Bitcoin IS basically DESTROYED

[Akupuniard]

It's just an attemnt to make monopoly around bitcoin, users don't care where coins was mined or smth like this. People who using bitcoin as investment will get a new chanse to get good money.

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[AlexGR]

The weak point of Bitcoin's game theory -at least in the stage where we are currently in- is not the players within the ecosystem (like miners), but the attackers who are operating from outside the ecosystem and have an interest in its failure.

NSA spending, say, 200mn to built a mining farm so that they can have a bitcoin "kill switch" is an issue, for example. Their 200mn "expenses" would be nothing compared to the trillions at stake for the hegemony of the dollar.

Compared to issues like these, miner attacks pale in comparison - especially when the miners stand to lose by poisoning the system where they themselves live and have their investments.

[Blacula X]

The weak point of Bitcoin's game theory -at least in the stage where we are currently in- is not the players within the ecosystem (like miners), but the attackers who are operating from outside the ecosystem and have an interest in its failure.

The weak point of Bitcoin is that *there is, and always will be* an "outside of the system." If store_of_wealth = bitcoin, there's be no problems. Miners are only "within the system" if they store their wealth in BTC, which they don't need to do. They can sell it for USD to go "outside."
Or simply end up outside when Teh Halvening commeth (if a factory mine is paying 1BTC in expenses to mine 1.99BTC? Making a killing. Come Teh Halvening? They are not even breaking even )

... poisoning the system where they themselves live ...

For people who love to think outside the box... You know how chemo works? Yeah, it poisons the patient, but it poisons the cancer cells more. I've listed many situations in which miner's interests differ from those of the hodlers. Yes, they're poisoning our well. They also bought nice bottled Evian with the dollars they made, they'll do fine

[pereira4]

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.

Honestly I think there's a lot of racism or something against China. If it was some north european country or somewhere in USA people wouldn't complain as much that they would be the leading Bitcoin miners in the world.

If you don't like that china is #1 in mining, then stop complaining and start funding companies in your country.

[Wapinter]

Why would the fact that China is basically controlling mining do anything to Bitcoin?

The whole concept of bitcoin was based around decentralization.

If China controlls a large % of the hash power then it would only take the collaboration of a few to hit the dreaded 51% control point

China owns over 80% from the mining and the trading market as well. China owns over 95% from BTC transactions too.

The centralization is a reality.


https://blockchain.info/pools?show_adv=no

http://bitcoincharts.com/charts/volumepie/

It was imminent given the huge population and fastest growing economy of china.But the good news is that it wont effect bitcoin price and as a trader, that is what matters most to me

[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.

"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

You quote an irrelevant statistic. Why would a Bitcoin miner locate next to more expensive coal generation plant, when there is 2 cents per kilowatt electricity available next to the hydroelectric generation plants.

What you are failing to put into your mind, is that these are huge mining farms with huge investments. They will locate with careful planning. Ditto in the USA, the large mining farms are in WA State where there is 4 cents per KWH near hydroelectric dams.

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!

China devalued their currency in order to keep imports low and exports high. You can't compare GDP on an exchange rate adjusted basis.

Besides the West is going to implode soon.

When the dust clears, 2033 China will be largest GDP in the world.

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.

Yeah nobody going to grude the banks for getting some extra QE from helicopter Bernanke.

Nobody here cares about theft via inflation (aka debasement) of the currency.

Don't tell me you can't see the analogy. Put on your thinking cap.

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.

Honestly I think there's a lot of racism or something against China. If it was some north european country or somewhere in USA people wouldn't complain as much that they would be the leading Bitcoin miners in the world.

If you don't like that china is #1 in mining, then stop complaining and start funding companies in your country.

Are you proud of making a comment that is entirely irrelevant to the point of this thread, which is that centralization is occurring because Satoshi designed the economics to become centralized.

Whether it is happening in China or Washington State, fact is that eventually only about 12 mining farms will control most of the hashrate of Bitcoin, which means they set smaller block sizes and drive transactions fees sky high.

And we will pay it. We will surely pay $1 transaction fees when selling $100 of Bitcoin, because we will have no other choice. Without centralization, they could never do this 51% attack on us.

@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.

The 51% attack already happened. The Chinese mining cartel (the guys you see in that photo upthread) prevented a timely increase in the block size.

Please stop speaking nonsense out of your ass and acting like you are some kind of authority on the issue. I had already explained this upthread several times if you had bothered to even read the thread before posting.

