to compete in mining and no entity has the authority to stop that.

The thing that you must understand is Bitcoin only works when mining is [nearly uniformly, as in "1cpu = 1 vote"] distributed, it breaks (becomes worthless) when mining is centralized.
If a Randian hero, through hard work, cunning, and ...other good stuff, manages to outcompete everyone and control 80% of the hashpower, yeah, Bitcoin becomes fundamentally broken. The outcome isn't much different when it's 9 Randian heroes rather than 1, as long as the 9 are buddies and trust each other, like so:



Cooperation. Something Satoshi failed to account for.

[RodeoX]

Bitcoin is about rewarding actual work and investment. China has gone big and now will be rewarded. It's that simple. If you thought ass sitting was a way to be successful with bitcoin then you don't understand bitcoin's complex set of rewards and incentives. Any country, business, or individual is free to compete in mining and no entity has the authority to stop that.

The thing that you must understand is Bitcoin only works when mining is [nearly uniformly, as in "1cpu = 1 vote"] distributed, it breaks (becomes worthless) when mining is centralized.
If a Randian hero, through hard work, cunning, and ...other good stuff, manages to outcompete everyone and control 80% of the hashpower, yeah, Bitcoin becomes fundamentally broken. The outcome isn't much different when it's 9 Randian heroes rather than 1, as long as the 9 are buddies and trust each other, like so:

http://s32.postimg.org/n43my2mmd/bitches.jpg

Cooperation. Something Satoshi failed to account for.

I would also like to see broad, worldwide mining by a diverse set of mines. But if one or a few players gain an 80% share of the hashes then they deserve to decide the future. It is not great if you disagree with their decisions. However bitcoin is designed to be in the hands of it's users and miners. No one forced anyone to do something or kept anyone from joining in. They invested the capitol, they built the mines, they took the risk, and now will receive a large proportion of the wealth generated.

If you or I had done the same then we would be the beneficiaries. During the time the Chinese were growing, many other bitcoin peers, like in the U.S., were engaged in senseless infighting and fruitless speculation. Speculation produces almost nothing in the economy while building mines directly strengthens the network and is worth something. IMO, bitcoin is not about what I want or some social equalizing by giving everyone a trophy. It is a capitalist contest in which the hardest workers get the most. Ironically, China seems to get this more than the west. 

[AlexGR]

Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work. The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power. As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they'll generate the longest chain and outpace attackers. The
network itself requires minimal structure. Messages are broadcast on a best effort
basis, and nodes can leave and rejoin the network at will, accepting the longest
proof-of-work chain as proof of what happened while they were gone.

----

The majority
decision is represented by the longest chain, which has the greatest proof-of-work effort invested
in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the
fastest and outpace any competing chains

----

If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins. He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth.

----

The three assumptions hold. In theory, mining centralization is a direct increase in risk. However it hasn't turned into an attack due to game theory. Actually the game theory is now more "loaded" with heavier disincentives (=losing millions in ASIC investment value) instead of just losing block rewards.

Generally speaking, the Chinese government would definitely prefer for bitcoins to be produced internally, than externally. This means that Chinese don't have to buy their BTCs from abroad. They can sell to foreign buyers though. It helps their trade balance and foreign reserve position. It's like gold, in a sense. Their 500+ tons per year mining output aren't sold to others - they are used internally, while keeping their USDs too (some of which they use for importing more gold).

[panju1]

Bitcoin is about rewarding actual work and investment. China has gone big and now will be rewarded. It's that simple. If you thought ass sitting was a way to be successful with bitcoin then you don't understand bitcoin's complex set of rewards and incentives. Any country, business, or individual is free to compete in mining and no entity has the authority to stop that.

As long as the Chinese don't gang up and try to do a 51% attack, nobody is going to grudge the Chinese getting some extra bitcoins.

[2c0de]

As long as the Chinese don't gang up and try to do a 51% attack, nobody is going to grudge the Chinese getting some extra bitcoins.

I agree with this point of view. China is huge country, and Bitcoin mining is still decentralized, even if few Chinese mining operations joined, there would be still
enough other mining operations to keep the system decentralized.

