Is Bitcoin over-paying for Hash-Power Security?

[Etlase2]

"Let me issue and control a Nation's money and I care not who makes its laws"-- Amsel (Amschel) Bauer Mayer Rothschild, 1838.

...

That is not very smart to accuse me of not knowing economics.

Perhaps I'm being pedantic, but http://en.wikipedia.org/wiki/Mayer_Rothschild "Mayer Amschel Rothschild (23 February 1744 – 19 September 1812)" pretty tough for a guy to make some prolific statement several decades after his death, no matter how prolific it might be.

[AnonyMint]

"Let me issue and control a Nation's money and I care not who makes its laws"-- Amsel (Amschel) Bauer Mayer Rothschild, 1838.

...

That is not very smart to accuse me of not knowing economics.

Perhaps I'm being pedantic, but http://en.wikipedia.org/wiki/Mayer_Rothschild "Mayer Amschel Rothschild (23 February 1744 – 19 September 1812)" pretty tough for a guy to make some prolific statement several decades after his death, no matter how prolific it might be.

Because it was his son:

http://en.wikipedia.org/wiki/Amschel_Mayer_Rothschild

[AnonyMint]

Microhydropower

So my innovative idea is that connecting diverse microhydropower to the grid obviates its cost advantage, because the grid doesn't always run to your ideal non-costly hydro location (rural) and also regulations are typically more onerous where the grid is (urban).

Yet with bitcoin-like PoW (proof-of-work), the electricity cost is the main input for mining new coins, yet the PoW can be submitted by wireless internet connection (cellular or satellite), so the power can be transferred to society with a very low cost connection (compared to wired connection to transfer centralized electric power).

My prior logic on this upthread:

https://bitcointalk.org/index.php?topic=285701.msg3061374#msg3061374
https://bitcointalk.org/index.php?topic=285701.msg3061171#msg3061171

Anyone thinking of mining a digicoin, should be locating a stream with high flow rate and steep drop:

http://www.energyalternatives.ca/content/Categories/MicroHydroInfo.asp

"If your site has a source of running water, you simply must investigate its potential as a source of electricity. Our experience has demonstrated that water power will produce between 10 and 100 times more power than solar or wind for the same capital investment."

http://www.energyalternatives.ca/Downloads/MicroHydroCalc.exe
http://www.oregon.gov/ENERGY/RENEW/Pages/hydro/Hydro_index.aspx

http://www.alternative-energy-news.info/micro-hydro-power-pros-and-cons/

"Energy output is dependant on two major factors: the stream flow (how much water runs through the system) and drop (or head), which is the vertical distance the water will fall through the water turbine."

http://www.microhydropower.com/

http://www.cnbc.com/id/30194554

"A river flowing at 2.2 meters/second can generate 1.5 kilowatts of electricity per every hour. Doubling that speed—not unusual in some rivers—generates up to 8 kilowatts per hour."

Diagram of system design:

http://www.whyhydropower.com/HydroTour2c.html

[AnonyMint]

Palm oil bio-diesel

Another option is palm oil bio-diesel, 508 x 0.90 x 1.30 = 594 > 478 = 0.67 x 714 that for sugarcane ethanol:

http://grist.org/article/biofuel-some-numbers/

The 1.3 is that diesel motors are about 30% more efficient. The energy balance for palm oil bio-diesel is 6 - 8 versus 8 - 9 for sugarcane ethanol, yet factor in the increased reliability and longevity of diesel generators.

Again factor in my proposed use case that you use it on-site thus don't need to transport it to and sell it to a distributor (cut out middle-men) who take a cut before product reaches the consumer.

Talk (politics) is cheap (weak). Technology is what really changes the dynamics of mankind:

http://grist.org/climate-energy/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/

[td services]

Mining would be a good store of value for excess power production in any alternative energy system with variable output based on environmental conditions - solar, wind, tidal, wave generation.

[bytemaster]

Mining would be a good store of value for excess power production in any alternative energy system with variable output based on environmental conditions - solar, wind, tidal, wave generation.

Good for the miners, yes.  Good for the network?  I think the there are better places for the network to spend money.

[gunzeon]

just to make a few alternative suggestions that might not have been kicked around yet ... with a view to moderate the mining arms race and to randomise who does the winning block ...

A Mining Right Lottery

Perhaps there should be a policy of block miners winning windows of say one or more blocks whereby their IP ( 4 or 6 ) is eligible to compete for the right to mine the next winning block.

