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Author Topic: [white paper] Purely P2P Crypto-Currency With Finite Mini-Blockchain  (Read 23843 times)
AnonyMint
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October 16, 2013, 09:19:18 AM
 #101

Powerful argumentation, as always.

I added a nod to PoS, because I am not omniscient. Let others try to show it is less centralizing if they can. But perhaps not in this thread?

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October 16, 2013, 10:00:59 AM
 #102

Then you are arguing against the Mini-blockchain design, and also against Bitcoin's design.
What is centralized about Bitcoin or the mini-blockchain design? The mini-blockchain design is sort of centralized in the sense that new nodes can rely on older nodes who have stored a lot of history, but there is no absolute requirement for any node to store anything more than the few days of history that the mini-blockchain requires and there are ways for the network to defend its self against attacks even if none of the nodes choose to store long term history.

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October 16, 2013, 10:31:17 AM
 #103

Then you are arguing against the Mini-blockchain design, and also against Bitcoin's design.
What is centralized about Bitcoin or the mini-blockchain design? The mini-blockchain design is sort of centralized in the sense that new nodes can rely on older nodes who have stored a lot of history, but there is no absolute requirement for any node to store anything more than the few days of history that the mini-blockchain requires and there are ways for the network to defend its self against attacks even if none of the nodes choose to store long term history.

I am not sure if you were addressing this to me or Etlase2. You quoted me so I will reply.

Isn't the applicable discussion the specifics of 50+% attack and how we resolve it?

http://bitfreak.info/mbc-wiki/index.php?title=Weaknesses_and_attack_vectors#The_Secret_Chain_Attack

I need to do some more thinking about the proposals for resolving it. In any case, lightweight peers are relying on "super" peers which have been online longer or otherwise have more history saved. Ditto for Bitcoin.

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October 16, 2013, 11:35:35 AM
 #104

I want to be very careful how I word my reply to this (which is why I didn't reply immediately because I am often not as careful in my forum posts as I am with programming code), because I really want to convince you to be as objective as possible without being condescending or otherwise using force. My goal should be to try to explain to you what I think is objective and why. Also to try to catch myself where I am not balancing objectivity of money against objectivity of realities of attaining consensus. And let's see where it takes us.

My long-winded way of saying let's both take a deep breath and try our best to discuss this objectively.

1. The debasement of mined (above ground) gold never stops, i.e. it is roughly 1 - 3% per year throughout history.
It will eventually stop though, there is only so much gold in the Earth.

Can I be very matter-of-fact without sounding like a jerk or unfriendly?

Richard Branson is already talking about mining asteroids. Malthusians have always been wrong since the dawn of civilization. I explained why in this blog:

http://unheresy.com/Information%20Is%20Alive.html#2nd_Law_of_Thermo

Do you remember the peak oil lunatics (apologies to any who haven't read the latest news)? We are now finding more oil and natural gas than we can consume in Australia and other places. Cars already run on natural gas (Honda has one for sale in the USA). When I was ridiculing them years ago, I did it by showing the entire world uses as much oil as would be produced by a medium size river flowing in oil. It is insane to think we are any where near tapping out the resources on earth. People will believe anything they read in the mass media even when it is complete nonsense from any scientific calculation.

Even if that was a true statement, it is objectively irrelevant because gold mining will continue on earth until long after we are dead.

And so if the point was to say Bitcoin won't be stricter than gold, it is objectively false.

Personally I don't think perpetual debasement is a desirable thing but this is really a debate for another thread.

But inherent in your subjectivity is that you deeply believe it is better have a strictly limited money supply. And this sort of belief is irrational but it seems very difficult to get believers to study it objectively. Note I used to think the way you do back in 2006, just drill down the link in the following quote and you will find my writings promoting silver and gold (luckily I wised up and never sent that email to Cool Page users):


Thus having suffered from that delusion  Embarrassed  Lips sealed  Cry (and lost a lot of money and time away from programming too!) and now having emerged from it and seen the rational truth, I don't want to go backwards. I'd rather try to educate others, or let them explain to me why my logic is not objective (then I could go backwards, but they won't be able to, because I've thought about this for years).

