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Author Topic: Transactions Withholding Attack  (Read 27349 times)
AnonyMint
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November 17, 2013, 07:22:44 AM
Last edit: November 17, 2013, 07:42:35 AM by AnonyMint
 #1

I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.

I think it is an economic attack, so I place it in the Economics forum. Also because I don't get good reception from Bitcoin developers when I try to post in the developers forums. Lets see if they ignore this thread or come post to refute it. I doubt they will.

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.

That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.

Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. Once they adopt one, they will stay with that one due to inertia and network effects.

Thus I see Bitcoin is doomed and it is not a solution to anything long-term, although short-term it shows us what might be possible with decentralized currencies if we were to improve them.

http://hackingdistributed.com/2013/11/08/fairweather-mining/#comment-1126378553

Quote from: AnonyMint
Quote from: cunicula
1) declining block reward and constant gains from monopoly fees

I believe I am the first person to raise that in my Bitcoin : The Digital Kill Switch article? I am naming it the "transactions withholding attack" since it means not forwarding transactions in order to monopolize transaction fees, as coin rewards diminish.

Do you know of any prior art to mine? Do you know of any discussion on this attack other myself constantly mentioning it and no one seemingly willing to discuss it? (because the only solution I see is to change Bitcoin's diminishing coin rewards supply curve)

Other recent discussion:

https://bitcointalk.org/index.php?topic=318001.msg3607709#msg3607709



Related. I have shown there is no economic advantage to a money supply that is constant:

https://bitcointalk.org/index.php?topic=13035.msg3609132#msg3609132
https://bitcointalk.org/index.php?topic=222998.msg3607535#msg3607535

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November 17, 2013, 07:43:19 AM
 #2

Damn. If only there was a way the originator of a transaction could directly connect to multiple mining pools of his own choosing and send his transaction to all of them simultaneously. Oh wait, there is a way: the way I just said. Roll Eyes

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November 17, 2013, 07:46:37 AM
 #3

Damn. If only there was a way the originator of a transaction could directly connect to multiple mining pools of his own choosing and send his transaction to all of them simultaneously. Oh wait, there is a way: the way I just said. Roll Eyes

I think you missed my point. That is why I had linked to discussion where I had already refuted this.

The masses don't see that in this attack. They see Amazon.com's website (or partner network) and click a button to buy.

You assume the masses are smart and concerned enough to demand their clicks on Amazon.com go to multiple miners. Sorry that is not the way the masses behave. I have much experience in marketing on the internet. Users click and and want to be done it. They just want their damn pizza. They don't get a rat's ass about your technological nirvana.

(take your rolly eyes smartass attitude and shove it up your ignorant ass. I am much more intelligent than you know and much more well studied on these issues. Beware)

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November 17, 2013, 07:47:13 AM
 #4

gavin andresen is hugely keen to get as much constructive criticism as possible and the first step i believe is to have your theory peer reviewed before the developer team would consider looking at it or wether an action would be required. this is fair as only today i read a theory on twitter that bitcoin price rise was a short squeeze and reprinted by several msm pundits on twitter. they need to have theories filtered at a fairly high level or else its just unwanted noise
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November 17, 2013, 07:48:38 AM
 #5

Damn. If only there was a way the originator of a transaction could directly connect to multiple mining pools of his own choosing and send his transaction to all of them simultaneously. Oh wait, there is a way: the way I just said. Roll Eyes

I think you missed my point. That is why I had linked to discussion where I had already refuted this.

The masses don't see that in this attack. They see Amazon.com's website (or partner network) and click a button to buy.

You assume the masses are smart and concerned enough to demand their clicks on Amazon.com go to multiple miners. Sorry that is not the way the masses behave. I have much experience in marketing on the internet. Users click and and want to be done it. They just want their damn pizza. They don't get a rat's ass about your technological nirvana.

(take your rolly eyes smartass attitude and shove it up your ignorant ass. I am much more intelligent than you know and much more well studied on these issues. Beware)

How do Amazon get to say how my transaction is sent from blockchain.info when I click their buy button (or any other wallet for that matter)?

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November 17, 2013, 07:50:49 AM
 #6

gavin andresen is hugely keen to get as much constructive criticism as possible and the first step i believe is to have your theory peer reviewed before the developer team would consider looking at it or wether an action would be required. this is fair as only today i read a theory on twitter that bitcoin price rise was a short squeeze and reprinted by several msm pundits on twitter. they need to have theories filtered at a fairly high level or else its just unwanted noise

My Bitcoin : The Digital Kill Switch article was published at marketoracle many months ago and I have a thread on this bitcointalk.org for that article with 100s of posts. How much more peer review does it need.

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November 17, 2013, 07:53:00 AM
 #7

How do Amazon get to say how my transaction is sent from blockchain.info when I click their buy button (or any other wallet for that matter)?

Read the link I provided in my OP. I will quote from it for you.

All transactions get propagated through the entire network of bitcoin users, with miners eventually also hearing them. So if you suggest that a mining cartel can somehow keep transactions from being broadcast, and keep other competing miners from hearing about them and mining them too, you are mistaken.

You are incorrect. If Amazon offers a downloadable client (or even one that runs from their website), which sends the transactions to their server, they have no obligation to forward the transactions to other miners.

So, if you are using an Amazon wallet app, and I am using some other wallet app, and you try to send me coins, how will I know whether you sent them if you only send them to Amazon's servers? It would essentially cut everyone using Amazon clients off from the rest of the bitcoin network. Why would anyone want to use such an app? Bitcoin transactions primarily work because they are propagated P2P through the network from person to person. Miners just sit on the perifere catching these transactions as they pass by and adding them to blocks.

Fact:

You are conflating the publication of block solutions with the propagation of transactions before the fact.

You don't understand well the way Bitcoin works.

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November 17, 2013, 07:57:57 AM
 #8

Thanks for the link, but I must be dumb, I can't work out whether that answers my question. Explain like I'm 5 please... How do Amazon control my blockchain.info wallet, I'm not using Amazon's downloadable wallet.

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November 17, 2013, 08:08:04 AM
 #9

Thanks for the link, but I must be dumb, I can't work out whether that answers my question. Explain like I'm 5 please... How do Amazon control my blockchain.info wallet, I'm not using Amazon's downloadable wallet.

Okay I apologize. I need to remember I speak to different audiences with different expertise.

A miner collects transactions then calculates a mathematical hash of them, then proceeds to search for a solution to the proof-of-work puzzle for that hash. If the miner finds the solution first, the miner publishes it to (other miners and eventually it is published to) the blockchain.info.

So the blockchain.info only records transactions that are in already solved blocks.

Normally miners share transactions and pass them around to each other, so that which ever miner solves the next block, those transactions will be included.

But it doesn't have to be that way.  A miner could decide to not share his transactions with other miners, thus if the other miners solve the next block, the withheld transactions won't be that block.

So you might say then that Amazon.com customers would be angry if Amazon withheld, because transactions would be slower (they would wait until one of Amazon's miners solved a block). But I have several rebuttals to such a rebuttal.

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November 17, 2013, 08:12:39 AM
 #10

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

take your rolly eyes smartass attitude and shove it up your ignorant ass.
How can my ass be both smart and ignorant at the same time? Huh

I am much more intelligent than you know and much more well studied on these issues. Beware
Beware of what? Unlike you, I am not afraid of knowledge.

A miner collects transactions then calculates a mathematical hash of them, then proceeds to search for a solution to the proof-of-work puzzle for that hash. If the miner finds the solution, the miner publishes it to (other miners and eventually it is published to) the blockchain.info.

So the blockchain.info only records transactions that have in already solved blocks.
Blockchain.info is a web service, and is unrelated to the Bitcoin blockchain except in name. Maybe you need to well study it some more.

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November 17, 2013, 08:13:08 AM
 #11

So you might say then that Amazon.com customers would be angry if Amazon withheld, because transactions would be slower (they would wait until one of Amazon's miners solved a block). But I have several rebuttals to such a rebuttal.

Main rebuttal is Amazon could accept 0-confirmation transaction and let the withheld data sit on its own miners until they win a block solution. The customer wouldn't notice.

I have other possible scenarios for how the attack could be done.

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November 17, 2013, 08:17:47 AM
 #12

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

Already rebutted in my immediately prior post where I mentioned Amazon accepting 0-confirmation transaction.

How can my ass be both smart and ignorant at the same time? Huh

It is your problem, not mine. Talk to your ass. Don't waste our time here.

I am much more intelligent than you know and much more well studied on these issues. Beware
Beware of what? Unlike you, I am not afraid of knowledge.

What "knowledge"?

A miner collects transactions then calculates a mathematical hash of them, then proceeds to search for a solution to the proof-of-work puzzle for that hash. If the miner finds the solution, the miner publishes it to (other miners and eventually it is published to) the blockchain.info.

So the blockchain.info only records transactions that have in already solved blocks.
Blockchain.info is a web service, and is unrelated to the Bitcoin blockchain except in name. Maybe you need to well study it some more.

I know that dufus. I was simplifying it for him, because he is a novice.

The point remains that the blockchain (either the decentralized protocol one or the web service copy of it) does not receive the withheld transactions until a block is solved by the miners withholding.

You are just making noise. You haven't made any point yet. Typical pompous idiot.

(I would have respected you, if you had respected me)

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November 17, 2013, 08:24:54 AM
 #13

So the blockchain.info only records transactions that are in already solved blocks.

Normally miners share transactions and pass them around to each other, so that which ever miner solves the next block, those transactions will be included.

But it doesn't have to be that way.  A miner could decide to not share his transactions with other miners, thus if the other miners solve the next block, the withheld transactions won't be that block.

When I send a transaction from blockchain.info, you're saying it's not getting propagated to all the nodes on the network and put in their mempool?

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November 17, 2013, 08:28:17 AM
 #14

So the blockchain.info only records transactions that are in already solved blocks.

Normally miners share transactions and pass them around to each other, so that which ever miner solves the next block, those transactions will be included.

But it doesn't have to be that way.  A miner could decide to not share his transactions with other miners, thus if the other miners solve the next block, the withheld transactions won't be that block.

When I send a transaction from blockchain.info, you're saying it's not getting propagated to all the nodes on the network and put in their mempool?

The attack is applied for transactions from customers of the cartel, not for transactions from customers of blockchain.info website although they are affected eventually as explained below.

If you are a very widespread cartel such as Amazon.com, joined with McDonalds, WalMart, etc, then you may control a majority of transactions. They could chose to not propagate them to other miners as I stated.

What is the benefit? Well for one motivation, stomping their competition. If their competition will gradually lose hashrate because other miners go bankrupt, then everyone who doesn't send through the cartel ends up with very slow confirmations, eventually hours and days as the cartel gains more and more control.

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November 17, 2013, 08:31:15 AM
 #15

Oh so I have to be using Amazon's wallet.

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November 17, 2013, 08:35:01 AM
 #16

Oh so I have to be using Amazon's wallet.

Not really. It will affect you eventually no matter which wallet you use as I explained in my prior post.

Customers of the cartel naturally transact at the cartel's website or retail POS terminals. So the cartel can control these transactions and starve the Bitcoin network of these revenues. Eventually this drives the Bitcoin mining network bankrupt, except for the cartel's mining servers which continue to function. Thus the mining network becomes asymptotically 100% controlled by the cartel. So then it affects you no matter which wallet you send from. The customers of the cartel will be happy, but you won't be if you don't also become a customer of the cartel.

Once the cartel controls the mining network, they control Bitcoin. Then the government can regulate the cartel, so the government controls Bitcoin. So then they do whatever they want, including printing as many new coins as they want to.

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November 17, 2013, 08:36:15 AM
 #17

Why would they bother though? If so many people are using their wallet and paying them, why not just keep the payments off the block chain entirely? Yes, they capture their own transaction fees, but only for cases where they could avoid a transaction fee entirely anyway.

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November 17, 2013, 08:38:38 AM
 #18

Why would they bother though? If so many people are using their wallet and paying them, why not just keep the payments off the block chain entirely? Yes, they capture their own transaction fees, but only for cases where they could avoid a transaction fee entirely anyway.

Clever reply. I expect as much from you. Kudos.

Because offchain would not be protected against double-spend.

You are describing another way the attack could be done, to destroy the Bitcoin network by forking it, but it would probably be safer (less chaotic) to dominate the Bitcoin network instead as I have explained.

I envision the attack being invisible to the "dumb masses" customers, so you wouldn't want to be offchain then, because you lose interoperability for the customers on their coins and coin change.

Also the cartel would ramp this up over time, and not dominate initially so it is easier to insideously cancer the network than to fork, because fork requires dominating force from the start.

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November 17, 2013, 08:42:37 AM
 #19

Because offchain would not be protected against double-spend.

So now we are using their central servers to process transactions off chain, why is their system vulnerable to double spends?

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November 17, 2013, 08:48:21 AM
 #20

Because offchain would not be protected against double-spend.

So now we are using their central servers to process transactions off chain, why is their system vulnerable to double spends?

This off blockchain server supports sending payments to every single user, merchant, service provider on the planet?

Wow that is both amazing and never going to happen.   If EvilCorp has 20% of the network hashrate then sending a payment to anyone not using their centralized servers will take 50 FRAGGIN minutes for first conifrmation due to witholding the the tx from the other 80% of miners.

Yeah I see that service being "super popular".  Even if people don't care about the network security they certainly don't want massively delayed txs just so evilcorp can rule the blockchain.
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November 17, 2013, 08:49:06 AM
 #21

Double spends.  Also the issue is if at the time when block generation rewards are phased out the miners will decide to continue them instead of reducing as designed and this type of withholding might get the rest of the miners onboard with the idea since their income will be severely reduced.  Of course all of that implies that mining will be highly centralized which may or may not happen.  Currently it is more profitable to sell miners to public at BTC prices higher then the total projected mining return.  That may always be more profitable then centralized mining thus eliminating both problems.

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November 17, 2013, 08:49:19 AM
 #22

I thought miners were to be funded by the theoretical rise in value over time.
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November 17, 2013, 08:54:19 AM
 #23

If EvilCorp has 20% of the network hashrate then sending a payment to anyone not using their centralized servers will take 50 FRAGGIN minutes for first conifrmation due to witholding the the tx from the other 80% of miners.

They don't have to withhold those. I said it can be insideous attack, where they slowly starve the network over time and build theirs. They are stealing (siphoning) resources and building their mass. Eventually they reach critical mass.

Yeah I see that service being "super popular".  Even if people don't care about the network security they certainly don't want massively delayed txs just so evilcorp can rule the blockchain.

Of course the cartel wouldn't withhold transactions sent to parties who are not in their cartel.

But I think you fail to appreciate even how small businesses use Amazon to sell through.

Cartelization is the natural outcome of commerce and we see it happening before our eyes now.

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November 17, 2013, 08:56:33 AM
 #24

I thought miners were to be funded by the theoretical rise in value over time.

That doesn't make any sense. The miners have to earn something on each block they solve, else why would they continue to expend electricity and hardware ongoing.

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November 17, 2013, 08:57:46 AM
 #25

Because offchain would not be protected against double-spend.

So now we are using their central servers to process transactions off chain, why is their system vulnerable to double spends?

No I don't think they will do it offchain. They will keep it onchain to maintain seamless interoperability while they attack.

I can see you are confused. Unfortunately I don't think you understand how Bitcoin works well enough for me to explain this attack to you. Maybe just let the experts debate me. I will try to reply to you, but seems you are really confused.

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November 17, 2013, 08:58:59 AM
 #26

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.   Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.  It is highly possible that "dual use" miners in the future providing home heating and hot water can operate at below electrical break even cost.   If anything they probably will starve the massive datacenter farms which simply can't compete.
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November 17, 2013, 09:03:15 AM
 #27

Double spends.  Also the issue is if at the time when block generation rewards are phased out the miners will decide to continue them instead of reducing as designed and this type of withholding might get the rest of the miners onboard with the idea since their income will be severely reduced.  Of course all of that implies that mining will be highly centralized which may or may not happen.

Well that would be great. But I don't think that is the way it will work out. If you are going to get that cooperation, you would do it now and if you can't fix it now, it will be more difficult to fix it later, because the vested interests will be so entrenched 20 years from now.

In short, the larger political systems are, the more difficult to get any consensus.

Currently it is more profitable to sell miners to public at BTC prices higher then the total projected mining return.  That may always be more profitable then centralized mining thus eliminating both problems.

Eliminating which problems?

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November 17, 2013, 09:06:51 AM
 #28

No I don't think they will do it offchain. They will keep it onchain to maintain seamless interoperability while they attack.

I can see you are confused. Unfortunately I don't think you understand how Bitcoin works well enough for me to explain this attack to you. Maybe just let the experts debate me. I will try to reply to you, but seems you are really confused.

Great argument.

How about you explain how a central off chain system can be vulnerable to double spends.  Explain to me like I'm a child, I don't care.

Also, if they are not doing it off chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

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November 17, 2013, 09:09:10 AM
 #29

Also, if they are not doing it off-chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

They can't.  He is saying you (and 99% of other Bitcoin users) will be stupid enough to use their fee withholding cartel wallet.  Of course the OP isn't stupid enough to do that, just everyone else in the world is.  The OP needs to save you from yourself.
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November 17, 2013, 09:11:31 AM
 #30

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.

Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

Amazon can put their miners in Kuwait.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.

Refuted.

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November 17, 2013, 09:13:43 AM
 #31

Also, if they are not doing it off-chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

They can't.  He is saying you (and 99% of other Bitcoin users) will be stupid enough to use their fee withholding cartel wallet.  Of course the OP isn't stupid enough to do that, just everyone else in the world is.  The OP needs to save you from yourself.

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.

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November 17, 2013, 09:14:33 AM
 #32

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

Well no.  Their gross revenue may increase 6% but then all of the costs in marketing their network killing centralized client, convincing the dumb masses to use it, promotional costs (like you said provide free txs), dealing with the whistle blowers and advocates convincing users to jump ship, etc, eat into that additional margin.

You also assume that other miners can't continue to operate profitably even with a reduction in revenue and will be forced out.
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November 17, 2013, 09:16:35 AM
 #33

Also, if they are not doing it off-chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

They can't.  He is saying you (and 99% of other Bitcoin users) will be stupid enough to use their fee withholding cartel wallet.  Of course the OP isn't stupid enough to do that, just everyone else in the world is.  The OP needs to save you from yourself.

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.
Exactly.  So it's easier to keep selling them overpriced money making machines instead of running those machines yourself.

