Topic: Gold collapsing. Bitcoin UP. - page 568. (Read 2032291 times)

That would destroy the confidence in Bitcoin, therefore the value of the bitcoins they want to earn.

For the same reason, they wouldn't be in favor of increasing the reward per block (although that may seem tempting to some naive souls without skin in the game).

There is no fixed number, of course. Rather, as the number of independent entities in a majority set of miners increases, their interest will be more aligned with the interest of the users.  (This is true of democracy too, by the way.)

In the case of bitcoin, one additional problem is that bitcoin ownership is highly concentrated too, and the largest holders are not miners.  So, even if the protocol were somehow fixed to require consensus of all miners (instead of just a set with 51% power), the miners would still be largely disjoint from the users, whether one counts people or bitcoins held.  So the miners might still change the protocol to increase their revenue at the expense of the users.  (Would PoS be a partial solution to this problem?)

The likelyhood of getting N mining entities to cooperate with a protocol change attempt depends also on the benefit that the miners will get from it.  For example, I would guess that nearly all of them would approve a postponement of the next reward halving.

Shorts at an all-time high and continuing to rise with price.  Over 23,000 coins on loan.  I feel a squeeze coming on.

Bitfinex continuing to jam forward

And I'm pleased that you see the potential in IBLT.
I know that your concern is that Bitcoin remains viable in a global SHTF, Katie-bar-the-door event. This is important, and I think that Bitcoin having IBLT capability beforehand will only strengthen it in the face of such times.

 - snip - technical details of neat trickery

Markets are good at dealing with that problem. Look at google adwords. Millions of tiny web sites insert spyware ads for a bit of extra revenue and google gets a huge datastream.

That is not true in a lot of cases, and this case in particular.  This because the intelligence only has value if the antagonist (in my opinion of things) has a certain quite large global footprint.

I just skimmed the info about IBLT yesterday to figure out what the fuck that was.  Seems kinda cool.
....

edit: Inverted Bloom Lookup Tables.  I hate it when people use acronyms to much and to early for the average reader...  Basically they are a condensed way to notate a list of transactions (aka, a block.)  Thus, if one already has the transactions (because they've been listening on the same network and the network is working) they can assemble the same block as someone else and be sure it is right rather than download the block containing the same data they already have.  (As i understand things.)

If there is revenue stream, it will be tapped, regardless of what other sources of revenue there might be. Those who don't tap it will be uncompetitive. It doesn't really matter if the baseline is zero or nonzero.

So this might provide a credible support foundation (as opposed to miners tapping other revenue streams like milking the userbase for intelligence data.)

http://gavintech.blogspot.ch/2012/05/neutralizing-51-attack.html

SCs will help too, it will be backup network :-)

I fully agree that the banking sector is an oligopoly.  And the same is true of the economy in general.  And centraliaztion of the economy invariably results in centralization of political power and collapse of the democracy.

But I do not agree that bitcoin is somehow different from banks. Because:

* The same economic process that created the banking oligopoly has already created a mining oligopoly; namely, the big fish grows faster than the smal fish, and may even eat it.

* The mechanisms that are supposed to protect the bitcoin users and the protocol from abuse by the dominating cartel do not work:

** Acting in its self-interest, the cartel will be careful not to destroy its market, but will try to maximize its gain in the long term;

** The cartel will charge monopoly-level prices and provide monopoly-quality service;

** Users who object to the cartel have no alternative except to do without the service, or to use a much inferior one;

** For that reason, most users just accept the cartel as a fact of nature, and even try to be friends with it;

** For that reason, the cartel can define and change its terms of service, and not even a supermajority of the users can stop them;

** New providers (banks or miners) who want to enter the market and survive must submit to the cartel;

** Therefore, unhappy users may take their money to another bank or miner, but cannot break free of the cartel's power;

And so on.

By the way, a majority cartel could, by following the same script outlined in my reddit post, also undo the Bitstamp heist.  All it needs to do is block withdrawals from that address (which it can do immediately and unilaterally, by its veto power), and then force the users to upgrade to a version of the software that includes a built-in table of exceptions: transactions that violate the normal rules, but should be considered valid anyway.  For the time being, that table would have only one transaction, moving those 18'000 coins from the thief's address to the new Bitstamp's address.  The input would have 'FuckAllThieves' as the signature; which of course is not valid for that address, but the exception table will override that. 

This change to the protocol will surely cause more revolt among the fundamentalist users than the mere extension of the reward schedule.  On the other hand, it would be much easier to justify to the general users, since it would undo what is universally viewed as a crime, redress the loss of the victims, and create a powerful deterrent of future bitcoin thefts.  In fact, this hack will probably make bitcoins more valuable, increase adoption, appease hostile governments, etc. etc..  And the non-ideological users are already used to the banks doing that sort of thing.

And you can see how this will end.

The fact is, you do not really own your bitcoins, even if you are the only person who knows their private keys. Since bitcoins cannot exist outside the blockchain, they are actually owned by the miners.  Your bitcoins will stay or move only if and where the miners are willing to keep or move them.  At present, the miners will only move coins  if they get a transaction request with the proper signature.  However, if a majoritary subset of the miners agrees to do something else, they will have the power to force the users to accept it -- as long as it is less harmful to the general user than being cut off from the service.

Just like them banks.

Bitfinex continuing to jam forward

Obviously the attacker will not do that.  It will ignore all blocks that the orthodox miners put out, and continue mining empty blocks using his last mined  block as the parent.  Since the attacker has more power than the orthodox miners, his empty chain will eventually outpace every orthodox side branch, and all the orthodox blocks in the latter will then be orphaned and discarded by all the orthodox clients.

Thus, every transaction request that the orthodox clients issue will either stay unconfirmed forever, or become unconfirmed even after having been confirmed several times.  Whereas the clients who upgrade to the cartel's version will not notice any difference.

1) There are two competing chains where one chain has only the attacker's blocks and the other chain has the honest miner's blocks. The goal of the attacker is to make their chain with their inclusion rules the longest. The network here can optionally choose the honest chain (which is what Gavin's proposal does). It also require 51% to pull off, which I don't think is possible anyway.

The size of the user base and the price are not important for the experiment. But the distribution of mining power is.

those 4 companies (which may actually be only 3, or 1, or may become 1 next year)

Despite your claims to the contrary, the truth is that we don't know whether the experiment will continue to work or not.  But so far it is working, and every month that passes by where it continues to work increases the chances for continued success.  There are risks: the dwindling numbers of full-nodes, mining centralization, core development centralization, etc.; however, there's also a growing community of talented people passionately working to address these risks.   If it does work--if Bitcoin remains decentralized and continues to grow--then not only will it represent a great advancement for economic freedom, but it will also put that trillion-dollar pie in the sky within arm's reach.

2) The blocks from both the attacker and honest miners build on top of each other in a single chain. In this this situation the honest miners include all transactions skipped by the attacker, and the attack fails.