Topic: Gold collapsing. Bitcoin UP. - page 572. (Read 2032291 times)

Your prose is amazingly polished and clear. You are a professor of something. Philosophy is my guess

I see centralization-decentralization as a spectrum. With POS the cursor is a lot more toward the decentralization side of the spectrum.

For example with Bitshares there are 101 validating delegates, admittedly a single entity can set up several delegates but if it become problematic the users can fired that entity really quickly.
With NXT I think the entities which together have the power to validate the transactions are several dozens, or even more.

So basically I think POS coins have structurally a better decentralization than PoW coins by almost one order of magnitude, which is huge since there is a non-linearity of the negative effects of centralization (but I am not convinced that the greater centralization of Bitcoin is a fatal flaw).

I know practically nothing about PoS coins; unfortunately the forums I have been reading only mention them to dismiss them.
Do you think that PoS solutions are immune to miner centralization?  Or will centralization only be delayed?

In short, no. There is significant power but not absolute power.

http://hackingdistributed.com/2014/06/19/bitcoin-and-voting-power/

I have to chime in on this one.  
When debt is created the interest to repay the debt is NOT also created, therefore the entire system is rigged to be a literal PONZI. It is a pyramid scheme in which the only way to repay interest is for more people to go into debt.  Repaying debt doesn't shrink the money supply as much as the original issuance expanded it because the interest added to the debt makes the total debt bigger than the issuance.

Of course.

back to troll

Sorry, I was not blessed with the necessary Faith.  

Put your feet on the ground again, please, and wake up.  We cannot create anything even remotely similar in robustness and permanence to a new law of physics.  The Bitcoin network is a minuscule hardware and software artifact, that survives only because a few thousand people are willing to keep it working.  If a few hundred (or maybe even a few dozen) of those persons changed their mind, the network would stop.  Or the protocol could be modified, e.g. to randomly toss coins around and make half of them negative, or whatever.

It may seem impossible to get those people to agree to that, because of incentives and bla bla.  But, physically, the energy required to change the neuronal state of a million bitcoiners, so that they start hating the thing, is maybe less than the charge of an AA battery.  And the wiring in their brains is such that one would not need some sci-fi mind-reprogramming zap gun, but only send the right signals through their eyes and ears.  I don't know how to do that, but it is absurd to claim that it will never happen.

The point, again, is that all human constructs are astronomically small and fragile; doubly so for virtual constructs; triply so for virtual constructs -- like bitcoin, the euro, or the US democracy -- that depend on a collection of humans behaving in some 'rational' way.  

Bitcoin in particular has already failed in its primary goal.  The network is still churning, and most bitcoiners still believe (or pretend to believe) that it has proven itself robust; yet it is anything but.

Bicoin, as stated by Satoshi, was designed to be a system for p2p transmission of money that does not require trusting a third-party authority.  But his solution, the Bitcoin protocol, does not do that.  The protocol still depends on trusting that the miners who retain a majority of the mining power are interested in preserving the network.

Satoshi apparently assumed that mining would be fairly spread out among the users, who would be well spread out over the world.  From that assumption, one is expected to conclude that any majoritarian subset of the miners would be so large that they would not collude, and could not be coerced, co-opted, or tricked into any particular behavior.  From that assumption, furthermore, one should conclude that there would be a majoritarian subset of the miners who would have a simple, greedy and rational behavior; meaning, that they would choose to play by the rules, if that choice maximized their expected revenue from block rewards and fees.

However, things did not turn out that way, and in retrospect it is perhaps obvious that they couldn't.   The total reward paid to the miners turned out to be large enough to make mining a very profitable activity, provided one could muster a significant fraction of the hashing power.  To maximize his profit, a miner had to increase his total hashing power and lower his operating and capital costs.  As we know, these facts led to the development of hashing ASICs. Economies of scale then made large miners mor eprofitable, and this advantage led to the extreme concentration of mining power that we see today.

The largest miner will usually grow the fastest, so in time it will have a majority of the hashing power all by itself.  The GHash.io pool briefly reached this state, but then it claimed to have voluntarily limited its growth to remove that very visible risk.  Even so, today the 4 largest know mining entities have ~54% of the total hashpower.

I don't know whether this size+technology race has been going on since the very beginning, or whether it started only after the price rose to a certain minimum level.  If Satoshi had chosen a different reward and fee schedule, or if bitcoin had never attracted the attention of speculators and hoarders, then the price today would probably be around 1 $ or less, the total mining reward would be only ~3600 $/day,  and perhaps the race would not have started yet.  However, if bitcoin (or any similar crypto-currency) were to gain widespread use, it would have to reward its miners well in order to ensure a robust network;  and then the size+technology race would occur anyway.

By now, everybody should be aware that an entity or cartel with the majority of the hashpower has absolute power over the network.  For starters, it can effectively disable the whole network and starve other miners, by selfish mining of empty blocks.  But then it can also use that capability to "convince" most users (including exchanges and payment processors) to accept changes in the protocol (such as extension of the reward schedule and/or increased fees). In the same way, it can convince most other miners to cooperate with the cartel.  These changes would probably include details that further consolidate the power of the cartel and gradually lock the users in, so that they will have to accept more radical changes.  (In general, any entity that can jam some process for a sufficient time can force the users of that process to accept anything that is not as bad as the jamming itself.)

Therefore, it is already a proved fact that the bitcoin protocol does not work. All users now have to trust a 3rd party authority, namely those 4 companies.  These miners must be trusted not to collude, and not be coerced, co-opted, or tricked into violating the network's "terms of service", such as inviolability of accounts, irreversibility, no-double-spending, etc..  That assumption could have been justified for a set of thousands of miners, but not for a set of 4.

