Topic: LN+segwit vs big blocks, levels of centralization. - page 2. (Read 8897 times)

Nope. M is increased and the decreasing V is the effect. 2+2 = 4. 2+1 = 3. Decreasing from 2 to 1 changed the effect to 3. One does not increase or decrease V. V changes because of M,T,P or any combinations of those 3.

Then don't change P,T,M.

Nope. V is the result of P*T/M=V and V depends on P,T,M. P,T,M are the causes. V is the effect. (end result of a formulae). V is not an independent entity and hence it can’t cause anything.

Bitcoin is like a "decentralised foreign currency" and when one exchange fiat to bitcoin, bitcoin value goes up, assuming one doesn't exchange bitcoin to fiat. The value of bitcoin is like any other value of fiat currency worldwide, it doesn't cause inflation at all.

The value of bitcoin is never constant, so what!!!! Is the $ v £ v yen v etc, ever constant? Nope. Bitcoin is an "unit of account" - all it requires is acceptance by more parties, ie retailers, users.

I disagree that there may not be enough "velocity"

And the price level as such is not very relevant (i.e. the question is not about lowering or keeping the prices constant). There is another aspect which your formula (i.e. Fisher's formula, obviously) cannot predict (and this is also another nail into the coffin of your "mathematics above all" attitude). More important here is decreasing price volatility that increase in money velocity will certainly contribute to. Nevertheless, you may try to employ Fisher's formula to explain that (I'm all ears and eyes, anyway) or, alternatively, try to actually understand how velocity affects prices in real life (beyond M×V = P×T) and thus see why it will be a factor for lowering volatility. It's time to choose, Mr. Freeman

==>  you are increasing M and decreasing V at the same time, to keep P and T constant.  Sure.   The whole idea was to keep V more or less constant, which in reality, it usually is - depending on the KIND of money.

For M2 money (which is including savings accounts, so which is held much longer)
https://fred.stlouisfed.org/series/M2V

For M1 money (which is normally quicker)
https://fred.stlouisfed.org/series/M2V

Of course it varies somewhat according to mood, payment and spending habits etc..., but not "orders of magnitude".

In your calculated examples, you use V as a kind of adjustment variable to give you the desired results.

But my initial claim is that if Q is going to grow many orders of magnitude (from "1 pizza" to "world economy", say), then V will not compensate this, and M is, up to a small factor, constant (small factor, less than 10 say: there will not be much more than 10 times more bitcoins than when the first pizza was bought with it).

As such, there's simply NO HOPE for bitcoin to keep a constant price during its rise from "one pizza" to "world economy" - which is empirically seen, because it rose from sub-dollar to over $1500,-.  Bitcoin has not the slightest bit of chance to ever be a "unit of account" of any meaning, and hence can never be considered a currency.

What are you trying to do?

M*V = P*T

M = supply of money. ($1000)
V = velocity.
P = average prices. ($10)
T = volume of transactions ($500)

Using the above figures, then
P*T/M=V
A) 10*500/1000 = 5. Velocity is 5. ($500/$10 = 50 transactions)

If M goes up to $1200 and P stays at $10 then
B) 10*500/1200 = 4.16. Extra M isn't boosting the economy. ($500/$10 = 50 transactions)

However if T goes up to $550 due to increases in M then
C) 10*550/1200 = 4.58. Extra M boosting the economy, T goes up 10% (transactions from 50 to 55) versus M going up 20%

However due to M going up 20% to $1200, P goes up 20% to $12, T goes up 20% to $600 then
D) 12*600/1200 = 6. Economy the same as (A), ($600/$12 = 50 transactions) just bigger numbers misleading people into thinking the economy is growing.

If P goes up to $12 but M stays the same then
E) 12*500/1000 = 6. T remaining at $500 means less transactions ($500/$12 = 41.66 transactions) Economy poorer due to less goods and services sold.

However with P at $12, T would fall due to higher P. T falls 20% to 400 then
F) 12*400/1000 = 4.8. T at $400 means less transactions ($400/$12 = 33.33 transactions) Economy even more poorer due to less goods and services sold.

