[XMR] Monero Speculation

[smooth]

...

AM, pleases not that "fee market" should be plural, as both in- and out-of-band fee markets are needed to efficiently allocate the scarce resources of the network.

All the FUD about BTCC is overblown.  Peter Todd already said RBF makes this mostly a non-issue, and Lightning will make us forget it ever happened.

The Gavinista big block fetishists (having lost their XT node/block/governance war) are just using anything available as a cudgel to beat up on Team Core, no matter how far fetched (because their intended audience is low-information redditards and MBAs, not True Bitcoiners).

Sure. Here is how the out of band market works. The fees in Bitcoin keep rising as growing demand hits the 1 MB blocksize brick wall. When the fees get high enough people start switching to Monero that does not have this problem. Then Monero becomes the dominant coin and the fees in Bitcoin fall as nobody really cares about Bitcoin any more. This is basic economics. If Monero does not step into the opportunity somebody else will. DASH for example cannot be faulted for at least trying.

It's a given that with relatively small blocks the Bitcoin main chain would not be place where most transactions are done (obvious). It isn't a given that means transactions would then move to Monero or Dash (or LTC or DOGE). They could in theory move to Bitcoin side chains or Lightning or something else closer to the Bitcoin sphere.

That still leaves the issue of what happens if the Bitcoin main chain has hardly any transactions as the block rewards run out. A small but highly-secure chain that serves as a monetary anchor for other transactional systems rather than as a platform for transactions directly makes much more sense if the rewards don't diminish down to nothing, but there is really no way to get there with Bitcoin's fixed supply.

[ArticMine]

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It's a given that with relatively small blocks the Bitcoin main chain would not be place where most transactions are done (obvious). It isn't a given that means transactions would then move to Monero or Dash (or LTC or DOGE). They could in theory move to Bitcoin side chains or Lightning or something else closer to the Bitcoin sphere.

That still leaves the issue of what happens if the Bitcoin main chain has hardly any transactions as the block rewards run out. A small but highly-secure chain that serves as a monetary anchor for other transactional systems rather than as a platform for transactions directly makes much more sense if the rewards don't diminish down to nothing, but there is really no way to get there with Bitcoin's fixed supply.

This is exactly the fundamental problem with Bitcoin and I would argue that Litecoin has exactly the same problem. Dodgcoin could save itself by adding an adaptive blocksize since they have already made the hard social covenant change of a tail emission. Dash is an unknown until we see exactly what Dash Evolution will be (supposedly in around 18 months), in its current state it also has the same problem. Bytecoin (premine / ninjamine) not withstanding also runs into this issue. Go down the market capitalization list and the first POW coin that has long term viability is Monero.

Edit: Anything built upon the Bitcoin main chain will fail if the Bitcoin main chain fails and this includes Lightning, side chains etc.

[digicoin]

Go down the market capitalization list and the first POW coin that has long term viability is Monero.

Quite a bold claim. But I like it

[smooth]

...

It's a given that with relatively small blocks the Bitcoin main chain would not be place where most transactions are done (obvious). It isn't a given that means transactions would then move to Monero or Dash (or LTC or DOGE). They could in theory move to Bitcoin side chains or Lightning or something else closer to the Bitcoin sphere.

That still leaves the issue of what happens if the Bitcoin main chain has hardly any transactions as the block rewards run out. A small but highly-secure chain that serves as a monetary anchor for other transactional systems rather than as a platform for transactions directly makes much more sense if the rewards don't diminish down to nothing, but there is really no way to get there with Bitcoin's fixed supply.

This is exactly the fundamental problem with Bitcoin and I would argue that Litecoin has exactly the same problem. Dodgcoin could save itself by adding an adaptive blocksize since they have already made the hard social covenant change of a tail emission. Dash is an unknown until we see exactly what Dash Evolution will be (supposedly in around 18 months), in its current state it also has the same problem. Bytecoin (premine / ninjamine) not withstanding also runs into this issue. Go down the market capitalization list and the first POW coin that has long term viability is Monero.

Edit: Anything built upon the Bitcoin main chain will fail if the Bitcoin main chain fails and this includes Lightning, side chains etc.

I agree with the last sentence. My last paragraph/sentence above says the same.

[luigi1111]

Why do I do these posts?

to talk some sense into my nonsense.

Yes, I misread it. There is no premium, its for their customers. ... those who hold bitcoin at BTCC... so, unless they are using a deterministic style wallet, the premium is the control of your bitcoin.