I still own silver, but this is because I expect a wipeout and reset of the global financial system, not because I expect a strict monetary system to ever have any practical use. It has never been the case throughout all of history that there is existed a strict money. Never! Some people try to cite the 1800s in the USA, but they forget the private banks were printing fractional reserve gold receipts, because society can't run without debasement. Either you get it officially or you get it by cheating and bank runs every few years as we had in the tumultuous 1800s which is why we eventually ended up with a central bank system. Others cite Byzantine Empire of Eastern Rome but they don't realize that gold was being imported continuously, thus the money supply was always expanding. As that reversed, the empire collapsed.

If we do a coin where debasement ends, then it will not live long.

Like I've said many times, I want to avoid any controversial changes, and perpetual debasement is certainly one of the most controversial changes possible.

We can surely create two coins, one with and one without. That is like a one line change in the source code.

Moldbug's point is that there can only be one blockchain that wins. This is the nature of money.

We have very low chance of winning against Bitcoin (you underestimated how many developers would want to develop this and you are underestimating how much power the mini-blockchain has by itself against Bitcoin, because first-to-market is nearly everything in cases where there can only be one, e.g. MS Windoze). We will need to be different to have any chance.

And not just a little bit different. We need to be different in every critical way.

And this is critical not just because of the monetary theory and PROVEN HISTORY, but also because we need debasement to make certain things work correctly as we are discussing in the other thread for the implementation.

A few percent per year debasement isn't going to hurt any savers in the coin as it is exploding in value 1000%, and it bringing more into mining economy means the coin has more users and thus will grow adoption faster.

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October 16, 2013, 11:46:25 AM
 #105

Isn't the applicable discussion the specifics of 50+% attack and how we resolve it?
Like I said, it is helpful in resolving a secret chain attack (which is different to a 51% attack) but not absolutely necessary. In the worste case scenario (where new nodes are unable to find any old node with a sufficient amount of history) the client will simply refuse to participate in the network until the conflict is resolved or until it receives an updated checkpoint from the user which points to the correct chain. In this way we exclude any possibility of the attacker tricking and "recruiting" new nodes, vastly lowering the chances that it could ever succeed in overwhelming the rest of the network.

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October 16, 2013, 11:56:47 AM
 #106

Richard Branson is already talking about mining asteroids. Malthusians have always been wrong since the dawn of civilization. I explained why in this blog:
While I don't want to get into a debate about monetary policies, I want to post a link to this article I wrote because it explains exactly why I think the way I think when it comes to economics: True Money. But I also want to point out that there is a limit to how much gold can be mined from other planets or asteroids, and that is because if we increase the mass of the Earth too much it will cause our orbit to become unstable. The people who inevitably always prove to be wrong are the ones who believe in perpetual anything. Everything has its limits and if you don't respect those natural limits the whole thing will come crashing down.

Quote
Even if that was a true statement, it is objectively irrelevant because gold mining will continue on earth until long after we are dead.
Yeah well the last of the bitcoins probably wont be mined until after we are dead so I don't quite see your point.

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October 16, 2013, 12:17:59 PM
 #107

Richard Branson is already talking about mining asteroids. Malthusians have always been wrong since the dawn of civilization. I explained why in this blog:
While I don't want to get into a debate about monetary policies, I want to post a link to this article I wrote because it explains exactly why I think the way I think when it comes to economics: True Money.

From your link:

Quote
As we can see, the single most important property of any currency is the ability of the currency to hold value over time

That statement has never been true even once in the history of the world.

Every single currency has died. The evidently most important property of a currency is that society can debase it.

I believe in science, which means we must measure our theories against measured reality.

Where has your reality ever existed in the history of the world since Mesopotamia? Can you give me even one example where that statement has been true? If your basis statement is false, then what do you have objectively remaining?

Any way, you take the coin with no debasement and I will take the coin with it, and let's see what the market chooses.

As I said, it is only a small change in the source code.

So no problem? But will you FEEL you don't want me to be involved because you know I will create a version with small, perpetual debasement? Subjectivity stinks. Much better when everyone involved is rational, so emotions don't mess us up.

Also two coins dilutes our energies somewhat doesn't it.

But I also want to point out that there is a limit to how much gold can be mined from other planets or asteroids, and that is because if we increase the mass of the Earth too much it will cause our orbit to become unstable.

Scientifically false.

6,000,000,000,000,000,000,000 tonnes versus
170,000 tonnes.

