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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1920229 times)
JorgeStolfi
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January 06, 2015, 12:36:21 AM
 #19741

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.

Sorry, I was not blessed with the necessary Faith.   Undecided

Put your feet on the ground again, please, and wake up.  We cannot create anything even remotely similar in robustness and permanence to a new law of physics.  The Bitcoin network is a minuscule hardware and software artifact, that survives only because a few thousand people are willing to keep it working.  If a few hundred (or maybe even a few dozen) of those persons changed their mind, the network would stop.  Or the protocol could be modified, e.g. to randomly toss coins around and make half of them negative, or whatever.

It may seem impossible to get those people to agree to that, because of incentives and bla bla.  But, physically, the energy required to change the neuronal state of a million bitcoiners, so that they start hating the thing, is maybe less than the charge of an AA battery.  And the wiring in their brains is such that one would not need some sci-fi mind-reprogramming zap gun, but only send the right signals through their eyes and ears.  I don't know how to do that, but it is absurd to claim that it will never happen.

The point, again, is that all human constructs are astronomically small and fragile; doubly so for virtual constructs; triply so for virtual constructs -- like bitcoin, the euro, or the US democracy -- that depend on a collection of humans behaving in some 'rational' way.  

Bitcoin in particular has already failed in its primary goal.  The network is still churning, and most bitcoiners still believe (or pretend to believe) that it has proven itself robust; yet it is anything but.

Bicoin, as stated by Satoshi, was designed to be a system for p2p transmission of money that does not require trusting a third-party authority.  But his solution, the Bitcoin protocol, does not do that.  The protocol still depends on trusting that the miners who retain a majority of the mining power are interested in preserving the network.

Satoshi apparently assumed that mining would be fairly spread out among the users, who would be well spread out over the world.  From that assumption, one is expected to conclude that any majoritarian subset of the miners would be so large that they would not collude, and could not be coerced, co-opted, or tricked into any particular behavior.  From that assumption, furthermore, one should conclude that there would be a majoritarian subset of the miners who would have a simple, greedy and rational behavior; meaning, that they would choose to play by the rules, if that choice maximized their expected revenue from block rewards and fees.

However, things did not turn out that way, and in retrospect it is perhaps obvious that they couldn't.   The total reward paid to the miners turned out to be large enough to make mining a very profitable activity, provided one could muster a significant fraction of the hashing power.  To maximize his profit, a miner had to increase his total hashing power and lower his operating and capital costs.  As we know, these facts led to the development of hashing ASICs. Economies of scale then made large miners mor eprofitable, and this advantage led to the extreme concentration of mining power that we see today.

The largest miner will usually grow the fastest, so in time it will have a majority of the hashing power all by itself.  The GHash.io pool briefly reached this state, but then it claimed to have voluntarily limited its growth to remove that very visible risk.  Even so, today the 4 largest know mining entities have ~54% of the total hashpower.

I don't know whether this size+technology race has been going on since the very beginning, or whether it started only after the price rose to a certain minimum level.  If Satoshi had chosen a different reward and fee schedule, or if bitcoin had never attracted the attention of speculators and hoarders, then the price today would probably be around 1 $ or less, the total mining reward would be only ~3600 $/day,  and perhaps the race would not have started yet.  However, if bitcoin (or any similar crypto-currency) were to gain widespread use, it would have to reward its miners well in order to ensure a robust network;  and then the size+technology race would occur anyway.

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.  For starters, it can effectively disable the whole network and starve other miners, by selfish mining of empty blocks.  But then it can also use that capability to "convince" most users (including exchanges and payment processors) to accept changes in the protocol (such as extension of the reward schedule and/or increased fees). In the same way, it can convince most other miners to cooperate with the cartel.  These changes would probably include details that further consolidate the power of the cartel and gradually lock the users in, so that they will have to accept more radical changes.  (In general, any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.)

