Gold collapsing. Bitcoin UP.

[cypherdoc]

hang on.  Dow futures -20.

[Natalia_AnatolioPAMM]

As Frappuccino purchases move off main chain and are consolidated by Layer 2 processes, each of Layer 1's 7 tps becomes increasingly valuable, demonstrating it is not the size of the block that matters, but how you use it.

I LOL'ed

LOL'ed - i love the word  good joke

[cypherdoc]

notice how stock mkts almost perfectly reflect consumer sentiment/confidence.  or vice versa.

http://www.zerohedge.com/news/2015-07-28/us-economic-consumer-confidence-plunges-10-month-lows-hope-crashes

[cypherdoc]

As Frappuccino purchases move off main chain and are consolidated by Layer 2 processes, each of Layer 1's 7 tps becomes increasingly valuable, demonstrating it is not the size of the block that matters, but how you use it.

I LOL'ed

LOL'ed - i love the word  good joke

kinda reflects where his thinking is derived.

[thezerg]

lets be honest the main problem with LN right now is that it does not exist and to make that happen it first needs to be built and then every wallet and service will need to be retooled to use it. 

But if the above was completed, its definitely worth using.  But does that mean we should also not scale the mainchain?  Absolutely not.  We need multiple options here.

There are secondary problems with LN which we'll only really start to understand as LN starts being used.

1.  Intermediary: If I understand it correctly, you open a payment channel with a LN node, and they open a payment channel with another LN node or with the ultimate destination.  So LN is an intermediary -- but one of Bitcoin's greatest strengths is its "disintermediation" for the many reasons I won't rehash now.  I've listened to well regarded entrepeneurs/technologists give speeches where this is one of their major talking points.  I guess they'll no longer be interested.

2. Fees:  IIRC, a LN payment requires the LN node contain as much working capital as outstanding payment channels.  So a bitcoin payment of quantity A will "utilize" N*A actual bitcoins during the duration of the payment channel(s), where N is the # of hops through the LN network (minimum 2).  LN nodes are GOING to charge a % for the privilege of using their $.  Lately in fiat currencies it costs 1-3% to make a payment.  It even costs that to get cash from an ATM and nowadays merchants just deposit that cash in the bank.  What an awesome racket to get 1% of every single transaction!  Bitcoin wiped away this scam because you could make a transfer for free or so close to free it did not matter (although you might have to wait).  Not going to happen with the LN.

3. No "Blockchain" applications.  Colored coins, etc won't work through LN (because you don't receive the exact coins that the sender sends into the network).  I suppose you could post a txn to the LN with additional data, but you can only post ONE chunk (because your LN payment channel transaction is repeatedly overwritten).  So I guess all the excitement right now around the blockchain as an immutable ledger (which TBH is the only exciting thing happening) will move to an altcoin...

[cypherdoc]

lets be honest the main problem with LN right now is that it does not exist and to make that happen it first needs to be built and then every wallet and service will need to be retooled to use it. 

But if the above was completed, its definitely worth using.  But does that mean we should also not scale the mainchain?  Absolutely not.  We need multiple options here.

There are secondary problems with LN which we'll only really start to understand as LN starts being used.

1.  Intermediary: If I understand it correctly, you open a payment channel with a LN node, and they open a payment channel with another LN node or with the ultimate destination.  So LN is an intermediary -- but one of Bitcoin's greatest strengths is its "disintermediation" for the many reasons I won't rehash now.  I've listened to well regarded entrepeneurs/technologists give speeches where this is one of their major talking points.  I guess they'll no longer be interested.

2. Fees:  IIRC, a LN payment requires the LN node contain as much working capital as outstanding payment channels.  So a bitcoin payment of quantity A will "utilize" N*A actual bitcoins during the duration of the payment channel(s), where N is the # of hops through the LN network (minimum 2).  LN nodes are GOING to charge a % for the privilege of using their $.  Lately in fiat currencies it costs 1-3% to make a payment.  It even costs that to get cash from an ATM and nowadays merchants just deposit that cash in the bank.  What an awesome racket to get 1% of every single transaction!  Bitcoin wiped away this scam because you could make a transfer for free or so close to free it did not matter (although you might have to wait).  Not going to happen with the LN.

3. No "Blockchain" applications.  Colored coins, etc won't work through LN (because you don't receive the exact coins that the sender sends into the network).  I suppose you could post a txn to the LN with additional data, but you can only post ONE chunk (because your LN payment channel transaction is repeatedly overwritten).  So I guess all the excitement right now around the blockchain as an immutable ledger (which TBH is the only exciting thing happening) will move to an altcoin...

no, no, no, nevermind your pretty little head.   iCEBlow has got it all figured out with Team Core.

[gmaxwell]

i'd like to revisit that thought experiment i introduced last week.

an anonymous person hard forks the current Bitcoin code with the only change being a lifting of the limit.  he provably destroys the commit key (a Bitcoin private key) over at github thru a op_return spend.  the result being a Bitcoin source code with no core devs and thus no ability to change it going forward.  would that be enough to carry Bitcoin forward for the next century?

