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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 1804134 times)
tvbcof
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August 07, 2015, 02:19:43 AM
 #29941

The economy has been growing since 2010.

The economy has been growing since 2010.

OMG, it keeps getting more hilarious each time you say it.  Tell us another one!   Cheesy Grin Cheesy Grin Cheesy

(Frap.doc, please replace the battery in your sarcasm detector.   Wink)

EDIT:

http://i.imgur.com/QePtpts.jpg

#REKT

These idiots and their arguments/assertions remind me of this toy I used to have as a kid:



The same car can be #REKT over and over again with the minor effort of clipping the doors back on.  Even as a kid of 7 I got bored with the repetition after half an hour or so.  Cypherdoc, for instance, never seems to tire of such entertainment.


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cypherdoc
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August 07, 2015, 02:34:03 AM
 #29942

This has always been my vision; take over the Forex markets. Are we going to let Bitcoin do this or not?:

http://www.fxstreet.com/analysis/daily-interviews/2015/08/06/03/
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August 07, 2015, 04:49:58 AM
 #29943

But only 250.000(sic!) adresses are active ... https://blockchain.info/charts/n-unique-addresses. In january the number dropped to 116.000.

I don't understand why upthread comments say that you are only quoting data for one wallet. The above data is for all addresses on the block chain. Duh!    Roll Eyes

I think it is very likely that Bitcoin adoption has stalled.

And it is very likely that active use is much less than a million users.

There are likely a million+ users who hold balances though.

I wouldn't worry about it. We are heading into a low price below $100 for Spring 2016, because the $usd is coming so strong due to the contagion in Europe, China, and developing markets. Commodities are declining.

Next year we will bottom and see the interest in private assets grow again, but it will be driven more by anti-government sentiment (due to expropriation in the EU) and thus anonymous coins will receive much more interest than Bitcoin.

Hi klee. Thanks for that.

however, i was hoping for a chart resembling this, with gold charted in.



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August 07, 2015, 07:03:49 AM
 #29944

continuing the plunge:

Zarathustra
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August 07, 2015, 07:06:45 AM
 #29945

We are heading into a low price below $100 for Spring 2016, because the $usd is coming so strong due to the contagion in Europe, China, and developing markets.

This prediction will fail.

"Staat nenne ich's, wo alle Gifttrinker sind, Gute und Schlimme: Staat, wo alle sich selber verlieren, Gute und Schlimme:
Staat, wo der langsame Selbstmord aller – »das Leben« heisst."
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August 07, 2015, 11:24:33 AM
 #29946

We are heading into a low price below $100 for Spring 2016, because the $usd is coming so strong due to the contagion in Europe, China, and developing markets.

This prediction will fail.

I think TBTB is over exaggerating the effect of a strong dollar regarding bitcoin. While it's true, that the euro will lose purchasing power compared to the dollar, bitcoin will function as a safe heaven to store wealth when europe starts crashing. For example, for me it's much easier to transfer euro to bitcoin than euro to dollar. Also I am in controle of my wealth and I am out of reach of the banks and the state.
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August 07, 2015, 01:13:34 PM
 #29947

Am I missing something? I can't think of a single way to design a system where it is economically advantageous to move away from centralization (where we are intentionally neglecting the possibility that bitcoins might be worth more in a more decentralized environment).

Heat dissipation, possibly.

A huge mining datacenter will produce a lot of heat, and may not be able to make efficient use of it.

Whereas, a million individuals with ASICs in their hot water heater, may be able to utilize close to 100% of the heat. Then their marginal cost to run the miner is close to zero. The difficulty would rise to make the marginal revenue close to zero also, but it would still be an advantage to decentralized mining.
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August 07, 2015, 01:26:13 PM
 #29948

We are heading into a low price below $100 for Spring 2016, because the $usd is coming so strong due to the contagion in Europe, China, and developing markets.

This prediction will fail.

First it was this Fall, now it's next Spring.  Roll Eyes
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August 07, 2015, 02:02:33 PM
 #29949

Am I missing something? I can't think of a single way to design a system where it is economically advantageous to move away from centralization (where we are intentionally neglecting the possibility that bitcoins might be worth more in a more decentralized environment).

Heat dissipation, possibly.

A huge mining datacenter will produce a lot of heat, and may not be able to make efficient use of it.

Whereas, a million individuals with ASICs in their hot water heater, may be able to utilize close to 100% of the heat. Then their marginal cost to run the miner is close to zero. The difficulty would rise to make the marginal revenue close to zero also, but it would still be an advantage to decentralized mining.

very good pt.  also, those small asics will dissipate the heat much more efficiently even if they can't utilize it.
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August 07, 2015, 02:08:14 PM
 #29950

EXCEPT, the game theory arguments. The bitcoins you mine are likely to be worth less simply because people won't like the idea of you having all of the control. Even if people didn't mind that you had 100% control, they would certainly mind if you abused your power.

