Decentrally mined currency has failed so far

[UnunoctiumTesticles]

Sorry no one provided a convincing argument as to why Bitcoin won't become a regulated fiat proxy.

Franky1 gave convincing arguments on how Bitcoin can remain deregulated, but that's not the same thing.

Where? I didn't see any. "can" requires a realistic pathway. If you mean "could in theory" then yes Bitcoin could remain decentralized if no pressures are ever applied. We are debating whether the pressures will be sufficient to derail Bitcoin's decentralization.

Europe has been beaten down by centuries of wars. SE Asians have suffered such wars even longer. America has had little in the way of total  war on its shores. Americans are restless to fight so much so that most of their entertainment is about violence. It's more likely they will get what they seem to want. But that is their choice.

There isn't one America. It was the economic prosperity that kept us united and occupied, other than the Civil war. There will be fracturing into different cultures. Some want to fight for racial injustice. Some want to fight for Constitutional injustice. Some want to fight for their right to own guns. Some want to fight for and against religious issues (abortion, etc). Some want to fight for gay marriage. Some want to fight...

America has always been a melting pot. That worked when everyone has individual responsibility. Now you have the government as the referee, so the pent up frustration is great.

But also note that most of the aggression of the USA is from the government and negros (and Latinos), not the people (and certainly not the white people). The USA government is a head of the globalist empire. And they intend to enslave all people, not just Americans.

I really don't think the rest of the world will follow America into fascism. Been there. Done that.

I think I mostly agree with that. But don't expect the filipinos to not apply the USA fascism to you. They could throw you under the bus when America says jump, they might say "how high".

The Philippines will likely (they have been thus far) follow USA edicts because they are so dependent.

And I would not agree if you asserted that there won't be war in SE Asia. And I would not agree if you asserted that economic hardship won't return to the Philippines, kidnappings, and that you might not be forced to leave for your safety or comfort.

Also don't rule out ISIS coming to the Philippines especially as the economy goes to shit.

Europe has been repeating the totalitarian debacles, so they could repeat it again. But at least one thing is different. Their population is old. And they have no guns. So I rather see some combination of Russia, ISIS, and European Commission enslaving Europe in the regulation outcome.

In short, no westerner, Chinese, nor Japanese will escape regulation. The brown skin countries will go into a bit of chaos, especially Latin America.

[jyakulis]

That's why we start creating legal platforms that skirt bitcoin getting labeled as property and taxed by the IRS. If it remains currency, by this I mean an exchange of asset for currency it's impossible to regulate. Though, once it's ruled as property, the IRS gets involved. You should check out my paper on this in some prior posts for what I'm saying.

It's attractive to me to move bitcoin to a basic set of legal systems based on simple promissory notes to start to give Payers and Payee's the vehicle to conduct business and access to the court system. No one wants to conduct business if they don't have any access to court for large items. There is just too much fraud and bad people running rampant in this world to act otherwise. People are naturally suspicious as they should be. Once you get burned a few times or know someone else that has you tend to be more careful.

This would then create a circumstance where people could view bitcoin as a true store of wealth. They could see the ever increasing price point and know the mechanics of the system creating increased users with a limited number of coins and see this as an opportunity to buy coins and sink wealth into bitcoin for the hope of a later larger ticket purchase of property. Right now no one is going to buy 500 dollars of bitcoin to then buy a flat screen tv at a later time. But it is not out of the question for someone to put say 20,000 dollars in bitcoin in the hopes at a later date to use it to purchase property or maybe renovate a business. This to me wouldn't be speculation per se as people are not playing bitcoin like the stock market. But instead using it as a store of wealth to later conduct business in the coin and to insulate themselves from unstable national fiat money systems.

[phillipsjk]

Oblivious shares mean that the block contents are not disclosed to the hasher. The hasher may be working on a malicious branch of the chain without even knowing about it. They may even be crushing start-up alt-coins, or embeding prayers in the block-chain.

I believe oblivious shares can be implemented using a public hash of the block data. The secret can be independent of the compilation of the contents of the block.

