Topic: Gold collapsing. Bitcoin UP. - page 780. (Read 2032266 times)

The FUD is that artificial production quotas are necessary to keep transaction fees "high enough".

It's the same economic fallacy every single cartel argues for - you can literally fill textbooks with the number of examples of people who run to the government to implement various methods for restricting supply because without a production quota some disaster or another will happen.


If you would have been paying attention, you'd have noticed that he said to broadcast your transactions over Tor, not download the entire blockchain over Tor.

That's a pretty simple and neat solution that should be obvious to anybody who was serious about solving the problem.

His proposal still has magic numbers in it, so it's no good.

Another fallacy here in the FUD camp is that without a hardcoded limit the size of blocks will rise to infinity.

Nobody tries to argue that we need a artificial limit on the number of loaves of bread that can be baked each day to stop bakers from producing an infinite number that nobody wants, but somehow when transistors are involved all well-known principles of supply and demand reverse themselves.

It really isn't the case that anything "technology" (as cbeast puts it) operates in some alternate bizarro world of reversed economics.

and what has that got to do with the inflation debate?

how does 1:1 sidechain inflate Bitcoin?

http://www.telegraph.co.uk/finance/economics/11206596/Dollar-smashes-through-resistance-as-mega-rally-gathers-pace.html

OK you have to go around the sun a fiew more times,
Altcoins don't lock in Bitcoin - someone gets to spend them, if one fulfills a function like fast transaction speed and is adopted it's because of market forces. Actual value as at risk.

FTFY

Can you see how no matter what direction you go your logic fails you?

so yes basically you just confirmed my two arguments.

1. OT is very much more centralized than SC
2. The danger of the majority of txs being handled off blockchain and removing the incentives for miners to mine any network is far greater than them potentially choosing to prefer mining a particular SC other than Bitcoin.

Here is an example where I will use your argument against you.

Consider two solutions : a fast transactions sidechain and a fast transaction OT coin.

Using the first solution, the sidechain, miners are incentivized to mine both chains, the mainchain and the sidechain. In my own, more pragmatic world, they benefit from both as both work in synergy and the potential for the sidechain to take over the main one along with its mining power is slim to none.

But just to entertain your scenario let us assume it does happen and an exodus to this new chain happen. Miners are still providing the security for a new mainchain and are incentivized to do so.

Now using the second solution, the fast transactions OT coin. It could indeed be a cool solution for awhile but since we have to consider both extremes, then we should also assume that by some strech of the imagination users would somehow have no use for the BTC mainchain and want to use only the OT fast transactions coin.

The problem with that scenario is that miners are left with no txs at all to mine. All the transactions are essentially occuring off-chain. Remember this is a scenario you have yourself championed and argued that once the block reward for BTC decreases or disappear then miners would be left with no incentive to secure the chain and would abandon it but this time, without any chain to turn to.

Don't you think that's a bit problematic. Do you see why SC is the better option?

not really, just think of an exchange, they have many more transactions than the Bitcoin blockchain can process, they have there own servers and internal accounting system (it could there own PoS coin or somthing like the NASDAQ) all OT does is ensure that your balance is locked and released when cretin criteria are met with a N of M script your bitcoin can be moved.

in this application it is similar or indistinguishable from a decentralized exchange using SC.

An alternate currency for example - with OT would be a for profit company - say for example a micro transaction currency, what OT would provide is a trust free way to secure your BTC, there internal servers or blockchain ledger would manage the system - risk, demand and competition would keep scales appropriate, and there dev team could trim the block chain as needed. if there micro payment coin was in high demand there would be an exchange rate floated either on the market or set by the company.    

but the above example with a SC would run at the prototypical level, and be totally decentralized the design of the coin would most likely be merged mined to incentivise mining, over time it will generate more revenue for miners than Bitcoin, the result is there is a motivation to mine and secure the SC's as they grow, the Bitcoin chain can be MM but if it gets to a point where it docent generate enough revenue because the revenue is generated on the SC, it will leave bitcoin vulnerable to exploration or attack.

this is the trade off with SC, the trade off with OT is market competition, you have to earn you way to the top, you cant boot strap you way up by getting something for nothing (mining) and risking Bitcoins incentive sachem.  



to be taken in context with the previous discussion, if the SC is more valuable it is a reason not to transfer back.

but there's a lunatic in Risto's thread saying BTC is the government's creation  surely they'd want use using it no ? 

