Topic: Gold collapsing. Bitcoin UP. - page 576. (Read 2032291 times)

I felt those econ 101 insults were a little harsh untill I read this line.

Real world economic constraints are a limit on the supply of mining gear, just the risk that it could be a bad investment validates the reward.

Have you seen the difficulty lately, it moved against me despite the price drop and R&D lag before gen4 ASIC's are implemented.

Crazy but some schmuck somewhere thinks it's a good idea to burn real world electricity and double digit MW of it. All to earn a fiew Bitcoin.

I bet it's him dumping on the market right now to cover overhead, cheep coins for sure if it is him.

I see, I guess we're back to square one whereas I believe at this point it will be trivial for miners to equally mine ANY chain with supporting considerable value so as to substain an ecosystem of co-existing blockchains without any incentive to favor a particular one.

Miners have X amount of hashing power. There is no valuable argument IMO for them to cut short their profits by allocating this hashing only to one particular sidechain.

I think I have mentioned to you previously that I consider cryptocurrency to be in some sense the democratization of money. Of course, this means we should expect 2% inflationary sidechains to eventually show up. They might indeed gather considerable traction from those who favor inflationary economies. On the other hand, there's a reason why you, Adrian-x, and a bunch of us here consider fixed supply money to be favorable : we believe it will can eventually lead to a healthier economic system. If we are right then the economic majority will, at last, have a free-market alternative to consider other than their inflationary currency.

MM NMC is converted to BTC at a market rate.
MM a SC is similar while it's small, but I can hold the transaction fees regardless of the market and convert at a fixed rate guaranteed by the Bitcoin protocol.

In 10 years when transaction fees supersede Bitcoin block rewards the blockchain with the greater revenue will attract the most mining, as time goes on it becomes more unlikely it will be Bitcoin, the skeptic in me believes the economic majority who believe a modest 2% inflation is healthy for an economy will prefer a blockchain with that feature.

Doesn't matter if the transaction fees are high or low.  Doesn't matter if the inflation-based reward 50 BTC or 0 BTC.  Doesn't matter if a block is empty or filled with 100,000*60*10 transactions.  The amount a sha256 miner nets approaches zero.  And if Bitcoin valuations fluxuate that net will drop below zero.  This due to the simple fact that there is no limit on supply of gear.  Only a lag.

None of the Libertarian brain-trust (justusravnier, cypherdoc, etc) want to touch this one.  Surprise, surprise.

The answer I was waiting for is that actually mining will be profitable for some (marginally) and not for others depending on various factors  (operational costs, economies of scale, ability to leverage otherwise idle resources, etc.)  What will almost certainly happen will be that alternate revenue streams will be tapped.  In http-land one such tap is known by the metric called 'eyeballs' and it's why you see ads all over the place.  Another tap is for intel.  Some of it you see when you notice targeted ads...some of it you don't (normally) see at all...  'Where who spends what' is an especially rich vein of actionable intelligence, BTW, and one the operators can easily get once they've got control of the system generally.

The salient point is that the only outfits who will be competitive in providing this support (and currently Bitcoin is wholly dependent on sha256 mining) are the companies who are already giants.  Perhaps also minor giants who sell intel to the major giants (both of whom are under the thumb of Big Brother.)  Well OK fine you might say.  But I've already got a Visa card and a PayPal account so yet another such thing doesn't hold much interest for me.

What does pique my interest is a solution which can be feasibly operated covertly in people's garages scattered about the world in a SHTF scenario.  That's still the case for Bitcoin at the present scale an it's something I don't want to lose.

I fail to see the point you are trying to make.

Your argument seems to be that sidechains change miners incentive who can now earn subsidy for their work without having to secure the Bitcoin network.

Can you explain how this is any different that a miner who at this very moment can decide to MM Bitcoin and Namecoin?

Why would a miner MM a BDS?
Transaction fees, nothing but a good old honest 1:1 exchange is needed the token being the BTC substitute on the BDS blockchain. (Sure there will be SC with inflationary block subsidies call them what you like, I'll call them SC's)

Just a thought but alts add more value to the crypto market than SC, the reason those that fail illustrate the markets preference for a simple better money. SC will not succumb to the same market evolution. Alts that aren't scams will provide new utility.

Again, this doesn't seem quite right to me.

"BDS" that give a token (block subsidy) are alts. They are in nature inflationary and by no means can you redeem these units for equivalent amounts of BTC.

Remember, you can only return to the mainchain what has been locked out of it.

In a properly implemented, ideal sidechain there is no block subsidy.

Good point, I'd be more open to distributing the network tragic in a manner similar to the way SideChain would manage it when we have to manage that type of bandwidth.