As I understand it, the secret can be an arbitrary length: that is the whole point of a hash function.
With oblivious shares, block manipulations possible with getblocktemplate are impossible: since a hashed header implies a read-only block.

Wait I will dig up the math to be sure. I will go eat first outside, reply when I return.

In the Pool analysis paper (section 6.2.3), they don't go into specific math. They don't have to: the operation of hash functions are well-known to computer scientists.

Your distrust of I2P seems to boil down to op-sec. That is, you don't trust I2P even if it works as advertised, because to err is human.

I am starting to suspect the OP's goal is to spread FUD. Maybe he genuinely is scared of the way the world is going (I think we all are). However he comes across as a government (or bank) agent with a goal of disrupting any organized resistance.
 

[UnunoctiumTesticles]

Oblivious shares mean that the block contents are not disclosed to the hasher. The hasher may be working on a malicious branch of the chain without even knowing about it. They may even be crushing start-up alt-coins, or embeding prayers in the block-chain.

I believe oblivious shares can be implemented using a public hash of the block data. The secret can be independent of the compilation of the contents of the block.

As I understand it, the secret can be an arbitrary length: that is the whole point of a hash function.
With oblivious shares, block manipulations possible with getblocktemplate are impossible: since a hashed header implies a read-only block.

Wait I will dig up the math to be sure. I will go eat first outside, reply when I return.

In the Pool analysis paper (section 6.2.3), they don't go into specific math. They don't have to: the operation of hash functions are well-known to computer scientists.

I already replied on this. They do go into the specific math about SecretSeed is < 2^256/D.

Your distrust of I2P seems to boil down to op-sec. That is, you don't trust I2P even if it works as advertised, because to err is human.

No I gave specific issues. You can't relabel those issues as op-sec and be credible.

I am starting to suspect the OP's goal is to spread FUD. ... However he comes across as a government (or bank) agent with a goal of disrupting any organized resistance.

On what basis? I speak facts. Where is the FUD?

[ArnoldChippy]

There's no doubt about it, all countries have been and are being shafted by the banks.

I am big believer in personal responsibility. The people borrowed and accepted government spending. The people are complicit.

Where 99% of people are asleep is that there is no debt, because the banks never lent us anything anyway - because they don't have anything lend - and it's all about book-keeping entries and the ability to maintain a lie.

It is not that simplistic.

The debt now represents actual investments and labor as the debt money has gone through the economy. You can't just unwind that without picking winners and losers thus stealing from some and redistributing to others.

The notion that debt can be canceled is a fallacy. It always has to be paid down by someone.

Then I'm afraid you have failed to see that governments are merely the 'shop window' of the banks, otherwise you would realise that there is no reason in the whole wide world why a government would allegedly 'borrow' money at interest from a private company, when it has the ability to create its own for free.

Personal responsibility is just common sense and common sense should tell you that if your government is just a bank in disguise, then it will charge 'its people' for the 'loans' it has arranged on their behalf. Please don't perpetuate the lie that "The people borrowed and accepted government spending." and "The people are complicit.", as they have no say in the matter, regardless of who's managing the shop today.

You can not have debt based on a fraud.

[UnunoctiumTesticles]

There's no doubt about it, all countries have been and are being shafted by the banks.

I am big believer in personal responsibility. The people borrowed and accepted government spending. The people are complicit.

Where 99% of people are asleep is that there is no debt, because the banks never lent us anything anyway - because they don't have anything lend - and it's all about book-keeping entries and the ability to maintain a lie.

It is not that simplistic.

The debt now represents actual investments and labor as the debt money has gone through the economy. You can't just unwind that without picking winners and losers thus stealing from some and redistributing to others.

The notion that debt can be canceled is a fallacy. It always has to be paid down by someone.

Then I'm afraid you have failed to see that governments are merely the 'shop window' of the banks, otherwise you would realise that there is no reason in the whole wide world why a government would allegedly 'borrow' money at interest from a private company, when it has the ability to create its own for free.

I was a goldbug before so I am aware of all these arguments. You can't say anything I didn't know about years ago.

My point is not about how the debt was born, but about what it is now in the economy.

