Topic: Gold collapsing. Bitcoin UP. - page 599. (Read 2032266 times)

I'm not sure if you know but people who can code in bitcoin core receive frequent lucrative offers (eg like $500k) to code altcoins.  Devs all received them, and rejected them.  The only people who took such money was Peter Todd (I think busy at $250/hr), however as I understand it he only takes that work with the caveat that he can work on decentralising bitcoin or other tech that is mutually useful to bitcoin.   A few of these guys have almost no bitcoins or spent them trying to do startups or such things.  I think thats a pretty clear evidence of intent to do the right thing.  They have more fealty to bitcoin as a concept and doing the right thing than putting food on their table.  And also disdain for ethics of pump & dump business models that have victims at the bottom of the pyramid.

You can view that while in theory some one could fork bitcoin if Gavin went nutso on something really bad (or was blackmailed into doing something dodgy) or something, that the community could fork the code.  However in practice there is also realistically a shortage of people with the skill set to maintain and create security patches for a fork, so while the desire to do it would be real, the number of devs is a problem.

As Greg mentions here thats something we thought was important to improve - train more core devs - so there is more decentralisation.  http://www.coindesk.com/gregory-maxwell-went-bitcoin-skeptic-core-developer/

Secondly basically there isnt anything thats going to happen in the core that a consensus of this group of people dont agree to.  And they listen to feedback and want to keep the social contract and understand that contract.  In fact their view is ideally its impossible for them to not keep the social contract (for their own personal safety as well as desired outcome) because the bitcoin network is really controlled by the economic majority.  Thats kind of what cant be evil is about, an attempt to replicate that type of thinking into a corporate structure to fail-safe it.  Not even miners can fork the protocol if no full nodes nor users like the change.  That effect holds companies honest to bitcoin ethos - companies are dead in the water without developers.  As I said our company was founded by core developers.  And we actually view it as a feature that if we all disagreed vehemently with a strategy the company would have a problem - like a technical inability to do the thing we disagreed with.

Its actually in the companies interest to do the right thing as a company also, in terms of fiduciary responsibility because something bad for bitcoin ethos will likely be rejected by the bitcoin user & business community.

You might imagine given the shortage any core developer could walk out and get  job the next day.  Even outside of bitcoin its a pretty uber-geek architect level crowd in terms of employability.  But right now the only hope of doing something might be Peter Todd (however he's pretty rabidly pro-decentralisation, pro-anonymity (eg stealth addresses etc), anti-censorship (work on proof of publication and end-to-end policy full node only exploration with tree-chains idea) etc so I doubt he'd be interested to do something bad for users), or perhaps Mike Hearn (who sort of floated the idea of red-lists though I'm not sure how serious he was).  However I dont think Mike did a lot of core development in years, more working on java wallet library and apps.

Sidechains may also be good for that - an escape valve - people who want to do crazy stuff, can go do it in a sidechain, that no one (who cares about bitcoin ethos features) would use.  Vs try to coerce legally or otherwise developers into subverting bitcoin itself at its core where there's no choice left, and bitcoin risks destruction.

In summary yes we thought about this stuff, and outside of some disagreement that sidechains create more risk than they remove (I say they remove risk, because bitcoin is exposed to offchain risk & monetary shocks from eg mtgoxings, such that sidechains are a clear improvement over offchain economically), I'd imagine we're in violent agreement on the ethos of bitcoin and whats are the important aspects of idealised bitcoin features & ethos.

Feel free to suggest protocol improvements.  Eg other ways to firewall features (eg hardened vm per feature inside core) or whatever.

Adam

Death also does this, but I am not eager for it.

Yep.  Bitcoin has a lot to offer, and some of those things are not possible for the legacy systems to mimic.  Particularly sound money, no counter-party risk, irreversable transactions (seizing and freezing basically prevent that outside of paper cash, though even that is partly relying on fungibility laws or it could have reversibility problems).  Smart-contracts that are strengthened by no counter-party risk and irreversibility are one of the most interesting advantages I think.  Without irreversibility and no freezability a "smart-contract" isnt smart, its just an electronic contract and we already have those.  Ultimately if you combine it all you could rearchitect the financial system to largely remove systemic risk, add competition legacy systems cant react to (they intrinsically need their governance costs).  This is why people gave us $21mil.  Bitcoin all-in is a big deal.  Sound-money is cool, but its only part of the picture.