Therefore, it is already a proved fact that the bitcoin protocol does not work. All users now have to trust a 3rd party authority, namely those 4 companies.  These miners must be trusted not to collude, and not be coerced, co-opted, or tricked into violating the network's "terms of service", such as inviolability of accounts, irreversibility, no-double-spending, etc..  That assumption could have been justified for a set of thousands of miners, but not for a set of 4.

It does not matter whether those 4 companies will form a cartel, or will abuse their power.  The mere possibility of them doing so already requires us to trust that they won't.  And it does not matter if they will always seek to gather the most bitcoins, or if they will have other external motives: in fact, the concentration of hashpower, the takeover of the network by a small majority, and the changes of the protocol are all predictable outocomes of the assumption that every agent will behave in a greedy and rational manner.

The price does not matter, too.  It may recover in the next few months, perhaps even go to a new all-time high.  But the only advantage that bitcoin was supposed to have over other payment systems -- not being controlled by a central authority -- is not there. Inevitably, it will lose is "market" to traditional systems; that are just as centralized as bitcoin, but much more efficient.  Even those who love bitcoin because of political idealism will abandon it -- precisely because it does not meet their ideals.

This is not my own view, of course.  This fact has been known for quite some time, and has been pointed out by many critics; and no one has provided a glimmer of hope that this flaw can be corrected.

Among bitcoiners, I still see a lot of denial, with people disputing the ability or willingness of a majoritary cartel to exercise their power, or assuming that a larger coalition of 'rebel' users can prevail over such cartel, or predicting that individual pool members would desert the cartel.

But in the last couple of months I have been seeing also many bitcoiners who seem to have internalized the fact, and are now scrambling to find a way to save their investment -- or at least convince the public, for a while longer, that they have found a solution and are working on it.

EDITS: Grammar and typos

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 06, 2015, 12:48:27 AM
 #19742

massive misunderstanding

back to troll
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January 06, 2015, 12:59:32 AM
 #19743

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.

Sorry, I was not blessed with the necessary Faith.   Undecided

Put your feet on the ground again, please, and wake up.  We cannot create anything even remotely similar in robustness and permanence to a new law of physics.  The Bitcoin network is a minuscule hardware and software artifact, that survives only because a few thousand people are willing to keep it working.  If a few hundred (or maybe even a few dozen) of those persons changed their mind, the network would stop.  Or the protocol could be modified, e.g. to randomly toss coins around and make half of them negative, or whatever.

It may seem impossible to get those people to agree to that, because of incentives and bla bla.  But, physically, the energy required to change the neuronal state of a million bitcoiners, so that they start hating the thing, is maybe less than the charge of an AA battery.  And the wiring in their brains is such that one would not need some sci-fi mind-reprogramming zap gun, but only send the right signals through their eyes and ears.  I don't know how to do that, but it is absurd to claim that it will never happen.

The point, again, is that all human constructs are astronomically small and fragile; doubly so for virtual constructs; triply so for virtual constructs -- like bitcoin, the euro, or the US democracy -- that depend on a collection of humans behaving in some 'rational' way.  

Bitcoin in particular has already failed in its primary goal.  The network is still churning, and most bitcoiners still believe (or pretend to believe) that it has proven itself robust; yet it is anything but.

Bicoin, as stated by Satoshi, was designed to be a system for p2p transmission of money that does not require trusting a third-party authority.  But his solution, the Bitcoin protocol, does not do that.  The protocol still depends on trusting that the miners who retain a majority of the mining power are interested in preserving the network.

Satoshi apparently assumed that mining would be fairly spread out among the users, who would be well spread out over the world.  From that assumption, one is expected to conclude that any majoritarian subset of the miners would be so large that they would not collude, and could not be coerced, co-opted, or tricked into any particular behavior.  From that assumption, furthermore, one should conclude that there would be a majoritarian subset of the miners who would have a simple, greedy and rational behavior; meaning, that they would choose to play by the rules, if that choice maximized their expected revenue from block rewards and fees.