The people who inevitably always prove to be wrong are the ones who believe in perpetual anything. Everything has its limits and if you don't respect those natural limits the whole thing will come crashing down.

Calculations are more important than irrational beliefs.

Somethings run in effect perpetually, at least on our relevant timescale.

Quote
Even if that was a true statement, it is objectively irrelevant because gold mining will continue on earth until long after we are dead.

Yeah well the last of the bitcoins probably wont be mined until after we are dead so I don't quite see your point.

I will be 68 in 2033. The rate of debasement will be miniscule a decade before that.

The point is you were implying gold would one day stop debasing, yet that couldn't possibly be in the next 1000 years, so Bitcoin ending in 2033 is much stricter than gold. And even gold has never been a currency without being debased.

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October 16, 2013, 12:32:31 PM
 #108

What will happen as it does after every debt crisis and reset is interest rates will be skyhigh.

So investors will want to buy bonds. But Bitcoin won't be able to back bonds, because it doesn't debase. So fractional reserves will be built on top of Bitcoin or more likely it will be forsaken (cartels will likely control it by then, we can see it already headed that way now) and the new digital fiat currencies will be preferred by investors.

Actually it doesn't really matter. If end the debasement just to appease goldbugs (assuming that is the main audience now), then who cares when we end up with the NWO digital fiat currency. Wink

Just make our money now and we will be old then any way. Maybe I can consider to hold my nose and just nevermind what is long-term correct.

Are we sure we want to be exactly the same as Bitcoin? The survey says there is a market for perpetual debasement. We will give that market away while reducing our differences from Bitcoin. Wise?

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October 16, 2013, 01:00:24 PM
 #109

Remember that coins are perpetually lost (ditto in Bitcoin) so without creating new coins forever, the system will eventually have 0 coins.

While I don't want to get into a debate about monetary policies

Okay then how about we look at this from the objectivity of making the coin work correctly?

One potential attack vector is that as debasement ends, then miners must depend on transaction fees. But a cartel could offer to process transactions for 0 tx fees (or even negative tx fees...by sending a refund tx), thus bankrupting the other miners (users would see they can send 0 tx fee txs), thus allowing them to own the coin. This is another reason I think we should set tx fees with the protocol (see my other reason upthread). Setting a tx fee could replace debasement, but it is not consistently the same for each block and cartels might not relay all transactions (and they might be able to siphon them to them with their marketing, e.g. Amazon offering a Bitcoin client). So potentially independent miners could still be driven bankrupt. This was debated exhaustively in my Bitcoin : The Digital Kill Switch thread, and no one was able to refute it.

Without debasement, there is no way to get non-tainted virgin coins (every coin will have a history possibly all passing through illegal activity at some point). Taint is a real-world issue:

http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

Quote
Proving that your cash is connected to a crime is surprisingly easy to demonstrate. That's because 97% or more of cash circulating today contains tiny concentrations of narcotics residues—primarily cocaine. All police need to do is to bring in a drug-sniffing dog to inspect the cash.  If the dog alerts, police seize the cash. And, under civil forfeiture rules, it's up to you to prove that the cash has a legitimate origin.

Consider the case of Emiliano Gomez Gonzolez. During a traffic stop, Nebraska state troopers asked Gonzolez for permission to search his vehicle. During the search, the troopers found bundles of currency totaling $124,700. Based on a dog sniff, police seized all the money.

Gonzolez contested the forfeiture in court. Prosecutors neither convicted nor accused Gomez or any of the other owners of the seized cash of any crime. Nor did police find any drugs, drug paraphernalia, or drug records connected to the cash. Despite these facts, a federal appeals court upheld the confiscation of every dollar found in the vehicle.

With a cartel above, then no way to get coins anonymously from mining any more.

So what is wrong with a 3 or 5% per year debasement?

What you really want to avoid is the following, i.e. 50 - 100% per year:

http://armstrongeconomics.com/2013/10/16/fed-balance-sheet-lack-of-oversight/


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October 16, 2013, 01:32:16 PM
 #110

Readers please make your opinions known by at least voting on the polls at following links:

Features:
https://bitcointalk.org/index.php?topic=279340.0

Rate of debasement:
https://bitcointalk.org/index.php?topic=311668.0

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October 16, 2013, 03:15:58 PM
 #111

AnonyMint try to make a thorium coin instead of a gold or silver one (Bitcoin/Litecoin).
Probably it would do the trick (debasement, scarcity etc).

