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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 2009746 times)
cypherdoc
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January 06, 2015, 03:12:13 PM
 #19761

pretty soon they'll be giving the stuff away:



hey, but as long as gubmint gets theirs:

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January 06, 2015, 04:45:23 PM
 #19762

Dow -141
Adrian-x
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January 06, 2015, 05:25:37 PM
 #19763

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 thought the blockchain and the currency couldn't be separated. Can a blockchain exist without having a token to secure it? (or have I misinterpreted the entire thing - long day)

No.  The currency and the blockchain cannot be separated.  A blockchain without a currency has no security.

yep, this is the correct view.

just goes to show you how early we all are.  even our greatest public proponent seems not to get it.

The way I understood it is, we give value to BTC, because it's the way we interface with the value stored on the blockchain. Money is memory (memory is the blockchain)

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
JorgeStolfi
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January 06, 2015, 05:51:55 PM
 #19764

The fundamental issue is that the centralization, which is inherent in Bitcoin, is incredibly minuscule when compared to EVERY OTHER FORM OF MONEY with its almost nonexistent barrier to entry.  It is the reason many of us like it.  Governments are busy trying to set up barriers for people to be their own banks with Bitcoin and force people to use the current banking cartels, but ultimately it is a bit difficult to prevent so long as it is easy to download and run a node..

I fully agree that the banking sector is an oligopoly.  And the same is true of the economy in general.  And centraliaztion of the economy invariably results in centralization of political power and collapse of the democracy.

But I do not agree that bitcoin is somehow different from banks. Because:

* The same economic process that created the banking oligopoly has already created a mining oligopoly; namely, the big fish grows faster than the smal fish, and may even eat it.

* The mechanisms that are supposed to protect the bitcoin users and the protocol from abuse by the dominating cartel do not work:

** Acting in its self-interest, the cartel will be careful not to destroy its market, but will try to maximize its gain in the long term;

** The cartel will charge monopoly-level prices and provide monopoly-quality service;

** Users who object to the cartel have no alternative except to do without the service, or to use a much inferior one;

** For that reason, most users just accept the cartel as a fact of nature, and even try to be friends with it;

** For that reason, the cartel can define and change its terms of service, and not even a supermajority of the users can stop them;

** New providers (banks or miners) who want to enter the market and survive must submit to the cartel;

** Therefore, unhappy users may take their money to another bank or miner, but cannot break free of the cartel's power;

And so on.

By the way, a majority cartel could, by following the same script outlined in my reddit post, also undo the Bitstamp heist.  All it needs to do is block withdrawals from that address (which it can do immediately and unilaterally, by its veto power), and then force the users to upgrade to a version of the software that includes a built-in table of exceptions: transactions that violate the normal rules, but should be considered valid anyway.  For the time being, that table would have only one transaction, moving those 18'000 coins from the thief's address to the new Bitstamp's address.  The input would have 'FuckAllThieves' as the signature; which of course is not valid for that address, but the exception table will override that. 

This change to the protocol will surely cause more revolt among the fundamentalist users than the mere extension of the reward schedule.  On the other hand, it would be much easier to justify to the general users, since it would undo what is universally viewed as a crime, redress the loss of the victims, and create a powerful deterrent of future bitcoin thefts.  In fact, this hack will probably make bitcoins more valuable, increase adoption, appease hostile governments, etc. etc..  And the non-ideological users are already used to the banks doing that sort of thing.

And you can see how this will end.

The fact is, you do not really own your bitcoins, even if you are the only person who knows their private keys. Since bitcoins cannot exist outside the blockchain, they are actually owned by the miners.  Your bitcoins will stay or move only if and where the miners are willing to keep or move them.  At present, the miners will only move coins  if they get a transaction request with the proper signature.  However, if a majoritary subset of the miners agrees to do something else, they will have the power to force the users to accept it -- as long as it is less harmful to the general user than being cut off from the service.