However, things did not turn out that way, and in retrospect it is perhaps obvious that they couldn't.   The total reward paid to the miners turned out to be large enough to make mining a very profitable activity, provided one could muster a significant fraction of the hashing power.  To maximize his profit, a miner had to increase his total hashing power and lower his operating and capital costs.  As we know, these facts led to the development of hashing ASICs. Economies of scale then made large miners mor eprofitable, and this advantage led to the extreme concentration of mining power that we see today.

The largest miner will usually grow the fastest, so in time it will have a majority of the hashing power all by itself.  The GHash.io pool briefly reached this state, but then it claimed to have voluntarily limited its growth to remove that very visible risk.  Even so, today the 4 largest know mining entities have ~54% of the total hashpower.

I don't know whether this size+technology race has been going on since the very beginning, or whether it started only after the price rose to a certain minimum level.  If Satoshi had chosen a different reward and fee schedule, or if bitcoin had never attracted the attention of speculators and hoarders, then the price today would probably be around 1 $ or less, the total mining reward would be only ~3600 $/day,  and perhaps the race would not have started yet.  However, if bitcoin (or any similar crypto-currency) were to gain widespread use, it would have to reward its miners well in order to ensure a robust network;  and then the size+technology race would occur anyway.

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.  For starters, it can effectively disable the whole network and starve other miners, by selfish mining of empty blocks.  But then it can also use that capability to "convince" most users (including exchanges and payment processors) to accept changes in the protocol (such as extension of the reward schedule and/or increased fees). In the same way, it can convince most other miners to cooperate with the cartel.  These changes would probably include details that further consolidate the power of the cartel and gradually lock the users in, so that they will have to accept more radical changes.  (In general, any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.)

Therefore, it is already a proved fact that the bitcoin protocol does not work. All users now have to trust a 3rd party authority, namely those 4 companies.  These miners must be trusted not to collude, and not be coerced, co-opted, or tricked into violating the network's "terms of service", such as inviolability of accounts, irreversibility, no-double-spending, etc..  That assumption could have been justified for a set of thousands of miners, but not for a set of 4.

It does not matter whether those 4 companies will form a cartel, or will abuse their power.  The mere possibility of them doing so already requires us to trust that they won't.  And it does not matter if they will always seek to gather the most bitcoins, or if they will have other external motives: in fact, the concentration of hashpower, the takeover of the network by a small majority, and the changes of the protocol are all predictable outocomes of the assumption that every agent will behave in a greedy and rational manner.

The price does not matter, too.  It may recover in the next few months, perhaps even go to a new all-time high.  But the only advantage that bitcoin was supposed to have over other payment systems -- not being controlled by a central authority -- is not there. Inevitably, it will lose is "market" to traditional systems; that are just as centralized as bitcoin, but much more efficient.  Even those who love bitcoin because of political idealism will abandon it -- precisely because it does not meet their ideals.

This is not my own view, of course.  This fact has been known for quite some time, and has been pointed out by many critics; and no one has provided a glimmer of hope that this flaw can be corrected.

Among bitcoiners, I still see a lot of denial, with people disputing the ability or willingness of a majoritary cartel to exercise their power, or assuming that a larger coalition of 'rebel' users can prevail over such cartel, or predicting that individual pool members would desert the cartel.

But in the last couple of months I have been seeing also many bitcoiners who seem to have internalized the fact, and are now scrambling to find a way to save their investment -- or at least convince the public, for a while longer, that they have found a solution and are working on it.

EDITS: Grammar and typos
It looks like POS coins might be your thing. What do you think about Bitshares?
afbitcoins
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January 06, 2015, 01:01:11 AM
 #19744

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.

Sorry, I was not blessed with the necessary Faith.   Undecided

Put your feet on the ground again, please, and wake up.  We cannot create anything even remotely similar in robustness and permanence to a new law of physics.  The Bitcoin network is a minuscule hardware and software artifact, that survives only because a few thousand people are willing to keep it working.  If a few hundred (or maybe even a few dozen) of those persons changed their mind, the network would stop.  Or the protocol could be modified, e.g. to randomly toss coins around and make half of them negative, or whatever.

