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Topic: John Nash created bitcoin - page 11. (Read 22254 times)

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April 13, 2017, 09:39:43 AM
But it's where I want to get at is that in this particular context, the pow is totally over kill to solve this problem, and if the goal is only to reach consencus in the simplest / more efficient manner, it's not the good solution.

I entirely agree.  PoW is a total disaster.  Thanks to a lot of discussions with @iamnotback I realized HOW MUCH it is a disaster.

Quote
The criteria to sélect good block and transaction are not that hard-core to require this giant pow lotery.

Indeed.  Moreover, as I recently saw, Satoshi even foresaw that this mining would become totally centralized, defeating the purpose !  It is totally ridiculous to introduce PoW to avoid a sybil attack, and then come to the conclusion that only a few big players will decide on the consensus as a consequence of his "solution".

This is why I think that Satoshi, after he finished the outline of his invention, accepted to modify the design criteria he put forward himself, because his design didn't fit it, but now that he made it, he didn't want to discard it.

That is like wanting to make an airplane, finding out it will not fly, but it will float very well, and declare in the end that your were actually designing a boat !

In the same way, Satoshi wanted "money for everyone to use" and then put in a 1 MB block limit, making it impossible for this to be used as money for more than a few geeks on a few obscure trading places.

Of course, all this can be the work of an evil genius.  But Occam's razor makes me believe that this is just a guy in his basement, doing the best he could, and the best he could, he realized, wasn't good enough for what he set out to do, but that wouldn't stop him.  Don't put on the shoulders of conspiracy, what can be explained by ignorance.
 

But you see it's here I see something that still is weird.

If you are a guy in your basement, and that you want to find a solution to keep the chain coherent, and you choice between à simple well proven determinstic solution , or a solution that is completely off chart, super costly, and risky, why he would choose the second ? Why going through all this bother with pow and block reward who introduce huge complexity ? Why ?

Cause if it's too sélect between block header A and B, it doesnt even matter, any can be chosen arbitrarily as long as everyone agree.

Between tx A and B, same, anyway there is one that is a fraud, so any can be picked up.

That could be just be as simple as selecting block and tx based on which have the lowest hash. Period. No pow, no reward, no mining craze.

Why in the name of ocam razor to insert this  whole pow in the system ?

If it's not to introduce some kind of un certainty on purpose to encourage speculation. Toss a coin and watch the fools making bets.


If we had to deal with a stream of chaotic random data that make no sense in itself, ok for the pow. Because it need strong power to establish the good stream.

But in the case it doesnt make much sense in this perspective of consensus.  

The rule to make the decision could be 100% hard coded in the protocol and basta. The few case where there can be ambiguity are not really that hard to solve.









sr. member
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Best IoT Platform Based on Blockchain
April 13, 2017, 09:38:22 AM

Miners care about the absolute fee, not about a percentage.


So if we take away power of the miners, will the possible scenario change?
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April 13, 2017, 09:30:25 AM
Scenario A: Fee rises along with bitcoin price within a fixed percentage. So if the percentage is 0.1% and bitcoin price is at $100,000, then the fee will be $100. And if bitcoin price is at $1,000,000, then the fee will be $1,000.

Scenario B: Fee rises regardless of bitcoin price. So if fee is fixed at $1,000 minimum, it will remain at $1,000 (minimum) regardless of whether bitcoin price is at $100,000 or $1,000,000 (or even at $10,000, effectively meaning to say the fee is 10% of transaction value).

Which scenario (do you think) will play out?
Or will there be scenario C?


Miners care about the absolute fee, not about a percentage.  If for one reason or another, a miner can take transaction A OR transaction B, but not both (for instance, limited block size, or other technical aspects that make that him taking on another transaction generates a cost: cost of missing a block, cost of infrastructure, cost of I don't know what), then that miner will pick the transaction with the highest ABSOLUTE fee. 

The fee market is about "transaction room" ; it doesn't care about what amount is transacted.  This is like driving a truck: the cost, and the fee of hiring a truck, depends on the load to be transported, not upon the value of the load.

So in an on-chain fee market, scenario B seems plausible.

However, in a lightning network banking, I guess it will be more like scenario A.  Because the "cost" of transacting on a LN (namely, the cost of having to settle on chain) depends on the amount transacted.  If that amount is small, it will easily go over many channels that have still provisions to do so.  If that amount is big, chances are bigger that it stresses the reserves in the channels used.

On the other hand, the bigger are the LN hubs, the more they can put into their channels, and the lower the fees they can ask for the same amount of transmitted value.  So a LN with limited block size will converge to very expensive block transactions between major LN hubs to settle their things, and a limited oligarchy of big LN hubs, being your bank, to which everybody is attached with a single expensive settlement on-chain (making it essentially impossible to "change bank") of your unique channel, which is entirely controlled by your bank, and which charges you proportionally to the transactions you want to make.
Like fiat banking, but without legal protection, and being bound to sleazy obscure bankers on the internet, without any recourse and to whose mercy you are delivered.  Unless you are wealthy enough to permit settling your channel on chain yourself, and go see one of their competitors (if they don't collude).

sr. member
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April 13, 2017, 09:07:06 AM
Scenario A: Fee rises along with bitcoin price within a fixed percentage. So if the percentage is 0.1% and bitcoin price is at $100,000, then the fee will be $100. And if bitcoin price is at $1,000,000, then the fee will be $1,000.

