User705
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November 17, 2013, 08:49:06 AM |
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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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Rupture
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November 17, 2013, 08:49:19 AM |
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I thought miners were to be funded by the theoretical rise in value over time.
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AnonyMint (OP)
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November 17, 2013, 08:54:19 AM |
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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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AnonyMint (OP)
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November 17, 2013, 08:56:33 AM |
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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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AnonyMint (OP)
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November 17, 2013, 08:57:46 AM |
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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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DeathAndTaxes
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Gerald Davis
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November 17, 2013, 08:58:59 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:03:15 AM |
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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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Chaz
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November 17, 2013, 09:06:51 AM |
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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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DeathAndTaxes
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Gerald Davis
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November 17, 2013, 09:09:10 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:11:31 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:13:43 AM |
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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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DeathAndTaxes
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Gerald Davis
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November 17, 2013, 09:14:33 AM |
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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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User705
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First 100% Liquid Stablecoin Backed by Gold
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November 17, 2013, 09:16:35 AM |
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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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Pente
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November 17, 2013, 09:17:24 AM |
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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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DeathAndTaxes
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Gerald Davis
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November 17, 2013, 09:17:50 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:24:55 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:26:07 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:30:32 AM |
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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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AnonyMint (OP)
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November 17, 2013, 09:35:26 AM Last edit: November 17, 2013, 09:53:12 AM by AnonyMint |
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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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Chaz
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November 17, 2013, 09:39:12 AM |
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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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