Gold collapsing. Bitcoin UP.

[iCEBREAKER]

Bitcoin has all the properties of a super money that gold can only aspire to be.  That has to be on your radar.

Bitcoin is literally at a fork.  One path leads to super-gold, the other leads to yet another forgettable/replaceable retail token.

In the most likely scenario, competing camps take both forks and mutual hostility/drama/lulz ensure (as usual).

Have you weighed in on the blocksize debate?  I'd rather have sidechains than 20MB++ gigablocks, and am curious where you stand ATM.

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[smoothie]

I'd rather have sidechains than 20MB++ gigablocks, and am curious where you stand ATM.

Please enlighten us all why you rather have SCs.

[iCEBREAKER]

I'd rather have sidechains than 20MB++ gigablocks, and am curious where you stand ATM.

Please enlighten us all why you rather have SCs.

I'm not a huge fan of side chains yet, but Bitcoin's Grandfather (Adam Back) and a couple of other notables participating in this thread have done a lot to convince me they won't be the end of the world and may ameliorate pressure to adopt Gavin's Bloatchain proposal.

Doc's economic attack via free options still worries me, but I have faith antifragility win out in the end.

OTOH, 20MB blocks would destroy TOR, etc. compatibility and poke holes in our beautifully small (defensible/diffuse/resilient) network, which is the vehicle for BTC's antifragility.

Sorry I can't be more specific and impressively techie!   

What's your take on the matter, old bean?

[rocks]

I'd rather have sidechains than 20MB++ gigablocks, and am curious where you stand ATM.

Please enlighten us all why you rather have SCs.

I'm not a huge fan of side chains yet, but Bitcoin's Grandfather (Adam Back) and a couple of other notables participating in this thread have done a lot to convince me they won't be the end of the world and may ameliorate pressure to adopt Gavin's Bloatchain proposal.

Doc's economic attack via free options still worries me, but I have faith antifragility win out in the end.

OTOH, 20MB blocks would destroy TOR, etc. compatibility and poke holes in our beautifully small (defensible/diffuse/resilient) network, which is the vehicle for BTC's antifragility.

Sorry I can't be more specific and impressively techie!   

What's your take on the matter, old bean?

It isn't the 20MB block size that scares me, it is the automatic doubling every two years until we reach 20GB blocks. This scares the crap out of me because if a problem turns up we need a fork to pause the scaling. Would much rather see a series of independent increases that we take in steps.

[jones techbit]

$400 seems a reasonable short term target.

[tvbcof]

I'd rather have sidechains than 20MB++ gigablocks, and am curious where you stand ATM.

Please enlighten us all why you rather have SCs.

I'm not a huge fan of side chains yet, but Bitcoin's Grandfather (Adam Back) and a couple of other notables participating in this thread have done a lot to convince me they won't be the end of the world and may ameliorate pressure to adopt Gavin's Bloatchain proposal.

Doc's economic attack via free options still worries me, but I have faith antifragility win out in the end.

OTOH, 20MB blocks would destroy TOR, etc. compatibility and poke holes in our beautifully small (defensible/diffuse/resilient) network, which is the vehicle for BTC's antifragility.

Sorry I can't be more specific and impressively techie!   

What's your take on the matter, old bean?

I cannot see any noteworthy economic disadvantages with sidechains.  Fewer small users, but higher transaction fees, so this part is a wash but with the significant advantage that Bitcoin need not bloat and chase out ever more of those who might wish to be infrastructure supporters.  In fact, many sidechain users would probably become infrastructure supporters for their own chosen sidechain(s), and if they can (or must) provide infrastructure support for Bitcoin itself because it is light-weight, that is a very good thing.

The main concern I have about sidechains is that Bitcoin itself has some historic baggage and disadvantages as a backing currency.  A carefully and specially designed crypto-currency could almost certainly do better.  There exists a theoretical possibility that an entire sidechains ecosystem could migrate away from Bitcoin and on to something better, although it probably would not happen without a very good reason.