Maybe so, but don't expect Keynesians to just throw in the towel. They will entice BTC owners with wonderful exchange rates. They will offer insurance. They will offer miners Quantitative Easing. All the while they will be hoarding BTC for reasons of National Security.

I'm sorry, I indeed was not sure how to interpret your comment. Allow me to apologize for that.

If, indeed, the cryptofiat cannot be exchanged outside of legal channel (something I'm quite certain is impossible) then I would also like to know how do you envision the cryptofiat securing its chain? One could suggest they could use coercion and violence to force miners of their country to merge mine it but in a global, crypto world, that is not sufficient and it would render them very vulnerable to a new crypto-future type of financial attack, don't you think?

I did.

Here is my example :


In such a scenario, assuming there are still mining rewards being handed over, the miners will continue mining the BTC chain since they can claim the new, widely used, scBTC 1:1 from the BTC they mine.

So essentially, withstanding some VERY particular and farfetched situation, even the last one to jump boat can claim his equivalent stake on the scBTC chain.

Of course this implies a security issue in that effectively all of the users would have to export their cold wallets and what not over to the new blockchain. This is why I'm arguing that people will be very reluctant to follow such a mass exodus and that the more likely scenario is that when the mainchain developers realize that the market has voted for whatever feature is included in the sidechain they will fork it onto the mainchain so as to create a less risky transition.

Remember that if the sidechain does induce this mass exodus it will need the consensus of all nodes and miners to become the mainchain and so I believe that in this situation, the nodes and miners will simply conclude that a fork of the existing mainchain is a safer proposition.

Maybe you didn't notice that I was agreeing with you in the point that people will chose a 1:1 if they have a choice. Your magic wallet not may not exist if the cryptofiat is not exchanged outside of legal channels. All I'm saying is that we should expect states to ban 1:1 pegged cryptocurrencies at first.

But my friend we are in CRYPTO world!

If they want to force the use of cryptofiat upon every businesses in the country then let them do it.

Let's use your analogy with Pesos(BTC). Remember there are no borders in CRYPTOworld. So imagine that I have this magical wallet that contains only Pesos(BTC). Any time I have to pay in an american brick and mortar store that only accepts USD(cryptofiat) my magic wallet automatically transfers my pesos(BTC) into USD(cryptofiat). The merchant receives cryptofiat, hands over the good to me and we are both happy!

brg444, did you ever address the concern that a utility chain has the chance to permanently attract all tx fees to itself in the long run at the expense of BTC miners who need those tx fees?  or is your answer simply that Bitcoin will pre empt that by adopting said innovation before that happens?

thank you, I will look into this but you did not adress my point.

if most of the transactions occur on OT then the danger is even greater for miners considering unlike SCs they do not get to mine and profit from OT, correct?

and regarding inflation on a SC. yes indeed there could be, but if there is then it becomes much like any other altcoin and this inflation does not affect the BTC ledger.

I don't see any businesses selling pirated songs or movies, because only the legal ones have value. I don't see Americans using Pesos. Nobody will sell a currency if it is not liquid enough to use in a brick and mortar store. Just like every other foreign currency, you will be asked to leave it at the border.

Well I guess someone COULD create a sidechain that is capped at a certain amount of 1:1 units and then if you do not hold any of that stake you are stuck using the sidecoin to use the feature but to be frank I honestly don't see how someone could be fooled by such a scheme.

The bolded simply points out that in such a situation another developer could simply clone the feature of the sidechain and make it available through a 1:1 peg with no cap.

re the last point there need not be value inflation on a SC, but there could be.

re. OT it's not a change on the prototypical level, so no risk to the incentives in mining Bitcoin over time. As there will always be as similar risk as there is with SC, it naturally gets priced in in the market. OT in my view enables the vision people see when thinking of Bitcoin as a trust free reserve currency. 

OT can be a  "decentralized exchanges" here is an intro as to how to do it without screwing with the bitcoin protocol.
http://youtu.be/teNzIFu5L70?t=1m

and some more info.
https://www.youtube.com/watch?v=vtJcUM5-TeA

i actually see your point.

what did you mean by the bolded part?

And ban the use of any other cryptocurrency throughout the country ?

You realise this is like saying you can use the internet but please don't download songs.