Topic: Bitcoin - we have a problem. - page 4. (Read 14570 times)

for me the OP is a troll, nuf said

If VISA decides to shut everything down, doesn't the same happen to the credit card network?

Why isn't this a huge problem? VISA is making money hand over fist, and shutting down for no reason is irrational and would cause them to lose money.

Well, ASICMINER is in the same position.  It would be completely irrational for them to stop mining and throw money away.

My thoughts are that it is not a problem, in fact it is a benefit of bitcoin.  If VISA goes down, VISA cards stop working.  If ASICMINER stops mining, transactions take a little longer to process, but they do still get processed eventually.  This is a vast improvement.

I've heard all of these arguments before somewhere, oh ye it was back when CPU mining was being killed by the "evil" gpu miners who were only in it for the profit.

What would you rather have.. botnets of consumer zombie devices that control and threaten the network or hardware farms that control and threaten the network? 

IMO this largely a non-problem.

But if it were actually a problem - the solution would be an increase in block generation target time + block reward reduction... preferably automatically done by the protocol after some long time gap between blocks.

People who don't think that bitcoin mining is not becoming more centrazilzed must be on something. The fact is since ASIC's can only be produced by companies then you will have most of the mining centralized, and a few of the scraps will be sold to the PUBLIC. Think about other countries like CHINA, Taiwan..etc major silicon valley players, they will further centralize the mining network.

If a massive pool went down, all the miners that were on it will just switch to the other pools, so the number of miners or the block payouts will not change.

But otherwise yeah, agreed.

Massive pool goes down, more people start mining because they're more likely to get the block.

Just like any other economy, don't screw with it and things will balance themselves out.

I'll provisionally accept that as a plausible hypotheses until we have enough data to say one way or the other.

Ah, but BitPay users don't represent the typical consumer.

That is a theory which so far the evidence does not support, given that BitPay continues to see healthy growth in their transaction volume.

Ah, if you're talking about a transaction not being reversible, yes, that can take months. But that's actually another problem with Bitcoin - the typical consumer is going to get scared off by the irreversibility.

I actually used to work at a credit card company about 20 years ago and have since been involved in programming e-commerce applications, so yeah, I think I know a little about how it works.

Does Bitcoin have a system wherein the clients will simply reject to accept and retransmit a transaction if they have said transaction in their memory pool, even if that transaction hasn't been included in a blockchain yet?

When I go into a restaraunt, I get a nice meal before they even swipe my card.
I don't think lack of instant auth is a problem most places.

Some people will abuse it, just like they do now, and they eventually will be arrested for it.

The point is that a merchant who accepts a card payment has to wait a lot more than 10 minutes in order to get the same assurance that a transaction will not be reversed as a 1-conf bitcoin transaction provides.

If you compare like to like, then Bitcoin is extraordinarily fast compared to the legacy payment system.

It is to do with double spending - If a transaction took that long to be processed what is stopping you spending everything in your account 20 times over.

When purchasing on a card -there a several payment states - pre auth and post auth. So when you are online and purchase something from a website the value of the purchase is "reserved" on your account known as pre authentication.
e.g. You have £1000 and you spend £200 the £200 is immediately reserved as a pre auth transaction. If you checked you account balance at this point it would read as £1000 but you would only be able to spend £800. When the item is dispatched the transaction is changed to post auth and the £200 removed from the account. If the transaction were not immediately verified there is nothing stopping you spending more money than you have.

If a vendor does not immediately validate the transaction and tries to do it at a later point after you have spent all your money the bank would then just decline it and the vendor would have lost their product and revenue.

When purchasing in a shop it just goes straight to post auth and the money removed there and then.

So to equate to Bitcoin - if you pay for something with bitcoins and the vendor does not wait till the transaction is confirmed and you have left the shop - he would loose the product and bitcoins.

Just because the money does not immediately show in the vendors account (banks like to sit on it for a bit extra money for them) it does not mean it has not been debited from the purchasers account.

If you take cheques for example - that is why you have a cheque guarantee card - the bank is committing to that spend even if you do not have the money (but they will fine you and charge you interest when you are overdrawn) you can not do that with Bitcoins.

I'm curious too.

Altcoins provide a powerful incentive to undermine Bitcoin's network.

Consider a situation where Bitcoin's price declines to, or stagnates at, a level that is no longer considered profitable by the miners or pools with the most hashing power. Suppose further that one of these miners/pools has enough power to sustain a prolonged 51% attack, or launch short but repeated attacks, sufficient to irreparably damage confidence in Bitcoin. This would result in immediate and intense competition among the most popular alts for Bitcoin's throne.

If the deviant miner/pool had invested in one or more of these alts before the attack, they stand to make a fortune afterwards. Further, if enough coins were purchased, the miner/pool could even control the early stages of competition with buy and sell walls. Such control could be used to maximize profits but is unnecessary, as the alts would rise in value without manipulative pressures while they are filling the void left by Bitcoin.

There is a fortune to be made through destroying Bitcoin.

Just in case this hasn't been brought up, this has brought other coins to their knees in the past. With a lot of the altcoins, there's a spike of interest, then everyone quickly moves on to the next coin. It's not a big problem if you're frequently adjusting difficulty, and adjusting difficulty too often can present its own problems (if it were changed every ~1 day, ASICMiner and a couple other major players could collude to shut their miners off for a day, then flip them all on when difficulty changes to try easier double-spends -- the flip-side to that would be that longer difficulty windows would also give malicious miners more time to try double-spends at an "artificially" lowered difficulty).

Kind of a "fucked if we do," "fucked if we don't" situation, and we're in a pretty critical time right now, where there are a few people and companies making up over a quarter of the network. Just be glad Voorhees isn't running ASICMiner and trying to do artificially lower difficulty to "encourage development." :p

Actually, hash rate's spiking to such an extreme, we might find ourselves with a 7-day difficulty window, which I'm not sure has happened yet (except maybe in the first weeks of Bitcoin's existence). This is obviously very dangerous, and people should be waiting for more confirmations during these times (6 is probably still more than enough) when network hash rate is increasing at such a shocking rate.