Scenario B: Fee rises regardless of bitcoin price. So if fee is fixed at $1,000 minimum, it will remain at $1,000 (minimum) regardless of whether bitcoin price is at $100,000 or $1,000,000 (or even at $10,000, effectively meaning to say the fee is 10% of transaction value).

Which scenario (do you think) will play out?
Or will there be scenario C?
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April 13, 2017, 08:40:38 AM
But it's where I want to get at is that in this particular context, the pow is totally over kill to solve this problem, and if the goal is only to reach consencus in the simplest / more efficient manner, it's not the good solution.

I entirely agree.  PoW is a total disaster.  Thanks to a lot of discussions with @iamnotback I realized HOW MUCH it is a disaster.

Quote
The criteria to sélect good block and transaction are not that hard-core to require this giant pow lotery.

Indeed.  Moreover, as I recently saw, Satoshi even foresaw that this mining would become totally centralized, defeating the purpose !  It is totally ridiculous to introduce PoW to avoid a sybil attack, and then come to the conclusion that only a few big players will decide on the consensus as a consequence of his "solution".

This is why I think that Satoshi, after he finished the outline of his invention, accepted to modify the design criteria he put forward himself, because his design didn't fit it, but now that he made it, he didn't want to discard it.

That is like wanting to make an airplane, finding out it will not fly, but it will float very well, and declare in the end that your were actually designing a boat !

In the same way, Satoshi wanted "money for everyone to use" and then put in a 1 MB block limit, making it impossible for this to be used as money for more than a few geeks on a few obscure trading places.

Of course, all this can be the work of an evil genius.  But Occam's razor makes me believe that this is just a guy in his basement, doing the best he could, and the best he could, he realized, wasn't good enough for what he set out to do, but that wouldn't stop him.  Don't put on the shoulders of conspiracy, what can be explained by ignorance.
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They're tactical
April 13, 2017, 08:31:40 AM
But to be sure, would need to do the maths lol need to find someone good with proba and algebra and market economy to put the equation together to see if some prectible behavior is supposed to emerge through some factor who is made to be kept constant in the equation, even if it's seemingly random and clumpsy.

I think one is reading too much in what isn't there. 


Well the only way to be sure it isnt there is still to admit the possibility Smiley it's a mark of open mind to consider all theory equally unless proven right or wrong. The opposite is mark of indoctrination Smiley and there are plenty of non religious form of indoctrination Wink


2) he then realized that he needed to solve a consensus problem, because of the finite propagation delays on the network: what if some participants received valid transaction A, and other participants received valid transaction B, and A and B are spending the same tokens ?  How to come to a consensus ?

=> he needed a kind of decision game so that at any moment, only one decider was going to decide upon the consensus, that is, the full list of accepted past valid transactions.  As he didn't want (at first) a central authority, he needed a LOTTERY BETWEEN PARTICIPANTS.  However, in order to avoid a sybil attack, he proposed to do the lottery with Proof Of CPU work.  --> a lottery every 10 minutes.


But it's where I want to get at is that in this particular context, the pow is totally over kill to solve this problem, and if the goal is only to reach consencus in the simplest / more efficient manner, it's not the good solution.

In the context, it's like the byzantine general all know the criteria for what is considered good attack time, and can just rely on this know when to attack.

The criteria to sélect good block and transaction are not that hard-core to require this giant pow lotery.
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April 13, 2017, 08:28:52 AM
Why hashing a public key could have been brilliant, and how bitcoin's design totally missed it.
=========================================================

I outlined before that hashing the public key as a bitcoin address was a faux good idea, but now I realize that it could have been a good idea.

The reasons I stated that it was a faux good idea were:
1) if you need the hash to protect a broken crypto system (elliptic curve crypto), you are making a fundamental mistake.  In as much as hashes can protect better against quantum computers and elliptic crypto is essentially TOTALLY DEAD, you can't use your private key any more because one can change your transaction on the fly if one has a quantum computer.  So instead of "protecting a broken system", one should have used one that isn't broken ; and in as much as one thinks that elliptic curve crypto isn't broken, there's no need to protect it.

2) I indicated that introducing the hash was wasting room on the chain, because if you hash the public key in the output (the address), you have to provide the key in spending input (as is the case today) ; while if you provided directly the public key in the output, you didn't need to copy it again in the spending input.

--> now it turns out that this argument is wrong.  So YES, introducing the hashed key IS winning room on the block chain.  However, this feature IS NOT USED.
 
In ECDS, with a key of N bits (and a security of N/2 bits classically), the signature contains 2N bits.  Essentially, the first N bits are related to a chosen random number, and the second N bits are the actual signature.  However, it is possible to derive the public key (actually a small set of public keys) most of the time from the signed message and the signature.

As such, the publication of the public key is not necessary !

The verifier can derive it (up to a few candidates) from the signature and the message.  In fact, for the curve that Satoshi chose, with cofactor 1, there are only two candidate public keys.

It is explained here.
https://crypto.stackexchange.com/questions/18105/how-does-recovering-the-public-key-from-an-ecdsa-signature-work

In this very case, there is no need, EVER, to publish the public key on the block chain: the signature gives you two candidates, and if one of them hashes to the public key hash, that's a proof that the signature came from that address owner.
And then you WIN by hashing the public key, because the hash can be half as short as the public key (given that the hash security is the length of the hash output - we are after pre-image security ; and the public key security is half of the key length classically).