This lottery might randomly choose an optimum fraction of the network's mining resources. Such a source of the candidate IPs could be picked sequentially, to save arguments, from the data portions of the blockchain transaction data

Standardised Hardware of miners

Maybe there could be defined a standard code, i686, x86_64, win32, win64 to start that was the only legal hardware with which mining could be done; a bit like:
 - when fishing laws restrict grid net sizes
 - international conventions restrict overspinning bullets, eye damaging lasers, poison gas or anti ballistic missiles
 - This could probably be enforced with the correct code audits somehow

[bytemaster]

just to make a few alternative suggestions that might not have been kicked around yet ... with a view to moderate the mining arms race and to randomise who does the winning block ...

A Mining Right Lottery

Perhaps there should be a policy of block miners winning windows of say one or more blocks whereby their IP ( 4 or 6 ) is eligible to compete for the right to mine the next winning block.

This lottery might randomly choose an optimum fraction of the network's mining resources. Such a source of the candidate IPs could be picked sequentially, to save arguments, from the data portions of the blockchain transaction data

Standardised Hardware of miners

Maybe there could be defined a standard code, i686, x86_64, win32, win64 to start that was the only legal hardware with which mining could be done; a bit like:
 - when fishing laws restrict grid net sizes
 - international conventions restrict overspinning bullets, eye damaging lasers, poison gas or anti ballistic missiles
 - This could probably be enforced with the correct code audits somehow

You cannot audit code people compile on their own.
Laws never work, ie: murder is illegal... proof it doesn't work.

[bytemaster]

There is an article on this topic here: http://letstalkbitcoin.com/is-bitcoin-overpaying-for-false-security/

[AnonyMint]

just to make a few alternative suggestions that might not have been kicked around yet ... with a view to moderate the mining arms race and to randomise who does the winning block ...

A Mining Right Lottery

Perhaps there should be a policy of block miners winning windows of say one or more blocks whereby their IP ( 4 or 6 ) is eligible to compete for the right to mine the next winning block.

This lottery might randomly choose an optimum fraction of the network's mining resources. Such a source of the candidate IPs could be picked sequentially, to save arguments, from the data portions of the blockchain transaction data

Standardised Hardware of miners

Maybe there could be defined a standard code, i686, x86_64, win32, win64 to start that was the only legal hardware with which mining could be done; a bit like:
 - when fishing laws restrict grid net sizes
 - international conventions restrict overspinning bullets, eye damaging lasers, poison gas or anti ballistic missiles
 - This could probably be enforced with the correct code audits somehow

None of this will work. Read upthread my explanations about the input entropy. Sorry, I am not going to explain it again, you need to understand math and entropy. No offense intended, it is just I get tired of seeing Dunning–Krugers make the same error over and over again.

[AnonyMint]

There is an article on this topic here: http://letstalkbitcoin.com/is-bitcoin-overpaying-for-false-security/

You have provided no solution for defending against a rogue NSA that will shutdown an anonymous currency. Politics is not going to be a solution for what is coming down the pike after 2015. The governments are planning to take everything down with them.

Your arguments against slightly (slow creep) higher debasement than was planned is irrelevant, as I have explained numerous times that debasement is good and required for an economy to grow. It is centralized debasement that is bad, where one group can manipulate the rate of debasement. No one can drastically alter the rate of debasement of Bitcoin or any PoW.

Yeah we have to stop ASICs or as I proposed, make ASICs available to everyone, because the major cost is the DRAM, not the ASICs in my proposed PoW algorithm.

So you want to continue your silly dividends of paying the debasement back to ourselves again. Accomplishes exactly nothing.

I have a design to defend against government packet filtering. Custom hardware won't help them, they will need to buy as much DRAM as the public has, and the public is going to buy it all up with my plan. The government can't make DRAM out-of-thin-air. DRAM plants require massive capital investments and time to ramp up. The government can force mining pools if the pools are P2P anonymous.

For a currency that wants to be anonymous, then if the NSA is attacking the currency in order to kill it, they could careless about profiting and the anonymity feature would also protect their identity. Merchants deal with charge-backs because the customer is not anonymous. Big difference with anonymous accounts and being unable to know which accounts to filter on past chargeback history or inability of the customer to provide the matching data on record for the card, i.e. the CVV2 code, name, and address. Customers can't get chargebacks these days without a valid reason.

It only takes a small amount of double-spend activity to send everyone running from the currency, because they can no longer trust to receive it in payment. There would be a stampede to get out, causing a waterfall crash in value.

The attacks from possessing a significant portion of the PoW difficulty are not limited to double-spending. The adversary can delay transactions. Assuming 10 minute blocks then with 90% of the difficulty, the adversary could with delay by 10 minutes 90% of the time, 20 minutes 81% of the time, 30 minutes 73% of the time, 40 minutes 66% of the time, 50 minutes 59% of the time, 60 minutes 53% of the time, ... to 2 hours 28% of the time.

