Gold collapsing. Bitcoin UP.

[cypherdoc]

Blocksize debate blowing up all over /r/Bitcoin right now, though it's mostly pro-increase.

what strikes me most about /nullc and LukeJr objections are that they revolve around incorrect perceptions of what the Bitcoin market looks like today.  for instance, /nullc believes that mining is centralizing.  i don't; look at the pie charts from mempool:



the distribution of miners has improved (decentralized) markedly since the ghash event.  i've regularly documented that improvement over the years and believe we may have in fact witnessed the very last time any pool gets anywhere near 50%.  i've argued using game theory and it appears to have been prescient.

also, he believes that the decrease in full nodes "creates huge systemic risk and undermines Bitcoin's value proposition".  give me a break; the decrease in nodes yes might be due partly to node dropout but i think it is mainly due to the proliferation of SPV clients.  furthermore, i was initially a part of the Bitnodes Incentive Program and was one of it's first payment recipients, however, due to the fact they require re-registration every month, i've dropped out.  it's too much of a hassle and involves relatively complex code to re-register while the payout is trivial.  but i still run my nodes and as i've said before, i'm actually looking forward to learning how to prune so i can run a dozen more nodes or so.

and what does he mean by this? "This is especially concerning as we've seen the deployment of full nodes fade out and even large commercial operations become dependant on third party hosted node services."  what's he talking about and where's the evidence?

and then he points to Kaminsky as some kind of prophet?:  "it should be noted that this outcome was already predicted years ago (e.g. by Dan Kaminsky's comments that I was writing about above), but we've still slid into it."  what sticks in my mind is the lost bet btwn Garzik and Kaminsky when DK predicted Bitcoin's underlying Proof-of-Work hash function (Sha-2) would be replaced within 12 months:  https://storify.com/socrates1024/bitcoin-pow-bet-10btc-jgarzik-vs-dakami-may-2014.   There haven't been any more famous tech experts who have been more wrong about Bitcoin.  even DK admits it now.

and then he points to Todd and MPOE as worthy colleagues against increased block sizes:  "Rather, the only push you see against larger blocks come from strong advocates of personal autonomy and decenteralization, like Peter Todd; or the MPOE crowd".   aligning one's self with these 2 is even more dangerous than Kaminsky.

he's always been almost bearish on Bitcoin; for years.  he's always said mining is centralizing despite the facts.  he's been a fan of Ripple in the past here:  https://en.bitcoin.it/w/index.php?title=Scalability&action=historysubmit&diff=14273&oldid=14112

you'll notice in the link below he admits to going back and deleting his posts of support for Ripple in the past.  who does that?  own up to it, don't try to cover it up.

here's all his concerns highlighted in gory detail  :

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqycy4h

[rocks]

I'm for Gavin's 20MB increase.  But if I was doing it, I'd propose actually building a real supply/demand curve so economic analysis actually works.  The reason it doesn't work today is because additional demand (price) cannot ever create new supply (space in the block).

So I'd do it by allowing txn fee paying blocks to be located beyond the limit (its now a "soft" limit).  In other words, if your txn pays 0uBTC fee it can be located in the block at 0-20MB, if 1uBtc located at 0-21MB, if 2uBTC located at 0-22MB, 3uBTC located at 0-23MB, etc (or some other pricing curve).  So supply (space in a block) can actually increase as demand increases.

You might be able to look at historical block size vs price information to actually price this... it does not need to be perfect since an error will just move the graph a bit.  The biggest concern would be if exponential BTC price increases (vs fiat) makes the minimum fee way too high.  In that case, we are no worse than today's proposal.

I like this proposal a lot.

High-priority non-fee transactions that consume older coins are suppose to be just that, free and gain priority access to a block. Today's situation is even if your transaction has enough priority to qualify for free processing, they often take hours to confirm since most minors do not pick high priority transactions without a fee. This completely defeats the purpose of having the priority system at all.