So, give us your keys, we'll give you faster transaction times.

It is getting even worse than I thought. Bold my emphasis

That doesn't necessarily follow. I didn't look at it in depth at all, but it seemed that they are prioritizing all associated transactions: deposits going to their known addresses (user initiated, user controls keys) and withdrawals (BTCC initiated, owned); perhaps also user to user transactions, which would be controlled by them as well, but I think using the chain for that is a waste.

[ArticMine]

...
That doesn't necessarily follow. I didn't look at it in depth at all, but it seemed that they are prioritizing all associated transactions: deposits going to their known addresses (user initiated, user controls keys) and withdrawals (BTCC initiated, owned); perhaps also user to user transactions, which would be controlled by them as well, but I think using the chain for that is a waste.

It means that Bitcoin ceases to be a peer to peer network and becomes a network for clearing transactions involving MSBs and banks. We already have fiat currencies for that.

Edit: https://en.wikipedia.org/wiki/Animal_Farm Worth reading in this context.

[iCEBREAKER]

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AM, pleases not that "fee market" should be plural, as both in- and out-of-band fee markets are needed to efficiently allocate the scarce resources of the network.

All the FUD about BTCC is overblown.  Peter Todd already said RBF makes this mostly a non-issue, and Lightning will make us forget it ever happened.

The Gavinista big block fetishists (having lost their XT node/block/governance war) are just using anything available as a cudgel to beat up on Team Core, no matter how far fetched (because their intended audience is low-information redditards and MBAs, not True Bitcoiners).

Sure. Here is how the out of band market works. The fees in Bitcoin keep rising as growing demand hits the 1 MB blocksize brick wall. When the fees get high enough people start switching to Monero that does not have this problem. Then Monero becomes the dominant coin and the fees in Bitcoin fall as nobody really cares about Bitcoin any more. This is basic economics. If Monero does not step into the opportunity somebody else will. DASH for example cannot be faulted for at least trying.

You are falsely conflating everyone switching ("nobody really cares about Bitcoin any more") with loss of marginal use cases (EG SatoshiDice and coffee).  That's not how the substitution effect works.  What actually happens those who gain the most value from Bitcoin stay and those who gain the least switch.  That is basic economics.

When oil prices rise, we demand/produce/consume (IE substitute) more coal, nat gas, and alt energy instead.  That doesn't mean nobody really cares about oil any more.

[ArticMine]

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You are falsely conflating everyone switching ("nobody really cares about Bitcoin any more") with loss of marginal use cases (EG SatoshiDice and coffee).  That's not how the substitution effect works.  What actually happens those who gain the most value from Bitcoin stay and those who gain the least switch.  That is basic economics.

When oil prices rise, we demand/produce/consume (IE substitute) more coal, nat gas, and alt energy instead.  That doesn't mean nobody really cares about oil any more.

With a 1 MB blocksize limit one has 3 tps (reasonable practical estimate) for the current Bitcoin network. This translates into approximately 95 million transactions per year.

So here are some questions:
What non marginal use cases do you expect the average person to be able to use Bitcoin for?
Do you expect on average those transactions to be mined within that average person's life expectancy? That of their children? That of their grand children? That of their great grand children?

Please do the math.

[smooth]

...

You are falsely conflating everyone switching ("nobody really cares about Bitcoin any more") with loss of marginal use cases (EG SatoshiDice and coffee).  That's not how the substitution effect works.  What actually happens those who gain the most value from Bitcoin stay and those who gain the least switch.  That is basic economics.

When oil prices rise, we demand/produce/consume (IE substitute) more coal, nat gas, and alt energy instead.  That doesn't mean nobody really cares about oil any more.

With a 1 MB blocksize limit one has 3 tps (reasonable practical estimate) for the current Bitcoin network. This translates into approximately 95 million transactions per year.

So here are some questions:
What non marginal use cases do you expect the average person to be able to use Bitcoin for?
Do you expect on average those transactions to be mined within that average person's life expectancy? That of their children? That of their grand children? That of their great grand children?

Please do the math.

At 3 tps it wouldn't be average people using it. With 10 billion people an average person could only make one transaction every 100 years. So that would have to be some sort of foundation for other systems (side chains, Lightning, etc.) that support higher volume.