Just my out of the box thought..
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October 16, 2013, 03:19:37 PM
 #112

Isn't the applicable discussion the specifics of 50+% attack and how we resolve it?
Like I said, it is helpful in resolving a secret chain attack (which is different to a 51% attack) but not absolutely necessary. In the worste case scenario (where new nodes are unable to find any old node with a sufficient amount of history) the client will simply refuse to participate in the network until the conflict is resolved or until it receives an updated checkpoint from the user which points to the correct chain. In this way we exclude any possibility of the attacker tricking and "recruiting" new nodes, vastly lowering the chances that it could ever succeed in overwhelming the rest of the network.

To be pedantic, technically the term "51%" is incorrect. From Satoshi's whitepaper, it only takes infinitesimally more than 50%, which is why I write 50+%.

If I am not mistaken this secret chain attack is still a 50+% attack, because the attacker must be able to generate new PoW solutions (at same or greater difficulty) faster than the cooperating, honest peers.

The centralizing aspect is we depend on those super nodes (peers) to provide the historical evidence to help resolve the attack, or we wait for checkpoint to come from community. Both are not perfectly decentralized methods of resolution, but I don't think this presents a major problem, as I argued to Etlase2.  As far as I can see, Bitcoin has the analogous centralized resolution to a 50+% attack, because light clients can't resolve these issues without trusting the full nodes. Bitcoin must trust the full nodes for mining, verifying transactions, etc, so it is much more centralizing in real-time in normal scenarios. Thus conceptually the mini-blockchain is superior (we have to prove it in real world though).

P.S. my argumentative style is intended to make sure the effort succeeds in the market place. I am not disrespecting you. I appreciate of course what you have designed.

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October 16, 2013, 03:35:12 PM
 #113

Every single currency has died. The evidently most important property of a currency is that society can debase it.

I believe in science, which means we must measure our theories against measured reality.
Every single unlimited fiat currency in history has died, so your science isn't exactly based on an unbiased set of observations. The simple fact is that most people who believe in Bitcoin-type technology also believe in Austrian principles. If you want to put so much stock into surveys then you must accept the fact that most of us prefer a limited money supply.

Quote
Any way, you take the coin with no debasement and I will take the coin with it, and let's see what the market chooses.
That's like asking me and other members of this forum whether we would prefer Bitcoin or Federal Reserve notes. The answer is plainly obvious.

Quote
6,000,000,000,000,000,000,000 tonnes versus
170,000 tonnes.
What is that even supposed to mean? How can you deny the fact that the mass of the Earth can only be increased to a certain degree?

Quote
I will be 68 in 2033. The rate of debasement will be miniscule a decade before that.
The last Bitcoin block will be mined in 2140.

Quote
The last block that will generate coins will be block #6,929,999 which should be generated at or near the year 2140

https://en.bitcoin.it/wiki/FAQ

Quote
The survey says there is a market for perpetual debasement.
The survey says people want anonymity, not perpetual debasement. I think they have experienced enough of that as it is.

Quote
One potential attack vector is that as debasement ends, then miners must depend on transaction fees.
That is the point of re-mining lost coins, it ensures that miners will always have something to mine other than transaction fees and also ensures that the money supply will remain stable, instead of increasing or decreasing perpetually, which I personally think is the most logical and rational option.

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October 16, 2013, 04:10:39 PM
 #114

To be pedantic, technically the term "51%" is incorrect. From Satoshi's whitepaper, it only takes infinitesimally more than 50%, which is why I write 50+%.
That is true, yes.

If I am not mistaken this secret chain attack is still a 50+% attack, because the attacker must be able to generate new PoW solutions (at same or greater difficulty) faster than the cooperating, honest peers.
It's very similar to a 50+% attack but a little bit different because it can only be pulled off by generating the fake chain in secret. A 50+% attack is not as drastic, it would only allow the attacker to alter recent transactions, and the older a block was, the harder it would be to alter. Pretty much like a 50+% attack with Bitcoin, which has yet to happen btw. But the main point is that historic "super nodes" are not absolutely necessary, even without any such super nodes there is still a very minute chance that a secret chain attack could be pulled off successfully if the attacker is unable to recruit new nodes.

