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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1980637 times)
brg444
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November 17, 2014, 12:30:15 AM
 #17201

When a Bitcoin miner starts merge mining Namecoin, how much more opportunity cost do they forfeit compared to the case where they only mine Bitcoin?

The time, electricity, and capex needed for mining Bitcoin doesn't count because that cost is paid for with Bitcoin. From the perspective of Namecoin's security model, it's not an opportunity cost.

If a Bitcoin miner wants to attack Bitcoin's ledger, they have to pay a real cost for it. If a Bitcoin miner wants to attack Namecoin, the cost of the attack is effectively free.

We know how easy it is for Bitcoin miners to attack other double SHA256 ledgers, because they've done it before.

At best, merge mining creates security equivalent to proof of stake.

How is it free if the chain is secured by the same work as BTC !?

If the work produced to secure Namecoin runs parallel to Bitcoins' and is equivalent then the opportunity cost to attack is the same. No?

I understand that there is no more additional work required from the miner but the work produced is enough to simultaneously secure both chains is it not?

"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 17, 2014, 12:46:53 AM
 #17202

Generally speaking, there are two different ways in which a miner can behave: they can operate in good faith or they can grief.

Griefer miners have to pay a real cost for their bad behaviour - they expend significant quantities of electricity and capex depreciation which they will never recover.

What if a Bitcoin miner decides to grief the Namecoin blockchain? Mine empty blocks, intentionally orphan valid parts of the chain, run difficulty up and then pull out, attempt double spends of Namecoins, etc.

Their electricity and capex is paid for by the Bitcoins they mine. Sure, they have to spend a little bit in bandwidth to run a Namecoin node, but that cost is insignificant compared to the cost of mining Bitcoin.

This is why merged mining doesn't provide the kind of security that people think it provides. The only security comes from the goodwill of the mining pool operators, without strong economic incentives that make good behaviour much more profitable than bad behaviour.

Just like proof of stake, and also just like central banks.
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November 17, 2014, 12:54:51 AM
 #17203

Generally speaking, there are two different ways in which a miner can behave: they can operate in good faith or they can grief.

Griefer miners have to pay a real cost for their bad behaviour - they expend significant quantities of electricity and capex depreciation which they will never recover.

What if a Bitcoin miner decides to grief the Namecoin blockchain? Mine empty blocks, intentionally orphan valid parts of the chain, run difficulty up and then pull out, attempt double spends of Namecoins, etc.

Their electricity and capex is paid for by the Bitcoins they mine. Sure, they have to spend a little bit in bandwidth to run a Namecoin node, but that cost is insignificant compared to the cost of mining Bitcoin.

This is why merged mining doesn't provide the kind of security that people think it provides. The only security comes from the goodwill of the mining pool operators, without strong economic incentives that make good behaviour much more profitable than bad behaviour.

Just like proof of stake, and also just like central banks.

I understand.

But this changes in respect to the economic incentive of the chain, correct? If miners profit from the considerable value transfer (transactions fees) on a sidechain then there is more incentive for miners to operate in good faith, right?

If we consider an ideal situation where there is economic incentive for miners to act with good faith do you agree with this model?

"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 17, 2014, 03:42:02 AM
 #17204

When a Bitcoin miner starts merge mining Namecoin, how much more opportunity cost do they forfeit compared to the case where they only mine Bitcoin?

The time, electricity, and capex needed for mining Bitcoin doesn't count because that cost is paid for with Bitcoin. From the perspective of Namecoin's security model, it's not an opportunity cost.

If a Bitcoin miner wants to attack Bitcoin's ledger, they have to pay a real cost for it. If a Bitcoin miner wants to attack Namecoin, the cost of the attack is effectively free.

We know how easy it is for Bitcoin miners to attack other double SHA256 ledgers, because they've done it before.

At best, merge mining creates security equivalent to proof of stake.



Merge mining may not require more hashes, but it does require CPU, ram, and network resources.

Resources are negligible after the bloat issue was fixed and headers were stored to disk by seperating mutable vs immutable data in block index classes.. Check out my devcoin merged mining patch

★☆★Syscoin - Decentralized Marketplace and Multisig Platform
Pay with Bitcoin, ZCash and many more
For more visit Syscoin.org  ★☆★
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November 17, 2014, 05:03:23 AM
 #17205

Bugs can't take entymologists to breakfast-Zingales

Economists are just as captured as regulators

http://www.econtalk.org/archives/2014/10/continuing_conv_23.html
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November 17, 2014, 07:10:40 AM
 #17206

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/


Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
brg444
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November 17, 2014, 07:19:46 AM
 #17207

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/

I have been waiting for your input on our discussion over here for awhile. Hopefully you will deliver, I'll be patient.

Thanks for the heads up though, looks interesting. I will frankly say I did not even bother looking into him or his website after having a glance at his "sales pitch"

"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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Enabling the maximal migration


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November 17, 2014, 07:36:41 AM
 #17208


Bro, do you even blockchain?
-E Voorhees
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November 17, 2014, 07:43:58 AM
 #17209

Bitcoin collapsing, SC up.
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November 17, 2014, 07:57:25 AM
 #17210

Generally speaking, there are two different ways in which a miner can behave: they can operate in good faith or they can grief.

Griefer miners have to pay a real cost for their bad behaviour - they expend significant quantities of electricity and capex depreciation which they will never recover.