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

Look in the mirror to find one.

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.

[Laniakea]

Can't Shelby Moore go n' do some pull requests at Github and fix the Bitcoin protocol?
sockpuppet1 can you go and ask Shelby if that's something he could think of doing please

[sockpuppet1]

Can't Shelby Moore go n' do some pull requests at Github and fix Bitcoin the BTC protocol?

There is no fix. It is an inherent phenomenon of the economics of mining. Satoshi of course knew this. He was no dummy.

The only possible fix I can think of, would be to make mining unprofitable. But of course this can't be done by changing Bitcoin's source code. No one would support it. The miners would attack any such fork. There would be chaos. You can't attempt to fix this via Bitcoin. Impossible. Too many vested interests in mining.

[Laniakea]

There is no fix. It is an inherent phenomenon of the economics of mining. Satoshi of course knew this. He was no dummy.

That's very interesting! Could you explain this a bit more?
If this was intended, what did Satoshi ultimately hope for?
Thank you for your time

[sockpuppet1]

There is no fix. It is an inherent phenomenon of the economics of mining. Satoshi of course knew this. He was no dummy.

That's very interesting! Could you explain this a bit more?
If this was intended, what did Satoshi ultimately hope for?
Thank you for your time

I explained the economics centralization upthread, just search "sockpuppet1" to find all the posts.

Satoshi obviously intended for us to end up with a centralized token. What other possibility could there be?

Note Satoshi even wrote in the discussions with others, that he did envision Bitcoin's mining becoming controlled by corporations. All that ideological crap about "better gold" and "usurping financial institutions" was just putting lipstick on a pig.

[twunkle]

It is pretty hard to prove that. Could also be that he was less smart than you make him out to be (as in realizing everything from the get-go), but was already executing on his solution to problems that were being discussed for years already.

[Ultrafinery]

"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

You quote an irrelevant statistic. Why would a Bitcoin miner locate next to more expensive coal generation plant, when there is 2 cents per kilowatt electricity available next to the hydroelectric generation plants.

Because subsidized power is subsidized power. China is familiar with UHV transmission lines, and still relies on 80% coal. Unless, of course, you think that the Chinese build hydro stations in the boondocks for the heck of it, not understanding that these multi-billion dollar projects are worthless because no one's there to use that power.

What you are failing to put into your mind, is that these are huge mining farms with huge investments. They will locate with careful planning. Ditto in the USA, the large mining farms are in WA State where there is 4 cents per KWH near hydroelectric dams.

I keep hearing about that, can you give me names/addys?
Industrial rates are actually pretty low across the country (average being 6 or 7 cents, afaik), but to qualify for those you need a buttload of employees, literally be a factory. That's the reason states offer industrial rates -- to attract industry, to get those lazy "retired old people" off their freeloading asses and back into the factories, so Adam Smith would approve.
And yes, US also knows all about HV polyphase transmission too, so delivering them killerwatts from spillways to places where they could be used ain't no big deal.

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

China devalued their currency in order to keep imports low and exports high.

Seems to be working. Devaluing their currency, I mean, not the other stuff.

You can't compare GDP on an exchange rate adjusted basis.

Ya, better toss actual hard data into the bin & trust the guy from the interweb. Because he realy knows his shit, never lies, and is always right

... All that ideological crap about "better gold" and "usurping financial institutions" was just putting lipstick on a pig.

Bitcoiners: Not catching on/remaining in denial since 2009.

[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.

[LoyceV]

Can't Shelby Moore go n' do some pull requests at Github and fix Bitcoin the BTC protocol?

There is no fix. It is an inherent phenomenon of the economics of mining. Satoshi of course knew this. He was no dummy.

The only possible fix I can think of, would be to make mining unprofitable.

I think indeed bitcoin could be better off if miners would get much less money. A block is currently worth $ 11,400. If miners would get much less, they would performe the exact same service with a lower hash rate. The only good thing about a high hash rate is that it makes a 51%-attack much more expensive to do. But as a few miners already have that much power, the possible risk of a 51%-problem is already present.

Industrial rates are actually pretty low across the country (average being 6 or 7 cents, afaik)

Electricity prices fluctuate wildly. Only a few hours per day prices are really high. For mining, it would even be possible to shut it down a few hours per day if prices get too high, but I doubt miners are big enough energy consumers to get good deals on the grid.

[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.

