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Author Topic: Satoshi Dice polluting Bitcoin?  (Read 15173 times)
unclescrooge
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July 25, 2012, 08:41:13 AM
 #101

None of that made any sense at all.  No idea what taxes, war, and bridges has to do with bitcoin fees but Bitcoin fees are PAID TO MINERS.

Are you somehow saying Bitcoin miners are exploiting Bitcoin?  The subsidy will continue to decline and transaction volume will continually increase.  Fees (although tiny on a per tx basis) will make a larger % of miner compensation.  You know the miners who are keeping the network secure, the secure network which is the only thing that causes Bitcoins to have any value.

Once again YOU AREN'T REQUIRED TO PAY.  As long as your tx is valid it will eventually be confirmed.  However to complain that transactions aren't both free AND fast is simply foolish.  Someone has to pay for the network.  So if you get free and slower be happy someone else is paying to keep your coins safe.

Let me reiterate to make things a bit more clear.  Even with our current massively corrupt corp/gov system, I would STILL prefer to be gouged by them than by Bitcoin miners.  There is an amusing correlation between government protecting me from a non-existent Al Qaeda threat and you protecting me from some non-existent massive 51% attack.  The chief difference is that I have a road to my house complements of a few of my tax dollars and sometimes the police will show up so I don't have to shoot some degenerate tweaker who is trying to steal my stuff whereas from you I get basically diddly-squat on a day-to-day basis.

I wish Bitcoin would have been designed such that large conglomerates of miners could not dictate who gets what service and that the network were realistically able to be secured and operated by the participants in the economy, but as they say, "if wishes were horses than beggars would ride."  It would be interesting in an academic sense to know what Satoshi would think.

In point of fact, I've not made a transaction for half a year so the fees are not hurting me (and the protection is, in fact, welcome although it is uncomfortable to be 'protected' by people I don't particularly trust.)  The attitude could cost me depending on it's impact on the trajectory of the project because I really only treat it as a speculative adventure.  But that is part of the calculus of the speculation so I'm cool with it.



Why are you even in bitcoins in the first place, you obviously don't understand it?

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July 25, 2012, 09:16:47 AM
 #102

I have seen any miners complaining.  The whinning and doom/gloom is from people to cheap to pay a fractional penny in fees and thus having lower priority tx.  Nothing more.

Actually, no. There is a huge problem with block validation times vastly increasing and a big developer discussion on scalability occurring now. Bitcoin can be broken. I personally think that the 50 BTC block reward is too high and acting as an artificial subsidy on tx fees.

50 BTC ... too high compared to what?

Since the number 50, by itself, is meaningless, the only meaningful number is the decay rate - once every four years.

Would you have the block reward drop at a fast rate? This does't make sense to me.
Bitcoin needs time to prove itself. If the reward dropped off every year instead of every four years, the "early adopter problem" would be much more severe. By the time most people heard about it, most coins would be mined. A four year decay rate gives the market ample time to discover Bitcoin.

You might argue that "The current dollar equivalent of 50 BTC is too high". If you think that is true, and you believe the market will agree, then perhaps you should short Bitcoin, or short mining bonds (since we might be bound for a correction in mining profitability).

Personally, I'm quite happy with the current numbers. I'm not a miner, but I understand that miners need to be well compensated for their efforts in the next ten+ years, to give Bitcoin time to spread organically.

Think about it this way - if something weird happened and mining rewards were to magically drop to 0.0001 BTC next month (without a meterotic rise in BTC/USD rate), then this might mean the death of Bitcoin - miners will leave en mass, and the rest of the market is just not sustainable yet.

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July 25, 2012, 03:45:46 PM
 #103

None of that made any sense at all. ...

Let me reiterate to make things a bit more clear. ...

Why are you even in bitcoins in the first place, you obviously don't understand it?

Why do you bother tapping on your keyboard, none of your efforts result in any particular value?


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July 25, 2012, 03:53:58 PM
 #104

Clue me in because I simply do not know, but say a large pool or agreement between several large pool operators resulted in certain Txn's being not included.  Lets say, for the sake of aurgument that they are ones which didn't include the fee the operators would like to see.  Let's say that the group included 90% of the hashing power.  Is there a way for users to either not ante-up the fee and not expect to have to wait several hours or more for non-alligned miner to get lucky and a Txn to go through?