Your prediction markets will suffer from the irrationality of the masses, as well any voting system is always vulnerable to manipulation.

I don't want to lobby the government. I want take away their cookie jar and shut them down. We can't negotiate with crooks and sociopaths. We have to remove what gives them their power. For as long as they can feed debt and socialism to the masses, the masses will be fooled.

http://armstrongeconomics.com/2013/09/08/agencies-never-obey-the-law/
http://armstrongeconomics.com/2013/09/08/are-they-going-after-safety-deposit-boxes/
http://www.nestmann.com/civil-forfeiture-of-cash-it-could-happen-to-you

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.

In conclusion, the marginal utility of increasing the difficulty of PoW is roughly constant until it reaches the size that governments can't possibly overcome. Since it is difficult to know what that level is, and since the harm that governments do now is much worse than 5% per annum debasement, and since we are paying it to ourselves, since most of us will be able to mine with the improved PoW algorithm, then it is a no brainer. Not to mention this will fund development of more efficient and decentralized energy as I have pointed out upthread, which can greatly help mankind.

P.S. Pedantic correction to the facts in your article, control of any higher than 50% of difficulty can mount an attack, doesn't require 51%.

P.S.S. I am glad you are continuing with your wrong design, it leaves the market wide-open for me.

[bytemaster]

There is an article on this topic here: http://letstalkbitcoin.com/is-bitcoin-overpaying-for-false-security/

You have provided no solution for defending against a rogue NSA that will shutdown an anonymous currency. Politics is not going to be a solution for what is coming down the pike after 2015. The governments are planning to take everything down with them.

Your arguments against slightly (slow creep) higher debasement than was planned is irrelevant, as I have explained numerous times that debasement is good and required for an economy to grow. It is centralized debasement that is bad, where one group can manipulate the rate of debasement. No one can drastically alter the rate of debasement of Bitcoin or any PoW.

Yeah we have to stop ASICs or as I proposed, make ASICs available to everyone, because the major cost is the DRAM, not the ASICs in my proposed PoW algorithm.

So you want to continue your silly dividends of paying the debasement back to ourselves again. Accomplishes exactly nothing.

I have a design to defend against government packet filtering. Custom hardware won't help them, they will need to buy as much DRAM as the public has, and the public is going to buy it all up with my plan. The government can't make DRAM out-of-thin-air. DRAM plants require massive capital investments and time to ramp up. The government can force mining pools if the pools are P2P anonymous.

For a currency that wants to be anonymous, then if the NSA is attacking the currency in order to kill it, they could careless about profiting and the anonymity feature would also protect their identity. Merchants deal with charge-backs because the customer is not anonymous. Big difference with anonymous accounts and being unable to know which accounts to filter on past chargeback history or inability of the customer to provide the matching data on record for the card, i.e. the CVV2 code, name, and address. Customers can't get chargebacks these days without a valid reason.

It only takes a small amount of double-spend activity to send everyone running from the currency, because they can no longer trust to receive it in payment. There would be a stampede to get out, causing a waterfall crash in value.

The attacks from possessing a significant portion of the PoW difficulty are not limited to double-spending. The adversary can delay transactions. Assuming 10 minute blocks then with 90% of the difficulty, the adversary could with delay by 10 minutes 90% of the time, 20 minutes 81% of the time, 30 minutes 73% of the time, 40 minutes 66% of the time, 50 minutes 59% of the time, 60 minutes 53% of the time, ... to 2 hours 28% of the time.

In conclusion, the marginal utility of increasing the difficulty of PoW is roughly constant until it reaches the size that governments can't possibly overcome. Since it is difficult to know what that level is, and since the harm that governments do now is much worse than 5% per annum debasement, and since we are paying it to ourselves, since most of us will be able to mine with the improved PoW algorithm, then it is a no brainer.

P.S. Pedantic correction to the facts in your article, control of any higher than 50% of difficulty can mount an attack, doesn't require 51%.

P.S.S. I am glad you are continuing with your wrong design, it leaves the market wide-open for me.

My aim was to use DRAM....  if you have an algorithm that can use a large amount of DRAM and yet can still run quickly enough to validate the work in a fraction of a second then share it.    If you are not willing to develop in the open and share ideas then stop posting your claims.

[AnonyMint]

If you are not willing to develop in the open and share ideas then stop posting your claims.

I want to be friendly and I do like you and I think you are talented.

I can't agree to your design, but I wish you best of luck with it.

I am pursuing my own design, so since you are ahead of me in implementation, I can't share any more about specifics at this time.

I don't forsee that I am copying any of your design ideas.

I tried to see if we had enough agreement on the design to work together on the same coin, but we don't.

Maybe we can work on something else in the future. Regards.

