Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[JorgeStolfi]

Hm, why are people euphoric about BIP100 superseding BIP101?

AFAIK, there is no implementation yet of BIP100, and its details are not even fully specified.  (Is there one?)

Moreover, BIP100 will allow blocks larger than 1 MB, won't it?

Moreover, BitcoinCore does not implement BIP100, and so fat Blockstream has been totally opposed to any increase.  So, if BIP100 gets into effect, it will be by some other implementation, right?.

Am I missing something?

[ChartBuddy]

Coin
Explanation

[hmmkay]

If bitcoin becomes one of the biggest financial instruments, and there is a fork, favouring miners mostly, my guess is that everyone (techsavvy enough) will fire up their computer to mine. Suddenly those mining pools will look very small compared to billion+ computers running against them.

Average user cpu mining might get around 20 mh/s if they're lucky (see: https://en.bitcoin.it/wiki/Non-specialized_hardware_comparison#CPUs.2FAPUs)

The current network hashrate is estimated at nearly 400,000 TH/s - meaning, you need about 20 billion average users to mine bitcoin with their computers...

Somehow, I don't think that everyone (techsavvy enough) will have even the slightest effect.

Well, that's concerning to say the least.

[Peter R]

Hm, why are people euphoric about BIP100 superseding BIP101?

AFAIK, there is no implementation yet of BIP100, and its details are not even fully specified.  (Is there one?)

Moreover, BIP100 will allow blocks larger than 1 MB, won't it?

Moreover, BitcoinCore does not implement BIP100, and so fat Blockstream has been totally opposed to any increase.  So, if BIP100 gets into effect, it will be by some other implementation, right?.

Am I missing something?

I don't think you are.  However, I think this will be a good thing (yes, I know, I see everything as good for bitcoin )

Imagine this: Core refuses to pull BIP100 because of developer deadlock (perhaps Gavin objects [I hope he does], or perhaps Greg disagrees).  Then Jeff Garzik forks Core into "Bitcoin-100" perhaps along with Gavin.  We end up with three competing implementations: Core (1 Mb), XT (BIP101) and Bitcoin-100 (BIP100).  Node operators then express their choice by downloading and running their favourite client.  Eventually, the losing dev teams cave (they don't want to lose all of their user base) and implement changes to make their code compatible with whatever appears to be the favourite scaling solution.

This has two benefits:

1.  Consensus is achieved for larger blocks

2.  We end up decentralizing development so that the circle on the right in the image below contains three slices of (hopefully) significant size.  

[brg444]

Hm, why are people euphoric about BIP100 superseding BIP101?

Because BIP101 is broken.

Moreover, BIP100 will allow blocks larger than 1 MB, won't it?

Yes, correct, this is the purpose of BIP 100.

Moreover, BitcoinCore does not implement BIP100, and so fat Blockstream has been totally opposed to any increase.  So, if BIP100 gets into effect, it will be by some other implementation, right?.

Blockstream is leading the development of a block size increase with a number of upcoming BIPXXX release as I understand it.

I don't trust much the votes from the miners but one thing is for sure they want no business with 8 MB blocks.

Am I missing something?

Everything!

[billyjoeallen]

Can't you see what these assholes are doing? They want to scare everyone off of BFX because those $25 M in margin longs will all have to close at some point. BY opposing block size increase, they are keeping almost any new investment from VCs because a Bitcoin that doesn't scale is a bitcoin that can't disrupt. So when the market slumps, it will flash-crash on BFX and they will be the only ones on BFX scooping up BTC for pennies on the dollar. 

BFX has problems but so do all other exchanges.

both bulls and bears are taking down leverage. We're seeing a slump because miners don't run the show. The market does and the market ain't buying your shitty BIP100.

[ChartBuddy]

Coin
Explanation

[RoadStress]

Hm, why are people euphoric about BIP100 superseding BIP101?

AFAIK, there is no implementation yet of BIP100, and its details are not even fully specified.  (Is there one?)

For me this shows the level of chaos that's present in this ecosystem. Luckily this is a very fast and innovative system and things will improve faster and better than in other systems. This is the first attempt of the ecosystem to learn and reach consensus. It needs time to learn how to deal with these situations. But for now there is chaos.