Why wouldn't a pool collect as much fees as possible?  There's no incentive to exclude transactions that have a fee.  Even the smallest fee possible is probably more than the electricity/bandwidth/storage used to process the transaction.  I wouldn't join a pool that was excluding transactions w/ fees because i'd make more money at another pool that was processing those transactions.

Now correct me if I'm wrong but blocks currently have a max size.  So if we ever start reaching that limitation, I can see how fees might increase because a pool would be incentivized to process in order by fee amount.  But that is just supply & demand assuming there is a good reason for the max size of the block.  If there isn't, then it would make sense for the community as a whole to support increasing the max block size.

The only reason to limit the block size is to subsidize non-Bitcoin currencies
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July 25, 2012, 04:02:32 PM
 #105

50 BTC ... too high compared to what?

high relative to the transaction value.
high relative to the block value.
high relative to the avg fee value.

The subsidy distorts the "fee economy" and creates some unusual scenarios.   For example it is less profitable to include tx, even paying tx when the block is relatively large.  Say a miner/pool includes 200 0.0005 BTC tx and nets an extra 0.1 BTC in rewards.  Larger blocks however result in slower propogating and increase the risk of being orphaned.   If the orphan chance rises by 1% the pool loses 0.5 BTC (1% chance of 50 BTC loss) per block.  So +0.1 BTC - 0.5 BTC = net -0.4 BTC reduction in mining revenue.

It isn't dooommmmzz but it does distort the market.  Luckily it is self correcting.  As tx volume increases and tx fees increase the block subsidy will decline and make the network more of a "pay per performance" model.
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July 25, 2012, 05:50:27 PM
 #106

I have seen any miners complaining.  The whinning and doom/gloom is from people to cheap to pay a fractional penny in fees and thus having lower priority tx.  Nothing more.

Actually, no. There is a huge problem with block validation times vastly increasing and a big developer discussion on scalability occurring now. Bitcoin can be broken. I personally think that the 50 BTC block reward is too high and acting as an artificial subsidy on tx fees.

50 BTC ... too high compared to what?

Since the number 50, by itself, is meaningless, the only meaningful number is the decay rate - once every four years.

Would you have the block reward drop at a fast rate? This does't make sense to me.
Bitcoin needs time to prove itself. If the reward dropped off every year instead of every four years, the "early adopter problem" would be much more severe. By the time most people heard about it, most coins would be mined. A four year decay rate gives the market ample time to discover Bitcoin.

You might argue that "The current dollar equivalent of 50 BTC is too high". If you think that is true, and you believe the market will agree, then perhaps you should short Bitcoin, or short mining bonds (since we might be bound for a correction in mining profitability).

Personally, I'm quite happy with the current numbers. I'm not a miner, but I understand that miners need to be well compensated for their efforts in the next ten+ years, to give Bitcoin time to spread organically.

Think about it this way - if something weird happened and mining rewards were to magically drop to 0.0001 BTC next month (without a meterotic rise in BTC/USD rate), then this might mean the death of Bitcoin - miners will leave en mass, and the rest of the market is just not sustainable yet.
It could be pointed out that not all the subsidy needs to be paid to the miners. Bitcoin could be injected to reputable services from a temporarily centralized authority in its developing stage, after which the subsidy's value would have become acceptably low.
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July 25, 2012, 05:53:37 PM
 #107

It could be pointed out that not all the subsidy needs to be paid to the miners. Bitcoin could be injected to reputable services from a temporarily centralized authority in its developing stage, after which the subsidy's value would have become acceptably low.

The decentralized, centralized currency?  Bitcoin only took off because of the "open nature".  To fund miner subsidies this centralized entity would need coins.  So we are talking about a premine.  Had Satoshi premined 21 million coins put them into his "for the common good wallet" and asked people to start mining & buying coins how well do you think that would have worked.

Satoshi did it right.  The fixed subsidy schedule and open access to mining creates trust in the system and incentive for people to get involved.  It isn't perfect but I can't see any other system working better.
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July 25, 2012, 06:02:58 PM
 #108

It could be pointed out that not all the subsidy needs to be paid to the miners. Bitcoin could be injected to reputable services from a temporarily centralized authority in its developing stage, after which the subsidy's value would have become acceptably low.

The decentralized, centralized currency?  Bitcoin only took off because of the "open nature".  To fund miner subsidies this centralized entity would need coins.  So we are talking about a premine.  Had Satoshi premined 21 million coins put them into his "for the common good wallet" and asked people to start mining & buying coins how well do you think that would have worked.

