Gold collapsing. Bitcoin UP.

[cypherdoc]

I've been watching the MACD centerline crossover as well. Historically it has been a good confirmation of trend continuation.

more importantly, it's a long term momentum indicator much less susceptible to manipulation.

[1713463507]

1713463507

[bassclef]

I've been watching the MACD centerline crossover as well. Historically it has been a good confirmation of trend continuation.

more importantly, it's a long term momentum indicator much less susceptible to manipulation.

Next hurdle is the 200 day / 30 week MA. That's a biggie for the pro technical traders out there.

[rocks]

I think there's two ways to look at it:

1.  Clearly, if an attacker has 50.0001%, then he has a 100% chance of eventually forging the longest chain.  If the attacker has 49.9999% instead, it makes sense that he'd have almost 100% chance, but not quite (why would it suddenly drop to less than 50%?).

2.  It's the attacker who gets to choose when to broadcast the attack chain.  Just by random luck, there's a good chance that at some point the attacker will hit a lucky streak and mine several blocks in quick succession.  When he hits this lucky streak and pulls ahead of the honest chain, he broadcasts his attack chain.

Thanks for the explanation guys. OK, now understand that the equation calculates how likely it is that at some point after 6 confirmations an attacker will gain the longest chain, publish it, and get the rest of the network over to that chain. This is just the odds though, not the cost.

It would be interesting to see the expected cost of such an attack though. If an attacker with 45% hash rate has a 96% chance of eventually gaining the lead for a moment, then a good portion of that probability is most likely in the long tail of many blocks from now. There should be an equation that calculates the average or expected cost of such an attack, such as by 50 blocks the attacker has x probability of succeeding, by 100 blocks y chance & by 10000 block z chance. And of course there is the possibility that the attacker has spent months without gaining the lead, and has lost all of those block rewards.  

I think we'd see that the expected cost is quite high, even for a 45% attacker. i.e. Even if you knew that the counter party to your bitcoin transaction had 45% hash rate and would use it against you, then 6 confirmation would still be enough for the value of a car or house, since an attack would cost more than that, half a day of confirmations would be enough for a skyscraper, and a day of confirmations for an island. This seems OK to me.

[Peter R]

I think there's two ways to look at it:

1.  Clearly, if an attacker has 50.0001%, then he has a 100% chance of eventually forging the longest chain.  If the attacker has 49.9999% instead, it makes sense that he'd have almost 100% chance, but not quite (why would it suddenly drop to less than 50%?).

2.  It's the attacker who gets to choose when to broadcast the attack chain.  Just by random luck, there's a good chance that at some point the attacker will hit a lucky streak and mine several blocks in quick succession.  When he hits this lucky streak and pulls ahead of the honest chain, he broadcasts his attack chain.

Thanks for the explanation guys.

My pleasure.

OK, now understand that the equation calculates how likely it is that at some point after 6 confirmations an attacker will gain the longest chain, publish it, and get the rest of the network over to that chain. This is just the odds though, not the cost.

It would be interesting to see the expected cost of such an attack though. If an attacker with 45% hash rate has a 96% chance of eventually gaining the lead for a moment, then a good portion of that probability is most likely in the long tail of many blocks from now. There should be an equation that calculates the average or expected cost of such an attack, such as by 50 blocks the attacker has x probability of succeeding, by 100 blocks y chance & by 10000 block z chance. And of course there is the possibility that the attacker has spent months without gaining the lead, and has lost all of those block rewards.  

I think we'd see that the expected cost is quite high, even for a 45% attacker. i.e. Even if you knew that the counter party to your bitcoin transaction had 45% hash rate and would use it against you, then 6 confirmation would still be enough for the value of a car or house, since an attack would cost more than that, half a day of confirmations would be enough for a skyscraper, and a day of confirmations for an island. This seems OK to me.

