25btc/block soon? | Bitcointalksearch.org

runeks

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Quote from: btc_artist on November 14, 2011, 04:45:31 PM

Quote from: runeks on November 14, 2011, 12:31:20 PM

So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

Perhaps it wouldn't even have to be hardcoded at 2 or 4 years-- why not have a dynamic formula based on number of transactions and amount of BTC being transferred (or something to that effect)?

I though about that too, but I came to the conclusion that it's important to be able to predict the future supply of a currency. If something can happen that all of the sudden can make the currency inflate crazily - by a lot of Bitcoin being produced - it is not a safe store of value. Right know we know how many Bitcoins will be in existence at any point in time. That's comforting.

Quote from: Meni Rosenfeld on November 15, 2011, 08:23:56 AM

Quote from: runeks on November 14, 2011, 12:31:20 PM

So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

It is 4 years.

The reasoning behind only 4 years is that what Satoshi really envisioned is a stable monetary base without inflation. Some inflation at first is necessary, but he wanted to "get over with it" as quickly as possible.

I see. I guess it's impossible to tell what just the right amount of time should be anyway. Only time will tell if 4 years were appropriate.

Meni Rosenfeld

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Quote from: FreeMoney on November 15, 2011, 02:30:33 PM

Quote from: Meni Rosenfeld on November 15, 2011, 08:23:56 AM

The reasoning behind only 4 years is that what Satoshi really envisioned is a stable monetary base without inflation. Some inflation at first is necessary, but he wanted to "get over with it" as quickly as possible.

This doesn't seem right. The inflation would be lower faster with a shorter doubling period.

That's what I said. runeks asked why isn't the period longer. I answered that inflation will become lower faster with a short doubling period.

Of course it can't be too short because there are disadvantages to that.

FreeMoney

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Strength in numbers

Quote from: Meni Rosenfeld on November 15, 2011, 08:23:56 AM

The reasoning behind only 4 years is that what Satoshi really envisioned is a stable monetary base without inflation. Some inflation at first is necessary, but he wanted to "get over with it" as quickly as possible.

This doesn't seem right. The inflation would be lower faster with a shorter doubling period.

I think he just thought 4 years would be roughly the time to get the word out. I really wish it was either a smooth curve or more frequent small percent drops. I'm very excited about 210000, but I don't know if an 'exciting' event is what a new currency needs really.

molecular

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Quote from: jetmine on November 15, 2011, 10:22:30 AM

Quote from: jetmine on November 15, 2011, 08:23:42 AM

That's a myth. It's possible to have large pools without them having control of the blocks, and thus, without a security risk. Also there's p2pool.

I can imagine how such a pool could work in theory, yes. But it would need special miner software and I don't see any actual implementation, not to mention a popular one (please prove me wrong on this!). Also, it would still be easy for a pool operator to distribute two types of software, one auditable and one crook. For the user it's almost impossible to distinguish, yet for the security of btc it is crucial.

p2pool is growing quite popular in the litecoin community, it seems.

molecular

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Quote from: jetmine on November 15, 2011, 08:23:42 AM

Quote from: molecular on November 14, 2011, 06:37:35 PM

Also: A low incentive would decrease hashpower (as you fear) and therefore security of the blockchain. Awareness of this might trigger users to pay more fees in order to have better security, I'm not sure about this.

The current behaviour of miners is not towards security at all, much the opposite (pools!).

Citing "security" as justification to push a pro pooled-miner development is a blatant lie.

To really improve security, one has to consider incentives for miners to give up on big pools and return to solo or small groups operation.

I was thinking about an attack by an indiviual, corporation, bank or government (agency). Pooled mining protects against that just as well as long as pool ops don't turn evil or cartel up.

Meni Rosenfeld

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Quote from: jetmine on November 15, 2011, 10:22:30 AM

I can imagine how such a pool could work in theory, yes. But it would need special miner software and I don't see any actual implementation, not to mention a popular one (please prove me wrong on this!).

To be sure, this isn't yet practiced. Eventually it will happen, so it's silly to say pools are a security risk going forward.

Quote from: jetmine on November 15, 2011, 10:22:30 AM

Also, it would still be easy for a pool operator to distribute two types of software, one auditable and one crook. For the user it's almost impossible to distinguish, yet for the security of btc it is crucial.

Pool ops don't typically make mining software.

Quote from: jetmine on November 15, 2011, 10:22:30 AM

And last not least, the current crop of miners doesn't seem to be caring about it anyway.

They don't have to. It's more important that developers of mining software care.

Quote from: jetmine on November 15, 2011, 10:22:30 AM

They just flock to whomever pays out more and has more blocks quick.

And eventually, this probably will be small pools with a p2pool backend.