It may seem impossible to get those people to agree to that, because of incentives and bla bla.  But, physically, the energy required to change the neuronal state of a million bitcoiners, so that they start hating the thing, is maybe less than the charge of an AA battery.  And the wiring in their brains is such that one would not need some sci-fi mind-reprogramming zap gun, but only send the right signals through their eyes and ears.  I don't know how to do that, but it is absurd to claim that it will never happen.

The point, again, is that all human constructs are astronomically small and fragile; doubly so for virtual constructs; triply so for virtual constructs -- like bitcoin, the euro, or the US democracy -- that depend on a collection of humans behaving in some 'rational' way.  

Bitcoin in particular has already failed in its primary goal.  The network is still churning, and most bitcoiners still believe (or pretend to believe) that it has proven itself robust; yet it is anything but.

Bicoin, as stated by Satoshi, was designed to be a system for p2p transmission of money that does not require trusting a third-party authority.  But his solution, the Bitcoin protocol, does not do that.  The protocol still depends on trusting that the miners who retain a majority of the mining power are interested in preserving the network.

Satoshi apparently assumed that mining would be fairly spread out among the users, who would be well spread out over the world.  From that assumption, one is expected to conclude that any majoritarian subset of the miners would be so large that they would not collude, and could not be coerced, co-opted, or tricked into any particular behavior.  From that assumption, furthermore, one should conclude that there would be a majoritarian subset of the miners who would have a simple, greedy and rational behavior; meaning, that they would choose to play by the rules, if that choice maximized their expected revenue from block rewards and fees.

However, things did not turn out that way, and in retrospect it is perhaps obvious that they couldn't.   The total reward paid to the miners turned out to be large enough to make mining a very profitable activity, provided one could muster a significant fraction of the hashing power.  To maximize his profit, a miner had to increase his total hashing power and lower his operating and capital costs.  As we know, these facts led to the development of hashing ASICs. Economies of scale then made large miners mor eprofitable, and this advantage led to the extreme concentration of mining power that we see today.

The largest miner will usually grow the fastest, so in time it will have a majority of the hashing power all by itself.  The GHash.io pool briefly reached this state, but then it claimed to have voluntarily limited its growth to remove that very visible risk.  Even so, today the 4 largest know mining entities have ~54% of the total hashpower.

I don't know whether this size+technology race has been going on since the very beginning, or whether it started only after the price rose to a certain minimum level.  If Satoshi had chosen a different reward and fee schedule, or if bitcoin had never attracted the attention of speculators and hoarders, then the price today would probably be around 1 $ or less, the total mining reward would be only ~3600 $/day,  and perhaps the race would not have started yet.  However, if bitcoin (or any similar crypto-currency) were to gain widespread use, it would have to reward its miners well in order to ensure a robust network;  and then the size+technology race would occur anyway.

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.  For starters, it can effectively disable the whole network and starve other miners, by selfish mining of empty blocks.  But then it can also use that capability to "convince" most users (including exchanges and payment processors) to accept changes in the protocol (such as extension of the reward schedule and/or increased fees). In the same way, it can convince most other miners to cooperate with the cartel.  These changes would probably include details that further consolidate the power of the cartel and gradually lock the users in, so that they will have to accept more radical changes.  (In general, any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.)

Therefore, it is already a proved fact that the bitcoin protocol does not work. All users now have to trust a 3rd party authority, namely those 4 companies.  These miners must be trusted not to collude, and not be coerced, co-opted, or tricked into violating the network's "terms of service", such as inviolability of accounts, irreversibility, no-double-spending, etc..  That assumption could have been justified for a set of thousands of miners, but not for a set of 4.

It does not matter whether those 4 companies will form a cartel, or will abuse their power.  The mere possibility of them doing so already requires us to trust that they won't.  And it does not matter if they will always seek to gather the most bitcoins, or if they will have other external motives: in fact, the concentration of hashpower, the takeover of the network by a small majority, and the changes of the protocol are all predictable outocomes of the assumption that every agent will behave in a greedy and rational manner.