Even if bitcoin transactions ended up costing more than headline fees for some transaction types, but it would still be worth it because of those features, the legacy system has higher costs, its just those are appearing in other places or disguised in the price.  The dispute resolution cost and auditors and governance and separate of duties and systemic risk and strong relevance of credit rating create an environment that must charge higher fees, and can charge much higher fees on top because of the barrier to entry to obtaining a corporate credit rating and reputation.  With bitcoin technology the product has the credit-rating, and is subject to real-time audit like bitcoins real-time assay.

A good day to buy more bitcoins.  Its cheap at the price and most do not understand this potential.  Its like 1990s internet tech stocks.

Adam

I guess you mean:


I guess the response from myself and GMaxwell kind of drifted off the topic of your question.

Sidechains are not a proprietary technology.  Everything is FOSS, open IP.  And we invested a fair bit of mental energy and legal review already into making sure it stays that way, even if blockstream management were someone replaced or blackmailed; to imagine yourself or a company a perpetual lifetime role is naive, and we've seen it before eg digicash patents got sold by the investors when they went bankrupt to some company that sat on them, preventing people who wanted to innovate using ecash.  We're all anti-patent and want to avoid that kind of crap creeping into bitcoin.  I have some first hand knowledge that some companies are patenting things related to bitcoin, and probably much more I dont know about.  I suppose someone could search patent db though filing is a long slow process.  At ZKS where I was working on our ToR-precursor and ecash, back in 1999-2001, Austin tried to buy digicash patent and making it available in the public domain, we failed to buy it sadly.  John Gilmore was our advisor and he'd helped cook up an open patent license GNU like scheme.

Its not our softfork - its a softfork to enable a generic extension mechanism.  We have no monopoly (and wouldnt want one) on use of the op code.  Our only defence is meritocracy - if we build better, more secure sidechains and people prefer to use them.  We wont be getting the fees off the sidechain either because those go to miners.  If we have the technical edge and people use our stuff that seems sort of fair enough to me.

Personally I guarantee I trust each and everyone of our team more than J Random web2.0 startup CEO.  What do those guys want?  To make a profit.  Would they stop at sabotaging bitcoin to get there?  I doubt it.  Some of the bitcoin web2.0 startup guys are cool and bitcoin enthused.  But they're getting patents some of them, and not all of them will survive.  Crappy things the less cool startup CEOs might try eg the red-ilist or other things so sucky I wouldnt even describe them for fear it'd give people ideas that they lack the technical competence to design.

I do get where you're coming from, in the past I was the guy holding people to account eg PGP incorporated when they were busy trying to include key escrow into PGP ostensibly for corporate data access.  (I imagine people selling stingrays tell themselves something also).  Partly due to my efforts that was never included in the open-pgp IETF spec.

Sidechains are just a mechanism to extend bitcoin.  The interesting thing is the extension not the chain.  If a better way to do it materialises great.  If some sidechain innovations are so cool and well validated from $1b resting on them for a year that it allows bitcoin core to merge them fantastic.  Actually Pieter Wuille views that as the best way to view the utility of sidechains, to enable longer and live validation of things that could then go into bitcoin where that'd be difficult to impossible to gain that confidence on directly.

There can also however be one-size fits-all limits.  Some extensions are mutually incompatible, or too risky though interesting (eg snark contracts, zerocash) unless a way to contain the risk in chain is found.  Also you can get some new scaling possibilities by having chains with different blocksizes.  Its more decentralised and safer to have a small bitcoin main block and a medium sized sidechain block, than introduce a large main bitcoin block as there is an escape route and choice.  You can within limits get your cake and eat it.

Adam

:-) Sidechains is great idea. Bitcoin wont survive without SC.
SC solves all known problems.

