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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
1.  yes
2.  no

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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2031518 times)
Adrian-x
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October 30, 2014, 05:48:20 PM
 #14981

https://twitter.com/jonmatonis/status/527846975769956352

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Jon Matonis @jonmatonis  ·
The time has come for me to resign as Executive Director of the Bitcoin Foundation. Thank you for all of your passionate support! More soon.

Something big is brewing.

I expect he will join the board of a possibly TBA Bitcoin company. Might be announced no later than by next week at Money2020.



that fist with TBI's leek before EmTygox was imploded. 2 more to go.

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Adrian-x
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October 30, 2014, 05:51:39 PM
 #14982


THAT is the 64,000 BTC question!


 Cheesy apparently its now a 144,000 BTC question!

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HeliKopterBen
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October 30, 2014, 06:00:47 PM
 #14983

2.  Means:  gvt has a 143000 BTC address which they could use to pump into a SC

market participants can follow the money:  https://blockchain.info/address/1i7cZdoE9NcHSdAL5eGjmTJbBVqeQDwgw

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4. Money:  gvt could partner with Wall St who could start buying scBTC and their preferred form of sidecoin with printed fiat
5. assisted with 51% attacks.

These two would have to be done with printed fiat to maintain the risk-free put.  So basically they would have to steal from others to pull this off, which they are good at doing.



I think this attack is an extreme long shot, but a possibility I suppose.  IMO, the benefits of side chains outweigh the risks.  I would prefer decentralized side chains without changing existing core code, but from what I understand, that can't be done.  So their proposal is the next best thing.  We have known for a while that bitcoin needs to scale somehow.  Whether SCs, TCs, increasing the block size limit, or a combination is necessary, bitcoin needs to scale to become a global reserve currency (I prefer the term backbone currency as I believe we should scrap as much legacy terminology as possible... the current fiat train wreck needs to be forgotten).  Technically bitcoin is still in beta.  This could be the last major change necessary for a finished product. 

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October 30, 2014, 06:04:21 PM
 #14984

I think this attack is an extreme long shot, but a possibility I suppose. 

please explain why.
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October 30, 2014, 06:14:32 PM
 #14985

...
2.  mining hardware and infrastructure build out has gone thru an impressive and exponential rise over the last several years also based on a tremendous amount of work and investment capital put at risk.  this is ensuring the security of the entire Bitcoin concept and encouraging savers and speculators to hold their Bitcoin based on the confidence in these miners. this mining, directed solely at the MC at the moment, can also be considered to be in a delicate equilbrium.  anything that disturbs this equilibrium will cause volatility and most likely loss in the value.
...

Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters.  We've seen in practice that this theory seems correct.  What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees.  At least when Bitcoin is used for buying trinkets.

The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off.  Some combination of economics and corp/gov coercion could provoke such a decision.

Two things which could help offset this threat would be:

  1) increase fees to increase the reward for properly supporting Bitcoin.

  2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.

  3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.

Sidechains seem to me to have the potential to promote all three of these desirable outcomes.


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October 30, 2014, 07:02:44 PM
 #14986

Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters.  We've seen in practice that this theory seems correct.  What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees.  At least when Bitcoin is used for buying trinkets.

The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off.  Some combination of economics and corp/gov coercion could provoke such a decision.

Two things which could help offset this threat would be:

  1) increase fees to increase the reward for properly supporting Bitcoin.

  2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.

  3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.

Sidechains seem to me to have the potential to promote all three of these desirable outcomes.
The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets.

The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude.

We just have to find a way to get from here to that point - after that it will take care of itself.
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October 30, 2014, 07:09:44 PM
 #14987

https://bitreserve.org/en/transparency

Now THAT is impressive.

This should be expected of EVERY Bitcoin company worth a thing

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 30, 2014, 07:12:50 PM
 #14988

https://bitreserve.org/en/transparency

Now THAT is impressive.

This should be expected of EVERY Bitcoin company worth a thing
Soon, even that by itself will be considered grossly negligent.

http://monetas.net/a-practical-elimination-of-risk/
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October 30, 2014, 07:14:04 PM
 #14989

https://bitreserve.org/en/transparency

Now THAT is impressive.

This should be expected of EVERY Bitcoin company worth a thing

Yes, I imagine this very thing to become the standard before too long because all the companies not doing this will lose almost all business and go bust.
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October 30, 2014, 07:19:35 PM
 #14990

https://bitreserve.org/en/transparency

Now THAT is impressive.

This should be expected of EVERY Bitcoin company worth a thing

Yes, I imagine this very thing to become the standard before too long because all the companies not doing this will lose almost all business and go bust.