Just like them banks.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
cypherdoc
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January 06, 2015, 06:16:20 PM
 #19765

Jorge, why do you keep ignoring the data?  in fact, this chart has been distributing out more evenly for over a year now:

cypherdoc
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January 06, 2015, 06:18:15 PM
 #19766

Dow -202
JorgeStolfi
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January 06, 2015, 06:47:41 PM
 #19767

Jorge, why do you keep ignoring the data?  in fact, this chart has been distributing out more evenly for over a year now:


The 4 largest named slices already add to more than 51%.  That is why I used "4" in my posts.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
msin
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January 06, 2015, 06:57:39 PM
 #19768

Jorge, why do you keep ignoring the data?  in fact, this chart has been distributing out more evenly for over a year now:


The 4 largest named slices already add to more than 51%.  That is why I used "4" in my posts.

What is your number threshold for a amount of combined pools over 51% in which you would feel safe? 10, 20, 100?  I don't think it would be hard to get 100 mining pools to conspire together.
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January 06, 2015, 07:03:31 PM
 #19769

Jorge, why do you keep ignoring the data?  in fact, this chart has been distributing out more evenly for over a year now:



So GHash.IO decided to split into several pieces to stop scaring bitcoin noobs? Very smart...
cypherdoc
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January 06, 2015, 07:23:51 PM
 #19770

keep buying
rocks
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January 06, 2015, 07:52:24 PM
 #19771

** For that reason, the cartel can define and change its terms of service, and not even a supermajority of the users can stop them;

That is the crux of your argument and it is so simply not true on many levels.

It is the P2P node network which validates and protects the integrity of the network, not miners. The miners only determine _ordering_ of transactions on the blockchain. That is how the system works.

A mining cartel can not change the terms of service, even if they have 51% or 90% of hash power. If they change the terms of service the blocks they produce would be considered invalid and rejected by the P2P network. Maybe network confirmation times would run a little slower until the next difficulty adjustment, but that would be the only impact.

About the only thing a mining cartel could do is refuse to _confirm_ certain transactions (such as black listed addresses). But unless the cartel has 100% of has power, which is impossible, these transactions would simply wait for an honest miner's block. And even this has simple solutions which Gavin and others have proposed and have ready if needed (such as including the economic value of a block's transactions in addition to difficulty, this would lower the height/priority of chains that do not include all the transactions that honest miners are including).

On top of this the miner centralization issue is not a long term problem anyway. The system will naturally decentralize over time. With the introduction of ASICS it was difficult to obtain hardware and professional setups had an advantage in procurement only. However centralized mining installations in datacenters naturally are at a cost disadvantage vs. home style setups which have free space and cooling. As the ASIC market matures I think we'll seem a shift back towards more decentralized mining anyway. Computing used to be the same way, at first we only had large centralized mainframes, today your average US home probably has 30+ processors in their house without even realizing it.

The only part that will remain centralized are pools, here the market tends to settle on 2-5 main pools historically. But pools are not a threat in regards to centralization, if any decided to cause issues the vast majority of their users would simply switch to a different pool. Attacks by pools are only effective at destroying the business model of the pool itself.
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January 06, 2015, 07:54:28 PM
 #19772

(such as including the economic value of a block's transactions in addition to difficulty, this would lower the height/priority of chains that do not include all the transactions that honest miners are including)
That doesn't sounds like a very good idea.

You've just described turning Bitcoin into a proof of stake system.
smooth
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January 06, 2015, 07:57:33 PM
 #19773

I haven't read your reddit posts so I can't comment on those.

Well, I see now why you keep claiming that millions of users would revolt.

You're rhetoric is utterly ridiculous.

Upgrading a piece of software is not "revolt." People upgrading in response to an instance of obvious abuse are not "rebels," they are ordinary users.

Quote
In that scenario that I described, the "protective improvement"  to the protocol would be proposed by the cartel sometime before the next halving.  By that time, the network will still be supported by money from the new adopters who buy the coins produced by the miners.  Which coins would those new users rather buy: cartelBTCs, that live on the largest network built by man, using (almost) the same protocol designed by Satoshi, wich has been tested for more than 6 years; or rebelBTCs, that live on a small CPU/GPU network, using a radically different protocol that was patched together in three days and has been in used for less than a month?