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November 17, 2013, 09:17:24 AM
 #34

If I understand this right by 2033, the miner reward will drop to 0.78125 btc. If Bitcoin is as big of a success as the core believers expect, this may be in the neighborhood of a million dollars. I could imagine a lot of small timers taking a loss on mining just hoping to hit the jackpot. Even if Amazon holds transactions till they win a block reward, I think there will still be enough competition. Besides, if the world is headed towards decentralization, Amazon might be lucky to have 5% of the world ecommerce business.



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November 17, 2013, 09:17:50 AM
 #35

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.

Then they don't have Bitcoins and aren't making Bitcoin transactions.   Problem solved.  Unless dominoes is also running an exchange (includin expensive MT license) I really doubt most users first interaction with  a Bitcoin wallet will be the dominoes website.

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November 17, 2013, 09:24:55 AM
 #36

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

Well no.  Their gross revenue may increase 6% but then all of the costs in marketing their network killing centralized client, convincing the dumb masses to use it,

That is an insignificant cost. They just change the backend for the "1 click button" they have now. Customer has the option of adding a Bitcoin address account to their spending profiles.

Amazon spends money all the time on sprucing up their website. That is in their ongoing budget.

promotional costs (like you said provide free txs),

Cartels recapture promotion fees because they destroy their competition. Their competition has to join them, or end up losing customers. This is no different than predatory pricing of goods.

dealing with the whistle blowers and advocates convincing users to jump ship, etc, eat into that additional margin.

We already have whistleblowers trying to convince people not to use WalMart because it destroyed the decentralized small stores that used to exist in the USA. Failed.

We already have whistleblowers saying Amazon is centralizing commerce on the internet. Failed

Cartelization is the natural mode direction of commerce.

You can deny it if you want to. Study history.

You also assume that other miners can't continue to operate profitably even with a reduction in revenue and will be forced out.

Eventually asymptotically their revenue will be 0.

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November 17, 2013, 09:26:07 AM
 #37

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.

Then they don't have Bitcoins and aren't making Bitcoin transactions.   Problem solved.  Unless dominoes is also running an exchange (includin expensive MT license) I really doubt most users first interaction with Bitcoin wallet will be the dominoes website.

So now you are arguing that Bitcoin will not be popular for most mainstream commerce.

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November 17, 2013, 09:30:32 AM
 #38

Also, if they are not doing it off-chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

They can't.  He is saying you (and 99% of other Bitcoin users) will be stupid enough to use their fee withholding cartel wallet.  Of course the OP isn't stupid enough to do that, just everyone else in the world is.  The OP needs to save you from yourself.

I am saying the masses don't know and don't care. They are not as paranoid as we are. They just want to click a button and order their Pizza. They have no clue how it all works behind the scenes. The go to Dominos Pizza and click the button the website. They don't go searching for a Bitcoin client.

Exactly.  So it's easier to keep selling them overpriced money making machines instead of running those machines yourself.

Cartels have the incentive of cutting out their competition by offering lower transaction fees. They also have the other choice to keep transaction fees for themselves instead of trying to build market share.

Both of those are easy as doing nothing bad and both are more profitable.

Either way, they siphon from the Bitcoin mining network.

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November 17, 2013, 09:35:26 AM
Last edit: November 17, 2013, 09:53:12 AM by AnonyMint
 #39

If I understand this right by 2033, the miner reward will drop to 0.78125 btc. If Bitcoin is as big of a success as the core believers expect, this may be in the neighborhood of a million dollars. I could imagine a lot of small timers taking a loss on mining just hoping to hit the jackpot. Even if Amazon holds transactions till they win a block reward, I think there will still be enough competition. Besides, if the world is headed towards decentralization, Amazon might be lucky to have 5% of the world ecommerce business.

It declines asymptotically to 0 BTC. Eventually there comes a time when your argument is false. We could debate over when that time is, but you can not argue it never comes.

Your point is incorrect for another reason too. The difficulty did not decrease because if it did, the cartel can much more easily dominate the mining any way. So your income decreased while the difficulty did not. Therefor you go bankrupt. Your lottery point is irrelevant, because that lottery win still comes after a very long time and you are bankrupt by that time. Even though due to variance some miner might win the lottery before going bankrupt then certainly would stop mining, because the probability of winning it again before going bankrupt is astronomically unlikely. This is all in the math of probability.

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November 17, 2013, 09:39:12 AM
 #40

No I don't think they will do it offchain. They will keep it onchain to maintain seamless interoperability while they attack.

I can see you are confused. Unfortunately I don't think you understand how Bitcoin works well enough for me to explain this attack to you. Maybe just let the experts debate me. I will try to reply to you, but seems you are really confused.

Great argument.

How about you explain how a central off chain system can be vulnerable to double spends.  Explain to me like I'm a child, I don't care.

Also, if they are not doing it off chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

I'm still waiting...

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November 17, 2013, 09:46:19 AM
 #41

No I don't think they will do it offchain. They will keep it onchain to maintain seamless interoperability while they attack.

I can see you are confused. Unfortunately I don't think you understand how Bitcoin works well enough for me to explain this attack to you. Maybe just let the experts debate me. I will try to reply to you, but seems you are really confused.

Great argument.

How about you explain how a central off chain system can be vulnerable to double spends.  Explain to me like I'm a child, I don't care.

If the cartel records your spends offchain, then you can spend them again onchain to non-cartel merchants. The Bitcoin money supply would be in effect doubled, tripled, quadrupled, depending how many separate cartels do this.

But then how do the cartels spend this offchain money? Receivers of this money would only be able to trust it has value within the cartel members. So which copy of the money would be worth more? Depends which network has more value.

So it just adds chaos and risk to the cartel's outcome. It might be a way to destabilize Bitcoin, but it looks like customers and members of the cartel would revolt. So I don't think this would be attempted.

Also, if they are not doing it off chain as you say, how on earth they are able to withhold a transaction I send from my non-cartel wallet.

I already explained this to you upthread.

I didn't say they can withhold what you send from a non-cartel wallet.

I said they can withhold only transactions that their customers send on the cartel's wallet. The cartel will not permanently withhold these from the blockchain. They only withhold them from non-cartel miners. Once a cartel miner adds a block, then all these transactions get added to the Bitcoin blockchain.

The transaction you send from a non-cartel wallet client is affected because the cartel miners may refuse to include your transaction in the blocks they win. So depending on what percentage of the total network hashrate the cartel has, your transactions might be delayed. Eventually the cartel gains so much mass and has bankrupted the non-cartel miners, so then when you send from non-cartel client, your transaction never gets added to a block or very delayed.

I'm still waiting...

Sorry for the delay but yours was the most difficult to explain because you were confusing some of the issues. So I responded to yours last.

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November 17, 2013, 09:51:09 AM
 #42

If I understand this right by 2033, the miner reward will drop to 0.78125 btc. If Bitcoin is as big of a success as the core believers expect, this may be in the neighborhood of a million dollars. I could imagine a lot of small timers taking a loss on mining just hoping to hit the jackpot. Even if Amazon holds transactions till they win a block reward, I think there will still be enough competition. Besides, if the world is headed towards decentralization, Amazon might be lucky to have 5% of the world ecommerce business.

It declines asymptotically to 0 BTC. Eventually there comes a time when you argument is false. We could debate over when that time is, but you can not argue it never comes.

Your point is incorrect for another reason too. The difficulty did not decrease because if it did, the cartel can much more easily dominate the mining any way. So you income decreased while the difficulty did not. Therefor you go bankrupt. Your lottery point is irrelevant, because that lottery win still comes after a very long time and you are bankrupt by that time. Some miner might win the lottery before going bankrupt then certainly would stop mining, because the probability of winning it again before going bankrupt is astronomically unlikely. This is all in the math of probability.

I have to concede that the mining reward will eventually drop to insignificant since I don't believe that Btc will double in value every four years once it reaches it's peak.

I have secretly wondered if maybe we should always reward at least 1 btc every block even though this would eventually lead to over 21M btc, but I won't say anything since I don't want to be stoned for blasphemy.

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November 17, 2013, 09:56:25 AM
 #43

I have secretly wondered if maybe we should always reward at least 1 btc every block even though this would eventually lead to over 21M btc, but I won't say anything since I don't want to be stoned for blasphemy.

Eventually the 1 BTC would become too small as the 21M would become 42M, 84M, etc.. Yet that would help.

I am getting stoned (not the maryjane type) but still alive.

I think an altcoin is a more viable solution.

This issue isn't going to affect Bitcoin until most of you have long since made your fortunes and exited.

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November 17, 2013, 10:02:45 AM
 #44

If the cartel records your spends offchain, then you can spend them again onchain to non-cartel merchants. The Bitcoin money supply would be in effect doubled, tripled, quadrupled, depending how many separate cartels do this.

I'm not sure you understand off-chain transactions. 

Lets interperate your sentence using what we have today:

1) I have bitcoins on MtGox.
2) I spend these bitcoins by sending them to another MtGox user or to MtGox themselves.  Lets say to buy a MtGox T-Shirt.  This transaction is recorded centrally on their systems.
3) I now send these bitcoins again (wat), but now using the blockchain.  I send them to Bitstamp.

How?

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November 17, 2013, 10:15:40 AM
 #45

If the cartel records your spends offchain, then you can spend them again onchain to non-cartel merchants. The Bitcoin money supply would be in effect doubled, tripled, quadrupled, depending how many separate cartels do this.

I'm not sure you understand off-chain transactions.  

Lets interperate your sentence using what we have today:

1) I have bitcoins on MtGox.
2) I spend these bitcoins by sending them to another MtGox user or to MtGox themselves.  Lets say to buy a MtGox T-Shirt.  This transaction is recorded centrally on their systems.
3) I now send these bitcoins again (wat), but now using the blockchain.  I send them to Bitstamp.

How?

You can't because #1 was recorded onchain, not offchain.

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November 17, 2013, 10:22:13 AM
 #46

You can't because #1 was recorded onchain, not offchain.

They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

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November 17, 2013, 10:26:56 AM
Last edit: November 17, 2013, 10:39:47 AM by AnonyMint
 #47

I have secretly wondered if maybe we should always reward at least 1 btc every block even though this would eventually lead to over 21M btc, but I won't say anything since I don't want to be stoned for blasphemy.

Eventually the 1 BTC would become too small as the 21M would become 42M, 84M, etc.. Yet that would help.

I am getting stoned (not the maryjane type) but still alive.

I think an altcoin is a more viable solution.

This issue isn't going to affect Bitcoin until most of you have long since made your fortunes and exited.

The other reason I think it would be better implemented in an altcoin, is because there are differences of opinion as to whether this attack will really occur or be successful. Because this attack involves economics on a wide-scale, not just a localized protocol game theory.

I am of course fairly worried that cartels will be the natural mode of outcome for commerce if they are not prevented from it with the protocol. Yet some of the others here in this thread think it is not likely. I disagree of course.

So I am thinking it is better to let people vote on their opinion of this issue by buying the altcoin or not.

And because I thus think you can't make this fix in Bitcoin without pissing off too many people. Which would hurt Bitcoin more in the short-term, which is what matters most to your investments.

However the argument against an altcoin would be that the cartels won't use it if Bitcoin is vulnerable to the attack they will prefer Bitcoin.

But personally I am fine with that. I just want something I can use that isn't cartelized for the non-cartel merchants. I just want freedom-of-choice when I am 70 years old.

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November 17, 2013, 10:35:03 AM
Last edit: November 17, 2013, 10:49:37 AM by AnonyMint
 #48

You can't because #1 was recorded onchain, not offchain.

They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

I was expecting you to say that Smiley

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

Let me remind readers that this offchain discussion has nothing to do with my OP and the attack I described. It a unnecessary tangent we are discussing here.

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November 17, 2013, 10:39:55 AM
 #49

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins.

Why do I still own these coins if I have spent them?

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November 17, 2013, 10:42:09 AM
 #50

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins.

Why do I still own these coins if I have spent them?

JoelKatz implied or asked if cartels might prefer to not send the transaction to the Bitcoin blockchain ever. And keep them offchain. Did you get it now?

P.S. I don't think they would choose that strategy, so please stop cluttering this thread with this off-topic discussion on not understanding the Bitcoin technology and terminology (e.g. offchain). If you still don't understand, please send me a PM and I will explain there. I am not angry, I appreciate your posts, but please in PM so I can explain without burdening the thread okay.

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November 17, 2013, 10:50:48 AM
 #51

JoelKatz implied or asked if cartels might prefer to not send the transaction to the Bitcoin blockchain ever. And keep them offchain.

P.S. I don't think they would choose that strategy, so please stop cluttering this thread with this off-topic discussion on not understanding the Bitcoin technology. If you still don't understand, please send me a PM and I will explain there. I am not angry, I appreciate your posts, but please in PM so I can explain without burdening the thread okay.

If we aren't sending them to the blockchain ever then we are using Cartel-Coins, not bitcoins.

Look, you don't make any sense.  If I send bitcoins to my cartel wallet, I don't control those bitcoins anymore.  What I have now is a claim for those bitcoins from the cartel.

P.S I'm not cluttering this thread, your theoretical attack is baseless at best.  You proclaim to be the expert and look down upon other people, yet you can't even understand off-chain transactions.

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November 17, 2013, 10:57:55 AM
 #52

JoelKatz implied or asked if cartels might prefer to not send the transaction to the Bitcoin blockchain ever. And keep them offchain.

P.S. I don't think they would choose that strategy, so please stop cluttering this thread with this off-topic discussion on not understanding the Bitcoin technology. If you still don't understand, please send me a PM and I will explain there. I am not angry, I appreciate your posts, but please in PM so I can explain without burdening the thread okay.

If we aren't sending them to the blockchain ever then we are using Cartel-Coins, not bitcoins.

Exactly. That is what JoelKatz suggested. I never suggested that attack. It has nothing to do with my attack. You are conflating what JoelKatz wrote with the attack I have described. Please stop doing that.

Look, you don't make any sense.

You don't have sufficient understanding. The others here understand that I do make sense. They may disagree with whether the attack I described is likely or not, but they don't say I make no sense.

JoelKatz's attack is not likely in my opinion, so I don't know why you continue to discuss it in my thread.

If I send bitcoins to my cartel wallet, I don't control those bitcoins anymore.  What I have now is a claim for those bitcoins from the cartel.

Agreed in JoelKatz's attack. But that is not the attack I described in my OP. Go talk to JoelKatz about his attack in another thread. That is not the attack I described.

P.S I'm not cluttering this thread, your theoretical attack is baseless at best.  You proclaim to be the expert and look down upon other people, yet you can't even understand off-chain transactions.

Trust me, there are many people here reading and they understand you don't understand. It is very obvious you don't understand. You think JoelKatz's attack is my attack.

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November 17, 2013, 11:06:23 AM
 #53

You missed my point entirely. 

My off-chain transaction debate has nothing to do with your theoretical attack.

I'm calling you out on how the hell I can double double spend bitcoins off-chain as you said here:

Because offchain would not be protected against double-spend.

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November 17, 2013, 11:26:01 AM
 #54

You missed my point entirely.  

My off-chain transaction debate has nothing to do with your theoretical attack.

I'm calling you out on how the hell I can double double spend bitcoins off-chain as you said here:

Because offchain would not be protected against double-spend.

I never wrote that Bitcoins could be double-spent off-chain. Can't you read above what I wrote?

I said that the offchain coins would not be protected against a double-spend, meaning that the Bitcoin chain could still spend the coin again, which was also "spent" into the offchain.

The double-spend notion comes from the fact that the customer has gained double value from one original Bitcoin, the offchain coin and the Bitcoin coin.

If you still don't get this, please give up. It would mean you are hopelessly retarded. I tried to be nice to you for a few posts, but you just go on and on with your inability to grasp a simple concept.

Again readers, the above is JoelKatz's suggested attack, not the attack I described in my OP.

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November 17, 2013, 11:48:35 AM
 #55

I never wrote that Bitcoins could be double-spent off-chain.

Excellent, at least we agree that bitcoins cannot be double spent off-chain, unless the system has a grave error.

I said that the offchain coins would not be protected against a double-spend, meaning that the Bitcoin chain could still spend the coin again, which was also "spent" into the offchain.

Which party is spending the coin again?

MtGox has a pool of coins, the coins aren't linked to any customers.  When I send those coins to my MtGox wallet, MtGox now control them.  They could spend them straight away, do whatever they want, it has no effect on the customer.

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November 17, 2013, 11:54:23 AM
 #56

If you still don't get this, please give up.

Which word of "give up" do you not understand?

You've forgotten what I already explained to you upthread. You will get no more hand-holding from me. Sorry. I like to help people, but you have to be willing to not forget what you've already been told.

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November 17, 2013, 12:00:31 PM
 #57

lolz  Grin, I am getting quite bored of this as well, we are going around in circles.

I will concede that you can't explain to me how a customer can double spend or benefit from sending coins to MtGox.

Done.

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November 17, 2013, 12:07:14 PM
 #58

Retail cartel != MtGox

MtGox owns the Bitcoin on the Bitcoin chain

Retail cartel owns nothing on the Bitcoin chain, instead has issued the customer a Cartelcoin in exchange for the Bitcoin which was never received.

JoelKatz proposed that, not me.

Actually he may not have even proposed that. He may have implied that cartel issues Cartelcoins in exchange for Bitcoin which was received but never uses Bitcoins again after that.

Sigh.

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November 17, 2013, 09:15:36 PM
 #59

Constant money supply is bad for crypto-currencies for more than one reason:

https://bitcointalk.org/index.php?topic=222998.msg3615848#msg3615848

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November 17, 2013, 09:48:28 PM
 #60

Because offchain would not be protected against double-spend.
You can't have it both ways. If you need protection from double spends on the regular block chain, then you need to get your transactions mined as soon as possible. If you don't need protection from double spends, then you can conduct your transactions off-chain. This "attack" just doesn't make any sense.

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November 17, 2013, 11:09:53 PM
 #61

Because offchain would not be protected against double-spend.
You can't have it both ways. If you need protection from double spends on the regular block chain, then you need to get your transactions mined as soon as possible. If you don't need protection from double spends, then you can conduct your transactions off-chain.

There are (at least) two orthogonal cases of risk from double-spends.

1. Cartel is in race to protect against a rapidly issued double-spend which is trying to achieve this by propagating two spends where one ends up orphaned. Or where cartel is trusting a 0-transaction spend.