Am I missing something?

i don't think you are:

[–]cypherdoc2 0 points 2 hours ago

It wouldn't die because Bitcoin owners have an almost infinite reason to defend the network; the potential for Bitcoin to Moon as a result of its fixed monetary supply.

https://www.reddit.com/r/Bitcoin/comments/3g3qje/serious_if_the_block_size_limit_was_removed_why/ctuotpg
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August 07, 2015, 02:53:24 PM
 #29951

Am I missing something? I can't think of a single way to design a system where it is economically advantageous to move away from centralization (where we are intentionally neglecting the possibility that bitcoins might be worth more in a more decentralized environment).

Heat dissipation, possibly.

A huge mining datacenter will produce a lot of heat, and may not be able to make efficient use of it.

Whereas, a million individuals with ASICs in their hot water heater, may be able to utilize close to 100% of the heat. Then their marginal cost to run the miner is close to zero. The difficulty would rise to make the marginal revenue close to zero also, but it would still be an advantage to decentralized mining.

very good pt.  also, those small asics will dissipate the heat much more efficiently even if they can't utilize it.


rofl, keep dreamin.
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August 07, 2015, 03:01:02 PM
 #29952

yeah baby, In Sync!  i loved those guys, btw:

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August 07, 2015, 03:13:28 PM
 #29953

Thank you to everyone for your acknowledgement of my paper--it is satisfying to see something you've worked hard on begin to make an impact in the discussion!  Like I said earlier, it was really just a formalization of some of the ideas we've been discussing here over the past months.    

I'm very happy with how the paper was received.  Between public and private comments (and Peter Todd calling it pseudo science) several aspects of the paper were challenged, and now I'm further convinced that the model and results are both useful and valid.  I think the most accurate criticism of the paper was that I should have spent more effort discussing the inter/intra communication issues (the "you don't orphan you're own block" point).1 Hopefully, I'll have time to work on this in the fall.  

I exchanged emails with Greg Maxwell over several aspects of the paper that he questioned.  One point he did make, that I admit is valid but do not personally see as an issue, is that the most profitable "configuration" according to the results from the paper is a single "super pool" made up of ALL the network's hashing power (which would be centralizing).  This would minimize the propagation impedance.  While I agree that this is true, it seems like just another way of looking at the 51% problem.  We already know that if one entity controls a huge amount of hash power they can do nasty things and gain certain advantages.  But it would be nice to find a way to explain why this shouldn't happen with more rigour than the "game theory" or "anti-fragile" fallback positions…


The experiment with the $10 bounties produced a mixed result.  On the one hand, I think it got people who normally wouldn't read such a paper more involved in the discussion, but on the other hand (like brg444 pointed out) it may have made the thread less readable.  I ended up paying out $90 to catch several small errors.  The error I was most pleased to catch was Noosterdam's "innumerate" versus "enumerate."  I think I've been using these words interchangeably my entire life but they actually mean very different things!


1Note that the math is valid nonetheless, as this just affects the propagation delay which was accounted for in the model.  

I can't think of any economic disincentives against centralizing, independent of the block size issue and propagation. You always get economies of scale (e.g., you produce one mask for every new ASIC, but that mask let's you order 10 thousand or 10 million chips depending on your budget/scale... lots of other examples too like data center staff come to mind).

EXCEPT, the game theory arguments. The bitcoins you mine are likely to be worth less simply because people won't like the idea of you having all of the control. Even if people didn't mind that you had 100% control, they would certainly mind if you abused your power.

Am I missing something? I can't think of a single way to design a system where it is economically advantageous to move away from centralization (where we are intentionally neglecting the possibility that bitcoins might be worth more in a more decentralized environment).

here's a very real everyday example of the decentralizing effects Bitcoin is having on ppl:

"The domain expertise, relationships, and career equity I've built are things I never could have done while at Goldman," Chou said. "As a former trader, I'm glad I made this trade-off at the stage of my career that I did."

http://www.reuters.com/article/2015/08/07/us-usa-bitcoin-wall-street-analysis-idUSKCN0QC0EO20150807
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August 07, 2015, 03:18:37 PM
 #29954

yeah baby, In Sync!  i loved those guys, btw:



gathering momentum to the downside.

Dow -117.

uh, Janet?
Peter R
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August 07, 2015, 03:27:00 PM
 #29955

Am I missing something? I can't think of a single way to design a system where it is economically advantageous to move away from centralization (where we are intentionally neglecting the possibility that bitcoins might be worth more in a more decentralized environment).

Heat dissipation, possibly.

A huge mining datacenter will produce a lot of heat, and may not be able to make efficient use of it.

