difficulty too high while bitcoin society too small

[da2ce7]

I just say, I even proove, with current algorithm, bitcoin system will fail down somewhere in 2012, probably at switch 50 BTC to 25 BTC per block. More exactly - when mining will reach unprofitable against electrical power, with typical hardware for newbie - 5850x2 or 5970.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

People trust Bitcoin because it is secure, not because they are mining it themselves.

[afterburner229]

Isn't this the reason why the transaction fees exist?  Won't the fees subsidize the increased difficulty/reduced rewards for mining?

Remember, when all bitcoins will be mined, transaction fees are the ONLY source of profit. Of course.

but @ 10 000 miners & trusters, we should reject all second-order arguments, but focus only on number of miners & trusters.
bitcoin specifics is number of miners ~ (roughly equal) number of trusters. due to digital, non-material nature of bitcoin.

it's just psychology effect, but no one cares, if bitcoin system fails with it's 10 000 - 20 000 adopters.

ps. do you know SHA-256 is partially broken ?

[vuce]

ps. do you know SHA-256 is partially broken ?

citation needed.

edit: how exactly can you "partially break" a hash function?

[afterburner229]

People trust Bitcoin because it is secure, not because they are mining it themselves.

It's MAIN mistake! People trust in bitcoin because 10 000 - 20 000 OTHER people already trust!

SHA-256 is partially broken, and algorithms themselves do almost nothing with trust. Did you study psychology?

algorithms lead earlier adopters - miners & brokers - to trust in, because they were geeks.

[afterburner229]

http://en.wikipedia.org/wiki/Sha-256

[barbarousrelic]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

[mestar]

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS

Ok, I will personally ALLOW you to mine bitcoins profitably.

[mestar]

It's MAIN mistake! People trust in bitcoin because 10 000 - 20 000 OTHER people already trust!

But, what does this have to do with mining?   

Your rant seems to be about the issue that new people can't mine profitably.  Person number 20.001 will trust in bitcoins because 20.000 people already trust in it, not because 20.000 are mining.

I'm sure there are some people who are mining, but still don't think the bitcoin will be around in 10 years.

Are you saying that the mining is the only way people can learn about bitcoin and start to use it?

What method do you propose that would allow million people to mine profitably.  Each gets his fair share? How?

[kjj]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

[afterburner229]

But, what does this have to do with mining?   

Your rant seems to be about the issue that new people can't mine profitably.  Person number 20.001 will trust in bitcoins because 20.000 people already trust in it, not because 20.000 are mining.

Psychology is NOT mathematical induction. And bitcoin is NOT a gold. Number of trust people will not increase just because 20 000 people already trust. You must represent them a psychological kind of ownership. I know too ways - mining & zombie-hypnosis.

Simply, 20 000 trusters in 6 000 000 000 world is UNseriously for GLOBAL currency, but is acceptable for a financial pyramid.

I'm sure there are some people who are mining, but still don't think the bitcoin will be around in 10 years.

Sure too. But for me, FEW days ago, mining was profitable, and FEW days later will NOT. See, DAYS, DAYS, DAYS. not even months!!!
This is the problem - difficulty doubling time interval is DAYS.

Are you saying that the mining is the only way people can learn about bitcoin and start to use it?

What method do you propose that would allow million people to mine profitably.  Each gets his fair share? How?

Because of bitcoin complete digital unmaterial nature, I see the only way - to normalize algorithm to allow profitable mining for 1 million people on time interval at least 1 year. NOT DAYS! NOT 10 000 people!
 

[afterburner229]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

[FooDSt4mP]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

If this is true, the mining software can be updated and we will double the hashing power of the mining network overnight.  Bitcoin will remain just as secure.

[afterburner229]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

Understand you, but disagree. only geeks take care it can't be faked.

Paper's dollars can be faked. But people trust in them because everyone MUST accept it as a currency media.

When you understand, that whether bitcoin can be faked or not - is just psychological reason to trust for FIRST adopters, that are simply geeks?!

[MoonShadow]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

Understand you, but disagree. only geeks take care it can't be faked.

Paper's dollars can be faked. But people trust in them because everyone MUST accept it as a currency media.

This is not so.  The average Joe only cares that his paper currency can be taken to another store next week or next month and buy (almost) as much as he had to give to get it.  For the average Joe, the relative difficulty in counterfitting is only important in that same context.

[barbarousrelic]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

[vuce]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

he obviously has no idea what he's talking about.

[afterburner229]

This is not so.  The average Joe only cares that his paper currency can be taken to another store next week or next month and buy (almost) as much as he had to give to get it.  For the average Joe, the relative difficulty in counterfitting is only important in that same context.

So I see you start to understand me.

But yet I don't know are you honest person or just a pyramid gamer. That's ok because of anonymous nature of our discussion and bitcoin too.

See, average Joe TRUSTs his paper currency can be taken to another store next week or next month. I am average Joe, and I just count number of people who accept bitcoins - the number is some 10 000. In my country, Russia, the only bitcoin excange btcex.com is CLOSED. Reason is dim. Beeing average Joe I simply do NOT trust in bitcoin as currency, in CURRENT moment with 10 000 other trusters.

But what can I do else? Reject bitcoin at all. Or.. MINING!

Consider current situation, there are some 10 000 miners. FEW days ago I could be miner. FEW days later I never can, with current algorithm of difficulty.

When you understand, these FEW days of difficulty-doubling interval is the problem, and 10 000 people in the 6 000 000 000 world who accept bitcoins is the problem.

I see the only way - normalize difficulty algorithm to allow profitable mining for 1 000 000 people around a world. at least. And I sure this is win-win way for all of us.

In the future, most miners will become peers, when all bitcoin will be mined. So transaction fees (for transaction to pass quickly) will be low.

Current algorithm of difficult makes it untrustable to enter in bitcoin world, so it will fail at 10 000 miners & 10 000 trusters/accepters of bitcoin world-wide.

[error]

Changing "difficulty" in that way would break Bitcoin. Perhaps you should study it more closely.

As for Russia, btcex.com disappeared because its operator was apparently a scammer, who also was apparently involved somehow in DDoS attacks on some other Bitcoin exchanges. Lots of people lost money when btcex.com closed. This is unfortunate.

Perhaps instead of complaining about mining being unprofitable, you should do something that IS profitable, like open a new exchange and run it honestly?

[afterburner229]

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

----------------
Currently, the best public attacks break 41 of the 64 rounds of SHA-256 or 46 of the 80 rounds of SHA-512, as discussed in the "Cryptanalysis and Validation" section below.[10]
----------------
--from http://en.wikipedia.org/wiki/Sha-256

but this is academical interest only, because I mentioned, whether sha-256 and bitcoin at all is cryptographically strong or not - is just psychological motivation for earlier bitcoin adopters because they are geeks. ang geeks trust in mathematics.

Average Joe is stupidly counting number of people who accept bitcoins worldwide and who mine worldwide.

[vuce]

----------------
Currently, the best public attacks break 41 of the 64 rounds of SHA-256 or 46 of the 80 rounds of SHA-512, as discussed in the "Cryptanalysis and Validation" section below.[10]
----------------
--from http://en.wikipedia.org/wiki/Sha-256

those attacks have time complexity of 2^500. Hardly a threat. (especially when birthday paradox tells you probabilistic attack has (expected) time complexity of 2^256)