2. Cartel permanently accepts a Bitcoin as a cartel coin, without ever requiring the spend in the Bitcoin blockchain, thus the customer could at some point in the future also spend the Bitcoin and the cartel coin separately.

It doesn't seem like #2 makes much sense as a cartel strategy, so I assume we both agree it won't be employed.

So let's focus on #1.

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.

The the cartel can accept 0-confirmation transactions and wait until the cartel's miners solve a block, to add the spend to the Bitcoin blockchain.

Thus my attack works perfectly well as I have explained throughout this thread.

This "attack" just doesn't make any sense.

Sorry you presented no cogent, logical argument to support that opinion.

I wrote downloadfast.com back in 2001. I did payment processing for software authors back when we had to devise our anti-fraud strategies in-house. I know these issues very well.

Joel I have had several months to think about this. I have a very high IQ. You are not going to win this. But please keep trying. I want to accept all challenges just to make sure I didn't miss something.

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November 17, 2013, 11:28:25 PM
 #62

i belive offchain, dont know why u dont

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Democracy is vulnerable to a 51% attack.


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November 18, 2013, 12:44:24 AM
 #63

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.
So, again, you have two cases:

1) Cases where the cartel cares about double spends, in which case it must get transactions into the block chain as soon as possible.

2) Cases where the cartel doesn't care about double spends, in which case, they don't need the block chain because this is the only service it offers.

Any cartel large enough to successfully make this attack work would have to handle a large enough fraction of Bitcoin transactions that it would just do them off the block chain. All the cartel would do is keep for itself transaction fees it wouldn't need to pay anyway.

But there's another reason this attack can't possibly work that's even more fundamental. The cost to the cartel of mining its own transactions would equal the benefit of not paying transaction fees on its own transactions. This attack is only sensible if zero-fee transactions rarely, if ever, make it into blocks. That means blocks will typically be full of fee-paying transactions. That means every transaction of its own that the cartel mines is one fee-paying transaction it gives up the chance to mine. So what's the point?

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November 18, 2013, 01:15:52 AM
 #64

The customer is not going to shop only one time on the cartel, because it is a cartel meaning the cartel covers a wide range of the commerce the customer encounters.

So the cartel doesn't have to worry about case #1, because they can ban the customer if the customer issues a double-spend.
So, again, you have two cases:

1) Cases where the cartel cares about double spends, in which case it must get transactions into the block chain as soon as possible.

Cartel doesn't need to get the transactions into the Bitcoin block chain asap, for the reason I explained in my prior post.

2) Cases where the cartel doesn't care about double spends, in which case, they don't need the block chain because this is the only service it offers.

Any cartel large enough to successfully make this attack work would have to handle a large enough fraction of Bitcoin transactions that it would just do them off the block chain. All the cartel would do is keep for itself transaction fees it wouldn't need to pay anyway.

You appear to be ignoring the game theory of a cartel. A cartel grows because it hurts competitors who don't join the cartel.

I explained the game theory upthread, and I will repeat a summary again.

As the cartel gains more and more of the Bitcoin network hashrate, it can delay non-cartel transactions by an ever increasing delay, i.e. asymptotically infinite delay.

This forces non-cartel entities to join the cartel else lose their businesses.

But there's another reason this attack can't possibly work that's even more fundamental.

Thanks. Fundamentals are a genre of peer review that has high utility IMO.

The cost to the cartel of mining its own transactions would equal the benefit of not paying transaction fees on its own transactions.

I am not entirely following your logic here. Are you referring to mining them on the Bitcoin chain?

I will say this which might cause you to conclude that your line-of-thinking could be irrelevant. The cartel's incentive is the value of all the business that is not already in the cartel.

Could you clarify your logic further? I think I may understand, but I don't want to try respond until I am sure I understand your point.

This attack is only sensible if zero-fee transactions rarely, if ever, make it into blocks. That means blocks will typically be full of fee-paying transactions. That means every transaction of its own that the cartel mines is one fee-paying transaction it gives up the chance to mine. So what's the point?

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November 18, 2013, 03:30:58 AM
 #65

I guess I am not so stupid after all, the author the selfish-mining paper took an interest in my proposed fix.

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November 18, 2013, 07:19:20 PM
 #66

Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

But as long as it clears before Amazon ships, nobody will be the wiser.  And if Amazon is putting that much processing power into the network to save a few measly fees, I still think it's a net loss for Amazon (in our hypothetical).

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November 18, 2013, 09:47:34 PM
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Oh, I see, so you envision a world in which everyone uses Amazon.com's wallet app. "The masses" may be stupid, but they're not so stupid that they'll use a wallet service that takes far longer than every other wallet service for their transactions to get confirmed.

But as long as it clears before Amazon ships, nobody will be the wiser.  And if Amazon is putting that much processing power into the network to save a few measly fees, I still think it's a net loss for Amazon (in our hypothetical).

Agreed on your first sentence which is support of my theory.

Disagree on the second sentence. Please re-read my last reply to JoelKatz on the profits cartels make by eliminating the competition.

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November 19, 2013, 01:46:28 PM
 #68

You can't because #1 was recorded onchain, not offchain.
They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

I was expecting you to say that Smiley

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

In your 'cartel' situation, who controls the private key for the customer's wallet?
If it is the customer, then the cartel website cannot sign a spending transaction, and so cannot withhold it from the network, it would have to be send by the customer.
If it the cartel, then the customer cannot sign a double-spend transaction.

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November 19, 2013, 07:34:54 PM
 #69

You can't because #1 was recorded onchain, not offchain.
They sure were, but now my balance is with MtGox, not the blockchain.  Your argument is that MtGox's systems are so inept that I can buy something off them and then send those bitcoins somewhere else (non-cartel).  I'm pretty sure those programmers would be fired.

I was expecting you to say that Smiley

You are confused.

And I know exactly what your confusion is, because I used to do techsupport.

Listen up. When the customer spends on the cartel, the offchain transaction would happen at that point. So the Bitcoin blockchain still shows the customer owning the coins. Whereas for your MtGox example, the Bitcoin blockchain shows MtGox owning the coins. So you are comparing two different things, apples-to-oranges.

It has nothing to do with ineptness once the coins are inside the cartel or MtGox. Both are managed correctly and no double-spends. The double-spend is due to the Bitcoin chain showing the customer still owns the coins in the cartel case, so customer can issue a Bitcoin chain spend again even while spending the coins in the cartel chain simultaneously. Whereas for your MtGox example, the Bitcoin chain shows MtGox owns the coins, so the customer can not issue a Bitcoin chain spend again.

In your 'cartel' situation, who controls the private key for the customer's wallet?
If it is the customer, then the cartel website cannot sign a spending transaction, and so cannot withhold it from the network, it would have to be send by the customer.
If it the cartel, then the customer cannot sign a double-spend transaction.

Sorry but you don't understand the technology well enough. The reason most readers dismiss my posts, is because they lack knowledge to ascertain how correct I nearly (as in 99.9%) always am if I've studied some matter for a sufficiently long time.

The attack as described in the OP is for example the customer issues a spend with his her private key to the cartel for example on the cartel's website or POS terminal. The customer would either give the private key to the cartel or sign in a client-side application provided by the cartel which would send the spend only to the cartel's server. Either case supports the attack. The masses do what they are told to do when visiting a retail website or storefront, as they just want to pay and be done with it. They don't care about your technological nirvana idealism. It is irrelevant to their purchase at that moment where they want their pizza and be on their way.

You raise an irrelevant point about double-spends (which incidentally I have also refuted in the preceding paragraph), because the offchain strategy was JoelKatz's idea and has nothing to do with the attack described in the OP. And I resoundly refuted JoelKatz's technical points as pertains to this attack.

This attack can't be disproven. I've thought out it for months and debated all comers in my Bitcoin : The Digital Kill Switch thread, as well in this thread. You can bet that none of the core devs will come here and debate me, because they know they will lose. And it is the sure way that any crypto-currency without perpetual debasement ends up as the government coin.

The only reasonable counter-point upthread was from DeathAndTaxes. Which I believe I also refuted because the cartel punishes competitors and thus takes a larger and larger market share over time, but everyone is free to make their own estimates on his point.

P.S.  JoelKatz is apparently a Bitcoin developer, but not a core one.

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November 19, 2013, 10:51:58 PM
 #70

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.

Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

Amazon can put their miners in Kuwait.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.

Refuted.

Actually the situation is precisely the opposite of what you assert. In a free market cartels tend to be unstable because it in the interests of members to cheat.

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November 19, 2013, 11:07:36 PM
 #71

There is no building mass.   Say Amazon is someday 20% of global ecommerce involving Bitcoins and 30% of population is willing to use their centralized client.   Wow Amazon can withold a whole 6% of the mining revenue.

That is a good point.

However:

1. If 6% is greater than their hashrate, it is still disporportionately siphoning revenue from the mining network. So over time it does build mass.

2. I think you underestimate the percentage of customers who would demand that amazon let them use any bitcoin client they want to. I rather think it would be 20% of global ecommerce and 100% of their customers (take it or leave it attitude since most of their customers don't know and don't care). So make that 15 - 20%, not 6%.

3. Cartels work together because that is the natural mode. I forget the scientific reason, but I can dig it up. So cartels in Europe, China, Japan and all over the world join together for mutual benefit. So this can be much larger than 20%. Don't forget your US History, Standard Oil and the way free "laissez faire" markets function.

Margins for miners vary dramatically.   A server farm in kuwait (1 cent per kWh) may have a 30% gross margin when Amazon is subsiding their operation at a massive annual loss.

Amazon can put their miners in Kuwait.

When you consider all the miners globally with low or subsidized power, I don't see it as a viable attack.

Refuted.

Actually the situation is precisely the opposite of what you assert. In a free market cartels tend to be unstable because it in the interests of members to cheat.

That is incorrect. A cartel grows because the competitors have no economic means to deny joining it. For example, with Rockefeller's Standard Oil he gained economies-of-scale that were impossible to compete with if you weren't larger than his operation. So you couldn't compete on price, so you had to sell your operation to him or join in the cartel.

Cartels are only unstable when the government breaks them up. But the government doesn't really break them up of course, they just pretend to. For example, they broke up the telephone monopoly, but then why does the USA have the worst price-performance internet in the developed world? Because the monopolies were sustained via a cartel of the entities created from the break up of the former monopoly. This is because cartels and government sleep in bed together.

Perhaps you missed the following quote which I wrote upthread:

You appear to be ignoring the game theory of a cartel. A cartel grows because it hurts competitors who don't join the cartel.

I explained the game theory upthread, and I will repeat a summary again.

As the cartel gains more and more of the Bitcoin network hashrate, it can delay non-cartel transactions by an ever increasing delay, i.e. asymptotically infinite delay.

This forces non-cartel entities to join the cartel else lose their businesses.

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November 19, 2013, 11:41:53 PM
Last edit: November 19, 2013, 11:51:59 PM by MoonShadow
 #72

I've decided to respond to this theory in as much detail as I can muster, since it seems to be a perversion of my 'Walmart versus Target mining cartels' concept from two years ago....



Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference.


Indeed, it does make no difference.  I makes no difference now, however the miners are funded.  Mining has always been intended to be a competitive function that tends towards a zero markup.  I'll get there soon....

Quote
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining. They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers.

That is the same as turning Bitcoin into a centralized currency, and thus eventually controlled by the government and thus back to fiat again.

Note this postulated attack wouldn't be possible for 20 years or so,


No, we could do it sooner than than that, and I expect it will happen within the next two years.  However, I don't consider it an attack, I consider it a feature.  I'll explain why shortly....

Quote
I believe I am the first person to raise that in my Bitcoin : The Digital Kill Switch article? I am naming it the "transactions withholding attack" since it means not forwarding transactions in order to monopolize transaction fees, as coin rewards diminish.

Not even close to being the first.  This is one of the set of memes that pops up repeatedly under the many "I'm a noob, but I alone am so smart that I have discovered the Great Bitcoin Flaw!" posts.  

Let me summerize the root of this (assumed) attack vector, for clarity.  If I miss a fine point, I'm sure that you will point it out, and we can adress it then.


As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

There are many counter-economic effects that would contradict the leverage that such a mining pool could gain over the network, so I'll only go over a few of the most significant.

First and foremost; the mining pools, nor any other miner, are not significant contributers to the fee paying transactions on the bitcoin netowrk.  Said another way, it's not in the interest of merchants to only submit their transactions to one mining pool, even if it's the largest.  It's in the interest of merchants to spread any transactions intended for themselves as far and wide across the bitcoin network as possible, as that reduces the risks involved in a well timed double-spend attack.  And being a p2p netowrk, there is no way for a mining pool to prevent any valid transaction from spreading regardless of whether or not that particular mining pool forwards said traansaction to it's competitiors or not.

Second, the largest miners have an economic incentive to cooperate with one another with regard to the bandwidth and information flow across the network, since working together they have a small, but notable, speed advantage over small mining outfits that must rely on slower Internet connections.  The more and faster peer connections major miners have to one another, the faster that they (as a group) can include those fee paying transactions into their own queues.  The faster they can do that, the more likely that whichever miner (among themselves) to solve the next block will have all of the fee paying transactions available at the moment.  Any effort to corner the market on transactions would be regarded as not playing square with the rest of the major players, and will end up getting that pool cut out of the core of the network, and edge connected miners have a slightly higher rate of orphaned blocks as well.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.  Since it's not safe to accept such transactions without confirmations, it then becomes highly in Walmart's own interest to sponsor a mining outfit that will process free transactions intended for Walmart's own wallet of addresses as quickly as possible.  Said another way, it's in Walmart's interest to pay a mining out fit (be it a mining pool, a seperate company, or an internal group to Walmart corporate) to process transactions at a loss.  Of course, it's also not in Walmart's interest to process a competitors' free transactions (i.e. Target) in the same way, so Walmart is also paying to keep Target's free transactions out of their own mining pools.  This sets up competing cartels, that each serve different players in each industry.  Say, as an example, that BTC Guild took contracts to mine for Walmart, McDonalds & Sears; while Eglius took contracts to mine for Target, Burger King & JCPenny's.  While this certainly is consolidation of the market for mining services, and consistant with the dirve towards driving the profit margin for mining to zero (or perhaps lower, under certain conditions) it's also impossible for there to be only one, because if any single mining pool were to gain more market share over the others, the others would suddenly be able to offer these out-of-band services for much cheaper to unrepresented merchants.  The cartels are, thus, self limiting in scope with regard to the bitcoin network itself, which is all that we really care about on the macro scale.

And fourth, there will always be a minority of small and sigular miners that mine at less than zero profit for various reasons.  One such reason is simply that mining produces heat in the winter, and thus a mining rig, once you already own it, is nothing more than an elector-resistive heater.  If you live in a area with both a high heat demand & relatively chaep electricty (i.e. Iceland) any actual coins your mining rigs produce become secondary profit.  No mining pool will ever be able to compete with that, if for no other reason than bandwidth consumptionbecomes a greater burden than solo mining in this context.

Questoins?  Objections?

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November 20, 2013, 12:18:24 AM
 #73

Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.

Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.

Indeed! That is why the attack I described happens.

The cartels will take over the mining.

I mentioned the 0% transaction fee aspect of this attack upthread.

Slow down and re-read the thread more slowly and reflect it on it for a while before you post again.

Don't make noise here please. I will get angry. Be professional.

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November 20, 2013, 12:43:10 AM
 #74

Sorry I still am the first person to write about this attack, unless someone cites for me a specific written prior art.


I'm not that interested in proving it, so you can keep your false pride.

Quote
As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

Quote
I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.


Granted.

Quote
The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.
Quote

Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.


You're sticking with that, I see.

Quote
Third, one unstated premise with this kind of attack vector theory is that the fees and block rewards are the only way that professional mining operations can make money.  This has never been the intended result of a mature bitcoin network.  Since mining profits are desinged to trend towards zero, the protocol permits 'out-of-band' methods of paying for transactions.  For example (and this is where we get to my Walmart verus Target theory from two years ago), it's expected that as Bitcoin matures, major retail outfits will not only start accepting bitcoins for meatspace purchases, they will also start supporting mining themselves.  Likewise, one such advantage that Walmart could offer over it's competitors is free transactions accepted at the counters.

Indeed! That is why the attack I described happens.

The cartels will take over the mining.

I mentioned the 0% transaction fee aspect of this attack upthread.

Slow down and re-read the thread more slowly and reflect it on it for a while before you post again.

Don't make noise here please. I will get angry. Be professional.

I don't care if you get angry.  I'm not going to read all this noise.  You can link back to whatever proof you have offered others, but I don't need to disprove your theory, you need to defend it.  Anger is a sign of your failure.  I'm not a professional.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 01:05:40 AM
 #75

As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

Yes it is, because pools get transactions from numerous bitcoin clients (software apps) thus transactions can't be withheld from other pools.

Whereas the cartel can lock in the transactions and not share them because the customers are buying at the cartel's storefront (e.g. website or POS terminal).

It is an entirely orthogonal game theory.

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

Granted.

So then don't say it is not different above.

The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

You just put your foot in your mouth. You write "has no basis" and "they can't", when you should first ask me "can they?". Because you are incorrect.

Now wrap your brain around a point you failed to see.

The cartel has a % of the total network hashrate, and this % is always growing as they starve the rest of the network of transaction fees and delay transactions for the rest of the network.

Thus they can delay transactions. If for example they have 20% of the network hashrate, they can delay the transactions from non-cartels 20% of the time. This is Bitcoin 101 stuff. Go read the Satoshi whitepaper again, you apparently failed to comprehend it entirely.

And I thus explained why this spirals to 100% over time.

Now please stop intentionally pissing me off and learn how to conduct a debate professionally and cordially by asking questions instead of making baseless statements.


Sorry your rebuttal failed. Your pool and miner game theory points make no sense in my described attack.

You're sticking with that, I see.

Because you did fail. You just couldn't see, but now hopefully you do.

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November 20, 2013, 01:54:45 AM
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As I understnad it, the thoery is that a greedy mining pool could choose to withhold fee-paying transactions that it has received, and retain them until it has solved it's own block; with the implication of boosting it's pool payouts relative to other pools. In turn attracting pool miners away from other pools, until such point that the first pool controls more than 50% of the total mining power, functionally owning the Bitcon network.

No that is not the attack described in the OP. You've entirely missed the point of what makes pools different from a cartel of retailers such as Amazon et al (all the small shops that sell through Amazon).