Bitcoin becoming relevant as an alternative to fiat means its value will go up 1000x or more. Even 5 halvings from now that would be a minimum of a 30x  larger mining industry. If people are thinking about reset/moon event sooner than 20 years, mining would need to be even bigger than that. Electricity in China and corrupt access to it are both limited, and both compete with other uses (including corrupt ones). So such growth would very likely would not be concentrated in China and we really have no idea what it will look like, though all kinds of likely and unlikely theories could be thrown out.

Very insightful attempt at a retort, I am impressed. Thanks. But the huge increases in scaling will come offchain with Lightning Networks and thus no mining. The Chinese mining cartel has been consulting with the core developers (i.e. Blockstream) about this issue.

The difficulty is set by the level of block reward and transaction fees times the Bitcoin price. If you are implying the price of Bitcoin will increase 1000X, then I have bridge to nowhere to sell you.

TPTB are managing their Bitcoin baby very well. And we are gullible fools.

Even at $3000, mining might expand enough to marginalize China. That is a numbers question and we don't have the numbers.

Smooth I suspect you've been busy doing other s/w work lately bcz you've been quiet and also because you don't totally have your mind immersed in this right now.

At 12.5 coins per block, 75 BTC per hour, and at $3000 that would be $225,000 per hour.  At 4 cents per KWH, that is 5.6 million kilowatts. Google tells that "China's power consumption in 2015 rose 0.5 percent from a year earlier to 5.550 trillion kilowatts".

That means in your scenario, Bitcoin would only be consuming one millionth of the electrical generation capacity of China. Sorry the increase in the value of Bitcoin can't overwhelm China's ability to subsidize the electricity.

[Wendigo]

I fear more the Chinese government making a move on the Chinese mining farms in the country because they fall under China's jurisdiction and it's very easy to keep the miners in check by threatening to close down their operations. By controlling the miners the Chinese government basically can control the Bitcoin network and as China is striving to become a global leader this plan of attack might be on their agenda who knows. I don't trust the Chinese and having the most of the hashing power centralized there is certainly alarming.

[sockpuppet1]

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.

Please stop painting me as a Bitcoin permabear. I merely claimed it might not have hit the bottom yet for the decline from $1000, but I never claimed it wouldn't go higher again.

And I am not 100% sure my vaporware design (with no ETA on when I might ever implement it) will solve the centralization problem, but at least it has a chance whereas the other designs don't have a chance if they also scale up. Monero's block size auto adjustment with penalty will do nothing to stop centralization if Monero is scaled up enough that it is becomes profitable to design ASICs for it. It is more difficult to design an ASIC for Monero's memory hard proof-of-work function, thus Monero can scale up more before it becomes profitable enough to design an ASIC for it. There is no way to solve the problem of centralization using a profitable PoW design. Period. Full stop. Whether an unprofitable PoW is viable and whether it would actually fix the centralization problem, is something that can't be properly peer reviewed because there is no white paper. And I don't want to go off on that diversion right now.

My criticisms against the other coins, was just to be sure that everyone admits they are just in love with gambling and not actually making any technical solutions to anything. As long as we all admit we are just gamblers, then I STFU and let us play Lotto and try to steal from each other in the zero sum game of greater fool theory of speculation. White the Chinese mining cartel is extracting $1 million a day from us via printing-coins-out-of-thin-air and soon also by sky high transaction fees. We steal from each other with speculation volatility while the oligarchs in China steal from us. Eventually all our wealth has been siphoned from us, they (TPTB) win. Which is what "Satoshi" designed Bitcoin to do to us. Period.

Satoshi isn't some man. Bitcoin was created by a secret group funded by the banksters. How can't that be obvious by now given what profitable proof-of-work does to all of us over time.

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.

I never thought the value of Bitcoin would crash to 0. I rather think you will be forced to pay your taxes when you transact in Bitcoin by signing an output over to the appropriate authority, which will be enforced at the block chain protocol level by the Chinese mining cartel. I don't know when those capital controls will come, but my guess is after 2018, maybe later. And I think these taxes will become very high as the governments around the world are bankrupt, people love socialism, and they will need to steal the money from those who still have any.

Yes chaos such as a fragmented Internet would change many things.

Do you guys think you would support China monopolizing Bitcoin if it caused the price to go up ?