DeathAndTaxes

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Gerald Davis

Quote from: jetmine on November 15, 2011, 10:22:30 AM

Quote from: jetmine on November 15, 2011, 08:23:42 AM

That's a myth. It's possible to have large pools without them having control of the blocks, and thus, without a security risk. Also there's p2pool.

I can imagine how such a pool could work in theory, yes. But it would need special miner software and I don't see any actual implementation, not to mention a popular one (please prove me wrong on this!). Also, it would still be easy for a pool operator to distribute two types of software, one auditable and one crook. For the user it's almost impossible to distinguish, yet for the security of btc it is crucial.

Why would the pool issue miner software. Your right that would be a stupid solution.

The major change is that the miner generate block header. It simply requires a change in mining pool protocol. Instead of pool generating headers the miner generates headers (using pool reward address) and submits valid shares to the pool.

No reason 3rd party miners can't support this. You are right it requires will on the behalf of the community but there is no technical reason that a pool w/ >51% of hashing power to represent any danger to Bitcoin.

jetmine

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Quote from: jetmine on November 15, 2011, 08:23:42 AM

That's a myth. It's possible to have large pools without them having control of the blocks, and thus, without a security risk. Also there's p2pool.

I can imagine how such a pool could work in theory, yes. But it would need special miner software and I don't see any actual implementation, not to mention a popular one (please prove me wrong on this!). Also, it would still be easy for a pool operator to distribute two types of software, one auditable and one crook. For the user it's almost impossible to distinguish, yet for the security of btc it is crucial.

And last not least, the current crop of miners doesn't seem to be caring about it anyway. They just flock to whomever pays out more and has more blocks quick.

Yet they will cheer if you enforce higher transaction fees "for security reasons", no doubt..

Meni Rosenfeld

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Quote from: runeks on November 14, 2011, 12:31:20 PM

So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

It is 4 years.

The reasoning behind only 4 years is that what Satoshi really envisioned is a stable monetary base without inflation. Some inflation at first is necessary, but he wanted to "get over with it" as quickly as possible.

Quote from: jetmine on November 15, 2011, 08:23:42 AM

Quote from: molecular on November 14, 2011, 06:37:35 PM

Also: A low incentive would decrease hashpower (as you fear) and therefore security of the blockchain. Awareness of this might trigger users to pay more fees in order to have better security, I'm not sure about this.

The current behaviour of miners is not towards security at all, much the opposite (pools!).

Citing "security" as justification to push a pro pooled-miner development is a blatant lie.

To really improve security, one has to consider incentives for miners to give up on big pools and return to solo or small groups operation.

That's a myth. It's possible to have large pools without them having control of the blocks, and thus, without a security risk. Also there's p2pool.

jetmine

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Quote from: molecular on November 14, 2011, 06:37:35 PM

Also: A low incentive would decrease hashpower (as you fear) and therefore security of the blockchain. Awareness of this might trigger users to pay more fees in order to have better security, I'm not sure about this.

The current behaviour of miners is not towards security at all, much the opposite (pools!).

Citing "security" as justification to push a pro pooled-miner development is a blatant lie.

To really improve security, one has to consider incentives for miners to give up on big pools and return to solo or small groups operation.

jetmine

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Quote from: mrich8 on November 14, 2011, 04:29:44 AM

I used to live in a building that did not sub-meter each apartment for it's own electricity. Literally, each unit did not have a meter. Only the entire building of over 25 apartments, had a single meter.

... snip ...

So very literally, in these apartments, mining would cost the entire building in a higher bill, but you would only pay some tiny fraction more, and there would be no legal recourse, in the unlikely event they discovered that you were somehow using a disproportionate share.

You only pay that tiny fraction until your 24 neighbours discover "free mining" too. Then, not even stopping your own rig would get you off the hook (or rather, just a tiny bit)... :-)

molecular

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Quote from: btc_artist on November 14, 2011, 04:45:31 PM

Quote from: runeks on November 14, 2011, 12:31:20 PM

So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

Perhaps it wouldn't even have to be hardcoded at 2 or 4 years-- why not have a dynamic formula based on number of transactions and amount of BTC being transferred (or something to that effect)?

Amount of BTC being transferred can easily be manipulated at low to no cost. So that might not be a good idea. If, at all, you'd probably want to base it on fees payed per block or something.

Also note: not only the number of transactions varies, but also the fee per transaction itself. The default (and minimum) fee in the standard client might offer a good enough way to increase/decrease fees when time comes.

Also: A low incentive would decrease hashpower (as you fear) and therefore security of the blockchain. Awareness of this might trigger users to pay more fees in order to have better security, I'm not sure about this.

Additionally: The survival of bitcoin depends on increase of transaction volume not only (maybe) by this mechanism, but also by the fact that if it doesn't grow fast enough, it will probably fail at some point for other (more "social") reasons.