What makes it different is the customer never interfaces with a pool and a pool interfaces with the actual miners.

That's not different.  Customers don't interface with a pool or miners now.

Yes it is, because pools get transactions from numerous bitcoin clients (software apps) thus transactions can't be withheld from other pools.

Whereas the cartel can lock in the transactions and not share them because the customers are buying at the cartel's storefront (e.g. website or POS terminal).

It is an entirely orthogonal game theory.


You seem to enjoy using big words, but it's still not different however you say it.  An Amazon.com vendor may or may not be compelled to use the Amazon.com POS; but that is no garantee that the transaction can be kept within house, but even if it can....

Quote

I am writing about the customer interfacing directly with the miner at the miner's website or POS terminal, i.e. Amazon could have its own mining farm of computers.

Granted.

So then don't say it is not different above.


Saying that Amazon can have it's own mining servers isn't remotely sthe same as saying that they can lockout the vendors from the bitcoin network.  You seem to lack a basic understanding of how the p2p netowrk actually functions.

Quote
The point is then Amazon can start to delay the transactions of those who are not in its cartel (also starving the rest of the mining network of transaction fees). This can eventually force customers away from non-cartel stores and to cartel stores (where store means website and/or POS terminal). Which thus increases the cartel's relative mining power over time, thus increasing the delay for the non-cartel stores. Thus it spirals until the cartel has 100%.

Your conclusion is dependent upon this premise highlighted, but this premise has no basis.  Even if Amazon could prevent it's vendors from issuing their own transactions to the greater bitcoin network, by what mechanism can Amazon prevent transactions on the main network from propogating?  The. core is that they can't.

You just put your foot in your mouth. You write "has no basis" and "they can't", when you should first ask me "can they?". Because you are incorrect.

This is a dodge.  Any native English speaker would know that my posing of the question above was retorical.  Either show how Amazon could prevent progagation of transactions across the main bitcoin network, or admit that you don't know how this part of your thory would actually occur.

Quote
Now wrap your brain around a point you failed to see.

All I see is that you had no point that was visable.  Again, it's your theory.  It's not mine to prove your theory wrong, it's yours' to prove my objections wrong.  You havent' even tried to do that.  You're the one that stated it as an economic attack.  I simply preesented four simple counter forces to your theory.  If you cannot address those counter points, then you have no theory.  Your back in class, son.

Quote
The cartel has a % of the total network hashrate, and this % is always growing as they starve the rest of the network of transaction fees and delay transactions for the rest of the network.


But how does the idea tha tAmazon can mine it's own transactions lead to this conclusion?  It's a stretch by any metric.  I've seen no argument that they can, economic or otherwise; and I personally know of several effects in the protocol that would undermine any such efforts, economic incetives notwithstanding.  I haven't even touched on those points yet.

Quote
Thus they can delay transactions.


Thus?  You've just made a conclusio without an argumetn.  You are presuming your conclusion, really.

Quote
his is Bitcoin 101 stuff. Go read the Satoshi whitepaper again, you apparently failed to comprehend it entirely.


Nope.  I'm not the one who missed something there.  BTW, I do agree that a major player can delay[/b] the procesing of bitcoin transactions under certain conditions.  The obvious problem with this is that delays are part of the protocol, and thus delays are not, into themselves, an issue.  Your premise depends upon Amazon preventing competitors from mining on fee paying transactions outside of their own network scope.  This is not possible.  If you disagree, show me how] such a mechaism would work.  With details, not vague statements.

Quote
And I thus explained why this spirals to 100% over time.


You have done no such thing.  

Quote

Now please stop intentionally pissing me off and learn how to conduct a debate professionally and cordially by asking questions instead of making baseless statements.


Baseless?

Look whose acting all professional now.  You get one forum member who's been around long enough to have seen this crap before, and you just fall to bits.  This is why the developers don't pay you any mind, they know you're full of shit.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 02:02:28 AM
 #77

Wow, page 4 and no mention of proof of stake yet? I think bitcoin will adopt proof of stake at some level in the next 20 years to remain competitive and reduce the massive electricity consumption it would otherwise involve. Also if mining hardware is available in the format of electric heaters, hot water heaters, etc. then decentralized miners will always be able to operate cheaper than miners in a data center.

Once you have stake mining in addition to proof of work mining it becomes much more expensive to dominate the network.
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November 20, 2013, 02:12:40 AM
Last edit: November 20, 2013, 02:56:00 AM by AnonyMint
 #78

MoonShadow is the type of person who is too stupid to understand (or too stubborn, I am not sure which) when he has been refuted. He will go on and on ad nauseum with noise, even after his points are clearly refuted.

I don't want to feed him, because he will never stop. He will try to bury the thread in noise.

The whole point of cartel is they won't let you in if you don't follow the rules. That is all I need to say to refute all that noise in his latest post above.

P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.



calin, I am aware the PoS would claim to avoid this attack. Also perpetual debasement of the coin is a fix with PoW.

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November 20, 2013, 04:44:38 AM
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Wow, page 4 and no mention of proof of stake yet? I think bitcoin will adopt proof of stake at some level in the next 20 years to remain competitive and reduce the massive electricity consumption it would otherwise involve. Also if mining hardware is available in the format of electric heaters, hot water heaters, etc. then decentralized miners will always be able to operate cheaper than miners in a data center.

Once you have stake mining in addition to proof of work mining it becomes much more expensive to dominate the network.

Bitcoin might adopt proof of stake in the future, as the protocol does permit it to be spliced into the blockchain with some effort.  However, proof of stake is a much more complicated security model that has yet to prove itself.  Proof of work certainly works, even if it is computationally expensive.  However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly. 

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 04:49:39 AM
 #80

I thought miners were to be funded by the theoretical rise in value over time.

That doesn't make any sense. The miners have to earn something on each block they solve, else why would they continue to expend electricity and hardware ongoing.

To protect their prior blocks from being 51% attacked would be one reason.

If you can't be paid anything, you can't pay your electricity. Then you can't continue mining.

That coinbase transaction can't be spent for 120 blocks.

You missed the point that this entire thread is about when coin rewards diminish to near 0.

Please do not post in this thread again. You don't have the knowledge to post in this technical thread. Please. You are making noise.

If you continue to post batshit nonsense, I will raise this with the moderator. I want high quality rebuttals in this thread.

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November 20, 2013, 04:51:13 AM
 #81

MoonShadow is the type of person who is too stupid to understand (or too stubborn, I am not sure which) when he has been refuted. He will go on and on ad nauseum with noise, even after his points are clearly refuted.

I don't want to feed him, because he will never stop. He will try to bury the thread in noise.

The whole point of cartel is they won't let you in if you don't follow the rules. That is all I need to say to refute all that noise in his latest post above.


My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.  As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.  Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.
Quote

P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.


Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 04:52:28 AM
 #82

However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly. 

I haven't analyzed that, and you may be correct the PoS doesn't eliminate the postulated attack.

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November 20, 2013, 04:57:02 AM
 #83

I thought miners were to be funded by the theoretical rise in value over time.

That doesn't make any sense. The miners have to earn something on each block they solve, else why would they continue to expend electricity and hardware ongoing.

To protect their prior blocks from being 51% attacked would be one reason.

If you can't be paid anything, you can't pay your electricity. Then you can't continue mining.


Sure I can.  I'm doing it right now.  It's 33 degrees outside, my electric rate is 7.5 cents per KWH, and my basement needs supplemental heat anyway.  I also mine solo, and haven't caught a block in over a year, but so what?  If I ever catch another, that's just free money.  The need for heat pays for my electric consumption, and my mining rig is already a sunk cost.  If you think I'm unique, you're deluding yourself.

Quote

That coinbase transaction can't be spent for 120 blocks.

You missed the point that this entire thread is about when coin rewards diminish to near 0.

Please do not post in this thread again. You don't have the knowledge to post in this technical thread. Please. You are making noise.

If you continue to post batshit nonsense, I will raise this with the moderator. I want high quality rebuttals in this thread.

Go ahead and raise anything you like with moderators.  It's yourself who seems immune to reason.

BTW, coinbase rewards don't diminsh to near zero until around 2130.  So I doubt that either of us will live to see resolution here.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 05:02:42 AM
 #84

Now you raised the level of your dialogue and logic to something worth discussing. Thanks.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.

History has shown this. Yet you are correct I can not prove that cartels will or won't continue to occur as they have throughout history.

Thus you can't prove they won't either.

It is a stalemate, but I have history of my side.

Normally the market will take advantage of any profit opportunity if it is overall more efficient. So your job if you want to prove it won't happen, is to prove it won't be overall more efficient. This is probably impossible to prove one way or the other since there are too many potential exogenous factors.

I have history of my side as to the real risk of this attack. I also know the government and banks feel threatened by bitcoin (or at least feign concern, if they realize they can take it over). So there is a lot of motivation to make a cartel.

As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.

Not my attack. It was never discussed. I've read everything from the early days with Satoshi. They assumed the corporations would be benign.

Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Sorry but the logic is clear. If they can withhold a percentage of funding from the network, they gain a parasitic and spiraling advantage over the network hashrate power.

The only way to argue against this is to explain how someone can afford to lose money on mining. Two or more competing cartels? Still not a good outcome.

Quote
P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

It is not easy for them to turn away. They get an ever increasing percentage of their sales from Amazon, because it is more efficient for both the customer and the vendor.

And many vendors are ready to take the place of those who leave.

Efficiency is always the reasons cartels win. This is how Rockfeller justified what he did with Standard Oil, including all the dirty tricks. He said he detested waste.

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November 20, 2013, 05:05:26 AM
 #85

If you can't be paid anything, you can't pay your electricity. Then you can't continue mining.

That coinbase transaction can't be spent for 120 blocks.

You missed the point that this entire thread is about when coin rewards diminish to near 0.

Please do not post in this thread again. You don't have the knowledge to post in this technical thread. Please. You are making noise.

If you continue to post batshit nonsense, I will raise this with the moderator. I want high quality rebuttals in this thread.

You do realize the coinbase transaction contains the transaction fees, right?  Roll Eyes

Correct but irrelevant because in my attack the transaction fees are withheld, so what is your point about fees can't be spent for some delay? How is that relevant my attack?

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November 20, 2013, 05:06:24 AM
 #86

However, proof of stake doesn't really alter his theory much, and might actually make it more likely if implimented poorly.  

I haven't analyzed that, and you may be correct the PoS doesn't eliminate the postulated attack.

Generally speaking, POS implies that the higher the number of coins that any particular miner has in savings, and is willing to 'stake' (i.e. freeze for a term, in order to gain a mining advantage without interest paid) than that miner can gain a bias advantage towards either mining in general, or towards special numbered blocks.  So Amazon, under your theory, would be able to magnify their advantage somewhat by staking their bitcoin earnings, and make their odds of finding the next block even higher.  POS throws the 51% mining rule off a bit, making it more into a 66%/33% rule (lessor versus major stakers).  However, POS in practice means different things to different people, so it also matters in detail how it might be implimented.  POS has been attempted by several alt-coins in different fashions, but none have amounted to much as of yet.  So far, the market doesn't put as much faith into POS as do the founders of these alt-coins.  I contributed to the destruction of one such alt-coin, because the particular version of POS permitted an attack wherein a trusted node turns malicious. (pure POW such as Bitcoin uses doesn't have trusted nodes, all nodes are untrustworthy)  I just framed how such an attack could occur, and someone else actually performed said attack about a month later.  Now I can't even remember what it was called.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 05:13:35 AM
Last edit: November 20, 2013, 05:24:56 AM by AnonyMint
 #87

You don't have an attack. Read the responses to you in this thread.

I've reported this to the moderator. I will not tolerate posts intended to deceive that have no information in them. This is a serious thread.

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November 20, 2013, 05:19:46 AM
 #88

MoonShadow thank you for your contribution on PoS. I can't judge it to be correct or not at this time, so it will stand on its merits with no opinion from me. I do also have my doubts about PoS.

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November 20, 2013, 05:21:05 AM
 #89

This is a serious thread.

Miners are going to collude to offer free transactions? That's a serious thread?

That isn't the attack described in this thread.

The OP is about a cartel (or cartels) withholding their customers' transactions from the other miners.

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November 20, 2013, 05:30:04 AM
 #90

This is a serious thread.

Miners are going to collude to offer free transactions? That's a serious thread?

That isn't the attack described in this thread.

The OP is about a cartel (or cartels) withholding their customers' transactions from the other miners.

From the OP: "They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers."

That is an optional mode of doing the attack. It is not required for the attack. It may help them accelerate the attack by drawing more customers to the cartel.

1) Why bother withholding the transactions if they're free?

The other miners wouldn't process them any way (when coin rewards are near 0). The effect is still to withhold fees and revenue from the other miners.

2) What are "mandatory tx fees"? Are you confusing the behavior of the clients with the protocol?

I said the attack would still be possible for a coin that decided to make transactions fees mandatory. In bitcoin transaction fees are voluntary and variable, but I was just preempting the incorrect argument that mandatory and/or fixed-rate transaction fees would be a fix.

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November 20, 2013, 05:55:40 AM
 #91

Now you raised the level of your dialogue and logic to something worth discussing. Thanks.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.

History has shown this. Yet you are correct I can not prove that cartels will or won't continue to occur as they have throughout history.


Historicly, cartels rise as a form of regulatory capture.  Said another way, cartels form functional monopolies in a regulated industry, within a country, because governments exist.  What influence any particular govenrment, or all of them together (unlikley), can have upon the bitcoin economy remains to be seen.  However, it cannot rationally be assumed that cartels will rise in an unregulated environment.  They never have before today.

And before you start spouting about Railroad Robber Barons or Standard Oil; the railroads were a government project from the start and Standard Oil was no more of a monopoly than Microsoft was during the 1990's.  They were simply market dominators who had not yet been out innovated by new competitors.

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Thus you can't prove they won't either.

It is a stalemate, but I have history of my side.


I could prove it, with great effort, but (once again) I don't need to do any such thing.  It's your theory.  In the long run, you could make a fortune betting your side of the theory if you are correct.  I'll stick with my side, and we will see who goes broke first.

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Normally the market will take advantage of any profit opportunity if it is overall more efficient. So your job if you want to prove it won't happen, is to prove it won't be overall more efficient. This is probably impossible to prove one way or the other since there are too many potential exogenous factors.


You just talked yourself into a circle.  I can easily prove that a mining cartel cannot be the most efficient.  I can prove it with existing examples, and have literally done this more than once over the past three years with nearly identical claims of cartel/monopoly based theories.  The key you're missing is that the protocol doesn't require that miners be paid within the system itself, or even at all.  Fee less transactions exist, and they can be paid for out-of-network.  Beyond that, off-network transactions are not only possible, they already occur quite regularly; even if they remain a small minority of the total economy.  On-network transactions are the high-mark of trustless security, but Satoshi undrstood that not everyone would really require such a high degree of security, nor trustless interactions.  In fact, he was counting on parrallel networks (such as Stratum) to develop without his own help that would handle less perfect transactions among parties that trust one another well enough, and thus remove a significant amount of network traffic from the main bitcoin network.  By the time your attack could even be tested, the majority of transactions wouldn't even be using the bitcoin network at all, and the main network would be more akin to the ATM network banks use today.  More of a backbone of the most risky or sensitive international transactions than what Joe Six Pack uses to order an ebook for his kindle.

Quote
I have history of my side as to the real risk of this attack. I also know the government and banks feel threatened by bitcoin (or at least feign concern, if they realize they can take it over). So there is a lot of motivation to make a cartel.

Motivation alone is not enough.  There also must be a credible regulatory path.  I don't see one.  If there is one, than government regulation is a greater risk than the rise of a single mining cartel.

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As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.

Not my attack. It was never discussed. I've read everything from the early days with Satoshi. They assumed the corporations would be benign.


Dude, that's not even possible.  Reading all of that, I mean.

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Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Sorry but the logic is clear. If they can withhold a percentage of funding from the network, they gain a parasitic and spiraling advantage over the network hashrate power.


I might be clear to you, but you don't understand the system yet.  Amazon can't withhold funding from the network.  They can only delay processing of their own transactions.  Time is definately money, and there is a hidden cost to Amazon to do this under any conditions.  They also open themselves up to a double spend attack if they do this in any significant capacity, and someone is going to use that against them eventually.  If you think that Amazon holding their own transactions so that other miners can't get their transaction fees is a problem, why not just issue fee-less transactions?  The fees would just be going back to Amazon otherwise.  You have not discovered something new here, AnonyMint.  Just because Amazon might refuse to pay other miners a mining fee, doesn't mean that they are denying funding for the network.  Other miners are just as able to ignore Amazon's transactions, and just as able to refuse to forward transactions to them.  In fact, I'm fairly sure that games like this already occur.  I'd be surprised to discover that no miners refuse to process free transactions, except for those who are on some kind of whitelist.  Miner favoritism is expected, but in the aggregate, has zero effect upon the network as a whole.  On the aggregate, the network is, and will remain, impartial towards fee paying transactions.  And fee-less transactions are expected to be ignored by a large portion of the professional mining class.  Why would it be any other way?  

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The only way to argue against this is to explain how someone can afford to lose money on mining. Two or more competing cartels? Still not a good outcome.

I've already explained two conditions wherein miners can literally "afford" to lose money on mining.  You didn't even bother to respond to them.

Two or more competing cartels is an outcome that functionally prohibits the complete takeover of the currency, which was the endgame of your attack theory.  I can't think of one reason that a consumer should care about any cartels, if the currency continues to function as far as he is concerned.  Cartels aren't the risk, a monopoly is the risk, and that is impossible.

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P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

It is not easy for them to turn away. They get an ever increasing percentage of their sales from Amazon, because it is more efficient for both the customer and the vendor.

What do you think they will do if it's no longer efficient?  Do you think they will just sit back and take it?  Or do you think that they will contrive to come up with other solutions, with or without Amazon's explict permission?

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And many vendors are ready to take the place of those who leave.


So?
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Efficiency is always the reasons cartels win. This is how Rockfeller justified what he did with Standard Oil, including all the dirty tricks. He said he detested waste.

Ha!  I knew we'd get here eventually.  

Again, Standard Oil was not a monopoly, or even a cartel.  Standard Oil was a temporary market dominator, and could only remain such as long as it was the most efficient provider of services.  As for the dirty tricks, Microsoft, Coca-Cola and Ford have all been caught playing dirty trying to maintain a dominate market position that would eventually fall anyway.  No one still considers Coca-Cola to be a monopoly on soft drinks, if they ever did.  I don't know anyone who still buys the meme that Microsoft is, or ever really was, a monopoly for operating system software.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 05:59:46 AM
 #92

1) Why bother withholding the transactions if they're free?