So, yes, it is a good idea to hash the public key after all, if you don't publish the public key in the spending input !  But in bitcoin, one does, so one has totally wasted this advantage.  Moreover, there's no point in making the hash bigger than 128 bits.

--> this indicates that the bitcoin designer wasn't aware of this economy of bits and hence, cannot have designed the crypto for that reason, given that he didn't use its potential.

So, the most economical design in bitcoin would:

1) have used a 128 bit hash of the public key in the output (instead of 160 bits), saving 32 bits
2) have imposed a single address usage in the protocol (eliminating the need for transaction references, saving  288 bits)
3) having used only the signature in the spending input, not the public key (saving 256 bits)

A transaction would hence have saved 576 bits, or 72 bytes, would have had consistent 128 bit security level, wouldn't have had the hassle of transaction hashes and malleability, and would not have exposed same address UTXO to different levels of security (once the first signature is out, the 160 bit long term hash security drops in any case to 128 bit key security).

Now, a full transaction in bitcoin (one output and one corresponding input) consist of the order of 24 + 8 = 32 bytes (output) and 32 + 4 + 36 + 36 + 4 =  112 bytes (input), so in total 144 bytes.

If we can save 72 bytes, we can reduce the volume of the block chain BY HALF, if we were using crypto correctly and consistently in the idea of optimizing consistent security (128 bit level) and maximum economy of room.

In fact, the original design even published the (x,y) coordinates in full of the public key, doubling the room used, but that was a total waste: you can recover y from x (and a single extra bit).  This is done now.
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April 13, 2017, 07:42:54 AM
All the $billionaires and $trillionaires will be doing their settlement in BTC.

It will be $500,000 per BTC.

That is obvious.

Of course not.  People are maybe buying bitcoin at $1000 because they think it may go up to, say, $10 000,-.  But who is going to buy a bitcoin at $500 000,- ?  You're not expecting it to reach $5 000 000,- do you ?  So if you buy at $500 000,- you must be buying near the all-time high for ever.  Who's going to do so ?  So bitcoin will still grow a while, until buyers realize that there's more downside than upside, not only in the short term, but also in the long term.  And then, the greater-fool game stops.  And we get the supernova, or the slow deflation of the bubble.  I have no idea if it will be in 5 years, 15 years, or 30 years.  

Like all crypto.  People will never pay their groceries with crypto.  Forget that.  Fiat systems will remain in place as long as humanity is still in command and states exist.

Correct. But entirely irrelevant to what we are discussing. That you don't realize it is irrelevant is indicative of why you are blind to the reality of what is going on.

The value of money, ultimately comes from what you can buy with it, or rather the belief of what you can buy with it.

is that I have good reasons to think that bitcoin's design has too many clunky crypto design features to be the product of a mind like Nash.

You've been refuted upthread but you continue to repeat your errors instead of studying what I taught you and contemplating more deeply on the permutations of what I taught you.

No, you didn't.  You gave some arguments that I debunked, and then you only repeated that I was wrong, or that I didn't understand, or that I was suffering from cognitive dissonance, but these are not arguments that demonstrate anything.

The points I made about the technical clunkiness not only stand, you haven't even been able to find a single argument against it.  Bitcoin's crypto is working, but clunky, inconsistently designed with wasteful applications of inappropriate cryptographic primitives.  That doesn't stop it from working, but it illustrates the ineptness of the designer of the system.  And no, I don't buy the arguments that:
1) it is truly genial, so genial that we don't understand it but it must be genial because it was designed by a genius, and if we think it is clunky, that's because we aren't smart enough (circular proof of genius)
2) it is indeed clunky, but on purpose, only to mislead you to make you not see the design was done by a real genius (unfalsifiable argument: if it was brilliant, it was a genius, and if it was clunky, a genius wanted to make you think he wasn't a genius)

These two logical errors won't convince me.

But it could be ; but as, moreover, Bitcoin's monetary philosophy is ALSO not in agreement with Nash ideal money,

I refuted that a few moments earlier upthread. You have so many errors.

Nope.  I argued why.  Your argument contains a contradiction, namely the impossibility to keep at the same time a pre-announced numerical debasement scheme, and a constant market value.  I indicated that you misunderstood the notion of non-manipulable debasement, not as meaning a pre-announced *numerical* emission scheme, but a pre-announced emission scheme with a value target (for instance, constant small inflation, or constant value), the only way to avoid the contradiction.

Where I don't agree with you is that bitcoin is designed by the "global elite" because apart from a gambler's token, it is not going to go anywhere that can interest the "global elite".

You have entirely ignored everything. Amazing. It is like you have selective reading comprehension. You are clearly in a massive state of cognitive dissonance.

I already told you that I think it is you who are suffering from that, simply because you are too much invested in that view, without which most of what you do would run the risk to be reduced to something of lesser importance than you are willing to conceive.

I'm not designing something that has to stop the evil future masters of the world (bitcoin), and I'm not the one wanting to change the world.  You need bitcoin to be designed by an evil genius, in the hands of the world elite, with a mega evil master plan that you can outplay in order for your work to be of the importance you want it to be.  So you need bitcoin to be the evil future domination after fiat finance has collapsed, at the right time scale so that your design has had the time to have overcome that devil's plan.  I don't.  I couldn't care less.  I simply don't care about the world, and yes, one day I will be "slaughtered" and I couldn't care less, either.  That's part of life.