Meni Rosenfeld does something similar to what you're suggesting in his "Analysis of hashrate-based double-spending" paper from December 2012.  I haven't looked into this paper in detail, but this table from Section 6 caught me eye.  It allows you to figure out how many confirmations you should wait depending on how large the transaction is in addition to the attacker's hash rate.



I'd be interested if you can think of ways to extend this work.

[cypherdoc]

I think there's two ways to look at it:

1.  Clearly, if an attacker has 50.0001%, then he has a 100% chance of eventually forging the longest chain.  If the attacker has 49.9999% instead, it makes sense that he'd have almost 100% chance, but not quite (why would it suddenly drop to less than 50%?).

2.  It's the attacker who gets to choose when to broadcast the attack chain.  Just by random luck, there's a good chance that at some point the attacker will hit a lucky streak and mine several blocks in quick succession.  When he hits this lucky streak and pulls ahead of the honest chain, he broadcasts his attack chain.

Thanks for the explanation guys. OK, now understand that the equation calculates how likely it is that at some point after 6 confirmations an attacker will gain the longest chain, publish it, and get the rest of the network over to that chain. This is just the odds though, not the cost.

It would be interesting to see the expected cost of such an attack though. If an attacker with 45% hash rate has a 96% chance of eventually gaining the lead for a moment, then a good portion of that probability is most likely in the long tail of many blocks from now. There should be an equation that calculates the average or expected cost of such an attack, such as by 50 blocks the attacker has x probability of succeeding, by 100 blocks y chance & by 10000 block z chance. And of course there is the possibility that the attacker has spent months without gaining the lead, and has lost all of those block rewards.  

I think we'd see that the expected cost is quite high, even for a 45% attacker. i.e. Even if you knew that the counter party to your bitcoin transaction had 45% hash rate and would use it against you, then 6 confirmation would still be enough for the value of a car or house, since an attack would cost more than that, half a day of confirmations would be enough for a skyscraper, and a day of confirmations for an island. This seems OK to me.

i posted earlier how the incentives in Bitcoin continue to screw up every major theory about mining cartels colluding to cheat.  yet, we continue to get them.  here's Ed Felten again:

ES-miners can’t agree to cheat, because it’s too easy for them to cheat on that agreement.

https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/

[cypherdoc]

I think there's two ways to look at it:

1.  Clearly, if an attacker has 50.0001%, then he has a 100% chance of eventually forging the longest chain.  If the attacker has 49.9999% instead, it makes sense that he'd have almost 100% chance, but not quite (why would it suddenly drop to less than 50%?).

2.  It's the attacker who gets to choose when to broadcast the attack chain.  Just by random luck, there's a good chance that at some point the attacker will hit a lucky streak and mine several blocks in quick succession.  When he hits this lucky streak and pulls ahead of the honest chain, he broadcasts his attack chain.

Thanks for the explanation guys.

My pleasure.

OK, now understand that the equation calculates how likely it is that at some point after 6 confirmations an attacker will gain the longest chain, publish it, and get the rest of the network over to that chain. This is just the odds though, not the cost.

It would be interesting to see the expected cost of such an attack though. If an attacker with 45% hash rate has a 96% chance of eventually gaining the lead for a moment, then a good portion of that probability is most likely in the long tail of many blocks from now. There should be an equation that calculates the average or expected cost of such an attack, such as by 50 blocks the attacker has x probability of succeeding, by 100 blocks y chance & by 10000 block z chance. And of course there is the possibility that the attacker has spent months without gaining the lead, and has lost all of those block rewards.  

I think we'd see that the expected cost is quite high, even for a 45% attacker. i.e. Even if you knew that the counter party to your bitcoin transaction had 45% hash rate and would use it against you, then 6 confirmation would still be enough for the value of a car or house, since an attack would cost more than that, half a day of confirmations would be enough for a skyscraper, and a day of confirmations for an island. This seems OK to me.

