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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?
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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1902928 times)
tvbcof
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January 05, 2015, 05:46:12 PM
 #19701


Doesn't matter if the transaction fees are high or low.  Doesn't matter if ....

To be honest, I have not previously considered the points you make above. I have always taken Satoshi's block rewards->fees evolution at face value, and am not convinced that the majority of miners will work for zero income. Obviously this does happen to some of them, occasionally.

I'm pleasantly surprised to see you say this.  Still, it's a hypothesis on my part, and the appropriate thing to do with a hypothesis is to file it away and match it against future observations.

Another somewhat weaker hypothesis is that some of the value streams that I alluded to are quite valuable indeed if enough data can be collected.  We could see mining completely subsidized in order to capture these value streams (and other's I've not thought of.)

With respect to the 'who spends what where' data, the 'who' part is still the most challenging.  Eventually Big Bro will probably solve that with a 'internet drivers license' type thing, but if/when that happens it's still not clear how available the data will be to private industry.  It will probably be a 'public/private partnership' arrangement with horse-trading that favors the big guys would be my guess.  In the here-and-now, when you see someone wanting you to use a particular authenticator, it's a pretty sure bet that that is what they are after.  Outfits with a large network footprint have other ways of course, but authentication optimizes things significantly.

A very common way to make money in tech is to achieve something that a big player will want then either sell it to them or sell the ability to obtain it (e.g., your company.)  One of my (very initial) hypothesis about OpenTransaction is that this might be their game because a successful transport layer would be a high-value item in a bunch of ways.

A real-world analogy must be the oil market. With the oil price down 45% a lot of producers are unprofitable, pumping for zero, and considering closing down. But there are profitable producers and the oil industry will continue, even if the price stays low and half of the producers go out of business.

The energy markets are probably about the worst example of a 'free market' that one could find.  For one, there are huge national security issues which touch almost every aspect of it.  For two, it's probably not a complete junk theory that our monetary system itself(!) is heavily tied in through what is monikered the 'petro-dollar' (and the 'world reserve currency' status of the USD.)  None-the-less, the old supply/demand laws are so powerful that they cannot be buried forever and they can be expected to rear their 'ugly heads' even in a heavily manipulated market like energy...with time...


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cypherdoc
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January 05, 2015, 05:59:44 PM
 #19702

The Bitstamp hacking highlights the need for sidechains IMHO.  Central bank's solution is to print money and bail out.  Our solution should be sidechains.  Bitshares could be forked onto a sidechain, potentially allowing all trade and storage to be done on protocol with bitcoin as the backing collateral... or perhaps the truthcoin model would work.  Its time for this to happen.

no, not necessarily.  your assumption is that SC's are more secure than current exchange models.  the only way to achieve this is to obtain 100% MM cooperation from miners.  there is no model for this and the best we have is about 55% for NMC.  just given the fact that some miners won't be aware of SC existence if and when they do come to fruition means they won't be mining SC's which means there will be <100% for sure.  theoretically, anything <100% MM'ing is vulnerable and i'm sure this can be mathematically modelled.

plus, i'm not sure where all this desire comes from to "bailout" speculators on current exchanges.  b/c that is what they are, imo.  the reason i have never lost a coin is b/c i realize that Bitcoin is about increasing personal responsibility by becoming your own bank.  i have never used an exchange as a trading mechanism and have just used them to buy and move coin to my privkeys.  SC's are an attempt to bailout the individual speculator who wishes to leave their coin on some speculative trading platform.  but even that doesn't work b/c of the MM'ing fallacies i've outlined above.

Its not just speculators that use the exchanges.  The sidechain model is not a bailout, it is a potentially more secure financial system where users have much less exposure to theft.  While bitcoin is still in beta, I don't see any reason to not implement it.

yes, there are users like me who simply use the exchanges to get in and out of BTC but over long time periods.  anyone who does leave their BTC/fiat on the exchange for prolonged periods are the speculators i'm talking about.  who of us here leave their fiat on Forex exchanges for prolonged periods.  not many i'd suspect as we generally are more about sound money and not speculation.  SC's are tempting us by claiming to be more secure; i question that b/c of the necessity for 100% MM.  the 2wp is also suspect as it implies a way to get out w/o losses esp if you're using the SC for speculation.  bailout is probably too strong a term so maybe my original "put" term applies.

the spvp does sound generic based on what Adam has told us but it's the unexpected feedback effects on MC that i question.
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January 05, 2015, 06:01:31 PM
 #19703

nice quote Marc Andreessen

Paraphrasing (Bitcoin's value is it's blockchain not the BTC)

My fundamental issue with SC is they don't secure the value just the BTC. SC offer economic hackers a way to steal that value.

It's economic ignorance to believe the value in the blockchain is inherent.
I've been saying this for a long time now. The Blockchain will be the only aspect of Bitcoin that survives.

The theory of right angles also survived the builders of house in which it was first used.  In a long enough time frame, the implementation must fall ahead of the knowledge.  This is a less profound observation than you might imagine.

That "survives" may be centuries away, or weeks, depending on how things get hacked up.