The other miners wouldn't process them any way (when coin rewards are near 0).

Maybe they would and maybe they wouldn't. Miners currently process zero fee transactions. Why would they stop just because "coin rewards" are near zero?

"there will probably always be nodes willing to process transactions for free" - Satoshi Nakamoto

Whether they accept them or not is irrelevant. The relevant point is they won't receive any fees for those transactions. As the cartel grows, then more and more of the transactions will either be withheld from the other miners or sent to them with 0 fees offered.

At some level, those other miners go bankrupt. The cartel starving them of a portion of their revenue yet they still need to produce the ENTIRE difficulty of hashrate because the cartel is paying their own miners from either the non-free transaction fees and/or from profits of being a cartel. Cartels gain more size and thus economies-of-scale efficiency as well they can charge higher prices once they have eliminated the competition.

The effect is still to withhold fees and revenue from the other miners.

And to greatly delay your transactions.

I refuted that already upthread. Why can't you read the thread carefully?

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Only the non-cartel transactions get delayed, because the cartels miners won't include them when they win the blocks sometimes.

2) What are "mandatory tx fees"? Are you confusing the behavior of the clients with the protocol?

I said the attack would still be possible for a coin that decided to make transactions fees mandatory. In bitcoin they are not, but I was just preempting the incorrect argument that mandatory transaction fees would be a fix.

The correct argument is that there's nothing that needs to be fixed in the first place. When miners fight over who can provide the cheapest transactions, the people making the transactions win.

The market rate for transaction fees has nothing to do with my attack.

I only said that alternate coin designs would still be subject to the attack.

You waste my time here.

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November 20, 2013, 06:18:59 AM
Last edit: November 20, 2013, 06:44:22 AM by AnonyMint
 #93

Now you raised the level of your dialogue and logic to something worth discussing. Thanks.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.

History has shown this. Yet you are correct I can not prove that cartels will or won't continue to occur as they have throughout history.

Historicly, cartels rise as a form of regulatory capture.  Said another way, cartels form functional monopolies in a regulated industry, within a country, because governments exist.  What influence any particular govenrment, or all of them together (unlikley), can have upon the bitcoin economy remains to be seen.  However, it cannot rationally be assumed that cartels will rise in an unregulated environment.  They never have before today.

Incorrect. You will find that for example in the case of Standard Oil that the initial stage of the cartel was to be more efficient. The regulatory capture came later once it was such a huge operation that they could do regulatory capture and then later to protect against smaller paradigm shifts. So by the end, Rockefeller was a liar about efficiency. But in the start, he was more efficient for example by moving rails closer to farms (the cost from the farm to the rail was often higher than the long-distance rail shipping rate) and consolidating inefficient managements, etc..

And before you start spouting about Railroad Robber Barons or Standard Oil; the railroads were a government project from the start and Standard Oil was no more of a monopoly than Microsoft was during the 1990's.  They were simply market dominators who had not yet been out innovated by new competitors.

hahaha you argue Microsoft didn't have a monopoly with Windows for decades.

Normally the market will take advantage of any profit opportunity if it is overall more efficient. So your job if you want to prove it won't happen, is to prove it won't be overall more efficient. This is probably impossible to prove one way or the other since there are too many potential exogenous factors.

You just talked yourself into a circle.  I can easily prove that a mining cartel cannot be the most efficient.  I can prove it with existing examples, and have literally done this more than once over the past three years with nearly identical claims of cartel/monopoly based theories.  The key you're missing is that the protocol doesn't require that miners be paid within the system itself, or even at all.  Fee less transactions exist, and they can be paid for out-of-network.  Beyond that, off-network transactions are not only possible, they already occur quite regularly; even if they remain a small minority of the total economy.  On-network transactions are the high-mark of trustless security, but Satoshi undrstood that not everyone would really require such a high degree of security, nor trustless interactions.  In fact, he was counting on parrallel networks (such as Stratum) to develop without his own help that would handle less perfect transactions among parties that trust one another well enough, and thus remove a significant amount of network traffic from the main bitcoin network.  By the time your attack could even be tested, the majority of transactions wouldn't even be using the bitcoin network at all, and the main network would be more akin to the ATM network banks use today.  More of a backbone of the most risky or sensitive international transactions than what Joe Six Pack uses to order an ebook for his kindle.

Moving most transactions off the blockchain would indeed be a possible fix to my attack. It doesn't however make my attack wrong, because that is not the case today and no one can guarantee it will be so.

I have history of my side as to the real risk of this attack. I also know the government and banks feel threatened by bitcoin (or at least feign concern, if they realize they can take it over). So there is a lot of motivation to make a cartel.

Motivation alone is not enough.  There also must be a credible regulatory path.  I don't see one.  If there is one, than government regulation is a greater risk than the rise of a single mining cartel.

You haven't see the new laws that you can't root your cell phone in the USA?

Don't be too naive okay.

As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.

Not my attack. It was never discussed. I've read everything from the early days with Satoshi. They assumed the corporations would be benign.


Dude, that's not even possible.  Reading all of that, I mean.

I do my research. And no better place to start, than at the beginning.

Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Sorry but the logic is clear. If they can withhold a percentage of funding from the network, they gain a parasitic and spiraling advantage over the network hashrate power.


I might be clear to you, but you don't understand the system yet.  Amazon can't withhold funding from the network.  They can only delay processing of their own transactions.

I have refuted this same point 2X already upthread. See my latest reply to anth0ny.

The only way to argue against this is to explain how someone can afford to lose money on mining. Two or more competing cartels? Still not a good outcome.

I've already explained two conditions wherein miners can literally "afford" to lose money on mining.  You didn't even bother to respond to them.

Sorry I must have missed that. You can reiterate.

Two or more competing cartels is an outcome that functionally prohibits the complete takeover of the currency, which was the endgame of your attack theory.  I can't think of one reason that a consumer should care about any cartels, if the currency continues to function as far as he is concerned.  Cartels aren't the risk, a monopoly is the risk, and that is impossible.

Cartels always functionally merge because it is more profitable, i.e. they can charge higher prices with less competition.

That is monopoly.

Customers do buy from monopolies. They bought Windows like hotcakes up until Linux started to compete effectively recently.

Microsoft was not able to attain regulatory capture to prevent Linux, so monopoly was eroded and now dying.


Quote
Quote
P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

It is not easy for them to turn away. They get an ever increasing percentage of their sales from Amazon, because it is more efficient for both the customer and the vendor.

What do you think they will do if it's no longer efficient?  Do you think they will just sit back and take it?  Or do you think that they will contrive to come up with other solutions, with or without Amazon's explict permission?

You may not like it, but they stick with the monopoly. That is the way monopolies work out, unless there is an alternative. Cartels are good at regulatory capture.

And the government and banks have every incentive to go along with it in this case.

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November 20, 2013, 06:19:18 AM
 #94

1) Why bother withholding the transactions if they're free?

The other miners wouldn't process them any way (when coin rewards are near 0).

Maybe they would and maybe they wouldn't. Miners currently process zero fee transactions. Why would they stop just because "coin rewards" are near zero?

"there will probably always be nodes willing to process transactions for free" - Satoshi Nakamoto

Whether they accept them or not is irrelevant. The relevant point is they won't receive any fees for those transactions. As the cartel grows, then more and more of the transactions will either be withheld from the other miners or sent to them with 0 fees offered.

At some level, those other miners go bankrupt. The cartel starving them of a portion of their revenue yet they still need to produce the ENTIRE difficulty of hashrate because the cartel is paying their own miners from either the non-free transaction fees and/or from profits of being a cartel. Cartels gain more size and thus economies-of-scale efficiency as well they can charge higher prices once they have eliminated the competition.


Nope.  This is where your theory falls apart.  Out-of-band transactions exist, and they exist because fee-less transactions are permitted.  The cartel can't grow, because it needs to have a dominate position among miners to start with.  It can't happen.  Currently, the bitcoin network is more than a 1000 times faster than the fastest unclassified supercomputer on Earth.  It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.  Even the NSA couldn't pull this one off, and they tried it more than a year ago.  You can't bankrupt the independent miners, there is simply no way to undercut the guy who's mining rig heats his flat.

Quote

The effect is still to withhold fees and revenue from the other miners.

And to greatly delay your transactions.

I refuted that already upthread. Why can't you read the thread carefully?


You refuted nothing of the sort.  What you are describing is an intentional network split, although asyncronous.  The small side of the split always loses, there is no exceptions.  No cartel would be willing to commit the resources to acheive this end, because it would be a money pit until they hit 51% of the hashing.  Over 58,000 Petaflops.  The fastest supercomputer on Earth is 33 Petaflops.  And that is now, what will it be in 20 years?

Quote

The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.


Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Quote
Only the non-cartel transactions get delayed, because the cartels miners won't include them when they win the blocks sometimes.


That happens now.  No mystery there either.


"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 06:34:58 AM
 #95

Anthony- Your argument reminds me of inane theorizing done in grad school with game system models that seldom work in the real world.

This supposed attack would not work for as many psychological/behavioral reasons as technical ones. Among them:

People want authenticity and will avoid cartels that disrupt the authenticity of bitcoin. Especially given the premise of bitcoin.

Over time, a body of law may come about making the Amazon-type activity you postulate illegal. Even if that does not happen, there will be cooperation by miners, users, and others to have the end result of such a cartel be the same. Failure.

Your theory is seriously lacking in common sense, and your attention to technical detail and pronouncements re. your IQ indicate that, like your theory, your ideas are not informed by any insight into real human behavior.

Fail.
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November 20, 2013, 06:38:14 AM
 #96

1) Why bother withholding the transactions if they're free?

The other miners wouldn't process them any way (when coin rewards are near 0).

Maybe they would and maybe they wouldn't. Miners currently process zero fee transactions. Why would they stop just because "coin rewards" are near zero?

"there will probably always be nodes willing to process transactions for free" - Satoshi Nakamoto

Whether they accept them or not is irrelevant. The relevant point is they won't receive any fees for those transactions. As the cartel grows, then more and more of the transactions will either be withheld from the other miners or sent to them with 0 fees offered.

At some level, those other miners go bankrupt. The cartel starving them of a portion of their revenue yet they still need to produce the ENTIRE difficulty of hashrate because the cartel is paying their own miners from either the non-free transaction fees and/or from profits of being a cartel. Cartels gain more size and thus economies-of-scale efficiency as well they can charge higher prices once they have eliminated the competition.


Nope.  This is where your theory falls apart.  Out-of-band transactions exist, and they exist because fee-less transactions are permitted.

Offchain activity is irrelevant to my attack. You can't predict the future. If offchain becomes the dominant mode of commerce, then my attack will be less useful. But it doesn't make my attack not exist for as long as onchain activity is the norm. You can speculate all you want about the future being not on the blockchain, but I deal with the reality as it stands today. Please don't argue this point further because I will ignore it as it is not relevant. It is a strawman.

Stay on topic please if you want me to discuss.

The cartel can't grow, because it needs to have a dominate position among miners to start with.  It can't happen.  Currently, the bitcoin network is more than a 1000 times faster than the fastest unclassified supercomputer on Earth.  It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.

Nonsense. Amazon controls more servers than the largest mining pools today.

Besides that is irrelevant and shows you don't understand this attack well.

Amazon controls a significant AND GROWING percentage of global commerce (heck I even order from them from Asia), plus there are other large outfits they can merge with in other countries, and thus they can starve the network of transaction fees when the coin rewards are insufficient.

Thus they can shrink the hashrate that they have to compete against by starving the pools of income.

Please don't make me repeat this again. I've stated it too many times already upthread.

You refuted nothing of the sort.  What you are describing is an intentional network split, although asyncronous.  The small side of the split always loses, there is no exceptions.  No cartel would be willing to commit the resources to acheive this end, because it would be a money pit until they hit 51% of the hashing.  Over 58,000 Petaflops.  The fastest supercomputer on Earth is 33 Petaflops.  And that is now, what will it be in 20 years?

Incorrect. I will let you figure out why that is nonsense.

Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.


Quote
Only the non-cartel transactions get delayed, because the cartels miners won't include them when they win the blocks sometimes.

That happens now.  No mystery there either.

It does not if the non-cartel includes a fee to pay miners!

You are just going around in circles in your arguments and forgetting the points of the attack.

If you intentionally waste my time again, I will ignore you. I don't have time for nonsense posts. Please try to think before you post. I know you are not stupid now.

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November 20, 2013, 06:49:36 AM
 #97

Anthony-

This is not anth0ny's attack. He is arguing against this attack of mine. You must be confused or was that a typo?

Your argument reminds me of inane theorizing done in grad school with game system models that seldom work in the real world.

Cartels happen often in the real world.

This supposed attack would not work for as many psychological/behavioral reasons as technical ones. Among them:

People want authenticity and will avoid cartels that disrupt the authenticity of bitcoin. Especially given the premise of bitcoin.

I already refuted this upthread in the early pages of the thread! Dam it read the thread before you post!

The customers of Amazon don't give a rat's ass about your ideological goals. They want their damn goods and click a button and are done with it. They follow what the website dictates.

Over time, a body of law may come about making the Amazon-type activity you postulate illegal.

The government (elite) power comes from control over fiat and you assume they will outlaw the way to take over Bitcoin and capture it?

Sorry you speak nonsense to me.

Fail.

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November 20, 2013, 06:50:08 AM
 #98

Now you raised the level of your dialogue and logic to something worth discussing. Thanks.

My point is that you have to actually show how a rise of a single cartel can happen in the first place.  You have not shown this.

History has shown this. Yet you are correct I can not prove that cartels will or won't continue to occur as they have throughout history.

Historicly, cartels rise as a form of regulatory capture.  Said another way, cartels form functional monopolies in a regulated industry, within a country, because governments exist.  What influence any particular govenrment, or all of them together (unlikley), can have upon the bitcoin economy remains to be seen.  However, it cannot rationally be assumed that cartels will rise in an unregulated environment.  They never have before today.

Incorrect. You will find that for example in the case of Standard Oil that the initial stage of the cartel was to be more efficient. The regulatory capture came later once it was such a huge operation that they could do regulatory capture and then later to protect against smaller paradigm shifts. So by the end, Rockefeller was a liar about efficiency. But in the start, he was more efficient for example by moving rails closer to farms (the cost from the farm to the rail was often higher than the long-distance rail shipping rate) and consolidating inefficient managements, etc..


You have just verified my point.  Standard Oil wasn't a cartel/monopoly to start with, they were the market dominator due to efficiency.  So they were the market dominator before they changed their methods to dirty tricks, in order to maintain an untenuable market position.  The regulatory capture was critical to maintaining that position.  Regulatory capture is (probably) impossible within bitcoin, since bitcoin is, itself, resistant to regulation.

Quote

And before you start spouting about Railroad Robber Barons or Standard Oil; the railroads were a government project from the start and Standard Oil was no more of a monopoly than Microsoft was during the 1990's.  They were simply market dominators who had not yet been out innovated by new competitors.

hahaha you argue Microsoft didn't have a monopoly with Windows for decades.


They didn't.  They had a dominate market position, as I stated.  During the 90's they used copyright law and dirty tricks of their own to maintain that market position, but in hindsight, we know that it was already be eroded by GNU/Linux.  You're using linux right now, and you do it everytime you do just about anything on the Internet.  More than half of all servers are some flavor of unix successor, that was already true when the US Department of Justice was sueing Microsoft for anti-trust (monopoly) violations.  It just took a while for the rest of the market to notice the quiet changes underway.

If you disagree, make an argument; rather than just a childish remark.
Quote

Normally the market will take advantage of any profit opportunity if it is overall more efficient. So your job if you want to prove it won't happen, is to prove it won't be overall more efficient. This is probably impossible to prove one way or the other since there are too many potential exogenous factors.

You just talked yourself into a circle.  I can easily prove that a mining cartel cannot be the most efficient.  I can prove it with existing examples, and have literally done this more than once over the past three years with nearly identical claims of cartel/monopoly based theories.  The key you're missing is that the protocol doesn't require that miners be paid within the system itself, or even at all.  Fee less transactions exist, and they can be paid for out-of-network.  Beyond that, off-network transactions are not only possible, they already occur quite regularly; even if they remain a small minority of the total economy.  On-network transactions are the high-mark of trustless security, but Satoshi undrstood that not everyone would really require such a high degree of security, nor trustless interactions.  In fact, he was counting on parrallel networks (such as Stratum) to develop without his own help that would handle less perfect transactions among parties that trust one another well enough, and thus remove a significant amount of network traffic from the main bitcoin network.  By the time your attack could even be tested, the majority of transactions wouldn't even be using the bitcoin network at all, and the main network would be more akin to the ATM network banks use today.  More of a backbone of the most risky or sensitive international transactions than what Joe Six Pack uses to order an ebook for his kindle.

Moving most transactions off the blockchain would indeed be a possible fix to my attack. It doesn't however make my attack wrong, because that is not the case today and no one can guarantee it will be so.


Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.

Quote

I have history of my side as to the real risk of this attack. I also know the government and banks feel threatened by bitcoin (or at least feign concern, if they realize they can take it over). So there is a lot of motivation to make a cartel.

Motivation alone is not enough.  There also must be a credible regulatory path.  I don't see one.  If there is one, than government regulation is a greater risk than the rise of a single mining cartel.

You haven't see the new laws that you can't root your cell phone in the USA?


I have seen that news.  Strangely, my phone is still rooted.  If the simple fact that a law against it existed really worked, then the US doesn't have a drug war going on anymore either.

Quote
Don't be too naive okay.


I'm the naive one?

Quote

As I have already pointed out, the rise of competing cartels was expected, and planned for, from the early days.

Not my attack. It was never discussed. I've read everything from the early days with Satoshi. They assumed the corporations would be benign.


Dude, that's not even possible.  Reading all of that, I mean.

I do my research. And no better place to start, than at the beginning.


You still haven't read all there is to read on this topic.  You probably haven't even read all that I've personally written on this topic.  I wouldn't want to read all that myself.

Quote

Simply saying that Amazon can control the transactions within it's own payment system is one thing, but saying that they can progressively take over all mining by this does not follow.  There are simply too many counter incentives to presume this.

Sorry but the logic is clear. If they can withhold a percentage of funding from the network, they gain a parasitic and spiraling advantage over the network hashrate power.