That said, the 'very good reason' is most likely to be that Bitcoin has fallen victim to the kinds of attacks (mostly against fungibility) that excessive growth makes possible.  At this point one must ask philosophically, 'Is Bitcoin's demise actually that bad of a thing?  Is it not good that we have a healthy and diverse crypto-currency ecosystem which can continue to work with just a swap in functional backing store?'  Should such a swap happen I suspect it would occur by allowing people to buy in with value from the old Bitcoin blockchain, or simply automatically buy them in.  That would be the most concrete way of achieving credibility.  Alternatives include giving a pre-mine to insiders, but that would rightly collapse any possible credibility the effort might have.

[cbeast]

I cannot see any noteworthy economic disadvantages with sidechains. 

I can think of a big one. You cannot use Proof of Work on a sidechain. Therefore you accept security and/or counterparty risk. It will up to the sidechain user to determine how much risk to accept.

[bitfilliates]

Is it always that bitcoin goes up, gold goes down just as usually when USD goes up against currencies gold goes down?

[hdbuck]

I cannot see any noteworthy economic disadvantages with sidechains. 

I can think of a big one. You cannot use Proof of Work on a sidechain. Therefore you accept security and/or counterparty risk. It will up to the sidechain user to determine how much risk to accept.

proof of work wont make it to the mainstream.
1billion^TM people will never benefit from it ~directly.
its insane. they just need ~apps.

ETFs, sidechains, offchains, blythechains.. whatever.

[Zangelbert Bingledack]

It isn't the 20MB block size that scares me, it is the automatic doubling every two years until we reach 20GB blocks. This scares the crap out of me because if a problem turns up we need a fork to pause the scaling.

I'm starting to wonder if forks are really that big a deal.

Imagine if all the exchanges were set up to handle economic arbitrage of two or more forks. Say you have 20 BTC on Bitstamp when a fork happens. Your account is automatically split into 20 BTC in BitcoinOld and 20BTC in BitcoinNew. If you don't know/care about the fork, you do nothing. If you think one of the two is obviously more viable and/or obviously more likely to get support, you immediately start selling BTC in one for BTC in the other.

Since everyone is doing the same, I bet this all plays out in a matter of minutes because once the trend becomes clear it will snowball since no one wants to be on the losing fork. Luckily, again, you can sit out the arbitrage and leave your stash untouched whichever fork wins. It's just that you can earn yourself some extra coin if you guess the winning fork correctly.

Now to guard against possible glitches in BitcoinNew, even if it wins in initial trading, BitcoinOld will probably still retain some value for a time - for instance 10% of its former value for a few days or weeks - as a representation of an estimated 10% probability of a glitch in BitcoinNew. After that it would likely fade into nothingness. All the while your bitcoins are safe no matter the outcome.

Not only is this far faster than waiting for "consensus," it also ties more solidly into the basic economics of Bitcoin itself. As Daniel Krawisz has pointed out, where investors go, everyone else follows. Investors have the ultimate control, so the forking process should reflect this and exchanges should be setting their systems up for this.

[uki]

Meanwhile, US Dollar Index is about to cross 100.

Looks toppish to me. Two important levels 100 (psychological) and 101.50.
Expect a correction from there. Gold doesn't look that bad so far.

Looks topish? lol check the monthly.. its prob about half way through

yes, it looks toppish to me, weekly chart with gold overlay attached below:



Do you think further move of dollar at such pace is sustainable? You say half way through, do you really expect to see 120? Do you know what consequences it would have for global economies?

Ps. don't need more lols, let's talk arguments and charts.

[uki]

Gold collapsing.  Bitcoin UP.

nice ramp in the dollar going on right now.  something's up.

gold in the dead cat bounce today, Bitcoin correcting slightly.
Last support in gold is the November low at $1130 and then $1094 at the quarterly chart.

[Spaceman_Spiff]

I don't sell (much) at the tops.  I don't want to be known as the guy who bilked lots of suckers out of $ if Bitcoin fails.  I want to be known as a guy who identified BTC's potential as a force for positive social change through economics early and invested accordingly.