Personal responsibility is just common sense and common sense should tell you that if your government is just a bank in disguise, then it will charge 'its people' for the 'loans' it has arranged on their behalf. Please don't perpetuate the lie that "The people borrowed and accepted government spending." and "The people are complicit.", as they have no say in the matter, regardless of who's managing the shop today.

You can not have debt based on a fraud.

Yes you can, and you do. And it can't be unwound with a magic wand. The debt is now largely held by the retirement plans ($17 trillion). You going to screw the old people to retire the debt?

Getting rid of the Fed for the future is an orthogonal issue from what the existing debt is now.

[cbeast]

I really don't think the rest of the world will follow America into fascism. Been there. Done that.

I think I mostly agree with that. But don't expect the filipinos to not apply the USA fascism to you. They could throw you under the bus when America says jump, they might say "how high".

The Philippines will likely (they have been thus far) follow USA edicts because they are so dependent.

And I would not agree if you asserted that there won't be war in SE Asia. And I would not agree if you asserted that economic hardship won't return to the Philippines, kidnappings, and that you might not be forced to leave for your safety or comfort.

Also don't rule out ISIS coming to the Philippines especially as the economy goes to shit.

I'm not going to follow you down that rabbit hole. Most of my neighbors are Muslim. I strongly disagree with your sentiment. I feel safer here than in many places in the US. The Philippines does not enjoy Most Favored Nation status with the US and does not participate in the visa waiver program. The US doesn't have much to offer anyone anymore and maybe that's why the dollar has been tanking here the last ten years. The Philippines has their own corrupt system and nobody is going to change it because it works for them and keeps the peace.

Most of America is like the Jerry Springer Show. Run tell dat, homeboy. I felt the need to carry weapons back in America. Here I have no such worries.

Save your doom and gloom for talk radio. You can't make an omelet without breaking a few eggs. I'm not worried about a one world currency and I'm certainly not worried about global regulation of Bitcoin. Your slip amygdala is showing.

[ArnoldChippy]

Please help my understanding by explaining this scenario.

There's just me and you left after the apocalypse - I'm the bank and you're Mr Testicles.
We both agree that I (the bank) can create money from nothing and lend it to you at 10% interest per week for doing fook all.
The bank grants Mr Testicles a loan of £100 for one week - so a total repayable of £110.

The question is - where does Mr Testicles find the £10 in interest?

[phillipsjk]

In the Pool analysis paper (section 6.2.3), they don't go into specific math. They don't have to: the operation of hash functions are well-known to computer scientists.

I already replied on this. They do go into the specific math about SecretSeed is < 2^256/D.

No, it is the SecretHash that is required to be < 2^256/D

Your distrust of I2P seems to boil down to op-sec. That is, you don't trust I2P even if it works as advertised, because to err is human.

No I gave specific issues. You can't relabel those issues as op-sec and be credible.

You:

• Complained you could not find the documentation
• Pointed out that Sybils may not honour the requested delay (duh)
• said "Also I don't trust I2P because it is operating at a very low-level in the network protocol stack, so I don't know how to characterize all potential de-anonymization correlations that can occur higher up the protocol stack."

On the last point, I decided it was complete bull-crap and tried to discern what you actually meant.
It is not job of a low-level protocol to deal with application-level details. Obviously I2P applications should avoid making it easy to "contaminate" your multiple identities.

I am starting to suspect the OP's goal is to spread FUD. ... However he comes across as a government (or bank) agent with a goal of disrupting any organized resistance.

On what basis? I speak facts. Where is the FUD?

You claim to be knowledgeable in computer science, but appear to miss how hash functions work. This suggests to me that your Computer Science background may be made-up to better fit-in with the community.

You appear to directly conflate tor vulnerabilities with I2P vulnerabilities, even though they are different mixnets with sightly different designs. This suggests you want to subtly encourage people not use such mixnets: because they are not anonymous anyway.

Now, nobody is perfect. Both those points can be explained away simply by saying you missed something. However, you have an arrogant attitude; explicitly claiming that you are smarter than everyone else.

[UnunoctiumTesticles]

I really don't think the rest of the world will follow America into fascism. Been there. Done that.