As such, the probability that you are suffering from cognitive dissonance is quite higher than the probability that it is me.  I am not invested into this.  I'm just putting elements on the table.  Yes, it might very well be that Nash was an evil genius working for the Rothschilds when he was 80 years old, has denied all his theories about money to build them a currency with which they would rule the world, has made a cryptographic design that violates about every rule of good design (because he wanted to convince knowledgeable people that he was clumsy and was at the same time far ahead of most cryptographers of his time, so that they don't even realize it), announced future visions of his decentralized oligarchic money that would take over VISA, and then killed it by introducing a 1 MB block limit, is going to use 10% of the world's electricity to use a stupid security mechanism PoW, and...
has enabled you to be the hero that will save the world by outsmarting that mathematical and economical genius, John Forbes Nash, and building a system that will kill his devil's machine.

Maybe.  I just bring in elements that make me believe that such is not the case, but if it is the case, I don't care: you will save us and bitcoin is done anyway.  I'll pay you a beer if you were right (and I won't pay it in bitcoin) in 2025 and if both of us are still alive.

But you see that your stake in this is way way higher than mine.  This is why I think that I can be more open-minded about these things that you are.  I'm not saying that I know better.  But the fact that you reply with judgements of my sayings, person and intelligence, rather than with rational arguments, which is the only reason I'm here, makes me think that if one of us is emotionally attached to a position, it is you rather than me.

And if it were, against all odds, designed by the global elite, it is a failure in any case.  Don't stare yourself blind on the "market cap" of bitcoin: that's nothing else but one big huge speculative bubble, driven by greater-fool games.

No man. Most BTC is hodling. MAJOR MISTAKE IN ANALYSIS!!

That is exactly the same analysis.  The only reason people hodl, is because they wait for greater fools.  Hodling stuff doesn't give it economic value, because no value is created by doing so.  This is also exactly the reason why bitcoin's market cap is fake if you see it as an illustration of the total amount of value stored in it.  The day the bubble bursts, this deflates to almost zero.

The economic value of bitcoin (the value creation it allows over its competition: fiat, in economic activity) is most probably 100 times smaller,

OMG you are really blind.

--> this is not a rational argument.
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April 13, 2017, 07:08:15 AM
But to be sure, would need to do the maths lol need to find someone good with proba and algebra and market economy to put the equation together to see if some prectible behavior is supposed to emerge through some factor who is made to be kept constant in the equation, even if it's seemingly random and clumpsy.

I think one is reading too much in what isn't there.  This is how people invent religions, by seeing purpose when there wasn't any.  In my idea, the whole concept was rather simple: Satoshi wanted a non-centralized token transmission system, and needed to solve a few technical, and a few economical problems.  There were already several elements lying on the table and he put them together (which is the merit he really has).

1) He needed to get rid of the "central bank".  The block chain concept, where instead of tokens to be materialized, TRANSACTIONS were the fundamental element, was a great insight.  In as much as it is impossible to prove that transmitted digital tokens aren't double-spent, if everyone has a list of past transactions, that solves the double spending problem.  So the idea was to get all participants to get the full list of all transactions at a point.

2) he then realized that he needed to solve a consensus problem, because of the finite propagation delays on the network: what if some participants received valid transaction A, and other participants received valid transaction B, and A and B are spending the same tokens ?  How to come to a consensus ?

=> he needed a kind of decision game so that at any moment, only one decider was going to decide upon the consensus, that is, the full list of accepted past valid transactions.  As he didn't want (at first) a central authority, he needed a LOTTERY BETWEEN PARTICIPANTS.  However, in order to avoid a sybil attack, he proposed to do the lottery with Proof Of CPU work.  --> a lottery every 10 minutes.

3) he needed also to create coins, and he realized that creating coins was going to give seigniorage which was going to undermine the belief system in the money.  So he (though he had) a brilliant insight:

"the CPU work spent in winning the lottery to determine consensus, is going to be rewarded with new coins ; that looks fair, because 1) a priori everyone gets the belief that they could have won the coins and 2) people doing something useful get rewarded".

That's more or less it.  I don't think Satoshi's insight went beyond that, but that was already quite something.

The rest consisted in:

1) working out the details
2) thinking about the consequences of choices made when working out the details.

One of the things Satoshi was religious about, visibly, was the fact that there should only be a finite amount of coins in circulation.  He must have been influenced by the Austrian school and gold bugs.  In fact, if he could have put them into circulation right away, most probably he would have preferred that, but as he now needed to emit them by people finding consensus, he HAD A SERIOUS PROBLEM: how to reward people in the future when all coins are emitted ?

In order to obtain a finite amount of coins at the end of the universe, he needed to diminish rewards ---> simple solution of block reward halvings.  In order to reward them in the long term, he needed transaction fees. 

In order to limit the coin emission, he needed the lottery to take place only once every 10 minutes, and because he didn't want to rely on real time (in the end, he did!) he invented the scheme of increasing difficulty.

The logical consequence of this was that the economic cost of the PoW at the 10 minute reward was going to rise to be about equal to the market value of the emitted coins.  This would lead to totally crazy amounts of PoW, the rise of specialized hardware, and the killing of the original idea of just "a lottery between participants to decide who was going to decide upon consensus next with Sybil mitigation".

