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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 1803510 times)
Adrian-x
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November 20, 2014, 01:33:43 AM
 #17641

Scalability as in block size limit.  
Transaction fees.
The other issues are non issues in relation to the above. (I'd feel progress is happening if we just altered 2 lines of code over the next 3 years while we debated the issue)

http://www.freebanking.org/2014/11/18/bitcoin-will-bite-the-dust/ read this.

Where Kevin Dowd's analysis falls short is he doesn't account for the economics in the block halving. The block halving wrestles power away from miners.

I've outlined how miners in cooperation with the proposed change to the protocol can avoid the declining revenue in the halving.

For every cent miners earn mining Bitcoin on a SideChain they insulate themselves from the disruption in the inevitable 50% revenue drop, and for every bit of insulation we move closer to Kevin Dowd's inevitable Bitcoin prediction.

let me see if I understand you correctly: you're saying that introducing spvp at the protocol level will block the inevitable erosion of miners power, am I correct?

In any case I've to thank you b/c I've never thought of block halving as a way to reduce miners influence on the btc env.
It makes sense and if we take into consideration that after a certain threshold concentration of mining power is pernicious
to the system we should appreciate the satoshi's genius even more.

The usual way of "reading" block halving is a method to control inflation in the system, the one you just make me
discovered  is less evident but not less important.

One last thing about the link you share above. I've just gave it a quick glance but I'm not sure that this part 100% true:

Quote from: Kevin Dowd bitcoin-will-bite-the-dust
However, the mining industry is characterized by large economies of scale. In fact, these economies of scale are so large that the industry is a natural monopoly.

Why, let say, discus fish rather than ghash.io should became a monopoly if being such a thing will mean getting a
btc/fiat ratio equal to 0?

re 1, it would be possible where that wasn't possible before, depending on the incentives and the economic energy invested it could happen fast or take a 100 years.

re Block halving, and inflation the step function feeds into other loops too it perseveres value, it ramps up early investment and stimulates innovation in efficiency.  (every time i learn something new i wonder if Satoshi actually knew it or it happened to be like that.)


re 2,  Kevin Dowd is a Bitcoin pessimist, but what he is saying is mining will tend to centralize and then a carrells will form and ultimately it will become a monopoly.

This is a view many Bitcoiners hold so it has merit.

Where he is wrong is in understanding mining, but what we see happening and what is expected to happen dont support his prediction.
we have price epochs, (some great Bitcoine mind here on bitcointalk came up with a energy theory that governs the price between each halving I can't find the reference and I'm not even sure if he called it an epochs I just built on it)

the situation is dynamic and mining centralization is expected we've seen this with pool mining and the resulting power shifts as different pool dominate. but block halving will discourages cooperation as miners scramble to squeeze out any profit they can, some may go bankrupt and some will survive, there are many feedback loops, this also makes the network more efficient and encourages value growth. there is also wild price volatility which is key to regulating miners investments in hardware, some will get lucky some won't, it also creates opportunity for new competition. ultimately this is all regulated by the available energy as the system grows, the extent of the analysis stops at energy infrastructure as is often planed 10 years in advance and the volatility and reward dropping prevents miners form influencing those decisions.  

funny story on infrastructure limitations, a friend unrelated to Bitcoin earlier this year was having problems with a production line, in the city where they were located in China, he told me there were no PCB assembly plants willing to do there job, as they were all busy doing Bitcoin ASICs, so even production capacity is a limitation in a boom.  

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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tvbcof
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November 20, 2014, 01:39:18 AM
 #17642

if memory serves I read somewhere that the cap on the block size was introduced due to DDoS attacks against the network using very large blocks, is it correct?
Due to the potential for such attacks.

That's a hypothesis, and one which is especially promoted by the 'wide open blocksize' crowd.

Satoshi didn't say why he did it in the commit comments as I recall, and I've not heard any credible person say that he explained it to them as it being due to DDoS concerns or anything else.

A perfectly viable hypothesis is that he knew that some other mechanism besides gross opening the blocksize would eventually be required due to scaling issues, and he thought that this setting would give enough headroom for Bitcoin to grow to a decent size before running into problems.