Because BIP101 is broken.

Why?

[Peter R]

Blockstream is leading the development of a block size increase with a number of upcoming BIPXXX release as I understand it.

The Flexcap idea doesn't make sense to me.  It seems Adam is trying to artificially make it more expensive for miners to publish large blocks.  The reason this doesn't make sense to me is that even without a block size limit it would be more expensive for miners to publish large blocks due to the orphan cost.  Why use "Flexcap" to simulate the natural supply and demand dynamics that already exist?

The fact that larger blocks are more costly to produce is illustrated in Fig. 8 of this paper:



As an example, in the absence of a block size limit, it would cost a miner approximately 100 BTC on average to publish a 128 MB block, assuming a propagation impedance of 7.5 sec / MB.

In a discussion with a 0.5% miner, Adam recently said:

   "Now if there is an excess of supply, price falls, ergo fees will drop to zero basically."

which is not true and demonstrates Adam's lack of understanding of the transaction fee market.  If the block size is not constrained by the protocol, then the fee per kilobyte is governed largely by the orphan cost. The orphan cost is a function of the propagation impedance for block solutions. Raising the block size limit does not affect the propagation impedance. Fees per kilobyte would be largely unchanged; however, since more kilobytes of transactions could be included in a block, the total fees per block could grow higher.

TL/DR: Flexcap reinvents the natural fee market.

[JayJuanGee]

Blockstream is leading the development of a block size increase with a number of upcoming BIPXXX release as I understand it.

The Flexcap idea doesn't make sense to me.  It seems Adam is trying to artificially make it more expensive for miners to publish large blocks.  The reason this doesn't make sense to me is that even without a block size limit it would be more expensive for miners to publish large blocks due to the orphan cost.  Why use "Flexcap" to simulate the natural supply and demand dynamics that already exist?

The fact that larger blocks are more costly to produce is illustrated in Fig. 8 of this paper:



As an example, in the absence of a block size limit, it would cost a miner approximately 100 BTC on average to publish a 128 MB block, assuming a propagation impedance of 7.5 sec / MB.

In a discussion with a 0.5% miner, Adam recently said:

   "Now if there is an excess of supply, price falls, ergo fees will drop to zero basically."

which is not true and demonstrates Adam's lack of understanding of the transaction fee market.  If the block size is not constrained by the protocol, then the fee per kilobyte is governed largely by the orphan cost. The orphan cost is a function of the propagation impedance for block solutions. Raising the block size limit does not affect the propagation impedance. Fees per kilobyte would be largely unchanged; however, since more kilobytes of transactions could be included in a block, the total fees per block could grow higher.

TL/DR: Flexcap reinvents the natural fee market.

In other words, it may take several more weeks for CCMF, based on some kind of consensus... until then, maybe we are going to get another test of $200 and possibly into the $180s-ish... ?

[Peter R]

…technical mumbo-jumbo…

In other words, it may take several more weeks for CCMF, based on some kind of consensus... until then, maybe we are going to get another test of $200 and possibly into the $180s-ish... ?

Hahaha sorry for polluting the Wall Observer thread with my tech talk.  The problem is that our usual discussion thread for this type of thing (Gold Collapsing. Bitcoin UP) was locked by the Forum Administrators.  Furthermore, my submissions to /r/bitcoin are all censored now.  Since I've lost my two favourite outlets, my Bitcoin addiction is leaking into nearby threads...

[brg444]

Blockstream is leading the development of a block size increase with a number of upcoming BIPXXX release as I understand it.

The Flexcap idea doesn't make sense to me.  It seems Adam is trying to artificially make it more expensive for miners to publish large blocks.  The reason this doesn't make sense to me is that even without a block size limit it would be more expensive for miners to publish large blocks due to the orphan cost.  Why use "Flexcap" to simulate the natural supply and demand dynamics that already exist?

The fact that larger blocks are more costly to produce is illustrated in Fig. 8 of this paper:

your beautiful graphic can't help you Peter.

you have been well advised that propagation time is not a constant and will very much improve over the years making it increasingly cheaper for miners to publish bigger blocks.

[Peter R]

Blockstream is leading the development of a block size increase with a number of upcoming BIPXXX release as I understand it.