Meni Rosenfeld does something similar to what you're suggesting in his "Analysis of hashrate-based double-spending" paper from December 2012.  I haven't looked into this paper in detail, but this table from Section 6 caught me eye.  It allows you to figure out how many confirmations you should wait depending on how large the transaction is in addition to the attacker's hash rate.



I'd be interested if you can think of ways to extend this work.

that's kind of a weird chart b/c it is denominated in BTC.  even Meni says so:

These values should be taken with a grain of salt, because of the many modeling assumptions made

"value" will vary greatly depending on whether 1BTC buys you a loaf of bread vs an island.

[sickpig]

can one of you tech guys comment on Peter Todds claim that there was an entire book embedded in the BC a month ago?  how is it done?

https://www.reddit.com/r/Bitcoin/comments/34uu02/why_increasing_the_max_block_size_is_urgent_gavin/cqystoo?context=3

As Odalv already said tx size can be really big. If you go over the 100KB a transaction
is considered non-standard though, see: https://github.com/bitcoin/bitcoin/blob/master/src/main.cpp#L603-L611
and  https://github.com/bitcoin/bitcoin/blob/master/src/main.h#L55-L56

Code:

   // Extremely large transactions with lots of inputs can cost the network
    // almost as much to process as they cost the sender in fees, because
    // computing signature hashes is O(ninputs*txsize). Limiting transactions
    // to MAX_STANDARD_TX_SIZE mitigates CPU exhaustion attacks.
    unsigned int sz = tx.GetSerializeSize(SER_NETWORK, CTransaction::CURRENT_VERSION);
    if (sz >= MAX_STANDARD_TX_SIZE) {
        reason = "tx-size";
        return false;
    }

Code:

/** The maximum size for transactions we're willing to relay/mine */
static const unsigned int MAX_STANDARD_TX_SIZE = 100000;

That said as long as you find a miner/poll that accept to include your tx
in the next block you're golden.

As soon as I have time I'll look for the actual txs that Peter Todd was referring to.

thanks for that.  but even if a miner tries to incl a non std tx into his solved block, it's quite probable that the majority of nodes/miners  still reject the block as a result, no?

The fact that the book is there on the blockchain means that the nonstandard tx was included in a block.

You need to find a pool accepting your nonstd tx, and it seems that eligius would do it if you pay enough  fees.

How are transactions selected for blocks?
Transaction Processing
Current transaction selection policy:

Both standard and non-standard transactions, including arbitrary P2SH, are mined if they pay a reasonable fee.
Probable spam incurs a penalty on transaction priority.
Dust, confirmed spam, "bare" multisig, and custom "dangerous" scripts will not be mined under any conditions.

I've never tried but as long as you forward the tx directly to the eligius node it should work. In fact it seems to me that nonstandard txs are not relayed by full nodes, but I could be wrong.

[Zangelbert Bingledack]

Let us assume unlimited block size and partial-monopolies. Thus the transaction fee can always be forced higher in order to generate more revenue for the miners.

Price fixing doesn't work because the incentive to break the price-fixing agreement and undercut the other miners becomes immense; the higher a group of miners agree to set the price floor, the greater the incentive to break the agreement. Say the other miners are refusing any transactions with less than $1 in fees. A miner that picks up the myriad 10-, 20-, 50-, 80-, and 90-cent fee transactions that other miners refuse, in addition to all the $1 fee transactions, is going to positively rake it in whenever they find a block.

If we instead assume limited block size, then the Bitcoin foundation will set the transaction fees, not the market.

The market ultimately determines the blocksize, and every other parameter. The devs, Foundation, etc. only suggest changes. I think it's highly likely the market will be arbitraging all the controversial hard forks on the exchanges, at least after the first one (there might not be time to make the arrangements if the first one is a surprise).

