Author

Topic: Gold collapsing. Bitcoin UP. - page 901. (Read 2032266 times)

legendary
Activity: 1470
Merit: 1007
October 02, 2014, 01:06:01 PM
So in practice it solves 99.99% of the problem

by "it", do you mean the timeclock?

Yes.  A semi-reliable time allows a bunch of entities to collectively decide that another entity is "dead".  This makes non-Byzantine distributed consensus easy (by non-Byzantine, I mean it handles "normal" failures -- node death, network split -- but not pathological cases where a node is deliberately trying to break the election).  This is all that is needed for distributed consensus in most tightly coupled distributed systems.

Very interesting post.

Question: would the problem of the time interval case you describe (with an imprecise time signal) possibly be solvable by having the clients decide on a time to accept the block in the form of a probability distribution, peaking around the agreed upon time point? that way, assuming a majority of clients would use that rule, we could assume a majority of clients would accept the block issued *around* time E, even if it is not issued at the *exact* time.
legendary
Activity: 1246
Merit: 1010
October 02, 2014, 12:50:10 PM
So in practice it solves 99.99% of the problem

by "it", do you mean the timeclock?

Yes.  A semi-reliable time allows a bunch of entities to collectively decide that another entity is "dead".  This makes non-Byzantine distributed consensus easy (by non-Byzantine, I mean it handles "normal" failures -- node death, network split -- but not pathological cases where a node is deliberately trying to break the election).  This is all that is needed for distributed consensus in most tightly coupled distributed systems.

EDIT: I want to say one more thing about this which is about physics. 

The BGP and Bitcoin's solution problem is fascinating because there are parallels with quantum mechanics which is also incapable of making a decision.  Particles are modeled as probability fields until that is collapsed by observation.  Block/txn validity is probabilistic and collapsed by work (building on the chain).   

But another way to think of that collapse is simply that you have been incorporated into a specific case in the probability field but an outside observer is now unaware of your state (schrodinger's cat).  From the outside observer's case, the probability field still exists; you are just now part of it.

So the universe only has state because it observes itself.  Bitcoin is the same... it only has state (validated txns) in the eyes of observers within the system.

legendary
Activity: 1764
Merit: 1002
October 02, 2014, 12:27:21 PM

that was bad.

another layman who's swallowed the "blockchain is great, the currency is bad" meme of Andreas, et al.

they are inextricably linked.
legendary
Activity: 817
Merit: 1000
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
October 02, 2014, 11:40:52 AM

Given that we know the BGP is mathematically unsolvable

i've heard this a few times already.

can u give a simple layman's description to why this is?

Allright I took fischer's provability class so I'll give it a go:

First of all whether BGP is solvable or not depends on the "powers" given to the honest vs. lying generals.  Can the honest generals "broadcast" a message to everyone else?  Can lying generals "intercept" and rewrite messages?  Do you have a mostly-synchronized clock, or even a local sense of time?  So papers basically define these "powers" and then prove a yes or no result based on them.

Let me try to couch why BGP is sometimes unsolvable in what you are familiar with: bitcoin.  Let's just say we choose one node to grab all txns and add them to the blockchain.  That node can't steal $ because it can't sign the txns.  But it could insist that there are no txns, or disappear.  If it insists there are no txns (but there are) then no progress is made (algorithm is halted).  If it disappears, can you just choose another?  No because you can't prove that it is really gone vs just slow.  That is, it could seem to disappear causing the rest of the network to pick another "issuer".  Then both nodes post a block at the exact same moment resulting in half the nodes using block A and the other half B [1].  Could you then get the network to "settle" on one of the 2 blocks?  Well, doing so is equivalent to solving the original problem (picking a block in the first place), so the above strategy made zero progress solving this problem.  

But note that if you had some relatively consistent sense of elapsed time (an additional "power"), say all nodes have time accuracy within an interval E (say 5 min), you could do something like:  the announcer has until time X to announce a block, at time X+E, we choose another announcer [2].  Ok that works but it requires a synchronized clock.  No clock is ever synchronized perfectly.  So in practice it solves 99.99% of the problem, but what happens if the announcer issues the block exactly at time X+E.  So half of the nodes will think that it is valid, the other half will reject.  So now we have to decide whether to accept the proposed block or not.  Doing so is equivalent to the original problem.  We have made no progress.

How about you use a "fitness function" to choose the best block?  Perhaps use the longest block (most txns in it).  This doesn't work because at any time someone could add a few more txns to a very old block and reissue it, wiping out the blockchain up to that point.  That is, an uncooperative node could cause the algorithm to never make progress.  Ok so let's say once the block is issued it can't be "unissued".  But what if 2 nodes "issue" conflicting blocks simultaneously.  We have to pick one.  Oops, we are back to square one!  (and what does "issued" mean anyway -- in fact it is not definable in a p2p network).