If T goes up $600 but P and M are the same then
G) 10*600/1000 = 6. Economy growing naturally via more trading. ($600/$10 = 60 transactions) Demand goes up but because M is the same and the prices can't go up. If prices goes up then you would get (E). Thus 60 transactions is better than 41.66 transactions. Or (F), thus 60 transactions is better than 33.33 transactions.

Velocity for (E) is higher than (A), (B), (C), and (F), but the economy is poorer. (F) is poorer than the lot even with higher velocity than (B) and (C).
(D) velocity is the same as (E) but (D) transactions is the same as (A).
(E) is the same as (G), but with higher T when M and P are the same = healthy economy.
(B) and (C) can happen after M goes up due to the time lag when new money circulates the economy.

Thus V causes nothing. Changes in M, T, P will change V. The law of cause and effect - causes are M, T, P and effect is V.
Rise in inflation of M cause P to go up leading to price inflation.
P going up on is own is bad (E) and that is price inflation when there is no inflation of M, leading to (F), thus forcing P to come down again.

There is no C - coin value in M*V = P*T.

Bitcoin is like a "decentralised foreign currency" and when one exchange fiat to bitcoin, bitcoin value goes up, assuming one doesn't exchange bitcoin to fiat. The value of bitcoin is like any other value of fiat currency worldwide, it doesn't cause inflation at all. Only M does. V for velocity causes NOTHING.

But I just made an inference following your own logic

And now you are trying to move away from that. I guess you can't have it both ways. If you think that the world is basically an illusion, i.e. a representation of an abstract mathematical "reality" (obviously, that wouldn't be reality in our accepted understanding), then we won't be able to find out anyway. But if we can't find it out, it doesn't exist for us, so any idea (yours included) will be no more than an opinion or just a fruit of sick imagination ("the sleep of reason produces monsters"). In other words, you should deal with what you have and can touch, figuratively speaking


I should understand at last that I don't doubt this formula, but it is accepted in economics that you should go from (or down to) the lowest possible level which is still treated by economics (e.g. atoms are beyond the scope of this science), i.e. from (down to) an individual consumer, household, or business. So it is not about explanation as such but showing how money velocity translates into inflation at that level

Sorry, missed this...


Yes, that's my view, yes.  But I don't see the point in making it here.


Nope.  What I said, was that for those things were we CAN have a mathematical model, that's worth more on the scale of understanding, than an "explanation".  But in many cases, we can't have that mathematical model, and we are reduced to handwaving and "explanations".

The funny thing is only when there is a mathematical model, and people are claiming that one isn't "understanding" it, because there isn't an "explanation".  That was the exact accusation you made.   You now understand why I think that was mistaken.  "explanations" are below "mathematical description" on the scale of understanding, even if our human brains see it differently.

So, concretely, to get back to the subject:

once we have that C (coin value) = Q / (M.V), everything about the relationship between velocity and inflation is said and done, and no "explanation" can do better.   If the velocity doubles, M and Q constant, well, C halves: 50% inflation.

usually most full nodes defaults are to accept full data. and setting it to prune is a opt-in after (changing a bitcoin.conf file).

id say for third party services yes. they should connect to many nodes to ensure users get most reliable data so that even if at user end its sourced from one server.. the server has adequate backup/contingency

but for prunned/lite(spv) node users they shouldnt try connecting to loads of nodes because they are using up other peoples chances to connect to good nodes and hurting the propogation time of getting good data to the real full nodes

What's the default?  Will my full node prune and/or not store witness data?  How can I tell?