Satoshi did it right.  The fixed subsidy schedule and open access to mining creates trust in the system and incentive for people to get involved.  It isn't perfect but I can't see any other system working better.
The point is, sometimes temporary centralizations helps a currency grow. We already had this to a certain extent: for years, there was only one Bitcoin client.
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July 25, 2012, 06:04:50 PM
 #109

I get your point I am just disagreeing.  Had Bitcoin been centralized it would have gone nowhere.  The open nature and "nobody can control or manipulate it" WAS the selling feature.  Without it Bitcoin would have been DOA; the next beenz or flooz.
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July 25, 2012, 06:08:14 PM
 #110

I get your point I am just disagreeing.  Had Bitcoin been centralized it would have gone nowhere.  The open nature and "nobody can control or manipulate it" WAS the selling feature.  Without it Bitcoin would have been DOA; the next beenz or flooz.
Sorry for the misunderstanding then. I don't exactly agree either (my post history probably confirms this). I raised the point mostly as a response to the statement that the miner reward can only be as it was designed.
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July 25, 2012, 11:26:49 PM
 #111

Clue me in because I simply do not know, but say a large pool or agreement between several large pool operators resulted in certain Txn's being not included.  Lets say, for the sake of aurgument that they are ones which didn't include the fee the operators would like to see.  Let's say that the group included 90% of the hashing power.  Is there a way for users to either not ante-up the fee and not expect to have to wait several hours or more for non-alligned miner to get lucky and a Txn to go through?

Why wouldn't a pool collect as much fees as possible?  There's no incentive to exclude transactions that have a fee.  Even the smallest fee possible is probably more than the electricity/bandwidth/storage used to process the transaction.  I wouldn't join a pool that was excluding transactions w/ fees because i'd make more money at another pool that was processing those transactions.

At some point in the (potentially distant) future it may cost a non-trivial amount to process bulk loads of transactions and there may be a savings by ignoring some of them.

But more to the point, do you remember not terribly long ago a fire department showed up and watched someone's house burn down because the homeowner had not paid the dues they wanted?  Even when he offered to make up if they would just stop the fire, they would take no action...they just stood by to keep the fire from spreading to the neighbor's  places.  I am actually not as antagonistic to the fire department as a lot of people.  I understand full well their calculus and it makes a great deal of sense (under the cost structure of the economy they lived in at least.)  To me, it is simple common sense that miners would employ the same type of tactics, at least if the organized (as they should.)

Now correct me if I'm wrong but blocks currently have a max size.  So if we ever start reaching that limitation, I can see how fees might increase because a pool would be incentivized to process in order by fee amount.  But that is just supply & demand assuming there is a good reason for the max size of the block.  If there isn't, then it would make sense for the community as a whole to support increasing the max block size.

I've actually not followed things like a hawk lately, but I think there is a fair chance that with the development of ASIC hardware, the only people who will be mining are those who are dedicated to doing exactly that.  Those who  do not make the investment will simply be non-competitive and exit the industry...like our dear friend Death-n-Taxes.  Hopefully Joe Sixpack will find the gear useful as space heaters, but I'm not holding my breath and even in that happy scenario, there will likely be a gap.  Seems to me quite likely that eventually a rack full of GPU's will have about the same chance of solving a block as does a laptop user running his/her CPU today.

So, say I invest in mining, give a damn exclusively about making money, and have the foresight to think more than a few days in advance.  I'm going to throw my resources behind a shrewd operator who understands the economy, has the contacts to muster a coalition of mining groups, and has the smarts to maximize this leverage without going over the top.  Even today Bitcoin is probably important enough to enough people that users would whine and bitch about being squeezed but would go ahead and pay a not-insignificant fee to use the solution.


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July 25, 2012, 11:31:57 PM
 #112

It isn't dooommmmzz but it does distort the market.  Luckily it is self correcting.  As tx volume increases and tx fees increase the block subsidy will decline and make the network more of a "pay per performance" model.
Self-correcting assuming there are good market dynamics between miners and users.  That's broken right now, but I'm working on fixing it (see pull #1590 for the first step).

How often do you get the chance to work on a potentially world-changing project?
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July 26, 2012, 01:13:31 AM
 #113

It isn't dooommmmzz but it does distort the market.  Luckily it is self correcting.  As tx volume increases and tx fees increase the block subsidy will decline and make the network more of a "pay per performance" model.
Self-correcting assuming there are good market dynamics between miners and users.  That's broken right now, but I'm working on fixing it (see pull #1590 for the first step).

