Gold collapsing. Bitcoin UP.

[cypherdoc]

gmax, you seem to think this post of yours is gospel, so let me address it pt by pt, since i don't and never have thought it was even worth my time to respond to:

https://www.reddit.com/r/Bitcoin/comments/39tgno/letting_miners_vote_on_the_maximum_block_size_is/cs6rek5

I think the first assumption is that there is a non-negligible marginal cost per transaction (/byte) which miners can forgo if they choose to not include a transaction. This is essentially untrue, at least in the fundamentals. A miner has a transaction already before deciding to include it, or will have to immediately obtain it if someone else includes it. Because the transactions have been already forwarded around, once a block is found all that must be communicated is which of the already relayed transactions were actually included. This is what the block-relay-network protocol does already, and it takes 2 bytes per already-relayed transaction. This can further be reduced by the use of schemes such as the "O(1)" block relay idea, which-- if miners adopt consistent priority/censorship policies-- need only send the difference between the expected block and the actual-- with data only proportional to the difference.

this flies in the face of the current facts.  Chinese miners are SPV mining for the very fact that they believe they can earn more block rewards by NOT including tx's than including.  they've also told you that b/c of their inferior connectivity behind the GFC, they cannot accept an initial block size inc beyond 8MB.  both of these precisely have to do with their marginal costs of propagation delays despite the theoretical advantages of the relay network.  they do in fact worry about orphans related to large blocks.

Next, you're assuming that to whatever extent these proportional costs are non-negligible, miners will address them by optimizing their block size to maximize income. However, there is a superior option: Miners can prevent orphaning by centralizing the control of their hashpower to single large pools. We saw this effect after miners started producing blocks over 500K that orphaning drove miners to consolidate in large pools to reduce orphaning. Decreasing your own blocksize is not enough to reduce your orphaning, others must do so too, and larger miners would be on the winning side of the orphaning more often, reducing the size also has an unclear benefit, delays transactions, and passes up fee income. Centralizing mining results in an all cause orphaning reduction, is simple, and can reduce other operating costs. As a result we saw single parties having administrative control of over half the hashpower, completely undermining one of the base security assumptions of the system. This inspired the emergency deployment of the block relay protocol, which seems to have helped; though the distribution is still quite ugly.

i think it's a shame you continue to be stuck on the ghash incident.  you continue to ignore the fact that the double spend was done by an insider, was small in amount, and was inflicted on a dice website conducting 0 conf transacting.  you also ignore the fact that the market has subsequently punished ghash down to the level of 2%:



furthermore, you ignore the obvious fact that hashers are independently minded and will leave any pool that abuses it's power via all the shenanigans you dream up to scare everyone about how bad Bitcoin is.  this takes us back to the very first time i became concerned with your behavior.  it had to do precisely with this mining centralization issue you have ALWAYS though was a huge problem with Bitcoin.  well, i think you are wrong and i think we probably saw the very last time a single pool reaches 50% or more.  the mining market is evening out but we still have more to go.  and that would be to lift the block size limit and allow mining operations in other parts of the world to compete with Chinese miners with bigger blocks.

Finally, you're assuming that the equilibrium where fees match the costs related to verification and transmission is a viable state of affairs. The level of POW security in the system is a totally free parameter, if most of the miners income is going to pay costs related to verification and bandwidth then those funds cannot be used to provide POW security. Moreover, if the cost for verification at this equilibrium (if one exists at all, as miners can always increase their own income by breaking rank and accepting lower fees if there is no size limit) is considerable (E.g. comparable to the fee income) then how will any non-miners be able to afford to also run the verification, which is an essential part of Bitcoin's economic argument for SPV security-- that the majority of hashpower will follow the protocol because others will reject their blocks if they violate it).

here, you are talking about the fact that full nodes aren't paid like miners are.  i, and many many Bitcoiners, have said that we foresee specialized server farms that act solely for the purpose of full node verification and relay.  this is according to Satoshi's vision:

https://bitcointalk.org/index.php?topic=68655.msg11625671#msg11625671

heck, I will run a specialized node if it gets to that pt.  that would be a great problem to have, all those tx's.  if so, the price will be correspondingly high and probably everyone of us could afford to run a full node.  but ignoring that level of altruism, if tx growth gets to that level, that would mean inc users-->inc merchants-->inc full nodes run by merchants.  merchants will want and have the fiduciary responsibility and financial wherewithall to run full nodes, no problem.

