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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 2022644 times)
smooth
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January 07, 2015, 05:20:11 AM
 #19821

Even if they were to fail in the attempt (how, I cannot see)

It will fail because the community will press what Adam calls the Big Red Button and hard fork.

Your cartel will lose the transaction fees they didn't earn when rejecting transactions on the original chain. They will also lose the value of the mining gear (and other brand value associated with their mining businesses). I doubt the community would go so far as to hard fork retroactively (eliminating the mining rewards from the empty attack blocks), but that is also possible, so its a risk the cartel would face.

You don't have to believe that individual end users would be behind this (I argue they will simple update their software from whatever its original source, which in no case of which I'm aware includes miners), but that the rest of bitcoin industry -- coinbase, bitpay, venture capital firms, hedge funds, etc. -- certainly would support it. They have nothing to gain and everything to lose from ceding power over the network to miners.

It is exactly this Big Red Button that will keep the future you describe from ever happening. Since your model fails to contain a mechanism that would prevent the outcome you predict, and that outcome will not occur, your model must be missing something. If it is not the Big Red Button that is missing from your model, what is it?

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January 07, 2015, 05:25:25 AM
 #19822

...
What would happen in your example is the millions of bitcoin participants would tell that one miner to take a hike and continue with the existing P2P core protocol. Then when that miner started to produce nonconforming 25BTC blocks, they would simply be rejected out of the P2P network as invalid, and the honest network would carry on. The attacking miner could have 95% of hash power and it wouldn't matter, his blocks would be rejected as nonconforming and the network would simply re-adjust to the 5% remaining.
...

IIRC that actually did happen at the 50BTC->25BTC juncture.  What you 'predict' is about exactly what happened I think but I was not paying that close of attention.  Whatever happened it was a blip and over within hours or days.

Back then though more Joe Sixpacks were running transfer nodes...I was at the time but I've since stopped (in part because I'm behind a satellite connection and the blockchain represents several months of my data allowance.)  edit - Nowadays with most people running Multibit, most people may not know (or much care) what chain they might be following in a stolfi-type attack scenario.  But then again they may...I don't know the precise details and capabilities of Multibit.


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January 07, 2015, 05:28:56 AM
 #19823


I understand "success" as "the bitcoin protocol provides a P2P payment system that does not require trust in a third-party authority".

We now know that the bitcon protocol does not provide that.  The protocol requires users to trust the miners; which is OK, as long as mining power is sufficiently well distributed over thousands of independent entities, benign or short-term greedy.   However, the protocol cannot prevent concentration of mining, and in fact forsters it.  Once mining is concentrated in a small number of companies, having to trust them is no longer OK.

OK lets all jump on Jorge,  Smiley

Jorge you're not expressing a sound understanding of Bitcoin.
Miners, in order to have a block accepted must follow the rules of the protocol.
The protocol rules are maintained by the p2p network of nodes.
Nodes are maintained by those who have an invested interest in the blockchain's integrity.

We hardly need to trust miners given the incentives, or the economic cost to participate but not cooperate. From my understand even if there were very few centralized miners the incentives would still provoke cooperation.

To your credit that balance is not well understood by the community or some of the core developers, mainly those accredited to authoring the SideChains white paper.

When If miners are enabled (entrusted) by the Bitcoin protocol to interoperate with other blockchains (SideChains) to process Bitcoin equipment transactions that do not registered the full transaction ledger in the Bitcoin blockchain, or conform with the Bitcoin protocol, (ie some SC with a feature not supported by the native Bitcoin protocol) then we can assume the quoted passage above to be correct.

While it's the nodes and not the miners that maintain the features in the Bitcoin protocol, the p2p payment network and the incentives that motivate miners and keep them cooperative is successful by your definition.

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Adrian-x
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January 07, 2015, 05:31:28 AM
 #19824

I'm still waiting for an answer on my bet.

I don't bet money if I can avoid it.  (That is one of the reasons why I do not own bitcoins.)