The price does not matter, too.  It may recover in the next few months, perhaps even go to a new all-time high.  But the only advantage that bitcoin was supposed to have over other payment systems -- not being controlled by a central authority -- is not there. Inevitably, it will lose is "market" to traditional systems; that are just as centralized as bitcoin, but much more efficient.  Even those who love bitcoin because of political idealism will abandon it -- precisely because it does not meet their ideals.

This is not my own view, of course.  This fact has been known for quite some time, and has been pointed out by many critics; and no one has provided a glimmer of hope that this flaw can be corrected.

Among bitcoiners, I still see a lot of denial, with people disputing the ability or willingness of a majoritary cartel to exercise their power, or assuming that a larger coalition of 'rebel' users can prevail over such cartel, or predicting that individual pool members would desert the cartel.

But in the last couple of months I have been seeing also many bitcoiners who seem to have internalized the fact, and are now scrambling to find a way to save their investment -- or at least convince the public, for a while longer, that they have found a solution and are working on it.

EDITS: Grammar and typos

Excellent commentary very thought provoking

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January 06, 2015, 01:03:38 AM
 #19745

Of course.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 06, 2015, 01:06:17 AM
 #19746

The USD desperately wants to appreciate.

The reason the USD lost so much value over the last century was due, not to base money printing, but to credit expansion, a.k.a debt issuance.

Debt is temporary. It's either repaid, or else defaulted. Either way of resolving debt shrinks the money supply as much as the original issuance expanded it.

As long as the population was growing, and as long as the middle class had positive savings, it was possible to expand credit. Now both conditions are no longer true.

Since it's no longer possible to continue credit expansion, the only way to stop the deflation caused by debt repayment and defaults is to print more base money (QE).

When QE stops, the USD resumes its natural appreciation.

I have to chime in on this one.  Tongue
When debt is created the interest to repay the debt is NOT also created, therefore the entire system is rigged to be a literal PONZI. It is a pyramid scheme in which the only way to repay interest is for more people to go into debt.  Repaying debt doesn't shrink the money supply as much as the original issuance expanded it because the interest added to the debt makes the total debt bigger than the issuance.

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January 06, 2015, 01:07:09 AM
 #19747

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.

In short, no. There is significant power but not absolute power.

http://hackingdistributed.com/2014/06/19/bitcoin-and-voting-power/
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January 06, 2015, 01:14:13 AM
 #19748

It looks like POS coins might be your thing. What do you think about Bitshares?
I know practically nothing about PoS coins; unfortunately the forums I have been reading only mention them to dismiss them.
Do you think that PoS solutions are immune to miner centralization?  Or will centralization only be delayed?

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 06, 2015, 01:24:36 AM
 #19749

It looks like POS coins might be your thing. What do you think about Bitshares?
I know practically nothing about PoS coins; unfortunately the forums I have been reading only mention them to dismiss them.
Do you think that PoS solutions are immune to miner centralization?  Or will centralization only be delayed?
I see centralization-decentralization as a spectrum. With POS the cursor is a lot more toward the decentralization side of the spectrum.

For example with Bitshares there are 101 validating delegates, admittedly a single entity can set up several delegates but if it become problematic the users can fired that entity really quickly.
With NXT I think the entities which together have the power to validate the transactions are several dozens, or even more.

So basically I think POS coins have structurally a better decentralization than PoW coins by almost one order of magnitude, which is huge since there is a non-linearity of the negative effects of centralization (but I am not convinced that the greater centralization of Bitcoin is a fatal flaw).
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January 06, 2015, 01:26:45 AM
 #19750

Your prose is amazingly polished and clear. You are a professor of something. Philosophy is my guess

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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January 06, 2015, 02:14:45 AM
 #19751

It looks like POS coins might be your thing. What do you think about Bitshares?
I know practically nothing about PoS coins; unfortunately the forums I have been reading only mention them to dismiss them.
Do you think that PoS solutions are immune to miner centralization?  Or will centralization only be delayed?