Even 3^rd parties that store privkeys for folks (which I don't like either but it is what it is) need access to a well-connected full node, right?

not really for network security..but for personal independence ( no third party managing privkeys)

which is why i hate the idea of having these 'fake full nodes' (such as pruned/ no witness)
if you(anyone reading this) want to be a full node then be a full node. if you dont then just run a lite client.

by a full node having features like no witness and prunned, basically makes it easier to fake the full node count for sybil attacks by not being required to do all the things that make a full node a full node

Well, somehow I didn't expect you to stop there

And it feels like you have stopped half way. Honestly, I expected you to go as far as to claim that the reality which is given to us through perception is in fact only a representation of some mathematical abstraction. Nevertheless, your point still remains mostly meaningless. How come? Because the lack of ability to model itself just proves there is no point in that altogether since you will be stuck in an endless loop of subsets being part of a bigger set which itself is only a subset (I'm using your parlance so you could better understand me). That's why this point is meaningless since it doesn't provide a solution apart from accepting that such inside-out modeling is impossible, and, consequently your mathematics is not omnipotent. As you have said yourself, we cannot "know everything and model everything accurately" because the "discovery of those formulae may be essentially impossible from within the system itself". In short, you basically just disproved your own point, conceptually

You are partially right by saying that your ideas never strayed from the main topic and I agree with that. But the longer you are pointing your facts and opinion and defending your side both you and the other person have become philosophically inclined with your line of thoughts and have already  moved away from the topic for a short period of time. But I dont have anything against it since I am enjoying your conversation and the way you are expressing it.

Thank you!

I fully intend on hosting the full blockchain, i.e. no pruning.  I will watch my bandwidth, CPU, and storage consumption but my guess is I will be ok.

The connectedness of the full nodes is one thing; I am wondering about the non-full nodes too.  Having a place for them to connect to is important, right?

Yes.  Even though the discovery of those formulae may be essentially impossible from within the system itself, or too difficult or simply difficult and we're not smart enough, which brings us back to the need for handwaving when true understanding lacks.  Because I don't claim that we can know everything and model everything accurately ; on the contrary.  Our understanding is limited.  However, whenever we *can* model things accurately mathematically, this is more "pure" knowledge than when we use handwaving, images, and "explanations" even though our brains prefer the last ones and give you a higher sentiment of "understanding".  I wanted somehow to point out the ironical side of that: when our brains give us the sensation of understanding, it actually means that we are lacking fundamental understanding ; and when our brains are somehow repulsed by formality, in fact, that's when there is true understanding.

My stance on the above "choice" you cite, even though itself "handwaving", is rather that the antagonism between different actors will be such that nor bigger blocks, nor segwit will arrive, even though almost everyone individually would like to see one of these solutions happening.  This comes about because it is relatively easy to keep "consensus" away from the solution that you don't want, but it is harder to find consensus over a change that you want (but others don't).  Now, again, I'm handwaving myself here, but I'm pretty sure that this can be turned into a class of individual behavioural models that will result in status-quo in essentially most of the cases (not all).

I don't really think that we are actually going astray

The main thread of this topic is itself about the choice that masses of people are going to make (in regard to "LN+segwit vs big blocks"), so, as to me, we are quite on track. More specifically, you are inclined to think that people actually don't have free choice, in this case in respect to choosing between LN and SW on the one side and Big Blocks and BU on the other, since it is all pure mathematics, and their behavioral patterns are described by mathematical formulas with an element of pure, pristine randomness if there is such at all. Did I get you right?

We are really, really getting far astray of the thread topic, but there is no contradiction between the sentiment of free will and nevertheless a behavioural model of the economic entity.   After all, what we call free will is nothing more than the sensation that we can decide ourselves how to satisfy our non-chosen desires and avoid our non-chosen sufferings.  One can hope that sufficiently diverse models of detailed individual behaviour nevertheless lead to quite similar emergent properties of the overall system, so that these properties can be considered as quite universal for a large class of different individual behaviours.  This, by itself, is purely mathematical.

This why is a well camouflaged how, in fact

I'm curious if you really don't understand the distinction between how and why. I refer to why as the reason, for example, why the Moon circles around the Earth, i.e. what is the purpose of that (I thought I made it pretty clear in my post)? Indeed, in the case of the Moon there might not be such reason or purpose at all but that doesn't mean that there is no idea of reason or purpose as such. Basically, this idea stems from the idea of free will itself (if we drop intermediate considerations), so good luck to you trying to fully describe it mathematically without losing its essence in the interim

"Why ?" on one level, is "how ?" on another.