So Bitcoin is money?  Smiley

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January 07, 2015, 05:36:50 AM
 #19825

So Bitcoin is money?  Smiley

See the level he's dragged you down to?
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January 07, 2015, 05:38:39 AM
 #19826

I'm still waiting for an answer on my bet.
I don't bet money if I can avoid it.  (That is one of the reasons why I do not own bitcoins.)
Talk is cheap. Keep on trollin.

What difference would the bet make?

I am not claiming that my hunch about the future is better than you faith.  I am not making predicitons.  As I already said, the survival of the network and the price of BTC are not the issue. 

I claimed that the bitcoin protocol does not provide a decentralized p2p payment scheme.  That should be obvious from the fact that 51% of the hash power is controlled by a handful of companies.  Mining is now centralized; that is a fact.

People have retorted that it is not really centralized because the piechart changes over time; or that GHash was forced to shrink.  Do I need to explain again why those facts are irrelevant?

People have claimed that a 51% cartel could not do anything except jam the network.  That is false, it is well known that they can do many nasty things besides just jamming. 

People claimed that a 51% cartel cannot do harm because the users decide which blocks are valid, so the miners cannot do anything against the will of the majority of the users.  That is false, and I explained why.

I observed that an entity that can jam a process can force users to accept changes to that process.  In particular, I observed that a 51% cartel can force a change in the protocol.  People denied that based on (1) implicit assumptions the cartel would try to do only "attacks" of a certain type, (2) statements of faith about how users and other miners woud react to such attempts and (3) claims that the users and miners who objected to the attack could prevent the change.  So I described in detail a plausible "attack" that did not fit those assumptions, pointed out that most miners (even those outside the cartel) would want the change and would cooperate with the cartel, and that users would submit to the change because it would not harm them directly, whereas rebellion could. And showed why the rebellious users and miners would not be able to stop the change.

So, where would my bet fit in the above?  Or my profession, or my IQ?

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
Adrian-x
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January 07, 2015, 06:08:54 AM
 #19827

Provided SideChain are not introduced the cost to mine empty blocks becomes prohibitive, and can approach infinity, the incentive system as is rewards corporation.

I don't understand why, but presumably you are saying that blocks with more transitions should have (or have now) greater weight when choosing between two branches of the orthodox chain.

 If that were (or is) the case, then wouldn't miners pad their blocks with transactions that move a few bits between their pockets, in order to win the block race by weight rather than by work?  

If that were (or is) the case, the cratel could fill the blocks of chain (2) with such transactions, instead of leaving them empty.  

Does this make sense?

Quote
At the moment you would need to spend around 150MWh to block transactions every 10 minutes.

Please check again the script that I outlined above.  The miners that will form the cartel have 54% (say) of the hashpower, so they consume about half of the total electricity; and that consumption will not change, whether they attempt the protocol change or not.  

Their expected payoff, if they succeed, is 54% of 3600 BTC/day, instead of 54% of 1800 BTC/day, for the next two years.  Even if they had to forfeit their revenue during the transition period, that would still be a huge gain.  (And all miners, cartel or not, will enjoy the same benefit.)

However, I believe that the cartel would not lose any revenue during the transition period.  Through that time, they will collect more than half of 3600 BTC/day from the reformed chain (1), and, if they succced, they will keep those BTC.  (They will also collect all the 1800 BTC/day from the empty orthodox chain (2); but those coins will not be usable outside of chains (2)+(3), so they will be discarded at the end of the transition.)

Even if they were to fail in the attempt (how, I cannot see), they would lose the coins from chain (1), but would retain those of chain (2); which are twice as much as they would have earned if they mined fairly.

(In fact, a cartel with 51% of the hashpower can just starve the other miners and collect 100% of the block rewards, without doing any other evil.  But that is a well-known evil.  What I am trying to show is that a 51% cartel can force a change in the protocol.)

Given the cost, you can't mine empty blocks for long even though the blockchain can support empty blocks and will support the longest chain, but that doesn't invalidate past transactions or future ones or constitute a change to the protocol supported by the p2p nodes. Transactions resume after the attack.

