smooth
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December 03, 2014, 01:30:45 AM |
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It's arguable that after the Brenton Woods agreement that the world did in fact have a single global currency. All other currencies were fixed to the dollar which in turn was pegged to gold (remember foreign central banks could redeem dollars for a fixed quantity of gold even if individuals could not).
Pegs have always been fragile and failed, and that is exactly what happened.
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smooth
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December 03, 2014, 01:33:36 AM |
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One single coin to rule them all is a catastrophe waiting to happen. Can you imagine the complete and utter disaster that would occur if the entire world only used the metric system? Interestingly the entire world does not use the metric system, and the analogy is flawed anyway. There is a long history of monetary systems failing with catastrophic results and no such history of measurement systems failing.
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rocks
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December 03, 2014, 01:41:43 AM |
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It's arguable that after the Brenton Woods agreement that the world did in fact have a single global currency. All other currencies were fixed to the dollar which in turn was pegged to gold (remember foreign central banks could redeem dollars for a fixed quantity of gold even if individuals could not).
Pegs have always been fragile and failed, and that is exactly what happened. That is an argument on why any single system controlled by people (whether a few or many) will almost always fail, not that we didn't have a single global currency for a shortish time period.
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smooth
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December 03, 2014, 01:47:12 AM |
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It's arguable that after the Brenton Woods agreement that the world did in fact have a single global currency. All other currencies were fixed to the dollar which in turn was pegged to gold (remember foreign central banks could redeem dollars for a fixed quantity of gold even if individuals could not).
Pegs have always been fragile and failed, and that is exactly what happened. That is an argument on why any single system controlled by people (whether a few or many) will almost always fail, not that we didn't have a single global currency for a shortish time period. What I'm arguing is that separate "pegged" currencies are not really one currency after all (and can't be). Relevance to side chains.
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cypherdoc (OP)
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December 03, 2014, 02:03:49 AM |
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can someone direct me to a source where i can practice constructing a multi-sig tx with the equivalent of a "createrawtransaction" using bitcoind and JSON-RPC?
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Peter R
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December 03, 2014, 02:10:31 AM |
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can someone direct me to a source where i can practice constructing a multi-sig tx with the equivalent of a "createrawtransaction" using bitcoind and JSON-RPC?
This might be lower-level than what you're looking for, but I use Vitalik's pybtctool. He wrote up a nice example here: http://bitcoinmagazine.com/11113/pybitcointools-multisig-tutorial/It requires that you have (or install) Python and then the pybtctool package, but that's fairly easy. The nice thing is that it's a stand-alone package (it pushes the signed TXs to blockchain.info or Eligius) and doesn't require bitcoind.
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rocks
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December 03, 2014, 02:17:34 AM |
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It's arguable that after the Brenton Woods agreement that the world did in fact have a single global currency. All other currencies were fixed to the dollar which in turn was pegged to gold (remember foreign central banks could redeem dollars for a fixed quantity of gold even if individuals could not).
Pegs have always been fragile and failed, and that is exactly what happened. That is an argument on why any single system controlled by people (whether a few or many) will almost always fail, not that we didn't have a single global currency for a shortish time period. What I'm arguing is that separate "pegged" currencies are not really one currency after all (and can't be). Relevance to side chains. OK got it, been trying to avoid SC. Side chains are not really pegs though and I think there's been some confusion on that. I think side chains can best be thought of as a vault with some known quantity of BTC allocated to that vault. For example side chain A has 400 BTC allocated to it while side chain B has 4000 BTC allocated to it. SC A can do whatever it wants, but it only has value of 400 BTC, similarly SC B can do whatever it wants, but it can only have value of 4000 BTC. Compare this to gold today. Today we are told the FED's vault has x,xxx tons of gold, JP Morgan's vault has y,yyy tons of gold and Russia has z,zzz tons of gold in their vault. But there is no method at all to verify this. It is up to the vault's word, and even if the vault publishes accurate numbers it's possible they are mistaken and unknowingly have tungsten bars. This is why time and time again pegs to gold (paper products, etc) have failed over and over again. There is no method to verify in real time how the peg is doing. Now compare this to side chains. With side chains you can compute in any given second EXACTLY has much BTC each side chain has allocated to it. You can always know the quantities of each vault. Now side chains can if they want "peg" their scBTC to their BTC allocated to them, or they can not. It is up to the function of that SC and there are no technology constraints. Personally I think economic factors (not technical) will cause people to only use SC's that maintain a peg otherwise it will be very visible that you are being devalued in terms of BTC.