What if a Bitcoin miner decides to grief the Namecoin blockchain? Mine empty blocks, intentionally orphan valid parts of the chain, run difficulty up and then pull out, attempt double spends of Namecoins, etc.

Their electricity and capex is paid for by the Bitcoins they mine. Sure, they have to spend a little bit in bandwidth to run a Namecoin node, but that cost is insignificant compared to the cost of mining Bitcoin.

This is why merged mining doesn't provide the kind of security that people think it provides. The only security comes from the goodwill of the mining pool operators, without strong economic incentives that make good behaviour much more profitable than bad behaviour.

Just like proof of stake, and also just like central banks.

What about converting Namecoin to NameSC ? Same functionality as now -> you will only pay for service with BTC. Do you need NMC ?
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November 17, 2014, 08:26:10 AM
 #17211

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/



Well, turns out this guy is a pretty smart fellow. It would be nice to have HIS input on sidechains. Every articles on his blog so far are very interesting and full of insights.


"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 17, 2014, 09:50:01 AM
 #17212

Jim Rickards in an interview re: China debt, global depression (lower % growth than could be achieved - the Keynesian def) and timing of the next crisis

Anyways, speaking about a system reset, the last question was:

Do you think such scenarios make people more optimistic about crypto currencies like Bitcoins?

I see the rise of crypto-currencies as a sign of waning confidence in traditional currencies, such as the dollar. I expect the trend towards alternative currencies, such as Bitcoin, to grow as central banks continue to fail in their efforts to manipulate asset values.

http://internationalfinancemagazine.com/article/The-debt-problem-in-China-is-not-hype.html#sthash.XPW1qNhD.dpuf
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November 17, 2014, 10:11:36 AM
 #17213

Jim Rickards in an interview re: China debt, global depression (lower % growth than could be achieved - the Keynesian def) and timing of the next crisis

Anyways, speaking about a system reset, the last question was:

Do you think such scenarios make people more optimistic about crypto currencies like Bitcoins?

I see the rise of crypto-currencies as a sign of waning confidence in traditional currencies, such as the dollar. I expect the trend towards alternative currencies, such as Bitcoin, to grow as central banks continue to fail in their efforts to manipulate asset values.

http://internationalfinancemagazine.com/article/The-debt-problem-in-China-is-not-hype.html#sthash.XPW1qNhD.dpuf

Nice find.

The back pedaling is  almost complete.
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November 17, 2014, 10:30:36 AM
 #17214

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/


burterins arguments against the paper:

https://www.reddit.com/user/vbuterin


cypherdoc
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November 17, 2014, 10:35:12 AM
 #17215

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/



Thanks for the reference. The relevant part which applies to our SC's discussion:

Individuals bought coins, or mining equipment, with a certain expectation. As more and more individuals do this, it becomes harder and harder for cryptocoin-competitors to compete with the network-effect of money unless they can change the rules.

Bolded part mine.
brg444
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November 17, 2014, 10:51:37 AM
 #17216

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/



Thanks for the reference. The relevant part which applies to our SC's discussion:

Individuals bought coins, or mining equipment, with a certain expectation. As more and more individuals do this, it becomes harder and harder for cryptocoin-competitors to compete with the network-effect of money unless they can change the rules.

Bolded part mine.

but sidechains are not competitors  Huh

"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
justusranvier
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November 17, 2014, 10:56:09 AM
 #17217

but sidechains are not competitors  Huh
The same value can not be held simultaneously in the main chain and in a side chain.
brg444
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November 17, 2014, 11:09:09 AM
 #17218

but sidechains are not competitors  Huh
The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.

"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
NewLiberty
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November 17, 2014, 01:54:42 PM
 #17219

but sidechains are not competitors  Huh
The same value can not be held simultaneously in the main chain and in a side chain.

But the value of the sidechain is derived from the mainchain and so the scarcity and ledger is respected.
The SC and MC compete for some things and cooperate on others.

The value of the sidechain is derived from the market price, which ought to include both its convertibility to main chain + the side chain's utility.
&
To the extent the main chain is locked in side chains, it can be expected to reduce the liquidity of the main chain, increasing its volatility, and also the incentive to 51% it.

Awareness of the positive and negative nuances will make for better investors.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
cypherdoc
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November 17, 2014, 01:59:44 PM
 #17220

TC is a pathetic example and an obvious scam that will attract so much suckers before it gets exposed.

TC in this statement is TruthCoin.

brg444 This guy has a much better take on what SC are than you.
He understand the mining incentives that make Bitcoin, the only scam he's pulling is capitalizing on the inflation effect offered by the idea of SC's, someone who gets mining like this and looks for a win win without addressing the effect the proposed protocol change will have on mining incentives is a businessman, he isn't the scanner you think he is. We'll see thousand of these   Wink

brg444 read the article you may learn something please address all criticism on the appropriate blog, feel free to invite my input over there if you like.

http://www.truthcoin.info/blog/pow-and-mining/



Thanks for the reference. The relevant part which applies to our SC's discussion:

Individuals bought coins, or mining equipment, with a certain expectation. As more and more individuals do this, it becomes harder and harder for cryptocoin-competitors to compete with the network-effect of money unless they can change the rules.

Bolded part mine.

but sidechains are not competitors  Huh

Because the SC's offer alternative assets, and there are only a fixed supply of BTC from which to attract, SC's will compete to attract those BTC.  Just likeTC  plans to do.
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