Topic: Options for offline-only users? (Read 4883 times)

Just as a bookend to this thread:
  - http://github.com/bitcoin/bitcoin/issues/271

Also:
Transactions when only one party is online
  - https://bitcointalksearch.org/topic/transactions-when-only-one-party-is-online-77608
 

Update: And these as well:
Desert island economy on Bitcoin without being connected to the internet?
 - https://bitcointalksearch.org/topic/desert-island-economy-on-bitcoin-without-being-connected-to-the-internet-106302

Creating transactions offline:
 - http://brainwallet.org/#tx

Basicly, yes.


A client could detect when it is on the minority side of a network split, although none presently do, by tracking the average time interval between blocks.  If the interval is more than twice the average for several blocks, or more than 6 times the average once, that client is almost certainly disconnected from the majority network.

Still, the clients cannot just decide to lower the difficulty.

No, and if they tried then their blocks would be wiped out each time that they reconnected to the majority network, and those transactions would have to be included in another future block anyway.  The chain split that it would cause wouldn't be a problem for anyone outside of the ship.

Let's say they fork the chain. When they reconnect, they find out that their chain is shorter (less combined difficulty). What happens to the transactions in their chain? If they are rebroadcast, that might solve the problem. The only thing I see is that they would be unable to generate blocks at current difficulty. Perhaps their clients are smart enough to know when they are disconnected from the main network. When disconnected, blocks are generated at a lower difficulty, which is readjusted every N blocks where N is significantly less than 2016.

Yes, but the sailors can't process the transactions by generating blocks, right? Otherwise, they'd have to fork the chain.

Not really true in this case.  The risk of double spending is if there is a person on the sub trying to send coins from a wallet to another person on the sub, while another person in the greater Internet has a copy of that same wallet trying to spend those same bitcoins.  This excludes the possibility that the sub was trying to generate while under water, which would be futile and therefore should be suspect anyway.  There would still be a near zero risk that coins could be double spent on the sub itself.  A disconnected client is at risk of a double spend, but a disconnected client can certainly itself spend.

In another thread I was making the analogy that you'd have a local network inside a submarine and the crew wanted to transfer bitcoins to eachother but there might be an occasion when the crew would want to buy a shipment of stuff from a city so ever so often the sub would emerge onto the water surface where the sub would them be in radio range to send the bitcoins. From the feedback that I got it sounded like you can't have a segregated bitcoin network like in my example as it would cause double spending? In any case I did come up with a solution for this. Instead of having one bitcoin network you'd have bitcoin networks. The bitcoin Internet and bitcoin intranets. To connect them to eachother people acting as bitcoin to bitcoin traders would handle the transactions that were off of each bitcoin network so for example bitcoin_submarine would have a bitcoin - bitcoin trader who would collect bitcoins from a crew member and then the bitcoin trader would call another bitcoin - bitcoin trader on the shore and tell that person that they collected 10btc and that the 10btc would go to some address in the city which then would become the responsibility of the bitcoin - bitcoin trader on the shore to make that transaction through the network. I guess what I'm saying is that if bitcoin must rely on the Internet for it to work then this might be an alternative solution so in the case that you make, someone in Africa who does not have a link to the Internet, that village would setup a bitcoin - bitcoin trader, someone who can be trusted by another bitcoin - bitcoin trader and then through a computer or a few computers setup in a LAN configuration that village would be able to make local BTC trades while also making global trades around the world without needing a 100% dedicated Internet connection.

Well, yes. Obviously! I don't think we'd all be here if that weren't so. :-)

That is true, but the rate of loss will be inversely proportional to their value. This deflation is quite mild compared to inflation via quantitative easing, interest rate manipulation, and fractional reserve banking.

Technically yes, we are in the inflationary stage of the bitcoin deployment. And yes, the number of bitcoins to be made is set at 21 million. However, we must assume that once all the bitcoins have been deployed there will be a slight rate of deflation as wallets are lost to the destruction of the media on which they are stored. Someone stores their wallet on a personal computer without an off-site backup and a natural disaster or accident destroys the data? All the bitcoins in that wallet are gone. So yes, bitcoins are ultimately deflationary. Once we hit 21 million we will only be able to destroy them.

No, you charge interest because it is a key component of the coordination between present and future desires.

I don't see why people keep calling Bitcoin deflationary, it's not. Prices today are chosen based on the amount of fiat currency some number of Bitcoin can buy. As Bitcoin becomes stronger with regard to fiat currency, it seems as if there is deflation, but there really is not. The money supply is increasing at a rate of 300 BTC/hour. Once prices are set primarily in BTC (when producers can buy raw materials with BTC), this "problem" will disappear. Bitcoin has a steady amount of monetary inflation, known by all in advance, which approaches zero. This will allow interest rates to be chosen that take this known inflation into account. I expect these rates will be much lower than today, if not negative.