I don't see how selling at the tops is immoral.  If anything it is praiseworthy, since selling at the top and buying at the bottom will smoothen out BTC's price, resulting in lower volatility and greater usability for commerce, store-of-value etc. .  

Selling at the top gives you the ammo needed to buy at the bottom.  
By buying at the bottom you are showing your faith in the continued existence of bitcoin, and stop a feedback loop of declining prices leading to less interest and a smaller network.  

[thezerg]

I don't sell (much) at the tops.  I don't want to be known as the guy who bilked lots of suckers out of $ if Bitcoin fails.  I want to be known as a guy who identified BTC's potential as a force for positive social change through economics early and invested accordingly.

I don't see how selling at the tops is immoral.  If anything it is praiseworthy, since selling at the top and buying at the bottom will smoothen out BTC's price, resulting in lower volatility and greater usability for commerce, store-of-value etc. .  

Selling at the top gives you the ammo needed to buy at the bottom.  
By buying at the bottom you are showing your faith in the continued existence of bitcoin, and stop a feedback loop of declining prices leading to less interest and a smaller network.  

Yes, like most real world activities the situation is not morally clear cut.  And I do sell some at the tops and certainly have bought on the way down.  Perhaps you are right, the real evil is the hype cycle that gets the suckers to invest.  Ofc without the hype cycle there would not be enough media coverage to pull in everyone else.

I cannot see any noteworthy economic disadvantages with sidechains. 

I can think of a big one. You cannot use Proof of Work on a sidechain. Therefore you accept security and/or counterparty risk. It will up to the sidechain user to determine how much risk to accept.

... and for those people who think that a sidechain might somehow "take over" from Bitcoin, this additional risk is a big reason why one won't.

It isn't the 20MB block size that scares me, it is the automatic doubling every two years until we reach 20GB blocks. This scares the crap out of me because if a problem turns up we need a fork to pause the scaling.

I'm starting to wonder if forks are really that big a deal.

I think that its fascinating.  A fork is like quantum mechanics applied to the real world.  In other words both possibilities exist simultaneously until an event (everybody selling one fork and buying the other) collapses the probability wave.

Bitcoin has all the properties of a super money that gold can only aspire to be.  That has to be on your radar.

Bitcoin is literally at a fork.  One path leads to super-gold, the other leads to yet another forgettable/replaceable retail token.

Why "forgettable/replaceable retail token"?  You could just as easily have said "spendable super gold".

I think that the promise of Bitcoin is, at its core, disintermediation (transfer to anyone, anywhere, nearly instantly).  This is where it gains its intrinsic value which then supports the value holders put on it by holding.  But if it costs too much for individuals to make transactions, then txns must be posted through intermediaries who as Circle/Coinbase have shown are susceptible to all the problems with today's banking system.  "Welcome the new boss same as the old boss". 

Sidechains could solve some of that problem which is why it is interesting to consider them alongside the block size; I suppose we could have sidechains for daily spending and Bitcoin could be essentially be your super-gold "savings account".  A carefully designed sidechain would still achieve disintermediation.  But money flow between sidechains and Bitcoin will not be quick so it would not be and ideal situation, and is still not achieveable with 1MB block sizes.

So I think we should accept Gavin's scalability plan, and guess what?  its not set in stone.  If it scales faster than the available hardware, we can always change it.

Really, the crux of the argument for me is this:

The worst case with the scalability plan is that individuals can't in practice be full nodes, but can STILL hold BTC in local wallets and spend them.

The worst case without scalability is that individuals must trust intermediaries to hold their BTC because a single txn is so expensive it must be aggregated -- i.e. the same banking system we have today. 

(none of the awesome functionality like multi-sig "custodial" accounts can be used (on a per customer basis); they all require a transaction to unlock the funds which would be too expensive to do per customer)

[cypherdoc]

You just can't stop it ;

http://www.cityam.com/211436/new-report-goldman-sachs-shows-why-bitcoin-here-stay

[cypherdoc]

Gold Collapsing. Bitcoin UP.

[cypherdoc]

300 coming right up.