[iCEBREAKER]

2.  Is F2Pool/AntPool more likely to produce an empty block when mempool swells?

...I don't see why the answer to Q2 would be yes for any reason other than the previous block is more likely to be large when mempool swells (i.e., mempool is not the cause, just correlated).

Exactly.  Dr. Frappuccino is letting his deranged, unreasonable hatred and fear of 1MB blocks color his thinking beliefs about completely unrelated (or, at best, merely "correlated") matters.

I'm shocked to discover how little he actually understands about technical issues on which he has such strong, stridently/frequently expressed opinions.

As Gmax was just saying, the end result of this trend is to burn up whatever is left of his tattered credibility.

As miners have created larger blocks F2Pool expirenced high orphaning (>4% according to them); they responded by adding software to mine without transfering or verifying blocks to avoid delays related to transfering and processing block data. Contrary to your claim-- the blocksize limit stems the bleeding here. Their issue is that large blocks take more time to transfer/handle and that they're falling behind as a result. Making blocks _bigger_ would not help this problem, it would do the _opposite_. If a miner wanted to avoid any processing of transaction backlog they'd simply set their minimum fee high and they'd never even mempool the large backlog.

Reasonable minds can differ on the relative importance of difference considerations, but when you're falling all over yourself to describe evidence against your position as support of it-- redefining F2pools crystal clear and plain descption of "large blocks" as their source of problems with the technically inexplicable "full" that you think supports your position, it really burns up whatever credibility you had left. That you can get away with it in this thread without a loud wall of "WTF" just shows what a strange echochamber it has become.

The trouble with our Gavinsta friends is not that they are ignorant, but that they know so much that isn't so.

[tvbcof]

...
3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

...
3.  Time to verify (via CPU-hard although parallelizable ECDSA) incoming block's tx is already (absent clusters of 48-core Xeons) problematic at sizes near 1MB, hence use of the subjective descriptor "large" and your conflation of that term with "full."

Whether 1MB is ideal or not, it's what we have.  It's pretty evident that Bitcoin would be lucky to avoid annihilation on attempts to change it in any way at this point in time.  That may or may not be the case in the future.

As it happens, 1MB seemed to have been at least quite fortuitous for us, and I wonder if it were not somewhat well considered when Satoshi made the setting as opposed to the perception promulgated by some that he pulled a random number out his ass.

 - It is/was just under the realistic limits needed to run the network behind TOR.

 - It got us all the way into mid 2015 before it became much of a stressor at all.  Had it been smaller, interest in Bitcoin may have died while at the current interest levels it is more likely that significant efforts will be made to solve any necessary engineering efforts rather than to walk away.

 - Even now that touching transaction rate limitations is within sight, the transaction body is chalk full of freeloaders who do nothing worthwhile for network support (e.g., Multibitch users) and there is much room to grow by simply allowing these users to drain away as a transaction fee market develops.

 - It looks like for some time the entire blockchain will fit on a MicroSD meaning that new nodes can be brought up with nodes which are modest in expense and a concealable bit of physical media.  There is an easily calculable and reasonable ceiling on the power and bandwidth necessary to operate this support infrastructure, and it is low enough in value that most operators can walk away from their investment if there were pressures applied from the mainstream legal and law enforcement world.

In retrospect, 1MB seems like a pretty ideal setting for the past history of Bitcoin and some distance into the future.  To me.

[cypherdoc]

2.  Is F2Pool/AntPool more likely to produce an empty block when mempool swells?

...I don't see why the answer to Q2 would be yes for any reason other than the previous block is more likely to be large when mempool swells (i.e., mempool is not the cause, just correlated).

Exactly.  Dr. Frappuccino is letting his deranged, unreasonable hatred and fear of 1MB blocks color his thinking beliefs about completely unrelated (or, at best, merely "correlated") matters.

I'm shocked to discover how little he actually understands about technical issues on which he has such strong, stridently/frequently expressed opinions.

As Gmax was just saying, the end result of this trend is to burn up whatever is left of his tattered credibility.