You are completely confused. New users would be the ones with the easiest upgrade path -- just install the current version. Furthermore they would want the version of software that interoperates with all the other users.

Users don't care about mining, and every wave of bitcoin users cares even less. Your whole mining-centric view of bitcoin is as bad as the people who see mining and immediately respond "free money from the interwebs!"

In fact your "cartel" has much more to lose from attempting to do this. Not only the potential loss of their equipment value, but simply the guaranteed value at risk of burning electricity to accomplish that might not work.

Finally, a CPU/GPU network supporting bitcoin would be neither small nor insecure. It wasn't then (during the GPU and CPU eras) and it wouldn't be now. It is easy to make silly comments about "the cartel would just rent cloud mining and attack the network" if you have never seen what happens in the cloud mining market when even a small altcoin shows a bit of success. Let me give you a hint to get you started: most of available cloud mining capacity (and it isn't really that much) would already be mining bitcoin honestly (for mining profits).




rocks
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January 06, 2015, 08:02:25 PM
 #19774

(such as including the economic value of a block's transactions in addition to difficulty, this would lower the height/priority of chains that do not include all the transactions that honest miners are including)
That doesn't sounds like a very good idea.

You've just described turning Bitcoin into a proof of stake system.

Gavin had a decent description of it (and other solutions) to address the possibility of 51% attack that withheld transactions a couple years ago, but I couldn't quickly find it.

It's definitely not a POS system though, mining still relies on hashing that anyone can participate in. It would only provide an additional priority advantage to blocks with more transactions in them. If all miners include all transactions in the P2P memory pool then its the same as what we have today. If an attacker decided to withhold transactions, then they'd be at a disadvantage and need progressively more than 51% of total hashing power as they processes less and less transactions.

POS provides rewards proportional to the amount of currency already owned/controlled. The scheme above is not influenced by the amount of currency owned/controlled, so it's definitely not POS.
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January 06, 2015, 08:07:02 PM
 #19775

But unless the cartel has 100% of has power, which is impossible, these transactions would simply wait for an honest miner's block.

This is incorrect. A cartel with a high percentage could, within the protocol, reject blocks that don't follow its transaction inclusion rules. It doesn't take 100% to completely block some or all transactions from the chain.

Quote
On top of this the miner centralization issue is not a long term problem anyway. The system will naturally decentralize over time. With the introduction of ASICS it was difficult to obtain hardware and professional setups had an advantage in procurement only. However centralized mining installations in datacenters naturally are at a cost disadvantage vs. home style setups which have free space and cooling. As the ASIC market matures I think we'll seem a shift back towards more decentralized mining anyway.

This has probably already happened to some extent. The physical (as opposed to pool) mining is somewhat centralized. It was even during the CPU and GPU eras -- specialists build big mining farms (Satoshi is rumored to have had a pretty nice one), the rest don't. But the early ASIC era when there was only a relatively small quantity of gear in the world that represented the bulk of all of the hash power made matters much worse (when ghash had 50% a large portion of that was their own actual equipment), but only temporarily. That kind of transition will likely never happen again.



smooth
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January 06, 2015, 08:10:11 PM
 #19776

(such as including the economic value of a block's transactions in addition to difficulty, this would lower the height/priority of chains that do not include all the transactions that honest miners are including)
That doesn't sounds like a very good idea.

You've just described turning Bitcoin into a proof of stake system.

Gavin had a decent description of it (and other solutions) to address the possibility of 51% attack that withheld transactions a couple years ago, but I couldn't quickly find it.

It's definitely not a POS system though, mining still relies on hashing that anyone can participate in. It would only provide an additional priority advantage to blocks with more transactions in them. If all miners include all transactions in the P2P memory pool then its the same as what we have today. If an attacker decided to withhold transactions, then they'd be at a disadvantage and need progressively more than 51% of total hashing power as they processes less and less transactions.

POS provides rewards proportional to the amount of currency already owned/controlled. The scheme above is not influenced by the amount of currency owned/controlled, so it's definitely not POS.