After all, "why?" implies an intention, but an intention is nothing else but the result of a dynamics on another level.  

"Why does the moon move in an orbit ?  Because of the gravitational attraction of the earth."

But then, the gravitational attraction of the earth is a result of "how does gravity work".

Now, the relationship between "velocity" and "economic behaviour of an economic agent" can be formulated, at the level where we are, as:

"why does the collection of economic entities hold coins for time X",

but this can be answered once we have a model of the dynamical interactions of economic agents, including their desires, fears and mutual interactions, and then it becomes a question of "how".  We only talk about "why" when we don't have a clear view of the underlying dynamical formulation.

If we had a good enough mathematical model of the economic agent, and its interactions with others, then we could mathematically answer the question of how it comes that these agents collectively "decide" to hold coins longer or spend them faster, in the same way that we can answer the question of why the "moon decides to go around the earth".

It is because we don't have such precise model, that we go "handwaving" and pretend to understand intuitive "explanations".  It is because we didn't know about gravity, that we thought that some angels decided to be pushing the moon and that we had a feeling of "understanding".  It is when the model became precise, that we really knew, and at the same time, had the uneasy feeling of not understanding any more.

That's the point I'm trying to make

All this doesn't really matter to you since you stick to your formulas, and you can't derive any conclusion from them in this regard. They will be deaf to all your such attempts. Basically, mathematics (which you seem to be so fond of) provides an answer to the question of how, but it fails miserably to answer the question of why, i.e. what is the reason for things to be the way they are. According to mathematics, the Universe is a soulless and inanimate mechanism with an element of randomness built in (and the latter is not even given)

I think this is the major cognitive limitation most people fall into.  The universe is mathematical, and our intuitive understanding is just a rough short cut because the true mathematical understanding is most of the time too overwhelming ; not the other way around.  Mathematics is not a tool, it is the goal.  Of course, I'm not talking about "curve fitting".  I'm talking about the logical conceptual structure.  All rigorous thinking is ultimately mathematical, but we cannot always afford that, and then we switch to intuition, feelings, images, and so on.

Your example is a good one to illustrate that.  Once you understand that

V = 1/M (0 . m0/M + 1 . m1/M + 2 . m2/M + ... + n . mn/M)

there's not much more to say, because everything is explicitly, or implicitly, in there.

V increases if people "don't want to hold money", that is to say, if mn is "big", if coins hop a lot, if people don't hold them, so want to spend them.  Now, do they want to spend them, because they want a lot of stuff ?  Or do they want to spend them because they don't want to hold them ?  All this doesn't really matter: if coins hop a lot to buy the same amount of goods, of course, per amount of good, more of them hop over the counter.  Why ?  That's not given.  It is just given that if the velocity is high, mn must be high, and hence, that there are a lot of coins that hop a lot and don't stay long in the hands of their successive owners.

most pools connect via things like fibre or supernodes as it used to be called and let the fibre/supernodes propogate the data out to all the other nodes thus taking pressure off the pools from getting huge demand for direct connections from random users.

as for the random users and merchants that build up the symbiotic relationship of the diverse decentralise per network that keep pools in line and ach other inline. thats more of a question of the 8 dgree's of separation.

for instance if instead of 52 connections there was only 8.
if everyone had only 8 connections
8*8*8*8=4096
the data would not propogate to everyone in 4 hops/relays(based on bitnode count ~7000)
8*8*8*8*8=~32k
the data would propogate to everyone in 5 hops/relays
10*10*10*10=10k
the data would propogate to everyone in 4 hops/relays
20*20*20=8k
the data would propogate to everyone in 3 hops/relays
84*84=7056
the data would propogate to everyone in 2 hops/relays

so ill leave you to rationalise if you should step up and be more of a super node by going upto 84 as a nice healthy 2 relay number.
P.S if your going to want to help the network sync. doont use prunned/no witness features. otherwise people cant grab full data from you.

if you want to use prunned/no witness. then just let 8 connections and be at the bottom end cesspit of nodes that cant reliably sync with each other