Topic: Another respected cryptographer predicts collapse in bitcoin mining - page 3. (Read 10764 times)

and the cryptographer's reputation is ruined by this prediction.

What are you talking about, specifically? You seem to be obfuscating.

The OP is wrong, I can prove it. No matter the price is high or low, the effective miner is profitable.

If the majority of professional CompScis read, quoted and applied Popular Science at work, then I'd have to say Popular Science is "considered reputable." There's simply a different standard between these two fields. The evidence is out there in the streets

But these are like Popular Science. I'm sure you could find BS in Popular Science too. Were you referring to popular science when you said "Computer Science paper?" If not, then it is not really a valid analogy, is it?

I didn't say "journal", I said reputable publications. People actually respect "The Economist", "Financial Times", and the economy section in any major generic newspaper. And they don't come short on BS.

Astrophysics and nuclear physics, both of which rely heavily on statistical data.

Now that is complete BS. Link to a recently published example in a leading journal.

But one more thing. It is true that the other sciences also just generate a weight of evidence rather than proof. It is a matter of degree, not black or white. It is just that the level of certainty attached to a laboratory result is much, much greater than in economics.

Competing botnets could take over the Bitcoin network, but that will strengthen it, not collapse it. Botpools: it's the future 

That is a bit of a stretch. Keynesian makes up a large minority viewpoint in academic macroeconomics. It is not dominant. It is only among government policymakers that Keynesian is the dominant viewpoint.

[Don't get me started on Austrian economics because that is complete wackjob rubbish that asshats believe in. I'm not responding to asshats here. It is not an enjoyable use of my time.]

It is not that Keynesian is necessarily wrong. In fact, I think it is correct, but exceptionally difficult to prove or disprove. From the empirical side, it is impossible to perform random experiments with national economies. From the axiomatic side, it is very difficult to derive a Keynesianism model based on seemingly sensible assumptions. The typical assumptions are that people are rational, have rational expectations about the future, and that prices adjust freely.

However, this is not surprising. The idea that people behave irrationally is at the core of Keynes' thought... "animal spirits" and such. If you allow people to deviate from rationality, then the axiomatic approach becomes pretty useless. People can deviate from rationality in many ways. Oftentimes there are multiple types of deviations which could generate similar macroeconomic data. That is multiple potential axioms could be broadly consistent with the same data. In this case, who is to say what the right way to set up axioms is? It becomes faith-based. This is like math, where people can disagree about whether parallel lines ever meet. This kind of theorizing is pretty useless in my view.


By the way, Francis Bacon and the scientific method is what I have in mind when I think of science.

The economics that I do is more in the way of applied statistics as the person above mentioned. It is not very scientific though it strives to be. The point is to tell a convincing story, where your audience believes you have thoroughly analyzed a situation and considered many possible explanations for it. There is no sense of certainty like you get in the natural sciences in which I did research prior to becoming an economist.

A bit like astronomy then  

No, I don't consider mathematics a science at all.

There are such things as "proofs" in mathematics; given certain axioms.  As muyuu says, they are disconnected from the physical universe and are valid only within the abstract universe of mathematics.

The is no such thing as a "proof" in science.  All there is is a weight of evidence.  We have models that fit all currently observed data -- that's as good as it gets for there is no way to know that tomorrow an apple won't fall upwards from a tree.

Since economics is a study of things that happen in the physical universe; it can offer proofs that are no stronger than those of physics (and given the enormous number of confounding variables, probably not even that level) -- i.e. no proofs at all.

Economics is all empirical.  If any proof you offer isn't empirical then it isn't economics, it's mathematics.

Mathematics "prove things" within their own models. This is why they are not proof of anything in the real world. Aprioristic economics also prove things within their own models. They can have a lot of merit and be arguably very solid, not discussing that. However there is always a "leap of faith" in taking proof from a model and saying that model is also sound and applicable to reality. This "leap of faith" exists even in extremely developed fields like physics. For instance, between Newton's model and reality there was a leap of faith, and for centuries it was considered absolute truth. Then Einstein proved it wrong and came up with a more precise model. Considering the Einstenian model to be absolute truth also requires a "leap of faith." If that elusive neutrino from the LHC was truly faster than light, then Einstenian model would actually be "wrong" (it would be an approximation just like the Newtonian model, but this time we don't have a "better" one that looks like the real deal - the faster-than-light neutrino observation is still being disputed though, so actually Einstein could theoretically be "right").

Anyway I think we are taking this off-topic and entering philosophical territory.

Let's just agree that this "paper" is highly speculative and not to the scientific standards one would expect of a Computer Science paper. I was arguing that in economics you read this level of "thing" even in the most reputable publications. Sad but true.

I couldn't find any mention of transaction fees in the paper. He only mentions the subsidy. Subsidy will decrease to almost nothing, but block rewards will not.

If he's right, we will see Litecoin collapse far sooner, giving the community enough time to develop a replacement like EnCoin. Don't worry.

You're wrong there, sound economics can prove things, just like math. And sound economics shouldn't even use statistics as a basis for knowledge building, that's why I made the distinction about "empirical economics" (which I consider flawed, for the same reasons you point) and "aprioristic economics".


Keynesianism is not sound economics, it's done empirically.

Topic title: Another respected cryptographer predicts collapse in bitcoin mining

What does his point have to do with cryptography?

Science in the classical definition meant "field of knowledge" - in that sense it is. But in the modern, more strict definition of science it doesn't qualify ("natural science" - as described by Sir Francis Bacon, XVII century). It's still the philosophical base for most if not all relevant science.

I brought this semantic distinction in the first place because non-sciences like economics don't prove anything at all in the real world and only give degrees of certainty in repeatable scenarios. In this case they are basically applied statistics.

The author(s) here are making highly speculative assertions about unprecedented situations without providing much base for them and taking a lot of dubious preconditions for granted. This level of discourse is very common in economics and sociology, even at academic levels. Just look at keynesianism.

+1

I believe one of the reasons that Bitcoin uses the type of algorithm that can be solved faster with specialized hardware is the issue of botnets. Right now it's already difficult for botnets to do anything with Bitcoin because they don't have specialized hardware. It's still in the realm of possibilities but saying that this will get worse in the future is totally ignorant. As Bitcoin gets bigger there are two things that ensure that botnets will be less and less of an issue.

As Bitcoin grows the value of bitcoins go up, which will cause an increase in the computing speed of the mining network. Bitcoin is fairly safe now but imagine a price of $100+, we would probably have a mining network with over 100 thash. At the same time there are other developments going on such as the mass production of FPGA's and eventually ASIC. These developments combined will make sure that worrying too much about botnets is unfounded.

Right now you could do something with a botnet of millions of regular computers but not in the future. In 5 years you'd probably need billions of computers and nobody has that many in their control.

There is another issue which is actually more significant and that is the centralization of mining pools. It becomes much easier to target Bitcoin if you first ddos all the big pools out of the way and then start hashing. I'm not too worried about this either, we have seen in short time that Deepbit has lost a lot of hashing power and new innovations such as p2pool have been very successful.

I'd say that the future of Bitcoin mining is looking bright.