I think I mostly agree with that. But don't expect the filipinos to not apply the USA fascism to you. They could throw you under the bus when America says jump, they might say "how high".

The Philippines will likely (they have been thus far) follow USA edicts because they are so dependent.

And I would not agree if you asserted that there won't be war in SE Asia. And I would not agree if you asserted that economic hardship won't return to the Philippines, kidnappings, and that you might not be forced to leave for your safety or comfort.

Also don't rule out ISIS coming to the Philippines especially as the economy goes to shit.

I'm not going to follow you down that rabbit hole. Most of my neighbors are Muslim. I strongly disagree with your sentiment. I feel safer here than in many places in the US.

You haven't lost an eye in the Philippines yet. I doubt you lived here during the Asian Crisis in 1999? The people were angry.

People get angry when they don't have enough money to eat what they like. Many are still nice, but danger increases.

Also you weren't here when while minding your own business the boys would constantly cat call from behind your back, "Hey joe, fuck you". And the new one is, "Hi Daddy" and the females have joined now (a sign of decline in the filipino culture).

The Philippines does not enjoy Most Favored Nation status with the US and does not participate in the visa waiver program. The US doesn't have much to offer anyone anymore and maybe that's why the dollar has been tanking here the last ten years.

The USA is protecting the Philippines against China with a Mutual Defense Treaty. There are more filipinos in the USA than in any other country. Their remittances are very important to the country at 53% of the total remittances.

http://armstrongeconomics.com/2014/12/02/25432/ (The Coming Dollar Highs)



The dollar is coming stronger and you observe how strong it will be in the coming years. It will skyrocket, because the entire world is short the dollar, i.e. there are massive dollar loans. Even the Philippine corporations have been borrowing dollars in bond offerings. As the global economy collapses, exports and remittances will collapse. The Philippines is primarily a consumer economy, something like 70% which is very unbalanced. They have a disproportionate share of the largest malls in the world for such a poor country.

Credit has been growing most recently at 20% (accelerating) but GDP at only 6 - 7% (not accelerating).

http://www.forbes.com/sites/jessecolombo/2013/11/21/heres-why-the-philippines-economic-miracle-is-really-a-bubble-in-disguise/

http://www.forbes.com/sites/jessecolombo/2013/11/28/heres-what-the-philippine-bubble-deniers-are-getting-wrong/

In short, you've been in the Philippines during the credit bubble. Everyone is feeling richer. Were you here during the Asian Crisis bust as I was?

Isn't amazing how people get fooled by credit booms and extrapolate that to the future.

The Philippines has their own corrupt system and nobody is going to change it because it works for them and keeps the peace.

The filipinos will probably rise up against the corruption during the next downturn, because they've been abroad and there more college graduates now. Expect revolutionary unrest if the bust is deep and long enough.

Most of America is like the Jerry Springer Show. Run tell dat, homeboy. I felt the need to carry weapons back in America. Here I have no such worries.

Depends where you are and who you associate with. White upper, middle class communities especially in the northern states are not like that. The kids are disciplined, the families work hard. Ditto Canada.

Same in the Philippines. I saw intentionally, tortured, burned bodies last week in Mindanao. Depends where you are.

And you think the teens in the Philippines aren't doing some of the same crap? Get out more. Take a walk to where the teens hangout.

Save your doom and gloom for talk radio.

Denial of reality is a positive trait?

I'm not worried about a one world currency and I'm certainly not worried about global regulation of Bitcoin.

Either that means you don't care if it happens. Or it means you don't believe it will happen. The probability of a global monetary reset with a global monetary unit is 100% certainty approximately before 2033. The probability of Bitcoin being regulated is also very high, unless some technological change occurs to break the current trajectory.

[UnunoctiumTesticles]

In the Pool analysis paper (section 6.2.3), they don't go into specific math. They don't have to: the operation of hash functions are well-known to computer scientists.

I already replied on this. They do go into the specific math about SecretSeed is < 2^256/D.

No, it is the SecretHash that is required to be < 2^256/D

Correct. Obvious typo. Did you have any point? I already refuted your original point.