BTW, Lightning doesn't work very well with small blocks, though maybe that can be fixed (in its present form, you need enough capacity to close many channels in a relatively short period of time). Sidechains probably don't either, although it seems at least possible that one or more side chains could become so popular that the main chain isn't used much by anyone except by miners (unlike Lightning you don't necessarily need main chain tx capacity for a side chain to operate). 100 million tx/year might be enough for that.

This still ignores the question of how the main chain is secure and remains decentralized, how sidechains are secured, and probably other unanswered questions with the approach.

[smooth]

The testnet fork that was scheduled for today seems to have gone fine.

[dEBRUYNE]

The testnet fork that was scheduled for today seems to have gone fine.

More detailed -> https://forum.getmonero.org/1/news-announcements-and-editorials/2429/testnet-hard-fork-23rd-november-2015-block-624634?page=&noscroll=1#post-4450

[jehst]

It would be nice if the blocksize were actually a problem. There's never been a time when paying 5 cents wouldn't get your transaction processed quickly. We're talking about a theoretical problem that's based on people using BTC for some non-marginal use. Realistically, that won't happen this year, and probably won't happen next year or the year after that.

[ArticMine]

It would be nice if the blocksize were actually a problem. There's never been a time when paying 5 cents wouldn't get your transaction processed quickly. We're talking about a theoretical problem that's based on people using BTC for some non-marginal use. Realistically, that won't happen this year, and probably won't happen next year or the year after that.

Just wait.

Edit: It is already having an impact most notably on price and venture capital investments. The current Bitcoin bear market has been longer than any previous one. Of course what could easily happen is there is little apparent impact because people simply stay away from Bitcoin. Also the fact that transactions are still going through with a small fee premium is what is giving people a false sense of security.

[iCEBREAKER]

You are falsely conflating everyone switching ("nobody really cares about Bitcoin any more") with loss of marginal use cases (EG SatoshiDice and coffee).  That's not how the substitution effect works.  What actually happens those who gain the most value from Bitcoin stay and those who gain the least switch.  That is basic economics.

When oil prices rise, we demand/produce/consume (IE substitute) more coal, nat gas, and alt energy instead.  That doesn't mean nobody really cares about oil any more.

With a 1 MB blocksize limit one has 3 tps (reasonable practical estimate) for the current Bitcoin network. This translates into approximately 95 million transactions per year.

So here are some questions:
What non marginal use cases do you expect the average person to be able to use Bitcoin for?
Do you expect on average those transactions to be mined within that average person's life expectancy? That of their children? That of their grand children? That of their great grand children?

Please do the math.

I'm glad to see you no longer pushing your fake 'all-or-nothing' version of the substitution effect.  That's progress I can work with.

There are too many 'non-marginal use cases for the average person' to list here, given

The true value that Bitcoin brings to the table is not "everyone gets to write into the holy ledger", it is instead "everyone gets to benefit from sane and non-inflationary financial instutions whose sanity and honesty are ensured by the holy blockchain".

And that's not even accounting for the additional capacity enabled by SC+LN.

The second question is you feigning obtuseness and being snotty.  You can do better than that; you know damn well if you want higher tx priority you simply have to pay for it.  You also know RBF makes that arrangement flexible, adaptive, and dynamic.

It would be great if you could stop pretending Bitcoin's Layer 1 was created (and/or is able) to replace commercial banking, cash, plastic, and Starbucks gift cards while remaining diverse/diffuse/defensible/resilient.  Please do the engineering.

[smooth]

It would be great if you could stop pretending Bitcoin's Layer 1 was created (and/or is able) to replace commercial banking, cash, plastic, and Starbucks gift cards while remaining diverse/diffuse/defensible/resilient.  Please do the engineering.

It's hard to argue that it wasn't created for that when satoshi wrote about things like how to do zeroconf for vending machines:

https://bitcointalk.org/index.php?topic=423.msg3819#msg3819

Or micropayments becoming practical over time as storage and bandwidth costs fall:

https://bitcointalk.org/index.php?topic=287.msg7687#msg7687

In the subsequent years, some may have realized that isn't the best way to approach things but learning is different from revisionism.

[ArticMine]

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I'm glad to see you no longer pushing your fake 'all-or-nothing' version of the substitution effect.  That's progress I can work with.

I never have.

There are too many 'non-marginal use cases for the average person' to list here, given

The true value that Bitcoin brings to the table is not "everyone gets to write into the holy ledger", it is instead "everyone gets to benefit from sane and non-inflationary financial instutions whose sanity and honesty are ensured by the holy blockchain".