As miners have created larger blocks F2Pool expirenced high orphaning (>4% according to them); they responded by adding software to mine without transfering or verifying blocks to avoid delays related to transfering and processing block data. Contrary to your claim-- the blocksize limit stems the bleeding here. Their issue is that large blocks take more time to transfer/handle and that they're falling behind as a result. Making blocks _bigger_ would not help this problem, it would do the _opposite_. If a miner wanted to avoid any processing of transaction backlog they'd simply set their minimum fee high and they'd never even mempool the large backlog.

Reasonable minds can differ on the relative importance of difference considerations, but when you're falling all over yourself to describe evidence against your position as support of it-- redefining F2pools crystal clear and plain descption of "large blocks" as their source of problems with the technically inexplicable "full" that you think supports your position, it really burns up whatever credibility you had left. That you can get away with it in this thread without a loud wall of "WTF" just shows what a strange echochamber it has become.

The trouble with our Gavinsta friends is not that they are ignorant, but that they know so much that isn't so.

i hope ppl here can discern the fact that most or all of what the Cripplecoin ppl have to say involves ad hominems and iCEBlow.  not to mention the obfuscation that attempts to link my dispute with the HF lawyers to the block size debate and Blockstreams financial conflict of interest in core dev.

[cypherdoc]

...
3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

...
3.  Time to verify (via CPU-hard although parallelizable ECDSA) incoming block's tx is already (absent clusters of 48-core Xeons) problematic at sizes near 1MB, hence use of the subjective descriptor "large" and your conflation of that term with "full."

Whether 1MB is ideal or not, it's what we have.  It's pretty evident that Bitcoin would be lucky to avoid annihilation on attempts to change it in any way at this point in time.  That may or may not be the case in the future.

As it happens, 1MB seemed to have been at least quite fortuitous for us, and I wonder if it were not somewhat well considered when Satoshi made the setting as opposed to the perception promulgated by some that he pulled a random number out his ass.

 - It is/was just under the realistic limits needed to run the network behind TOR.

 - It got us all the way into mid 2015 before it became much of a stressor at all.  Had it been smaller, interest in Bitcoin may have died while at the current interest levels it is more likely that significant efforts will be made to solve any necessary engineering efforts rather than to walk away.

 - Even now that touching transaction rate limitations is within sight, the transaction body is chalk full of freeloaders who do nothing worthwhile for network support (e.g., Multibitch users) and there is much room to grow by simply allowing these users to drain away as a transaction fee market develops.

 - It looks like for some time the entire blockchain will fit on a MicroSD meaning that new nodes can be brought up with nodes which are modest in expense and a concealable bit of physical media.  There is an easily calculable and reasonable ceiling on the power and bandwidth necessary to operate this support infrastructure, and it is low enough in value that most operators can walk away from their investment if there were pressures applied from the mainstream legal and law enforcement world.

In retrospect, 1MB seems like a pretty ideal setting for the past history of Bitcoin and some distance into the future.  To me.

it's a Magic Number!

no, it was always meant to be a DoS prevention mechanism and Satoshi foresaw much wider and greater usage of Bitcoin as a worldwide p2p cash system to challenge the big banks:

https://bitcointalk.org/index.php?topic=68655.msg11625671#msg11625671

it's is MUCH more likely these SPV mining attacks are a direct result of full blocks.

[cypherdoc]

and here we go again:

[cypherdoc]

unconf tx's at 14,700   

[cypherdoc]

and here we go again:

that 1 tx block is f2pool

[kazuki49]

The coin needs to be the first legitimate instance of its kind, had a fair start/emission, and a market niche
-----------------------------------------------------------------------------------------------------------------
Litecoin FAIL (not the first of its kind)
Peercoin FAIL (no market niche)
Bytecoin FAIL (not fair start)
Boolberry FAIL (not the first of its kind)
Ethereum FAIL (questionable start)
All shitcoins FAIL (2-3 counts)

Only BTC and XMR fulfill all conditions, so it makes sense to invest into them (and them alone). To be fully hedged, you can keep 99.8% in BTC and set 0.2% aside in XMR. Going over this ratio, is overinvesting in XMR.