P.S. my argumentative style is intended to make sure the effort succeeds in the market place. I am not disrespecting you. I appreciate of course what you have designed.
No need to worry, I am a very thick skinned person and I can appreciate a bit of healthy criticism and debate. Life would be boring if we all agreed with each other. I can also respect your desire for increased anonymity, I'm just saying that it's a very complicated thing to do and perhaps best left to future efforts. I just really want to see some of these concepts implemented and if we wait around trying to develop the perfect system we might not ever get anything done.

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October 16, 2013, 04:19:29 PM
 #115

Every single currency has died. The evidently most important property of a currency is that society can debase it.

I believe in science, which means we must measure our theories against measured reality.
Every single unlimited fiat currency in history has died, so your science isn't exactly based on an unbiased set of observations.

Every single currency has died, including gold currencies. We had gold currency in the 1800s. We don't now.

In fact, everything in the universe dies, and other things are born. This is the process of LIFE.

The simple fact is that most people who believe in Bitcoin-type technology also believe in Austrian principles.

What you believe has no relevance in science. In science we trust what we measure. Making things up out of thin air is for fairy tales.

Mises's crack up boom is occurring now, so I am not saying all Austrian economics is out-of-touch with reality. I am saying you are misinterpreting it. It never said money supplies must be constant. Mises wasn't into telling fairy tales.

http://en.wikipedia.org/wiki/Austrian_School#Inflation

Quote
He therefore used the term "inflation" to mean an excessive increase of the money supply

You are throwing the baby (normalcy) out with the bath water (Federal Reserve control) and you end up with a worse Frankenstein dark age or society kills the coin.

If you want to put so much stock into surveys then you must accept the fact that most of us prefer a limited money supply.

The two surveys say that "create coins forever" is popular and 5% is the most popular rate thus far in the poll.

I am pleasantly surprised to the see members here are astute about this issue.

Quote
Any way, you take the coin with no debasement and I will take the coin with it, and let's see what the market chooses.

That's like asking me and other members of this forum whether we would prefer Bitcoin or Federal Reserve notes. The answer is plainly obvious.

Apparently not. See the graph of the 50 - 100% increases lately from Fed. Apparently people here are reasonable and understand that we need to prevent cartels, and a small rate is normal and natural. We prevent it from rising to 50% because there is no Fed to control it.

It would be much better to protect that with a natural rate, then to lose it because we are selfish deflationists who want to steal from producers by sitting on idle savings for 600 years and create dark ages.

Quote
6,000,000,000,000,000,000,000 tonnes versus
170,000 tonnes.

What is that even supposed to mean? How can you deny the fact that the mass of the Earth can only be increased to a certain degree?

You must compare the relative mass of the earth to the total supply of gold to see that your fear is unfounded. As in several orders-of-magnitude beyond impossible. If you were a scientist, you would be ashamed of making that assertion, but I am not trying to embarrass you because I know you are not a scientist. You are just trying to help create a better coin and I appreciate that. I hope you will respect those who are more mathematical and knowledgeable than you are and try to learn rather than irrationally resist. That is not to say that I won't learn from you too. I already did from your excellent design of the mini-blockchain.

Quote
I will be 68 in 2033. The rate of debasement will be miniscule a decade before that.
The last Bitcoin block will be mined in 2140.

Quote
The last block that will generate coins will be block #6,929,999 which should be generated at or near the year 2140

https://en.bitcoin.it/wiki/FAQ

I had made a rough table of the planned Bitcoin debasement in the past. Let me reconstruct it, since I can't find it quickly.


2009 - 2012 0  10,500,000
2013 - 2016 5,250,000 15,750,000 11%
2017 - 2020 2,625,000 18,375,000 4%
2021 - 2024 1,312,500 19,687,500 1.7%
2025 - 2028   656,250 20,343,750 0.8%
2029 - 2032   328,125 20,671,875 0.4%
2033 - 2036   164,065 20,835,940 0.2%
2037 - 2040    82,033 20,917,973 0.1%


As of 2033, there isn't much debasement. Even a decade before that it has dropped below 1%. So my original statement was correct.

Bitcoin stops working for obtaining anonymous coins from mining, right when we will really need at the world goes into the SHTF mode and capital controls will be every where. That is highly suspicious to me.

Quote
The survey says there is a market for perpetual debasement.

The survey says people want anonymity, not perpetual debasement. I think they have experienced enough of that as it is.

