Topic: Gold collapsing. Bitcoin UP. - page 31. (Read 2032247 times)

It looks like Bitcoin*** has been released with the bigger-blocks patch.  Unfortunately, this news will likely be censored from /r/bitcoin.  

Below is Mike's email to the dev-list:


EDIT: It hasn't been censored yet: https://www.reddit.com/r/Bitcoin/comments/3h42cz/bitcoin_is_forked/

Thanks for the feedback.  Again, I think this illustrates an ideological difference between us.  I read what you wrote as:

"By making it easier for node operators to exercise the power they already have (i.e., they can already increase their block size limit), I'm worried that the network as a whole would make a worse decision balancing centralization with Blockchain access than the decision a group of talented developers would make."

The relationship between TXs^2 and market cap held remarkably well until 2014.  Since then, the two time series have become anti-correlated.  I have several hypotheses, the two that I think are most likely being:

1. The remarkable Metcalfe value relationship was just random luck (and will now permanently deviate).
 
2. The Metcalfe value relationship is actually expressing something fundamental about human behaviour and money.  The relationship will re-assert itself when the block size limit is lifted and if growth resumes.  

Both hypotheses will be tested over the coming months and years.

No, fiat means that the money manager states, through a law, that the paper money backed by gold, is just as good as gold, and it comes when the backing and therefore the redeemability is questioned by the market.

Anyway, my post here was to illustrate that bitcoins must be held directly with the public to the largest extent technically possible, to avoid that surrogates appear, and also galloping debt.

EDIT: (The real meaning of fiat after a while becomes nonsensical, when a gold mark is worth a million paper marks, no one believes in it, and they just forget that at some point, a paper mark was in fact worth a gold mark. So when the redeemability is removed, fiat is "out of nothing" as you say. But gold and bitcoin is also out of nothing. They are sound because there is no money manager).

this is true.

Fiat means 'out of nothing'. Money IS debt, and nothing different. It is not paper, and the debt is backed by deposits and securities. A bank creates money, as soon as you take a credit (backed by your deposit).

How do you envisage this working? Can you give some more details? Presumably remove any block size limit altogether. Thus letting it be a scramble to cram as many transactions into the next block, as as time and internet speed would allow?

This would probably lead to a new dimension for mining profitability calculations (currently it's just electricity price arbitrage) We would also have connectivity arbitrage too?

I speculate the future of mining and validation will play out to the point it actually becomes non profitable. Meaning I see a possible scenario, whereby some combination of partial chain validation (think treechains) and massively distributed pooled mining ( think 21inc ).

In this scenario everybody has a mining chip in their device, (a bitcoin RAM equivalent) that partially validates the full chain. The sum of all theses mini nodes fully and provably validates the entire chain with a suitable redundancy. Further to this there would be archival nodes (the various pools, governments banks and big business).

This would mean the block size limit would be redundant, as only those organisations that were financially dependant on full independent blockchain analysis/validation would be required to keep the entire blockchain.

Thoughts ? Or am I barking up the wrong treechain?

We do have fiat money, but the extent of debt is so large that it seems that debt is the basis. It is not, it is the fiat paper, plus the electronic only fiat created in QE. Unredeemable and unbacked. The debt extends the quantum of money while it exist, and contracts the money when it is extingushed by being paid back or written off. So debt is also money, I agree with that, but it is not the base, it is an extension of the base quantum.

I don't cry. I predict.

We don't have fiat money. Money is backed by deposits and securities. You will not get a credit (which is money) without that.

Hey Peter, I am in the process of writing a draft of what might become a BIP, hopefully can push something (very early & incomplete) to github soon to serve as a start on this. While further thinking about the whole blocksize mess, I had the following idea and I do not know whether it has been discussed yet:

The intend is to make the block size limit (BSL) configurable, command line or edit box, with eventually no default. The next step along this line would be - when thinking about BSL as an agreement that must be reached through communication of all interested parties - to have a BSL that can be dynamically and on-line set from outside the Bitcoin core software with something like a 'BSL governor', for example through a secured JSON-RPC call 'setmaxblocksizelimit'. Such as an external program that weights the input of several miners through their twitter feeds for example (not that twitter would be particularly good way to do it), or someone else might implement a scaling limit depending on a moving average or even anything noone even thinks of right now.

Now, what I noticed is that, to some extend, the hard fork/no hard fork split is a false dichotomy: Esentially, we have chain splits all the time in the way of orphans. An enduring chain split will only happen if people value two chains, or at least the survival of 'their' chain more than having a common agreement and single money system. (This is, by the way, a core incentive in Bitcoin, as laid out by Satoshi back then.)

Now, with 'BSL governors', there would be no need to make this a hard decision 'orphan/no orphan this block because I dislike the size of a block in this chain'. Instead, a full node could make its decision softer: Its BSL governor could for example look at the hash power longest chain, and say: I'll limit blocksize to 1MB when there is no hash power longest chain with more than 5 blocks (or any other figure) ahead of the 1MB one I am on.

