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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 1866320 times)
sickpig
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January 06, 2015, 11:55:35 AM
 #19781

Aww, give him a break, it is a public Uni, so government payroll and in a country arguably even more socialist than the US.  It is a handicap difficult for most to overcome, at least until they are tenured.
We can't expect him to even nibble at the hand that feeds him.  Even though the criticisms are fairly speculative, at least he is looking at it.

I am already tenured, actually, so I could badmouth the government at will (which in fact I do) with no risk.  

But of course I can't expect someone who is invested in bitcoin to admit that its future is in danger.  Wink


Really? I think that a good investor would be thankful to anybody that let him knows he's losing his  bet. Maybe you think tha all (?) people who bought Bitcoin are blind to the truth.

Bitcoin is a participatory system which ought to respect the right of self determinism of all of its users - Gregory Maxwell.
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smooth
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January 06, 2015, 12:27:55 PM
 #19782

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).

So, according to that post, the cartel cannot force the users to do a compatible change the protocol because the users who do not want any change to the original protocol would immediately agree to make an incompatible change to the protocol.  Makes sense...

Read the bold portion (which was quoted from your earlier post) and try again.

Quote
That hard fork would of course prevent *all* existing miners, including the faithful ones, from working on the 'born-again orthodox' chain.  That chain would be no different from any other junk altcoin with a tiny CPU-based network.

Actually it would be quite different from a junk altcoin because it would have the support of a few million bitcoin users and all of the rest of the economy that actually wants transactions to happen. Junk altcoins have tiny networks and are insecure because there is no value to motivate mining. That would not be the case with a bitcoin hard fork done in response to miner misbehavior. It would retain at least a large portion of the value of bitcoin (some value loss would likely occur, at least temporarily, in this "war" scenario), and therefore would attract a large and strong mining network. It can't be any other way with thousands of dollars up for grabs every ten minutes.

Quote
The cartel probably would have enough money to rent cloud computing and jam that rebel bitcoin chain too.

Unlikely, they would be too busy explaining to their investors why their stupidity just blew up a few hundred million dollars or more of the investors' money. I highly doubt that cartel would find itself awash in new funding.

Quote
Even if the rebel fork survives, it will in time see its mining get centralized again.  That is, users may escape from *that* cartel, but not from the centralization of mining itself.

You are still missing the point. Some degree of centralization does not give miners absolute power. Miners are participants in the overall economy certainly, significant ones, and it stands to reason they would have some influence, but not the ability to make demands under threat of stopping all transactions.

I haven't read your reddit posts and I'm not particularly interested in doing so until you demonstrate at least the ability to make a logical argument without changing your premise mid-stream, so I can't comment on those.



JorgeStolfi
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January 06, 2015, 01:05:46 PM
 #19783

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.

Actually [the rebel hard fork] would be quite different from a junk altcoin because it would have the support of a few million bitcoin users and all of the rest of the economy that actually wants transactions to happen.
But the easiest and safest way to retain access to one's bitcoins and keep issuing transactions, secured by 99% of the current network power, will be to upgrade to the cartel's version, not to the rebel version.

[ ... ] a bitcoin hard fork done in response to miner misbehavior. It would retain at least a large portion of the value of bitcoin (some value loss would likely occur, at least temporarily, in this "war" scenario), and therefore would attract a large and strong mining network. It can't be any other way with thousands of dollars up for grabs every ten minutes.

Recall that the change made by the rebels is such that the cartel cannot mine their fork.  That means that no off-the-shelf mining equipment will be able to mine it either.  The rebel network would have to rely on CPU and GPU mining for months, until manufacturers start selling equipment for it.

The value of the BTC money base will be divided into two currencies, cartelBTC and rebelBTC.  Every bitcoin owner will start off with equal amounts of both, and can choose to issue transactions in either network, or even in both of them.   So their self-interest will not automatically push them to side with the rebels and boycott the cartel.

Quote
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The cartel probably would have enough money to rent cloud computing and jam that rebel bitcoin chain too.

Unlikely, they would be too busy explaining to their investors why their stupidity just blew up a few hundred million dollars or more of the investors' money. I highly doubt that cartel would find itself awash in new funding.
The cartel will have nearly 100% of the existing mining equipment working for them.  It is the rebels who will have to convince investors to build an EH/s network from scratch.

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?

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
JorgeStolfi
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January 06, 2015, 01:20:49 PM
 #19784

Aww, give him a break, it is a public Uni, so government payroll and in a country arguably even more socialist than the US.  It is a handicap difficult for most to overcome, at least until they are tenured.
We can't expect him to even nibble at the hand that feeds him.  Even though the criticisms are fairly speculative, at least he is looking at it.
I am already tenured, actually, so I could badmouth the government at will (which in fact I do) with no risk.  
But of course I can't expect someone who is invested in bitcoin to admit that its future is in danger.  Wink
Really? I think that a good investor would be thankful to anybody that let him knows he's losing his  bet. Maybe you think tha all (?) people who bought Bitcoin are blind to the truth.