Reserving a front space in each block for high-priority non-fee transactions does two things:
1) It would ensure that high-priority transactions are processed in a timely fashion
2) It would encourage more competition from low-priority transactions and possibly increase the fees they need to offer to be processed quickly

This would shift transaction fees more towards for profit services that are built on top of bitcoin and away from individual wallet users. I would consider this to be a good thing.

Anyone on this thread have contact with any of the core developers? Have they considered it? If not how could zerg propose it (provide people here also think it makes sense...)

[Adrian-x]

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqycy4h

You've repeatedly made this accusation regarding me specifically-

LOL, bribing up that history is his response to this comment, for pointing out sidechains stand to benefit from a small transaction size.  I was not picking on him or even challenging his position merely pointing out why there was a debate at all.  

I originally stopped reading after the word specifically. but if it's any consolation ripple has always been a centralized system, and I have taken a lot of flack for pointing out that's its Achilles' heel and not supporting it, why not take some heat on the other side for not recognizing that fact at the start.  

I think nullc relates to sidechains on a very personal level and is feeling very threatened at the moment, my comment was an observation not an accusation for the record.

[cypherdoc]

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqycy4h

You've repeatedly made this accusation regarding me specifically-

LOL, that is his response to this comment, for pointing out sidechains stand to benefit from a small transaction size.  I think nullc feels very defensive at the moment, I was not picking on him or even challenging his position merely pointing out why there was a debate at all. 

ppl get defensive when they know there's some truth to the allegation.  in fact, they start seeing things that aren't there, like in your comment.  problem is, though, Blockstream for profit does indeed represent a conflict of interest to expanding tx throughput on the MC.  it's clear they stand to profit the more this tx volume gets pushed off to SC's.  plus, given all his Bitcoin skepticism and behavior over the years, it all fits.

[pa]

https://www.reddit.com/r/Bitcoin/comments/34zj70/fincen_fines_ripple_labs_inc_in_first_civil/

[Chainsaw]

https://www.reddit.com/r/Bitcoin/comments/34zj70/fincen_fines_ripple_labs_inc_in_first_civil/

So much joy from this news.

[Adrian-x]

https://www.reddit.com/r/Bitcoin/comments/34zj70/fincen_fines_ripple_labs_inc_in_first_civil/

So much joy from this news.

I cant help but have a little chuckle, it is now obvious to me one Core Developer is an amazing programer but with limited foresight.

[Adrian-x]

ppl get defensive when they know there's some truth to the allegation.  in fact, they start seeing things that aren't there, like in your comment.  problem is, though, Blockstream for profit does indeed represent a conflict of interest to expanding tx throughput on the MC.  it's clear they stand to profit the more this tx volume gets pushed off to SC's.  plus, given all his Bitcoin skepticism and behavior over the years, it all fits.

life isn't easy and I think there is more to his stress than we know, my only interest is to see Bitcoin succeed.

[cypherdoc]

https://www.reddit.com/r/Bitcoin/comments/34zj70/fincen_fines_ripple_labs_inc_in_first_civil/

So much joy from this news.

I cant help but have a little chuckle, it is now obvious to me one Core Developer is an amazing programer but with limited foresight.

limited understanding of economics and financial game theory.  his name is gmaxwell.

edit:  oh, and he's willing to try and cover up his posting history in this regard.

[cypherdoc]

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqycy4h

You've repeatedly made this accusation regarding me specifically-

LOL, bribing up that history is his response to this comment, for pointing out sidechains stand to benefit from a small transaction size.  I was not picking on him or even challenging his position merely pointing out why there was a debate at all.  

I originally stopped reading after the word specifically. but if it's any consolation ripple has always been a centralized system, and I have taken a lot of flack for pointing out that's its Achilles' heel and not supporting it, why not take some heat on the other side for not recognizing that fact at the start.  

I think nullc relates to sidechains on a very personal level and is feeling very threatened at the moment, my comment was an observation not an accusation for the record.

since even before the San Jose Conference 2013, smoothie and i have been pounding this thread and the forum in general about the problems with centralized Ripple gateways and their ridiculous premine model of XRP that awarded the founders billions.  we now see the fallout btwn them that has resulted.  anyone truly understanding of Bitcoin's core principles and how they did not relate to Ripple in any way recognized what has happened from the very beginning.