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smooth
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December 03, 2014, 02:23:28 AM |
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Now compare this to side chains. With side chains you can compute in any given second EXACTLY has much BTC each side chain has allocated to it. Yes but that has no direct relevance to how much you can claim from the site chain "vault" if the side chain is flawed in some manner. Consider that. If your point is that this has no direct harmful effect on bitcoin itself, I mostly agree (and disagree with cyperdoc) and consider side chains to be a bitcoin application that leads to more demand for bitcoin (to put in the "vault"), except for possible systemic and contagion effects, which are difficult or impossible to reason about in advance.
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rocks
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December 03, 2014, 02:28:24 AM |
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If your point is that this has no direct harmful effect on bitcoin itself, I mostly agree (and disagree with cyperdoc) and consider side chains to be a bitcoin application that leads to more demand for bitcoin (to put in the "vault"), except for possible systemic and contagion effects, which are difficult or impossible to reason about in advance.
I never said there are no direct harmful effects, I only said that the allocation is known, and then pointed out how that itself is a large step better than today.
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smooth
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December 03, 2014, 02:30:21 AM |
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If your point is that this has no direct harmful effect on bitcoin itself, I mostly agree (and disagree with cyperdoc) and consider side chains to be a bitcoin application that leads to more demand for bitcoin (to put in the "vault"), except for possible systemic and contagion effects, which are difficult or impossible to reason about in advance.
I never said there are no direct harmful effects, I only said that the allocation is known, and then pointed out how that itself is a large step better than today. Good point. I've always said that side chains are a useful tool that likely make bitcoin more powerful and better.
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Adrian-x
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December 03, 2014, 02:44:35 AM |
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i'm also going to claim that it's being driven by the commoditization of hardware as indicated by the leveling off of the hashrate. prices have plunged 10-fold allowing more and more smaller pools into the game. this was predicted here long ago:
The leveling off of the hash rate is almost certainly due to the 70% drop in price. You had huge investment pouring into mining, now you don't. What new gear is going into service is being balanced out by older unprofitable gear coming out of service. That may in turn have some effect on pool concentration, but the effect is not clear to me, other than the obvious of say ghash not spending a lot on expanding the in house cloud mining right now. I agree with Greg Maxwell as quoted in that tweet. The issues of mining decentralization have not been solved, as far as I can tell. I don't understand what you are talking about in terms of nash equilibrium so maybe you could expand on that so I can learn something. Lots of VC money in mining, just scroll through this list. http://www.coindesk.com/bitcoin-venture-capital/ over $90m invested and yet to materialize in hardware. Not to mention existing mining operations reinvesting. That 70% price drop has taken place over almost a year, during that time we've seen an exponential increase in mining starting in April 2013, at one stage it was almost like every 2 weeks we were adding more hashing power to the network than existed 2 weeks prior. The feed stock energy is still below 50% the market price. what I think we're seeing is the infrastructure committed too during the April 2013 growth spurt is now implemented. planing new infrastructure If you are setting up a big farm is a big undertaking with lots of risk given the "relatively small" profit margin at the moment, just the basic you have to get a warehouse and have the appropriate energy and cooling infrastructure installed, these logistics take manpower, capital and time, so it is likely it is being planed but to launch with next gen hardware. I feel comfortable projecting that any hardware investment made prior to the last 2 months has had a ROI. Just a few hours ago we had our first negative difficulty adjustment, since Feb 2013* (its the equivalent of losing all the hashing power that existed up until about October 2013) just a small 0.73% adjustment. It is now probably less risky to sell ASIC hardware than it is to invest in new infrastructure, given the uncertainty in price, so long as the price stays in this range. Asic Manufactures are probably focused on design and development stages given the flat difficulty. I think we will see mining hardware drop in price now, at least until Bitcoin starts its next growth stage, at which point it won't be sold but deployed by the developers themselves, or sold at a premium. Also i expect about 50% of mined coins to make it into the market as most miners can cover all costs and comfortably save 50% of there BTC income. (the proponents will be saving anyway) If you are worried about mining distribution and bullish on Bitcoin price long term, now could be a good time to think about diversifying into mining hardware, and if some of that VC investment comes through we could start to see growth in difficulty again, hardware should become cheaper. So I dont think mining hardware is centralizing, nor is a problem yet, it is still a function of the economic incentives driven by Bitcoin adoption. * my last reported observation was an error, I misread the charts)
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smooth
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December 03, 2014, 03:09:31 AM |
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That 70% price drop has taken place over almost a year, during that time we've seen an exponential increase in mining starting in April 2013, at one stage it was almost like every 2 weeks we were adding more hashing power to the network than existed 2 weeks prior.