[Ultrafinery]

Bitcoin is about rewarding actual work and investment. China has gone big and now will be rewarded. It's that simple. If you thought ass sitting was a way to be successful with bitcoin then you don't understand bitcoin's complex set of rewards and incentives. Any country, business, or individual is free to compete in mining and no entity has the authority to stop that.

The thing that you must understand is Bitcoin only works when mining is [nearly uniformly, as in "1cpu = 1 vote"] distributed, it breaks (becomes worthless) when mining is centralized.
If a Randian hero, through hard work, cunning, and ...other good stuff, manages to outcompete everyone and control 80% of the hashpower, yeah, Bitcoin becomes fundamentally broken. The outcome isn't much different when it's 9 Randian heroes rather than 1, as long as the 9 are buddies and trust each other, like so:

http://s32.postimg.org/n43my2mmd/bitches.jpg

Cooperation. Something Satoshi failed to account for.

I would also like to see broad, worldwide mining by a diverse set of mines. But if one or a few players gain an 80% share of the hashes then they deserve to decide the future. It is not great if you disagree with their decisions. However bitcoin is designed to be in the hands of it's users and miners. No one forced anyone to do something or kept anyone from joining in. They invested the capitol, they built the mines, they took the risk, and now will receive a large proportion of the wealth generated.

But you're missing the point. Many people invested in Bitcoin through a misunderstanding, on the oft-repeated and fallacious assumption that their money is secured by maths and sciences, not by 9 dudes whose interests may or may not coincide with theirs.

Had they known that they may have to start mining themselves t protect their shekels, most wouldn't have done it. Not unless their electricity rates are as low as those in China, because otherwise they couldn't compete.  Bitcoin is predicated on decentralized mining, if that ceases to be the case? Yeah, it's broken.

If you or I had done the same then we would be the beneficiaries. During the time the Chinese were growing, many other bitcoin peers, like in the U.S., were engaged in senseless infighting and fruitless speculation. Speculation produces almost nothing in the economy while building mines directly strengthens the network and is worth something.

No, ignoring for a moment that speculation is essential to a free market economy, factory mines don't add an iota of security to the network. No more than NSA building a mega Bitcoin mine would strengthen the network.

IMO, bitcoin is not about what I want or some social equalizing by giving everyone a trophy. It is a capitalist contest in which the hardest workers get the most. Ironically, China seems to get this more than the west.  

I'm not talking about human equity (or even decency). Only telling you that assuming that miner's interests coincide with those of the hodlers is absurd. Mainly because miners don't need to hold any BTC once it's mined -- they can sell it for USD & go to work for *ANYONE* willing to pay them >12.5 BTC per Bitcoin block solved.
See what I mean?

...
As long as the Chinese don't gang up and try to do a 51% attack, nobody is going to grudge the Chinese getting some extra bitcoins.

But there's so much more than a 51% attack that a mining consortium (controlling most of the hashpower) can do. They could could literally kill the network, you're 100% at their mercy, no different than a central bank.

[crazyivan]

Pls troll harder, we haven't had a good troll for a long time. 

[RodeoX]

@Ultrafinery and AlexGR
You have some good thoughts there and I don't think we are so far apart really. Satoshi was worried about a 51% attack, but that is not what is happening. The Chinese miners have the most to lose if bitcoin were to be hurt by an attack. They are participating and each time they route a Tx they are spending their money on electricity, parts, rent. Their effort is rewarded with fees and a chance at a block reward. This not only strengthens the network, it is the network.


You may be right that many people misunderstood bitcoin. Many seem to confuse "fair" with "moral". Bitcoin is fair because there are no rules or barriers to the market like in all other monetary systems. It is not, however, moral. It is not distributed based on need or who is most deserving. The Chinese account for most sale, most mined coins, most capitol input, take the greatest risk, and therefore have come to dominate the network. Of course this could all change tomorrow. Anyone on Earth may build a bigger mine and take their shares.
The only other option I see would be a system where some people decide who can participate in bitcoin and who can't. If that ever happened I would divest 90% of my BTC and would assume the project really is dead.

[twunkle]

Hm, bitcoin is about providing a currency to people that no-one else can interfere even if the powers that be dont like it. It should not be about mining and fee profit-making from operating its network. Those are only necessities to make it happen.
An imaginary network where everyone would join to reduce their own costs for having and using that currency might work out better (assuming freedom and absolute bottom price in participating).