Price rise considered alone is not sufficient. If the centralized control forces you to pay 90% of your Bitcoins to the world government when ever you want to transaction them, because you must pay your fair share of socialism's bankrupt cost ($100s of trillions of unfunded social obligations owed by the bankrupt nations to their entitled citizens), then a higher price may still be a loss.

but the most probable conclusion is Satoshi was one man and he was simply mistaken

One man can't accomplish what "Satoshi" did with such precision. It was a large group of experts. No doubt about it.

You guys who have no experience in doing something like this, love to have your James Bond fantasies. But you are completely out-of-touch with the reality of actually doing what "Satoshi" accomplished.

[sockpuppet1]

I think you are wrong about this, but only to the extent that current huge subsidies in various forms (I'm including likely corruption) in China become less significant, and also probably assuming ASIC commoditization.*

Eventually you get to a point where even though the waste heat is worth less than the electricity that goes in (as your comments correctly state), using it still adds to you efficiency and not using it will be uncompetitive.

* You and I both view ASIC commoditization is significantly less likely in the foreseeable future than r0ach believes. I may differ from you in that I don't completely rule it out longer term.

The cost of electricity for the corrupt in China can be essentially free (although it may be more at the level of 2 cents per KWH now from what I heard, so that the power players protect their political reputation in case it gets DOXXed). But there needs to be coins paid for mining, so that it is worthwhile to even do that corruption in the first place. Thus unprofitable mining with a tail reward could still be vulnerable, but in my design not so because the tail reward is so small compared to the PoW difficulty supplied by the signers of transactions, that the cartel can't find it worthwhile to do the corruption. I said my design will turn ASIC mining farms into door stops. Do you think it is wise for me to create such a CC and be assassinated? This is not a game we are playing here. This is real life and pissed off oligarchs have their ways of making people disappear.

On the ASIC commodization (besides that I already pointed out the fact that it wouldn't totally level the time-to-market access and does nothing to account for free electricity charged to the collective), it appears the opposite might occur:

If you don't know what AsicBoost is, in their own words: AsicBoost is a patent-pending method to lower your total cost per Bitcoin mined by approximately 20%.
The key word here is patent. Such a technology has the potential to dominate mining but patents go against bitcoin's FOSS design. The idea to make AsicBoost's technology impossible to be used on bitcoin has already been brought up and embraced by certain Core developers. The reason I'm calling this a dilemma is because making AsicBoost irrelevant as Peter Todd suggests, would be something inherently illiberal and against free market principles.

What are your thoughts on this?

That Core Dev Central Planner slope sure is a slippery one.

First, centrally planned blocksize production scarcity to incentivize the use of layer 2 and altcoins. Now, doing favors for the chinese mining cartel to protect them from more efficient competition. Then, deleting Satoshi's coins to keep the public "safe"...

[sockpuppet1]

Even at $3000, mining might expand enough to marginalize China. That is a numbers question and we don't have the numbers.

Smooth I suspect you've been busy doing other s/w work lately bcz you've been quiet and also because you don't totally have your mind immersed in this right now.

At 12.5 coins per block, 75 BTC per hour, and at $3000 that would be $225,000 per hour.  At 4 cents per KWH, that is 5.6 million kilowatts. Google tells that "China's power consumption in 2015 rose 0.5 percent from a year earlier to 5.550 trillion kilowatts".

That means in your scenario, Bitcoin would only be consuming one millionth of the electrical generation capacity of China. Sorry the increase in the value of Bitcoin can't overwhelm China's ability to subsidize the electricity.

Actually it is closer to a hundredth. 5.6 gigawatts power draw run for a year is 40 TWh and China's total is around 5550 TWh/year.

Ah I misread the Google quote as "kilowatt hour" and rather it is referring to annual consumption. Still 1/100th is still a small fraction.

Either way, that's a silly analysis because we both know that most of the electricity being produced in China is actually being used for important things like actual factories and cities. Only a relatively small portion is redirected to cheap Bitcoin mining. We have no idea of the scalability of that latter portion.

Ahem. You mean 0 profit margin factories with a Minsky Moment collapse imminent. China will massively reset and realign their economy away from the over reliance on zero-profit (State subsidized) manufacturing. Full employment is no longer the egregious problem that China had to worry about in the past. China  is very much diversifying now into producing high valued services and high valued, lower volume manufacturing. An example is the new ARM-based CPUs being produced out of China.

China will have abundant power to charge to its collective and use to control anything that is important for China's Communist Party to control. And Rockefeller has been over there consulting with them. The banksters are doing very well on their plan for the new totalitarian world order.

[DimensionZ]

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?