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cypherdoc
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January 05, 2015, 06:04:17 PM
 #19704


Doesn't matter if the transaction fees are high or low.  Doesn't matter if ....

To be honest, I have not previously considered the points you make above. I have always taken Satoshi's block rewards->fees evolution at face value, and am not convinced that the majority of miners will work for zero income. Obviously this does happen to some of them, occasionally.

I'm pleasantly surprised to see you say this.  Still, it's a hypothesis on my part, and the appropriate thing to do with a hypothesis is to file it away and match it against future observations.

Another somewhat weaker hypothesis is that some of the value streams that I alluded to are quite valuable indeed if enough data can be collected.  We could see mining completely subsidized in order to capture these value streams (and other's I've not thought of.)

With respect to the 'who spends what where' data, the 'who' part is still the most challenging.  Eventually Big Bro will probably solve that with a 'internet drivers license' type thing, but if/when that happens it's still not clear how available the data will be to private industry.  It will probably be a 'public/private partnership' arrangement with horse-trading that favors the big guys would be my guess.  In the here-and-now, when you see someone wanting you to use a particular authenticator, it's a pretty sure bet that that is what they are after.  Outfits with a large network footprint have other ways of course, but authentication optimizes things significantly.

A very common way to make money in tech is to achieve something that a big player will want then either sell it to them or sell the ability to obtain it (e.g., your company.)  One of my (very initial) hypothesis about OpenTransaction is that this might be their game because a successful transport layer would be a high-value item in a bunch of ways.

A real-world analogy must be the oil market. With the oil price down 45% a lot of producers are unprofitable, pumping for zero, and considering closing down. But there are profitable producers and the oil industry will continue, even if the price stays low and half of the producers go out of business.

The energy markets are probably about the worst example of a 'free market' that one could find.  For one, there are huge national security issues which touch almost every aspect of it.  For two, it's probably not a complete junk theory that our monetary system itself(!) is heavily tied in through what is monikered the 'petro-dollar' (and the 'world reserve currency' status of the USD.)  None-the-less, the old supply/demand laws are so powerful that they cannot be buried forever and they can be expected to rear their 'ugly heads' even in a heavily manipulated market like energy...with time...



actually, the hypothesis is a decent one (ouch, that's painful to say) and i have myself thought about this.  but i don't think it's a potential problem until 2140 when Bitcoin inflation goes to zero.  certainly, it could manifest itself earlier if the market perceives it as a bonafide problem and attempts to front run it.

however, i agree with solex that it can probably be better modelled by what we have in the energy mkts.  and oil companies don't seem to be having a problem; nor even smaller players who nip at their heels thru private oil wells or shale opportunities.

also, Adrian pointed out that your claim of "unlimited HW" is really Econ 101.
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January 05, 2015, 06:32:03 PM
 #19705

Bitstamp says.  meanwhile, in stockland.  $DJI -321:

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January 05, 2015, 06:34:19 PM
 #19706

speaking of oil and natgas overlayed; who the hell needs either of those?:

cypherdoc
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January 05, 2015, 06:36:37 PM
 #19707

copper and FCX copper mining?  who the hell needs those too?:

cypherdoc
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January 05, 2015, 06:40:24 PM
 #19708

apparently all we need is moar black hole shit and the dollar.  somehow though, this one should work out differently than 2008:

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January 05, 2015, 07:16:18 PM
 #19709

That if your home computer had to do 2.25TB/day down to be a full node you might not be able to do it, which is a centralising factor.

You're saying that retaining the possibility for home computers to be full nodes is both necessary and desirable.

I understand that many people have made this claim over the years, but I am not aware of any attempts to actually prove either of those.


He's saying that increasing the full-node bandwidth requirements is a centralizing factor.  It is.  If it requires more resources to run a full-node, less full-nodes will be run (all other variables held constant).  What is "necessary and desirable" is a different question: we want the Blockchain to scale but we require Bitcoin to remain decentralized.  Like you've pointed out several times, the proponents of keeping the blocksize limit small can't prove their claims; however, those who wish to increase or remove the cap can't prove their claims either.  

Bitcoin has value because it is decentralized.  It has value because the Blockchain is an unforgeable global ledger accessible to anyone according to the protocol rules, and secured by the largest single-purpose computing network ever constructed.  It has value because another individual, company or (possibly) government cannot prevent you from doing what you wish with your coins.  It has value because the majority cannot vote to redistribute your funds or attempt to paper-over economic problems by printing additional bitcoins.  In summary, it has value because it behaves less like a human invention/institution and more like a phenomenon of nature itself.  Just like there's nothing in the world we can do to stop gravity, we must also be unable to stop the ceaseless chaining of new blocks upon the Blockchain.  

Full-node count is currently estimated at 6495 nodes, and is steadily dwindling despite the fact that the blocksize-limit has remained static at 1 MB.  How would full-node count change if the average blocksize were 10x larger?  100x larger?  How many nodes do we even need?  I think these are difficult questions to answer.  