I might be clear to you, but you don't understand the system yet.  Amazon can't withhold funding from the network.  They can only delay processing of their own transactions.

I have refuted this same point 2X already upthread. See my latest reply to anth0ny.


Just because you say it, does not make it so.

Quote

The only way to argue against this is to explain how someone can afford to lose money on mining. Two or more competing cartels? Still not a good outcome.

I've already explained two conditions wherein miners can literally "afford" to lose money on mining.  You didn't even bother to respond to them.

Sorry I must have missed that. You can reiterate.


One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins. 

Quote

Two or more competing cartels is an outcome that functionally prohibits the complete takeover of the currency, which was the endgame of your attack theory.  I can't think of one reason that a consumer should care about any cartels, if the currency continues to function as far as he is concerned.  Cartels aren't the risk, a monopoly is the risk, and that is impossible.

Cartels always functionally merge because it is more profitable, i.e. they can charge higher prices with less competition.

Only if regulatory capture is an option.  There has never been an exception.  There is no evidence that regulatory capture is possible in bitcoin mining.

Quote
Customers do buy from monopolies. They bought Windows like hotcakes up until Linux started to compete effectively recently.

I already addressed this one.

Quote
Microsoft was not able to attain regulatory capture to prevent Linux, so monopoly was eroded and now dying.

That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.

Quote

Quote
Quote
P.S. Besides any one who has been to amazon.com knows that amazon.com processes the payment for the order, not the vendors. But that isn't necessary to make my point above. Maybe he is thinking instead of Amazon payments, not Amazon vendors.

Anyone who deals with online vending knows that Amazon's payment system is preferred by vendors because it's cheap and effective, but it's not the only way these same vendors sell products.  Almost all of them have their own websites, and can take payments outside of the Amazon ecosystem.  If Amazon were to turn hostile to those vendor's own interests, it's relatively easy for those vendors to abandon Amazon.  The same is true with any aggragate commerce site.

It is not easy for them to turn away. They get an ever increasing percentage of their sales from Amazon, because it is more efficient for both the customer and the vendor.

What do you think they will do if it's no longer efficient?  Do you think they will just sit back and take it?  Or do you think that they will contrive to come up with other solutions, with or without Amazon's explict permission?

You may not like it, but they stick with the monopoly. That is the way monopolies work out, unless there is an alternative. Cartels are good at regulatory capture.


My point is that there is an alternative, even for Amazon's vendors.  You just seem to be blind to the alternatives.

Quote

And the government and banks have every incentive to go along with it in this case.

Doesn't matter if they do.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 06:53:37 AM
 #99

My post was directed at AnthontMint. Sorry for confusion.

The argument just seems so inane and theoretical and devoid of behavioral analysis and common sense.

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November 20, 2013, 06:56:25 AM
 #100

It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.  Even the NSA couldn't pull this one off, and they tried it more than a year ago.

They did? Do you have a link? (Not because I don't believe you, but because I'd like to read more about it.)

Search this forum for the elusive "mystery miner" of yesteryear.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 07:04:05 AM
 #101



The government (elite) power comes from control over fiat and you assume they will outlaw the way to take over Bitcoin and capture it?

Sorry you speak nonsense to me.

Fail.
[/quote]

Anyone with a college degree or even self taught student of history ought to know that any elite is not homogenous. There are always divergences of opinion and action within the elite. Some of the elite will seek to protect bitcoin's authenticity, others won't. This is already happening. Again, you miss the most basic, rudimentary understanding of human behavior.

Sidenote: Are you being paid by a hedge fund or other entity that wants to accumulate more bitcoin for cheap? Your overly technical arguments and choice use of jargon seem like they're intended to mislead newbies. Or maybe you are just upset you didn't buy when the price was right. Or maybe you really believe your theoretical nonsense. In any case, you leave yourself enormous wiggle room by saying bitcoin will reach a trillion dollars before going to 0. Gee, thanks for the deep insight, like most human endeavors things will ebb and flow. Aside from self-agrandizing theoreticizing, I don't see much in your posts.






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November 20, 2013, 07:13:07 AM
 #102

The argument just seems so inane and theoretical and devoid of behavioral analysis and common sense.

That is not an argument. It is 0 specific information content.

I already refuted your specifics.

I need to go eat guys. Be back later.

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November 20, 2013, 07:14:56 AM
 #103


Nope.  This is where your theory falls apart.  Out-of-band transactions exist, and they exist because fee-less transactions are permitted.

Offchain activity is irrelevant to my attack. You can't predict the future. If offchain becomes the dominant mode of commerce, then my attack will be less useful. But it doesn't make my attack not exist for as long as onchain activity is the norm. You can speculate all you want about the future being not on the blockchain, but I deal with the reality as it stands today. Please don't argue this point further because I will ignore it as it is not relevant. It is a strawman.
[/quote]

You can speculate as much as you like as well.  Once again, I don't need to disprove your theory.  You need to disprove my objections.  Thus far, you have failed to disprove any of them.  Not one, and I have provided at least 6 market forces that undermine your theory.  I have not even touched upon the technical/protocol reasons your theory is flawed. 

Quote
The cartel can't grow, because it needs to have a dominate position among miners to start with.  It can't happen.  Currently, the bitcoin network is more than a 1000 times faster than the fastest unclassified supercomputer on Earth.  It would take nation-state level resources for Amazon to even match one of the top 10 mining pools, and they would have to commit those resources to this end for an indefinate period of time.

Nonsense. Amazon controls more servers than the largest mining pools today.


What part is nonsense?  First, show me that Amazon has control of 58,000 petaflops of computational power.  Then show me how they would be able to commit same to such a project without completely starving their existing businesses for resources.  I know that you can't show either, because while Amazon certainly has quite a network, they are actually using it for a great many other business functions.

Furthermore, the 33 petaflop supercomputer sits on more than 40 acres.  Amazon doesn't possess 40,000 acres of server farms.
Quote

Besides that is irrelevant and shows you don't understand this attack well.

Amazon controls a significant AND GROWING percentage of global commerce (heck I even order from them from Asia), plus there are other large outfits they can merge with in other countries, and thus they can starve the network of transaction fees when the coin rewards are insufficient.

I understand your attack better than you do, you just don't know it yet.  The percentage of global commerce that Amazon may control is what is irrelevant.  You don't know enough about the protocol for me to even explain why this is.

Quote

Thus they can shrink the hashrate that they have to compete against by starving the pools of income.


Won't work.  It's been tried already.  It didn't work for them either.

Quote
Please don't make me repeat this again. I've stated it too many times already upthread.


You've never actually stated anything of substance.  If you ever did, you'd have to admit failure when others ate out your substance.  Personally, I'd like to see it.

Quote

You refuted nothing of the sort.  What you are describing is an intentional network split, although asyncronous.  The small side of the split always loses, there is no exceptions.  No cartel would be willing to commit the resources to acheive this end, because it would be a money pit until they hit 51% of the hashing.  Over 58,000 Petaflops.  The fastest supercomputer on Earth is 33 Petaflops.  And that is now, what will it be in 20 years?

Incorrect. I will let you figure out why that is nonsense.


Prove it.

Quote
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!


"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 07:15:23 AM
 #104

Please address the question of whether you are being paid to spread fear re. bitcoin in order to influence the price.
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November 20, 2013, 07:16:11 AM
Last edit: November 21, 2013, 10:34:06 AM by AnonyMint
 #105

Please address the question of whether you are being paid to spread fear re. bitcoin in order to influence the price.

Absolutely false. I would like to see an altcoin which fixes this attack.

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November 20, 2013, 07:16:58 AM
Last edit: November 20, 2013, 07:37:52 AM by freedomno1
 #106

Feel like poking at this somewhat amusing
Breaks it down into assumptions postulation hypothesis statements and fact
   
Transactions Withholding Attack
November 17, 2013, 07:22:44 AM
Reply with quote  #1
I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.

I think it is an economic attack (Assumption) so I place it in the Economics forum.

Also because I don't get good reception from Bitcoin developers (Assumption) when I try to post in the developers forums.
Lets see if they ignore this thread or come post to refute it. I doubt they will. (Assumption)

Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. (Fact) The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. (Postulation and Assumption)

Then put them on the blocks found by its own mining servers. (Assumption (Heavy Centralization)

This would starve the rest of the network of funding (Postulation and Assumption)
and eventually the cartel would be doing all the mining. (Assumption)

They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers. (Assumption and Postulation)

That is the same as turning Bitcoin into a centralized currency, (Statement)  and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. (Assumption and Postulation) Once they adopt one, they will stay with that one due to inertia and network effects. (Assumption)

Thus I see Bitcoin is doomed and it is not a solution to anything long-term, (Postulation) although short-term it shows us what might be possible with decentralized currencies if we were to improve them. (Statement)

Well that was amusing

On the Assumptions

OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks

On the Postulation

OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

Rebuttal:

It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.

OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)

Rebuttal:

We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.

OPs viewpoint on the end result:

This would starve the rest of the network of funding (Postulation and Assumption)

Rebuttal:

Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability

OPs conclusion:

and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Rebuttal:

This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned

___

Sort of interesting but runs into a lot of assumptions and postulation that make it weaker when broken down through a case by case point analysis
Also it was mostly restating your points and your presumptions when you made your statements not really breaking any of your points down rather than clarifying your position

Seems clearer to me maybe it will be clearer to the thread too have fun you all  Cool
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November 20, 2013, 07:18:12 AM
 #107

freedomno1, I can't read that. It is very poorly formatted and worded. Click Edit and improve or I will ignore it.

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November 20, 2013, 07:22:26 AM
Last edit: November 20, 2013, 07:35:49 AM by freedomno1
 #108

freedomno1, I can't read that. It is very poorly formatted and worded. Click Edit and improve or I will ignore it.

No edit required Smiley (But I edited anyways should be clearer now it was basically a restatement of your own statement)
I just sorted your points into assumptions postulation facts and statements you made.

I copied your OP to the bone then added brackets where I thought your points fit

To that extent I put a (postulation) (assumption) (hypothesis) in Brackets after each of your sentences and left your OP untouched
If you can't read your own OP after each sentence then it is your poorly worded formatting Smiley

Carrying on I then evaluated each of your sentences in the categories below

Your Assumptions

Your Hypothesis

Your Postulation

Then provided a rebuttal to each assumption or postulation you made
Nice and organized
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November 20, 2013, 07:23:50 AM
 #109

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The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Whereas when the non-cartel transactions are delayed because the cartel's mining servers don't include them in their blocks, the non-cartel customers using a normal bitcoin client will notice the delays.

So thus this drives the system towards competing cartels which can offer 0-confirmations due to repeat customers.

Then cartels merge to increase profits.

Same old shit that happens over and over in history.

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November 20, 2013, 07:25:09 AM
 #110

freedomno1, I don't respond to something written in jumbled way like that. Sorry. My time is valuable to me.

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November 20, 2013, 07:29:50 AM
 #111

I think I understand this attack, and will now summarize it in a form a five year old can understand:

http://www.youtube.com/watch?v=-vohNUTTx3A

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November 20, 2013, 07:34:41 AM
 #112

I think I understand this attack, and will now summarize it in a form a five year old can understand:

http://www.youtube.com/watch?v=-vohNUTTx3A

Haha that is funny. I don't think the masses care enough for it to be $trillions in terms of the retail model. But I do get your deeper point which is innovation could create entirely new business models perhaps that are much more productive. Indeed cartels fail when the paradigm changes out from under them, e.g. Microsoft.

But I don't yet see retail changing, except we might someday be downloading and 3D printing and perhaps that would lower the capital requirement for retailing so much that it could disrupt amazon's lead.

But here is the thing. Amazon is not profitable now. They are already a front for someone who wants control of the market, not profit.

And the government will not give up their monopoly on money at any cost. Thus I can see the attack is already being formulated.

Bezos bought the Washington Post, so it means he must be part of or cowtail to the elite now. Mass media is definitely rubbing shoulders with the ilk of Bilderbergers.

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November 20, 2013, 07:38:14 AM
 #113

freedomno1, I don't respond to something written in jumbled way like that. Sorry. My time is valuable to me.

Fine edited it Smiley

Meat:

OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks

On the Postulation

OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)

Rebuttal:

It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.

OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)

Rebuttal:

We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.

OPs viewpoint on the end result:

This would starve the rest of the network of funding (Postulation and Assumption)

Rebuttal:

Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability

OPs conclusion:

and thus eventually controlled by the government and thus back to fiat again. (Postulation)

Rebuttal:

This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned
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November 20, 2013, 07:38:49 AM
Last edit: November 20, 2013, 04:07:48 PM by AnonyMint
 #114

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.  Wink

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November 20, 2013, 07:40:21 AM
 #115

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.  Wink

OP assumes that something needs to be fixed when the Economic incentive to do so is not there as it would create an instability in the system
IT is after all an economic attack Cheesy
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November 20, 2013, 07:44:53 AM
 #116

So assuming there's something worth worrying about here, what's to prevent the same thing from happening off the blockchain:

1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%

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November 20, 2013, 07:47:29 AM
 #117

So assuming there's something worth worrying about here, what's to prevent the same thing from happening off the blockchain:

1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%

Extending on that the Amazon cartel would need to have a majority of the network to initiate the 50% attack and we would run into the Double Spend and reverse transaction problems which could be significantly worth more to the Cartel than transaction fees from withholding blocks

OP assumes that the 50% attack is not a greater risk if it can control the servers its not decentralized at less than 50%
Each node being independent and what not
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining.
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November 20, 2013, 07:49:24 AM
Last edit: November 20, 2013, 04:07:21 PM by AnonyMint
 #118

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.  Wink

OP assumes that something needs to be fixed when the Economic incentive to do so is not their as it would create an instability in the system
IT is after all an economic attack Cheesy

That makes no sense to me. My proposed fix is to not stop coin rewards.

And that has the benefit of increasing distribution, and possibility making it a currency and not a ponzi scheme as bitcoin most unarguably is. If you want to refute that not-a-currency-and-is-a-ponzi point, do it in the linked thread, not off-topic here.

If you don't like an altcoin with coin rewards, then don't buy it.

I am not proposing to fix bitCON. They would never fix it any way.

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November 20, 2013, 07:58:02 AM
 #119

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.  Wink

OP assumes that something needs to be fixed when the Economic incentive to do so is not their as it would create an instability in the system
IT is after all an economic attack Cheesy

That makes no sense to me. My proposed fix is to not stop coin rewards.

And that has the benefit of increasing distribution, and possibility making it a currency and not a ponzi scheme as bitcoin most unarguably is. If you want to refute that not-a-currency-and-is-a-ponzi point, do it in the linked thread, not off-topic here.

If you don't like an altcoin with coin rewards, then don't buy it.

I am not proposing to fix bitCON. They would never fix it any way.

Well if you can code a theoretical fix then propose it to the Dev team assuming they accept it as a real concern. (Why shouldn't I fix the attack?)

What is your proposed fix

Coin rewards and bonus blocks ?
And bitcoin is not a ponzi

I digress that is off topic here but the point must be stated for the record


Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
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November 20, 2013, 08:00:57 AM
 #120

I digress that is off topic here but the point must be stated for the record


Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.

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November 20, 2013, 08:14:11 AM
 #121

I digress that is off topic here but the point must be stated for the record


Is Bitcoin a Ponzi scheme?

In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.

A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.

I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.

Done now provide your solution to the problem in this thread
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November 20, 2013, 08:17:01 AM
 #122

I refuted you over at the other linked thread. The solution is never stop coin rewards. That also improves the distribution problem, which fixes the fact that BitCON can never be a currency, as I explained in my rebuttal at the other thread.

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November 20, 2013, 08:26:42 AM
 #123

since bitcoin is, itself, resistant to regulation.

Hahaha. Hahahahahahaha!

Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.

I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.

Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.


One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Of free energy and perpetual motion!  Roll Eyes

I didn't write "reduced" costs, I wrote "free" costs.

Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins.  

Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.   Huh

As if they do it for free  Roll Eyes

That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.

And what do you think I am trying to do by explaining and defending this attack?

Fix it! With open source! And you are trying  to stop me!

Great logic you have there.  Cry

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November 20, 2013, 09:34:28 AM
 #124

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

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November 20, 2013, 03:42:56 PM
 #125

Sorry but you don't understand the technology well enough. The reason most readers dismiss my posts, is because they lack knowledge to ascertain how correct I nearly (as in 99.9%) always am if I've studied some matter for a sufficiently long time.

The reason the core developers won't debate with you is that you appear to be a know-all blowhard who simply ignores any posts that don't agree with your views, and repeatedly tell the entire world how much smarter you are than them.

Quote
You raise an irrelevant point about double-spends

You raised it, not me.

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November 20, 2013, 03:47:12 PM
 #126

Sorry but you don't understand the technology well enough. The reason most readers dismiss my posts, is because they lack knowledge to ascertain how correct I nearly (as in 99.9%) always am if I've studied some matter for a sufficiently long time.

The reason the core developers won't debate with you is that you appear to be a know-all blowhard who simply ignores any posts that don't agree with your views, and repeatedly tell the entire world how much smarter you are than them.

ok, ok, ok, I see your dick size. Now...

Any way, you still haven't refuted my attack.

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November 20, 2013, 03:54:24 PM
 #127

Quote
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

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November 20, 2013, 04:22:18 PM
 #128

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Amazon won't care about it?

Sure, Amazon can trust its customers not to double-spend. But so can all the other merchants.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

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November 20, 2013, 04:23:36 PM
 #129

Quote
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

This line of thinking was already refuted. See my replies to JoelKatz.

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November 20, 2013, 04:56:59 PM
 #130

Quote
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

That only works if the customer does not have control of their wallet, otherwise they could double-spend the money away from Amazon.
So Amazon must control the wallet.
In which case it could instead just manage everything off-chain instead, as current exchanges do.
So there are no transactions to withhold.

This line of thinking was already refuted. See my replies to JoelKatz.
BTW he is a Ripple core dev Wink
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November 20, 2013, 05:08:32 PM
 #131

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

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November 20, 2013, 05:10:37 PM
Last edit: November 21, 2013, 12:50:43 AM by AnonyMint
 #132

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

I guess you missed where I wrote the market cap will likely go to the $trillions first, and the market cap today is about $7 billion. So where does this "Shit! Sell sell sell!" nonsense come from?   Huh

Who wrote about no more gold in the earth's crust?  Huh

What universe are you reading from?

