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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 1922626 times)
cypherdoc
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November 06, 2014, 03:28:17 PM
 #16021

We're going UP.

Last chance to get in the train.
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November 06, 2014, 03:28:32 PM
 #16022


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

"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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November 06, 2014, 03:41:23 PM
 #16023

We're going UP.

Last chance to get in the train.

I think that ~1% upward jolt a few minutes ago originated from ~1500 alot of BTC being market order purchased on BTC china.
All other exchanges arb bots went yummy spanning a few mins later. BTCe only did a small amount of the arb.

Yes get on the train, good chance of departure anytime now.

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November 06, 2014, 03:53:01 PM
 #16024

....
Then we agree.
Side chains accommodate arbitrary crypto (good bad or ugly) and which crypto is used for a particular chain matters.

It is my understanding that while the transactions can use arbitrary crypto, block hashing would be limited to sha256 (or possibly a small list of others).  In order to ensure a malicious attacker can not simply lie, the bitcoin miners supporting SPV proofs will need to verify the block hash is valid for the headers provided.  The transaction's details that destroy the pegged coin and unlock the bitcoin will be used, but the signature can be trusted since it is in the block with the highest amount of work.  If nobody presents a higher difficulty block header that contains a contradicting transaction within the contest period, the bitcoins unlock.  But, to verify all this, the miners must be able to hash the headers.

notme, you're into math.  you've looked at the SPV proof.  i take it you're satisfied.

can you distill it down for us non maths as to how it works and why we should take comfort?
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November 06, 2014, 03:55:00 PM
 #16025


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

We, we, Senor!!!
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November 06, 2014, 03:56:43 PM
 #16026


Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

Sounds like we have a core dev in our midst. 

 Cheesy



I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

We, we, Senor!!!

as in : we, the proponents of SC.


"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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November 06, 2014, 04:05:44 PM
 #16027

I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

boys, boys ... we are all just trying to tease out the pros and cons of SCs, let's keep it productive.

wouldn't an exit of miners to SC's help the Blockstream business model?

it is a good reflex to persistently ask cui bono. but as brg444 has argued, and as seems straightforward, this is not a great concern. the existence of any SC depends on the integrity of the MC. so in principle SCs do not incentivize abandonment of MC mining.

looking far into the future, when there is no block reward and all miner revenue comes from tx fees, adrian-x foresees a possibility in which SC mining could be more profitable than MC mining, which might start to provide incentive to devote more hashing resources to SCs than to the MC.

but is this worry not supposed to be addressed by the fact that miners of SCs have every reason to merge mine with the MC?
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November 06, 2014, 04:10:39 PM
 #16028

I think the obvious technical shortcomings I have displayed in this thread suggest this other brain fart of yours is not quite likely

boys, boys ... we are all just trying to tease out the pros and cons of SCs, let's keep it productive.

wouldn't an exit of miners to SC's help the Blockstream business model?

it is a good reflex to persistently ask cui bono. but as brg444 has argued, and as seems straightforward, this is not a great concern. the existence of any SC depends on the integrity of the MC. so in principle SCs do not incentivize abandonment of MC mining.

looking far into the future, when there is no block reward and all miner revenue comes from tx fees, adrian-x foresees a possibility in which SC mining could be more profitable than MC mining, which might start to provide incentive to devote more hashing resources to SCs than to the MC.

but is this worry not supposed to be addressed by the fact that miners of SCs have every reason to merge mine with the MC?

MM can only be expected to be a % of whichever is MC.  like Namecoin, approx 70% of MC hashing.  so more vulnerable.
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November 06, 2014, 04:18:21 PM
 #16029

keep buying.
brg444
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November 06, 2014, 04:18:35 PM
 #16030

MM can only be expected to be a % of whichever is MC.  like Namecoin, approx 70% of MC hashing.  so more vulnerable.

Again, I disagree, there is little incentive for miners to MM Namecoin.