This message is technically incohearent-- there is no such thing as a a "commit key", and "op_return spend" doesn't destroy information if there were; achieving what you suggest simply requires people stop upgrading (which is also part of the reason that we do not use automatic 'push' upgrades)----  but I certantly get the _intent_. and it's one I've forelorely expressed multiple time myself, going back years:

That it would be philosophically ideal and achieve the highest security properites if the system were completely involatile, defined by it's own mechnical construction, and any change to it would simply be a different system which people could voluntarily move to by their own free choice. Through this the system would be immune to whilm, political control, or subterfuge in a much stronger sense.

Sadly, that result currently appears to be pratically be beyond the scope of human engineering abilities-- or at least beyond the efforts expended on any software system I'm aware of thus far.

A particular point that I couldn't disclose the time cypherdoc initially made the argument was that the software the network was running at that moment was vulnerable: http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-July/009697.html

We've had a pipeline of newly discovered non-public vulnerabilties in the Bitcoin protocol running almost all the time since 2012.  I don't have a great answer to that hard questions, but sadly burying our heads in the sand cannot work-- it would just result in a regular series of potentially devistating "emergency" changes, rather than a orderly, planned, resolution.

[molecular]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

[lebing]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

cash is king in times like these. Bitcoin will probably see some of that redistribution I imagine however

[wpalczynski]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

[uvwvj]

US Dollar.

Just make sure 1-5% of your NET WORTH (don't leverage yourself in a bad position) in BTC

[cypherdoc]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

yeah, i was gonna say.  altho it's not perfectly correlated. 

China seems to be dumping it into gold; knife catching  :

[molecular]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

Because people believe Yellen will increase interest rates?

[sgbett]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

deleveraging as a precursor to incoming deflation?

[tabnloz]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

Because people believe Yellen will increase interest rates?

I think money is exiting Europe and Chinese stocks and heading into the dollar / govt bonds as a flight to perceived safety. If the US does raise rates the dollar bull run will intensify; commodities and EM economies / currencies will fall and EM corporate debt issued in usd will be affected. So a raise will beggar thy neighbor and also possibly cripple Us domestically by importing more deflation into an already weak economy.

[wpalczynski]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

Because people believe Yellen will increase interest rates?

Because people have more faith in the US Dollar than other currencies.  Thats the benefit of having a world reserve currency I guess, you can fuck around and inflate for a long time before it all come crashing down.

[cypherdoc]

hang on.  Dow futures -20.

I have a question...

Everything seems to be going down (except bitcoin, but I exclude it here because it's negligibly small).

Where's the money going?

US Dollar.

Because people believe Yellen will increase interest rates?

i'm not sure too many ppl believe that.  after all, raising rates will have profound effects on the national debt interest owed each month for all countries.

i just think we're at the top of another stock cycle that's long overdue to roll over.  how far and how deep is the question.  ppl are anticipating this esp after all the currency crises overseas and liquidating assets for cash; which drives up the demand for USD's.  if the roll gets momentum to the downside, i've said all along that i doubt the US will get lucky again with having both UST's and the USD go up like they did in 2008.  if i had to choose, i'd guess we'd go the way of Japan and watch the USD dump while they do everything they can to save UST's ala JGB's. 

[iCEBREAKER]

IBLT is a known change which can help a lot with decentralised scaling.

IBLT is still somewhere between whitepaper and prototype, and won't really help scale until blocks are ~100s of MB.

According to Gavin, the relay network already plucked the low-hanging fruit for the short and medium term future:

TODO: measure Matt's approach against an IBLT approach. My guess is at small block sizes the simpler approach works better, but at some point IBLTs win.

[iCEBREAKER]

If we are to think about Bitcoin in the long term, and given Bitcoin's reasonably critical economic mass of ~$5 bil, current temporary block subsidies can be discounted as we consider fundamental questions about how and when to change one of Satoshi's Holy Numbers.

To which holy number are you referring?

One last question: what's your position on block size limit, never change it or change (in the way you like the most) in the future?

I agree with Satoshi, change it "eventually" sometime in the next ~5 years (after optimization by sidechains/LN and fee markets mature).

"Eventually" will be when we see actual congestion (competitive fees no longer prioritizing tx) or the network otherwise being harmed by the Holy 1MB crapflood regulator.

Accommodating more 'cosmic background spam' with a permanent home in the Mother Chain is the worst reason ever for increasing blocksize.

[iCEBREAKER]

Unfortunately for money to have store of value efficiency it must ultimately have value which with bitcoin rests again on its currency efficiency.

Miners could only store non dust UTXOs in easily accessible storage and ignore incoming txns that spend them unless the fee is worth the cost to look the UTXOs up. There are so many possibilities.   Your problem is that you are a central planner even tho you dont know it -- you are forcing a particular solution (expensive limited txns) onto the network as a whole.

Gold's example disagrees with your assertion.  Gold used to be an efficient currency, and is now a store of value.  Bitcoin is, by design, following this path.

I am in no position to "force" anything onto the network has a whole, especially not a particular solution.  You need to calm down and stop exaggerating.