See the surveys I mentioned above.

Quote
One potential attack vector is that as debasement ends, then miners must depend on transaction fees.

That is the point of re-mining lost coins, it ensures that miners will always have something to mine other than transaction fees and also ensures that the money supply will remain stable, instead of increasing or decreasing perpetually, which I personally think is the most logical and rational option.

I added that as an write-in option to the poll.

Yet that is only miniscule. The lost coins only gradually take the money supply towards 0 over decades. It can't substitute for a reasonable level of debasement.

Thus you have not addressed my point that cartels can take over mining otherwise.

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October 16, 2013, 04:37:43 PM
 #116

To be pedantic, technically the term "51%" is incorrect. From Satoshi's whitepaper, it only takes infinitesimally more than 50%, which is why I write 50+%.
That is true, yes.

To be very pedantic, u can do the attack even with 42%. Depends on luck. Smiley
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October 16, 2013, 04:56:51 PM
 #117

To be pedantic, technically the term "51%" is incorrect. From Satoshi's whitepaper, it only takes infinitesimally more than 50%, which is why I write 50+%.
That is true, yes.

To be very pedantic, u can do the attack even with 42%. Depends on luck. Smiley

Smiley And the probability becomes astronomically unlikely to sustain that for 6 blocks with less than 50%, based on the random walk calculation in Satoshi's whitepaper. I know you knew that. Smiley

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October 16, 2013, 05:21:49 PM
 #118

Every single currency has died, including gold currencies. We had gold currency in the 1800s. We don't now.
That is some what true, but I would argue that gold is still used a currency in some places even to this day and the only reason we got rid of the gold standard in the past was to replace it with a fiat system, not necessarily because a gold standard wasn't working.

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He therefore used the term "inflation" to mean an excessive increase of the money supply
Even if you are correct it's still an impossibly difficult task to algorithmically implement the correct level of debasement over long periods of time. The only logical reason for perpetual debasement is to keep the value of the coins stable, but it is extremely difficult to achieve this because the value of the coin isn't just a function of the total money supply.

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It would be much better to protect that with a natural rate, then to lose it because we are selfish deflationists who want to steal from producers by sitting on idle savings for 600 years and create dark ages.
I would like to know who has 600 years to sit on idle savings for a start. There is nothing selfish about deflation, it is the natural consequence of a currency which experiences increased demand and no one should have the ability to steal that extra value from the currency. What you are basically saying is that people shouldn't be allowed to save their money and hope it goes up in value, which is obviously not the spirit of cryptocurrency.

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You must compare the relative mass of the earth to the total supply of gold to see that your fear is unfounded. As in several orders-of-magnitude beyond impossible.
Just because the limit is large doesn't change the fact there is a limit. Plus if you calculate the cost of recovering gold even from the nearest planet in our solar system, it works out the the cost of the transportation is more than the value of the gold.

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As of 2033, there isn't much debasement. Even a decade before that it has dropped below 1%. So my original statement was correct.
Yes, but by 2033 when it becomes extremely hard to mine even small amounts of bitcoin, the value of each bitcoin will be much higher. The creation of new bitcoins drops off exponentially for a reason, Satoshi wasn't an idiot. He designed it that way for a reason and it seems to be working well thus far.

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Yet that is only miniscule. The lost coins only gradually take the money supply towards 0 over decades. It can't substitute for a reasonable level of debasement.
The whole concept of a "reasonable level of debasement" is completely subjective in the first place, thus impossible to implement algorithmically in a fair and consistent manner. Being able to re-mine lost coins doesn't offer any level of debasement, it simply ensures that the money supply wont get perpetually smaller and cause perpetual inflation in that way. If the value of the coin goes up it will be purely due to an increase in demand and other natural economic forces.

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October 16, 2013, 05:39:45 PM
 #119

If I am not mistaken this secret chain attack is still a 50+% attack, because the attacker must be able to generate new PoW solutions (at same or greater difficulty) faster than the cooperating, honest peers.

It's very similar to a 50+% attack but a little bit different because it can only be pulled off by generating the fake chain in secret. A 50+% attack is not as drastic, it would only allow the attacker to alter recent transactions, and the older a block was, the harder it would be to alter. Pretty much like a 50+% attack with Bitcoin, which has yet to happen btw.