I'm very impressed by BitReserve. I don't have any incentive to use them but I can see how they could become a MAJOR player in this place.

Their service looks and feel very professional, kind of Circle-like.

Can't wait for these two and some others to launch marketing campaigns in 2015

"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 30, 2014, 07:24:25 PM
 #14991

The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets.

The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude.

We just have to find a way to get from here to that point - after that it will take care of itself.

Sidechains to the rescue because they are highly tunable and can easily create incentives for people to WANT to use them.  And, of course, the net effect economically is very close to using Bitcoin as native chain due to the two-way peg.

I don't actually use Bitcoin at the moment because it is not competitive with the alternatives as a means of doing most of the economic transactions I do.  I do sell them from time to time however.  If I were able to, rather than sell them, peg them to a sidechain which did something I liked (micro-transactions for instance, or allowed me to charge my PayPal account that way) I would much rather do that than go through fiat using something like Coinbase.

In fact, in addition to the sidechains push-back from fraudulent alts, a fair amount of pushback may come from outfits like Bitpay and Coinbase who could get cut out of the loop.


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HeliKopterBen
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October 30, 2014, 07:39:37 PM
 #14992

I think this attack is an extreme long shot, but a possibility I suppose. 

please explain why.

1.)  The 144,000 bitcoin is trackable.  Users will be less likely to panic into a side chain they know is heavily invested in by the gov.  Besides, I don't think 144,000 bitcoin is enough to cause a panic.  A few of the top alts have market caps near or above this and I don't see a panic into those coins, of course those alts are not pegged so there is risk in moving.
2.)  Any buying of side chain coin and/or buying of processing power to attempt a 51% attack on the main chain will invalidate the risk-free put, even if printed fiat is used. 
3.)  Arbitrage of an asset pegged at the protocol level will probably be effective, especially if multiple exchanges are involved. 

Of course the only thing protecting bitcoin from losing its MC status is the block subsidy, so there is real risk that over time bitcoin could cease to be the main chain.

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October 30, 2014, 07:40:37 PM
 #14993

fundamentally, i disagree with the core observation of the Sidechain Whitepaper which originally stated (interestingly, it seems they've changed it):

"the core observation is that “Bitcoin” the blockchain is conceptually independent from “bitcoin” the asset: if we had technology
to support the movement of assets between blockchains, new systems could be developed which
users could adopt by simply reusing the existing bitcoin currency"


http://www.blockstream.com/sidechains.pdf

as i've said since the start of my participation in Bitcoin: Bitcoin the currency is inextricably linked and intertwined with its blockchain.  the blockchain is nothing without the currency.

i'd also flip that around by saying that Bitcoin the currency is nothing without its blockchain.

given all the potential risks and complexities introduced by Sidechains, are they something we should be serious about?

But they are not saying that in the way you suggest they are. Their point is not that Bitcoin the blockchain doesn't need "bitcoin" the asset but that the asset should not have to be tied only to the Bitcoin blockchain but could, conceptually, be used on other blockchains.



above is the reason, I disagree with what you are suggesting, bitcoin is the asset ledger, money is not the token but memory, you don't own bitcoin, you control a % of the asset ledger. Balance in value and security is maintained by miners making economic value judgments. For PoW to be rewarded appropriately to preserve the network and the distributed allocated of control, miners need to be incentivised . Nodes are incentivised to preserve the ledger because they have value in it, Miners are incentivised to wright to that ledger in lieu of a Block rewards.  

this is a dynamic equilibrium but in general if the Bitcoin network grows (number of users) one can expect the utility to grow as it has, (thanks Peter-R) according to Metacafe's law if it grows faster then the mining reward diminishes, then one  expects competition in mining to produce coins (miners - create "credit" in the immutable memory ledger called the block reward). What is expected to happen is: 1) innovation in mining efficiency to make better use of the limited and costly resources and energy; 2) miners will use any increase in efficiency to consume all available resource - Jevons paradox gives us a hit of what could be. if not for diminishing rewards to eventual just the cost of writing tx.  

in short efficiency in mining innovation is responsible for the hashrate, and the price of bitcoin is reasonable for the amount of energy burned. (energy being important as it is the root of all economic activity and productivity) PoW efficiency is a highly contentious issue among many in other threads, and there too the economics is also not well understood as opponents argue the energy burned and wasted while its clear to those who see it it is is not wasted and the dynamic and economics are sound.

