Topic: Bitcoin XT - Officially #REKT (also goes for BIP101 fraud) - page 195. (Read 378996 times)

Bitcoin whitepaper describes it as "A Peer-to-Peer Electronic Cash System" right in it's headline and "an electronic payment system based on cryptographic proof". Wouldn't redefining it as e-gold be breaking the social contract and alienate lot of users? Only time gold is mentioned in the whitepaper is to explain mining, not usage.

When you reduce the use cases for Bitcoin you also reduce its demand. With the reduced demand its valuation will decrease, unless you get enough new e-gold bugs to join to compensate for disappearing sectors of bitcoin economy.

As bitcoin is obviously intended to work as payment system. Wouldn't it be better to create an alternate coin with a whitepaper that tells its users that it's main purpose is to work as e-gold? No one would feel cheated and everyone would be happy.

If a rule is "consensus approved" it means the rule is what the market wants.  This is why the anti-spam (1 MB) limit was enforced for the past five years.  However, now the market wants a higher limit.  It will get that higher limit eventually. 

Right now the "consensus approved" limit on the inflation rate is <= 25 BTC / block.  Since the market wants this limit, there is no pressure to change it.  If the market wanted a different limit--and I suspect it will when the halving hits--then we will get a different limit (in this case 12.5 BTC per block). 

The invisible hand of the market is always in charge of the consensus rules and will eventually prevail.  What you're missing is that since this "market" is composed of the community of Bitcoin holders, it will never vote for changes that it believes would hurt it's interest.

I think this chart (which I've shown you several times but I don't believe you've understood) shows the effect best: the blocksize limit was accepted as an anti-spam measure.  It is no longer accepted now that it's beginning to serve as a political measure instead.  The area shaded in brown represents the unmet demand clamouring for change…


 
 

Exactly...

Peter would have you believe the block size is the only centrally designed, consensus approved, hard limit in Bitcoin 

Yeah we've seen how successful XT was  

To enforce a quota in Bitcoin you only need to include it in the consensus code. The code reflects the desire of the consensus. Those who are against it are free to leave but this exit is not without cost.

Correct.  But remember the "market" in this case is all of the Bitcoin holders in aggregate.  Non-holders don't have a say.  Everyone can understand why this "market" would want to increase the block size.  But why would it want to increase the inflation rate and debase the very source of its wealth?  

Nevertheless, I agree that it could happen.  Perhaps in 100 years there will be a decision to grow the Bitcoin money supply at 0.5%, if, for example, this is deemed the best way to maintain the security of the Blockchain global ledger.  

I think it is possible.

If you look at retail distribution, often a national distributor will set a minimum advertised price (MAP)
to prevent price wars between retailers from destroying the ecosystem.

Bitcoin mining is more similar to gold or diamond mining where the resource isn't passed down from
another party but mined directly.  I really don't know how those markets operate in depth but
the negative externality of security complicates the matter. 

I think there should be a way to raise fees without compromising the bandwidth via a blocksize consensus rule,
and I've hinted at some of them, but the topic appears complex.

I wonder if you question whether it's possible to keep the 21m cap as well. I guess if 'the market' desires it be scrapped, then we can't do anything?

It is a fair argument.  In fact, we can show that--all other variables held constant--that a production quota on block space will have the effect of increasing the equilibrium hash rate.  


Ignoring the question of whether or not there would be sufficient security, I question whether it is even possible to force fees upwards.  Enforcing a production quota means that you are going against the natural desires of the market.  Normally, to enforce a quota, you need a strong government or organization willing and able to use force if necessary.  I'm not sure Bitcoin Core has sufficient power, especially when other implementations can fork from Bitcoin Core to attempt to satisfy the demands of the market like we've seen with XT.  


The negative externality could be lower security, just like you said.  Another negative externality could be that people with low-cost hardware and slow internet connections might not be able to run full nodes.  

Free market competition, yes.  What the "cap advocates" are saying is that the free market revenue will provide an insufficient level of security and they would like to boost it by decreasing the supply.  
Its a fair argument.  But, A) it can't be proven that the free market revenue will necessarily be insufficient,  B) it is questionable that decreasing the supply is the only way to boost revenue, and C) it is unclear how much of a boost it would actually be able to accomplish.

I don't really see any negative externalities, unless you do actually have a blocksize cap, in which case the negative externality would be the limitation of bandwidth.