Bitcoin itself does not even solve the problem.  At any time, someone could show up with an alternate blockchain that is full of empty blocks since 2009 (say he's secretly been racing with the public chain) and all clients would switch to that chain where no transactions have happened.  So in fact from a theoretical perspective the algorithm can be proved to never make progress.  However, from a practical perspective this is unlikely to happen, and if it did, I as a community we could throw in some kind of hard coded change (essentially a centralized decision hard-coded in a new client) that forces "our" chain to be chosen.  

So what's cool about Bitcoin is if it breaks down it can essentially "devolve" into (worst case) a centralized scheme.  No worse then we had before Bitcoin (and actually a whole lot better in other metrics).


[1] http://cs-www.cs.yale.edu/homes/arvind/cs425/doc/fischer.pdf
[2] http://research.microsoft.com/en-us/um/people/lamport/pubs/reaching.pdf


Quoted For Truth
...
In the smaller chains of the alt coin world, these concerns are dealt with more commonly.  Some of them show promise as ways to deal with what might happen if Bitcoin faced existential threats from major powers.  Some of these innovations ultimately do matriculate into Bitcoin.

By way of example, A week or two ago such an existential threat materialized in one of the up and coming alt coins with savvy devloper team, (Monero), in which an issued threat of a hostile fork using massive hashpower (and maybe some clever hacks against clocks) was met with an innovative solution.  That solution decentralized the chain-fork choice with the option of individual manual interventions, allowing miners/generals to swiftly select a chain without requiring (but still allowing for) the devolution to a centralized scheme.

In effect, this raises the hostility-cost in the battle to be the issuing miner/general, by allowing the other miner/generals an easy tool to select an alliance if the need arises, without waiting for a recompiled code from their HQ to resolve it.  This innovation expands individual liberty in time of crisis.  It lets the miner/generals act in response to threat if they are cut off from HQ.  It also serves to increase the confidence that these crypto currencies are truly 'antifragile' and cleave true to Wei Dai's cypherpunk entreaty to make "the threat of violence impossible because violence is impossible..."  
legendary
Activity: 1764
Merit: 1002
October 02, 2014, 11:38:42 AM
excellent interview:

We have no tradition in this country of holding our intelligence community officials legally responsible for law-breaking.

https://www.guernicamag.com/interviews/pull-back-to-reveal/
legendary
Activity: 1764
Merit: 1002
October 02, 2014, 11:21:08 AM
So in practice it solves 99.99% of the problem

by "it", do you mean the timeclock?
legendary
Activity: 1764
Merit: 1002
October 02, 2014, 10:46:56 AM
RUT & oil have clearly busted major support levels:



legendary
Activity: 1764
Merit: 1002
October 02, 2014, 10:38:13 AM
Dow -109
legendary
Activity: 1246
Merit: 1010
October 02, 2014, 10:31:22 AM

Given that we know the BGP is mathematically unsolvable

i've heard this a few times already.

can u give a simple layman's description to why this is?

Allright I took fischer's provability class so I'll give it a go:

First of all whether BGP is solvable or not depends on the "powers" given to the honest vs. lying generals.  Can the honest generals "broadcast" a message to everyone else?  Can lying generals "intercept" and rewrite messages?  Do you have a mostly-synchronized clock, or even a local sense of time?  So papers basically define these "powers" and then prove a yes or no result based on them.

Let me try to couch why BGP is sometimes unsolvable in what you are familiar with: bitcoin.  Let's just say we choose one node to grab all txns and add them to the blockchain.  That node can't steal $ because it can't sign the txns.  But it could insist that there are no txns, or disappear.  If it insists there are no txns (but there are) then no progress is made (algorithm is halted).  If it disappears, can you just choose another?  No because you can't prove that it is really gone vs just slow.  That is, it could seem to disappear causing the rest of the network to pick another "issuer".  Then both nodes post a block at the exact same moment resulting in half the nodes using block A and the other half B [1].  Could you then get the network to "settle" on one of the 2 blocks?  Well, doing so is equivalent to solving the original problem (picking a block in the first place), so the above strategy made zero progress solving this problem.  

But note that if you had some relatively consistent sense of elapsed time (an additional "power"), say all nodes have time accuracy within an interval E (say 5 min), you could do something like:  the announcer has until time X to announce a block, at time X+E, we choose another announcer [2].  Ok that works but it requires a synchronized clock.  No clock is ever synchronized perfectly.  So in practice it solves 99.99% of the problem, but what happens if the announcer issues the block exactly at time X+E.  So half of the nodes will think that it is valid, the other half will reject.  So now we have to decide whether to accept the proposed block or not.  Doing so is equivalent to the original problem.  We have made no progress.

How about you use a "fitness function" to choose the best block?  Perhaps use the longest block (most txns in it).  This doesn't work because at any time someone could add a few more txns to a very old block and reissue it, wiping out the blockchain up to that point.  That is, an uncooperative node could cause the algorithm to never make progress.  Ok so let's say once the block is issued it can't be "unissued".  But what if 2 nodes "issue" conflicting blocks simultaneously.  We have to pick one.  Oops, we are back to square one!  (and what does "issued" mean anyway -- in fact it is not definable in a p2p network).

