Topic: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) - page 15. (Read 91087 times)

Shelby, if you look at BTC and XMR as modules for how to launch and implement a coin, then you are on the right page--this is how opensource works : stages.

Many ways.  


I argue in my white paper that TaPoS is as objective as proof-of-work. I think Vitalik's idea of how TaPoS could be attacked is as implausible as doing a long-con attack on Bitcoin.


The hashrate value is only going to be some % of the market cap daily. So to attack this coin and double-spend, you just rent that level of hashrate. Otherwise the coin needs to become the "one chain that rules over all the rest" and is dominated by entrenched mining farms which refuse to rent out 51% of the hashrate.

So what happens in that later optimistic case is that if those who transact end up paying a transaction fee for this PoW to be done on some mining farm. Thus the mining farms are not paying for the hashrate, yet they have the hashrate available to attack the coin when they are ready to flip the switch and take control.

But the mining farms have this huge investment which they don't want to destroy, thus they will not attack in any overt way which undermines their investment.


One of the other problems is that you are disincentivizing buy & hold investors/speculators.

You are basically emulating Freicoin's market failure and its demurrage concept.

I don't see penalizing those who don't transact as a viable model for a store-of-value which is one of the attributes of money.

Power vacuums are disequilibria. That is the fundamental point of my white paper and my attempt at a technical solution.

So in your proposed negative interest rate design, if the loss of stake is greater than the cost of the proof-of-work, then all savers will transact to themselves, thus this is just proof-of-stake so the majority stake must collude to do the 51% attack I explained as quoted above. If the loss of stake is less than the cost of the proof-of-work, then there is a gradual transfer of the ownership of the coin to the mining farms and thus the stake eventually becomes winner-take-all concentrated.

I hope readers are starting to understand how very difficult it is to design a money system which is not a winner-take-all power vacuum.

I expect V to be on the order of 10 - 100 for a microtransaction coin for use on all the activities we do on the Internet. So a minted block reward in the realm of ~1% would require transaction-related costs that are less than 0.01 - 0.1%. Yet microtransaction values may be so small that actual costs may be higher than that. Most damning is my additional point which you did not respond to:


So for the control over mining to remain decentralized and for their to be a viable fee market, this means the 0.1% hashrate miner has to have transaction-related costs in the realm of 0.0001 - 0.001% of the tiny microtransaction values of transactions. You may argue that Monero will be a coin for high valued transactions and you don't think microtransactions are important, and I will rebut by arguing that it will not survive then as a system of money:

https://bitcointalksearch.org/topic/m.16969596
https://bitcointalksearch.org/topic/m.16993233
https://bitcointalksearch.org/topic/m.16993524

Also although costs will decline over the decades, transaction volumes can also increase at that rate or faster than Moore's law.

And lastly, as I said arguing about your tail reward is pointless, because it can't stop the economies-of-scale which cause proof-of-work (in Monero, Bitcoin, etc) to be a power vacuum which is a winner-take-all economic system. You didn't even address this point:




Edit: apologies about the gloating. I am just letting out some pent up frustration about the way I felt about the way (some or most of the) Monero folk were so sure they were superior to everyone else. That had really alienated me and I admit it one of driving motivations I have. I understand the importance of building a community, but not a community that thinks that no other experimentation from outside can be valuable. Any way talk is cheap. So unless someone demonstrates a better way, then it is useless for me speculate verbally about what sort of community I would like to be a part of.

Because we are transitioning to battery powered transportation. These dense cities are suffocating on smog in China. Ditto Asia in general. Just makes sense as Asia becomes the most wealth economy in the world.

As for fossil fuels generation plants, Australia and other places are loaded to gills with cheap coal.


Malthusians want to return to simpler time when there was no surplus and thus we were all struggling every day to find food:

Thank you for providing these interesting details! I think I got your basic idea. I'm curious to know in what ways your concept can improve the idea of TaPoS.

Btw, does you model offer objective consensus or does it rely on weak subjectivity in the sense of V. Buterin?

Of course, this scenario would be possible. But would it make sense economically? I have my doubts. In case of profitable PoW, such an attack indeed makes sense since you only hurt the minority miners, whereas the owners of the currency remain unaffected. With a negative interest on your stake (that gets inevitable due to the attack), the owners would quickly get discouraged from using/keeping the currency, which will eventually lead to depreciation.
It's not sufficient to look at the nominal value of your stake, you also have to take its real value into account.

I'm not sure how big the hashrate would be if it's used to avoid negative interest on your stake. For sure the total hashrate would depend on the market capitalization of the coin and its popularity. It would also depend on the interest rate itself and how it can be decreased by PoW blocks.

Even if the hashrate alone was insufficient to protect the coin, an attacker would still have to buy/rent 51% of the stake if we put an upper limit on block creation for each account, in proportion to its stake.