If you have a point, make it.

Right. At the end of all of this, stands bitcoin's status as limited-supply, censorship resistant money.

It's something of an accident that *right now* bitcoin enjoys superior transactional properties to online fiat payment systems. Legacy money will get better over time, and crypto won't have the same sorts of obvious and immediate transactional advantages that it currently enjoys. How would the btc merchant-service-providers fair if legacy payments didn't suck?

At that point, it should become more obvious that bitcoin's strength and value proposition is not so much in payments, or even "programmable" money, but as fully independent money. People have to eventually find value in that for bitcoin to have a robust future.

Actually not even.  The podcast is on a completely different topic: a response to Vitalik Buterin's bitcoin maximalism assertion (its pretty funny everyone is too polite to accuse Vitalik of ether maximalism given the percentage of the premine he owns).  

I encourage you (or others) to read David Krawisz article http://bitcoinist.net/the-two-ideologies-in-bitcoin/ he is quite knowledgeable about economics and able to reason.  He draws a conclusion that is a little different to what most are assuming: that it is investors that drive bitcoins price & network effect, and transactional usage follows; rather than the assumption many make that it is the usage that drives intrinsic value & network effect.  I am not sure about that - maybe its a bit of both, but its an interesting and well reasoned argument, that is somewhat reassuring - we're not fully beholden to the success of people like bitpay trying to integrate merchants and the success of those merchants in having people pay in bitcoin etc. if Krawisz is to some extent right.

Adam

Ladies and gentlemen. Just look at  what I've had to deal with for 4 years now.  

BTW, ain't dat da little dog I be talkin bout?

I have few easy questions:
 - how much bitcoin transactions did you do last year ?  ( 0 )
 - how much fiat transactions did you do last year ?  ( 1,000 )

And 1 harder questions:
 - how big would be blockchain if 1,000,000 users creates 1,000 bitcoin transactions each last year ? ( 20-40 times  bigger than is now )

Cypherdoc encounters Coinlock on Reddit:

i thought this comment from coinlock debating aminok on Reddit was interesting:

http://www.reddit.com/r/Bitcoin/comments/2qtdxi/thoughts_on_sidechains_by_lukas_ryan/cn9zpi7

[–]coinlock 2 points an hour ago

Please, just concisely explain why having a pegged asset is better than one that is priced by the market for two things that are not equivalent in any way.

    nd you're making up an excuse to call it something else to make it sound like it's just another altcoin with no special characteristics that make it better for the Bitcoin ecosystem

That is exactly what it is. The special characteristic you define is not necessarily beneficial to bitcoin.

    Side chains meanwhile have the same beneficial effect on scaling, but WITHOUT the inflation. It's blindingly obvious that this is good for the Bitcoin ecosystem.

What inflation? Having multiple alt coins is not inflation if they have different utility or features and are thus different. Side chains preserve digital scarcity, but are not equivalent, and over time unfairly priced one way or the other by definition.

    (without introducing the inflationary effect of fragmenting market share across altcoins) by splitting the load of bitcoin and bitcoin-backed currency transactions across multiple blockchains

Why is it desirable to split the load amongst bitcoin-backed currencies? If we want to increase the bitcoin network by a factor of 5 we need to run 4 other side chains. For these chains to be equivalent we would need the same number of peers, and the same cumulative hashing power as the main network, which equals the total amount of power and space we would need to proportionally scale a single chain already. So in that sense we are not scaling up so much as designing a load shedding system.

    Sidechain functionality would undoubtedly be of huge benefit to the Bitcoin ecosystem

I have a doubt. Anyone who has been paying attention should also.

    That is not what's being proposed!

The road to hell and good intentions and all that. If I was playing devil's advocate I would say that you couldn't design a more perfect backdoor into bitcoin if you were trying to build a migration path away from the existing technology.