[cypherdoc]

here's LukeJr going off on Reddit:

https://www.reddit.com/r/Bitcoin/comments/34y48z/mike_hearn_the_capacity_cliff_and_why_we_cant_use/cqzadpn

[Chalkbot]

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqycy4h

You've repeatedly made this accusation regarding me specifically-

LOL, bribing up that history is his response to this comment, for pointing out sidechains stand to benefit from a small transaction size.  I was not picking on him or even challenging his position merely pointing out why there was a debate at all.  

I originally stopped reading after the word specifically. but if it's any consolation ripple has always been a centralized system, and I have taken a lot of flack for pointing out that's its Achilles' heel and not supporting it, why not take some heat on the other side for not recognizing that fact at the start.  

I think nullc relates to sidechains on a very personal level and is feeling very threatened at the moment, my comment was an observation not an accusation for the record.

since even before the San Jose Conference 2013, smoothie and i have been pounding this thread and the forum in general about the problems with centralized Ripple gateways and their ridiculous premine model of XRP that awarded the founders billions.  we now see the fallout btwn them that has resulted.  anyone truly understanding of Bitcoin's core principles and how they did not relate to Ripple in any way recognized what has happened from the very beginning.

Maybe the entire point of Ripple was to show bitcoin's superiority to the idea of "modernizing" the traditional money system.

[cypherdoc]

Coinbase coming out backing Gavin:

https://twitter.com/cypherdoc2/status/595741967759335426

[justusranvier]

Maybe the entire point of Ripple was to show bitcoin's superiority to the idea of "modernizing" the traditional money system.

I'll just leave this here...

If FinCEN loses they say "hmm well now we know" and there is absolute no consequence.  Even the cost of the trial was simply paid for by taxpayers (including Mike indirectly). If Mike loses they judicial system could take everything he owns, include his freedom for the next thirty years.  Not really worth it.

Imagine we played a game of poker and if you win I have to say "I was wrong" in public, if I win you get executed.  Now you are 80% sure you can beat me in poker, everyone says you have a very sold game.  Would you play?  How about if you were 99.9% sure?

Everybody thought I was exaggerating. "It's no problem - we'll talk to the regulators and do what it takes to become compliant like a good citizens and everything will be fine," they said.

Future Bitcoin services need to be run as if they are illegal enterprises, like Silk Road, even if what they are doing is apparently legal.

Why:

• Laws change.
• Regulations are vague and open-ended, and it's probably impossible to operate a business without accidentally violating one.
• Even if you do manage to operate without violating any rule law enforcement agencies do not always limit themselves to the letter of the law when deciding to begin an enforcement action.
• Governments are not the only threats to a successful business. Non-governmental organized crime is almost equally capable of extortion.

The solution is to run all services in the darknet, not tied to any physical location or legal jurisdiction, and without any explicit connection to a real-life identity.

[cypherdoc]

given what has happened to Ripple today, i am forced to haul out one of my old time memes which i have now taken up to 70% probability in my own mind:

"The blockchain may only ever be applicable to Bitcoin as Money".

i've written several posts over the years detailing how CEO's and founders of Bitcoin financial startups are identifiably known targets for law enforcement.  they are almost irresistible targets as they are treading on the foundations of our financial system and incumbent interests.  this applies to every Bitcoin 2.0 company and every altcoin that has a known founder.

Bitcoin, as the only purely decentralized POW protocol designed specifically to be Sound Money, has none of these problems.  this is exactly why Satoshi disappeared.  sure, you can bring up the age 'ol argument that the USG can try to shutdown Bitcoin here in the US but then there will be many countries who will simply allow Bitcoin to route around the damage.  there is too much to be gained.

fiat investment is going to start being forced into the BTC currency unit as the only safe option.

edit:  here's one guy starting to get it: 
https://twitter.com/kristovatlas/status/595740095036182532

[solex]

Coinbase coming out backing Gavin:

https://twitter.com/cypherdoc2/status/595741967759335426

Excellent. Any serious Bitcoin business will have this view because retaining the 1MB will not only cripple the network but also cripple dependent business models.