It sounds like what you're describing is just normal competition in a free market.  If a new entrant can produce a commodity below the prevailing price (but above his costs) then simultaneously (a) he can earn a profit, and (b) consumers enjoy lower prices [he helps to drive down the prevailing market price].  

I think it is better to ask if there is some negative externality that arises by free-market competition for block space production.  (For example, if Bob could produce cheaper lumber by cutting down Old Growth Forests, the negative externality would be the loss of those forests [and the value they add to the world for other reasons]).  

In thinking more about my previous post, here's what I can say:

I could be wrong and the amount of an average fee with a cap could be
orders of magnitude higher than without a cap.  The question isn't if
users would pay it.  The question is if miners would charge it.

The tragedy of the commons theory would say that there will be always
some mining pool or miner who is trying to creep in and offer a rate lower
than the market rate but higher than the marginal cost, and so without
controls in place, the rate will drift down to the marginal cost.

However, there may be other factors at play, other than just price war mining.
There could be social norms, minimums built into wallets, positive collusion
by miners, and other consensus building dynamics.  Moreover, if these dynamics
get traction and the number of pools is large, the price war factor may be greatly
mitigated since a large number of pools means people won't wait an inordinate time
for their transaction to get into a lower fee block.

Please note this "positive collusion" also includes miners abandoning small fee
pools and joining larger fee pools.

There could even be purposeful reorging of the blockchain by an economic
majority who doesn't want to see smaller fee blocks.  That's an extreme example,
but my point is that saying the tragedy of the commons will necessarily force fees
down to the marginal cost, even in the face of itself (the tragedy of the commons),
and expecting nothing could be done and there will be no other forces at play,
is, I think, a simplistic and pessimistic view.  

price of it depends in coin supply and how hard to earn it and also the security.
maybe they dont know that if this will happen price of bitcoin can go lower single digits.
this is the worse thing that can happen in bitcoin..

That's all fine, but at which point do you think the hashrate will settle? If we go down to 1PH/s, for example, would you be happy about that when the rest of equipment is worthless and can easily be used to attack the network? Also, don't you see a vicious circle of lower fees -> lower hashrate -> lower security -> lower price -> lower hashrate -> ... ?

Moreover, you say we will reach equilibrium. I'm not sure it matters if we end up with fees like 1 satoshi per tx and miniscule hashrate.

Bitcoin as it is works fine and it can scale globally as it is, the proper way to see things is to think that bitcoin simulates gold with the added property of being portable.

you would not buy a soft drink using gold or a $100 dollar bill, for that reason alt coins like litecoin o dash have a purpose, we do not need 500 alt coins, but maybe a few are needed.

Moore's law does not hold on the long term, only on the short them, and something that must never be sacrificed is the fact that Bitcoin is decentralized, increasing the block size centralizes Bitcoin that it is very bad and should not be allowed.

As of now the Bitcoin DB is over 50GB with a 1MB block, on the long term if the block where to be x times bigger the DB would be x times bigger, as of now the DB is too big to be on cell phones, and on an average laptop, lets keep the 1 MB limit to prevent centralization.

If we think of bitcoin as gold and litecoin or dash as silver combined we can cover both large transactions and small ones.

Another thing to consider, The code-base for Bitcoin must be 100% bug free for security reasons, ask any developer and they will tell you that is something very difficult to achieve, but since Bitcoin is a currency security must take the biggest priority, in general small computer programs can be made very secure and 100% bug free, but as the size of code increases security goes down,  take for example an operating system. Do we have a 100% bug free OS? We do not and that's because the amount of code is very large, and some of that code is complex. The same applies for Bitcoin, if we end up with a very large and complex code it will be very difficult to keep it 100% secure, the ideal codebase is lean and mean, meaning keeping as simple as possible that keeps the code secure.

Forks are a bad thing specially in a digital currency, now that it can be seen that the fork is failing bitcoin has started to go up in price.

For Bitcoin to succeed certain things must be assured not to change ever:
for example the 21 million limit must not change.
decentralization
the ability to pay anyone directly with the need of a third party.
All coins have equal value, opposite of colored coins.
Consensus has to be respected.

As of now 1MB block limit is fine, and it helps to prevent spam, you raise that limit and then the blockchain will get full of spam that the people that run full nodes will have to pay for, and for that reason large blocks creates a big security risk.