I like to think that, like myself, sidechains at least occurred to Satoshi early on in his ruminations about scaling modes.  Likely we'll never know though.  For my part I imagined the name 'child chains', but whatever.  Same diff.  They are just a logical sub-set of the Bitcoin solution one way or another.


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November 20, 2014, 01:39:25 AM
 #17643

This is where economics in the economy come in to play risks and reward, at the moment federation/oracles/OT all are owned by the entities that want you to trust them with your Bitcoin, what happens there after is business. (And federation/oracles/OT are magnitudes more trusted than anything before) What entities do to build trust or create value, if it has any impact on miners it is catered for in the existing incentive structure.
There's something important to be said here about OT (and other off-chain systems).

OT is a contract processing system that operates on liabilities.

You'll never be able to transact with Bitcoins anywhere except on the Bitcoin blockchain, in OT or in any other system.

If we want Bitcoin to succeed as money, then we need as many Bitcoin transactions to happen as possible.

yes, and they should happen on MC to maximize miner tx revenue.
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November 20, 2014, 01:45:52 AM
 #17644

...
If we want Bitcoin to succeed as money, then we need as many Bitcoin transactions to happen as possible.

yes, and they should happen on MC to maximize miner tx revenue.

Yup, the hamster is back to the wheel.  You people are as pathetic as a sheep stuck under an electric fence and bleating every time it gets zapped because you cannot figure out the nature of your problem or how to deal with it.


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November 20, 2014, 01:49:21 AM
 #17645

This is where economics in the economy come in to play risks and reward, at the moment federation/oracles/OT all are owned by the entities that want you to trust them with your Bitcoin, what happens there after is business. (And federation/oracles/OT are magnitudes more trusted than anything before) What entities do to build trust or create value, if it has any impact on miners it is catered for in the existing incentive structure.
There's something important to be said here about OT (and other off-chain systems).

OT is a contract processing system that operates on liabilities.

You'll never be able to transact with Bitcoins anywhere except on the Bitcoin blockchain, in OT or in any other system.

If we want Bitcoin to succeed as money, then we need as many Bitcoin transactions to happen as possible.

yes, and they should happen on MC to maximize miner tx revenue.

but they cant  Undecided

"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 20, 2014, 01:53:56 AM
 #17646

if memory serves I read somewhere that the cap on the block size was introduced due to DDoS attacks against the network using very large blocks, is it correct?
Due to the potential for such attacks.

I like to think that, like myself, sidechains at least occurred to Satoshi early on in his ruminations about scaling modes.  Likely we'll never know though.  For my part I imagined the name 'child chains', but whatever.  Same diff.  They are just a logical sub-set of the Bitcoin solution one way or another.

I actually had a similar thought experiment the other day.

Imagine that Satoshi had built sidechains out the box with Bitcoin.

Would we be worse off

or significantly ahead?

I think sidechains are the most natural extension possible to Bitcoin if they can execute what is in the white paper. Of course that remains to be seen but considering just about all of silicon valley invested in their 20 million seed round. My bet is they will.


"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
cypherdoc
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November 20, 2014, 01:55:02 AM
 #17647

This is where economics in the economy come in to play risks and reward, at the moment federation/oracles/OT all are owned by the entities that want you to trust them with your Bitcoin, what happens there after is business. (And federation/oracles/OT are magnitudes more trusted than anything before) What entities do to build trust or create value, if it has any impact on miners it is catered for in the existing incentive structure.
There's something important to be said here about OT (and other off-chain systems).

OT is a contract processing system that operates on liabilities.

You'll never be able to transact with Bitcoins anywhere except on the Bitcoin blockchain, in OT or in any other system.

If we want Bitcoin to succeed as money, then we need as many Bitcoin transactions to happen as possible.

yes, and they should happen on MC to maximize miner tx revenue.

but they cant  Undecided

Gavin will get his proposals thru.

https://bitcoinfoundation.org/2014/11/everybody-pivots/
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November 20, 2014, 02:05:52 AM
 #17648

if memory serves I read somewhere that the cap on the block size was introduced due to DDoS attacks against the network using very large blocks, is it correct?
Due to the potential for such attacks.