You claim to be knowledgeable in computer science, but appear to miss how hash functions work. This suggests to me that your Computer Science background may be made-up to better fit-in with the community.

WTF? A typo means I don't understand how hash functions work? Nice try at political spin mofo.

Do you even know what the wide pipe construction of a hash function means? Little test for you. Answer quickly to prove you didn't have to go look it up.

Your distrust of I2P seems to boil down to op-sec. That is, you don't trust I2P even if it works as advertised, because to err is human.

No I gave specific issues. You can't relabel those issues as op-sec and be credible.

You:

• Complained you could not find the documentation
• Pointed out that Sybils may not honour the requested delay (duh)
• said "Also I don't trust I2P because it is operating at a very low-level in the network protocol stack, so I don't know how to characterize all potential de-anonymization correlations that can occur higher up the protocol stack."

Your summaries prove you didn't understand what I wrote. I said there is no specification. I didn't say "documentation". If you knew anything about computer science, you would understand that a technical specification is not the same as documentation. I never said Sybils wouldn't honor a delay. I said I2P and Tor have no mechanism to prevent Sybil attacks. You apparently don't even know what a Sybil attack is. A Sybil attack is where the adversary populates a large percentage of the nodes, thus is able to de-anonymize the network. And the Sybil attack point is the most important one.

On the last point, I decided it was complete bull-crap and tried to discern what you actually meant.
It is not job of a low-level protocol to deal with application-level details. Obviously I2P applications should avoid making it easy to "contaminate" your multiple identities.

It wasn't bull crap, because you actually did understand what it meant. And yes, I2P leaves too much variability in higher levels of the network stack and thus it will be very difficult for a n00b user to be sure he isn't leaking his identity, by virus or bug or poorly programmed app choice, etc..

The underlying point is that I2P is too complex. If knew anything about computer science you would understand that it is essential to minimize complexity when perfection is required. You don't get a second chance to restore your anonymity after it has been breached.

Also the underlying point is I would prefer something more "batteries included, plug and play" so n00bs can click and go. No hassles. No technobabble. Just click and go.

I am starting to suspect the OP's goal is to spread FUD. ... However he comes across as a government (or bank) agent with a goal of disrupting any organized resistance.

On what basis? I speak facts. Where is the FUD?

You appear to directly conflate tor vulnerabilities with I2P vulnerabilities, even though they are different mixnets with sightly different designs. This suggests you want to subtly encourage people not use such mixnets: because they are not anonymous anyway.

Now, nobody is perfect. Both those points can be explained away simply by saying you missed something. However, you have an arrogant attitude; explicitly claiming that you are smarter than everyone else.

So the real problem is your butthurt ego. I knew that. That is not FUD.

Fuck off noise machine. You are wasting my time with your low S/N content. You haven't made a decent point yet.

[UnunoctiumTesticles]

Please help my understanding by explaining this scenario.

There's just me and you left after the apocalypse - I'm the bank and you're Mr Testicles.
We both agree that I (the bank) can create money from nothing and lend it to you at 10% interest per week for doing fook all.
The bank grants Mr Testicles a loan of £100 for one week - so a total repayable of £110.

The question is - where does Mr Testicles find the £10 in interest?

This question is not relevant to the explanation I provided to you before.

I understand the inherent corruption of the fractional reserve system. That is not my point. My point is that the (government and corporate bond debt) lenders are in large part now the public. If you default, you default on the public, not on the banksters.

The Fed also bought up a lot of debt recently and put it on its balance sheet. But if you selectively default on that portion only, you will cause all the USA debt to collapse in value due to the loss of confidence and stampede.

[UnunoctiumTesticles]

That's why we start creating legal platforms that skirt bitcoin getting labeled as property and taxed by the IRS. If it remains currency, by this I mean an exchange of asset for currency it's impossible to regulate. Though, once it's ruled as property, the IRS gets involved. You should check out my paper on this in some prior posts for what I'm saying.

It's attractive to me to move bitcoin to a basic set of legal systems based on simple promissory notes

The IRS routinely rules that such shell games don't constitute a legal change and they continue to tax as property.