[bytemaster]

If you are not willing to develop in the open and share ideas then stop posting your claims.

I want to be friendly and I do like you and I think you are talented.

I can't agree to your design, but I wish you best of luck with it.

I am pursuing my own design, so since you are ahead of me in implementation, I can't share any more about specifics at this time.

I don't forsee that I am copying any of your design ideas.

I tried to see if we had enough agreement on the design to work together on the same coin, but we don't.

Maybe we can work on something else in the future. Regards.

Just to be clear, you gain nothing by keeping your work secret, because if your POW is that great, I will just switch to it once you do announce it.   If you are going to use patents and IP then you are resorting to government privilege and coercion. 

[AnonyMint]

Just to be clear, you gain nothing by keeping your work secret, because if your POW is that great, I will just switch to it once you do announce it.   If you are going to use patents and IP then you are resorting to government privilege and coercion.  

I am happy if you copy something that I have released in a product. I would release my work as open-source.

I am simply not ready to release (nor to explain, test out my theory, etc) because I am busy creating a computer language:

http://copute.com/dev/docs/Copute/ref/compiler/Xtext/
https://groups.google.com/forum/#%21topic/scala-debate/LWBz3-Q0pNI

[AnonyMint]

The powers-that-be are up to something about a power-kill-switch:

http://armstrongeconomics.com/2013/09/11/beware-november-13-14/

[AnonyMint]

I wrote this on Mon 18 Oct 2010 - 19:52.

Thanks for posting that!

From Paul Rosenberg the CEO of Cryptohippie USA, the leading provider of Internet anonymity.

http://cryptohippie.com/

http://www.lewrockwell.com/orig11/rosenberg-p1.1.1.html

• It is impractical for them to enforce that proposed wiretap backdoor legislation, people will simply move to P2P and rogue anonymous software for doing so. This will be effective against large, popular sites though.
• "Internet kill switch" is technically impractical, because TCP/IP is self-healing and will route around any networks that are taken down. They can kill major arteries, but the internet will go virally P2P in a very short time.
• Technically, SecureBGP (BGPSEC) can't be widely implemented because it won't scale well beyond the major arteries. Ad hoc routing with TCP/IP will route around it, if it becomes a block (nature sees it as non-functional and routes around due to Coase's Theorem). The fact that BGP is P2P now, means that it will be impossible to go back to making it centralized.
• Regarding intellectual property policing, a decentralized DNS is feasible and will be incentivized by the govt's fascism.
• All of this is like the Napster experience-- the more the authorities attacked, the more P2P alternatives popped up and the more people that participated in downloading music for free.  The govt is powerless (as usual), but they will hold sway over the large sites and arteries.
• "Computer health certificate" is so impossible, I really doubt the competence of the author of the link you provided.
• Cloud computing can be P2P.

Yes we have a battle coming between the State and the individual.

[digitalindustry]

I voted 1million .

But my follow up question is:

Whats $1 worth ?

[digitalindustry]

I wrote this on Mon 18 Oct 2010 - 19:52.

Thanks for posting that!

From Paul Rosenberg the CEO of Cryptohippie USA, the leading provider of Internet anonymity.

http://cryptohippie.com/

http://www.lewrockwell.com/orig11/rosenberg-p1.1.1.html

• It is impractical for them to enforce that proposed wiretap backdoor legislation, people will simply move to P2P and rogue anonymous software for doing so. This will be effective against large, popular sites though.
• "Internet kill switch" is technically impractical, because TCP/IP is self-healing and will route around any networks that are taken down. They can kill major arteries, but the internet will go virally P2P in a very short time.
• Technically, SecureBGP (BGPSEC) can't be widely implemented because it won't scale well beyond the major arteries. Ad hoc routing with TCP/IP will route around it, if it becomes a block (nature sees it as non-functional and routes around due to Coase's Theorem). The fact that BGP is P2P now, means that it will be impossible to go back to making it centralized.
• Regarding intellectual property policing, a decentralized DNS is feasible and will be incentivized by the govt's fascism.
• All of this is like the Napster experience-- the more the authorities attacked, the more P2P alternatives popped up and the more people that participated in downloading music for free.  The govt is powerless (as usual), but they will hold sway over the large sites and arteries.
• "Computer health certificate" is so impossible, I really doubt the competence of the author of the link you provided.
• Cloud computing can be P2P.

Yes we have a battle coming between the State and the individual.

+1

Wow an unusually concise and positive statement,  which is also backed up by truth, but id go further..

Generally "Government" is not the enemy here friends.

"Government" really truly is the sum of its many parts and corruptions.

"Government"  in its self , isn't the wall of oppression its sometimes made out to be.

Its much better to analyze problems back to the cause, if you think about that deeply,  how often is "Government" the problem.