    Use of sidechains would be 100% voluntary

Until it isn't? For example when you need a sidechain network to accomplish a specific task, in a certain jurisdiction? It seems to me that if I was building a premium network that ran alongside bitcoin, a sidechain would be a great way to do it, like taking the highway instead of the side streets. Since sidechains don't restrict fees I don't see why I couldn't charge whatever I wanted if you needed it badly enough.

    It would increase the freedom and optionality of Bitcoin users in every way

Right now you can take your bitcoin and trade it anywhere for anything, this lets you trade it at a rate determined by a third party into a chain potentially controlled by an organization or government, or pretty much anyone else. So I'm not sure why you say this is helping Bitcoin freedom when it could easily be subverted.

    competing against altcoins with innovative new features (a competitive risk you handwave away, inexplicably

Competing alt coins aren't a competitive risk. If someone does come up with something truly better we will sell bitcoin and everyone will move, thats life. The same thing would happen in a side chain economy. With bitcoin's network effect and hash power lead that seems unlikely. Alt coins are the boogeyman in the room come to steal our bitcoins and dilute our network value.

Listen, we don't agree, but I'm not spreading FUD. There are potential ramifications to this change that haven't been addressed, and a lot of commercial interest to push it through. I would like to see the pitch deck that got blockstream 21 million, I bet it includes some interesting ideas as to how to monetize separate and distinct side chains.

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[–]cypherdoc2 1 point 21 minutes ago*

    I would like to see the pitch deck that got blockstream 21 million, I bet it includes some interesting ideas as to how to monetize separate and distinct side chains.

great point. i would too. courtesy of GMaxwell, CEO.

I do see it as a consideration, but don't dwell on it as much as other more interesting and pertinent considerations.

I don't see this as a big threat because I always anticipated native Bitcoin being my long-term value store where sidechain coins be what I use day-to-day.  I have a higher tolerance for risk here because it would normally be a relatively small fraction of my holdings and something I can walk away from in a worst-case scenario.

Secondly, I would be looking favorably to an implementation which would allow me to bail back to Bitcoin more-or-less whole (with, possibly, some degree of slop) if the solution simply evaporated.

Thirdly, I anticipate that under a lot of potential failure modes there would be some early warning of potential problems which would allow me to make a more clean exit.  Here again, I would be looking toward implementations which foster this sort of a scenario.

---

Relatedly but slightly different, I could imagine situations where Bitcoin itself failed or took on attributes which I and a majority of users felt to be intolerable, and the strongest contender as a replacement was itself a successful sidechain.  That might be a concern which is driving an undercurrent of Sidechain fear here in the ecosystem but the detractors are to chicken-shit to fess up.  Hard to know.  Whatever the case, I'm relatively fearless about such things and don't have any sort of spiritual or fundamentalist attachment to Bitcoin in and of itself.  Although I like Bitcoin just fine, I've always felt that if something better comes along, or is promoted to that rank by a failure of Bitcoin, that's something to be thankful for in the scheme of things.  Indeed, I think just such a failure is more likely than not as people naively seek to 'enhance' native Bitcoin to provide capabilities that are effectively impossible.

edit: clarify as 'native'.

PS. The sidechains project may have also another goal:

(3) give hope to those who own large quantities of bitcoins that, if bitcoin is to be superseded by some other cryptocoin, there will be a way to move their fortune to that cryptocoin, at a fixed exchange rate.

OK, since this is the "de facto" sidechain thread, here is some serious trolling:

Having read the whitepaper, the grayblogpost, and several lightblueforumposts, I am currently convinced that the sidechains "project" is 100% marketing, with no technical contents whatsoever.  

Specifically, I claim that there is no functionality that sidechains would enable that could not be provided by a project totally independent of the blockchain.  The only (possible, far from certain) advantage of implementing something as a  sidechain would be the transfer of prestige from the bitcoin project to that something.