It does not matter whether those 4 companies will form a cartel, or will abuse their power.  The mere possibility of them doing so already requires us to trust that they won't.  And it does not matter if they will always seek to gather the most bitcoins, or if they will have other external motives: in fact, the concentration of hashpower, the takeover of the network by a small majority, and the changes of the protocol are all predictable outocomes of the assumption that every agent will behave in a greedy and rational manner.

The price does not matter, too.  It may recover in the next few months, perhaps even go to a new all-time high.  But the only advantage that bitcoin was supposed to have over other payment systems -- not being controlled by a central authority -- is not there. Inevitably, it will lose is "market" to traditional systems; that are just as centralized as bitcoin, but much more efficient.  Even those who love bitcoin because of political idealism will abandon it -- precisely because it does not meet their ideals.

This is not my own view, of course.  This fact has been known for quite some time, and has been pointed out by many critics; and no one has provided a glimmer of hope that this flaw can be corrected.

Among bitcoiners, I still see a lot of denial, with people disputing the ability or willingness of a majoritary cartel to exercise their power, or assuming that a larger coalition of 'rebel' users can prevail over such cartel, or predicting that individual pool members would desert the cartel.

But in the last couple of months I have been seeing also many bitcoiners who seem to have internalized the fact, and are now scrambling to find a way to save their investment -- or at least convince the public, for a while longer, that they have found a solution and are working on it.

EDITS: Grammar and typos

tell me what a SNARK allows. 

man, that is depressing when one sees "un_" and extrapolates everything to mean the same thing after that  of course you're right.

but aren't UTXO also held in memory?:

UTXO are tracked by every full-node bitcoin client in a database held in memory, called the UTXO set or UTXO pool.
http://chimera.labs.oreilly.com/books/1234000001802/ch05.html#tx_inputs_outputs

i assume you mean high volumes of unconfirmed tx's.  if so, how do we make the transition from the existing standard low volume method to IBLT?

how is this possible?  i thought the unconf tx sets differences were supposed to be currently quite low which is the reason for IBLT in the first place? (sounds like you're saying we, in fact, don't have enough volume to make IBLT practical as of today)

so how do miners know which unconf tx's are known vs unknown, ie, which to incl in the IBLT to enhance block acceptance ?

how do you arrive at 500KB or 1MB?  or are you just using the current 1MB block limitation of today into which you would fit the IBLT?  so are you saying that a 1MB sized IBLT equals 1500 diffs or an estimated 1% difference in unconf tx sets across network nodes or an equivalent 150,000 tx's block?

I do not agree with red underlined sentences.

 - SNARK is developed
 - cold wallet and exchange account are 2 different things
 - there is not problem to add/implement OP_SNARK_VERIFY into bitcoin
 - 2wp is just fine  1-way) deposit  and 2-way) withdraw

2,5+ billion euros bankrun in greece within december only. acknowledgedly by anticipation of Syriza winning the election and thus resulting in a possible exit of the euro zone...

http://www.spiegel.de/wirtschaft/soziales/neuwahlen-griechen-heben-2-5-milliarden-euro-von-konten-ab-a-1010865.html#ref=plista

note that the first media reporting it is german..

OK, so the bounds.

Note that UTXO is unspent tx outputs held in the blockchain, but unconfirmed tx are in node mempools, pending inclusion into the blockchain by miners. What Satoshi achieved with his PoW blockchain breakthrough was consensus on the whole transaction history, and resulting UTXOs. I think of that as the steel-work in a skyscraper. What IBLT does is go to further by enforcing consensus on unconfirmed transactions, it pours concrete into that steel reinforcing. This is a significant improvement to cryptocurrency, but it is truly effective only at high volumes, volumes too high for the existing standard method of block propagation.

The reason is that right now the whole network could agree on the same 2000 unconfirmed tx, real-world business, but the next block mined can contain none of them. It could be full of previously unknown gambling dice-bot spam tx, a set which is 100% different. Because these tx validly spend UTXO, then the block is accepted, and the 2000 unconfirmed tx have to wait for the next block. However, when blocks are too big to propagate in the existing method, and require IBLT, then miners have to rely on the majority of the nodes knowing their unconfirmed tx in advance, they can only include a few unknown tx as the more unknowns they include the more likely their IBLT will fail to get decoded, and it gets rejected.

I expect IBLT blocks to be a constant size, starting at about 500KB or 1MB and staying at the same size for a long time, then increasing in steps, perhaps doubling after a number of years, just as the block reward halves periodically. A 1MB IBLT contains about 1500 differences, which means a 1% difference in mempools allows for 150,000 tx or 60MB disk blocks. A 32MB IBLT could support 3GB disk blocks, or 20,000 TPS, as by then differences of <1% should be the norm.

Newest video from Cypherdoc's favourite artist:

https://www.youtube.com/watch?v=lEBP9dpVM70

Marc is the best kind of representative/cheerleader that BTC can have.

Great stuff! And yes, you are totally misinterpreting him if you think he doesn't understand the basics of the bitcoin protocol.

Marc made 26 great tweets today defending both Bitcoin and BTC. He clearly does not believe that Bitcoin's value is the blockchain and not BTC, which is impossible since the two are inseparable.

https://www.coinprices.io/articles/marc-andreessen-defends-bitcoin-on-twitter-in-latest-tweetstorm

Population not growing?