Yes because the 10x price rise over a relatively short period last year (2013) sent profitability through the roof and and manufacturers and farm builders into overdrive. Mining was being increased as fast as possible, and while difficulty was rising, it was gated by manufacturing and farm build out. Plus it meant that older gear remained profitable long past its prime. I ran some ASICMINER blades for a while at horrific hash/watt, but they were still profitable anyway. I sold them for a reasonable price and they were still profitable for the buyer to continue running them for some time longer. None of that is true any more, given the price drop. Yes, brand new ASICs are still profitable vs. power, but the investment is much riskier now, and old gear isn't worth running at all.
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Adrian-x
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December 03, 2014, 04:11:41 AM Last edit: December 03, 2014, 05:38:54 AM by Adrian-x |
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That 70% price drop has taken place over almost a year, during that time we've seen an exponential increase in mining starting in April 2013, at one stage it was almost like every 2 weeks we were adding more hashing power to the network than existed 2 weeks prior.
Yes because the 10x price rise over a relatively short period last year (2013) sent profitability through the roof and and sent manufacturers and farm builders into overdrive. Mining was being increased as fast as possible, and while difficulty was rising, it was gated by manufacturing and farm build out. Plus it meant that older gear remained profitable long past its prime. I ran some ASICMINER blades for a while at horrific hash/watt, but they were still profitable anyway. I sold them for a reasonable price and they were still profitable for the buyer to continue running them for some time longer. None of that is true any more, given the price drop. Yes, brand new ASICs are still profitable vs. power, but the investment is much riskier now, and old gear isn't worth running at all. Yes I agree hash rate would have increased if the price of Bitcoin were 70% higher today, and I would expect mining hardware manufacturers to employ there own equipment rather than sell it, but an equilibrium has now been achieved. I don't think of Bitcoin mining gear as having a "prime", but rather they have an efficiency rating in the law of comparative advantage. The Bitcoin Price will tend to be marginally higher than the total energy consumed to mine one, we are still at about 50% capacity this gives a nice buffer for volatility this also creates opportunity for new competition. the fact that old gear isn't profitable dose not imply centralization, if you bought new mining hardware 9 weeks ago (available to anyone who wants to take a business risk) you have had a RIO on your new hardware. If you have fairly cheep electricity it costs about $130 to find a Bitcoin. If the price goes up too quickly one could see GPU's become profitable again, but we have a healthy balance now, and those who have taken the risk are now in profit taking mode until the next wave of disruption, guaranteed to occur after 87341 new block have been mined, or if the network grows, or if some of those VC funded mining investments come on line. Sure mining is nothing like it was in 2011, but it's decentralized enough, and the incentives to keep it so are still in play. looking at the difficulty it seems mass deployment has stalled, and new mining hardware is now readily available. There will always be risks, and those that circumvent them most successfully will prosper. The market may respond differently but I see the readily available hardware and the upside price potential in Bitcoin as a reversal in the centralized incentives that got us here. The same incentives that encouraged the exponential growth in the security in the networks hashing power are now changing it could be starting to decentralize again. The risk of profitable mining is increasing so I agree not everyone can mine Bitcoin profitably, and some centralization needs to take place for efficiency of scale, but there is a limit and i think we just hit the optimum scale limit with the decrease in difficulty in this price zone.