That type of attack you describe would be prohibitive in terms of cost, if successful it would render Bitcoin useless, given the cost to participate un-cooperatively, any actor would stand to gain more by cooperating.  

But that said, miners can change the protocol but all nodes need to accept the blocks in order to be valid, so the change is limiting but as BlockStream have pointed out disruption of the incentive stasis is possible with such a change it's called a SideChain soft fork, in this scenario centralization is both inevitable and bad.

If miners were ever allowed control the flow of Bitcoin and earn it through mining at the same time then yes it would constitute a fail of the protocol.

The evil doers may even trick the miners into supporting such a change by offering them additional mining revenue, should that happen miners won't be dependent on the p2p Bitcoin nodes to validate there blocks and rewards, they could depend on a cacophony of financial products governed by rules set by a central authority to provide income.

So yes we're at a junction, but no, the protocol hasn't failed yet.  



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January 07, 2015, 06:18:08 AM
 #19828

There's that sweet smell again:

Euro-Area Prices Seen Falling as Risk of Deflation Spiral Mounts

http://mobile.bloomberg.com/news/2015-01-07/euro-area-prices-seen-falling-as-risk-of-deflation-spiral-mounts.html
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January 07, 2015, 06:18:20 AM
 #19829

I'm still waiting for an answer on my bet.
I don't bet money if I can avoid it.  (That is one of the reasons why I do not own bitcoins.)
Talk is cheap. Keep on trollin.
What difference would the bet make?
...

Assuming the bet was for a non-trivial amount, it would suggest that you actually believed the claims you're making.  Like the PoW miners, you'd be putting your resources at risk. 

I think this debate regarding mining centralization has gone as far as it can with you.  You presented your theories (and called them facts).  Many people provided counter arguments as to why it won't play out the way you imagined.  You disagreed.  

Smooth then offered you a chance to wager on what, according to your logic, is almost guaranteed to occur (that the block reward halving wouldn't happen).  You made excuses and declined.  


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JorgeStolfi
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January 07, 2015, 06:27:08 AM
 #19830

What you describe is not even a +51% attack, it is a demand for a forced hard fork from one miner telling millions of other people what software to upgrade to. That is simply the most absurd thing I've ever heard. And the reason you think this will happen is because if that one miner claims "this change is actually necessary and good for bitcoin because the network is in grave danger", that would be accepted by the general public?

It is not "one miner".  It is 51% of the haspower having decided to do something that will bring millions additional revenue to all miners.

And that is precisely why the 51% attack is a problem: because 51% of the hashpower may be just one miner, and yet that miner WILL prevail against all the others.  That is a fundamental feature of the protocol.  When it was designed, it was called "one CPU, one vote instead of one man, one vote", and it was believed that the difference between those two concepts would not be significant.  Now we have seen that the two are vastly different.

Quote
What would happen in your example is the millions of bitcoin participants would tell that one miner to take a hike and continue with the existing P2P core protocol. Then when that miner started to produce nonconforming 25BTC blocks, they would simply be rejected out of the P2P network as invalid, and the honest network would carry on. The attacking miner could have 95% of hash power and it wouldn't matter, his blocks would be rejected as nonconforming and the network would simply re-adjust to the 5% remaining. You do not even understand the basics of how a potential 51% attack is limited in it's range of attack vectors in the real world and how those limited attack vectors are harmless/manageable.

As I have pointed out several times, users can reject blocks, but cannot create them; only miners can.  The users do not own the mining equipment, the miners (obviously) do.  So the millions of users can scream and cuss as much as they want, but they cannot control or harm the miners, not even deny them the block rewards.  Even if all the users reject all the blocks that the miners mine, they will not be able to interact with other users, or get any transactions in the blockchain, if the miners will not serve them. And a cartel that has 51% of the hashpower can close the network to all competing miners, and to all millions of users who are using the current protocol, whatever that is.  Even if the users try to mine with their CPUs, they will not have enough hashpower to get through the cartel's jamming.  Is any of these statements wrong?