I've mentioned elsewhere that paper bitcoin notes could each have a public key that you could use to check that the bill was backed. The bill could also have a feature that would reveal the private key upon voiding the bill.

As for interest, don't charge it! Why would you, just because you can?

The price of freedom is eternal vigilance. We'll have to work to keep people educated about such possibilities.

We could also potentially pre-emptively create an "open bank" based on the same decentralized principles underlying the Bitcoin network to handle basic bank functions like lending and borrowing. People are going to want loans, and if we don't give them a *good* way of filling that need then some bank-like entity will take advantage of that giant, gaping hole in the market.

Loans, of course, will be tricky. In a deflationary system any sort of interest rate will act as a constantly rising variable interest rate even if it's fixed. It'll be a completely different way of thinking for people since most come from inflationary systems. And even if there is no interest rate on the loan, the rate of deflation will act as an interest rate. If that rate is too high, it could result in bankruptcy for a lot of unwary people. It might be prudent to implement a negative interest rate for such loans so that the rate of deflation plus the negative interest rate works out to be something sane and manageable.

Wow, this is a fun thought experiment. I'm not used to thinking in terms of deflation...

I agree with what you're saying but I think it's almost inevitable they're going to do that. You don't need to give them permission.
It would be just how it is now. Bank has 1000 of your BTC in it and a guy comes in for a 100btc loan they'd give him 100 of yours. Now if you go in the next day and want your 1000btc all at once you've got a problem. Obviously on a larger scale more people etc. Also there probably wouldn't be any regulation / reserve rate so who knows maybe they take your 1000 and feel like loaning 50,000 out. It could be worse than the existing system in some ways. Also you know the average person won't understand. They'll see it as "I bought 10k btc and lost it all when it was in the bank, it's not safe".


Maybe being pessimistic but oh well, I'm just looking at how the banks can use it to benefit because they will.

Upon further reflection I think that sort of thing might start getting us into trouble. After all, if the bank still has the bitcoins, and if they figure a certain percentage of the bitbucks they issue will be out of their hands at any given moment, they can start doing things like:

1) Using the bitcoins behind the "missing percentage" to speculate. When they lose the bitcoins they will effectively be inflating the bitbucks economy.

2) Printing more bitbucks than they have bitcoins to cover. Let's say the bank is short some money and needs to pay off a debt *now.* Why not print off some bitbucks to represent that "missing percentage?" After all, it's not like there's ever going to be a run on the bank such that they'll have to actually account for that missing percentage.

By creating a physical currency issued by a single entity we will have re-created the Fed and the fiat system we are desperately trying to escape. Let's worry about the local stores that don't accept bitcoins before we worry about the villages that don't have access to the bitcoin network. If we need a physical representation of value, we may as well use one of the established fiat currencies, or else numismatics. Both of these currency classes can be bought with bitcoins and can be used to represent bitcoins physically.

If the time comes when the isolated African village *is* a worry for us, then let one of us who were here in the beginning bring the network to *them.* As society struggles on and the standard of living rises globally, the Internet will become almost as ubiquitous as gasoline or plastics.

Could work well. I'm thinking though if you can afford to run a bank and print currency etc etc you can probably afford some type of sat connection to the internet and move bitcoins. I could see a lot of person to person transfers in the future though where neither person on either end had a clue what btc was and just paid a comission to a guy that sent the money to the other end and another guy handed cash to the receiving party. Basically like any other transfer.

I've actually been tossing that idea around in my head too. In fact, I've seen it mentioned here a few times already. I like the idea of a lightweight client though. With physical representations of currency, you start to have problems with counterfeiting. And then it's "oops, goodbye deflationary model!"

Btw, regarding WiFi ranges; google "super wifi"

Why not have a bank issue notes backed by bitcoins? Users will have to trust the bank, but at least you won't need electricity to conduct a bitcoin transaction.

So, if your network got isolated, and you didn't want to fork the block chain, you could just conduct transactions without confirming them?

If i'm not mistaken, except for mining, you could network two machines and have them exchange transfers data, then pull one of them and connect it alone to the Internet, then connect it back to the other lone one and things would work just as if  they have all been connected to the Internet, except for the huge lag in transaction confirmations etc, and this would still work no matter how many steps you place between one machine and the Internet as long as it gets connected to the Internet no matter how indirectly in a way both things sent and to be received eventually reach their destination.



Mining can't be trusted in such a scattered network 'cause the Internet probably found the solution before one of the sneakernet nodes did and the coins from the sneaker node will be considered invalid and wiped.