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cypherdoc (OP)
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December 03, 2014, 06:58:41 AM |
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that was a pain in the ass. but well worth the time: ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FVc6kMN2.png&t=665&c=hYz5gyP0SnmD6g)
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Peter R
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December 03, 2014, 07:40:57 AM |
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that was a pain in the ass. but well worth the time: ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FVc6kMN2.png&t=665&c=hYz5gyP0SnmD6g) Yep. You'll always remember the first time you did raw multisig.
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molecular
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December 03, 2014, 07:45:40 AM |
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can someone direct me to a source where i can practice constructing a multi-sig tx with the equivalent of a "createrawtransaction" using bitcoind and JSON-RPC?
you could try sx: https://sx.dyne.org/
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cypherdoc (OP)
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December 03, 2014, 12:30:55 PM |
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can someone direct me to a source where i can practice constructing a multi-sig tx with the equivalent of a "createrawtransaction" using bitcoind and JSON-RPC?
you could try sx: https://sx.dyne.org/I used bitcoind and json simply for reasons of consistency. Why use sx or pybtctools? Easier, no need for blockchain, diversity, curiosity? I guess it's like learning another language. Literally, I suppose. Its always insightful and fascinating for me to find out what drives all you smart people.
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justusranvier
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December 03, 2014, 12:41:02 PM |
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Why use sx or pybtctools? Easier, no need for blockchain, diversity, curiosity? Why do we have Firefox, IE, Chrome, and Opera?
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Zangelbert Bingledack
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December 03, 2014, 02:33:46 PM Last edit: December 03, 2014, 02:54:12 PM by Zangelbert Bingledack |
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On monoculture and diversity... There absolutely should be one coin/ledger but is it imperative that there be one protocol/chain to update it?
Maybe multiple chains could allow us to manage the risk of one failed blockchain bringing its coin down with it?
And what if the coin itself fails, perhaps for economic rather than technical reasons? The term "coin" is introducing confusion. The question is, what if the ledger fails? This makes it clear that we must be careful to distinguish between the ledger (a conceptual spreadsheet keeping track of who owns what percentage of the economic community known as "the Bitcoin ecosystem" and later perhaps just "the global economy") and the protocol for updating that ledger. Now here I wondered how you could possibly mean that a ledger - a mere spreadsheet - could "fail" for economic reasons. Then I noticed later you posted this, which is a common economic misconception that I recommend rooting out of your thinking completely: Also your example of physical gold is not really an argument in favor of bitcoin because gold does not have a fixed supply and also has a supply that is responsive to technological advancement (correlated with economic growth). The problem is in imagining that the money supply needs to expand to accommodate an expanding economy (or contract in an contracting economy). As a ledger, all that matters is what percentage of total supply you own. Disregarding the physical difficulty of working with very tiny pieces of gold, even a single ounce of gold would be enough to power the world economy, no matter how it may grow or shrink. Any amount of money works the same, because again it just comes down to what percentage of the total supply you hold. The term "1 BTC" just means 1/21M of the total ledger (or 1/13M of the current ledger). 130,000 BTC is just another way of saying "1% of the current ledger." An ounce of gold is just another way of saying X% of the total gold supply. Laboring under that misconception, and thinking in terms of "coins" instead of a ledger (and these two confusions go hand in hand), I can see how you might think the Bitcoin ledger could fail due to there "not being enough money." With that possibility out of the way, you are still quite correct that Bitcoin the protocol could fail for technical reasons, so arguably a monoculture in protocols is bad. However, monoculture in the sense of everyone using the same ledger is not a bad thing at all, and it's kind of the point of money in the first place; the only way it could be bad is if the system for updating that ledger were faulty, which again points to the protocol as a possible weak point, not the ledger itself. TL;DR: Monoculture in protocols may introduce weaknesses; monoculture in a having a single ledger doesn't, and is pretty much the point of having money at all.
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sickpig
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December 03, 2014, 02:35:05 PM |
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I used bitcoind and json simply for reasons of consistency. Why use sx or pybtctools? Easier, no need for blockchain, diversity, curiosity?
I do not define myself as a smart person, but I dare say that diversity is fundamental. As smooth already said a few posts ago diversity brings you anti-fragility. (if you didn't read Nassim N. Taleb's work yet, look at: http://www.fooledbyrandomness.com. it's worthy imo.)
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Bitcoin is a participatory system which ought to respect the right of self determinism of all of its users - Gregory Maxwell.
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