When the banks get together and decide to raise some fee, their millions of users may scream and cuss as much as they want, but cannot stop the banks from doing that.  Some rebel users may take their cash out, and perhaps try to create their own informal banks; but most users would continue using the banks, because they would rather pay the extra fee than do without their services.  That is reality.  Why do you think that bitcoin users and bitcoin miners would behave differently?

Quote
You then claim miners and users who do not upgrade would have their transactions blocked. Again this is insane. What would happen is those miners and users would confirm transactions on their own honest chain (the original chain) and not care whether their transactions confirm on the attacker's invalid chain.

But that is not how a 51% cartel can jam the honest chain.  Read my outline, PLEASE.

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cypherdoc
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January 07, 2015, 06:27:24 AM
 #19831

Black holes everywhere:

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January 07, 2015, 06:52:49 AM
 #19832

Given the cost, you can't mine empty blocks for long even though the blockchain can support empty blocks and will support the longest chain
That type of attack you describe would be prohibitive in terms of cost

I understood that empty blocks do not cost more to mine than normal blocks, and pay the 25 BTC reward just like them.  Isn't this true?  (Transaction fees are still negligible -- less than 20 BTC/day, compared to 3600 BTC/day for rewards.)

According to the script I described, the cartel does not need to increase its hashing power during the transition, and does not
lose the block rewards, whether it succeeds or fails in the attempt.

Quote
[jamming of the main chain] doesn't invalidate past transactions or future ones or constitute a change to the protocol supported by the p2p nodes. Transactions resume after the attack.

Users who do not upgrade will have their bitcoins blocked for as long as the cartel wants to.  Meanwhile, users who upgrade early will not even notice the transition, and those who upgrade after the deadline will immediately recover access to their coins.

Quote
if successful it would render Bitcoin useless

Why? Objectively, it would be as if Satoshi himself had written "2018" instead of "2016" in the reward halving schedule.

Do you mean that it would show that the protocol is not resistant to change, as many believe?  But, unless there is a flaw that I still can't see, the plan could succeed.  So bitcoin is already useless?

Quote
given the cost to participate un-cooperatively, any actor would stand to gain more by cooperating.

Exactly.

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January 07, 2015, 07:10:15 AM
 #19833

Assuming the bet was for a non-trivial amount, it would suggest that you actually believed the claims you're making.  Like the PoW miners, you'd be putting your resources at risk.   [ ... ] according to your logic, is almost guaranteed to occur (that the block reward halving wouldn't happen. [ ... ]
Smooth then offered you a chance to wager on .  You made excuses and declined. 

I am not predicting that the next halving will be postponed.  That plan I described is an example of how a 51% cartel can force a change of protocol, presented in response to claims that a 51% "attack" cannot do that.

A similar plan could be used tomorrow by the top 4 miners to, say, reverse the last halving and restore the reward to 50 BTC/block.  (But of course this change would cause a lot more commotion.  By 2016 people hopefully will have accepted the fact that the miners do rule the network.  Grin)

Quote
You presented your theories (and called them facts).  Many people provided counter arguments as to why it won't play out the way you imagined. You disagreed.  

Well, I described a plan for a protocol-change "attack" and pointed out the options, incentives, and risks that each player would have.  Some people expressed their beliefs about how the players would react to a different attack (and called them facts).  I disagreed.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 07, 2015, 07:42:57 AM
 #19834

It will fail because the community will press what Adam calls the Big Red Button and hard fork.

(I don't recall whether I replied to that here or on reddit.)  The "Red Button" solution is the third option that, in my summary above, each user would have: upgrade to a different protocol that the cartel miners cannot mine.

That option is a suicide only for the rebel users, since all the miners, whether they like the change or not, would be forced to abandon the rebels and join the cartel ranks.  The rebel users would then find themselves in a new altcoin, with a fourth blockchain (4)  that wuld not use the bitcoin protocol, supported by a minuscule CPU/GPU mining network.  Their rebelBTCs would not be accepted by users or services who converted, and they would not be able to receive cartelBTCs from them.  