Here are some write-ups on Nxt POS if you care to read.

https://github.com/ConsensusResearch/articles-papers/tree/master/articles
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January 06, 2015, 02:33:50 AM
 #19752

The USD desperately wants to appreciate.

The reason the USD lost so much value over the last century was due, not to base money printing, but to credit expansion, a.k.a debt issuance.

Debt is temporary. It's either repaid, or else defaulted. Either way of resolving debt shrinks the money supply as much as the original issuance expanded it.

As long as the population was growing, and as long as the middle class had positive savings, it was possible to expand credit. Now both conditions are no longer true.

Since it's no longer possible to continue credit expansion, the only way to stop the deflation caused by debt repayment and defaults is to print more base money (QE).

When QE stops, the USD resumes its natural appreciation.

Exactly with an additional subtlety. Not only does the Fed have to print, they have to stimulate confidence because they can never print enough to fill the debt hole  and especially the derivatives mountain. If anything, the last 6 years has shown dubious levels of confidence, if any, along with demonstrably worse real wage growth. The Internet has spawned nearly instantaneous documentation of all the stealing going on.

The last few ramps this year have been nearly vertical short squeezes by the invisible hand which shows increasing desperation, imo. Now is the time to be cautious.  

sidhuajag, I really don't think you're gonna find your masses piling into a final blow off top.
What makes you think its over fundamentally? The flash crash looked like it was over but the fed didnt let it happen...

It may consolodate until next leg up until rates rise enough to become unsustainable..

Usd and stocks will return to positive correlation as they are doing now which means the real bull may just be getting started. I have 32k on dow as first target.

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January 06, 2015, 02:49:28 AM
 #19753

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.
In short, no. There is significant power but not absolute power.
http://hackingdistributed.com/2014/06/19/bitcoin-and-voting-power/

I read that article before.  It is mistaken; users do not have voting power, because their only options are give in to the cartel or lose their coins.  Note that any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.

This paper is more correct, as far as I can tell: 
http://hackingdistributed.com/2014/06/16/how-a-mining-monopoly-can-attack-bitcoin/

And here is my attempt to describe in more detail how the cartel could force a change of protocol that benefits miners:

http://www.reddit.com/r/Bitcoin/comments/2qdfat/without_downvoting_me_to_hell_can_someone_explain/cn5s41z
http://www.reddit.com/r/Bitcoin/comments/2qmfgw/so_warren_buffet_says_bitcoin_is_bs/cn82t3q
http://www.reddit.com/r/Bitcoin/comments/2qmfgw/so_warren_buffet_says_bitcoin_is_bs/cn7rxz1

Discussion of the "51%" risk often seem to assume that the attacker wants to either destroy bitcoin or to pull some scam, like a large double-spend, and then run away with the loot.  However, monopolies usually try to use their power to maximize their gains in the long term, and are careful to not kill their cash cows -- which does not prevent them from doing many nasty things.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 06, 2015, 02:50:40 AM
 #19754

Your prose is amazingly polished and clear. You are a professor of something. Philosophy is my guess
Uh, thanks! Yes, a prof of Computer Science, at a public univ in Brazil.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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Let's talk governance, lipstick, and pigs.


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January 06, 2015, 02:50:54 AM
 #19755

Since PoS was mentioned I'll just deposit this as well.

PoS threatens human rights.