Satoshi's idea of having most payments done with bitcoin led him to understand that the block chain as he designed it, would have to grow at 100 GB a day.

However, as is often the case with inventions, when one sees the consequences that were orthogonal to the original design ideas, the right way is to discard the invention because it fails in implementing what one had in mind ; but most often, one perseveres in modifying the initial design goals so that the invention in which one has a lot of emotional and intellectual investment, ends up suiting the goals.  I think bitcoin has been created exactly that way: when Satoshi realized (partially) that his invention wasn't exactly what he set out to do, but not being able to think of anything better at the moment, he considered that it should go ahead and modified his initial ideas so that they suited the thing he invented.

This is why bitcoin is the clunky thing we see it is, and not the thing Satoshi set out to design, but failed to do so: a digital peer-to-peer trustless, decentralized money and payment system for all to use.

One can of course always think that this clunky thing is what he intended to make, but this is like explaining why God, in his perfection, allows man to make war and allows him to suffer unfairness.  Simply because there wasn't any god, there wasn't any masterplan, but things just happened, and they weren't designed this way or another way.

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April 13, 2017, 06:40:03 AM

Where I don't agree with you is that bitcoin is designed by the "global elite" because apart from a gambler's token, it is not going to go anywhere that can interest the "global elite".  The sleazy business it is profiting is not the global elite, but second-hand maffioso.  And if it were, against all odds, designed by the global elite, it is a failure in any case.  Don't stare yourself blind on the "market cap" of bitcoin: that's nothing else but one big huge speculative bubble, driven by greater-fool games.  The economic value of bitcoin (the value creation it allows over its competition: fiat, in economic activity) is most probably 100 times smaller, and dominated by dark web markets, its main economic utility for the moment.  Bitcoin's economic value must at most be a few hundreds of millions of $$ worth ; that is, the value creation it helped create which wouldn't have been possible with fiat because of legal or other obstacles.  The 20 billions are nothing else but greater fool speculators waiting for still greater fools.  If they don't find greater fools after 10 years or 15 years, that bubble will collapse.  But there are still a lot of greater fools to be taken, so as long as the black tulips rise in price, you will find speculators flowing in.  But that is not economic value.  



Well if you see this only through the prism of economy this is right.

But if you think more generally in term of propagating "stananist agenda", law of the jungle, irrationnal risk taking for greed, etc, it can still have interest in that view.

And on a bigger perspective it's easy to see how that could benefit "elite" in the sense illuminati/satanists .
sr. member
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April 13, 2017, 06:39:55 AM
There will be digital currencies and they will be regulated like 666, and you won't be able to transact on chain in Bitcoin which won't be regulated.

Satoshi designed it this way and even @dinofelis admits he did, but somehow @dinofelis can't see that such a design forces the masses off chain into the totalitarianism of 666 regulated currencies.

Satoshi designed it that way BY ERROR (or by cheating and lying to make me think he blundered because I am naive as a 12 year old girl).

ftfy

You will eventually realize I am correct. Hopefully realize it before it is too late for you to escape the 666 totalitarianism coming.

I simply don't think that bitcoin is going to fly so high.  It will find its niche, namely an unregulated reserve currency for big sleazy business, and as a highly speculative toy for gamblers/traders, and that's it.

All the $billionaires and $trillionaires will be doing their settlement in BTC.

It will be $500,000 per BTC.

That is obvious.

You don't seem to understand money very well. And I am not going to write a treatise here. It isn't my responsibility to fix your ignorance about money. I say this forcefully because it behooves you to do some learning so you stop spouting off incorrect judgments.

Bitcoin, nor any other block chain type crypto, will be "the future of money" for most people, simply because it is too clunky, authorities won't let it happen, and in the end, people are material beings.

It isn't intended to be used by the masses. It is intended to be used by the $billionaires and they have the most wealth.

So, yes, I agree with you that the design of bitcoin is such that it will remain immutable, and that most of the current characteristics of bitcoin are understandable by game-theoretical arguments.

Where I don't agree with you is to think that bitcoin will become world-important - it will remain in a niche.

Because you don't understand money and what time it is. You don't even understand that your own EU is collapsing into abject totalitarianism.

You are far too smug and overconfident. A well fattened cow ready for the slaughter.

You have a high IQ but you aren't motivated to use it. Because you are too comfortable. The cows don't try to escape, because they have plenty of grass to eat and fields to roam. Yet they do get slaughtered one day.

Like all crypto.  People will never pay their groceries with crypto.  Forget that.  Fiat systems will remain in place as long as humanity is still in command and states exist.

Correct. But entirely irrelevant to what we are discussing. That you don't realize it is irrelevant is indicative of why you are blind to the reality of what is going on.

Where I sort of don't agree with you, but I don't care much,

You don't care much because you are smug and comfortable. Lots of grass to eat.

is that I have good reasons to think that bitcoin's design has too many clunky crypto design features to be the product of a mind like Nash.

You've been refuted upthread but you continue to repeat your errors instead of studying what I taught you and contemplating more deeply on the permutations of what I taught you.

But it could be ; but as, moreover, Bitcoin's monetary philosophy is ALSO not in agreement with Nash ideal money,

I refuted that a few moments earlier upthread. You have so many errors.

Where I don't agree with you is that bitcoin is designed by the "global elite" because apart from a gambler's token, it is not going to go anywhere that can interest the "global elite".