It is not hard to come with these understandings after a generous overview of the top 50 altcoins, reason why I'm as uninpressed with LTC market as with its innovative features (none).

[Peter R]

It's been two months since I plotted the original version of this chart.  We're still tracking the dashed line, as we progress deeper into the red zone:

[cypherdoc]

do we have a detailed statement from the Chinese pools as to "why" from their perspective they are SPV mining?  unfortunately, they might not tell us.

[tvbcof]

...
3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

...
3.  Time to verify (via CPU-hard although parallelizable ECDSA) incoming block's tx is already (absent clusters of 48-core Xeons) problematic at sizes near 1MB, hence use of the subjective descriptor "large" and your conflation of that term with "full."

Whether 1MB is ideal or not, it's what we have.  It's pretty evident that Bitcoin would be lucky to avoid annihilation on attempts to change it in any way at this point in time.  That may or may not be the case in the future.

...

In retrospect, 1MB seems like a pretty ideal setting for the past history of Bitcoin and some distance into the future.  To me.

it's a Magic Number!

no, it was always meant to be a DoS prevention mechanism and Satoshi foresaw much wider and greater usage of Bitcoin as a worldwide p2p cash system to challenge the big banks:
...

We don't know who Satoshi was and if what 'he' said about this or that is even especially reliable.  Assuming it is, we don't know that he said exactly what he was thinking.

If Satoshi said that he wanted to build a niche monetary system for big players and insiders to use as a reserve currency, I would not have been interested and would not have gotten involved.  Only after having dwelt on it some did I come to the conclusion that in spite of the faults and somewhat distasteful nature of the solution, it is the best way to have a chance of enduring success (and thereby at least partially dislodge those who do the same under a vastly inferior monetary system design such is our current crop of fiat solutions.)  So, Satoshi may well have tuned much of his writings (and code) to play on social pressures as much as computer science ones.

From a fairly early stage Satoshi seems to have gathered a contingent of fairly small-minded adherent (in addition to some brilliant ones such as Hal.)  Lesser minds tend to be attracted to shiny and simplistic things such as the 'Bitcoin is everything to everyone always and forever' philosophical construct.  I don't find it at all difficult to believe that Satoshi may have tuned his messages to retain these folks and build a 'critical mass' using these as footsoldiers.  If it were that or nothing, that is preferable in the battle to achieve a viable solution.

[iCEBREAKER]

i hope ppl here can discern the fact that most or all of what the Cripplecoin ppl have to say involves ad hominems and iCEBlow.  not to mention the obfuscation that attempts to link my dispute with the HF lawyers to the block size debate and Blockstreams financial conflict of interest in core dev.

These days, the only difference between you and the Buttcoiners is that you say "Cripplecoin" instead.   

You're the one who hired the guy that under oath represented you as the LeBron of BTC.

When you aggressively and egregiously misunderstand the flow and causation of tx broadcasting from clients to pools to block inclusion and then on to verification, of course we're going to have fun with that amusing apparent contradiction (however unfair it may be to confuse athletic, financial, and technical expertise).

If you don't want to be called LeBron until the day Lord Satoshi moves His Holy Coins, I suggest apologizing for accusing the core devs (who write the free code you run) of impropriety/malfeasance/obstructionism/etc.

it's is MUCH more likely these SPV mining attacks are a direct result of full blocks.

More SPV mining, which is not an attack but rather explicitly permitted/encouraged by the protocol and arguably beneficial, is the result of larger (not "full") blocks.

Even Peter, your fellow Gavinista, has tried explaining you are full of shit, to no avail:

2.  Is F2Pool/AntPool more likely to produce an empty block when mempool swells?

...I don't see why the answer to Q2 would be yes for any reason other than the previous block is more likely to be large when mempool swells (i.e., mempool is not the cause, just correlated).

What's your excuse for ignoring Peter's attempt to inject you with sanity?  He's not a Cripplecoiner, nor did he mention ad hom/HF/iceblow.

Can't you just man up and admit being wrong?  Come on LeBron, the ball is in your court!   

[cypherdoc]

...
3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

...
3.  Time to verify (via CPU-hard although parallelizable ECDSA) incoming block's tx is already (absent clusters of 48-core Xeons) problematic at sizes near 1MB, hence use of the subjective descriptor "large" and your conflation of that term with "full."