Whereas, a million individuals with ASICs in their hot water heater, may be able to utilize close to 100% of the heat. Then their marginal cost to run the miner is close to zero. The difficulty would rise to make the marginal revenue close to zero also, but it would still be an advantage to decentralized mining.

That's a really good point.  The amortized cost per hash, η, in the miner's profit equation can be made very low if the heat byproduct from hashing is useable:  



I think this means that a miner who has a larger η value (e.g., one who can't use the byproduct heat efficiently) must compete by having better connectivity to network hash power so that he can produce larger blocks to claim more fee revenue.

It would be nice to make a table of the aspects of mining that favour centralization versus those that favour decentralization.    

Run Bitcoin Unlimited (www.bitcoinunlimited.info)
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August 07, 2015, 03:54:51 PM
 #29956

i think everybody and their mother is thinking that the USD is going to go up in the next crisis, which could be now.  i think this will be a mistake:

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August 07, 2015, 04:54:38 PM
 #29957

i think everybody and their mother is thinking that the USD is going to go up in the next crisis, which could be now.  i think this will be a mistake:


go up against what?

against bitcoin? probably not.
Against pretty much any other fiat, its going to go up guaranteed.

Bro, do you even blockchain?
-E Voorhees
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August 07, 2015, 05:00:57 PM
 #29958

the short just keeps getting better and better!:



these guys used to be one of the biggest bulk carrier companies in the world.  not so much anymore:

http://www.dryships.com/index.php

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August 07, 2015, 05:17:22 PM
 #29959

Peter, I read through about half of your paper and it outlines the issues very well. What it appears to me is how things will be moving forward there will be no block size limit and the network will be self-regulating as there is increased risk in creating larger blocks for more fees (i.e. pay off) in the form of that block being orphaned.

Sorry for the delayed response.  I've been travelling through different time zones and have had limited internet access.

What I am still on the side lines about is whether there will be a successful attack on creating a very large block like say 1 TB just be happenstance.

If there is no limit, then there is always a non-zero probability of a very large block being included in the Blockchain.  The thing is, that this probability becomes exceedingly small as the size of the spam block grows.  Another way to look at this, is the expected cost to create a very large block grows quickly with the block's size.  

I tried to illustrate this effect in Fig. 8:



Even with a propagation impedance of 2 sec/MB (which I'm confident is faster than the present network average), it still costs 1,000 BTC to produce a 1 GB spam block (and astronomically more to produce a 1 TB spam block!).  

Of course putting an upper limit on the block size could help I personally would like to see bitcoin stand on its own two feet with no limit restrictions on block sizes and let the free market of miners and attackers decide on how big the blocks should be going forward.

Me too.  I think BIP101 (Gavin's proposal) is nearly ideal.  If it were my exclusive choice, the only thing I'd change would be to keep the doublings going forever.  We'd double the limit every two year, so as not to create a major disruption with a sudden rule change, but still slowly transition to an entirely market-controlled block size in the far future.  If a genuine problem came up in 10 years, it's a soft fork to reduce the limit (which is easier than a hard fork to raise the limit).

I'll have to read the rest of your paper but so far it is very interesting how you have outline the major issues and put them into visual representations for all to see and understand.

Thanks!

Run Bitcoin Unlimited (www.bitcoinunlimited.info)
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August 07, 2015, 05:28:08 PM
 #29960

...  
I exchanged emails with Greg Maxwell over several aspects of the paper that he questioned.  One point he did make, that I admit is valid but do not personally see as an issue, is that the most profitable "configuration" according to the results from the paper is a single "super pool" made up of ALL the network's hashing power (which would be centralizing).  This would minimize the propagation impedance.  While I agree that this is true, it seems like just another way of looking at the 51% problem.  We already know that if one entity controls a huge amount of hash power they can do nasty things and gain certain advantages.  But it would be nice to find a way to explain why this shouldn't happen with more rigour than the "game theory" or "anti-fragile" fallback positions…
...


I think what a lot of the sharp technical people miss is that realworld markets tend to *not* centralize to a total monopoly, even in a commodity market. A lot of people correctly realize that as bitcoin mining commoditizes, competition will happen on marginal energy cost, economies of scale have large impact, and therefore the market will centralize. People take this to extreme and assume that therefore the market will centralize to a single player with the cheapest energy.

But that usually doesn't actually happen in the extreme. Mining companies will innovate and vertically integrate other services, where the margin on the higher level services easily eclipses any remaining margin on the core commodity product production. Look at oil companies or car insurance... There are plenty of players, despite very similarly centralizing forces as with bitcoin mining.

It kinda boils down to a lack of appreciation for human ingenuity (ability to innovate and vertically integrate driven by profit motive, etc). This is what I think a lot of the small-blockers and uber-decentralists fail to fully understand. I wish I could describe this more rigorously at the moment.

Anyways, great job on the paper, Peter. Awesome that you spent the time to formalize it - the community needs more of that.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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