The Bitcoin scripting system is purposefully not Turing-complete - why?

[DeathAndTaxes]

but i think my point about some (eg dice-like) contracts would create many more transactions still stands. afaik there is no coin which could handle a large  tx volume (though 100 bets/sec might be possible in the future).

Not true that implies Bitcoin will eventually become so popular it fails.  Eventually 1000 merchants or 10,000 merchants or 100,000 merchants would generate the same tx volume.   Fees will keep tx usage in line.   A 1 bit fee is cheap if you are transferring 1,000,000 bits but you might think twice if you are trying to transfer 2 bits.   Still fees can't resolve the problem of UXTO bloat and that was a problem.

[onemorebtc]

but i think my point about some (eg dice-like) contracts would create many more transactions still stands. afaik there is no coin which could handle a large  tx volume (though 100 bets/sec might be possible in the future).

Not true that implies Bitcoin will eventually become so popular it fails.  Eventually 1000 merchants or 10,000 merchants or 100,000 merchants would generate the same tx volume.   Fees will keep tx usage in line.   A 1 bit fee is cheap if you are transferring 1,000,000 bits but you might think twice if you are trying to transfer 2 bits.   Still fees can't resolve the problem of UXTO bloat and that was a problem.

actually you are right.
i think that bitcoin will mainly be used as a clearence network between bitpay like institutions and exchanges.

[DeathAndTaxes]

surely there must be SOME limit there.

Yes but it is self resolving.  Someday a large number of merchants combined may produce 10x as many txs the dice site.  Does that mean Bitcoin is doomed.   It is inevitable it will get so popular it will produce "too many transactions" and then die?   Of course not.  As tx volume rises, tx will compete for space in the next block and fees will discourage low value transactions (like martingaling 100 sat starts to look stupid when it will cost you 10x in fees).

These other 'rider' networks like Color Coins don't necessarily have any relationship to the price of BTC at all and that's going to be the basic problem from which many technological issues will emerge.

They still have to pay fees like any other tx.  If tx volumes rise sufficiently those colored coins concepts may find themselves stuck on a network where moving their assets is prohibitively expensive.   

[gmaxwell]

Still fees can't resolve the problem of UXTO bloat and that was a problem.

Well, they could if bitcoin were designed a bit differently, but I don't know that its worth it.

Imagine that each txout created by a transaction reduced the permitted block size by— say— 100 bytes and every txout consumed by a transaction decreases its the transaction's effective size by up to 100 bytes per scriptsig (clamped to not result in a negative size for each scriptsig)... and then there was some sanity limit on the real size to prevent silly attacks.

Then in that case the transactions that are creating txouts are effectively prepaying for the space the signatures will take to consume them. This would help a lot with the UTXO bloat.  I don't think anything short of utxo expiration of some form can be a complete solution, but if the system worked a bit differently fees would be a much better tool.

[bluemeanie1]

to further back up my point, here are some trading stats from the NYSE.

http://www.allcountries.org/uscensus/835_volume_of_trading_on_new_york.html

so in 1999, we had daily highs of several billion trades a day.  Since 2000 this has increased considerably.

now keep in mind that under the current schedule for ie. Color Coins, *creating* a new ticker costs a few cents.  Thus it's reasonable to expect even more than 1 billion transactions a day.  I think you're ignoring the problem because you would rather attention not be going to alternatives like NXT that do have the possibility of supporting this sort of volume.  Volume, network character, and processing seem to be completely ignored by Ethereum altogether.

-bm

[DeathAndTaxes]

to further back up my point, here are some trading stats from the NYSE.

http://www.allcountries.org/uscensus/835_volume_of_trading_on_new_york.html

so in 1999, we had daily highs of several billion trades a day.  Since 2000 this has increased considerably.

now keep in mind that under the current schedule for ie. Color Coins, *creating* a new ticker costs a few cents.  Thus it's reasonable to expect even more than 1 billion transactions a day.  I think you're ignoring the problem because you would rather attention not be going to alternatives like NXT that do have the possibility of supporting this sort of volume ...