You are equating "50+% attack" with what it means in Bitcoin. The secret chain attack doesn't exist in Bitcoin. Whereas I am saying any attack that requires possessing 50+% of the PoW resources, is a 50+% attack. The secret chain attack requires being able to outpace the creation of PoW solutions, thus it is a 50+% attack.

But the main point is that historic "super nodes" are not absolutely necessary, even without any such super nodes there is still a very minute chance that a secret chain attack could be pulled off successfully if the attacker is unable to recruit new nodes.

I am thinking it depends how far back in the history the attacker can go, i.e. what percent of the PoW difficulty they have.

If the nodes online only have a year of transaction history, but the attacker can go back further and create transaction history that matches the proof chain, then we need evidence from before that to decide which is the valid chain. You might want to add this to the wiki if I am correct.

P.S. my argumentative style is intended to make sure the effort succeeds in the market place. I am not disrespecting you. I appreciate of course what you have designed.

No need to worry, I am a very thick skinned person and I can appreciate a bit of healthy criticism and debate. Life would be boring if we all agreed with each other. I can also respect your desire for increased anonymity, I'm just saying that it's a very complicated thing to do and perhaps best left to future efforts. I just really want to see some of these concepts implemented and if we wait around trying to develop the perfect system we might not ever get anything done.

I am also concerned about time-to-implement, and I won't take on something I can't implement in reasonable time. If I am correct that we can't add the mix-net later (as we discussed in the implementation thread), then what choice do we have but to implement now?

If I could convince you to argue for a 3 - 5% debasement, I would gain an important ally. And it would show that it is possible to convince goldbugs. And you would know what point actually made it click in your mind.

Hope you saw this, I added it after posting:

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He therefore used the term "inflation" to mean an excessive increase of the money supply

You are throwing the baby (normalcy) out with the bath water (Federal Reserve control) and you end up with a worse Frankenstein dark age or society kills the coin.

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October 16, 2013, 06:23:14 PM
 #120

You still haven't addressed how to stop cartelization of mining if you remove debasement?

You want a cartelized coin?

Every single currency has died, including gold currencies. We had gold currency in the 1800s. We don't now.

That is some what true, but I would argue that gold is still used a currency in some places even to this day and the only reason we got rid of the gold standard in the past was to replace it with a fiat system, not necessarily because a gold standard wasn't working.

Currency is what you can trade for goods & services in society. Don't conflate with assets which are what you can trade to investors.

No where in any normally functioning country can gold be directly traded for goods & services.

Gold standard failed in the USA due to very frequent bank runs and depressions due to private banks running fractional reserves of loans in gold receipts. Strict money systems fail because society will not agree to not use loans. And mathematically loans require more money supply every year due to the interest rate. So if you only have gold, then you have no choice but to cheat and debase it with fractional reserves.

How was it working?

Goldbugs have elaborate illusions that sustain their delusion. Breaking them out of the dream-like state is not easy. I was quite ashamed with myself (having thought I was rational) when I fell out of it finally and returned to rationality. It caused me to doubt whether I will always be rational. My excuse is I was going through some severe personal issues at the time (e.g. sister was murder by her husband, loss of my marriage, got influenced by a guy named Jason Hommel, etc). I also went off on a God delusion during that period too  Embarrassed All of that caused me to change from a worldclass productive entrepreneur and programmer into a loser. But I should blame it on myself only (take responsibility).

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He therefore used the term "inflation" to mean an excessive increase of the money supply

Even if you are correct it's still an impossibly difficult task to algorithmically implement the correct level of debasement over long periods of time. The only logical reason for perpetual debasement is to keep the value of the coins stable, but it is extremely difficult to achieve this because the value of the coin isn't just a function of the total money supply.

One reason (see bold text below for other reason) perpetual debasement exists is because society will always use loans and loans pay an interest rate, thus the demand for money increases compounded every year. If you don't have the money to pay the interest rates, then society will create it somehow which means for example creating fractional receipts (IOUs) for Bitcoins.

There is no such thing as a stable value of anything in the universe. Everything is measured relative to everything else. Please study my The Universe blog article. Do you realize that even measurements change depending on relative speeds?

http://unheresy.com/The%20Universe.html

Nothing the in universe is at a fixed position. You have a layman's incorrect comprehension of what it means "to exist".