If we expect that a significant amount of txs are processed on SC then there will be an incentive for the majority of the miners to MM them.

"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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November 06, 2014, 04:19:11 PM
 #16031

MM can only be expected to be a % of whichever is MC.  like Namecoin, approx 70% of MC hashing.  so more vulnerable.

good, so even in that possible future scenario in which merged SC/MC mining is more profitable, MC hashrate would still be greater. and if SC miners undercut that, they undermine their own sidechain. subsidizing the blockchain is a price they have to pay.

niet?
cypherdoc
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November 06, 2014, 04:21:56 PM
 #16032

MM can only be expected to be a % of whichever is MC.  like Namecoin, approx 70% of MC hashing.  so more vulnerable.

Again, I disagree, there is little incentive for miners to MM Namecoin.

that's funny. then why do i and 70% of hashing power on the network "do" it?
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If we expect that a significant amount of txs are processed on SC then there will be an incentive for the majority of the miners to MM them.

yes, but he was saying if a SC becomes the MC, miners would MM Bitcoin. maybe so, i'm just saying that Bitcoin would then be less secure as it would only have a % of the total hashrate.
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November 06, 2014, 04:35:56 PM
 #16033

MM can only be expected to be a % of whichever is MC.  like Namecoin, approx 70% of MC hashing.  so more vulnerable.

Again, I disagree, there is little incentive for miners to MM Namecoin.

that's funny. then why do i and 70% of hashing power on the network "do" it?
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If we expect that a significant amount of txs are processed on SC then there will be an incentive for the majority of the miners to MM them.

yes, but he was saying if a SC becomes the MC, miners would MM Bitcoin. maybe so, i'm just saying that Bitcoin would then be less secure as it would only have a % of the total hashrate.

Namecoin is ALTCOIN it does not have its own BTC locked in MC.

SC is not ALTCOIN.  SC starts in MC and continues. If MC is disolved then SC is too.
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November 06, 2014, 04:36:45 PM
 #16034

Hi all,

The following snippet by JR had me thinking for a few days about the blocksize debate and how it relates to sidechains, while reading the extensive back and forth between sidechain supporters and opponents here. I believe I have an answer, but it overturns some of the conventional wisdom.

Bitcoin could never survive as a high-fee settlement currency because high fees would arise due to block size rationing, not because transactions should naturally cost that much for technical reasons. Bitcoin would lose out to a competing currency with less/no rationing that would be less expensive to use for settlements.

High transaction rates on the main chain are the only way for Bitcoin to survive. Yes, getting there is a difficult technical problem to solve. Deal with it.

First of all, in a future where trillions of dollars' worth are transacted on the network, a 51% attack has to cost on the order of billions at least for good security. When the block reward ceases to fund miners enough to make a 51% attack cost billions, total revenue from transaction fees will have to be around that high to maintain security. But, as JR implies, tx fees will tend to fall to the actual marginal cost of including them in a block, which makes it seem near impossible for the revenue to be enough. After all, if Bitcoin devs choose to artificially limit block sizes as a handout to miners in lieu of the block reward, another coin that charges lower fees will eventually take its place...

...but no, this isn't quite right. Because somehow or other, a PoW network where trillions of dollars are securely transacted has to have plenty of mining to thwart 51% attacks, and in order to do that there must be a hefty incentive for miners to keep mining. That means a competing coin can only steal Bitcoin's thunder with lower tx fees if it retains high block rewards - and in the long run it must be like Dogecoin, retaining constant, non-decreasing block rewards, in order to continue funding miners enough to secure the trillion-dollar network.

In other words, besides the dynamics of who pays (just the transactors, or every holder), the block rewards and the tx fees (and hence the blocksize limits) are two sides of the same coin: they're both ways of paying the miners, with the aim of ensuring the miners get enough to keep the network secure.