Whether 1MB is ideal or not, it's what we have.  It's pretty evident that Bitcoin would be lucky to avoid annihilation on attempts to change it in any way at this point in time.  That may or may not be the case in the future.

...

In retrospect, 1MB seems like a pretty ideal setting for the past history of Bitcoin and some distance into the future.  To me.

it's a Magic Number!

no, it was always meant to be a DoS prevention mechanism and Satoshi foresaw much wider and greater usage of Bitcoin as a worldwide p2p cash system to challenge the big banks:
...

We don't know who Satoshi was and if what 'he' said about this or that is even especially reliable.  Assuming it is, we don't know that he said exactly what he was thinking.

If Satoshi said that he wanted to build a niche monetary system for big players and insiders to use as a reserve currency, I would not have been interested and would not have gotten involved.  Only after having dwelt on it some did I come to the conclusion that in spite of the faults and somewhat distasteful nature of the solution, it is the best way to have a chance of enduring success (and thereby at least partially dislodge those who do the same under a vastly inferior monetary system design such is our current crop of fiat solutions.)  So, Satoshi may well have tuned much of his writings (and code) to play on social pressures as much as computer science ones.

From a fairly early stage Satoshi seems to have gathered a contingent of fairly small-minded adherent (in addition to some brilliant ones such as Hal.)  Lesser minds tend to be attracted to shiny and simplistic things such as the 'Bitcoin is everything to everyone always and forever' philosophical construct.  I don't find it at all difficult to believe that Satoshi may have tuned his messages to retain these folks and build a 'critical mass' using these as footsoldiers.  If it were that or nothing, that is preferable in the battle to achieve a viable solution.

that's pretty sad but totally expected from you.

if you'll recall, it wasn't actually that long ago when i was of similar thought; doing nothing to the protocol.  ever.

but reading some of JR's stuff and thinking about the concept of digital gold, i think Bitcoin has to be reliably and cheaply accessible by everyone worldwide for maximum decentralization and value.  whether that's achievable via future tech improvements remains to be seen but we need to try.  otherwise, gold will continue to be used and valued by an outside large contingent that won't bother with Bitcoin and will even compete to a very large degree. 

[gmaxwell]

1.  Why do larger mining pools have less orphans, assuming most miners even small ones are connected to the relay network?

Because it greatly reduces the time it takes to transmit blocks but does not completely eliminate it-- nothing can (due to the speed of light).  In particular, something I didn't know until my conversation with them on July 4th:  the nearest relay network hub to F2Pool is still 200ms away due to insane routing that sends traffic between some networks in china and singapore via the US (thanks NSA?).

2. Even if mining pools set higher fees, aren't the unconfirmed TX's still added to their mempools?

No.

3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

I don't know what you're talking about there.  AFAICT F2Pool would also consider e.g. 750k "large".

Do you mean why was 1MB selected as the particular hard limit in the protocol?   ::shrugs:: It happens to be the the highest value you could sync over a modem and stay up with the network (though not for mining, due to latency), though that could be by chance.

[cypherdoc]

1.  Why do larger mining pools have less orphans, assuming most miners even small ones are connected to the relay network?

Because it greatly reduces the time it takes to transmit blocks but does not completely eliminate it-- nothing can (due to the speed of light).  In particular, something I didn't know until my conversation with them on July 4th:  the nearest relay network hub to F2Pool is still 200ms away due to insane routing that sends traffic between some networks in china and singapore via the US (thanks NSA?).

since small pools can also connect to the relay network, and i assume they do, there is no reason to believe that large miners can attack small miners with large blocks.  in fact, we've seen the top 5 chinese miners deprecated due to the GFC making it clear they CANNOT perform this attack despite what several guys have FUD'd.

2. Even if mining pools set higher fees, aren't the unconfirmed TX's still added to their mempools?

No.

how can that be?  mining pools all use a full node around which they coordinate their mining.  all full nodes are relatively in sync with their mempools which is the whole concept on which IBLT depends on. 

3. How is it that 1MB just "happened" to be the magic number at which blocks are deemed to be "large" ?

I don't know what you're talking about there.  AFAICT F2Pool would also consider e.g. 750k "large".