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It would be much better to protect that with a natural rate, then to lose it because we are selfish deflationists who want to steal from producers by sitting on idle savings for 600 years and create dark ages.

I would like to know who has 600 years to sit on idle savings for a start.

Rothschild family for example.

There is nothing selfish about deflation, it is the natural consequence of a currency which experiences increased demand and no one should have the ability to steal that extra value from the currency.

Currencies don't have exchange price demand, you are talking about an asset, e.g. Bitcoin is not primarily a currency.

Currencies have a demand based on the velocity of trade (money) in the economy but since they are the unit-of-account for all gooods and services, they don't have an exchange demand. In other words, most Americans don't care what the fluctuations in the exchange value of the dollar to other currencies or gold is, because everything they spend on it is priced in dollars. Now the relatively large influence of foreign exchange ingress and egress is why small countries are beholden to the dollar, they don't really have independent currencies.

Persistent monetary deflation in a true currency (not an asset) only occurs either in a dark age where hoarders thus destroy all the production (by failing to invest in production due to hoarding currency or assets) or in situation where the gold standard is being fractionally debased but hasn't defaulted yet, so there is an illusion that gold's value is rising persistently. Yet as we saw in the 1800s, the fractional reserves of gold certificates by the private banks in the 1800s eventually lead to total collapse where JP Morgan had to bailout the USA and in turn probably obtained the control to implement the Federal Reserve system in 1913, as documented in The creature from Jekyll Island and Bill Still's video The Money Masters.

So you can have an illusion about asset being a currency and pretend to yourself that persistent deflation is a demand for a currency (which is actually demand for that asset not a true currency), but that is not reality.

What you are basically saying is that people shouldn't be allowed to save their money and hope it goes up in value, which is obviously not the spirit of cryptocurrency.

No I specifically said the debasement rate should not be too high (sometimes not higher than the prevailing bond rates), because saving for lean times is important, as is the concept of delaying gratification to save. Yet we want that savings to be invested in productive activities. What is savings? It is society saying that you generated excess production in the past and it now trusts you to continue to do that, thus it allows you to decide which investments to do.

It is not a license to sit on that talent, and expect to leech off the others who are increasing production. Society won't tolerate that. The Bible (taken as a book of knowledge about realities of life) specifically talks about this in the Parable of the Talents.

Debasement also exists to force you to invest, and not allow you to cheat the implicit contract society has made with you.

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You must compare the relative mass of the earth to the total supply of gold to see that your fear is unfounded. As in several orders-of-magnitude beyond impossible.

Just because the limit is large doesn't change the fact there is a limit.

Please if you are not going to admit when you are wrong, then that is disingenuous. I always do when I am wrong. A 20 foot basketball rim is a limit too, yet you will never dunk on it.

Plus if you calculate the cost of recovering gold even from the nearest planet in our solar system, it works out the the cost of the transportation is more than the value of the gold.

Moving the goal posts in a soccer game is not allowed. Many people have said things were impossible, that later become very possible. Seems to happen regularly. That is what technology is all about.

I said Branson was talking about mining asteroids as they pass nearby earth.

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As of 2033, there isn't much debasement. Even a decade before that it has dropped below 1%. So my original statement was correct.

Yes, but by 2033 when it becomes extremely hard to mine even small amounts of bitcoin, the value of each bitcoin will be much higher. The creation of new bitcoins drops off exponentially for a reason, Satoshi wasn't an idiot. He designed it that way for a reason and it seems to be working well thus far.

Wow the greed. Getting something for nothing. Great virtues of every boom and bust.

And yeah he made sure he got most of the coins in the first years. Yet you are concerned about a small premine for this coin.

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Yet that is only miniscule. The lost coins only gradually take the money supply towards 0 over decades. It can't substitute for a reasonable level of debasement.

The whole concept of a "reasonable level of debasement" is completely subjective in the first place, thus impossible to implement algorithmically in a fair and consistent manner. Being able to re-mine lost coins doesn't offer any level of debasement, it simply ensures that the money supply wont get perpetually smaller and cause perpetual inflation in that way. If the value of the coin goes up it will be purely due to an increase in demand and other natural economic forces.

The data I have (it is buried on one of my threads), is the average debasement for society is consistently about 5% for normalcy. This goes back to the 1800s in the USA.

You can't change what is normal, just because you think it would be neat. Society will route around you as if you are parasite that needs to be eradicated.

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