[Peter R]

i posted earlier how the incentives in Bitcoin continue to screw up every major theory about mining cartels colluding to cheat.  yet, we continue to get them.  here's Ed Felten again:

ES-miners can’t agree to cheat, because it’s too easy for them to cheat on that agreement.

https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/

Speaking of Ed Felton, looks like he was just appointed by the White House as Deputy U.S. Chief Technology Officer:

https://www.whitehouse.gov/blog/2015/05/11/white-house-names-dr-ed-felten-deputy-us-chief-technology-officer

[cypherdoc]

there's a subtlety in here that bears noting that i've not seen mentioned anywhere yet dovetails nicely with my Wall St vs Silicon Valley thesis.

Lawsky says Coinbase doesn't have license approval in NY and now Dresslar says California Dept of Business Oversight is not prepared to say itBit can operate in California?  Conflict is good when it comes to Bitcoin and it transcends borders:

http://www.wired.com/2015/05/new-york-backs-bitcoin-exchange-may-not-fly-california/

[Zangelbert Bingledack]

They hit the dreaded Digital Kill Switch. What happens then?

Dissidents and competitors are targeted and eliminated (Digital Kill Switch one of the important tools of discipline on anyone who doesn't conform). The masses huddle into the NWO one world reserve currency and Global Technocracy fascist economy.

1984.

It is a slow burn eugenics paradigm to achieve Ted Turner's 500 million population goal.

you're a whack job.

Actually there are population-reducing agendas (debatable whether they're conspiracies) out there,* but when they turn on the kill switch, we just fork to a different mining algo (etc.), keep the ledger, and anyone who cares about unimpeachable money (or whatever other feature the NWO decides to remove) joins in. We've discussed this before.

*It doesn't take much study of environmental issues to realize that it always comes back to overpopulation. You can tinker around the edges, but the only final solution (heh) to most environmental problems, at least until space colonization, is a lower population size. This fundamental tradeoff between population and environmental quality means that if someone is hardcore enough about their environmentalist agenda, then population limiting through birth control, propaganda, or even in the extreme case eugenics and murder, might start to look like reasonable options to them.

[cypherdoc]

i posted earlier how the incentives in Bitcoin continue to screw up every major theory about mining cartels colluding to cheat.  yet, we continue to get them.  here's Ed Felten again:

ES-miners can’t agree to cheat, because it’s too easy for them to cheat on that agreement.

https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/

Speaking of Ed Felton, looks like he was just appointed by the White House as Deputy U.S. Chief Technology Officer:

https://www.whitehouse.gov/blog/2015/05/11/white-house-names-dr-ed-felten-deputy-us-chief-technology-officer

that is pretty significant.  we know that Ed Felten is pro-Bitcoin and has a deep understanding of what's going on.

[tvbcof]

The value of the 'network effect' peaked some time time ago an it is now a distinct negative and a distinct threat to the system in my opinion.  By now everyone who can make legitimate use of the system has heard about it.  Most of the new-users are of the class who have no real chance of protecting themselves (even less than the historic dismal record that the userbase has demonstrated) and will thus induce even more nanny-systems to lend them a hand.  These are inevitably bad for Bitcoin in a variety of ways (the most common one being that they are scams and/or even worse that the mainstream banking system in multiple important ways.)

Bitcoin will not really fill it's potential until sidechains are up-and-running.  I just hope it lasts that long before it is destroyed from within.  If so something else and probably something much better will take it's place though it would probably set certain things back by a few years.  I hope(d) it would be Bitcoin since I still sit on a fair number of them and it would make my life easier.

I am not sure many people will agree with your assertions.

I'm quite certain that most people will not.  I'm comfortable and very used to this scenario.

In fact most of the new users in the future will be using multi-sig technology with companies like coinbase or enjoying consumer protection with companies like circle without even realising it. They will use bitcoin like they use gmail. It isn't appropriate for members of the public to be playing with cold storage and dice or worrying about what a private key is or how to store it safely.

It might be worth remembering that bitcoin isn't a plaything entirely for superior beings like yourself. It is for everyone.

That is exactly why a nearly perfect proxy like sidechains with a two-way peg appeals to me so much.  The best of both worlds and a classic symbiotic relationship which benefits both native Bitcoin and the multitude of tuned solutions which rely on it.

If I'm a 'superior being' and 'elite' so be it.  It was dumb luck more than anything.  (Thanks again to whoever attacked Wikileaks and opened my eyes to the solution, BTW.)  I very much look forward to re-joining the 'lower classes' and expect to be a prolific user of various kinds of sidechains to use for various things and support various entities who choose to deploy one...thus stealing back the inherent value of an exchange currency which has been monopolized mostly by the Federal Reserve operating within (and parasitizing) the United States.

[Adrian-x]

Gold is tangible asset. Hard to convince older generation to hold bitcoin.

I think you may be underestimating "Hard" above, cypher being the exception, if he is a Boomer.

Anyway as life goes on wealth is inherited, and governments are probably statistical counting on it (inheritance taxes).

It's not the older generation who need convincing, but the younger ones who stand to loos as a result of malinvestment during the peek boomer years.

They are the one who will create demand with older generation wealth.  

[cypherdoc]

i posted earlier how the incentives in Bitcoin continue to screw up every major theory about mining cartels colluding to cheat.  yet, we continue to get them.  here's Ed Felten again:

ES-miners can’t agree to cheat, because it’s too easy for them to cheat on that agreement.

https://freedom-to-tinker.com/blog/felten/bitcoin-isnt-so-broken-after-all/

Speaking of Ed Felton, looks like he was just appointed by the White House as Deputy U.S. Chief Technology Officer:

https://www.whitehouse.gov/blog/2015/05/11/white-house-names-dr-ed-felten-deputy-us-chief-technology-officer

Obama:

"give me the implications of performing a selfish mining attack on Monero".

[cypherdoc]

Felten:

"Mr. President, I would advise you to get alittle coin for you and the Mrs."

[Zangelbert Bingledack]

Could this be a hint at 21's real plan? Qualcomm's Neighborhood Small Cells.

[Bagatell]

Could this be a hint at 21's real plan? Qualcomm's Neighborhood Small Cells.

Do the details matter? It's the smart grid whatever they call it.

[rocks]

Meni Rosenfeld does something similar to what you're suggesting in his "Analysis of hashrate-based double-spending" paper from December 2012.  I haven't looked into this paper in detail, but this table from Section 6 caught me eye.  It allows you to figure out how many confirmations you should wait depending on how large the transaction is in addition to the attacker's hash rate.



I'd be interested if you can think of ways to extend this work.

That is interesting, thanks. Will have to take a deeper look.

It seems the main remaining variable is what is the current average block reward. I assume this was calculated when rewards were 50BTC and these numbers probably will adjust for a 25BTC/block reward. Adding the average/expected block reward to the mix would enable one to determine how secure a confirmation chain is when block rewards are determined by variable fees & usage, and not a static inflation rate.

If anything, these numbers show that even if an attacker gets into the 30% range, 6 confirmations still secures a significant amount of value. It is only when an attacker approaches 50% that you need longer confirmation chains, but if a determined attacker has the resources to push 40%, they should be able to reach the fabled 50% where it doesn't matter anymore.

that's kind of a weird chart b/c it is denominated in BTC.  even Meni says so:

These values should be taken with a grain of salt, because of the many modeling assumptions made

"value" will vary greatly depending on whether 1BTC buys you a loaf of bread vs an island.

Denominating in BTC probably makes the most sense because: 1) Bitcoin is a closed system and 2) Mining will always tend towards a given equilibrium given the current $/BTC and the current BTCreward/block. To look at it another way, if 1BTC buys you an island you can be sure that there is a massive amount of mining power behind the network and any attacker trying to achieve 20% of the hash rate would need to spend proportionally just as much more effort to reach that 20%.

[Wandererfromthenorth]

Peter Todd on scalability:

https://www.youtube.com/watch?v=Td6fwuI7F7U&feature=youtu.be