This way, the full node would create a disincentive for miners to make bigger blocks, while still allowing it should the need for a larger blocksize be strong enough. Miners will have an incentive to tread carefully, dipping their toes, for example with 1.1MB blocks first, and full nodes can weight their needs by choosing a trade-off between influence on miners and their local chain reorg risk. This would make what you call a 'gray limit' and I think is very *visible* to the user and also *flexible*.

Thoughts?

By the way, the point in time where a gold backed money becomes a fiat money, is when there is just a tad more paper than gold in the system than the people are comfortable with, and a run starts. The state proclaims that the been (ref example) is just as good as gold, and apply a law to support that illusion. The law is the fiat point.

If you are relying on simple bullying tactics to defend your position then I fear that you are already tacitly accepting a high possibility of defeat.

I like your analagy of Gavin as Freedom Fighter (Sandinista). It is, in an oldskool fashion, quite apt.

The Sandanistas took on the american hegemony in South America, and despite the best (illegal) efforts of the CIA with the Contras, they prevailed.

Daniel Ortega is president of Nicaragua today.

Here is how a fiat system can be started and developed. Imagine going back to the time of gold or silver backed money, and you need to establish a brand new state. The state is established as a spinoff of a bigger state. This has happened and can happen again. The people of the land thinks "Our own free country! Great, I support that." The state wants or needs to establish a money system starting from nothing. What can they do?

They can ask the inhabitants to voluntarily hand over some gold, or they can loan it. Say they are able to collect a million ounces of gold. They establish a money unit with a new name, say a bean, named after something they are proud of producing in that country. They scale it to be close to the value of the unit in the neighboring country they just disconnected from, to lure people into loaning gold for the new unit. Based on the amount of gold, and the desired unit value, they decide on a number of beans to create. The gold loans from the inhabitants will then have the form "The state owes to mr Smith the amount of two thousand beans to be paid at date (10 years in the future)".

Now they have a gold backed bean money system. The state starts with prudent money printing, just a tad over the gold posession, the beans are backed and redeemable. Now the crucial point: The state can now print a few beans, and buy gold from the inhabitants, thus expanding the state's posession, and reducing the inhabitants' gold posession. They can also pay back the gold loans with beans. Everybody are happy, because paper is more practical than gold anyway. Then we soon come to the point where all the gold belongs to the state. It can then print even more, and when a run happens on the state, they devalue the beans compared to gold. They can keep the redeemability, the state is suddenly solvent again. Or they can just remove the redeemability, to the people it does not matter much.

This can happen, not because gold is not good money, but because gold is not good enough money.

When the current fiat system collapse, one or several new system backed by gold, or some other valuable commodity will be attempted, with the same result eventually.

It can happen with bitcoin too, but we can hope that it will not, because some qualities of bitcoin are better. The qualities that support wide direct holding of bitcoin in stead of surrogates, and those are the ease with which the individual can safely store, use and hide the money, without depending on third parties. Lots on lots of individuals, which means we need the absolute maximum capacity within the limits of the proverbial gravity.

What do you believe. Sorry to derail a bit but the apparent unlinking itself is reasonably interesting.

Oh come on Tvbcof.  The winky face means that I'm admittedly pushing it with what I wrote in red on that plot.  It was designed to tease Brg444 and I don't necessarily believe it myself.

True.  Very few people choose to participate as a percentage of the world's population.  In otherwords, they freely vote with their feet.  For some reason all of the Bloatcoin nitwits think that is going to change after half a decade and jubilation is just around the corner.

Bitcoin has the potential to be very useful for certain things and under certain circumstances.  Indeed, as a backing store for various tuned crypto-currency solutions (aka, sidechains) it would not take anything catastrophic in mainstream-land to create such conditions.  The Bloatcoin guy's tasks are to nuke Bitcoin before or during such a time of need.

I would argue! Bitcoin is extremely democratic by its nature

The "populism of the 1MBers" is not your concern.

Your concern is the multi-year duration and multi-billion-dollar magnitude of Bitcoin's current economic majority.

Are you going to be the first brave fellow to defect from that imposing majority by accepting Gavin-tainted XTcoins?  No?  Then you are just a poser.

In the remote possiblity XT becomes a matter of more importance than the hype, mirth, and scorn it generates at present, MPex and other 1MBer Elder Whales are prepared to use substantial (possibly exhaustive) portions of their extraordinarily massive war chests to repel 8MBer attacks.  To them, this is Holy War, with barbarian Gavinista hordes clamouring for a Free Shit Junta at the gates of their bespoke civilization.  They are more of a mood to impale heads atop spikes than reward with compromise Hearn's attacks on decentralization, Tor, and the consensus process.

Are you still sure you want to risk your tiny stash playing Hard Fork Poker with such ultra-high-rollers?

Before you answer, please take into account that nodes by default prioritize tx moving older coins, and the Royalty of La Serenissima possesses, in great quantities, very old coins.

What will you do when the limit isn't raised within the next 12 months?  Continue to cry wolf?  Self harm? Or admit being wrong?   

Yes, the populism of the 1MBers has no power, neither in the threads of the elite nor anywhere else. That's why the limit will be raised within the next 12 month.