Are you referring to the IBLT proposal? That would indeed make miners' blocks propagate faster if they include the same set of transactions instead of trying to make their own rules. However, it wouldn't really help in the case of a large cartel, since the cartel's miners would all use the same rules, so it is the others mining (using for example the current largely non-discriminatory rules) that would actually suffer.

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January 06, 2015, 08:11:42 PM
 #19777

(such as including the economic value of a block's transactions in addition to difficulty, this would lower the height/priority of chains that do not include all the transactions that honest miners are including)
That doesn't sounds like a very good idea.

You've just described turning Bitcoin into a proof of stake system.

Gavin had a decent description of it (and other solutions) to address the possibility of 51% attack that withheld transactions a couple years ago, but I couldn't quickly find it.

It's definitely not a POS system though, mining still relies on hashing that anyone can participate in. It would only provide an additional priority advantage to blocks with more transactions in them. If all miners include all transactions in the P2P memory pool then its the same as what we have today. If an attacker decided to withhold transactions, then they'd be at a disadvantage and need progressively more than 51% of total hashing power as they processes less and less transactions.

POS provides rewards proportional to the amount of currency already owned/controlled. The scheme above is not influenced by the amount of currency owned/controlled, so it's definitely not POS.
http://gavintech.blogspot.ch/2012/05/neutralizing-51-attack.html

SCs will help too, it will be backup network :-)
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January 06, 2015, 08:13:13 PM
 #19778

What is your number threshold for a amount of combined pools over 51% in which you would feel safe? 10, 20, 100?  I don't think it would be hard to get 100 mining pools to conspire together.

There is no fixed number, of course. Rather, as the number of independent entities in a majority set of miners increases, their interest will be more aligned with the interest of the users.  (This is true of democracy too, by the way.)

In the case of bitcoin, one additional problem is that bitcoin ownership is highly concentrated too, and the largest holders are not miners.  So, even if the protocol were somehow fixed to require consensus of all miners (instead of just a set with 51% power), the miners would still be largely disjoint from the users, whether one counts people or bitcoins held.  So the miners might still change the protocol to increase their revenue at the expense of the users.  (Would PoS be a partial solution to this problem?)

The likelyhood of getting N mining entities to cooperate with a protocol change attempt depends also on the benefit that the miners will get from it.  For example, I would guess that nearly all of them would approve a postponement of the next reward halving.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
smooth
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January 06, 2015, 08:17:32 PM
 #19779

The likelyhood of getting N mining entities to cooperate with a protocol change attempt depends also on the benefit that the miners will get from it.  For example, I would guess that nearly all of them would approve a postponement of the next reward halving.

Then by your reasoning guessing, it should be almost guaranteed to happen.

How about a friendly wager that the next block halving happens right on schedule? I'll be generous and make it an even-odds bet, although for something almost guaranteed to happen you might as well give me some nice odds for betting against it.



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January 06, 2015, 08:32:08 PM
 #19780

But unless the cartel has 100% of has power, which is impossible, these transactions would simply wait for an honest miner's block.

This is incorrect. A cartel with a high percentage could, within the protocol, reject blocks that don't follow its transaction inclusion rules. It doesn't take 100% to completely block some or all transactions from the chain.
A miner does not reject blocks, a miner can only build on top of a chain of blocks.

What you are describing is an attacking miner only building on top of their blocks and not on top of any blocks. That is the very definition of a 51% miner attack. The reason an attacking miner needs 51% is so their chain, that only includes their blocks with their inclusion rules, grows faster than the rest of the network.

There are two possible paths here.
1) There are two competing chains where one chain has only the attacker's blocks and the other chain has the honest miner's blocks. The goal of the attacker is to make their chain with their inclusion rules the longest. The network here can optionally choose the honest chain (which is what Gavin's proposal does). It also require 51% to pull off, which I don't think is possible anyway.
2) The blocks from both the attacker and honest miners build on top of each other in a single chain. In this this situation the honest miners include all transactions skipped by the attacker, and the attack fails.
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