Gold collapsing. Bitcoin UP.

[HeliKopterBen]

http://nakamotoinstitute.org/mempool/who-controls-bitcoin/

Im gonna give that to a coworker who is a conspiracy theorist yet pessimistic about bitcoin.. He always asks who controls bitcoin and never satsified as a fork can cause a large loss to his investment.. Thus labels it a ponzi scheme aimed at luring in small fish

He will panic-buy at much higher prices.

[1714202013]

1714202013

[cbeast]

http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

Thanks for writing that. It finally clears up what you've been talking about. Just curious, what are your thoughts about how price discovery will deal with Bitcoin price fluctuation?

[cypherdoc]

He made a technical error in the article; a low hashrate of a fork wouldn't extend the time between blocks. It only would make them less secure.

really? I would had thought it would be the case at least until the next diff re-target, no?

well, a hard fork new chain gets started with x hashing rate.  blocks are 10 min apart, just like they were with Bitcoin back in 2009.  any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty.  we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes?

[justusranvier]

Thanks for writing that. It finally clears up what you've been talking about. Just curious, what are your thoughts about how price discovery will deal with Bitcoin price fluctuation?

Bitcoin exchange rate fluctuation would be no different than any other factor which will affect the price of various services on a day-to-day basis.

Suppliers of services will not do so very long at a loss, so they'll only accept prices that don't work out to be a loss for them.

That basically means that fees would adjust automatically to exchange rate changes.

[justusranvier]

well, a hard fork new chain gets started with x hashing rate.  blocks are 10 min apart, just like they were with Bitcoin back in 2009.  any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty.  we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes?

At the point of the fork, the difficulty has already been set based on the entire network's hash rate.

Miners have to choose one fork to mine.

If half of them go one way, and the other half goes to the other fork, then both forks are mining at with difficulty at double the value it should be, so both forks will experience 20 minute block times until the next difficulty adjustment.

If the split is 70/25, then the smaller chain will experience 40 minute block times and the larger chain will get 13 minute block times.

[cypherdoc]

Thanks for writing that. It finally clears up what you've been talking about. Just curious, what are your thoughts about how price discovery will deal with Bitcoin price fluctuation?

Bitcoin exchange rate fluctuation would be no different than any other factor which will affect the price of various services on a day-to-day basis.

Suppliers of services will not do so very long at a loss, so they'll only accept prices that don't work out to be a loss for them.

That basically means that fees would adjust automatically to exchange rate changes.

People will want to transact with bitcoin, but they will be forbidden by the Bitcoin protocol from doing so.

that quote from your article should be changed, as i know you didn't mean it the way it reads.  you mean "limited by market prices".

[bambou]

short the shorts: http://www.returnofkings.com/55524/americas-booty-obsession-is-another-symptom-of-social-decline

[cypherdoc]

http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

i like your idea of fees for relay nodes.  i run 5 at my cost for the network.  i'd run more if i were paid.

[Hunyadi]

short the shorts: http://www.returnofkings.com/55524/americas-booty-obsession-is-another-symptom-of-social-decline

WTF   broscience FTW!

[cypherdoc]

The failure of fiat money will be totally self-imposed. It will be the product of pure hubris. But it will dramatically hasten adoption of Bitcoin. Bitcoin’s killer app isn’t some clever tipping or multisig feature. It’s killer app is merely the stability of the monetary supply. That doesn’t sound very sexy. But in today’s world, in which paper money has failed so badly in the most basic function of currency, that’s saying a lot.

https://medium.com/@abarisser/central-banks-will-hasten-the-rise-of-bitcoin-fb1973c671e9

[rocks]

And more generally, I think a lot of people make a misjudgment in assuming that actors in the bitcoin ecosystem will behave with only very short-term focus. Tim Swanson (@ofnumbers) is particularly bad about taking these absurdly narrow views and spitting out blog posts full of "analysis". Unfortunately his analysis is often not particularly useful because his assumptions are broken.

Exactly, a particularly absurd attack is that bitcoin will fail due to mining centralization and this centralization will enable miners to act poorly. The reason this is absurd is the more mining becomes centralized the more capital each miner has committed to the project, which means miners will act with more of a long-term mindset as they become larger and commit more capital.

But even if this wasn't the case, the incentive structure of mining means that even IF miners took a short-term only mindset (which is illogical), incentives still encourage them to only mine the longest chain.