The current price reflects the belief that Bitcoin has the potential to one day become a significant world currency/SoV.  Like Smooth pointed out earlier, that pie-in-the-sky $10,000+ price multiplied by the market's estimate of its probability of success sets today's price.  If Bitcoin can't scale to the extent necessary to fulfil this potential, then the price of bitcoin today will become adjusted to this new reality (lower).  How much scaling is necessary?  I don't know, but I'm pretty sure the 1 MB limit put in place by Satoshi many years ago as a stop-gap measure is not it.
  

BTW, I don't think the "free-market-solves-all-problems-so-remove-the-cap-completely" approach can fly.  The Satoshi Social Contract requires that certain system-level constraints exist (for example, the inflation schedule….we can't have the free-market solve that problem).  Another requirement is that Bitcoin remain decentralized.  Without a constraint on blockchain growth, it seems less likely that this would always be the case.  

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January 05, 2015, 07:28:25 PM
 #19710

He's saying that increasing the full-node bandwidth requirements is a centralizing factor.  It is.  If it requires more resources to run a full-node, less full-nodes will be run (all other variables held constant).

Fewer nodes is not itself the entire problem, it is also where the nodes are. If most of the nodes end up at a few big VPS companies that is not a good outcome, even if the node count increases.

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January 05, 2015, 07:29:44 PM
 #19711

He's saying that increasing the full-node bandwidth requirements is a centralizing factor.  It is.  If it requires more resources to run a full-node, less full-nodes will be run (all other variables held constant).

Fewer nodes is not itself the entire problem, it is also where the nodes are. If most of the nodes end up at a few big VPS companies that is not a good outcome, even if the node count increases.

Agreed.  Good point. 

Run Bitcoin Unlimited (www.bitcoinunlimited.info)
cypherdoc
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January 05, 2015, 07:44:40 PM
 #19712

Dow -331 345 and falling.
tvbcof
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January 05, 2015, 07:51:57 PM
 #19713

He's saying that increasing the full-node bandwidth requirements is a centralizing factor.  It is.  If it requires more resources to run a full-node, less full-nodes will be run (all other variables held constant).

Fewer nodes is not itself the entire problem, it is also where the nodes are. If most of the nodes end up at a few big VPS companies that is not a good outcome, even if the node count increases.

Agreed.  Good point. 

A new transport layer which slices, dices, etc, could mitigate certain of the concerns here.  Something like Oh, I dunno, 'SuperNET'?  I'll expect this to be one of the main sales pitches.


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January 05, 2015, 07:54:47 PM
 #19714

If it requires more resources to run a full-node, less full-nodes will be run (all other variables held constant).
This is an effect of shitty network design.

Satoshi was right to realize that a currency should have a limited supply, but that doesn't mean he was right about (or even though about) the economic features of the rest of the software stack.

With a tiny handful of exceptions, all P2P networks are economically broken.

Consider a McDonalds restaurant. The more customers they need to serve, the more resources they require to do so.

Yet in spite of that fact, as the customer demand for McDonald's product increases, so does the number of stores!

Why is that the opposite of what happens with P2P networks? Because in the case of Big Macs, people pay for what they use. This customer action of paying for what they concume means that McDonalds doesn't really need to worry about how it will gather the resources it needs to scale.

The Satoshi Social Contract requires that certain system-level constraints exist (for example, the inflation schedule….we can't have the free-market solve that problem).
That's an objection only brought up by people who don't understand money.

The reason the inflation schedule shouldn't change is the same reason you shouldn't put an anchor on an airplane.

In a way, the free market *does* solve that question though - because people are free to choose whether or not they want to travel in a boat or in an airplane.

Another requirement is that Bitcoin remain decentralized.  Without a constraint on blockchain growth, it seems less likely that this would always be the case.
Let's talk more about this requirement after you produce a workable definition of what "decentralized" means, and the arguments you use to justify your conclusion about how different situations will affect it.
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January 05, 2015, 07:55:28 PM
 #19715

we got a really nice Dow Theory non-confirmation going right now which should widen with time:

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January 05, 2015, 08:24:52 PM
 #19716

oil @ 49.90.  the only thing sweet about sweet crude oil is the sweet smell of Deflation.
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January 05, 2015, 08:48:57 PM
 #19717

we got a really nice Dow Theory non-confirmation going right now which should widen with time:


nice buy

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January 05, 2015, 09:00:32 PM
 #19718

oil @ 49.90
Just wow.
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January 05, 2015, 09:16:08 PM
 #19719


This is war on Shale - mainly the US Shale and thus we could see US junk bonds implode.

Could this be the start of the big collapse everyone here is hoping for?

Given the unprecedented nature of that price divergence from its normal relationship with stocks one has to assume something big can happen. Certainly is also possible that tech has rebooted us to permanent nirvana but I tend to doubt it given that nothing got fixed after 2008 and all we did was double the national debt, quintupled the money supply, and let the criminals multiply like viruses.

And by my estimation, Bitcoin has the potential to end all this in a positive manner, so I'm loading up further every chance I get.
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January 05, 2015, 09:17:41 PM
 #19720

oil @ 49.90.  the only thing sweet about sweet crude oil is the sweet smell of Deflation.

The more dollars are printed the more scarce they are :-) ... I don't get it.
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