Topic: BIP 16 / 17 in layman's terms - page 9. (Read 38973 times)

Wow did that ever go off course, WTF was I going to respond to after all that?

Yes, blaming the children for what some priests sometimes for some time get away with is not quite right.

But does it mean the Pope is a pederast? I'm not sure that follows.

Lets go back to basics. Decentralisation. If I want to decentralise, should I listen to the chap who hangs out with the C.I.A. or the raving religious nutbar who actually and possibly unfortunately can be amazingly on point when its not a question of how many angels can dance on the head of a pin or some other theological debate?

I think maybe I need to hear/read again Luke's argument(s) against BIP16 as it seems to me that if Gavin's arguments against BIP 17 were as cogent as he seems to think, Luke would have recognised that fact by now. It is not, afterall, a religious matter. (Is it?)

Presumably Luke has heard all Gavin's arguments, yet they have not convinced him. That worries me, as I have not yet found Luke to be a nutbar in such fields and dismissing people's expert opinions on account of their extra-curricular nutbarism is not something we nutbars particularly approve of.

-MarkM-

Nice. Thanks for bringing us back to the real world.

why are you concerned about giving a lot of power to pool managers but not about giving a lot of power to miners in general?
Isn't it the same thing on a different scale. Most Bitcoin users aren't miners ( same as most miners aren't pool managers), yet the miners can set the transaction prices to whatever they want, they can force a protocol change or shutdown the network altogether. they have the incentive to make the "right" decision, but so do the pool managers.

In layman's terms:

They want to happily charge you more fees.

I don't value people like you very much, you're lacking something I tend to value a lot which is communication skills. As far as the issue is concerned, you're again clueless. Incentives are everything but the problem is that if you only take into account monetary incentives, you're basically stepping off a cliff. This might apply to a large corporation that bases everything on numbers, but for a regular consumer the incentives can be very complex. In fact they are too complex to be able to model accurately with any current science or technology. You can get accurate results in very specific scenarios where a limited set of incentives have a major role, but that's it.

Bitcoin mining is something that can be called very complex, there is no average miner mindset. You have miners who use Bitcoin for more than mining, miners who don't. People who have ideological feelings for Bitcoin, people who don't. Small miners, medium sized operations and mining businesses. People who hoard their bitcoins and people who sell them all. And everything in between.

All of these people should care about these issues because it affects the long term profitability of Bitcoin mining. Not all of them care because many are only concerned about the direct profits, but through raising awareness and educating people it's clear that people change their behaviour. The pool pie has already changed quite a bit because of the concerns over 51% attacks but it's still too centralized, this recent issue highlights that.

One of the biggest issues in the world today is short term thinking. Companies care about their quarterly profits while the thinking of miners seems to be even more short-sighted. If they thought about the bigger picture a little more they would understand many things, first and foremost that variance in mining goes way down over time, you don't need to mine in a 1000gh/s+ pool to get very low variance. Second, they would understand that what happens in the Bitcoin world affects price which affects their mining profits so they should care a little more about what's happening.

I've actually studied incentives quite a bit but not from an economics standpoint. To read more on how incentives really work, based on real science, I can recommend this book. For everyone. http://www.amazon.com/Drive-Surprising-Truth-About-Motivates/dp/1594484805/ref=sr_1_1?ie=UTF8&qid=1327661332&sr=8-1

That book is not exactly about consumer or business incentive, more like employee incentive. But it proves nonetheless how flawed the thinking regarding incentives really is, especially in economics and business.

+1

It's absolutely erroneous to think that it's not an incentive for miners to improve the way we mine. It's not only about direct profit, if people want to see mining and the network itself as a healthy business environment in the long term, it must be developed and it can be developed by anyone. This has been proven first with people starting pools of their own that have succeeded as smaller pools. Now mining has evolved again with p2pool. I'm confident that p2pool in the way it is now is not the end game either, we will go forward.

I think this topic has derailed a bit thanks to cunicula, his arrogant and in my opinion ignorant approach isn't helping much. Comparing traffic jams with Bitcoin mining is a very bad analogy, traffic jams are clearly a symptom of a badly designed traffic system, with Bitcoin mining it's different. It costs people very little in either money or convenience to fix the problem of excess centralization. With car traffic the situation is very different.

I find it funny that cunicula is claiming here that people don't understand economics when I think he's been learning from a clueless mentor. It has been proven over and over again that people are not "rational" when it comes to their decision making, it's more complex than that. Feelings and more important than that, values, matter a lot when people make economic decisions. These factors can be affected by raising awareness, or educating people.

