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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 1807129 times)
molecular
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March 12, 2015, 09:07:48 PM
 #21961

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?

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March 12, 2015, 09:15:29 PM
 #21962

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.

I agree.

I would like this scenario a lot more if we replaced "exchanges set up to handle multiple forks" to "wallets/nodes set up to handle multiple forks".

Maybe I should prepare for such scenario and have a node / wallet ready that does that. Anyone have a suggestion?

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March 12, 2015, 09:24:33 PM
 #21963

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)
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March 12, 2015, 09:28:22 PM
 #21964

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

Yes, but not if the transaction references a coinbase from after the fork directly or indirectly. So 100 blocks after the fork (assuming this rule is not changed), fungibility with respect to publishing on both would start to break.



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March 12, 2015, 09:42:50 PM
 #21965

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

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March 12, 2015, 09:51:46 PM
 #21966

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)

We need to get this right the first time.  One does not simply "always change it."  Otherwise hard forks would be called 'easy forks.'   Cheesy

When TOR and other slow/hardened connections are excluded by GavinBlocks, users must then trust their ISP/.gov/etc. to not snoop on or throttle/banhammer their nodes.  This creates intolerable intermediaries at the network layer, which destroys the basis for BTC's antifragility and thus its unique/intrinsic store-of-value function.

We can't ignore the trade off between retail suitability and super-gold fitness.  Trade-offs, like diminishing marginal returns, are economic law. 

Some of us simply won't be able to afford Bitcoin when it assumes its rightful position as Gold 2.0.  Let's accept that and move on, instead of rejiggering everything just to appease us pikers at great risk to the whales who do the heavy lifting to keep BTC viable and growing.  If you can't afford regular gold now, what makes you think you have the right to expect affordable SuperGold?

Many of us will actively resist network degradation and less super-gold fitness in exchange for more retail noise accommodation and uncertainty about the impact of exponential blocksize growth.  It's not just the initial 20MB Gavinblocks, it's the >>20MB Gigablocks that kick in relatively soon which concern those of us who care about the weakest links in the system's chain.

Individuals making low value tx don't have to trust Paymium or other off-chain intermediaries so long as plenty of capacity exists in 2nd tier altcoins' blockchains.  Litecoin, for example, is secured by more than enough ASICs and GPUs to be perfectly acceptable for small and medium size daily retail consumer BS.

Let's also note that blockchain technology, by enabling unprecedented transparency and real time auditing, allows us to keep our off-chain overlords on a short leash.  As Davout put it so succinctly:

The true value that Bitcoin brings to the table is not "everyone gets to write into the holy ledger", it is instead "everyone gets to benefit from sane and non-inflationary financial instutions whose sanity and honesty are ensured by the holy blockchain".

This is sig-worthy quote really gets to the crux of the 'retail token vs super-gold' fissure, and makes clear why the FUD of Fundamentalist Monopolists ("Thou shall have no other coins before Holy BTC, lest you be cast into the off-chain lake of fiat") is unfounded.

The difference between bad and well-developed digital cash will determine whether we have a dictatorship or a real democracy.  David Chaum 1996
Fungibility provides privacy as a side effect.  Adam Back 2014
"Monero" : { Private - Auditable - 100% Fungible - Flexible Blocksize - Wild & Free® - Intro - Wallets - Podcats - Roadmap - Dice - Blackjack - Github - Android }


Bitcoin is intentionally designed to be ungovernable and governance-free.  luke-jr 2016
Blocks must necessarily be full for the Bitcoin network to be able to pay for its own security.  davout 2015
Blocksize is an intentionally limited resource, like the 21e6 BTC limit.  Changing it degrades the surrounding economics, creating negative incentives.  Jeff Garzik 2013


"I believed @Dashpay instamine was a bug & not a feature but then read: https://bitcointalk.org/index.php?topic=421615.msg13017231#msg13017231
I'm not against people making money, but can't support questionable origins."
https://twitter.com/Tone_LLT/status/717822927908024320


The raison d'être of bitcoin is trustlessness. - Eric Lombrozo 2015
It is an Engineering Requirement that Bitcoin be “Above the Law”  Paul Sztorc 2015
Resiliency, not efficiency, is the paramount goal of decentralized, non-state sanctioned currency -Jon Matonis 2015

Bitcoin is intentionally designed to be ungovernable and governance-free.  luke-jr 2016

Technology tends to move in the direction of making surveillance easier, and the ability of computers to track us doubles every eighteen months. - Phil Zimmerman 2013

The only way to make software secure, reliable, and fast is to make it small. Fight Features. - Andy Tanenbaum 2004

"Hard forks cannot be co
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March 12, 2015, 09:57:14 PM
 #21967

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.