I don't know why you think the powers-that-be would give you any chance in their kangaroo courts.

You are talking about challenging the powers-that-be on the status of money, which is their source of power. They will spare no effort.

to start to give Payers and Payee's the vehicle to conduct business and access to the court system. No one wants to conduct business if they don't have any access to court for large items. There is just too much fraud and bad people running rampant in this world to act otherwise. People are naturally suspicious as they should be. Once you get burned a few times or know someone else that has you tend to be more careful.

Why do you assert that people can't do legally binding contracts with Bitcoin? Can only legal tender be used in contracts? Sorry I don't have time to read your essays, because for one thing I am not that interested in the premise which I don't believe is viable.

This would then create a circumstance where people could view bitcoin as a true store of wealth. They could see the ever increasing price point and know the mechanics of the system creating increased users with a limited number of coins and see this as an opportunity to buy coins and sink wealth into bitcoin for the hope of a later larger ticket purchase of property. Right now no one is going to buy 500 dollars of bitcoin to then buy a flat screen tv at a later time. But it is not out of the question for someone to put say 20,000 dollars in bitcoin in the hopes at a later date to use it to purchase property or maybe renovate a business. This to me wouldn't be speculation per se as people are not playing bitcoin like the stock market. But instead using it as a store of wealth to later conduct business in the coin and to insulate themselves from unstable national fiat money systems.

The dollar has been much more stable than Bitcoin.

Bitcoin is a speculation.

If you want to challenge fiat in terms of share of GDP, you need Bitcoin to be adopted for use as a currency, not as a speculation. Speculative use does not drive the velocity of money, which is what makes the GDP in the Quantity Theory of Money.

[ArnoldChippy]

Please help my understanding by explaining this scenario.

There's just me and you left after the apocalypse - I'm the bank and you're Mr Testicles.
We both agree that I (the bank) can create money from nothing and lend it to you at 10% interest per week for doing fook all.
The bank grants Mr Testicles a loan of £100 for one week - so a total repayable of £110.

The question is - where does Mr Testicles find the £10 in interest?

This question is not relevant to the explanation I provided to you before.

I understand the inherent corruption of the fractional reserve system. That is not my point. My point is that the (government and corporate bond debt) lenders are in large part now the public. If you default, you default on the public, not on the banksters.

The Fed also bought up a lot of debt recently and put it on its balance sheet. But if you selectively default on that portion only, you will cause all the USA debt to collapse in value due to the loss of confidence and stampede.

It may not be a relevant question to you, but it's fundamental to most people... After all, it is the very foundation upon which the financial system is built.

You can not build on top of fraud - it's like saying it's okay for the banks computers to register 2+2=5 and have that verified as correct by the accountants. It's too daft to laugh at.

If fraud is the mechanism by which the seed money is produced then that fraud is present thereafter - it can't just be ignored.

[UnunoctiumTesticles]

It may not be a relevant question to you, but it's fundamental to most people... After all, it is the very foundation upon which the financial system is built.

You can not build on top of fraud - it's like saying it's okay for the banks computers to register 2+2=5 and have that verified as correct by the accountants. It's too daft to laugh at.

If fraud is the mechanism by which the seed money is produced then that fraud is present thereafter - it can't just be ignored.

I never advocated ignoring it. I am saying you can't unwind the existing debt with a magic wand and not hurt a lot of innocent people. You could try to abolish the Fed. That is not the same as erasing the current debt as you originally stated.

[UnunoctiumTesticles]

What is clear to me from this discussion is that people invest in Bitcoin to satiate some incorrect perspective (delusion) they have on idealism, morality, money, economy, political economy, and economic reality.

This is to be expected. Bitcoin was always (sales) pitched as a delusion starting with Satoshi:

https://bitcoin.org/bitcoin.pdf

The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation.

...

Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.

You start with that one delusion about a fixed supply of gold money being inflation-free, then of course the followers will also be delusional.

Either Satoshi never studied the 1800s and how fixed supplies of gold were loaned out in fractional amounts by private banks. Or he was deceiving. Surely he would realize the same would happen to Bitcoin. The supply of Bitcoin can't be limited to 21 million coins, it will also be set by the market for debt denominated in Bitcoin. This was not likely the work of an amateur with no agenda.