You have entirely ignored everything. Amazing. It is like you have selective reading comprehension. You are clearly in a massive state of cognitive dissonance.

The sleazy business it is profiting is not the global elite, but second-hand maffioso.

Look over the forest, not just at the bark on the trees.

And if it were, against all odds, designed by the global elite, it is a failure in any case.  Don't stare yourself blind on the "market cap" of bitcoin: that's nothing else but one big huge speculative bubble, driven by greater-fool games.

No man. Most BTC is hodling. MAJOR MISTAKE IN ANALYSIS!!

You are way off. Only a very small % of BTC supply is traded on exchanges. The same coins traded over and over again.

The economic value of bitcoin (the value creation it allows over its competition: fiat, in economic activity) is most probably 100 times smaller,

OMG you are really blind.
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April 13, 2017, 06:39:07 AM
You are mistaken. By the time Bitcoin reaches its intended use case phase after the global monetary reset 2024ish, Bitcoin's debasement will be winding down.

I don't believe in that "monetary reset".  There will be financial crises, as there always have been.  No big deal.  Crypto won't help.

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Also you are causing confusion with your incorrect use of the term deflation. Deflation is an economy-wide phenomenon so would only apply if Bitcoin was the unit-of-account widely employed in the economy. Although it is true that in a few more years, Bitcoin will be causing massive global deflation.

I use deflation simply in terms of "monetary unit acquires value".  

From wiki:
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In economics, deflation is a decrease in the general price level of goods and services.[1] Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one to buy more goods and services than before with the same amount of money.

When a monetary unit acquires value, there is deflation of that monetary unit.

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Also Nash specifically wrote that debasement was compatible with his ideal money, as long as the schedule of debasement was non-manipulable (which is the case for Bitcoin).

You can't have it both ways.  You can't require the ideal money unit to keep a stable value (with respect to a large basket) and have its debasement *numerically* specified in advance.  What you can do, is to have strict target rules for debasement to act to reach an inflation target.  In as much as these rules are immutable, they are non-manipulable.

This is why Nash thought of the Euro as close to an asymptotic ideal money:
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John Nash mentioned in his lecture that Euro might become an ideal money in the future, because Euro is used in a large range of places and has a good stability. It is the currency used by the Institutions of the European Union and is the official currency of the eurozone which consists of 18 of the 28 member states of the European Union. In general, Euro has a macroeconomic stability, people in Europe owning large amounts of euros are "served by high stability and low inflation." Moreover, in March 2014, Euro was commented as "an island of stability" by the head of the European Central Bank.

(from the wiki on ideal money).

So, the "schedule of debasement" as a non-manipulable rule to reach the inflation target, yes.  A pre-programmed, blind, debasement scheme: obviously not, because otherwise, the introduced inelasticity cannot guarantee price stability or price inflation stability, which is the defining characteristic of ideal money.  

It is why gold is not a possible ideal money:
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The gold does not reach the standard of ideal money, despite its merits. The main problem is because the silver and gold do not have a constant value all the time. "To the undiscerning minds of the mass of men a pound sterling of gold, a silver five-franc piece, or a paper dollar, represents always a definite unit. It has not escaped attention, however, that a given amount of money buys much less at one time than another."

exactly because one cannot apply a debasement (or destruction) to keep its value constant.

This is the other reason why I don't think it was Nash that created bitcoin: the economic model of ideal money of his hand, would never go for a collectible with DIMINISHING emission.  At best, Nash would have built in an emission curve that would follow predicted adoption (which is essentially impossible in advance): few emission in the beginning, and issuing MORE AND MORE bitcoins as time advances, so as to keep the price of bitcoin constant with growing adoption.

In fact, there would have been a way to do so: instead of increasing difficulty to have constant (and 4-year stepwise decreasing) emission rate, have constant difficulty, compensated by Moore's law.  As such, the price of a bitcoin would more or less remain constant, and equal the cost of the work spent on making them.  You would accept bitcoins against value if it would cost you more to make them, and you would make bitcoins if it would cost you less making them than buying them.

PoW at constant work cost, was a way to implement something much closer to ideal money, than bitcoin's sound money doctrine.

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April 13, 2017, 06:35:02 AM

However, I was able to outsmart the global elite, because I realized that if the users of the system gained more value from the system for its non-monetary function and iff that value can't be financed (i.e. its value can be leeched off by control of fungible money), and if I provided a way for the users to provide the Byzantine fault DETECTION as a check-and-balance against the power of the whales and if I provided this in a way that is not democracy and is a crab bucket mentality Nash equilibrium, then I would have defeated the problems with the concept of fungible money.

The elite simply weren't aware of these concepts, because I invented them. Nash didn't know this.

And that is what I intend to launch with BitNet.

Im quite in line with this idea Smiley

In fact my initial idea in seeing blockchain only as distributed ledger lead me to think the whole interest of pow is very limited in this context, and the same result could be achieved in way that are much simpler and less expansive risk, like "fault checking " even if the real pb is not exactly fault checking, but selecting one between two valid version , but even this could be achieved without pow. And the base cost / risk to operate distributed database is not that high.

Maybe there is something im missing.

But it could look as the whole pow thing was just inserted to put some game theory in it, and give it more speculative value or for purely economic reason  ( in the sense market economy) than to really be the most efficient way to keep à decentralized ledger consistent.