I think Team Sidechain sees that as a feature, not a bug.   Grin

It's also one of my reasons for believing BTC's antifragility will endure and win out or equilibrate versus the 'free options -> hollowed out mainchain' scenario cypher describes.

The difference between bad and well-developed digital cash will determine whether we have a dictatorship or a real democracy.  David Chaum 1996
Fungibility provides privacy as a side effect.  Adam Back 2014
"Monero" : { Private - Auditable - 100% Fungible - Flexible Blocksize - Wild & Free® - Intro - Wallets - Podcats - Roadmap - Dice - Blackjack - Github - Android }


Bitcoin is intentionally designed to be ungovernable and governance-free.  luke-jr 2016
Blocks must necessarily be full for the Bitcoin network to be able to pay for its own security.  davout 2015
Blocksize is an intentionally limited resource, like the 21e6 BTC limit.  Changing it degrades the surrounding economics, creating negative incentives.  Jeff Garzik 2013


"I believed @Dashpay instamine was a bug & not a feature but then read: https://bitcointalk.org/index.php?topic=421615.msg13017231#msg13017231
I'm not against people making money, but can't support questionable origins."
https://twitter.com/Tone_LLT/status/717822927908024320


The raison d'être of bitcoin is trustlessness. - Eric Lombrozo 2015
It is an Engineering Requirement that Bitcoin be “Above the Law”  Paul Sztorc 2015
Resiliency, not efficiency, is the paramount goal of decentralized, non-state sanctioned currency -Jon Matonis 2015

Bitcoin is intentionally designed to be ungovernable and governance-free.  luke-jr 2016

Technology tends to move in the direction of making surveillance easier, and the ability of computers to track us doubles every eighteen months. - Phil Zimmerman 2013

The only way to make software secure, reliable, and fast is to make it small. Fight Features. - Andy Tanenbaum 2004

"Hard forks cannot be co
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March 12, 2015, 10:02:49 PM
 #21968

Question about economics: say we have a hard fork coming up and people expect 2 chains with trading as described earlier by Zangelbert. Will that generate buying pressure on BTC (vs. fiat) beforehand because everyone wants to participate in 'the doubling' of coins?

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March 12, 2015, 10:16:00 PM
 #21969

Question about economics: say we have a hard fork coming up and people expect 2 chains with trading as described earlier by Zangelbert. Will that generate buying pressure on BTC (vs. fiat) beforehand because everyone wants to participate in 'the doubling' of coins?

It happens all the time with stock spinoffs. Sometimes there is is some effect when the announcement is made if the move is unexpected and viewed as positive but the actual spinoff itself doesn't move the stock much usually.

To make a specific example here, if the infrastructure were in place to do everything like this smoothly and a fork like that to increase the block size were announced I think the price of BTC would go up, not because of the doubling but because of the damn block size being fixed. However, the ability to pull off these kinds of upgrade forks would be more important than the actual content of the fork. Just my opinions.

BTW, something very similar is discussed at some length here: https://bitcointalk.org/index.php?topic=563972.0 (referencing back to this thread!)

Adam Back's one-way peg idea (before it got, er, "improved" to the two way peg) was similar in net effect but slightly different (existing owners get a call option on newcoin at par instead of getting newcoin directly). I think this is slightly worse overall, but it is debatable.

EDIT: clarify difference between spin off and one way peg.


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March 12, 2015, 10:25:39 PM
 #21970

you guys cant seriously still be debating side chains?  Undecided

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March 12, 2015, 10:58:21 PM
 #21971

Question about economics: say we have a hard fork coming up and people expect 2 chains with trading as described earlier by Zangelbert. Will that generate buying pressure on BTC (vs. fiat) beforehand because everyone wants to participate in 'the doubling' of coins?


This is a storm in a teacup. The reality is that a properly implemented fork will have 80+% hashing power on the new version blocks before the first >1MB block is produced. (Hopefully there will be a grace period of, say, 10k blocks after the 80% is triggered, for laggard miners and non-mining nodes to upgrade). So the old fork will have less than 20% hashing power, quickly dropping to as little as 5%. Blocks on the old fork will take about 2 hours each to produce, with coinbase rewards spendable after 1 to 2 weeks.

No company in the Bitcoin ecosystem will accept fresh reward coins from the old fork. There will be no "market" as the old fork will be unusable as it will take a year for difficulty to fall until old fork blocks take 10 mins each again.

In the scenario where there is a monumental cock-up and no preparations are made until the average block size approaches 1MB, under stress conditions, I expect all the major companies in the Bitcoin ecosystem will quickly converge and agree a change, then two forks would persist for a while. Expect the price to plumb the recent lows if that happens.