Quote from: btc_artist on November 14, 2011, 04:45:31 PM

Having said that, it's probably not a good idea to try and change it now.

I agree

btc_artist

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Bitcoin!

Quote from: runeks on November 14, 2011, 12:31:20 PM

So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

Perhaps it wouldn't even have to be hardcoded at 2 or 4 years-- why not have a dynamic formula based on number of transactions and amount of BTC being transferred (or something to that effect)?

Having said that, it's probably not a good idea to try and change it now.

molecular

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Quote from: sadpandatech on November 12, 2011, 01:06:49 PM

If we're estimating, I would say difficulty will be almost double what it is now and price will be $1.50 or less. Unless we have some heavy market intervention between now and then.

Heh. I'm pretty sure the price will not be $1.50 +- 1.00

runeks

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So the survival of Bitcoin seems to very much depend on the decline in block reward coinciding with an increase in transaction volume. Can anyone say why Satoshi chose the 2 year period as amount of time after which the block reward halves? Wouldn't it have been safer to choose, say 4 years, to allow more time for adoption before block rewards are lowered?

sadpandatech

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Quote from: mrich8 on November 14, 2011, 04:29:44 AM

So very literally, in these apartments, mining would cost the entire building in a higher bill, but you would only pay some tiny fraction more, and there would be no legal recourse, in the unlikely event they discovered that you were somehow using a disproportionate share.

I would be very careful with that assumption. Before anyone goes hooking up twice the electric usage worth of mining equip, it would be highly advisable to atleast check if where you live even has 'rental control laws'. I am only familiar with those here in Florida which only require the landlord give you 30 days notice to raise your rent. And you can bet your ass if it were an electric bill included he is highly likely to take you to court for the amount over what would be considered a 'reasonable accomadation' amount that was included in any rent. Just be careful, and do your homework is all.

Cheers,
Derek

mrich8

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I used to live in a building that did not sub-meter each apartment for it's own electricity. Literally, each unit did not have a meter. Only the entire building of over 25 apartments, had a single meter.

To assign electricity costs, they sent a monthly bill that divided the building's bill based on how many square feet you had in the apartment and how many occupants in the apartment. They literally had no idea how much electricity you really use. The same idea was used to bill for water.

These were fully private apartment homes with outside entrances, not dormitory halls etc. No part of any contract addressed concerns of over-usage by any tenant.

So very literally, in these apartments, mining would cost the entire building in a higher bill, but you would only pay some tiny fraction more, and there would be no legal recourse, in the unlikely event they discovered that you were somehow using a disproportionate share.

mmortal03

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Quote from: mrdavis on November 13, 2011, 06:33:35 PM

Quote from: mmortal03 on November 13, 2011, 07:06:18 AM

According to the Mesoamerican Long Count calendar, it will occur on December 21, 2012.

What a disappointment to find this reference at the end of the thread. It was my first thought and I wanted to make the joke.

Whenever it is, I hope it won't be the end of the world for bitcoin.

DeathAndTaxes

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Gerald Davis

Quote from: odysseus654 on November 13, 2011, 06:57:31 PM

You know, considering that one purpose of the coin drops is eventually to get to zero and have everything be running off of transaction fees, perhaps some adjustment to the transaction fees should be made near these jumps so as to get some (not all) of the lost-gen in as increased fees? I know that I hate paying fees myself, but if a block only generates 0.1 BTC for whoever creates the block then we're not gonna see much difficulty by the time we get to that point.

Any drop in difficulty when we get to 25 BTC I don't see as that problematic, it's when we get to the lower levels that I'm more concerned about long-term damage.

No matter how you structured the fees there simply isn't the transaction volume to support the 25 BTC which will be removed. The developers have expressed interest in modifying fee structure and IMHO the current structure is simply unsustainable but fees don't matter if the volume is so low.

http://blockchain.info/charts/cost-per-transaction-percent

The cost of a transaction (w/o subsidies0 is roughly 10%. So if today all block subsidies were eliminated to support current network hashing power at current prices would require a 10% fee structure. Note that is a fee on both transaction and change. So actual fee would be much higher maybe 15%+.

The goal should be to grow the network. With 10x the transaction volume it would require a fee of 1%. With 100x the transaction volume it would require a fee of 0.1%.

odysseus654

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You know, considering that one purpose of the coin drops is eventually to get to zero and have everything be running off of transaction fees, perhaps some adjustment to the transaction fees should be made near these jumps so as to get some (not all) of the lost-gen in as increased fees? I know that I hate paying fees myself, but if a block only generates 0.1 BTC for whoever creates the block then we're not gonna see much difficulty by the time we get to that point.

Any drop in difficulty when we get to 25 BTC I don't see as that problematic, it's when we get to the lower levels that I'm more concerned about long-term damage.

Topic: 25btc/block soon? (Read 5097 times)