Hi Gavin,
    Are these the "knobs" you were referring too (sorry can't find where I had read it) that would allow miners to have more control what transactions are included in blocks?
unclescrooge
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July 26, 2012, 07:11:43 AM
 #114

It isn't dooommmmzz but it does distort the market.  Luckily it is self correcting.  As tx volume increases and tx fees increase the block subsidy will decline and make the network more of a "pay per performance" model.
Self-correcting assuming there are good market dynamics between miners and users.  That's broken right now, but I'm working on fixing it (see pull #1590 for the first step).

Great news, thanks. That's only what we need, a way to better adjust fees!

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July 26, 2012, 01:31:26 PM
 #115

    Are these the "knobs" you were referring too (sorry can't find where I had read it) that would allow miners to have more control what transactions are included in blocks?
Yes, partly.

The most important change is having miners sort transactions by fee-per-kilobyte, and prefer higher-fee transactions to lower-fee transactions. That way users that want their transactions to get confirmed quickly can pay a higher-than-average fee. Today, most miners are using the reference code which selects transactions based on priority, not fee.

Still todo: give better recommendations to users about how long it might take their transaction to get confirmed if they send it without a fee, and recommend an appropriate fee.

How often do you get the chance to work on a potentially world-changing project?
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August 24, 2012, 11:09:48 AM
 #116

    Are these the "knobs" you were referring too (sorry can't find where I had read it) that would allow miners to have more control what transactions are included in blocks?
Yes, partly.

The most important change is having miners sort transactions by fee-per-kilobyte, and prefer higher-fee transactions to lower-fee transactions. That way users that want their transactions to get confirmed quickly can pay a higher-than-average fee. Today, most miners are using the reference code which selects transactions based on priority, not fee.

Still todo: give better recommendations to users about how long it might take their transaction to get confirmed if they send it without a fee, and recommend an appropriate fee.


Gavin,

On the subject of "Satoshi Dice Polluting Bitcoin" - i.e. something blowing up the block chain parabolic like this gaming product did - In 10 years, assuming bitcoin is widely adopted, the blockchain would be absolutely huge.  So if that happened, and bitcoin "worked" - do you envision large nodes, almost banks as we think of them today, as the only ones being able to properly store the block chain and keep it up to date?  It seem like smaller nodes will eventually disappear from the bitcoin network if one gaming product can double the already multi-GB blockchain DB.  Surely if bitcoin is widely accepting in 10 years my personal computer, even though it is gaming-quality, won't be able to handle a DB of every transaction ever.  It probably wont' be able to handle the last month of satoshi dice by that point. 

So banks become super-computers that can handle the block chain?  my mobile will only need the last few hours of it?

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August 24, 2012, 01:29:07 PM
 #117


Since when has hard drive space ever been an expensive commodity?

I'd like to make a corollary to Moore's Law:  The Blockchain will never exceed $100-worth of hard drive space (adjusting for inflation).
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August 24, 2012, 02:17:12 PM
 #118

Well, really, if people are trying to run bitcoind in some old, spare, cheap piece of hardware with not much RAM - then yep you can expect performance problems even now.

I upgraded my desktop last month and only spent $495 on doing it - it's now a 16GB, Quad AMD 3.6GHz, with a 60GB SSD system disk.
(and space for another 16GB of RAM)
Hardware keeps getting better and cheaper.
This desktop can easily run a few bitcoinds while I run PLENTY of other stuff

Of course the bitcoind needs will rise, but so will the hardware.
... and really the main thing needed will be more RAM and SSD - CPU's and HDD's are well past what is needed.

The actual limit in the design will be the network, not the computer.

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August 24, 2012, 02:19:02 PM
 #119

Ooh, where'd you get that PC upgrade kano?

You are in a maze of twisty little passages, all alike.
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August 24, 2012, 03:22:45 PM
 #120

Ooh, where'd you get that PC upgrade kano?
Among many other things, I build computers for people - middle of the road ones, not expensive stupid stuff Smiley
That one was actually cut down coz I was broke last month when I needed the upgrade
(why I got AMD instead of Intel - same speed less cost)
... my 4yr old desktop could only take 8GB of RAM ... not much these days even on Linux, coz I run so much stuff on my desktop Tongue
So new MB/CPU/RAM + I decided to get an SSD
So really $495 isn't that cheap - but the SSD was a store credit so it was only $395 out of my pocket
As soon as I can afford it I'll get the other 16GB of RAM

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