The Flexcap idea doesn't make sense to me.  It seems Adam is trying to artificially make it more expensive for miners to publish large blocks.  The reason this doesn't make sense to me is that even without a block size limit it would be more expensive for miners to publish large blocks due to the orphan cost.  Why use "Flexcap" to simulate the natural supply and demand dynamics that already exist?

The fact that larger blocks are more costly to produce is illustrated in Fig. 8 of this paper:

your beautiful graphic can't help you Peter.

you have been well advised that propagation time is not a constant and will very much improve over the years making it increasingly cheaper for miners to publish bigger blocks.

You are confused.  What you just wrote is exactly what the Figure shows; moving to the left on the horizontal axis represents faster propagation rates.  Or just read the figure caption: "Improvements in the rate at which block solutions can be communicated to the other miners significantly decrease the cost of the attack."

This is not a problem.  As network connectivity improves, both transaction fees (measured in BTC) and the cost of spam attacks is reduced.  But that makes sense because the network is proportionally more able to handle the added TX volume.  That's why the costs are lower in the first place!  

The free market: it really does work

[JayJuanGee]

…technical mumbo-jumbo…

In other words, it may take several more weeks for CCMF, based on some kind of consensus... until then, maybe we are going to get another test of $200 and possibly into the $180s-ish... ?

Hahaha sorry for polluting the Wall Observer thread with my tech talk.  The problem is that our usual discussion thread for this type of thing (Gold Collapsing. Bitcoin UP) was locked by the Forum Administrators.  Furthermore, my submissions to /r/bitcoin are all censored now.  Since I've lost my two favourite outlets, my Bitcoin addiction is leaking into nearby threads...

Well, I was attempting to take the opportunity for either you or others to chime in regarding a potential time line for consensus... maybe the best case scenario is a couple of more weeks.. and worse case scenario would be much longer.

Regarding your technical topic, it seems that we talk about all things in this thread, so something technical about bitcoin seems a bit more related to the original topic as compared with some of our rants on religion, sex, politics and/or what the dog brought home for lunch...     

[ChartBuddy]

Coin
Explanation

[Hunyadi]

BIP100 seems awesome!

" Economic actors that wish to see the speed limit at X or Y ­ thus
dictating the fee market ­ will lobby the Chief Scientist and other “core” developers, individually,
in private, in public, with carrots, and with sticks. When bitcoin market cap achieves 10x or
more, the lobbying is even more intense. Yet there is no single human or commitment on the
planet capable of picking a good speed limit"

"Software ­ and software developers ­ should
not be taking that choice out of the hands of use

A key goal, therefore, is to transition the speed limit from software control to market control.
Remove the policy wedge. Let the free market decide the long term shape of bitcoin’s
transaction fee market, level of security and level of decentralization.
Miner voting was chosen for BIP 100 as a “lesser of the evils” Stakeholder voting is appealing,
"

"This does not give the miners “complete power.” Miner income is in the long run aligned with
users in a cooperative market relationship, even if short term counter­incentives exist. Users
signal economically via the market ­ or directly via email and social media! ­ their views on miner
behavior ­ which must be signalled up front, months in advance of any change. While imperfect,
miner voting works; it has been field tested (BIP 34).
BIP 100 is a slow, paced transition to free market control."

The best solution so far.
Great job Jeff!

[ChartBuddy]

Coin
Explanation

[Bagatell]

 The problem is that our usual discussion thread for this type of thing (Gold Collapsing. Bitcoin UP) was locked by the Forum Administrators.  Furthermore, my submissions to /r/bitcoin are all censored now.  Since I've lost my two favourite outlets, my Bitcoin addiction is leaking into nearby threads...

http://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/

[ChartBuddy]

Coin
Explanation

[Peter R]

The problem is that our usual discussion thread for this type of thing (Gold Collapsing. Bitcoin UP) was locked by the Forum Administrators.  Furthermore, my submissions to /r/bitcoin are all censored now.  Since I've lost my two favourite outlets, my Bitcoin addiction is leaking into nearby threads...

http://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/

Crazy.  Cypherdoc just posted an announcement for his thread's new home here and BANG, the Admin killed it!