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April 13, 2017, 06:23:09 AM
There will be digital currencies and they will be regulated like 666, and you won't be able to transact on chain in Bitcoin which won't be regulated.

Satoshi designed it this way and even @dinofelis admits he did, but somehow @dinofelis can't see that such a design forces the masses off chain into the totalitarianism of 666 regulated currencies.


Satoshi designed it that way BY ERROR (or by cheating and lying).  I simply don't think that bitcoin is going to fly so high.  It will find its niche, namely an unregulated reserve currency for big sleazy business, and as a highly speculative toy for gamblers/traders, and that's it.  Bitcoin, nor any other block chain type crypto, will be "the future of money" for most people, simply because it is too clunky, authorities won't let it happen, and in the end, people are material beings.

So, yes, I agree with you that the design of bitcoin is such that it will remain immutable, and that most of the current characteristics of bitcoin are understandable by game-theoretical arguments.

Where I don't agree with you is to think that bitcoin will become world-important - it will remain in a niche.  Like all crypto.  People will never pay their groceries with crypto.  Forget that.  Fiat systems will remain in place as long as humanity is still in command and states exist.

Where I sort of don't agree with you, but I don't care much, is that I have good reasons to think that bitcoin's design has too many clunky crypto design features to be the product of a mind like Nash.  But it could be ; but as, moreover, Bitcoin's monetary philosophy is ALSO not in agreement with Nash ideal money, I tend to reject the hypothesis that Satoshi was Nash.  I tend to think it was a guy with some bright ideas, and some limited crypto and math understanding, and some limited economic understanding, that made bitcoin in his basement.  But I could be wrong.   The "design features" that I find clunky in bitcoin, don't break it, but they are simply clunky.  There's nothing "brilliant" about them.

Where I don't agree with you is that bitcoin is designed by the "global elite" because apart from a gambler's token, it is not going to go anywhere that can interest the "global elite".  The sleazy business it is profiting is not the global elite, but second-hand maffioso.  And if it were, against all odds, designed by the global elite, it is a failure in any case.  Don't stare yourself blind on the "market cap" of bitcoin: that's nothing else but one big huge speculative bubble, driven by greater-fool games.  The economic value of bitcoin (the value creation it allows over its competition: fiat, in economic activity) is most probably 100 times smaller, and dominated by dark web markets, its main economic utility for the moment.  Bitcoin's economic value must at most be a few hundreds of millions of $$ worth ; that is, the value creation it helped create which wouldn't have been possible with fiat because of legal or other obstacles.  The 20 billions are nothing else but greater fool speculators waiting for still greater fools.  If they don't find greater fools after 10 years or 15 years, that bubble will collapse.  But there are still a lot of greater fools to be taken, so as long as the black tulips rise in price, you will find speculators flowing in.  But that is not economic value.  

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April 13, 2017, 06:11:59 AM


In regards to John Nash creating Bitcoin I think I could just as well say someone else created it. I don’t think we will ever know for sure.
Absolutely true and intelligent point!  Although on other hand, how many people do you know spent the last 20 years explaining how an international e-currency with a stable supply and asymptotically stabilizing inflation rate would cause a currency war that would eventually end the monopoly on central banks and government ability to issue money?

This is another reason why bitcoin is not corresponding to Nash's ideal money.  Bitcoin has a diminishing DEBASEMENT, and a huge DEFLATION (that is, value appreciation).  

For Nash, it was extremely important that this international currency had zero or low and fixed, inflation, that is VALUE DEPRECIATION.  He accused gold of not being ideal, exactly because it was too much of a collectible, and couldn't adapt supply to keep its value constant.  Bitcoin is based upon sound money doctrine, which is not what Nash considers ideal money, because it doesn't have a stable value, and can't because you cannot have inelastic supply, variable demand, and constant price.  Bitcoin has perfectly inelastic supply (it is programmed in advance), even a diminishing growth rate of his supply.  So this must be a value-appreciating asset, which cannot serve as ideal money with constant value AT ALL.

If it was meant to be a reserve ASSET (not money), then Satoshi has been lying through his teeth, and it doesn't correspond to what Nash called ideal money.

You are mistaken. By the time Bitcoin reaches its intended use case phase after the global monetary reset 2024ish, Bitcoin's debasement will be winding down.

Also you are causing confusion with your incorrect use of the term deflation. Deflation is an economy-wide phenomenon so would only apply if Bitcoin was the unit-of-account widely employed in the economy. Although it is true that in a few more years, Bitcoin will be causing massive global deflation.

Also Nash specifically wrote that debasement was compatible with his ideal money, as long as the schedule of debasement was non-manipulable (which is the case for Bitcoin).

Eventually the speculative value of Bitcoin will become nil as it becomes the home of $billionaires-only (which btw is mathematically why all the speculative value in the economy will leech off into BTC), then the miners will not longer be able to do these manipulations of the speculative exchange price as they are currently doing with for example Litecoin.
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April 13, 2017, 05:57:35 AM
Hello everyone, it's my first post here.

...

That being said, do you really think billionaires will stick to bitcoin and not have a portfolio of at least tens of coins ?

Welcome aboard. You have a lot of reading to do. You would be well advised to read my entire archive.
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April 13, 2017, 05:52:31 AM
Satoshi clearly stated that he intended to have VISA-like transaction volumes on-chain with bitcoin, but that bitcoin would become a semi-centralized served thing.