If you tie other assets to the blockchain, by locking bitcoin in, you in effect are reducing bitcoins network and growing another network the SC, what happens then is the value grows in the other network, according to Metacafe's law, and the Bitcoin network is diminished. The result is lower block rewards, and less incentive to mine, all the while bitcoin holders can exchange into the new network further reducing Bitcoins value.

Bitcoin is a success precisely for all the reasons that make it, but a AltChain that leverages the value out of bitcoin, by differentiating bitcoin the currency form bitcoin the ledger, is created not as a competing innovation but as a for profit idea. truly competing ideas compete 1:1 head to head like alts, they dont peg 1:1 and drain the life out of the host.

We have the tech to do secure trust less off Blockchain micro transaction with technologies like micro payment channels, and we have the ability to create secured trust free BTC funds in an exchange or contract environment.

Given the obvious value proposition of the different aspects of sidechains (which you are not honest if you choose to ignore) I would say it is only fair to give the runner a chance to prove itself.

I have not seen any examples of obvious value proposition for SC from an economic point of view that can't effectively be addresses with existing technology. The only one I have respect for is to make the investors money but i dont like that it comes with a risk to Bitcoin, and bitcoin holders.

Are there any examples?


  


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cypherdoc
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October 30, 2014, 07:45:49 PM
 #14994

Of course the only thing protecting bitcoin from losing its MC status is the block subsidy, so there is real risk that over time bitcoin could cease to be the main chain.

so then you're effectively saying we have to have inflation in BTC for the Bitcoin MC to survive/compete over the long run when put up against a SC issuing a sidecoin and accepting scBTC.

i don't desire that and i certainly don't want to be moving my BTC to a SC.
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October 30, 2014, 07:53:26 PM
 #14995

Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters.  We've seen in practice that this theory seems correct.  What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees.  At least when Bitcoin is used for buying trinkets.

The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off.  Some combination of economics and corp/gov coercion could provoke such a decision.

Two things which could help offset this threat would be:

  1) increase fees to increase the reward for properly supporting Bitcoin.

  2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.

  3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.

Sidechains seem to me to have the potential to promote all three of these desirable outcomes.
The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets.

The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude.

We just have to find a way to get from here to that point - after that it will take care of itself.


well said, the problem isn't technical its adoption of the idea or cryptocurrency, everything flows from faith in Bitcoin.

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October 30, 2014, 08:01:31 PM
 #14996

Of course the only thing protecting bitcoin from losing its MC status is the block subsidy, so there is real risk that over time bitcoin could cease to be the main chain.

that's it! miners only do what they do for incentives, SC give miners new incentives the result is neglecting the value stored in the Bitcoin Blockchain as it moves to the SC. for Bitcoin to grow it needs competition not a transfer of value.
 

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October 30, 2014, 08:17:24 PM
 #14997

i've always said this:   Bitcoin: "A Self-Contained Financial System"

that means the bitcoins themselves HAVE to stay on the blockchain from which they were created.  if you move them to a different blockchain (SC's), the dynamic changes entirely especially the security model.  you will destroy Bitcoin.
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October 30, 2014, 08:25:50 PM
 #14998

http://siliconangle.tv/cubeconversations-ted-rogers-xapo/

The guys at Xapo have the clearest vision out of any of the major Bitcoin companies IMO. They are spot on and great spokespeople for Bitcoin.

Rarely do we hear these type of guys say "hold on to your Bitcoins, they're going to be worth more"


"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 30, 2014, 08:36:26 PM
 #14999

Of course the only thing protecting bitcoin from losing its MC status is the block subsidy, so there is real risk that over time bitcoin could cease to be the main chain.

so then you're effectively saying we have to have inflation in BTC for the Bitcoin MC to survive/compete over the long run when put up against a SC issuing a sidecoin and accepting scBTC.

i don't desire that and i certainly don't want to be moving my BTC to a SC.

You either risk a side chain overtaking bitcoin or an alt coin overtaking bitcoin.  With the side chain you have the risk free put to take advantage of if the side chain wins out.  The alt coin would have a harder time winning without the risk free put, but it could happen.  Pick your poison.

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October 30, 2014, 08:48:19 PM
 #15000

here is an interesting Jim Rickards video I happened to watch. he mentions Bitcoin out of the blue.

http://youtu.be/RVoMSJ4sry8?t=13m40s (just the snip leading up to Bitcoin - I found the full 20 min interesting.

What I found alarming: is firs he talks about "fiat" as print money, doesn't use the dirty fiat word that is so prevalent on this forum.
and second, he preemptively throws in Bitcoin - notably missing is rai stone in his comparison as he lumps it in with paper and feathers, but clearly on the radar as a competitor to Gold. 

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