Quote
Your cartel will lose the transaction fees they didn't earn when rejecting transactions on the original chain. They will also lose the value of the mining gear (and other brand value associated with their mining businesses). I doubt the community would go so far as to hard fork retroactively (eliminating the mining rewards from the empty attack blocks), but that is also possible, so its a risk the cartel would face.

Unless I missed something, in the plan that I outlined the cartel will earn both cartelBTC and rebelBTC rewards throughout the transition.  Depending on the outcome of the attack they will lose one of the two, but the other is still double what they would earn by fair play.

The rebels could try to take revenge from the cartel by stealing their rewards, but they could do that only in the rebel altcoin.

Quote
You don't have to believe that individual end users would be behind this (I argue they will simple update their software from whatever its original source, which in no case of which I'm aware includes miners), but that the rest of bitcoin industry -- coinbase, bitpay, venture capital firms, hedge funds, etc. -- certainly would support it. They have nothing to gain and everything to lose from ceding power over the network to miners.


The bitcoin industry will surely choose the fork that is expected to have most users.   The cartel fork will have all the miners and 500 PH/s (say) of hash power.  Rebel users will be unable to use the network for days until they upgrade to the red button version; while users who give in to the cartel will not suffer any inconvenience.  The design of the economic game part of the protocol has always assumed that the players are greedy and will choose their behavior so as to maximize their immediate gain; but that would make them switch immediately to the cartel version.  The network has always been controlled by the miners, only that now the power is concentrated in half a dozen companies.  

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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January 07, 2015, 07:52:09 AM
 #19835

You see, if power was distributed over many thousands of independent miners, all such lists would have thousads names
This statement is logically false.

I forgot the word 'evenly' before 'distributed'.   (I used it elsewhere when saying that same condition.)
Is that why you did not understand the logic?

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 07, 2015, 08:00:21 AM
 #19836

Please stop feeding the troll. All as in 100% of his arguments have been debunked or already have solutions planned. He is very good at using fallacious arguments. Don't play into them. They are easy to spot because they have few details. If you challenge them, he doesn't answer you directly, instead he plays another trick.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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January 07, 2015, 08:11:29 AM
 #19837

Please stop feeding the troll. All as in 100% of his arguments have been debunked or already have solutions planned. He is very good at using fallacious arguments. Don't play into them. They are easy to spot because they have few details. If you challenge them, he doesn't answer you directly, instead he plays another trick.

Without taking sides: A Q&A or matrix or whatever for each argument (and counter-argument) would help the undecided.
Any source available?
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Let's talk governance, lipstick, and pigs.


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January 07, 2015, 08:23:06 AM
 #19838

Please stop feeding the troll. All as in 100% of his arguments have been debunked or already have solutions planned. He is very good at using fallacious arguments. Don't play into them. They are easy to spot because they have few details. If you challenge them, he doesn't answer you directly, instead he plays another trick.

Without taking sides: A Q&A or matrix or whatever for each argument (and counter-argument) would help the undecided.
Any source available?
I'll let you pick one and I'll point out the fallacy and google the discussion if necessary.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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January 07, 2015, 08:26:57 AM
 #19839

You see, if power was distributed over many thousands of independent miners, all such lists would have thousads names
This statement is logically false.

I forgot the word 'evenly' before 'distributed'.   (I used it elsewhere when saying that same condition.)
Is that why you did not understand the logic?

I did understand the so called logic, but it was false.

It is false because it assumes all such lists are showing power, but in fact they all show something else, generally pools. I've never seen a "mining power list," have you?

Even with a relatively small number of pools you can still have power distributed over many thousands (or even more) independent miners, because those miners are able to move their hash rate. No pool can be confident of maintaining a given share because hash power can shift and new pools can be created.

In fact this was not the case with ghash since much of their mining was their own equipment.
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January 07, 2015, 08:31:46 AM
 #19840

I'm still waiting for an answer on my bet.

I don't bet money if I can avoid it.  (That is one of the reasons why I do not own bitcoins.)

Talk is cheap.

Keep on trollin.


I for one would like to see Jorge put some money where his (big) mouth is.
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