From my perspective as things stand today the proposed SC change to the Bitcoin protocol has more risk than benefit.

Agreed.  I didn't mean to understate the importance of IBLTs; I just wanted to point out for readers that IBLTs only improve block propagation (still an important problem) … and that each TX still needs to be processed by each node (linear BW scaling with TX/sec).  

how does the IBLT scale with the size of the block UTXO set?  linearly or by some other ratio?

edit:  actually iirc, it scales with the size of the difference btwn UTXO set estimates across the network.  iow, a UTXO set estimated to be 99% similar across the network will allow a miner to send a smaller IBLT when solving a block than a UTXO set estimated to be only 89% similar across the network.  is that right?

As you put

1. Mnt Gox, can run off with one's Bitcoin or a Bank or service could function on fractional reserves untill there is a confidence call and a proverbial run on the bank.

2. Is not necessarily parasitic, if it claims to be a better money sure it's 100% parasitic, there are other ways to achieve the same security one eg. Open Transaction with federated oracles. But any innovative multisig decentralized authoring system could achieve this with no change to the BCP.

3. MM is a good idea, while it limits innovation to just PoW, it can tap into the sea of hashing that goes to waste.

The way BlockStream has proposed to manage what you call BDS is to have in principal the multisig authorizing of Bitcoin transactions in and out of different secured ledgers, this will alow miners to MM BDS's in exchange for a token that is guaranteed to be redeemable in BTC by the BCP.

The perversion is miners could MM a BDS earn additional Bitcoin, without being forced to mine on the BCP or use there hashing power to protect the BCN.

MM = GOOD, but MM for BTC* is an attack at the very incentives that protect the BCN.

*MM alts are subject to market force, so while you can exchange them for BTC, the BCN is unaffected by them, if they gain value it will be a utilitarian value unsupported by the BCN, and thus just grow the ecosystem, otherwise it will shrivel and die as a scam. 

MM a BDS that gives a token that is redeemable for BTC regardless of market rates allows miners to earn BTC equivalent tokens without contributing there hashing power (securing the Bitcoin blockchain) on the BCN, or any work to the greater economy. I.e. it has similar characteristics to our financial system today. What changes is just trust the central bank now becomes just trust the protocol. Making a change to the BCP to alow this is evil at the core.
 
Your conclusion is correct but I'm not sure how deep your understanding is, miners can manipulate (by mining empty blocks in the BDS or the BCN, controlling the flow of BTC and herding markets and controlling money flow, even restricting money supply on demand.

Yes, but "simply" is an understatement. Real-time tx cross the network uniformly, with enormous capacity already available, perhaps 1000 TPS. It is block propagation which is time critical where milliseconds count. When a block is solved the rest of the mining network is then hashing uselessly until the block is fully propagated. Incentives are perverse, against large blocks which are ultimately needed to fund the network via fees rather than rewards. Removing the bottleneck for block propagation is a huge win for scaling Bitcoin.

It will cut full-node bandwidth requirements by no more than in half. 

IBLTs make propagation of solved blocks orders of magnitude more efficient, but that's only because the nodes already have the TXs in mempool.  The TXs still need to be processed by each node as they're broadcast across the network; IBLTs simply prevent the TXs from being transmitted a second time with each solved block. 

Make that 4 TB while you weren't paying attention.

http://www.newegg.com/Product/Product.aspx?Item=N82E16822178338

6 and 8 TB are also available, but more expensive. 12 TB coming in a few weeks.

Two terabytes of data has a cost of transportation to it, there has to be some feedback into the coin at some point.    It would not be worth propagating that data without a decent set worth like bitcoin has, alot of the side chain coins arent really worth much so how could they be mixed in at some cost like this

Exactly.
And, the demand to support 100k TPS will not happen anytime soon, maybe two or three decades from now. I remember, about 1990, buying 30MB hard disk drives and thinking they held a lot of data. 2TB is common today, and by the 2030s high density optical data storage could be standard:


With that, IBLT can slash bandwidth requirements by at least 2 orders of magnitude. Only full node bootstrapping and re-sync will remain bandwidth intensive.

The problem is not so much the storage. Bandwidth is where you'll run into a bottleneck

Lets put problems in perspective, when I'm faced with the problem of managing 2.2TB/day in Bitcoin tx's the value stored in my 10 BTC that I've held onto all this time will take my hobby to a whole new level.

Building that data storage system would be a labour of love many will do it just to make sure there 10 BTC are secure.

Keep up the great work, Adam.

no offense, but it is difficult talking to you about this with all the sarcasm. 

Adam, is there a problem with my logic?