He lied by not mentioning that isn't his intended use case. He was just responding to a question about if Bitcoin could scale from a bandwidth consideration alone. You can find other cases where he lied by not pointing out how impractical something would be, such as how he claimed some nodes would still be willing to process a transaction for free:

I read from Satoshi also that he realized that his system would only be viable in the long term in the hands of an oligarchy of miners.

So why can't you add 2+2?

He knows it will become centralized yet some how he thinks hobbyist nodes will still process for free. Satoshi was a liar.

Btw, John Nash was a prankster and deviant.

I was listening to him in an interview and he said he isn't concerned about helping the poor, because he said they are adjusted to their poverty.

So much for the P2P nature of bitcoin, which was only intended as a bootstrap with useful idiots.  He clearly didn't care about a long-term P2P network, and the importance of decentralized nodes:

Now you are starting to understand.

So why can't you add 2+2?

The block chain was just the ledger that a few oligarchs would share amongst them, hopefully keeping one another in check, to serve as the new centralized VISA backbone to which all users would connect.

However, the way bitcoin is evolving, and was actually designed with the 1 MB limit (and other practical limits), is that on chain transactions will be limited to a few big actors and will not reach large scale, but on the other hand, that most people will be able to download a chain with which they cannot do anything apart from contemplating how big guys are filling it with their expensive transactions.

Bitcoin is "rich sleasy business" OWN private money, NOT to be used by normal people, contrary to what Satoshi initially announced.   Bitcoin IS downloadable by anybody, but not usable ; Satoshi announced bitcoin to be usable by anybody, but not downloadable except for a few miner oligarchs.

And why did it become a rich sleazy business money and not a VISA administered by a few miners ?  Because Satoshi put himself a 1MB limit on the block chain.  If he understood the game structure of bitcoin, he would have known that this limit would become immutable because it was needed to generate fees (which he needed for reasons of his diminishing coin creation scheme in the longer term) but then it couldn't turn into a VISA kind of money and he would deny what he had been proposing from the start  - and if he didn't understand the consequences of him introducing a "temporary" 1 MB limit, then he couldn't foresee that it was going to become a rich-business-only crypto either.

Yup. So why can't you admit the evil genius of Satoshi?


Btw, I think it was necessary to murder John Nash before the blockchain scaling debate reached its boiling point. Because by now even people such as yourself are starting to realize something smells funny.
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April 13, 2017, 05:24:10 AM
I've first heard about John Nash is when I've watched the movie a beautiful mind.

The movie contained many lies and misrepresentations of the facts. Read the biography book instead.
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April 13, 2017, 05:21:06 AM
I've first heard about John Nash is when I've watched the movie a beautiful mind. Of course the movie is not enough to tell whole of John Nash story but I think he has a paranoid schizophrenia, where he think that something or someone is real.

I don't know if John Nash created Bitcoin but I think he's field is more on game theory and partial differential equations.

Bitcoin is basically two part, one of them is game theory, the other is decentralized transactional database.

Game theory is all about reward vs risk. Bitcoin pow is exactly this. Into maintaining a constant with the risk/reward thing for miner. The risk is the difficulty ( 1/rateof(good nonce)), and reward is the block reward associated with taking the risk associated with finding the good nonce.

The whole mining for reward thing totally fit within game theories.

The other aspect is speculative value, which is something Nash also studied.

Not saying it's Nash who made it, but the model could fit.
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April 13, 2017, 05:00:31 AM
Again would need to do the maths to be sure, but im fairly convinced the whole design rely on tieing up two opposite for them to work together as a greater whole with a certain global order even if it's composed of two opposite forces.

The two sides are the market/trading/speculation, and the other side, the predictible nature supposed to emerge from it, from the Mining, to keep the chain coherent and secure the transactions.

The two opposing sides are just distractions.

The shadow elites neither understand Taoism nor are practicing Taoist wisdom.

Because they do not practice what they understand/preach, thus they are as good as not practicing any wisdom.

Besides, the shadow elites worship the money god.

Money, no matter how perfect we try to make it to be, will never be perfect.

Depend on what you call "elite" Cheesy

Originally elite is the same root than "elected" and are supposed to emerge as responsible to handle certain things for the other people better than what they would do themselves. Shadow elite in itself is bit an oxymoron.

But if you are talking about money worshiping,  if you study occidental philodophy, it's really classic. It's even the stuff in the first star war trilogy with the federation of trade against jedi council . Well just to say it's very classic abc of philosophy since the beginning and plato wrote many about this.

It's not really about elite, but psychology of the mass and pyramidal nature of society. With gauss curve etc you know very small fraction of person really study math or philosophy or care about law , justice, truth, good & all.

It's really a central question in occidental philosophy since the beginning.

And the idea is always the same that money worshiping or greed, materialism , doesnt lead to wisedom, or idealism. Actually materialism is the enmy of rationality and moral for plato. But majority of people are materialistic, and plato was very aware of this.

And it's just where you get Nash theories with proba and game theory who are made to model this "low end of the pyramid" psychology, and model it as a coherent whole with higher purpose even by taking in account all the economic game theory that animate trader and speculators.

And im not sure the whole demarch would be so coherent coming from plain dumb money worshiping greedy person. Those people just run mining hardware and play on bitrex. They dont design whole system like this in the shadow.
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