CATO Evaluation of Bitcoin Eventual Collapse of protocol

[bongger]

CATO, What do you think about Bitcoin???

Uhhhh??? Don't buy them...

Why???

Uhhh welll? Uhhhhh??? Flinstones use them and uhhhh they like Ghostbusters and uhhh to be successfull you have to be stupid and have manners too!!! Uhhh??? I have to go take my Alzheimer's Medication‎....

Uhhh??? Oh yeah now I remember... Bitcoin puts me out of a job and out of business....

[1714909098]

1714909098

[franky1]

as for saying ghash is a 'dominant player'
the video shows that GHASH has 300k users.. thats 300k individual people. not one entity (but nice try with a ghost buster analogy)

i think you cant win this particular argument as ghash may have 300k users, but most of their hash power is provided by a very small number of users, most of whom are under the control or influence of ghash or bitfury.

you can see from the well analysed stats that ghash has several large entities mining with significant hashpower on its pool.  ie: unlike the other 'so called public' mining pools, ghash has a small number of large entities (source: organofcorti)

AsicMiner claims to have about 5 Petahash on ghash (source: amhash)

Ghash itself seems to operate its own very large mining farm, and BitFury also has been known to have a large amounts of its own hash power on ghash (as well as its own separate mine).   sources:  reading between the lines of statements and conversations with ghash and bitfury.

bottom line is that ghash's hash power is quite centralised.  its not worth trying to claim ghash is a prime example of decentralisation cos it isnt.

if ghash solely owned all its hashpower you would have a point. but if ONE of the large entities wanted to mess with the protocol, they would have to collaberate with GHASH to rewrite the mining protocol to change how bitcoin works.. BUT yes a big but to rebuttle your point.... the other 299 that actually give a crap about protecting the blockchain will move to different pools to then make GHASH's share of the hash power decrease.
for instance if ASICMiner colluded with GHASH to mess with the protocol. and maybe 10 other big players, totalling maybe 30 ptahash.. the other miners will move to take ghash's power away from ghash and move to other pools that stick with the standard protocols. making ghash's potential fork, redundant.

there is still no way for a single entity to control / alter the protocol. and even if there was, people can move to different pools and reinstate the standard protocol freely. there is nothing forcing people to stay, and also if peoples funds are at risk they have no reason to stay.

in short its far better to run a ethical service then try to attempt to mess with it

[Elwar]

Oh wait...

http://www.cato.org/people/kevin-dowd
"Kevin Dowd is a visiting professor at the Pensions Institute at Cass Business School in London. He is an expert on free banking, central banking, financial regulation, banking history, financial risk management and pensions."

Get in line professor. "academics" are stepping forward daily to talk about how bad Bitcoin is. I doubt this speech will get you any paid speaking slots at the World Bank conference like other professors. You need to try harder. But you have many dinner parties to look forward to.

[Addition]

This.  Also, in the not too distant future we'll hit the same process as CPUs, memory etc for miners.  E.g. 14 nm, 7 nm, 5nm.  Once mining rigs hit the same process that CPUs and other semiconductors are using for that generation hash rate increases will level off and growth will be due to the number of chips sold and much slower increases in hash rates due to process improvements.  E.g. the Avalon was a 110nm process for their chips, the AntMiner S3 is 28nm process and other chips are using smaller processes (all iirc although I think they are accurate or very close).  The performance increases between GPU and 110nm was huge.  The performance increases between 110n and 28nm (for example) are large too.  

However, going from 28nm to 14nm (what Intel is using in many of their chips now) is good, but not the same order of magnitude as 110nm to 28nm.  Once you see new mining rigs all running on the current process at a high clock rate, then I believe that you will end up with more opportunities for "hobby miners" since they will be able to project an ROI much easier and it will be much more likely that they will be able to have a ROI.  People will be much more inclined to purchase a miner if they know it won't be replaced by something 100 times better in 3 months.

This will be a somewhat more stable situation in terms of hash rate increases and miners coming to market.  It will be closer to how CPU mining was in 2010 and GPU mining was in, 2011-2012 (even the first third of 2013) where you could buy a few video cards and have a pretty good idea that they would return X BTC/week (decreasing slightly each week due to added GPUs on the network) for a year or two until a new video card came out and that might cause a slight increase in the difficulty increases.  And even then you might mine some fewer BTC/week but not 1/1000th of the number in that period like the difference between January 2013 and November 2014.

It is difficult to model and so it is not surprising that they may not be catching all the nuances there.  I certainly wouldn't be confident in being able to predict it all going forward.  Particularly with so many variables - regulations, halving in ~18 months, improvements (e.g. sidechains etc), new uses.