1. It's trickle down economics, or voodoo economics as POTUS 41 phrased it
2. No room for technological innovation, it's rigged for early adopters only.
3. Closed universe that can arbitrarily exclude groups of people with no entry point.
4. Can be secretly and permanently monopolized with no detection mechanism. No free market possible.
5. Deceptive practices to spoof decentralization can promote extortion and human traficking.

edit: Bitcoin mining pools also threaten human rights, but not the protocol itself.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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January 06, 2015, 03:01:43 AM
 #19756


I read that article before.  It is mistaken; users do not have voting power, because their only options are give in to the cartel or lose their coins.

how can you be so blind as to not see there is a 3rd option for users which prevents the miners from exercising this cartel gambit:  SELL.

if users get the sense that there is any funny business going on with the fundamental process of fairness and honesty that was "sold" to them in the first place when researching open source, transparent Bitcoin, they will "get out" by selling their coins.  this would crash the price and all the profits the miners were hoping to harvest would vanish in a second along with the multi-millions they invested in their mining equipment.  we know this b/c it is a voluntary system that has grown from nothing precisely b/c of these promises.  which is, btw, why i have such a problem with BS inserting a change into the source code meant precisely to benefit their business model.
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January 06, 2015, 03:09:44 AM
 #19757

It looks like POS coins might be your thing. What do you think about Bitshares?
I know practically nothing about PoS coins; unfortunately the forums I have been reading only mention them to dismiss them.
Do you think that PoS solutions are immune to miner centralization?  Or will centralization only be delayed?

while certainly eloquent, you admittedly and surprisingly have very little knowledge about many of the ancillary branches surrounding Bitcoin.  before making rash judgments about Bitcoin, you'd be wise to research and understand how these alternative systems fit into and interact within the cryptocurrency space.  by doing that, you will get a much bigger and more accurate picture of how Bitcoin compares and contrasts. this is very critical information b/c one of the cardinal investment principles that i often parrot around here is that "most investors in the cryptocurrency space are going to lose money".  i say that b/c i have significant experience investing in markets and this seems to be a universal rule.  it makes sense b/c not everyone can get rich, not even most everyone.  in fact, only a small %.  bull mkts buck most investors off several times on the way to their tops.  which is why we have, for the most part, a small % elite class in every country you might care to name (ignoring of course crony capitalism).  once you realize that so many ppl are losing money on so many altscams you realize that the simplicity of Bitcoin is a beauty to behold and has fooled so many ppl, esp geeks, who think their time has come and they can design and deserve their own money making systems that cannot possibly lose since Bitcoin and tech are right up their alley.  it's quite striking.
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January 06, 2015, 03:42:39 AM
 #19758

Your prose is amazingly polished and clear. You are a professor of something. Philosophy is my guess
Uh, thanks! Yes, a prof of Computer Science, at a public univ in Brazil.

prof. bitcoin troll. ... all of your claims in that lengthy (worthless) prose are unsubstantiated of course.

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January 06, 2015, 04:09:36 AM
 #19759

Your prose is amazingly polished and clear. You are a professor of something. Philosophy is my guess
Uh, thanks! Yes, a prof of Computer Science, at a public univ in Brazil.

prof. bitcoin troll. ... all of your claims in that lengthy (worthless) prose are unsubstantiated of course.

A Taxonomy of the Troll

Class B bitcoin troll (lat.  trollus averagus)

-How to recognize: bait-and-switch thread titles and well-executed concern trolling; methods designed to fool the reader into thinking the troll is a non-troll.  

-Recommended response: agree with everything they say in a satirical way.  Their arguments are usually so flawed that simply rephrasing back what they said will reveal their lunacy.  This technique is especially effective if the troll doesn't recognize this attack vector until he's already sunken his ship.

-Examples: Nagle, JorgeStolfi, Edward50

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January 06, 2015, 04:19:25 AM
 #19760

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.
In short, no. There is significant power but not absolute power.
http://hackingdistributed.com/2014/06/19/bitcoin-and-voting-power/

I read that article before.  It is mistaken; users do not have voting power, because their only options are give in to the cartel or lose their coins.  Note that any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.

You need to read it again, until you understand it.

If a cartel of miners tried to block all transactions, there would be code for a hard fork within 3 hours making some trivial change to the PoW that rendered the current mining industry worthless and the hard fork itself would probably happen within a few days. And then life would continue on as usual, except that the next set of miners would know how suicidal such a move would be (and on a more contemplative schedule further changes would be made).

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