However with mining we can assume that a good number of miners are mining only because of the profit, they do not really have an ideological feeling about Bitcoin or something like that. Even those people should care about this if they are economically rational, their business is at stake here. Not only is centralization bad for the security of the network, now it has been proven that the whole development of Bitcoin is at stake here and that could significantly affect the competitiveness of the whole technology. All this affects price which affects miners.

I believe that this issue is one of the factors that have caused a recent price dip. In fact it will have a significant effect for the whole future of Bitcoin depending on how the whole issue is solved and how it affects future decision making. My personal opinion is that everything went wrong the minute this whole thing went public like this. The developers should be able to make a decision on this and then present it to the public as the solution, which undoubtedly people will accept. I know that they were unable to do this but bringing it to the laymen so to speak is most likely only going to bring the ball back to the developers.

The good thing about this is that the devs have had some feedback from technical people who are not part of the core dev team, so that's probably helpful. Clueless non-coders speculating on the whole thing is not helping at all, it's clearly just adding doubt to the whole development of Bitcoin. I'm not calling names again but I think some devs need to start compromising amongst themselves if they really know what's best for Bitcoin.

That's the whole point of monopoly - no competition. any new comer can join the monopoly. if he wants a short term profit he won't join, but in the long term it will be beneficial for him to join - less risk, almost guaranteed profit. thats why new miners join deepbit by default

How can you take the power away from miners in a protocol that relies on computing power for its security? To make such a change you will have to reinvent the core principles of bitcoin.

edit: i do agree the the power miners have over bitcoin it too big, but i dont see a way to "fix" this

Yes, but now we come to an interesting issue in theories of innovation.

Changing the protocol is difficult (synonym costly). Therefore, the initial choice of protocol can have a long term impact on the evolution of the system. Start from a bad protocol and you can end up stuck with a bad technology for a prolonged period.

This is not true with miners or pool operators. Bad miners and bad pool operators face competition via low-cost entry and exit.

Entry and exit for a protocol is possible, but it is a big, time-consuming, and costly endeavor. Changes to the protocol are the control instrument here.

Most Importantly, the fact that miners control the protocol is a central feature of the protocol [central flaw would be more apt].
This can and should be changed.

i dont know if to laugh or cry

So true. (As suggested by picture and motto.)

so educate =  conform to your world vision ?
"anyone who is n't agreeing with me is stupid and wrong"
nice

Aside: It is so much more difficult to educate people when you can't threaten to fail them for failing to conform to your world vision.

are you serious?
To blame the protocol is like blaming a gun for murder.
The protocol is a tool.the miners and traders are the ones making the decisions and steering Bitcoin to what it is today and will be in the future.
this has nothing to do with economics. People should be responsible for the conequences of their actions and not blame the tool they used to do that.

edit:
not only that, the miners have control over the protocol. if the miners decide not to support a part of it (like what is happening now) it wont be in the protocol.

Wow. You just don't know anything about economics. It's okay. Just flush the shit out of your brain and I'll drop some knowledge in it instead.

Whatever the outcome is. Only the protocol is to blame.

If someone sits in the road blocking traffic, it is because there is no system in place to sanction people who sit in the road blocking traffic.

The protocol is the system.

The miners are just regular guys. You could purge all the miners and bring in new people. The new people would adopt the same pattern of behavior because they would face the same incentives. The incentives are structured by the protocol.

I dont see how your response has anything to do with my post. read before you post.
if somebody is standing in the middle of the road and creating a traffic jam - it is their fault, but i dont understand the analogy.
so who do you want to blame for Bitcoin centralization? the economics? the bitcoin protocol?
Or do you thing that centralization of bitcoin is not a problem?

Ridiculous. Idiotic. Insert additional expletives. This is like blaming the other people on the road when there is a traffic jam. Or like blaming other orange growers for selling oranges for too low a price during a good harvest year. Learn some fucking economics or STFU.

There is free entry and exit into mining. There is relatively low cost entry and exit into pool management. The decision-making patterns of miners and pool managers are determined by the protocol. It is nonsensical to blame miners, pool managers, etc.

The protocol is the only primitive of the system. Nothing else has a causal role. If there is any problem, it is a problem with how voting operates in the protocol.

Because 3% of $5 is less than 3% of $20.

I think there can be a major problem if Deepbit agrees to work with another pool or gets 51%
It will be possible for them to set the transaction fees to 1-5BTC/kb and reject any block that was not created by them.
I think this is a lot worse than the 51% double spending problem Satoshi described
And the miners might not leave - they will be making extra money from those fees.
This is sort of the reason monopolies are illegal in most countries. when a large group agrees on a price - that group can get almost twice the profit - at the expense of the users.
Even if tycho won't do something like this, somebody needs to hack just ~2 servers to achieve this goal.
Bitcoin will become regulated...

Edit:
just to be clear. i dont think the pool managers are the problem. the miners are.