Sorry, you are right.  Indeed I see many bitcoiners who are aware of and worried by the centralization issue.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
igorr
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January 06, 2015, 01:32:32 PM
 #19785

Bitstamp is dead !!!

https://www.bitstamp.net/


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Славься, Отечество наше свободное,
Братских народов союз вековой,
Предками данная мудрость народная!
Славься, страна! Мы гордимся тобой!
cbeast
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January 06, 2015, 01:48:00 PM
 #19786

Aww, give him a break, it is a public Uni, so government payroll and in a country arguably even more socialist than the US.  It is a handicap difficult for most to overcome, at least until they are tenured.
We can't expect him to even nibble at the hand that feeds him.  Even though the criticisms are fairly speculative, at least he is looking at it.
I am already tenured, actually, so I could badmouth the government at will (which in fact I do) with no risk.  
But of course I can't expect someone who is invested in bitcoin to admit that its future is in danger.  Wink
Really? I think that a good investor would be thankful to anybody that let him knows he's losing his  bet. Maybe you think tha all (?) people who bought Bitcoin are blind to the truth.

Sorry, you are right.  Indeed I see many bitcoiners who are aware of and worried by the centralization issue.
Yes we are very aware of the centralization of banks. That's why they are called Central Banks.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
msin
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January 06, 2015, 01:53:36 PM
 #19787

you could say that regardless of how decentralized bitcoin is or was, it always relies on miners (pools) to secure the blockchain, whether this is 4, 40, 400, 4000 etc.. regardless of the #, they could at any time decide to collude for 51% hashing power.  There is no incentive for pools to conspire and regardless of the number of pools needed to reach 51%, there will always be a certain # of pools that "could" conspire.  There are 4 US banks that could conspire to destroy the USD, but what incentive do they have to do so?

The largest banks clearly conspire, as an explicit or tacit cartel, to obtain maximum profit.  That is one reason why bank fees are so high compared to the actual costs (including fraud damages) and large banks are so obscenely profitable.

The correctness of the bitcoin protocol apparently was based on the implicit assumption that a sufficiently large number of users would have sufficient hashpower to fight attacks, and, having a vested interest in the health of the network, would want to do so.  (It is the same assumption used to justify democracy with frequent direct elections.)  That assumption is not valid if there are 4 mining entities that hold the majority of the hashpower, and are not even significant holders of bitcoins.

Yes, but these are pools are made up of thousands of participants who can at any time redirect their hashing power.  Pools are setup only for consistency of income.
MarketNeutral
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January 06, 2015, 02:28:48 PM
 #19788

19,000 BTC gone? Damn. That's painful.
NewLiberty
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January 06, 2015, 02:42:59 PM
 #19789

Aww, give him a break, it is a public Uni, so government payroll and in a country arguably even more socialist than the US.  It is a handicap difficult for most to overcome, at least until they are tenured.
We can't expect him to even nibble at the hand that feeds him.  Even though the criticisms are fairly speculative, at least he is looking at it.

I am already tenured, actually, so I could badmouth the government at will (which in fact I do) with no risk.  

But of course I can't expect someone who is invested in bitcoin to admit that its future is in danger.  Wink

Great.  Everyone has expectations.   You should be able to look deeper too.  Get past these little issues.
The centralization of the pooling is only one layer of the mask.  There is also centralization of the mining, and centralization of ASIC production, core dev centralization.

Each layer is a problem and has a risk of cartelling.  The Nash equilibrium inherent in the incentive structure doesn't prevent any centralization, it merely makes it less likely, given merely economic incentives.
If Bitcoin ever becomes meaningful enough to threaten any of the real power structures in play, the game changes.

So your critique is pretty thin, we're not only aware of the issues, some of us get pretty noisy when one of them gets amplified.  This is one of the ways that the risks are addressed.   Because the block chain is right out in the open, so much of this is visible and addressable as it happens.  

The fundamental issue is that the centralization that concerns you, and 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.

You are worried that Bitcoin is not better at the thing that it happens to be pretty good at, such that it beats every other choice?

The "perfect" will always be the enemy of the "good".
We'd all like perfect, but if you wait for it, you miss what's good.

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cypherdoc
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January 06, 2015, 03:12:13 PM
 #19790

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
 #19791

Dow -141
Adrian-x
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January 06, 2015, 05:25:37 PM
 #19792

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
 #19793

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
 #19794

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

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January 06, 2015, 06:18:15 PM
 #19795

Dow -202
JorgeStolfi
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January 06, 2015, 06:47:41 PM
 #19796

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.
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January 06, 2015, 06:57:39 PM
 #19797

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
 #19798

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...
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January 06, 2015, 07:23:51 PM
 #19799

keep buying
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January 06, 2015, 07:52:24 PM
 #19800

** 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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