Topic: Real honest Money - page 2. (Read 6828 times)

Energy doesn't back PoW, because you cannot redeem bitcoins for a guaranteed amount of energy, like you could exchange bank notes for a specified amount of gold in the 19th century. Gold was then backing bank notes and if a bank printed too many bank notes, it couldn't service all customers' requests and went bankrupt.

In case of PoW coins energy doesn't back them, because there is no entity that guarantees any pay back with a certain amount of kWhs. The exchange rate is free floating. Hence, PoW only has utility value, not intrinsic value. People value crypto currencies for what they can do with them. With that in mind, it doesn't matter for users whether it's PoW or PoS, as long as the crypto does what they need it to.

The advantage with PoW is NOT that it is somehow "backed by work," what gives bitcoin its value is its superior usefulness to that of fiat.

The real advantage with PoW is that you have an independent means of quantifying effort to secure the network and distribute coins.

Unfortunately, in its current state bitcoin has become centralized through mining pools and industrial mining (centralization of mining increases efficiency). Because of this, and because bitcoin uses 10% of its market cap atm to pay the miners, people are innovating and trying new types of blockchains hoping that we hit upon something that can destroy the old economical system and replace it with a faster, more fair, open, secure, decentralized and lower cost system.

Bitcoin is a vision, bitcoin is a dream we all have, and anyone who holds bitcoin can easily "vote" with their money to incentivize research into potential new technologies that can bring value into this helpless world of ours. Not all altcoins are pump and dump scams, many are lead by visionaries who, inspired by Satoshi, set out to try doing things a little differently. Bitcoin does not have to be the be-all end-all. Bitcoin is our basecamp.

So lets explore and figure out how to bring the bitcoin vision into reality. If government corrupts the central mining pools we all lose; if we have ten thousand blockchain tentacles each with new innovations there is no stopping us.

Bitcoin is a intangible good just like your shoes are a tangible good. You will have a hard time doing any meaningful exchange of wealth on a global scale with any tangible (physical) good. Who creates a good does not matter, after all when was the last time you made your own shoe. Most people are quite happy to wear a shoe made by a multimillion dollar big company. What matters is that you can be assured fair work has been done, you can not cheat.

http://en.wikipedia.org/wiki/Intangible_good

While you can't create something material from nothing but bitcoin is not in 'material things' category. After all it is just line of code. I think it CAN't be fully transparent and stable currency without proper protection. Something that can disappear after one power surge is not really trustworthy...

+1
Why would you pay someone for doing no work = PoS

Isn't this because, if the prices drops, miners leave and the difficulty falls, making it cheaper to mine a bitcoin? Looking at it this way, the cost to mine a bitcoin falls to the market prices. That is, price of a bitcoin drives the cost of mining.

How do you argue that there is a fundamental cost to mine a bitcoin when there is changing difficulty?

Hm... interesting

Some good points but the conclusions seem a bit confused

The difficulty drives the cost to mine a bitcoin, which drives the local-minimum price after a burst bubble. Price is driven by a mix of supply-and-demand, but also the price to mine a coin. When demand outstrips supply, price increases well beyond the cost to mine a bitcoin. However, when the market crashes after a bubble, it doesn't crash below the fundamental cost to mine a bitcoin - and if it does - not by much, and not for long.

The article implies that mining difficulty drives the price, but it's more complex than that. Due to the effects mentioned in the article, miners will join and leave based on profitability, therefore the hashrate will follow the price to some extent (or rather mining investment per unit mining return).

Gold, Silver, Bitcoin = Honest money.

Could you give any reason for that? I am really interested in that since i have no idea why one should not compare two methods to secure the coin network.

Comparing PoW to PoS seems silly and deceptive to me.

It's a free market.  People can choose to not participate in such big pools,
which are a bad idea anyway.

I said above that yes, selfish mining issue is related to large pools. The incentive is extra block rewards and taking those rewards away from competitors by orphaning their blocks. "Bitcoin is broken" is just the title of the article, we are not discussing the title, we are discussing the issue of selfish mining, which is real and does happen. You can go on burying your head in the sand, it doesn't make this issue go away. The outcome is smaller miners go out of business, large pools become larger.

I took a look at the paper.

They may be correct that you can sometimes gain an advantage
by using selfish mining techniques, although I didn't review all
of their math and assumptions. 

You will notice, that the assumed advantages become more
pronounced with pools above 30%, which are also capable
of performing double spending attacks.

None of this means "Bitcoin is broken".  It simply reaffirms
the fact that large pools are not a great idea.

 

You will. Exactly by hiding blocks and mining a longer chain and then orphaning competitors' blocks. See the links above and watch the blockchain for confirmation.

You won't gain more rewards.

You cannot orphan a competitor's block unless
you hide your own block.  And when you hide
your own block, you risk someone else will solve
it and the network starts building on that chain.
If that chain becomes the longest one, you lost
the block reward you would have gotten from
doing normal mining.  

So you lose as much as you would gain and
your mining profits would be more unevenly
distributed.

There is nothing to gain from trying to hide blocks
unless you are trying to build the longest chain as
part of a double spend attack.

No, it's not about this.

Please feel free to educate yourself:

http://hackingdistributed.com/2013/11/04/bitcoin-is-broken/

http://hackingdistributed.com/2014/01/15/detecting-selfish-mining/