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March 12, 2015, 10:59:30 PM
 #21972

Gold Collapsing. Bitcoin UP.
I wouldn't say that gold collapsed today. Pretty much not. Let's see if we can get the double bottom painted on the charts.
How about gold up and bitcoin up (my scenario of choice), as the dollar starts to correct after last rally (touched 100)?

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March 12, 2015, 11:08:42 PM
 #21973

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

Yes, but hacker(bot) can move fork-coins to fresh address too ? :-)

edit:
I only want to say. One mistake(signature) on worthless fork-chain and you lose all bitcoins in main-chain
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March 12, 2015, 11:29:38 PM
 #21974

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

Yes, but hacker(bot) can move fork-coins to fresh address too ? :-)

edit:
I only want to say. One mistake(signature) on worthless fork-chain and you lose all bitcoins in main-chain

The coins go to the same destination on both chains (or nowhere at all if the transaction isn't valid on both chains). So unless you were sending coins to the hacker on one chain, he won't get them on the other chain either.
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March 12, 2015, 11:31:45 PM
 #21975

This is a storm in a teacup. The reality is that a properly implemented fork will have 80+% hashing power on the new version blocks before the first >1MB block is produced. (Hopefully there will be a grace period of, say, 10k blocks after the 80% is triggered, for laggard miners and non-mining nodes to upgrade). So the old fork will have less than 20% hashing power, quickly dropping to as little as 5%. Blocks on the old fork will take about 2 hours each to produce, with coinbase rewards spendable after 1 to 2 weeks.

No company in the Bitcoin ecosystem will accept fresh reward coins from the old fork. There will be no "market" as the old fork will be unusable as it will take a year for difficulty to fall until old fork blocks take 10 mins each again.

It is not necessarily determined ahead of time which fork will be the 80% and which the 20%, so people will go slow for a while. In complex cases where the decision isn't clear it could take weeks or longer for one to win out. I wouldn't necessarily expect that to happen often, but it could happen.

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March 12, 2015, 11:35:57 PM
 #21976

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

Yes, but hacker(bot) can move fork-coins to fresh address too ? :-)

edit:
I only want to say. One mistake(signature) on worthless fork-chain and you lose all bitcoins in main-chain

The coins go to the same destination on both chains (or nowhere at all if the transaction isn't valid on both chains). So unless you were sending coins to the hacker on one chain, he won't get them on the other chain either.

Yes, you are right. But it is easy to scam noobs.
 - show them worthless fork-chain
 - pay them $$ for worthless fork-coins
 - and finally -> steal bitcoins using same transactions on main-chain
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March 12, 2015, 11:38:23 PM
 #21977

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

Yes, but hacker(bot) can move fork-coins to fresh address too ? :-)

edit:
I only want to say. One mistake(signature) on worthless fork-chain and you lose all bitcoins in main-chain

The coins go to the same destination on both chains (or nowhere at all if the transaction isn't valid on both chains). So unless you were sending coins to the hacker on one chain, he won't get them on the other chain either.

Yes, you are right. But it is easy to scam noobs.
 - show them worthless fork-chain
 - pay them $$ for worthless fork-coins
 - and finally -> steal bitcoins using same transactions on main-chain

Change the transaction format (header) slightly on the fork so transactions are not portable. That make the whole thing work more directly like a spin off and avoids the confusion that some transactions are portable and some not.
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March 12, 2015, 11:46:31 PM
 #21978

If you spend bitcoins on one fork then anybody can publish same transaction on other chain ... I think :-)

The wallet could manage that by moving the coins to fresh own address on the other chain?

Yes, but hacker(bot) can move fork-coins to fresh address too ? :-)

edit:
I only want to say. One mistake(signature) on worthless fork-chain and you lose all bitcoins in main-chain

The coins go to the same destination on both chains (or nowhere at all if the transaction isn't valid on both chains). So unless you were sending coins to the hacker on one chain, he won't get them on the other chain either.

Yes, you are right. But it is easy to scam noobs.
 - show them worthless fork-chain
 - pay them $$ for worthless fork-coins
 - and finally -> steal bitcoins using same transactions on main-chain

Change the transaction format (header) slightly on the fork so transactions are not portable. That make the whole thing work more directly like a spin off.

:-) please tell me, how many of 7,000,000,000 people can understand, verify and safe use bitcoins ?
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March 12, 2015, 11:47:09 PM
 #21979

you guys cant seriously still be debating side chains?  Undecided

Apparently you missed the part where the title of this thread actually says "Debate sidechains here!" Smiley
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March 12, 2015, 11:48:16 PM
 #21980

:-) please tell me, how many of 7,000,000,000 people can understand, verify and safe use bitcoins ?

It's less than the number of people currently using bitcoins.
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