And that's not even accounting for the additional capacity enabled by SC+LN.

The second question is you feigning obtuseness and being snotty.  You can do better than that; you know damn well if you want higher tx priority you simply have to pay for it.  You also know RBF makes that arrangement flexible, adaptive, and dynamic.

It would be great if you could stop pretending Bitcoin's Layer 1 was created (and/or is able) to replace commercial banking, cash, plastic, and Starbucks gift cards while remaining diverse/diffuse/defensible/resilient.  Please do the engineering.

I have done the engineering. Please see this link. https://upload.wikimedia.org/wikipedia/commons/8/87/IBM_card_storage.NARA.jpg. This is a picture taken during my lifetime. Now try to run the current VISA network using punched cards and tabulating machines. Credit cards existed before this picture was taken.

If they are using LN or some other off chain solution there are using some kind of bank by another name.
If they are using a side chain they are using an alt-coin by another name

In both the above cases there remain the serious security issues that smooth has mentioned in a prior post, in particular how do you secure the Bitcoin main chain. So my solution was to move from Bitcoin to a combination of XMR and CAD. I have both the solutions above. The "sidechain" XMR and the "bank" CAD.

Of course if you want a higher TX priority you have to pay for it. In a normal market It also means that if people offer to pay more for TXs they get an increase in supply of TXs. It is here where Monero TXs behave as a normal market. If there is an increase in demand, leading to an increase price it results this in an increase is supply. With Bitcoin TXs no matter how much the demand and price increase there is no increase in supply, and therein lies the fatal flaw in the Bitcoin TX market and by extension in Bitcoin itself.

The whole point of Bitcoin was to replace the bank for certain transactions, not to create a "better" bank so davout is dead wrong here.

[jehst]

https://bitcointalk.org/index.php?topic=287.msg8810#msg8810

It would be nice to keep the blk*.dat files small as long as we can.

The eventual solution will be to not care how big it gets.

But for now, while it's still small, it's nice to keep it small so new users can get going faster.  When I eventually implement client-only mode, that won't matter much anymore.

There's more work to do on transaction fees.  In the event of a flood, you would still be able to jump the queue and get your transactions into the next block by paying a 0.01 transaction fee.  However, I haven't had time yet to add that option to the UI.

Scale or not, the test network will react in the same ways, but with much less wasted bandwidth and annoyance.

The orthodox bitcoin stance is to eliminate the  block size limit altogether. But it seems that some people have decided to revise that. Making the block size bigger is now seen as the heretical position. Incredible.

[ArticMine]

https://bitcointalk.org/index.php?topic=287.msg8810#msg8810

It would be nice to keep the blk*.dat files small as long as we can.

The eventual solution will be to not care how big it gets.

But for now, while it's still small, it's nice to keep it small so new users can get going faster.  When I eventually implement client-only mode, that won't matter much anymore.

There's more work to do on transaction fees.  In the event of a flood, you would still be able to jump the queue and get your transactions into the next block by paying a 0.01 transaction fee.  However, I haven't had time yet to add that option to the UI.

Scale or not, the test network will react in the same ways, but with much less wasted bandwidth and annoyance.

The orthodox bitcoin stance is to eliminate the  block size limit altogether. But it seems that some people have decided to revise that. Making the block size bigger is now seen as the heretical position. Incredible.

This runs into the opposite problem. Effectively infinite supply. The likely result is transaction fees would go down to zero. So now how do you secure the net work in the absence of an emission?

Edit: We see now see how intractable the blocksize in Bitcoin is. Both sides can make very valid points.

[smooth]

If they are using LN or some other off chain solution there are using some kind of bank by another name.

Depending on how it is realized a Lightning network doesn't have to be like a conventional bank because your ability to get your money back (and the inability of the bank to use your money other than under your direction) is enforced by smart contracts. But that depends on a secure and high capacity main chain to execute the smart contracts

If they are using a side chain they are using an alt-coin by another name

Agree and I haven't seen any proposals for how these are even going to be done well by altcoin standards. The proposals I've seen are merged mining and a closed group of block signers.

[jehst]

The likely result is transaction fees would go down to zero. So now how do you secure the net work in the absence of an emission?

The block reward subsidizes all transactions until it doesn't.

Then you pay to play. Maybe the miners include your transaction and maybe they don't. If they don't, then you offer a higher transaction fee. What's the issue?