I am not ignoring the "problem".  Volume on NYSE is in the billions of shares because fees are insanely low, less than $0.00004 USD net (88 satoshis) per share traded.   Any assets traded on the blockchain would need to compete with bitcoin transactions and fees will probably be at least a magnitude higher.   If NXT is more economical for colored coins then the assets will move there so I don't see a problem either way. 

There is no such thing as "too many transactions" what types of transactions are viable will change over time depends on the cost and limits imposed by the network.  For example the US fedwire (bank wire) network processed 134,244,177 transactions last year.  That works out to about 4 tps.

[bluemeanie1]

to further back up my point, here are some trading stats from the NYSE.

http://www.allcountries.org/uscensus/835_volume_of_trading_on_new_york.html

so in 1999, we had daily highs of several billion trades a day.  Since 2000 this has increased considerably.

now keep in mind that under the current schedule for ie. Color Coins, *creating* a new ticker costs a few cents.  Thus it's reasonable to expect even more than 1 billion transactions a day.  I think you're ignoring the problem because you would rather attention not be going to alternatives like NXT that do have the possibility of supporting this sort of volume ...

I am not ignoring the "problem".  Volume on NYSE is in the billions of shares because fees are insanely low, less than $0.00004 USD (88 satoshis) per share.   Any assets traded on the blockchain would need to compete with bitcoin transactions and fees will probably not be that low.  If NXT is more economical for colored coins then the assets will move there so I don't see a problem either way.

there's also another important issue.

the payoff of an attack becomes exponentially higher.  The chain could be carrying trillions of dollars in securities and such.  Therefore the payoff of reversing transactions are similarly increased.  This creates greater incentives, and in this age where hashing power is brokered and transfered to different hands instantly- an attack starts to appear more immanent.

if the chain were suddenly thought to be inviable, what would happen to the holders of these assets?  it would be an utter disaster.

this problem doesn't exist in NXT because the cost of an attack scales perfectly in ratio to the cost of NXT, whereas in Bitcoin it scales to the cost of hashing power.

-bm

[DeathAndTaxes]

the payoff of an attack becomes exponentially higher.  The chain could be carrying trillions of dollars in securities and such.  Therefore the payoff of reversing transactions are similarly increased.  This creates greater incentives, and in this age where hashing power is brokered and transferred to different hands instantly- an attack starts to appear more immanent.

If NXT provides better security for assets then assets will be transacted on that network.   So what is the problem again?

[bluemeanie1]

the payoff of an attack becomes exponentially higher.  The chain could be carrying trillions of dollars in securities and such.  Therefore the payoff of reversing transactions are similarly increased.  This creates greater incentives, and in this age where hashing power is brokered and transferred to different hands instantly- an attack starts to appear more immanent.

If NXT provides better security for assets then assets will be transacted on that network.   So what is the problem again?

problem for who?

this would be a problem for Color Coins and Counterparty and certainly anyone who chose to invest in assets on those networks.

I predict there will be a tension between those who maintain the core features of Bitcoin(and it's status as the reserve cryptocurrency) and those who are attempting to overlay new features.  These new features may seriously threaten the basic functions of Bitcoin.

-bm

[DeathAndTaxes]

this would be a problem for Color Coins and Counterparty and certainly anyone who chose to invest in assets on those networks.

Agreed.

I predict there will be a tension between those who maintain the core features of Bitcoin(and it's status as the reserve cryptocurrency) and those who are attempting to overlay new features.

Agreed. 

These new features may seriously threaten the basic functions of Bitcoin.

Disagree.

[bluemeanie1]

These new features may seriously threaten the basic functions of Bitcoin.

Disagree.

what is stopping these sorts of initiatives from abusing the network?

-bm

[jonald_fyookball]

DOGETHEREUM.

 

[Peter R]

there's also another important issue.

the payoff of an attack becomes exponentially higher.  The chain could be carrying trillions of dollars in securities and such.  Therefore the payoff of reversing transactions are similarly increased.  This creates greater incentives, and in this age where hashing power is brokered and transfered to different hands instantly- an attack starts to appear more immanent.