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November 20, 2013, 05:26:53 PM
 #133

This line of thinking was already refuted. See my replies to JoelKatz.

If by refuted you mean: waved hands at, blustered and ignored, sure.
If Amazon control the wallet, there would be no reason for them to have on-chain transactions in the first place, they would do the entire accounting in-house. Just like exchanges do already.

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November 20, 2013, 05:38:23 PM
 #134

An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:

https://bitcointalk.org/index.php?topic=339876.msg3649398#msg3649398

Somewhere in an alternate universe:

"Hey guys, we have definitive proof there's no more gold in the earth's crust."

"Shit! Sell sell sell!"

I guess you missed where I wrote the market cap will likely go to the $trillions first, and the market cap today is about $7 billion. So where does this "Shit! Sell sell sell!" nonsense come from?   Huh

Who wrote about no more gold in the earth's crust?  Huh

What universe are you reading from?

You said the 21 million coin limit makes it unarguably a ponzi scheme. If we suddenly had mined all of the gold in the universe, would that magically make gold unarguably a ponzi scheme?

The limit has no influence on whether people perceive bitcoin to have value or not. However, as long as people perceive that it has value at all, the limit puts *positive* pressure on the price. You can't turn around and say that same limit is proof bitcoin is a ponzi scheme.

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November 20, 2013, 07:49:10 PM
 #135

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.  Wink
You don't turn the steering wheel 15 miles before a curve that may never come.

There are definitely some cases where fixing a problem early has huge advantages. For example, if you're developing a product, it's better to fix a problem in the design stage than after manufacturing. And it's better to fix it after manufacturing than after shipping. And so on.

But when the problem is a possible problem for the far future, there are huge disadvantages to fixing it early. For one thing, the technology available to fix it will get better the longer you wait. The problem may never even materialize, in which case the effort expended to fix it is wasted. Other problems may actually materialize and it may be possible to fix both problems with the same effort. The attempt to fix the problem may create a risk of other problems that are more serious or more likely to appear.

Basically, you have to prioritize resources. If you can propose a fix and make the case that the effort and risks associated with the fix exceed the risk associated with the attack, then maybe you have something. But "I have an obscure theoretical risk that might or might not materialize in the future under circumstances that might or might not be plausible, why don't you all work to fix it?" doesn't cut it.

I am an employee of Ripple. Follow me on Twitter @JoelKatz
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November 20, 2013, 07:55:58 PM
 #136

Quote
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.

Everyone can give 0-confirm transactions to their customers.  That's a question of business risk, not capacity.  It happens now.  Please search for the fast-transaction problem and/or the vending machine problem.

Don't play dumb just to obfuscate the point.

The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.

YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners.  There is no way to avoid it!  That's what you can't wrap your head around!

INCORRECT!

You still didn't get the point.

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

The merchant will care.  He will not get paid until the transaction is processed.  If the transaction is withheld from the majority of the miners, that opens an opprotunity for a double spend attack after product has been shipped.  This will harm merchants directly, and they will either not accept bitcoin transactions via Amazon at all (nullifying your trhoery altogether) or only accept bitcoin transactions with the added garantee from Amazon against double spend fraud.  This will hurt Amazon.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 07:59:03 PM
 #137

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.  You're welcome to start your own alt-coin, however, and see how it turns out.  Nothing is stopping you.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 08:13:59 PM
 #138



Again, I don't need to disprove your theory.  I only need to point out objections.  If you can't defend your theory, then you don't have one.  I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down.  Coin-mixers do them as a matter of their primary function.  All that is required for them to grow in scope is for a market force to require them.  Something as simple as a percentage rise in the transaction fee would be enough.  A government crackdown would certainly do it.

I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.

Just because you say it, does not make it so.

Quote
Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.

It may or may not reintroduce 3rd party risk.  Consumers may or may not be willing to invite government back into their economic activity.  Doesn't matter, it's their choice.  But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.

Quote

One.  Mining as a secondary effect to electro-resistive heating.  I.e. you can't undercut the miner who's rig heats his flat.  There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.

Of free energy and perpetual motion!  Roll Eyes

I didn't write "reduced" costs, I wrote "free" costs.


Reduced costs are free costs to someone.  Please respond to the effect that sero profit margin miners would have upon your theory.

Quote
Two.  The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union.  Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins.  

Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.   Huh

As if they do it for free  Roll Eyes


They would do it for free, because it would still be cheaper at scale than their current "cost centers" for online commerce security, as well as the overhead with the handling and security with regard to both credit card transactions and cash transactions today.  Do you think that armored cars are costless?  That IT security gurus work cheap?  That Walmart puts cameras above every cash register because they trust their $7.50 per hour part time cashiers to be trustworthy with hundreds or thousands of cash dollars?

Quote

That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux?  Because it wasn't a company that could be regulated, it was simply the product of a new kind of development.  Open source.  Which turns out to be rather resistant to regulation by governments.  Bitcoin is open source, and p2p, and distributed.  All things deliberately designed to contribute to it's resitance to regulation.

And what do you think I am trying to do by explaining and defending this attack?

Fix it! With open source! And you are trying  to stop me!

Great logic you have there.  Cry

I'm not trying to stop you from fixing whatever you think is broken, just don't try to fis inside Bitcoin.  Go start an alt-chain, and if you're right about the problem, as well as how to fix it, then you will profit.  For that matter, considering your proposed fix, you don't even have to start a new coin, inflation coins without the block reward reductions already exist, and have for years.  Go have fun.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 08:17:20 PM
 #139

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Amazon won't care about it?

Sure, Amazon can trust its customers not to double-spend. But so can all the other merchants.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

There is no way that this cartel starts with anything near 15% of the hashrate.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 20, 2013, 11:40:52 PM
Last edit: November 20, 2013, 11:52:43 PM by AnonyMint
 #140

But if the majority of small value transactions are off-network, the majority of Amazon-cartel's transactions will have no mining value anyway.

Ifs have nothing to do with my attack. We can debate if there will be nuclear winter this year too. I am not here to debate every possible exogenous factor in the universe.

If the blockchain is not the majority, we no longer have decentralized currency any way. Private offchain currencies means cheating and fractional reserves, which means failures and government intervention.

Reduced costs are free costs to someone.

No they are not. Zero fees still bankrupts a miner with very small costs.

inflation coins without the block reward reductions already exist, and have for years.

Obviously inflacoin is not compelling, because high levels of debasement are not very enticing to those who think a small coin supply returns greater ponzi system gains (oh we know they rationalize away that it is really a ponzi scheme so they don't pay attention to that tradeoff of not distributing new coins perpetually).

Large debasement and no other significant advances over Bitcoin are not going to succeed in the market place.

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November 20, 2013, 11:45:01 PM
Last edit: November 21, 2013, 12:16:18 AM by AnonyMint
 #141

The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.

So that delay is irrelevant.

Amazon won't care about it?

Sure, Amazon can trust its customers not to double-spend. But so can all the other merchants.

I already explained this upthread!

Customer would be banned from all cartel member sellers after one double-spend. Not very wise for the customer if the cartel is widespread in retail and online.

Also most purchases (not downloaded) ship after hours, so if the cartel has 15% of the network hashrate, any double-spend would be detected before shipping.

There is no way that this cartel starts with anything near 15% of the hashrate.

Disagree.

Even if so, 1% of the hashrate means the spend will be in the block-chain before it ships in most cases.

And even if not so, that is irrelevant because the customer will want to buy from the cartel again and not lose reputation.

Besides Amazon doesn't sell to those who don't provide a name, address, and credit card (i.e. some form of ID), thus they can send the collection agencies after you.

To argue that a cartel can't invoke the powers of the law against fraud is nonsensical.

As well to argue that a cartel can't issue 0-confirmation transactions is nonsensical, and this is a good thing for Bitcoin since the 6-confirmation time is 1 hour.

P.S. Tangentially to argue that a cartel which controls 15% of the online transactions (by value not quantity) can't control on the order of 15% of the network hashrate when mining will be solely funded by transaction fees is also nonsensical.

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November 20, 2013, 11:48:39 PM
Last edit: November 21, 2013, 12:01:29 AM by AnonyMint
 #142

This line of thinking was already refuted. See my replies to JoelKatz.

If by refuted you mean: waved hands at, blustered and ignored, sure.
If Amazon control the wallet, there would be no reason for them to have on-chain transactions in the first place, they would do the entire accounting in-house. Just like exchanges do already.

Are you so thick brained that you can't read what I wrote to JoelKatz upthread.

Let me write it again for you! You force me to hand-feed every lazy idiot who can't read what was already written upthread.

Do you think I like all these people wasting my time because you are too lazy to read? And you expect me to be nice to you when you intentionally waste my time and try to deceive in order to induce me to repeat what was already written upthread! Fuck man!

The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Duh!

Shut up mofo.

P.S. I seriously regret not making this a self-moderated thread. Major mistake on my part.

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November 20, 2013, 11:57:53 PM
 #143

BTW he is a Ripple core dev Wink

Yup I knew that. So he may not like my comment against fractional reserves. Frankly I have not studied Ripple enough to have fully formed opinion of it.

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November 21, 2013, 12:02:35 AM
 #144

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.

Can you turn on the physically disconnected webcam or microphone on my computer to see or hear what I am doing. Are you able of intercepting my IP packets or otherwise monitoring my internet activity. Have you put a virus on my computer and monitoring all my keystrokes and reading my hard disk.

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November 21, 2013, 12:07:00 AM
 #145

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.


It wasn't an argument, it was my personal opinion.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 12:08:36 AM
 #146

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.


It wasn't an argument, it was my personal opinion.

Please spread that opinion as much as you want to. That helps me.

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November 21, 2013, 12:11:48 AM
 #147



The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.  With 51% of total hashrate, such a cartel could do so, but there are other consequences to that cartel for doing so, and even then it requires that the cartel keep it up.  If they ever stop, those delayed transactions complete nearly immediately.  It's apparent to many of us that you still don't really grok how the p2p protocol actually does what it does, so you have made up a theoretical flaw based upon what you believe happens.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 12:13:45 AM
 #148

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.


It wasn't an argument, it was my personal opinion.

Please spread that opinion as much as you want to. That helps me.

You think that is so?  You must not be much of a libertarian.  Reputation matters a great deal here, and I have a very good reputation.  A great many members here will take my opinion of you on faith, whether or not I come across as a dick or not.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 12:18:04 AM
 #149



The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.

Your ignorance of Satoshi's white paper and Bitcoin 101 stands out like a blackeye.

The percentage of the hashrate controls the percentage of blocks won, which therefor controls the percentage blocks that the cartel can exclude non-cartel transactions.

Now shutup mofo.

Reputation? You just blew yours to smithereens.

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November 21, 2013, 12:20:37 AM
 #150


No they are not. Zero fees still bankrupts a miner with very small costs.


A miner will do what he think is best for him. In most cases, he has coins and won't join the cartel. Neither as miner nor as customer since it will destroy his economy. The zero fees won't matter the more coins he already has.
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November 21, 2013, 12:21:59 AM
 #151

One thing that all of you have failed to do is argue why I shouldn't fix the attack?



Because you don't know what you are doing.

You must have powers greater than a mind reader and a prophet, I think I am aware of what I am doing.

Character assassination is not an argument.


It wasn't an argument, it was my personal opinion.

Please spread that opinion as much as you want to. That helps me.

You think that is so?  You must not be much of a libertarian.  Reputation matters a great deal here, and I have a very good reputation.  A great many members here will take my opinion of you on faith, whether or not I come across as a dick or not.

I want to destroy my reputation.

Because those can't discern truth from filibuster don't deserve the extravagant fruits I will bestow on them.

Matthew13:10 The disciples came to him (Jesus) and asked, “Why do you speak to the people in parables?”

11 He replied, “Because the knowledge of the secrets of the kingdom of heaven has been given to you, but not to them. 12 Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. 13 This is why I speak to them in parables:

“Though seeing, they do not see;
    though hearing, they do not hear or understand.

John 15:19

19 If you belonged to the world, it would love you as its own. As it is, you do not belong to the world, but I have chosen you out of the world. That is why the world hates you.

Proverbs 12:1

Whoever loves discipline loves knowledge, But he who hates reproof is stupid.

Proverbs 17:10

A rebuke goes deeper into one who has understanding Than a hundred blows into a fool.

Deuteronomy

"The LORD will send upon you curses, confusion, and rebuke, in all you undertake to do, until you are destroyed and until you perish quickly, on account of the evil of your deeds, because you have forsaken Me.

Ezekiel 33:7-12

“So you, son of man, I have made a watchman for the house of Israel. Whenever you hear a word from my mouth, you shall give them warning from me. If I say to the wicked, O wicked one, you shall surely die, and you do not speak to warn the wicked to turn from his way, that wicked person shall die in his iniquity, but his blood I will require at your hand. But if you warn the wicked to turn from his way, and he does not turn from his way, that person shall die in his iniquity, but you will have delivered your soul.

Timothy 6

False Teachers and the Love of Money

These are the things you are to teach and insist on. 3 If anyone teaches otherwise and does not agree to the sound instruction of our Lord Jesus Christ and to godly teaching, 4 they are conceited and understand nothing. They have an unhealthy interest in controversies and quarrels about words that result in envy, strife, malicious talk, evil suspicions 5 and constant friction between people of corrupt mind, who have been robbed of the truth and who think that godliness is a means to financial gain.

6 But godliness with contentment is great gain. 7 For we brought nothing into the world, and we can take nothing out of it. 8 But if we have food and clothing, we will be content with that. 9 Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

Matthew 10

12 As you enter the home, give it your greeting. 13 If the home is deserving, let your peace rest on it; if it is not, let your peace return to you. 14 If anyone will not welcome you or listen to your words, leave that home or town and shake the dust off your feet. 15 Truly I tell you, it will be more bearable for Sodom and Gomorrah on the day of judgment than for that town.

31 So don’t be afraid; you are worth more than many sparrows.

32 “Whoever acknowledges me before others, I will also acknowledge before my Father in heaven. 33 But whoever disowns me before others, I will disown before my Father in heaven.

34 “Do not suppose that I have come to bring peace to the earth. I did not come to bring peace, but a sword. 35 For I have come to turn

“‘a man against his father,
    a daughter against her mother,
a daughter-in-law against her mother-in-law—
36     a man’s enemies will be the members of his own household.’[c]
37 “Anyone who loves their father or mother more than me is not worthy of me; anyone who loves their son or daughter more than me is not worthy of me. 38 Whoever does not take up their cross and follow me is not worthy of me. 39 Whoever finds their life will lose it, and whoever loses their life for my sake will find it.

40 “Anyone who welcomes you welcomes me, and anyone who welcomes me welcomes the one who sent me. 41 Whoever welcomes a prophet as a prophet will receive a prophet’s reward, and whoever welcomes a righteous person as a righteous person will receive a righteous person’s reward. 42 And if anyone gives even a cup of cold water to one of these little ones who is my disciple, truly I tell you, that person will certainly not lose their reward.”

Matthew 25:14-30

The Parable of the Bags of Gold

14 “Again, it will be like a man going on a journey, who called his servants and entrusted his wealth to them. 15 To one he gave five bags of gold, to another two bags, and to another one bag,[a] each according to his ability. Then he went on his journey. 16 The man who had received five bags of gold went at once and put his money to work and gained five bags more. 17 So also, the one with two bags of gold gained two more. 18 But the man who had received one bag went off, dug a hole in the ground and hid his master’s money.

19 “After a long time the master of those servants returned and settled accounts with them. 20 The man who had received five bags of gold brought the other five. ‘Master,’ he said, ‘you entrusted me with five bags of gold. See, I have gained five more.’

21 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

22 “The man with two bags of gold also came. ‘Master,’ he said, ‘you entrusted me with two bags of gold; see, I have gained two more.’

23 “His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

24 “Then the man who had received one bag of gold came. ‘Master,’ he said, ‘I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. 25 So I was afraid and went out and hid your gold in the ground. See, here is what belongs to you.’

26 “His master replied, ‘You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? 27 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.

28 “‘So take the bag of gold from him and give it to the one who has ten bags. 29 For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them. 30 And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.’

Mark 10:17-31

The Rich Man

17 As Jesus was starting out on his way to Jerusalem, a man came running up to him, knelt down, and asked, “Good Teacher, what must I do to inherit eternal life?”

18 “Why do you call me good?” Jesus asked. “Only God is truly good. 19 But to answer your question, you know the commandments: ‘You must not murder. You must not commit adultery. You must not steal. You must not testify falsely. You must not cheat anyone. Honor your father and mother.’[a]”

20 “Teacher,” the man replied, “I’ve obeyed all these commandments since I was young.”

21 Looking at the man, Jesus felt genuine love for him. “There is still one thing you haven’t done,” he told him. “Go and sell all your possessions and give the money to the poor, and you will have treasure in heaven. Then come, follow me.”

22 At this the man’s face fell, and he went away sad, for he had many possessions.

23 Jesus looked around and said to his disciples, “How hard it is for the rich to enter the Kingdom of God!” 24 This amazed them. But Jesus said again, “Dear children, it is very hard to enter the Kingdom of God. 25 In fact, it is easier for a camel to go through the eye of a needle than for a rich person to enter the Kingdom of God!”

26 The disciples were astounded. “Then who in the world can be saved?” they asked.

27 Jesus looked at them intently and said, “Humanly speaking, it is impossible. But not with God. Everything is possible with God.”

28 Then Peter began to speak up. “We’ve given up everything to follow you,” he said.

29 “Yes,” Jesus replied, “and I assure you that everyone who has given up house or brothers or sisters or mother or father or children or property, for my sake and for the Good News, 30 will receive now in return a hundred times as many houses, brothers, sisters, mothers, children, and property—along with persecution. And in the world to come that person will have eternal life. 31 But many who are the greatest now will be least important then, and those who seem least important now will be the greatest then.[c]”

Proverbs 23:5

5 Cast but a glance at riches, and they are gone,
    for they will surely sprout wings
    and fly off to the sky like an eagle.

Proverbs 13:11

Dishonest money dwindles away,
    but whoever gathers money little by little makes it grow.

2 Timothy 3

3 But mark this: There will be terrible times in the last days. 2 People will be lovers of themselves, lovers of money, boastful, proud, abusive, disobedient to their parents, ungrateful, unholy, 3 without love, unforgiving, slanderous, without self-control, brutal, not lovers of the good, 4 treacherous, rash, conceited, lovers of pleasure rather than lovers of God— 5 having a form of godliness but denying its power. Have nothing to do with such people.