I am very skeptical of the future of bitcoin as investment and as a currency for e-commerce, but I admit that the bitcoin protocol provides some non-trivial and interesting functionality.    However, paradoxically, its value lies not so much in what one can do to the blockchain, but in what one cannot do (unless one has 51% of the hashing power):

* One cannot insert a transaction with an input that is not an output of an earlier trasaction, or a coinbase;
* One cannot use the output of a transaction more than once as input to another transaction;
* One cannot insert a transaction whose output total is greater than the input total;
* One cannot insert a transaction whose inputs are not properly signed;
* One cannot add a new block that does not have the crypto signature of the previous block and the required proof of work;

and so on.  It is because of these "cannots"  that the blockchain has a non-trivial functionality.

Now, the sidechains proposal describes many wonderful things that one could do with them.  But it does not specify a single thing that a sidechain protocol cannot do, other than the trivial constraint that it cannot return more bitcoins to the blockchain than it took from it.  

The process of transfering bitcoins between the main chain and the side chain is formally equivalent to sending the bitcoins to a blockchain address owned by the sidechain admins, and later from that address to some other address specified by the sidechain admins.  Thus the only constraint above is trivially enforced by the bitcoin protocol as it is (which the proponents seem to admit).

As far as I can tell, since there is no clearing or overseeing of the sidechains by any entity, the sidechain can do absolutely anything at all,  even immediately destroy the keys that would allow "return" of the bitcoins to the blockchain.  It can create its own tokens from nothing,  rewite its operations history, impose arbitrary fees, steal from its clients, use broken cryptography, whatever.  Nothing prevents the "sidechain" from being centrally managed.  Nothing prevents it from being a reincarnation of MtGOX, with Willy and all.  Nothing prevents it from being, by all objective criteria, an altcoin totally independent from the blockchain.

I propose the following experiment: take the whitepaper, or any paper that discusses sidechains, and replace the word 'sidechain' everywhere by the word 'something'.  Would it make any difference?

I see this project as a desperate attempt by faithful bitcoiners to save the "bitcoin industry" from looming collapse, in two ways:

(1) by trying to co-opt the best altcoin projects, so that instead of them saying "bitcoin is broken and cannot be fixed, use our coin instead" they will say "use our coin, which, among other advantages, builds on and is backed by bitcoin, the 'gold of the internet'"  

(2) by trying to convince investors that bitcoin is worth investing in, even if it is failing as a payment system and may be superseded by other altcoins, because it will be the 'gold of the internet'.

I believe that this marketing effort is 'evil' because it is trying to make people think that bitcoin will be contributing functionality to the sidechains, when in fact it is only contributing prestige.  Just as every nation that issued a paper currency found that pegging it to gold or silver was only a marketing gimmick, more a nuisance and embarassment than a concrete advatage, any successful project that starts as a sidechain will almost certainly detach from bitcoin, for the same reasons.

So, fire away.[/troll]

I personally haven't been following the SC discussion these past months but the first thing that comes to mind for me is that any SC for bitcoin would need its own infrastructure. If that infrastructure were not to be as high level as bitcoin (MC) OR it were to be too centralized then having a SC would be pointless as it would be less secure in one form or another.

Not sure if people see this (the majority). If not, then many are going to get burned.

no, i'm quite satisfied with you nipping at my trouser bottoms.

Not necessarily.  I went to USD and paid a shit-load of taxes.  Had I found a way to convert directly into gold it's not clear that my hit would have been so heavy.

BTW, please forgive me if I don't hang on your every word with respect to what the future holds.

gold?  u kidding me?  flat over the year.  they'd have been better off going to the USD.

long term, you're toast.

The Bitcoin Foundation is 'non-profit' in the same way that nearly every other 'non-profit' is these days.  That is to say, most participants are profiting nicely in one way or another.  At least at the higher levels.  There are often plenty of drones in the lower levels who make it all possible and never knew what hit them.  And an even greater number who want nothing to do with the scammy organization but get sucked into the vortex in one way or another.

BTW, being called a blasphemer is one of the highest complements one could bestow on me.  So, Thanks!


You are still the broken clock who is right twice a day.  And looks like 2014 won't be one of those periods.  Perhaps 2015 will turn that frown up-side-down for ya.  I wonder how many other people followed Goat's lead and cashed in for gold a year ago.  They'll be smiling now I dare say.