Without acquiring the necessary stake, you would have to create a whole new alternative chain (fork) by doing PoW, which would be very costly even if the hashrate is lower than in Satoshi's PoW. This would amount to surpassing the cumulative hash power (or energy) as I explained here: https://bitcointalksearch.org/topic/m.15972492

I've been trying to research claims by this Hill's group about thermodynamic collapse of oil:  http://thehillsgroup.org

It's something that will obviously happen eventually since we take all the low hanging fruit first, but they're claiming that within only 10 years 75% of gas stations in the US will be gone, which is a pretty big shocker for ending of fossil fuels in modern civilization.  I know that peak oil seems to have occurred in 2004 (peak of conventional, high return on investment crude production and not low return shale/fracking/etc), so it looks like there's going to be some mega paradigm shift somewhere along the lines here.  The only question is when it occurs.

The part that makes this a more immediate event is that other sources claim you need $120 a barrel oil to bring new and not existing sources online right now (and oil is currently $50ish).  Some people say, well, the free market will just jack up the price to fix it, but that's not really possible in the following scenario.  Let's make two assumptions, that you have a drive to Walmart economy where people are blowing lots of energy to travel long distances to buy things, and that cars (specifically delivery vehicles) will not get significantly better MPG.  If the market cannot bear $120+ a barrel oil, the price doesn't go up with supply continuing to flow, the drive to Walmart economy simply ceases to exist, demand collapses, and nobody drills the oil.  

The oil has been constrained from being delivered to market both due to production costs that the average human can't afford, and the fact you eventually reach a point where it requires more energy to extract than it gives you.

Again a false assumption bold since there is no explanation how this is supposed to happen in the presence of a fixed tail emission. This assumption is up against:
1) The Equation of Exchange in economics. https://en.wikipedia.org/wiki/Equation_of_exchange MV = PQ. What is being assumed here is to increase Q without a corresponding decrease in P.  Or to put it in simpler terms one cannot expect a 100x increase in the number of transactions (Q) in Monero without a corresponding increase in 1/P (purchasing power) of the tail emission in Monero.
2) The fall in real terms of the unit cost of the "transaction related costs". The best example of the latter is the credit card industry. The transaction throughput of the VISA network today would not be possible with the technology of 1949 (punched cards, tabulating machines telegraph lines etc. ) This is relevant because the business model that was conceived in 1949 for Diner's Club, retail payments of high margin luxury goods and services (Tiffany & Co.). fails today when it is applied to very low margin retail purchases of commodity items (Walmart). We do not see American Express at war with Tiffany & Co but we sure see VISA ar war with Walmart. I wonder why.

Edit 1: The only other variable in the equation of exchange that can change is V (The velocity) and changing V would require a change in use of the coin. M is set by the protocol and cannot be changed. One time changes in V and the slight increase in M due to inflation are more than compensated by the drop in real terms of the unit cost of the "transaction related costs".  

Edit 2: One cannot simply extrapolate what are valid assumptions in Bitcoin to Monero without running into some very serious problems.

No. Dude, this goes back to what I was saying about decentralized power structures, they feed multiple pools of resources, so the more payment gateways you add the more decentralization you have--if you run around chasing oil fields, of course you are going to get train costs plus land cost plus whatever, but if your aim is towards the stars, you must create multiple points of entry, re-entry, pull, push, whatever....my point is that if you land the thing to friendly miners in a control spasm of leaked resources, of course you get a parasite that can barely get airborne--the lust for power works as a virtual control mechanism through the will for control and anarchy--these are fail safes built into the natural order of Earth--they don't necessarily apply to space, which in our limited terms is infinite--so infinity negates limited resource arguments as I can at least fathom self-replicating drone farms that intertwine and create new outposts as they scour the universe for not-so-rare minerals that remain in abundance. The Egyptians kept pointing us out of the fertile crescent and towards the sun god--that's why he remains a part of myth and religion. What's weird is that I sucked at puzzle's growing up, but I was always good at drawing them.

TLDR : a way to counteract electrical mining cartels is to increase distribution field and to create software designed to disrupt centralizing.

phones # + software # + entry/exit points # = scale of decentralization

Focusing on power constraints misses the point.

ArticMine here you are again posting your inkblots. Slow down and try to understand your mistakes. Go take some quiet time and think for a while before you respond, so you don't fill up thread with useless noise.

I am saying that is as the "transaction-related costs" approach the minted block reward, then the Tragedy of the Commons in transaction fees results. This has nothing to do with a fixed per KB transaction fee, but rather the costs of actually processing the transactions. You have to factor in that costs include the fact in proof-of-work mining, that a 0.1% hashrate miner must propagate and validate 100% of the systemic transaction volume (yet he is only paid 0.1% portion of the total systemic rewards, and probably even paid less because of selfish mining and asymmetric propagation costs due to mining on the wrong chain part of time).

And any way, the entire discussion is irrelevant, because regardless, the economies-of-scale in proof-of-work dictate that it is a winner-take-all power vacuum. So you are just wasting your time any way arguing about the transaction fee aspect.

The inevitable mining cartel (presuming Monero becomes economically relevant) will dictate transaction fees in Monero as well, and also control the mining and all the bad impacts (censorship, deanonymization, etc) that come with it.

Sorry. Better luck next time.