6 They are the kind who worm their way into homes and gain control over gullible women, who are loaded down with sins and are swayed by all kinds of evil desires, 7 always learning but never able to come to a knowledge of the truth. 8 Just as Jannes and Jambres opposed Moses, so also these teachers oppose the truth. They are men of depraved minds, who, as far as the faith is concerned, are rejected. 9 But they will not get very far because, as in the case of those men, their folly will be clear to everyone.

A Final Charge to Timothy

10 You, however, know all about my teaching, my way of life, my purpose, faith, patience, love, endurance,

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November 21, 2013, 12:27:59 AM
 #152



The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.

Your ignorance of Satoshi's white paper and Bitcoin 101 stands out like a blackeye.

The percentage of the hashrate controls the percentage of blocks won, which therefor controls the percentage blocks that the cartel can exclude non-cartel transactions.

While the percentage of total hashrate controls the percentage of blocks that said cartel can control, they can't control the others in any fashion.  Control of blocks is not akin to control of transaction processing, nor is it akin to delaying of transaction processing.  I can accept that, under some rather extreme conditions, such a cartel could force up the market rate for transaction fees, and perhaps backlog transactions with insufficient fees for a period of time if blocks are regularly full; however this is a far cry from the assumption that such a cartel can delay those transactions to any noticable degree.  (It might be measureable, but not likely noticable to the average bicoin consumer/merchant)  That all changes at the 50% mark, ut getting there is no small task.  As I write this, the network Petaflops rate is roghly 1000 petaflops higher than when I mentioned it yesterday. It took three years to build the 33 petaflop supercomputer that holds the top spot worldwide.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 12:32:13 AM
 #153



The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.

Your ignorance of Satoshi's white paper and Bitcoin 101 stands out like a blackeye.

The cartel's percentage of the hashrate controls the percentage of blocks won, which therefor controls the percentage blocks that the cartel can exclude non-cartel transactions.

While the percentage of total hashrate controls the percentage of blocks that said cartel can control, they can't control the others in any fashion.  Control of blocks is not akin to control of transaction processing, nor is it akin to delaying of transaction processing.

You are displaying your ignorance of the proof-of-work technology.

This is wonderful. You are destroying your reputation all by yourself.

You better go research, because what I wrote (above in bold text) is 100% correct.

(variance will mean it is not a level percentage but will vary greater and lower, but that is irrelevant)

You think it out, or go ask JoelKatz or any knowledgeable Bitcoin developer.

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November 21, 2013, 12:47:28 AM
Last edit: November 21, 2013, 01:27:16 AM by AnonyMint
 #154

One thing that all of you have failed to do is argue why I shouldn't fix the attack?

Do you have a problem within fixing threats?

Sounds like you love to leave things broken.

So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.  Wink
You don't turn the steering wheel 15 miles before a curve that may never come.

There are definitely some cases where fixing a problem early has huge advantages. For example, if you're developing a product, it's better to fix a problem in the design stage than after manufacturing. And it's better to fix it after manufacturing than after shipping. And so on.

But when the problem is a possible problem for the far future, there are huge disadvantages to fixing it early. For one thing, the technology available to fix it will get better the longer you wait. The problem may never even materialize, in which case the effort expended to fix it is wasted. Other problems may actually materialize and it may be possible to fix both problems with the same effort. The attempt to fix the problem may create a risk of other problems that are more serious or more likely to appear.

Basically, you have to prioritize resources. If you can propose a fix and make the case that the effort and risks associated with the fix exceed the risk associated with the attack, then maybe you have something. But "I have an obscure theoretical risk that might or might not materialize in the future under circumstances that might or might not be plausible, why don't you all work to fix it?" doesn't cut it.

I certainly could not make this case for Bitcoin, because the marketing demographic is based significantly on the asymptotic limit of 21M coins.

And the only fix I currently see is to not diminish coin rewards asymptotically towards 0.

But crypto-currencies are a broader topic than Bitcoin. And an altcoin could offer the proposed fix, c.f. my upthread reply to MoonShadow where I claim that an inflatacoin with no other compelling improvements over Bitcoin would not succeed in the market place.

Also inflatacoin is entirely the wrong connotation, since non-excessive coin rewards have no algebraic correlation to inflation, even Mises admitted that. Even at the current 12.5% per annum (monotonically decreasing) debasement of Bitcoin, the coin is deflationary (ahem, well not the past couple of days with the fall in price).

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November 21, 2013, 12:51:23 AM
 #155



The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Yes, much hand waving.  Again, just because you can say it, does not make it so.  There is zero evidence that a cartel of any size less than 51% of the total network can delay fee paying transactions issued by others to any noticible extent.

Your ignorance of Satoshi's white paper and Bitcoin 101 stands out like a blackeye.

The cartel's percentage of the hashrate controls the percentage of blocks won, which therefor controls the percentage blocks that the cartel can exclude non-cartel transactions.

While the percentage of total hashrate controls the percentage of blocks that said cartel can control, they can't control the others in any fashion.  Control of blocks is not akin to control of transaction processing, nor is it akin to delaying of transaction processing.

You are displaying your ignorance of the proof-of-work technology.

This is wonderful. You are destroying your reputation all by yourself.


Smiley

Quote

You better go research, because what I wrote (above in bold text) is 100% correct.

(variance will mean it is not a level percentage but will vary greater and lower, but that is irrelevant)

You think it out, or go ask JoelKatz or any knowledgeable Bitcoin developer.

Perhaps you misunderstood what they were talking about.  Have you ever considered the possibility that you're wrong?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 12:52:05 AM
 #156

anth0ny has been placed on ignore.

MoonShadow, you will need to find a more convincing way to weasel out of your display of ignorance of the proof-of-work algorithm.

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November 21, 2013, 01:12:09 AM
 #157

anth0ny has been placed on ignore.

MoonShadow, you will need to find a more convincing way to weasel out of your display of ignorance of the proof-of-work algorithm.

You might as well put me on ignore also, because I'm not the one displaying ignorance while feigning understanding.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 02:37:11 AM
Last edit: November 21, 2013, 02:48:26 AM by AnonyMint
 #158

Isn't it ironic when a Dunning-Kruger dolt thinks he is arguing against me, yet the logic implied by what he wrote is supporting my point. He of course doesn't realize this, thus it is wisest not to point it out to him. Then hopefully he shuts up thinking he won the argument.  Wink

I regret the argumentation by filibuster here, i.e. very few new points were made after the first few pages of this thread. My huge mistake not to make this a self-moderated thread.

At the time I started this thread, I was thinking openness was the most important. Thanks to those who have taught me why open-source never works without a benevolent dictator such as Linus Torvalds or Guido van Rossum.

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November 21, 2013, 02:47:56 AM
 #159

Isn't it ironic when a Dunning-Kruger dolt thinks he is arguing against me, yet the logic implied by what he wrote is supporting my point. He of course doesn't realize this, thus it is wisest to not to point it out to him. Then hopefully he shuts up thinking he won the argument.  Wink

I regret the argumentation by filibuster here, i.e. very few new points were made after the first few pages of this thread. My huge mistake not to make this a self-moderated thread.

...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen, this is Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!

Why would a Wookiee, an 8-foot-tall Wookiee, want to live on Endor, with a bunch of 2-foot-tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this case? Nothing. Ladies and gentlemen, it has nothing to do with this case! It does not make sense! Look at me. I'm a lawyer defending a major record company, and I'm talkin' about Chewbacca! Does that make sense? Ladies and gentlemen, I am not making any sense! None of this makes sense! And so you have to remember, when you're in that jury room deliberatin' and conjugatin' the Emancipation Proclamation, does it make sense? No! Ladies and gentlemen of this supposed jury, it does not make sense! If Chewbacca lives on Endor, you must acquit! The defense rests.

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November 21, 2013, 02:53:32 AM
Last edit: November 21, 2013, 03:11:10 AM by AnonyMint
 #160

...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen

Seriously capable technical people don't view technical debates as public juries.

They view them as founded in facts and objective consensus, because rational people know when they are wrong (or at least rationality is recognition of lack of sufficient expertise).

Whereas, arrogant Dunning-Kruger technology neophytes who don't understand what they are talking about and motivated by what they naively perceive to be political "rewards", can filibuster forever and prefer a subjective political contest by obfuscating the information content with pages upon pages of 60 Hz noise. Political contests are won by whom every can make the most useless noise, because the other dolts in the public jury commit the erroneous conclusion the entire thread is noise.

That is precisely a form of Tragedy of the Commons failure.

This is one of the synergistic reasons why academics communicate using cryptic vocabulary and symbols, so the dolts are unable to participate.

P.S. It is intentional that the dolts will perceive this post as a victory for them, and the technologically capable will realize who won the debate.

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November 21, 2013, 03:15:58 AM
 #161

...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen

Seriously capable technical people don't view technical debates as public juries.

They view them as founded in facts and objective consensus, because rational people know when they are wrong (or at least rationality is recognition of lack of sufficient expertise).

Whereas, arrogant Dunning-Kruger technology neophytes who don't understand what they are talking about and motivated by what they naively perceive to be political "rewards", can filibuster forever and prefer a subjective political contest by obfuscating the information content with pages upon pages of 60 Hz noise. Political contests are won by whom every can make the most useless noise, because the other dolts in the public jury commit the erroneous conclusion the entire thread is noise.

That is precisely a form of Tragedy of the Commons failure.

This is one of the synergistic reasons why academics communicate using cryptic vocabulary and symbols, so the dolts are unable to participate.

P.S. It is intentional that the dolts will perceive this post as a victory for them, and the technologically capable will realize who won the debate.

The very fact that you regard this whole debacle as a form of a Tragedy of the Commons failure is evidence enough that only you regard yourself as a member of the "technologically capable".  In fact, most people have resorted to mocking you simply because trying to reason with you is futile, and none of us are here for your benefit.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 03:19:24 AM
 #162

Just remember you blew your credibility to smithereens with your ignorance of proof-of-work math upthread.

And every time you try to reply with subjective political grandstanding, I am going to repeat the same statement until you shut up.

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November 21, 2013, 03:31:48 AM
 #163

Just remember you blew your credibility to smithereens with your ignorance of proof-of-work math upthread.

And every time you try to reply with subjective political grandstanding, I am going to repeat the same statement until you shut up.

I'm amused.

Can you envision any information that might force you to reconsider your position?  Or are you truely this certain that you understand this topic?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 03:53:27 AM
 #164

Prior art?

http://arstechnica.com/information-technology/2013/11/the-best-way-to-take-control-of-bitcoin-rally-other-greedy-selfish-miners/

You claim that you've laid this attack out months ago.  Perhaps you have.  It's still not the first of this type of attack that I've seen claimed, but I have to admit that this is the first of it's type to earn it's own whitepaper.

Of course, the authors of this same whitepaper also offer a simple solution to this kind of attack as well, that simply involves a small protocol change in how mining clients decide upon the block version that they build upon.  I've yet to read this whitepaper myself, so I'm not yet ready to comment on their take on the attack.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 04:05:12 AM
 #165

Selfish-mining as published by those from Cornell is based on withholding block solutions until another peer generates a block solution then using a high gamma of propagation advantage to cheat the network.

That is entirely different than the attack that this thread describes. And yes I described this attack in the bitcointalk discussion of my Bitcoin : The Digital Kill Switch article earlier this year, which was widely syndicated. Google can find it for you.

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November 21, 2013, 04:07:54 AM
 #166

No, it's similar in nature, but not quite the same, I think.

However, after reading the whitepaper for it, I can see how the 'selfish mining pool' can gain a profit advantage.  I don't agree that the end result is that all miners choose to join said cartel pool, because it would become rather obvious that one pool is doing this when they win block races too often for chance, and the rate of orphaned blocks increase.  Also, I can think of a number of counter-stragedies other pools could use to negate the selfish pool's outsized advantages, not the least of which is to simply do the same thing.  If all mining pools act in a similar manner, no pools can gain a profit advantage; but then orphaned blocks become much more common.  Much better would be to simply identify pools that don't play by the rules and take counter-measures until they quit acting badly.

More research is required....

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 21, 2013, 04:15:22 AM
 #167

No, it's similar in nature, but not quite the same, I think.

Not similar, and I will not discuss it with you further. Please stop filibustering me with noise.

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November 21, 2013, 06:22:16 AM
Last edit: November 21, 2013, 07:51:04 AM by mootinator
 #168

Seriously capable technical people don't view technical debates as public juries.

I'm amused you assumed any of those words were my own.

Credit: http://en.wikipedia.org/wiki/Chewbacca_defense

Incidentally, there's a simple diagnostic test for Dunning-Kruger effect. If you understand it mainly as a reminder you don't know everything, you probably aren't affected. If, on the other hand you use it primarily to call other people out for having it, well, I have some bad news for you...

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November 21, 2013, 04:04:59 PM
 #169

The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Why?
You think they will create transactions that don't need to exist, just so that they can not send them out to the rest of the network?
From the network point of view that is the same as the transactions not existing in the first place.
Why bother with all the hassle, just to pay yourselves transactions fees that could be totally avoided by doing offchain transactions in the first place?

They need to gain hashrate in order to withhold transactions.
They need to withhold transactions in order to gain hashrate.
Phase 3: Profit?

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November 21, 2013, 08:17:56 PM
 #170

The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Why?
You think they will create transactions that don't need to exist, just so that they can not send them out to the rest of the network?

You are confusing the cartel's transactions with the non-cartel transactions. The later are the ones that get delay. The cartel's miner excludes them when adding a block solution to the block chain.

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November 22, 2013, 03:34:49 AM
 #171

Fact:

The cartel can hide how much hashrate it has, by using many IP addresses and sharing transactions until it has 50+% or more and is ready to move to the next stage.

Fact: moving to the next stage, i.e. announcing to the world that they do have 51% power, will be tantamount to them shooting themselves in the foot. Bitcoin will crash, as will their investments, OR they will be seen as hostile, and punished.

In a cartel attack, the 50+% derives from having a majority of the customers, so they retain 50+% of the value, even if the 50-% decides to make a fork. Then they can attack that fork too.

So, if you are using an Amazon wallet app, and I am using some other wallet app, and you try to send me coins, how will I know whether you sent them if you only send them to Amazon's servers? It would essentially cut everyone using Amazon clients off from the rest of the bitcoin network. Why would anyone want to use such an app? Bitcoin transactions primarily work because they are propagated P2P through the network from person to person. Miners just sit on the perifere catching these transactions as they pass by and adding them to blocks.

Fact:

You are conflating the publication of block solutions with the propagation of transactions before the fact.

You are assuming that bitcoin wallets must wait for a solved block (~10 minutes) to see whether someone sent them money. That's not how it works. If your case was ever encountered, where you tried to use your Amazon wallet app to send me coins, and your app only send the transaction to Amazon's miners, I would claim that you have not sent me any money, since it hasn't shown up on the network (not within the first 10 minutes), and walk away, OR notice that your software is hiding transactions, and consider you suspect. Besides, with version 0.9 that's coming out, you would be sending me money from your Amazon app in the form of a signed transaction, and I would be the one to broadcast it. As a recepient of the coins, I have incentive to broadcast it to everyone I can, not just to your Amazon. So...

This was already refuted by me upthread. Amazon would only need to delay transactions which are paying to their vendors. And sends to destinations outside the cartel, could be shared normally.

Quote
You don't understand well the way Bitcoin works.

Fact:

You are full of shit. And have quite the gall to come in here as some newbie who only recently heard about bitcoin, doesn't even own any, and spends time trying to shit on it without even understanding the basic underlying technology, telling me that I'm the one who doesn't understand.

You can fill up the butt hurt report form to air your grievances.


Fact:

If the cartel waits until they have 80 or 90% of the hashrate and transactions before attacking, then you will not get most of the commerce on your new fork. You lose.

The cartel's customers are not going to change which websites they send their transactions on. They will be happy with the service they are getting.

Fact: the cartel's customers will be VERY unhappy when their currency crashes 90% in value,

Still much higher than the value of the minority fork. They will likely blame the minority fork for it and avoid it like the plague.

[snip]

The rest of the technologically ignorant blabber was not worth responding to.

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November 22, 2013, 04:32:39 AM
 #172

The reason is because the cartel needs to gradually consume the hashrate of the network, so it can delay the transactions of non-cartel customers who are on the blockchain. To force them to join the cartel or lose customers to the cartel.

Why?
You think they will create transactions that don't need to exist, just so that they can not send them out to the rest of the network?

You are confusing the cartel's transactions with the non-cartel transactions. The later are the ones that get delay. The cartel's miner excludes them when adding a block solution to the block chain.

I should have left this in this thread days ago....

https://yourlogicalfallacyis.com/burden-of-proof

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 22, 2013, 04:33:50 AM
 #173

I should have left this in this thread days ago....

True.

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November 22, 2013, 09:43:31 AM
 #174

The OP started with "Once Bitcoin's coin rewards decline to less than can pay for the miner's costs"

As this needs to be fact before a "TWA" could be considered, could you please explain to me the background as to why bitcoin's miner rewards get to a point of reward less than miner costs?

Thanks in advance.   
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November 22, 2013, 10:22:38 AM
 #175

The OP started with "Once Bitcoin's coin rewards decline to less than can pay for the miner's costs"

As this needs to be fact before a "TWA" could be considered, could you please explain to me the background as to why bitcoin's miner rewards get to a point of reward less than miner costs?

Thanks in advance.

This is an open question being discussed at my other thread.

I am still trying to formulate a coherent theory of how the variables of voluntary transactions fees, mandatory diminishing coin rewards, asymmetry of motivations, and difficulty scaling will behave.

Does anyone know of any research modeling this?

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November 22, 2013, 11:05:28 AM
 #176

The OP started with "Once Bitcoin's coin rewards decline to less than can pay for the miner's costs"

As this needs to be fact before a "TWA" could be considered, could you please explain to me the background as to why bitcoin's miner rewards get to a point of reward less than miner costs?

Thanks in advance.

This is an open question being discussed at my other thread.

I am still trying to formulate a coherent theory of how the variables of voluntary transactions fees, mandatory diminishing coin rewards, asymmetry of motivations, and difficulty scaling will behave.

Does anyone know of any research modeling this?

Using say 2030...Here is a calc that could be used http://www.coinish.com/calc/ to model (BTC reward is ?) add in the proposed difficulty and assume hardware is $X cost in X year and determine a hashrate.