Remember, if you reverse a colored-coin coinjoin trade for bitcoins, then all it does is gives you back your colored coins and gives the other person back their bitcoins.  With coinjoin, the "trade" is a single transaction, so why would you reverse it after 30 minutes? 

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward). 

[bluemeanie1]

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward). 

how does that work?  the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin.

-bm

[Peter R]

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).  

how does that work?  the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin.

Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid.  What would happen?

A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit.  This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly).  Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800.  This is what happens in a competitive free market.  The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate).  

[bluemeanie1]

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).  

how does that work?  the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin.

Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid.  What would happen?

A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit.  This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly).  Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800.  This is what happens in a competitive free market.  The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate).  

youre ignoring a very important point.  Is a troy ounce of silver more valuable than a 5000 dollar bill?  simply because it's shiny and heavy?

if we can establish this balance of power without the hashing gear, then is performs the same function and thus has the same value.  Ergo, NXT is valuable.  QED.

-bm

[jonald_fyookball]

The fifth most valuable by crypto by marketcap right now.  Which is something.

[bluemeanie1]

The fifth most valuable by crypto by marketcap right now.  Which is something.

most of the cryptocoins are pump and dump schemes.  The market cap is measured by some weak function of sales, but the owners could be holding onto 95%+ of the coin.

NXT is not in the above category.

-bm

[Peter R]

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).  

how does that work?  the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin.

Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid.  What would happen?

A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit.  This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly).  Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800.  This is what happens in a competitive free market.  The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate).  

youre ignoring a very important point.  Is a troy ounce of silver more valuable than a 5000 dollar bill?  simply because it's shiny and heavy?

if we can establish this balance of power without the hashing gear, then is performs the same function and thus has the same value.  Ergo, NXT is valuable.  QED.

It is generally accepted that the market value of a commodity and the cost to produce that commodity tend to the same price in a free and competitive market.  This rule doesn't apply to US dollars because US dollars are not commodities and producing them isn't a competitive free market. 

Nxt tokens, on the other hand, are more like shares in a p2p company than commodities.  The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. 

What do you think the P/E ratio for the Nxt network would be today?

[bluemeanie1]

That being said, the bitcoin market cap would most likely be measured in trillions of dollars if "trillions of dollars in securities and such" were tokenized via colored coins.  The higher the price of bitcoin, the more costly it is to attempt to reverse a transaction (at a given coinbase reward).  

how does that work?  the cost to reverse a transaction is related to the cost of HASHING POWER, not the price of bitcoin.

Q: Imagine that gold is trading at $1000 oz and anyone can dig it out of the ground and refine it for $500 / oz after all expenses and labor have been paid.  What would happen?

A: A bunch of people would start mining like crazy and selling for a risk-free $500 profit.  This would initially increase supply (thereby dropping the price) and eventually increase the difficult of mining it (e.g., all the easy $500 gold will get mined quickly).  Eventually, the price of gold would decrease to, say ~$800, and the cost to mine it would increase to, say ~$800.  This is what happens in a competitive free market.  The cost of production (cost of hashing power) approaches the market value of the commodity (BTC inflation rate).  

youre ignoring a very important point.  Is a troy ounce of silver more valuable than a 5000 dollar bill?  simply because it's shiny and heavy?

if we can establish this balance of power without the hashing gear, then is performs the same function and thus has the same value.  Ergo, NXT is valuable.  QED.

It is generally accepted that the market value of a commodity and the cost to produce that commodity tend to the same price in a free and competitive market.  This rule doesn't apply to US dollars because US dollars are not commodities and producing them isn't a competitive free market. 

Nxt tokens, on the other hand, are more like shares in a p2p company than commodities.  The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. 

What do you think the P/E ratio for the Nxt network would be today?

actually that was recently discussed.  Someone calculated the value at something comparable to an American savings account(cant confirm that though).

It is generally accepted

these are not concrete economics ideas, sorry.  This is the gold bug mindset and as the story has been told countless times this ignores the effects of credit, innovation and imho the entire premise of civilization itself.  Is man just a resource extractor?

The market value of the Nxt network should reflect the present value of all future (discounted) cash flows. 

more or less true.  It's not just cash flows because the software also supports(and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations.

-bm