I think the problem that luke, gmaxwell, todd etc have is that they are too close to the tech. They think that the decay in confirmation times can be managed (when it will be a PR disaster), they think that the 1MB has relevance to the fees market, they ignore that node quality is improving even though node quantity declines, (but the decline should eventually be arrested by a growing ecosystem, and increasing price).

They basically need to get out of the woods and see the whole landscape: like Coinbase clearly does.

[justusranvier]

even though node quantity declines, (but the decline should eventually be arrested by a growing ecosystem, and increasing price).

Here's a quote from an essay I'm using as a source for my next article about Bitcoin economics. See if you can spot the parallel between this example and the number of nodes in the Bitcoin network:

https://mises.org/library/why-nazism-was-socialism-and-why-socialism-totalitarian

In the face of the combination of price controls and shortages, the effect of a decrease in the supply of an item is not, as it would be in a free market, to raise its price and increase its profitability, thereby operating to stop the decrease in supply, or reverse it if it has gone too far. Price control prohibits the rise in price and thus the increase in profitability. At the same time, the shortages caused by price controls prevent increases in supply from reducing price and profitability. When there is a shortage, the effect of an increase in supply is merely a reduction in the severity of the shortage. Only when the shortage is totally eliminated does an increase in supply necessitate a decrease in price and bring about a decrease in profitability.

As a result, the combination of price controls and shortages makes possible random movements of supply without any effect on price and profitability. In this situation, the production of the most trivial and unimportant goods, even pet rocks, can be expanded at the expense of the production of the most urgently needed and important goods, such as life-saving medicines, with no effect on the price or profitability of either good. Price controls would prevent the production of the medicines from becoming more profitable as their supply decreased, while a shortage even of pet rocks prevented their production from becoming less profitable as their supply increased.

[cypherdoc]

Greece has revealed it is to introduce a surcharge for all cashpoint withdrawals and financial transactions in a desperate attempt to prevent citizens withdrawing their money from the country's beleaguered banks.

http://www.dailymail.co.uk/news/article-3068975/Greece-introduces-mandatory-surcharges-cashpoints-desperate-attempt-raise-money-stop-panicked-citizens-withdrawing-life-savings-country-s-beleaguered-banks.html

[cypherdoc]

more Gavin.

http://gavinandresen.ninja/does-more-transactions-necessarily-mean-more-centralized#kudo

[marcus_of_augustus]

Coinbase coming out backing Gavin:

https://twitter.com/cypherdoc2/status/595741967759335426

Excellent. Any serious Bitcoin business will have this view because retaining the 1MB will not only cripple the network but also cripple dependent business models.

I think the problem that luke, gmaxwell, todd etc have is that they are too close to the tech. They think that the decay in confirmation times can be managed (when it will be a PR disaster), they think that the 1MB has relevance to the fees market, they ignore that node quality is improving even though node quantity declines, (but the decline should eventually be arrested by a growing ecosystem, and increasing price).

They basically need to get out of the woods and see the whole landscape: like Coinbase clearly does.

coinbase looks to me like the next mt. gox waiting to happen ... can't see why you guys always rally behind centralised organisations for your self-affirmation. coinbase will be hacked or corrupted in some way, will you be singing their praises for what that brings?

luke-jr gmaxwell ptodd have done nothing to deserve the opprobium being dished up here, most of them have worked for free for years already, such ungrateful ignorance on display here is dismaying. There are many other quieter devs who disagree with gavin/hearn on this one but afraid of speaking out because of the risk of the kind of pillorying from the loud-mouths that might result. Wumpus is actually the lead dev now, gavin has been a figurehead for the last 2 versions ... and I haven't seen anyone question his role in the Bitcoin Foundation fiasco?