 Once we get through it, we should see a nice pop. 

[rocks]

I cannot see any noteworthy economic disadvantages with sidechains. 

I can think of a big one. You cannot use Proof of Work on a sidechain. Therefore you accept security and/or counterparty risk. It will up to the sidechain user to determine how much risk to accept.

proof of work wont make it to the mainstream.
1billion^TM people will never benefit from it ~directly.
its insane. they just need ~apps.

ETFs, sidechains, offchains, blythechains.. whatever.

blythechains, now that's a thought. What have we wrought.

[tvbcof]

I cannot see any noteworthy economic disadvantages with sidechains. 

I can think of a big one. You cannot use Proof of Work on a sidechain.  Therefore you accept security and/or counterparty risk. It will up to the sidechain user to determine how much risk to accept.

Those are neither 'economic' disadvantages, especially from Bitcoin's perspective, nor are they meaningful or true.

Firstly, there is a strong incentive on the parts of the Blocksteam folks to design out counter-party risk, and as engineering problems go it is little or no more difficult than doing so in Satoshi's Bitcoin.  At least as long as Satoshi's Bitcoin itself can be relied upon in this respect.

Secondly, note that if one has a backing such as Bitcoin or gold, one does not need to rely on POW for this function.  One could use POW to a much lesser degree to shore up internal bookeeping to keep away the ankle-biters, but that's a secondary design issue and not terribly important.  The backing currency is the ONE system which actually NEEDS absolute security and Bitcoin has ONLY POW to achieve this.  Alts don't have this advantage since they tend to try to occupy the same place as Bitcoin.  Bitcoin can transfer it's security to other solutions with no net loss.  Just the opposite, really, because the more solutions relying on Bitcoin (and likely supporting native Bitcoin in some manner in most sidechains designs I would guess), the better.

The main thing that a user of a backing needs is for that backing to be solid and usable.  For gold this would mean some combination of physical security and transparency.  Gold was not discontinued as a backing currency because these things were impossibly to achieve, but rather because there was a desire by TPTB to get away from a non-inflationary base currency because they wanted an inflationary monetary system.  Achieving transparency and security for Gold would be, while possible, very much less efficient than with Bitcoin.

I think people lose sight of the value of POW in Bitcoin also.  Say you have a speeding semi truck that you wish to stop.  You build a wall of reinforced concrete which is 100' thick.  (Today's sha256.)  How much value is there to making the wall 200' thick?  Twice?  Nope.  There are other ways to attack the wall which will be explored, and a defender would be well advised to try to anticipate these and defend against them accordingly.

As nonsensical as it is to assign a simplistic linear value function in wall thickness as above, it is even more silly to reject any wall for any purpose simply because it isn't as strong as the massively over-spec'd wall for stopping the speeding semi truck.

As long as I have a reliable store of wealth in native Bitcoin, I care very little about the relatively less security of a sidechain (if it is even that much different.)  My uses of the two solutions will be entirely different.  True, in a sidechain failure I might get stung paying native Bitcoin transaction fees to get my money out upon a sidechain failure, but it's not an event that would be common but rather just a hypothetical issue which would give me confidence to use the solution and lessen the incentive for people to run bogus sidechains for the purposes of ripping people off (like some alts for instance.)

I do see it as rational to exclude some people from the highest echelons of monetary security (e.g., native Bitcoin.)  When I was younger I was sometimes lucky to have enough money in my bank account to pay my car insurance or buy a bag of weed.  Did I have some God-given right or entitlement to have my $25 balance secured in a Swiss vault on someone else's dime?  Absolutely not, and I never dreamed to ask for it.  My money, even if it represented half  of my life's savings was never at significant risk in part because if was only $25 on not worth the bother to steal.

[molecular]

another ramp in dollar starting right now.  look out risk assets...

more deflation, bad for gold.....until US doesn't raise rates.

Gold price is rising currently, along with US$. Not uncommon, just an unholy alliance, albeit temporary, I assume.

money is fleeing from somewhere... the Eurozone, I guess?