So it is not surprising that we have the n00bs here in this thread doing their best Dunning-Kruger effort.

Conclusion: no altcoin will ever beat Bitcoin, because it can't surpass the original delusion. The only way to displace Bitcoin is to create an actual currency that is widely used by people who need to, not targeted to delusional speculators. In short, I am wasting my time here. Period.

[phillipsjk]

It took so long to get back to this.

The SecretSeed does not depend on the contents of the block[1]. Thus I don't see how it is incompatible with any modifications to the contents of the block.

[1] http://arxiv.org/pdf/1112.4980.pdf#page=29

I missed the fundamental issue here: Update: Apparently Did not read the algorithm carefully enough.

For the block to be valid: Instead of requiring that the block hash is less than
2 256 /(2 32 D), it is required that the block hash is less than 2 256 /2 32 and that SecretHash
is less than 2 256 /D.

The Secret, which the hasher knows nothing about has the high-difficulty hash. The block contents, which is what we are trying to protect with PoW, have the low-difficulty hash.

The proposal not only lets the mining pool ignore any hasher suggestions via getblocktemplate; but also allows a well-funded (or even a not-so-well-funded one) adversary attack the network at will with low-difficulty blocks. That is, unless the "SecretHash" is mandatory for all blocks. Edit: I see, low-diff blocks are not allowed unless you have a high-diff secret hash.

Edit2: since I forgot my reasoning within 2 mins, I should expand on this. Because the secret becomes known once the block is published, taking that secret and bundling it into a new attack block is possible. The only way to avoid this to for the SecretHash to include a hash of the block contents and previous block header. This still opens the block-header to manipulation, which has implications for merged-mining and the like.

BTW, I was aware of what the Sybil attack was. As far as I know, there is no general way for P2P software to avoid it.

[ArnoldChippy]

It may not be a relevant question to you, but it's fundamental to most people... After all, it is the very foundation upon which the financial system is built.

You can not build on top of fraud - it's like saying it's okay for the banks computers to register 2+2=5 and have that verified as correct by the accountants. It's too daft to laugh at.

If fraud is the mechanism by which the seed money is produced then that fraud is present thereafter - it can't just be ignored.

I never advocated ignoring it. I am saying you can't unwind the existing debt with a magic wand and not hurt a lot of innocent people. You could try to abolish the Fed. That is not the same as erasing the current debt as you originally stated.

Would that be current debt that's built upon a fraud by any chance? 

[UnunoctiumTesticles]

Would that be current debt that's built upon a fraud by any chance? 

Yes it is. You still can't erase it without hurting innocent people.

[UnunoctiumTesticles]

It took so long to get back to this.

The SecretSeed does not depend on the contents of the block[1]. Thus I don't see how it is incompatible with any modifications to the contents of the block.

[1] http://arxiv.org/pdf/1112.4980.pdf#page=29

I missed the fundamental issue here:

For the block to be valid: Instead of requiring that the block hash is less than
2 256 /(2 32 D), it is required that the block hash is less than 2 256 /2 32 and that SecretHash
is less than 2 256 /D.

The Secret, which the hasher knows nothing about has the high-difficulty hash. The block contents, which is what we are trying to protect with PoW has the low-difficulty hash.

You apparently don't understand how mining shares work? The hasher sends the share no matter how much below the required share difficulty, thus if low enough it is a block solution. The Secret only obfuscates (from the hasher's view) how far below the target difficulty the share is, but it doesn't change the fact that all the difficulty remains on the miners who are sending shares.

The secret doesn't partition the probability space.

The proposal not only lets the mining pool ignore any hasher suggestions via getblocktemplate,

Incorrect, the miner's submitted share can be a hash of the blockhash and a nonce. So the miner can still set his preferred formation of the block. As I said before, the secret is orthogonal to the blockhash.

BTW, I was aware of what the Sybil attack was. As far as I know, there is no general way for P2P software to avoid it.

There is a general way to avoid it: reputation.