I like to think that, like myself, sidechains at least occurred to Satoshi early on in his ruminations about scaling modes.  Likely we'll never know though.  For my part I imagined the name 'child chains', but whatever.  Same diff.  They are just a logical sub-set of the Bitcoin solution one way or another.

I actually had a similar thought experiment the other day.

Imagine that Satoshi had built sidechains out the box with Bitcoin.

Would we be worse off

or significantly ahead?

I think sidechains are the most natural extension possible to Bitcoin if they can execute what is in the white paper. Of course that remains to be seen but considering just about all of silicon valley invested in their 20 million seed round. My bet is they will.



one of my other memes is that "most investors in cryptocurrency will lose money".  and that includes Silicon Valley investors.

that's b/c most investors/geeks, imo, don't understand what Bitcoin is and what its ultimate destiny will be.  and that is the fulfillment of Sound Money as envisioned by the goldbugs and cypherpunks.  there are too many common ppl in the world who are depending on us to provide a way to "exit" the fiat system.  what resonates with most non US ppl round the world is the fixed supply nature of Bitcoin.  they don't care about stocks, bonds, insurance, smart contracts, etc which SC's wants to provide.  all they care about is Sound Money that is liquid and acts like a SOV.  even Americans hold few stocks and bonds these days as none of them are compelling at these inflated prices and dangerous levels.  everyone knows it's a Ponzi Scheme enable by the #1 problem of the day:  fiat money printing ala central banks.  Bitcoin is a poison dart aimed directly at the heart of this problem and i don't think humanity is going to let this chance go by.  this is why the Bitcoin community needs to maintain a focus on what got us to where we are:  the SOV sound money function.

we want to force the outsiders to "buy in" to BTC on MC.  this is what will take us to The Moon.
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November 20, 2014, 02:07:01 AM
 #17649

Quote
Coloring Bitcoins. The systems I’ve looked at don’t route bids/offers over the Bitcoin system so any matching will be done external to the platform. So it seems to me that “decentralized exchanges” on this model will have to require those posting bids or offers to demonstrate that they have placed the corresponding colored coins/Bitcoins in escrow with one or more acceptable third parties.

http://gendal.wordpress.com/2014/06/10/a-decentralized-securities-trading-and-settlement-system-is-being-built-hidden-in-plain-sight/

How true is this?
It's possible to build decentralized order books.

Order matching does not require escrow with a third party.

Orders can be executed with atomic swaps on the blockchain.

At the same time, it's possible to use semi- or fully trusted third parties for any or all of those functions.

I expect both models to see real world usage.

But this doesn't really address the original statement you made. Originally you did not specify that you were talking about certain ways markets could be built that utilized colored coins.

Without that clarification, your statement about sidechains being "more decentralized" is false.

Colored coin tokens are stored on the main chain and enjoy the full security model of Bitcoin. The same can not be said for tokens created on a sidechain.
smoothie
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November 20, 2014, 02:11:20 AM
 #17650

hey, looky here.  thanks to brg444, i've catapulted past D&T to #2 poster here on the forum.  thanks brg444!  take me to #1!



Don't worry I will catch up Cypher.  Grin Grin Grin

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cypherdoc
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November 20, 2014, 02:14:58 AM
 #17651

hey, looky here.  thanks to brg444, i've catapulted past D&T to #2 poster here on the forum.  thanks brg444!  take me to #1!



Don't worry I will catch up Cypher.  Grin Grin Grin

not while i have my shadow assassin.
brg444
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November 20, 2014, 02:29:28 AM
 #17652

Quote
Coloring Bitcoins. The systems I’ve looked at don’t route bids/offers over the Bitcoin system so any matching will be done external to the platform. So it seems to me that “decentralized exchanges” on this model will have to require those posting bids or offers to demonstrate that they have placed the corresponding colored coins/Bitcoins in escrow with one or more acceptable third parties.

http://gendal.wordpress.com/2014/06/10/a-decentralized-securities-trading-and-settlement-system-is-being-built-hidden-in-plain-sight/

How true is this?
It's possible to build decentralized order books.

Order matching does not require escrow with a third party.