I make no such assumptions. What you are assuming, incorrectly I must add, is a fixed per KB transaction fee in Monero regardless of blocksize or market cap. This assumption is fundamentally incorrect as I have explained before because of the adaptive blocksize limit and penalty function ensure that over time the total fees paid per block remain in a constant range when compared to the block reward. Increase the blocksize in Monero by a factor of 100x and the fees per KB drop by a factor of 100x.

Which my paper states very clearly, that is only true because you assume that transaction volume won't be significant enough such that transaction fees do not approach the minted block reward. You assume Monero will never handle any where near the world's volume of transactions and/or that the market cap will rise sufficiently such that the tiny perpetual minted block reward is greater than the transaction-related costs (but given the horrendous O(n²) scaling problem of Satoshi's design, then this assumption also isn't likely true at VISA scale).

But in any case none that can help, because as my paper states very clearly, proof-of-work remains a winner-take-all any way. Thus Monero's perpetual minted block reward does nothing to solve the problem.

The inevitable mining cartel (presuming Monero becomes economically relevant) will dictate transaction fees in Monero as well, and also control the mining and all the bad impacts (censorship, deanonymization, etc) that come with it.

Sorry. Better luck next time.

I waited a few days before responding to this.

The analysis is the paper is correct, except for the where the POW coin has a tail or permanent block reward sufficient to secure the coin on its own. The notable cases with a tail or permanent block reward are Monero and Dogecoin. In the Monero case the net fees paid to the miners (fees less block increase penalties) could theoretically approach zero under the right circumstances, where there is a sharp decrease in the transaction volume. The obvious example would be on Christmas Day. The point in Monero is that fees are not there to secure the coin, that task is left to the block reward, but rather to regulate the adaptive blocksize and deter spam. I would expect gross fees, before any penalties are paid, in Monero to be about 2 - 4% of the block reward so we are dealing with the case where to quote from the paper In this situation since the fees are insignificant and determined by the block reward and the variance in transaction demand, the financial incentive for a centralizing cartel over fees is simply not there.

This is vary interesting

Because the nation-states and banks are powerless to stop the lurch to crypto-currency and the global ledger. They simply don't have globalized jurisdiction. This creates a demand for a world government system, so that regulations can be placed on all countries at once. In this way, crypto-currency can be regulated later after the world government takes form. Until then, the nation-states will find themselves powerless to stop crypto-currency unless they shut off the Internet, which they can't do. Even China will succumb (the people already know how to use VPNs to subvert the Great Firewall of China).


This is why the nation-states will need to support the creation of a world government. Bitcoin is the Trojan horse that forces them to.


Well Bitcoin is traceable if you have the resources of the NSA, but other countries don't have those resources. And more anonymous coins are underway, so yes ultimately governments can't track it if they can't regulate it globally to force a government viewkey to be attached to every transaction. Again crypto-currency breaks the authority of nation-states and renders banks irrelevant. It thus drives the need for a world government and a world bank.


Grasshopper you don't think in sophisticated logic, and that is one reason why you could not ever be a member of the global elite.

Bitcoin is working perfectly as they designed it to do.

Ask yourself this. Does Bitcoin eliminate the need for people to borrow money and will Bitcoin prevent fractional reserve lending? The answer to both is no. And so the business of the global elite is still intact, while they destroy all their competitors with the Bitcoin Trojan horse.


That is of course what they knew you would think. Masterful their plan. They know very well, you could not possible conceive of them making Bitcoin and instead you want to believe that Satoshi Nakamoto is a real person. Lol. Larry Summers has a bellyache from laughing too much.

I don't really get this theory (conspiracy theory that is) about how Bitcoin is a trojan horse by the so called elite. Why would the elite deploy a software that is open source, and allows people to hide money from the government or anyone else but you and the other party?

I mean people that work for bitcoin, if they never cash out and buy with bitcoin... the circle is closed, government can't never tax any of that, they will never know how much bitcoin a person that got bitcoin within bitcoin ecosystem be it by mining or by working in exchange of bitcoin has... so what's the point? If I was the elite, I would be hating bitcoin and having nightmares about it. I don't see how the elites benefit from bitcoin.

I think bitcoin was simply the work of crypto anarchists/hackers. They saw that the future is digital, and that governments will deploy closed source currencies where they have total control. They saw this coming, and released bitcoin as a way to fight against that. Therefore I don't buy the conspiracy theory of bitcoin being a trojan horse, since I fail to see how the elite benefits in any way from it.

Sticks and stones may break my bones, but walls of words can't hurt my argument--if you would stick with what offers the best solution and work towards it--instead of away from it--you may end up in the right hemisphere, but then again, your negativity is good for quality control.

You're missing that setting the goal creates a net effect, it's no longer karate or boxing, it's mma. We aim for a perfection and achieve various degrees of success based on preferred taste--sooner or later, you will get there, or not, but all your negative energy helps

The "of course" will be disproven.

I understand your point is you think competing altcoins is a form of decentralization. But if all of them are not decentralized, then no matter which one you switch to, then you've still got the same "light bulb" (from your analogy) in control.

The wealthy can spread their wealth around to all the important altcoins as well.

The problem isn't solved in your conceptualization. Sorry.