...
Yup. Additionally, large miners are likely to, eventually, vertically integrate other services. There are some potential negatives (as well as positives) to that, but it also probably means that there are a number of workable business models for a number of large fairly-efficient miners, as opposed to an endgame where strictly the least-cost producer gobbles all hashpower.

Regardless of all that, the same arguments that are thrown around about mining could be thrown around about data-centers in general (OMG! there will only be a single least-cost/massive-scale producer that will run everything!), or pretty much *any* industry for that matter; this is really just a (mostly) extrapolated-short-sight criticism of capitalism in general, not specifically bitcoin mining. Few industries actually coalesce to pure monopoly in practice.

Anyway, the natural incentives of bitcoin mining make it less likely than other domains.

Thanks for that mate! Yeah it's interesting how Moore's Law will apply to BTC Hashing.

Sort of like Ivy Bridge; Haswell; Broadwell; ....

It's interesting that the engineers/architects @ Intel haven't looked into. They seem well placed to investigate ASIC 3.0 architecture?

Don't know about Intel? Think they are happy with their market share R&D/Provision of commercial processors. However, specialists KNC are working on it:

http://www.coindesk.com/kncminer-plans-16nm-bitcoin-mining-asic-launch-2015/ 

[Addition]

Oh wait...

http://www.cato.org/people/kevin-dowd
"Kevin Dowd is a visiting professor at the Pensions Institute at Cass Business School in London. He is an expert on free banking, central banking, financial regulation, banking history, financial risk management and pensions."

Get in line professor. "academics" are stepping forward daily to talk about how bad Bitcoin is. I doubt this speech will get you any paid speaking slots at the World Bank conference like other professors. You need to try harder. But you have many dinner parties to look forward to.

Not knocking the prof, he is well versed in legacy/central banking evolution and infrastructure - so his opinion, is his opinion and counts.

I personally believe that he has not taken into account how multi-variate and adaptable Blockchain applications can be. And thus, suspect they will be serving "humble pie" at those dinner parties.

[cryptogeeknext]

CATO, What do you think about Bitcoin???

Uhhhh??? Don't buy them...

Why???

Uhhh welll? Uhhhhh??? Flinstones use them and uhhhh they like Ghostbusters and uhhh to be successfull you have to be stupid and have manners too!!! Uhhh??? I have to go take my Alzheimer's Medication‎....

Uhhh??? Oh yeah now I remember... Bitcoin puts me out of a job and out of business....

I need to quote this, it's precious!

[Addition]

CATO, What do you think about Bitcoin???

Uhhhh??? Don't buy them...

Why???

Uhhh welll? Uhhhhh??? Flinstones use them and uhhhh they like Ghostbusters and uhhh to be successfull you have to be stupid and have manners too!!! Uhhh??? I have to go take my Alzheimer's Medication‎....

Uhhh??? Oh yeah now I remember... Bitcoin puts me out of a job and out of business....

I need to quote this, it's precious!

+ 1 Yeah, a quality summation from Bongger 

[Elwar]

The simplest question would be to ask the guy to point out just one natural monopoly.


And when he gives an example of a government created monopoly ask him again to point out just one natural monopoly.

[Addition]

http://www.youtube.com/watch?v=EBSlSUIT-KM

A fellow member just shared this on here - This video should be watched by everyone!!

Our friend Kevin Dowd was mentioned however, there obviously appears to be a division in his initial analysis of BTC


Video synopsis:

Published on Nov 21, 2014
http://www.positivemoney.org/
On Thursday 20th November 2014, for the first time in 170 years, UK parliament has debated the creation of money. Few people know that 97% of our money supply is created not by the government (or the central bank), but by commercial banks in the form of loans.

As the results of our recent poll show, most MPs lack a sufficient understanding of money creation. A worrying number of our MPs do not understand where money comes from. This leaves them ill-equipped to predict another financial crisis, deal with rising debt, housing bubbles or understand a fundamental driver of inequality.

[Beliathon]

Here's a rationale provided by Kevin Dowd, University of Durham

Similar concerns have been expressed by our BTC community in recent times. What I'm looking for is logical input from you guys, whether he is right or wrong?

I will approach Kevin with arguments/rebuttals and post his response here, thanks.


http://www.youtube.com/watch?v=Qlydjg1tiso

Wrong. You're welcome.

[Lauda]

P2Pool is the way to forward, I think antpool is on the right track 

Well this was said many times in the past. If there was only some way to force only p2pools, we would get rid of this bullshit. They're talking about the same thing just in a different way.
The protocol won't collapse, the mining system would.
Now I'm wondering how this guy got his reputation, unless he is trying to put shame on bitcoin on purpose.