Since it cannot be known in advance how popular Bitcoin will ultimately be, nor how big the world economy may grow over the next hundred years under Bitcoin, it doesn't makes sense to go the Dogecoin route of perpetual inflation. The block reward is deemed sacred by investors so should not be altered. That ultimately leaves only transaction fees to be adjusted in line with the volume of transactions vs. the cost of securing the network. Who will adjust the fees? Of course the market, finally, but who will put a floor on the fees to ensure miners are getting paid enough? Rationing, as it were, but by the market. Perhaps there is a way to tie it to market conditions directly, or perhaps devs will simply release different versions with different max_blocksizes and see what the economic majority goes for. Either way, it is being left to the market. It is not centrally planned rationing, but market rationing, whether directly or indirectly. It is not like government rationing food or apartments, any more than Bitcoin's 21M coin limit and block reward schedule is.

Therefore I believe blocksize limits will increase, but not without bound. Any coin that tries to increase the blocksize limits without bound, in an attempt to undercut Bitcoin's transaction fees, will have to do that by having - at that point in time - a larger block reward, punishing savers a little more and spenders a little less. There is not free lunch. In the end the same tax is being paid from the users of the network to the miners. Any chain that tries to undercut on both aspects will be undersecured, not to mention the network effect making this whole undertaking difficult in the first place. The network effect makes is so the market or economic majority can mess up its guestimates quite a bit and still retain Bitcoin's dominance.

Nevertheless, this means that if most of the transactions are happening on sidechains the Bitcoin network could become grossly undersecured after a few more halvenings. Which suggests that ultimately paying miners with transaction fees for a ledger network that is designed, above all else, to store the value of its ledger is a bad idea, since the transactions can be moved off the network. The transactions are not something that must happen on the network, as sidechains make clear. Paying miners with tx fees thus fails to tether the service miners perform to the payment they receive.

As uncomfortable a prospect as this is, perhaps endless inflation like Dogecoin really is the answer, maybe with hardforks every few decades deciding on new inflation schedules that the economic majority prefers. The 21M coin limit is sacred to me, yet I have to admit it is meaningless if you have to pay a hefty fee to do anything with the bitcoins you own. What difference does it really make, as a hodler, if you lose 1% to inflation over 21M coins vs. losing 1% to transaction fees when you spend? In the end what matters is that there is no central authority dictating the inflation rate for political whim, and hence it will be very low, just as tx fees will be very low. Ultimately that rate, and hence the "tax" going to the miners (whether by inflation or tx fees), is determined by the market.

TL;DR: Sidechains (if they succeed) force Bitcoin's hand, although decades in the future, in setting an inflation rate determined by the market, in order to tie miner's subsidies more exactly to the primary service they perform: that of securing Bitcoin's store of value. This is because successful sidechains would allow Bitcoin transactions to be disconnected from Bitcoin miners. Bitcoin therefore could not rely on transaction fees for its network security incentives. Sidechains would have made it clear that transaction functionality is not intrinsic to or inseparable from the Bitcoin network; only the store of value function is, and therefore miners must be continually rewarded for maintaining this function alone, for the lifetime the network.
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November 06, 2014, 04:45:07 PM
 #16035

that's funny. then why do i and 70% of hashing power on the network "do" it?

Did not you tell us that you have no investment in altCoins.
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November 06, 2014, 04:56:57 PM
 #16036

that's funny. then why do i and 70% of hashing power on the network "do" it?

Did not you tell us that you have no investment in altCoins.

Namecoin is not an altcoin in my book.

it's more of a public service for a public good that's been around since day 1.  also, BTCGuild where i now pool, does this by default.  i just found this out about 3 mo ago as it was a setting i had to turn on in their control panel to view.  voila!  i had some NMC i didn't even know about!  sure, i'll take it.
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November 06, 2014, 04:59:23 PM
 #16037

that's funny. then why do i and 70% of hashing power on the network "do" it?

I don't know, you will have to answer that. I assume because it is trivial to do so. If you could pull profit out of it don't you think that even more people would be doing it?

yes, but he was saying if a SC becomes the MC, miners would MM Bitcoin. maybe so, i'm just saying that Bitcoin would then be less secure as it would only have a % of the total hashrate.