Of course if the day comes that a cell phone has 1 TB of data storage, and the bitcoin user base is 100 times larger, then and only then by consensus with a very careful study done not to break with the security model, could the block size be increased. But what Bitcoin-XT had done was recklessness, a total disrespect to the security model and the principals of decentralization, and for what bitcoin stands.

Mostly I'm saying D -- tragedy of the commons won't ensue, or at least not fatally.  

The reason is simple.  The endgame "tragedy" of miners not securing the network will never happen
because an equilibrium will be reached where 1. some miners will stay profitable and
2. Those remaining miners will charge enough to achieve an acceptable network hashrate,
even with NO subsidies and NO blocksize limits.

How do we know 1. will happen?

This:


How do we know 2. will happen?  

Well, to be fair, we don't know for sure. There are too many variables such as what will the transaction
volume be, and what an "acceptable network hashrate" will be.  However, it stands
to reason that if the community agrees it needs a certain minimum hashrate and
calculates what the minimum fee should be to support that hashrate, users would
likely pay it if miners charged it... and it would be in the miner's interests to charge it
both in terms of profitability and supporting the network.

Furthermore:  If the users won't pay the fee because its simply too high, what makes you think
they will pay it when its enforced by the blocksize rather than the miners directly?  (It would
actually have to even HIGHER because now we are artificially limiting the number of
transactions).

Or do you think they won't pay it for another reason...but somehow will under your
scenario with small blocks?

Or do you think the miners will just refuse to charge that much and leave us with
a lower hashrate?

What exactly do you think will happen under this "tragedy" scenario?

Regarding your "empirical data", what data do you have?  You claim "negative marginal returns".
To me, that means you have P/L numbers from major mining companies.  Do you?

Now, as to the question of:  Could you get MORE revenue to the miners by instituting a cap, just as you can get more money to egg farmers by fixing prices?  Probably.  But I would also bet that the increase would be limited, probably less than an order of magnitude and thus not overwhelmingly impactful as far as changing the security.  In other words, users might pay a dime for a transaction, but they ain't gonna pay a dollar...Not when they can use litecoin or whatever.  A very simplified example but hopefully you get my point.
  

Let's be charitable and assume English is not jonald's first language.

Because if it was, there would be no excuse for not recognizing gmax's pellucid prose as exceedingly precise and articulate, with proper adaptation for its intended audience, and drawing on a vocabulary befitting a senior at an Ivy League law school.

Many brilliant engineers can't write for shit, but he is not among them.

I guess the problem is jonald disagrees with gmax, but can't think of a less pitiful argument than to just critique the dude's "every sentence."

Peter's Paper, much like Hearn's XT Manifesto (*snicker*) are both monumental frauds deployed in support of the Gavinistas' social engineering attacks on BTC core governance.

Watching them get #R3KT as they attack an antifragile system is very enjoyable and inspiring.   

So you are claiming which of the following?

A. block space is *not* a scarce resource
B. miners *don't* sell block space
C. miners *do* pay for block space
D. tragedy of the commons *won't* ensue
E. tragedy of the commons *can't* be avoided by a size cap
F. tragedy of the commons can be avoided by something *besides* a size cap

I think you're going for F. but since you simply assert debunking with no elaboration I can't really be sure.

It doesn't matter, because we know from empirical data 1MB is already too large to completely prevent the negative externalities, false economies, and negative marginal returns which are occuring due to information/accountability/incentives destroyed or perverted by subsidizing free riders in the mining and user subsystems.

Peter's shiny new illustrations are indeed excellent.  But besides the slick graphics to impress the Redditurd mob, his paper is a giant obfuscatory nothingburger.  Cite: https://botbot.me/freenode/bitcoin-wizards/2015-08-30/?msg=48477664&page=1

#REKT

Peter is not ignoring it, he just doesn't agree with it.

We already debunked that myth if you were paying attention.  Just because it was said on reddit doesn't mean it's true.

https://bitcointalksearch.org/topic/m.12348544

I fixed it for you.

Your most glaringly flawed assumption is to ignore the fact

It is well known that blockchain.info for example did not run their own node until very recently. There was a lot of discussion about this on the dev mailing list. A lot of companies rely on services like chain.com, blockcypher.com, etc. They have somewhat valid reasons as they don't have to build the whole software infrastructure for node indexing that these services have already built.