Orders can be executed with atomic swaps on the blockchain.

At the same time, it's possible to use semi- or fully trusted third parties for any or all of those functions.

I expect both models to see real world usage.

But this doesn't really address the original statement you made. Originally you did not specify that you were talking about certain ways markets could be built that utilized colored coins.

Without that clarification, your statement about sidechains being "more decentralized" is false.

Colored coin tokens are stored on the main chain and enjoy the full security model of Bitcoin. The same can not be said for tokens created on a sidechain.

My original statement refers to trust. Decentralized trust. Is colored coins not introducing an additional layer of trust?

"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 20, 2014, 02:33:34 AM
 #17653

Is colored coins not introducing an additional layer of trust?
That depends on how you define "another layer of trust".

Colored coins are inherently used for tracking things outside the blockchain - that by definition means representing obligations a.k.a counterparty risk. Any technique that tracks obligations outside the blockchain will be tracking counterparty risk.

But none of that has nothing to do with the underlying technology used to create the token. Colored coins as tokens are no different from other bitcoins. A colored coin token doesn't all of a sudden become less trustworthy than a non-colored Bitcoin.
BlindMayorBitcorn
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November 20, 2014, 02:39:30 AM
 #17654

Is colored coins not introducing an additional layer of trust?
That depends on how you define "another layer of trust".

Colored coins are inherently used for tracking things outside the blockchain - that by definition means representing obligations a.k.a counterparty risk. Any technique that tracks obligations outside the blockchain will be tracking counterparty risk.

But none of that has nothing to do with the underlying technology used to create the token. Colored coins as tokens are no different from other bitcoins. A colored coin token doesn't all of a sudden become less trustworthy than a non-colored Bitcoin.

How much bitoshis will it take to create a coloured token. Is there a minimum? Will it burn them as bits forever?

Forgive my petulance and oft-times, I fear, ill-founded criticisms, and forgive me that I have, by this time, made your eyes and head ache with my long letter. But I cannot forgo hastily the pleasure and pride of thus conversing with you.
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November 20, 2014, 02:40:28 AM
 #17655

Is colored coins not introducing an additional layer of trust?
That depends on how you define "another layer of trust".

Colored coins are inherently used for tracking things outside the blockchain - that by definition means representing obligations a.k.a counterparty risk. Any technique that tracks obligations outside the blockchain will be tracking counterparty risk.

But none of that has nothing to do with the underlying technology used to create the token. Colored coins as tokens are no different from other bitcoins. A colored coin token doesn't all of a sudden become less trustworthy than a non-colored Bitcoin.

I define "another layer of trust" as trusting anything else but the Bitcoin network.

In that regard colored coins are less decentralized than sidechains.

"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
BlindMayorBitcorn
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November 20, 2014, 02:43:11 AM
 #17656

Is colored coins not introducing an additional layer of trust?
That depends on how you define "another layer of trust".

Colored coins are inherently used for tracking things outside the blockchain - that by definition means representing obligations a.k.a counterparty risk. Any technique that tracks obligations outside the blockchain will be tracking counterparty risk.

But none of that has nothing to do with the underlying technology used to create the token. Colored coins as tokens are no different from other bitcoins. A colored coin token doesn't all of a sudden become less trustworthy than a non-colored Bitcoin.

I define "another layer of trust" as trusting anything else but the Bitcoin network.

In that regard colored coins are less decentralized than sidechains.

I don't get sidechains. Will they just be alt-coins then?

Forgive my petulance and oft-times, I fear, ill-founded criticisms, and forgive me that I have, by this time, made your eyes and head ache with my long letter. But I cannot forgo hastily the pleasure and pride of thus conversing with you.
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November 20, 2014, 02:44:54 AM
 #17657

...
I like to think that, like myself, sidechains at least occurred to Satoshi early on in his ruminations about scaling modes.  Likely we'll never know though.  For my part I imagined the name 'child chains', but whatever.  Same diff.  They are just a logical sub-set of the Bitcoin solution one way or another.

I actually had a similar thought experiment the other day.

Imagine that Satoshi had built sidechains out the box with Bitcoin.