Not necessarily, if SC creates an incentive for miners to mine them (txs) then it is perfectly reasonable to assume that maybe 100% of the miners would MM them.

With sidechains, the mining revenue pie is now split between different chains. As a miner, would you choose to mine only a slice of the pie or MM all of the slices. I think the answer goes without saying.

"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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November 06, 2014, 05:01:46 PM
 #16038

LOL, of course the notion of 2wp and the cryptography used to accomplish it are different things.  That is however orthagonal to the point that the cryptography used to accomplish it does matter, it matters quite a bit.

Here are some simple ways that it matters, there are many others.
1) It is either compatible with the ASICs used for MC mining, or not (this matters for merge mining potential).
2) It is either using a key escrow or not (this would allow the initiator of the side chain to seize any of the side chain that doesn't comply with its rules - like the govSC discussed earlier).
3) It is either a well established cryptographc algorithm or not.
4) The algorithm uses cryptographic primitives which are either compromised or not.
5) The algorithm is either conducive to a PoW structure, or not.

If what you mean by "it doesn't matter what crypto SC will use" is that SC can use any crypto, good bad or ugly, then we agree.  I would just suggest that it does matter whether the crypto is good bad or ugly.

This is so obvious to anyone reading this thread I'm not sure why it deserves to be mentioned.

Did you somehow think it escaped us that some SC could be used for nefarious purposes? That we believe ALL SC should be trusted?

This is possibly the rudest "I agree with you" statement I've seen in a while, but thank you.  Grin

Yes, I was concerned it had escaped you. 
Pretty much the content of most of your posts in this thread led to the conclusion that you are ignoring some very important details.   When I see someone blindly advocating, it makes me curious just how blind they are.  Especially when there are explicit statements saying things like "it doesn't matter what crypto is used" (which you didn't write, but the person to whom that response was written did).

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cypherdoc
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November 06, 2014, 05:05:54 PM
 #16039

that's funny. then why do i and 70% of hashing power on the network "do" it?

I don't know, you will have to answer that. I assume because it is trivial to do so. If you could pull profit out of it don't you think that even more people would be doing it?

yes, but he was saying if a SC becomes the MC, miners would MM Bitcoin. maybe so, i'm just saying that Bitcoin would then be less secure as it would only have a % of the total hashrate.

Not necessarily, if SC creates an incentive for miners to mine them (txs) then it is perfectly reasonable to assume that maybe 100% of the miners would MM them.

With sidechains, the mining revenue pie is now split between different chains. As a miner, would you choose to mine only a slice of the pie or MM all of the slices. I think the answer goes without saying.

that's hyperbole to expect 100%.  that's b/c there still is a % solo mining that won't have a clue nor the resources to facilitate such MM.  even at the pool level, i wouldn't expect 100%.
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November 06, 2014, 05:09:57 PM
 #16040

that's funny. then why do i and 70% of hashing power on the network "do" it?

I don't know, you will have to answer that. I assume because it is trivial to do so. If you could pull profit out of it don't you think that even more people would be doing it?

yes, but he was saying if a SC becomes the MC, miners would MM Bitcoin. maybe so, i'm just saying that Bitcoin would then be less secure as it would only have a % of the total hashrate.

Not necessarily, if SC creates an incentive for miners to mine them (txs) then it is perfectly reasonable to assume that maybe 100% of the miners would MM them.

With sidechains, the mining revenue pie is now split between different chains. As a miner, would you choose to mine only a slice of the pie or MM all of the slices. I think the answer goes without saying.

that's hyperbole to expect 100%.  that's b/c there still is a % solo mining that won't have a clue nor the resources to facilitate such MM.  even at the pool level, i wouldn't expect 100%.

It is unfortunate but these entities (solo miners) are soon going to disappear from the ecosystem. We're entering the big leagues now and the professional want to eat all of the pie.

"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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