To break bitcoin would require a large 51% entity who could operate without economic concerns or constraints, i.e. they have billions in capital to destroy specifically to attack the project, expecting a full loss if successful. Only a government could try to pull this off at this point, the private market will not.

[coric]

short the shorts: http://www.returnofkings.com/55524/americas-booty-obsession-is-another-symptom-of-social-decline

At first it looked like funny trolling and an excuse to make pseudo-sociologic graphs of boobs and butts, but continuing it seems like the author is serious and believes his weird ideas...

[NewLiberty]

And more generally, I think a lot of people make a misjudgment in assuming that actors in the bitcoin ecosystem will behave with only very short-term focus. Tim Swanson (@ofnumbers) is particularly bad about taking these absurdly narrow views and spitting out blog posts full of "analysis". Unfortunately his analysis is often not particularly useful because his assumptions are broken.

Exactly, a particularly absurd attack is that bitcoin will fail due to mining centralization and this centralization will enable miners to act poorly. The reason this is absurd is the more mining becomes centralized the more capital each miner has committed to the project, which means miners will act with more of a long-term mindset as they become larger and commit more capital.

But even if this wasn't the case, the incentive structure of mining means that even IF miners took a short-term only mindset (which is illogical), incentives still encourage them to only mine the longest chain.

To break bitcoin would require a large 51% entity who could operate without economic concerns or constraints, i.e. they have billions in capital to destroy specifically to attack the project, expecting a full loss if successful. Only a government could try to pull this off at this point, the private market will not.

The underlying assumption here is that (Bitcoin) economics is the only motivator.  If there exist entities that both care about Bitcoin and want to end it (and have sufficient motivation and resources), than this argument fails.  There may well be much cheaper ways to end bitcoin than a persistent 51% attack, (and such a persistent 51% would not be guaranteed to succeed anyway), so it is probably in the 'good enough' category.  It is not in the 'safe' category (though Andreas A. disagrees with me on this).

[coric]

well, a hard fork new chain gets started with x hashing rate.  blocks are 10 min apart, just like they were with Bitcoin back in 2009.  any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty.  we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes?

At the point of the fork, the difficulty has already been set based on the entire network's hash rate.

Miners have to choose one fork to mine.

If half of them go one way, and the other half goes to the other fork, then both forks are mining at with difficulty at double the value it should be, so both forks will experience 20 minute block times until the next difficulty adjustment.

If the split is 70/25, then the smaller chain will experience 40 minute block times and the larger chain will get 13 minute block times.

And the 20 minutes are for both forkd for a time of 4 weeks, the 40 minutes for a time of 8 weeks for slowfork.
Add the value crashing, there's enough time to do some real damage, in the worst case to both Gavincoin and Mirceacoin.

[cypherdoc]

Dow rolling again.  -100.

desperately trying to stay up.

[NewLiberty]

well, a hard fork new chain gets started with x hashing rate.  blocks are 10 min apart, just like they were with Bitcoin back in 2009.  any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty.  we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes?

At the point of the fork, the difficulty has already been set based on the entire network's hash rate.

Miners have to choose one fork to mine.

If half of them go one way, and the other half goes to the other fork, then both forks are mining at with difficulty at double the value it should be, so both forks will experience 20 minute block times until the next difficulty adjustment.

If the split is 70/25, then the smaller chain will experience 40 minute block times and the larger chain will get 13 minute block times.

And the 20 minutes are for both forkd for a time of 4 weeks, the 40 minutes for a time of 8 weeks for slowfork.
Add the value crashing, there's enough time to do some real damage, in the worst case to both Gavincoin and Mirceacoin.

This math assumes the fork starts just after adjustment.

[coric]

This math assumes the fork starts just after adjustment.

You're right, I forgot about that. So would it be best to schedule the fork for the middle of a period to minimize this impact, if that can be done? I think the Doge merged mining hardfork was scheduled for a specific block count, not time.

[cypherdoc]

how much deader can Greece get?

http://www.zerohedge.com/news/2015-02-09/greek-bank-bonds-stocks-crumble-record-lows

[cypherdoc]

this must be bullish, right?

[cypherdoc]

i love this chart.  can't get enough of it.  it's a record after all.  down 99.83% from its 2007 high.  how low can it go?  dead, dead, and deader: