Gold collapsing. Bitcoin UP.

[iCEBREAKER]

a store-of-value that can't offer anything for the micropayments of the fledgling Knowledge Age, is going no where in terms of network effects.

Bitcoin is going to monopolize network effects in the NWO paradigm that most of the masses will fall into. If you are going to create an alternative, then you must identify the unique network effects of the alternative market.

Micropayments are only feasible given a prunable mini-blockchain like XCN's, or perhaps vaporware such as the Lightening Network.

Bitcoin is not here to create monopolies, it is here to destroy them.  And it brought a friend...

Bitcoin is the good cop; Monero is the bad one.  One hand washes the other, like salt and pepper:

Monero’s Allure

Furthermore, potential attackers are at a disadvantage for another reason. Monero tends to oppose organizations rather than people. Even someone who stands to lose from Monero by not reacting to it, such as a banker or government agent, stands to gain a great deal by buying now. Only the very wealthiest people might reasonably expect to be worse off attempting to buy up as much as possible now than if it were gone. (This could happen if their attempt to buy caused the price to rise too fast relative to their ability to acquire additional Moneros, to the point that they ultimately had less influence over the future Monero economy than they have over the economy of today.) Thus, the agency problem with Monero affects Monero competitors as well as Monero holders.

Nearly any government agent who begins to see Monero as a potential threat must also simultaneously see it as an opportunity. He, too, can invest in Monero. And why shouldn’t he? Monero may be a threat to his livelihood, but it may well be making him an offer he can’t refuse. How can an organization that stands to lose by the adoption of Monero provide its members with a better opportunity for staying loyal than Monero provides for defection?

Even those who might resist the temptation to defect would have to think about the defection of his fellows. How quickly is adoption happening? Is there time to mount an attack before Monero becomes too powerful? How easily could the resources for such an attack be amassed, given both the ignorance and treachery of the other agents. If such an attack would be unlikely to succeed, then buying now would be the only intelligent action. Regardless of whether he liked Monero, it would be futile to continue pursuing a doomed cause.

Potential Monero attackers are in a Prisoner’s Dilemma. In the same way that the people cannot easily rebel against the king owing to a lack of coordination on their part, governments cannot rebel against Monero for the same reason. The government puts the people in a Prisoner’s Dilemma against one another, and Monero does the same to government agents.

Monero is like Invasion of the Body Snatchers. Monero attracts inside men to act as covert saboteurs. There have long been predictions from both Moneroers and naysayers of impending government attacks, but I think there is a possibility that Monero could win without suffering much resistance. Moreover, although I said above only that any legal Monero attack could be perverted, the considerations discussed in this section tend to make such diffusion very likely.

Monero defends itself by being obscure, but once it has attracted someone’s attention, its best interest is for that person to understand the logic presented here. For then he will also understand that his best course is to deny Monero’s threat to his superiors and quietly to become its willing slave.

Because of the automatic availability of privacy with the opt-in alternative of transparency, everything true about BTC is twice as true for XMR.

IE, defection previously impossible or too risky using BTC is now enabled via XMR's radical opacity.   

[Erdogan]

need some opinions on this, from Reddit:

"Second, if push comes to shove and we end up with a fork battle then whoever holds the most will have the most power in choosing which wins out anyway. They can simply sell on one fork and buy on the other to shift the relative values. Whichever fork ends up most valuable will attract the most miners. Stronger value and security will attract more users to that fork."

is this viable?  this could be interesting...

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

[Zangelbert Bingledack]

Rather then risk the mess above, it would probably be better to add a "version" field to the transactions (and every other protocol message), change this version field EVEN if that protocol message didn't actually change, and have clients ignore messages of the wrong version.  Write your new clients to rev the version field once a particular block # is mined.  This would get you a clean separation.

Thanks, that was the missing piece to the forkbitrage proposal. Either that or somehow change how the signing works whenever there's a hard fork(?).

[Zangelbert Bingledack]

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

So something like a blockchain "The Price is Right" where miners try to bid on the biggest acceptable block without going over?

[Erdogan]

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

So something like a blockchain "The Price is Right" where miners try to bid on the biggest acceptable block without going over?

I just think that even if there is general agreement, the first miner going for a large block will be a bit nervous of the outcome, more nervous if there is only partial agreement, and if it's orphaned, it could play out as normal without the necessity for merchants to cater for both branches.

The fee market is another animal. I happen to think markets work in general and the market will find a way, even if they are not "optimal" or "efficient" (note the quotes).

[domob]

need some opinions on this, from Reddit:

"Second, if push comes to shove and we end up with a fork battle then whoever holds the most will have the most power in choosing which wins out anyway. They can simply sell on one fork and buy on the other to shift the relative values. Whichever fork ends up most valuable will attract the most miners. Stronger value and security will attract more users to that fork."

is this viable?  this could be interesting...

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

The "hardness" is in your example elimiated by the assumption you made that most nodes already upgraded.  This is just the definition of hardfork - all nodes have to upgrade, otherwise they may be left behind when the chain with large blocks becomes the longest one.  But I also see it like the others, as long as there is not universal consensus about the fork, miners may not create large blocks by themselves.  It becomes interesting when they see a large block by someone else, because they they have to risk either building on it and being orphaned if the majority does not agree with them, or building on the preceding small block and being orphaned if the majority accepts the large block.

[Erdogan]

need some opinions on this, from Reddit:

"Second, if push comes to shove and we end up with a fork battle then whoever holds the most will have the most power in choosing which wins out anyway. They can simply sell on one fork and buy on the other to shift the relative values. Whichever fork ends up most valuable will attract the most miners. Stronger value and security will attract more users to that fork."

is this viable?  this could be interesting...

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

The "hardness" is in your example elimiated by the assumption you made that most nodes already upgraded.  This is just the definition of hardfork - all nodes have to upgrade, otherwise they may be left behind when the chain with large blocks becomes the longest one.  But I also see it like the others, as long as there is not universal consensus about the fork, miners may not create large blocks by themselves.  It becomes interesting when they see a large block by someone else, because they they have to risk either building on it and being orphaned if the majority does not agree with them, or building on the preceding small block and being orphaned if the majority accepts the large block.

Ok, but the new nodes will be compatible with small blocks, so the upgrade will be an easy insurance for nodes. There is no risk for a node to accept a large block, should one appear. A version number jack should make it quite transparent how the nodes develop.

[TPTB_need_war]

a store-of-value that can't offer anything for the micropayments of the fledgling Knowledge Age, is going no where in terms of network effects.

Bitcoin is going to monopolize network effects in the NWO paradigm that most of the masses will fall into. If you are going to create an alternative, then you must identify the unique network effects of the alternative market.

Micropayments are only feasible given a prunable mini-blockchain like XCN's, or perhaps vaporware such as the Lightening Network.

Blockchain size is not the main issue with micropayments (no amount of pruning is scalable if the unpruned chain isn't scalable, i.e. scalability is a different complexity class from bounded compression). Rather as I discussed with thezerg upthread, at some scale micropayments force centralization of full nodes due to processing and bandwidth requirements. I argued that renting a hosting server is not decentralization, because the authorities can regulate the ISPs. Anonymity derives from mixing targeted activity (monopolization of mining by the cartel that runs our world) with untargeted activity (users surfing the net from a home ISP connection).

Going one step further, the requirement that full nodes (and mining in general) have to see every transaction is centralization and is one of the main design flaws I see in Bitcoin. Is this that great of a riddle? I don't think so. Just think about the only one thing the blockchain needs to guarantee in order to make crypto-currency valid. Is that still not yet enough hints (including prior posts with hints) to deduce my design?

[TPTB_need_war]

From the thread, One-world reserve currency inevitable and will enslave all nations?

As I have outlined in this thread and else where on these forums...

http://armstrongeconomics.com/archives/31006

The prospects of the Federal Reserve remaining on track to raise interest rates later this year are still settling in yet people fail to grasp that raising rates will be bullish and it will confirm the capital flows are moving into the USA. We have a serious divergence between the USA and Europe. Not merely is the USA the best situated from the problem of the graying of society, but the lower taxes in the USA remain key as well as the fact that FATCA does not apply in reverse. Foreign citizens can come to the USA and open bank accounts without a problem, Americans cannot leave the country with the same privilege. So the capital inflows are pointing straight to the USA and as real estate on the high end and stocks look good, more and more capital will travel into the USA. The Fed will be accused of creating the bubble since the domestic press will never understand the complexity of the world economy as a whole. So the Fed will be blamed for creating a bubble both from the media (rich are getting richer) and from Congress.

Meanwhile, there are growing concerns that financial woes could engulf Spain in addition to Greece. Higher interest rates for the world’s largest economy could lessen the the likelihood of economic survival among the allure the emerging markets and add to the problem of Europe going negative. Everything so far appears to be shaping up for a Phase Transition in the USA. That will baffle most and will place the maximum amount of pressure of Asia and Europe. By the time we get to the other end, they will be calling for a one world currency – watch.

[sickpig]

we would end up with an Austrian fork and a Keynesian fork dueling it out

(snip)
Satoshi's Austrian fork can continue to represent a new store of value and settlement system, guaranteeing for the first time in history every human the opportunity to be their own bank.
(snip)

last time I've checked Satoshi himself explicitly states that max block size limit was a temporary band aid to avoid a certain type DoS attack to the bitcoin network, just for the record.

[iCEBREAKER]

last time I've checked Satoshi himself explicitly state that max block size limit was a temporary band aid to avoid a certain type DoS attack to the bitcoin network, just for the record.

For the record, I've never disputed the origin of the 1mb max block size, only the desirability of increasing it twenty fold before we know what trade-offs are entailed in the forms of optimization pressure, miner/pool/fee incentives, centralization, UXTO bloat, etc.

I'd wager the majority of the core devs, who at this time also oppose 20mb blocks, are likewise completely aware of the 1mb cap's origin.  I guess it's news to you, so you think nobody else knew either and you need to tell us all the good news.

Please note Satoshi chose to include in the blockchain a newspaper quote from an article about bailouts for TBTF banks, instead of one from an article about excessive bank, ATM, or credit card fees. 

Bitcoin is revolution and financial freedom, not a nifty gadget to put in retail points of sale.  If a guy in Venezuala (or Florida) can't be his own private bank by running a full node over TOR on a slow 5mb DSL line, this experiment has failed.

Satoshi did not create Bitcoin because he was mad about the 50 cent credit/debit surcharge on his iced Americano, and you can't kill/obsolete the BIS with some stupid VC micropayment daydream internet-of-bullshit Visa-wannabe transaction network.

And there is this:

The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.

If we subsidize blockchain bloat, we'll get more of it.

That most precious resource should be optimized, not diluted.

The sooner you Monopolist Maximalists get over the fact that GavinCoin doesn't have the required 80% consensus, the better.

The max doesn't have to stay 1mb forever, but now is not the time to potentially undermine the diffuse/defensible/resilient nature that provides BTC's antifragilty.

[sickpig]

last time I've checked Satoshi himself explicitly state that max block size limit was a temporary band aid to avoid a certain type DoS attack to the bitcoin network, just for the record.

For the record, I've never disputed the origin of the 1mb max block size, ...

fair enough.

I was just trying to keep separate our own speculation (as in "ideas or guesses about something that is not known")  from Satoshi's actual statements, such as:

It can be phased in, like:

if (blocknumber > 115000)
    maxblocksize = largerlimit

It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete.

When we're near the cutoff block number, I can put an alert to old versions to make sure they know they have to upgrade.

or

Forgot to add the good part about micropayments.  While I don't think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall.  If Bitcoin catches on on a big scale, it may already be the case by that time.  Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms.  Whatever size micropayments you need will eventually be practical.  I think in 5 or 10 years, the bandwidth and storage will seem trivial.

or, fwiw, :

And there is this:

The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime.

and last but not least

The sooner you Monopolist Maximalists get over the fact that GavinCoin doesn't have the required 80% consensus, the better.

I won't define myself a "Monopolist Maximalists", you're misinterpreting my intentions.

[Peter R]

last time I've checked Satoshi himself explicitly state that max block size limit was a temporary band aid to avoid a certain type DoS attack to the bitcoin network, just for the record.

For the record, I've never disputed the origin of the 1mb max block size, ...

For those who missed it on Reddit, here's an annotated history of the average blocksize and blocksize limits, including a relevant quote from Satoshi:

[HeliKopterBen]

Bitcoin is revolution and financial freedom, not a nifty gadget to put in retail points of sale.  If a guy in Venezuala (or Florida) can't be his own private bank by running a full node over TOR on a slow 5mb DSL line, this experiment has failed.

The experiment will likely fail if it the network is NOT upgraded and the limit eventually removed.  The limit has already been reached anyway.

Running a full client is ALREADY too resource-intensive for average Joe.  The blockchain.info model is better suited for average Joe.  That model has proven to solve the problem of trust in an environment where trust has been violated a majority of the time.  Average Joe will be his own bank with a simple web interface where he has full control over his keys. 

[hdbuck]

Bitcoin is revolution and financial freedom, not a nifty gadget to put in retail points of sale.  If a guy in Venezuala (or Florida) can't be his own private bank by running a full node over TOR on a slow 5mb DSL line, this experiment has failed.

The experiment will likely fail if it the network is NOT upgraded and the limit eventually removed.  The limit has already been reached anyway.

no. and no.

Running a full client is ALREADY too resource-intensive for average Joe.  The blockchain.info model is better suited for average Joe.  That model has proven to solve the problem of trust in an environment where trust has been violated a majority of the time.  Average Joe will be his own bank with a simple web interface where he has full control over his keys.  

the average joe doesnt give a crap about bitcoin for all i can see right now.  
and its likely not to change in the short/medium term considering the averageness of their minds regarding economy or finance.
it would take a brutal shutdown of global finance, spoiling and bailing in their personal accounts for them to realize they've been duped (being polite here).

games and wine for the masses. not bitcoin.


edit: or fiat and drones apparently.. but still no bitcoin.

[iCEBREAKER]

While I don't think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall.  If Bitcoin catches on on a big scale, it may already be the case by that time.  Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms.  Whatever size micropayments you need will eventually be practical.  I think in 5 or 10 years, the bandwidth and storage will seem trivial.

Gavin (but no other core dev) and Hearn strenuously believe we are at, or fast approaching, the "eventually" of which Satoshi spoke.

To one degree or another, the rest of the core devs disagree we have arrived or will soon arrive at that eventuality.

Because the trade-offs involved are valued differently by different individuals, at this point no consensus is possible.  Thus, status quo prevails.

It's not reasonable to expect Bitcoin to jump directly from 3 tps to tipping economy nirvana.

Of course nobody claims 20mb blocks get us anywhere near Micropaymentopia either.  But 20mb blocks aren't just a can-kick band-aid stop-gap, as they threaten the diffuse/defensible/resilient systems which undergrid Bitcoin's antifragility.

2015 is earliest possible date within SN's "5 or 10 years" forecast.  What good causes have we to seize upon the most optimistic scenario and proclaim it as factually reasonable?

Shouldn't we at minimum wait until the UXTO problem is optimized to go and press the Turbo button?

Bitcoin is revolution and financial freedom, not a nifty gadget to put in retail points of sale.  If a guy in Venezuala (or Florida) can't be his own private bank by running a full node over TOR on a slow 5mb DSL line, this experiment has failed.

The experiment will likely fail if it the network is NOT upgraded and the limit eventually removed.  The limit has already been reached anyway.

Running a full client is ALREADY too resource-intensive for average Joe.  The blockchain.info model is better suited for average Joe.  That model has proven to solve the problem of trust in an environment where trust has been violated a majority of the time.  Average Joe will be his own bank with a simple web interface where he has full control over his keys. 

Who mentioned "average Joe?"  Not me. 

But I disagree that Average Joe cannot run a full node with a laptop, some extra RAM, and an average DSL.  Average Joe is very clever when his life savings is at stake, and his pocket is being picked by price inflation and ZIRP/NIRP.

Do you consider LukeJr an "average Joe?"  I don't.  If LukeJr can't run a full 20mb node in Florida, just imagine how many other lesser beings would be excluded.

The struggling Argentinian/Venezuelan/Cypriot/Ukrainian/Syrian is closer to "average Joe" but they find themselves in extraordinary (IE non-average) economic and political circumstances, which require them to run full nodes as a lifeline instead of a mere hobby.

[cypherdoc]

need some opinions on this, from Reddit:

"Second, if push comes to shove and we end up with a fork battle then whoever holds the most will have the most power in choosing which wins out anyway. They can simply sell on one fork and buy on the other to shift the relative values. Whichever fork ends up most valuable will attract the most miners. Stronger value and security will attract more users to that fork."

is this viable?  this could be interesting...

I think it is interesting to speculate what happens if most nodes implement the suggested 20 MB patch. It means that they will accept both large and small blocks, so it is not really a hard fork at that point. Let's say the miners are not sure about the other miners. Eventually, someone will produce a large block, hoping that others will build on it. If some does, and some does not, this will be seen as an orphaned branch by the nodes, not a fork. The longest branch will win as normal. If the large block does not win, it will be a costly experience for the miners who made the large block, and also for those who build on it. It could be that the first attempt does not succeed, and it will be clear after only 2 blocks. Then another attempt could be done a few weeks later, after maybe a discussion among miners and others. I don't see the hardness of the fork.

The "hardness" is in your example elimiated by the assumption you made that most nodes already upgraded.  This is just the definition of hardfork - all nodes have to upgrade, otherwise they may be left behind when the chain with large blocks becomes the longest one.  But I also see it like the others, as long as there is not universal consensus about the fork, miners may not create large blocks by themselves.  It becomes interesting when they see a large block by someone else, because they they have to risk either building on it and being orphaned if the majority does not agree with them, or building on the preceding small block and being orphaned if the majority accepts the large block.

if Gavin goes ahead with his fork, i suspect most miners and nodes will upgrade; just in case.  this allows them to build on any block that comes thru, whether it is under 1MB or over.  and if this happens, i suspect everyone/miners goes back to the long tested strategy of accepting the longest chain as they always have, as this limits the chances of orphans.

[iCEBREAKER]

The experiment will likely fail if it the network is NOT upgraded and the limit eventually removed. 

Nonsense.

Bitcoin does not "fail."  It gains strength when, and only when, faced with adversity.

In this case, economic and social pressure from full blocks will force ad hoc (offchain) and per se (technical) optimizations, as well as the required consensus/political courage to implement those big scary changes.

I find your lack of faith disturbing.

[cypherdoc]

Bitcoin is revolution and financial freedom, not a nifty gadget to put in retail points of sale.  If a guy in Venezuala (or Florida) can't be his own private bank by running a full node over TOR on a slow 5mb DSL line, this experiment has failed.

The experiment will likely fail if it the network is NOT upgraded and the limit eventually removed.  The limit has already been reached anyway.

Running a full client is ALREADY too resource-intensive for average Joe.  The blockchain.info model is better suited for average Joe.  That model has proven to solve the problem of trust in an environment where trust has been violated a majority of the time.  Average Joe will be his own bank with a simple web interface where he has full control over his keys. 

yes, the avg Venezuelan doesn't care about running a full node.  he cares about reliable, cheap tx's.  sad thing is, if we stay at 1MB blocks, he might never know about Bitcoin.  and he certainly will never learn about the more complex concept of digital gold.

[bucktotal]

excuse my ignorance, but why is average joe (or average jose in argentina) "required" to run a full node.

why cant they run an spv client?  Are spv clients like multibit unsafe (or not safe enough?) once sync'd to the rest of the nodes. satoshi believed that the vast majority would use spv clients. was this an unwise decision to make?