Would we be worse off

or significantly ahead?

I think sidechains are the most natural extension possible to Bitcoin if they can execute what is in the white paper. Of course that remains to be seen but considering just about all of silicon valley invested in their 20 million seed round. My bet is they will.


Satoshi had some ideas about pruning.  Apparent that went nowhere, but it seems possible via some hieroglyphics by some of the more clever of the core devs that sidechains might have been evident as to be a better solution some time ago.

Satoshi also had a seemingly weird artifact where even with a small payment, the whole wad went went into the system and change came back out.  I remember back when I started paying attention some of the main active people at the time were kind of scratching their heads about what he might have been thinking then basically shrugged and said 'who knows?'  The thought occurred to me that between this mechanism and pruning there was potentially quite a bit of room for optimization to deal with some of the scaling issues (but not all.)  I actually like the whole idea of sidechains better anyway due to the advantages of flexibility and diversity in addition to their providing a much better scaling potential.


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November 20, 2014, 02:47:20 AM
 #17658

I define "another layer of trust" as trusting anything else but the Bitcoin network.

In that regard colored coins are less decentralized than sidechains.
Now you're just making up inconsistent, dishonest bullshit.
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November 20, 2014, 02:52:04 AM
 #17659

...
I like to think that, like myself, sidechains at least occurred to Satoshi early on in his ruminations about scaling modes.  Likely we'll never know though.  For my part I imagined the name 'child chains', but whatever.  Same diff.  They are just a logical sub-set of the Bitcoin solution one way or another.

I actually had a similar thought experiment the other day.

Imagine that Satoshi had built sidechains out the box with Bitcoin.

Would we be worse off

or significantly ahead?

I think sidechains are the most natural extension possible to Bitcoin if they can execute what is in the white paper. Of course that remains to be seen but considering just about all of silicon valley invested in their 20 million seed round. My bet is they will.


Satoshi had some ideas about pruning.  Apparent that went nowhere, but it seems possible via some hieroglyphics by some of the more clever of the core devs that sidechains might have been evident as to be a better solution some time ago.

Satoshi also had a seemingly weird artifact where even with a small payment, the whole wad went went into the system and change came back out.  I remember back when I started paying attention some of the main active people at the time were kind of scratching their heads about what he might have been thinking then basically shrugged and said 'who knows?'  The thought occurred to me that between this mechanism and pruning there was potentially quite a bit of room for optimization to deal with some of the scaling issues (but not all.)  I actually like the whole idea of sidechains better anyway due to the advantages of flexibility and diversity in addition to their providing a much better scaling potential.



Will there be a sidechain for micropayments? For example? Are there any proposals?

Forgive my petulance and oft-times, I fear, ill-founded criticisms, and forgive me that I have, by this time, made your eyes and head ache with my long letter. But I cannot forgo hastily the pleasure and pride of thus conversing with you.
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November 20, 2014, 02:55:59 AM
 #17660

Is colored coins not introducing an additional layer of trust?
That depends on how you define "another layer of trust".

Colored coins are inherently used for tracking things outside the blockchain - that by definition means representing obligations a.k.a counterparty risk. Any technique that tracks obligations outside the blockchain will be tracking counterparty risk.

But none of that has nothing to do with the underlying technology used to create the token. Colored coins as tokens are no different from other bitcoins. A colored coin token doesn't all of a sudden become less trustworthy than a non-colored Bitcoin.

I define "another layer of trust" as trusting anything else but the Bitcoin network.

In that regard colored coins are less decentralized than sidechains.

I don't get sidechains. Will they just be alt-coins then?

Sidechains have two models. They are effectively an alt-chain that is supported by the BTC unit on a 1:1 peg.*

In the proposed concept, they use a SPV client to settle between chains. To secure the chain they would use merged-mining which potentially lets them access 100% of Bitcoin's mining power. They are not quite as secure though as they are not accepted by all nodes.

They can also use a less-decentralized model that rely on Oracles/Federations/Voting Pools.

*the unit is technically not the actual BTC but an image of it locked in a multi-sig type of way. the peg could also be a deterministic function but that defeats the purpose and effectively creates an altcoin.

"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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