750 kB blocks are clearly being mined by miners who haven't changed the default.  in fact, i think the top 2 Chinese miners only recently changed their default to 1MB.

pt being, it's statistically unlikely that full blocks today represent the magical level of "large" blocks that Satoshi set 6 yrs ago.  the problems we are having with the forks are a result of the defensive tactics being taken from those full blocks.

have the Chinese miners given you a technical reason why they're SPV'ing?

[tvbcof]

We don't know who Satoshi was and if what 'he' said about this or that is even especially reliable.  Assuming it is, we don't know that he said exactly what he was thinking.

If Satoshi said that he wanted to build a niche monetary system for big players and insiders to use as a reserve currency, I would not have been interested and would not have gotten involved.  Only after having dwelt on it some did I come to the conclusion that in spite of the faults and somewhat distasteful nature of the solution, it is the best way to have a chance of enduring success (and thereby at least partially dislodge those who do the same under a vastly inferior monetary system design such is our current crop of fiat solutions.)  So, Satoshi may well have tuned much of his writings (and code) to play on social pressures as much as computer science ones.

From a fairly early stage Satoshi seems to have gathered a contingent of fairly small-minded adherent (in addition to some brilliant ones such as Hal.)  Lesser minds tend to be attracted to shiny and simplistic things such as the 'Bitcoin is everything to everyone always and forever' philosophical construct.  I don't find it at all difficult to believe that Satoshi may have tuned his messages to retain these folks and build a 'critical mass' using these as footsoldiers.  If it were that or nothing, that is preferable in the battle to achieve a viable solution.

that's pretty sad but totally expected from you.

if you'll recall, it wasn't actually that long ago when i was of similar thought; doing nothing to the protocol.  ever.

but reading some of JR's stuff and thinking about the concept of digital gold, i think Bitcoin has to be reliably and cheaply accessible by everyone worldwide for maximum decentralization and value.  whether that's achievable via future tech improvements remains to be seen but we need to try.  otherwise, gold will continue to be used and valued by an outside large contingent that won't bother with Bitcoin and will even compete to a very large degree. 

I've alternately nearly given up on Bitcoin multiple times over the last few years, and these periods coincide with the attacks on reasonable blocksize.

The 'trust everyone' idea of sidechains has given me new hope for Bitcoin in light of the fact that the lite and supportable nature necessary for a core solution has not yet been killed.  This makes for a situation where total shit-heads can own the 'reserve currency' and the world still have a scenario where the benefits can be used unencumbered by the masses.  Yes, the shit-heads may become even more rich, but they would and do do so anyway.   And yes, these large fish probably could game things, but the transparency inherent in Bitcoin allows end-users to migrate to solutions which take measures to avoid the manipulation.

[Wexlike]

Then why don't we decrease the blocktime from 10 min down to let's say 2 min. This way we can also have more transactions/second without touching the blocksize.

[iCEBREAKER]

Whether 1MB is ideal or not, it's what we have.

As it happens, 1MB seemed to have been at least quite fortuitous for us, and I wonder if it were not somewhat well considered when Satoshi made the setting as opposed to the perception promulgated by some that he pulled a random number out his ass.

In retrospect, 1MB seems like a pretty ideal setting for the past history of Bitcoin and some distance into the future.  To me.

Exactly this.  Intentionally or not, 1MB turned out to be a serendipitous choice.  Now it has ossified and is ready for the next layers to be built on its solid foundation.

I favor Adam Backamoto's extension block proposal.

The 1MB blocksize limit reminds me of the old 640k limit in DOS.

Rather than destroy Window's interoperability with the rich/valuable legacy of 8088 based software, that limit was extended via various hacks sublime software engineering.

Before resorting to the nuclear option of a contentious hard fork, we should attempt to achieve the desired result with soft forks.

[cypherdoc]

wow, Varoufakis out.  one less Bitcoin Bear; altho we still have lots of them roaming around here:

http://www.nytimes.com/2015/07/07/business/international/yanis-varoufakis-abruptly-resigns-as-greek-finance-minister.html?hp&action=click&pgtype=Homepage&module=a-lede-package-region&region=top-news&WT.nav=top-news&_r=0