Bitcoin itself does not even solve the problem.  At any time, someone could show up with an alternate blockchain that is full of empty blocks since 2009 (say he's secretly been racing with the public chain) and all clients would switch to that chain where no transactions have happened.  So in fact from a theoretical perspective the algorithm can be proved to never make progress.  However, from a practical perspective this is unlikely to happen, and if it did, I as a community we could throw in some kind of hard coded change (essentially a centralized decision hard-coded in a new client) that forces "our" chain to be chosen.  

So what's cool about Bitcoin is if it breaks down it can essentially "devolve" into (worst case) a centralized scheme.  No worse then we had before Bitcoin (and actually a whole lot better in other metrics).


[1] http://cs-www.cs.yale.edu/homes/arvind/cs425/doc/fischer.pdf
[2] http://research.microsoft.com/en-us/um/people/lamport/pubs/reaching.pdf
legendary
Activity: 1764
Merit: 1002
October 02, 2014, 10:11:26 AM
Dow down again.  for sure we'll get a weekly sell signal by the end of tomorrow unless something gets done quick.

VIX on the rise yet again and looking to break out.  fear is on the rise.

sounds simple enough, but diversify out of some risk assets and into something non-correlated:

hero member
Activity: 731
Merit: 503
Libertas a calumnia
October 02, 2014, 05:32:54 AM
That could be a very interesting service: Netagio launches his exchange between Gold, GBP and Bitcoin.

http://www.netagio.com/

The British Bitcoin industry is entering a phase of innovation and Netagio is proud to be a driver of change in the industry. This summer, in July, we successfully launched the first British peer-to-peer exchange that  allows both retail customers and institutional investors to trade gold, Bitcoins and GBP on the same platform.
legendary
Activity: 1162
Merit: 1004
October 02, 2014, 05:27:51 AM
Most people I know believe money can only be defined by a government and only functions if it is "managed" by a central body with the power to "expand supply to grow with the economy". (Nevermind this is never actually implemented in practice.) And so refuse to trust in anything else.
Most people know more about how electricity works than they understand how money works (this includes the people who issue and control the money).

We know that electricity works in spite of how few people understand it.

Bitcoin will be the same. It will be adopted because it works long before people really understand how and why it works.

Yes. Most people believe that money is a 'thing'. But it isn't. Money is debt and never had been something different. Gold and Gold 2.0 are more or less liquid commodities.

A second major argument of the book is that, contrary to standard accounts of the history of money, debt is likely the oldest means of trade, with cash and barter transactions being later developments. Debt, the book argues, has typically retained its primacy, with cash and barter usually limited to situations of low trust involving strangers or those not considered credit-worthy.

http://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
legendary
Activity: 1260
Merit: 1002
October 02, 2014, 03:52:07 AM
good sum up of the market's current situation: http://btccharts.everdot.org/bullbearsept2014.pdf
legendary
Activity: 2044
Merit: 1005
October 01, 2014, 11:09:20 PM
we're gonna get a long awaited gold bounce for the gold bugs, maybe up to the resistance level as drawn:



the mirror image of this should be a drop in $DXY down to its support level:




I think we head up for awhile now on gold...lets see
sr. member
Activity: 371
Merit: 250
October 01, 2014, 10:03:59 PM
Cypher, what are your thoughts on short term silver? I want to take a longer term position but short term I'm still worried.

Silver moves with gold. Short term up but beyond that, down.

Yep. We're each responsible for our financial bets. I like silver just for its industrial use but the physical purchase of coins in the last few weeks indicates to me it has some legs.
legendary
Activity: 1764
Merit: 1002
October 01, 2014, 09:49:46 PM
Cypher, what are your thoughts on short term silver? I want to take a longer term position but short term I'm still worried.

Silver moves with gold. Short term up but beyond that, down.
sr. member
Activity: 371
Merit: 250
October 01, 2014, 09:46:17 PM
Cypher, what are your thoughts on short term silver? I want to take a longer term position but short term I'm still worried.
legendary
Activity: 1764
Merit: 1002
October 01, 2014, 09:23:35 PM
we're gonna get a long awaited gold bounce for the gold bugs, maybe up to the resistance level as drawn:



the mirror image of this should be a drop in $DXY down to its support level:


legendary
Activity: 1764
Merit: 1002
October 01, 2014, 07:10:06 PM
since we spent some time talking about the blockchain today, it occurred to me that it would be interesting to compare the costs of global accounting with the Bitcoin market cap, given that the blockchain is just one big ledger.  i didn't do much other than google the top 100 accounting firms in the world and eyeball add what appears to be their networth.  the top 10 total approx. $6 billion in value which is more than Bitcoin's $5 billion at this point.  and that's not counting all the other global firms and types of accounting at corporate and small business levels.  if someone wanted to do a more in depth analysis, it would make for a great study:

http://www.brw.com.au/lists/top-100-accounting-firms/2013/
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