Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 37. (Read 907247 times)
Thanks for the info. The idea is to make the cost of sending the spam comparable to the cost of cleaning up the spam, which makes a lot of sense. Min TX fees can work as an anti spam measure, and can be applied without hard forking the coin if enough nodes simply refuse to relay transactions without the min TX fee.
Like ArticMine pointed out, there is already a cost to produce a large spam block, regardless of whether the costs is paid by a user in the form of fees, or by a miner in the form of increased orphan risk.
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Smooth is also correct, however, that just because the spam block has a finite cost and that a fee market exists, it doesn't necessarily mean that the fees will be the "right" fees to keep people who want to run Bitcoin nodes on low-cost hardware with slow internet connections happy, for example. As the chart above shows, both transaction fees and spam costs (measured in bitcoins) decrease as the propagation impedance of the network improves.
This relates to the question of externalities.
(a) Does retaining the block size limit as an anti-spam measure (i.e., a production quota above the free market production Q*) result in a negative externality? If so, is it worth it to implement a production quota below Q* and suffer a loss of economic activity equal to the region shaded in brown?
(b) If the answer to both questions in (a) is "yes," then the question is whether it is even possible to enforce a production quota without a strong organization or government willing to use force if necessary.
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Smooth is also correct, however, that just because the spam block has a finite cost and that a fee market exists, it doesn't necessarily mean that the fees will be the "right" fees to keep people who want to run Bitcoin nodes on low-cost hardware with slow internet connections happy, for example. As the chart above shows, both transaction fees and spam costs (measured in bitcoins) decrease as the propagation impedance of the network improves.
This relates to the question of externalities.
(a) Does retaining the block size limit as an anti-spam measure (i.e., a production quota above the free market production Q*) result in a negative externality? If so, is it worth it to implement a production quota below Q* and suffer a loss of economic activity equal to the region shaded in brown?
(b) If the answer to both questions in (a) is "yes," then the question is whether it is even possible to enforce a production quota without a strong organization or government willing to use force if necessary.
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Your paper is fundamentally flawed because it addresses nothing resembling the current dynamics at stake in Bitcoin. More precisely it ignores the incentives for miners to centralize (as they have shown to have) to mitigate propagation times. In effect your paper clearly demonstrates it is more profitable to do so under free-floating blocks and you essentially rely on their altruism to maintain the validity of your model to make decisions going forward. In short, your work might be sound from a technical standpoint but can not be used to construct security models that depend on worst-behaviours assumptions.
I cannot accept that you could comment on Greg's game theory intelligence when you continue to wave away the clear negative externality present in your models. You chose to ignore the obvious tragedy of commons at stake and that is why your opinion can never be considered as long as you don't recognize the cost externalized to node and the overall centralization pressure suggested by YOUR alignment of the incentives.
I cannot accept that you could comment on Greg's game theory intelligence when you continue to wave away the clear negative externality present in your models. You chose to ignore the obvious tragedy of commons at stake and that is why your opinion can never be considered as long as you don't recognize the cost externalized to node and the overall centralization pressure suggested by YOUR alignment of the incentives.
Relevant material:
http://pastebin.com/jFgkk8M3
https://botbot.me/freenode/bitcoin-wizards/2015-08-30/?msg=48477664&page=1
http://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-August/010737.html
Everyone is free to read and make their own judgment but considerable holes have been poken into Peter's work and he has often been urged to revise his conclusions. He is now parading his charts, illustration all over the forum in an attempt to obtuse the debate, confusing more impressionable users who do not have time, ability or care for validating his propositions.
Like ArticMine pointed out, there is already a cost to produce a large spam block, regardless of whether the costs is paid by a user in the form of fees, or by a miner in the form of increased orphan risk.
Smooth is also correct, however, that just because the spam block has a finite cost and that a fee market exists, it doesn't necessarily mean that the fees will be the "right" fees to keep people who want to run Bitcoin nodes on low-cost hardware with slow internet connections happy, for example. As the chart above shows, both transaction fees and spam costs (measured in bitcoins) decrease as the propagation impedance of the network improves.
This relates to the question of externalities.
(a) Does retaining the block size limit as an anti-spam measure (i.e., a production quota above the free market production Q*) result in a negative externality? If so, is it worth it to implement a production quota below Q* and suffer a loss of economic activity equal to the region shaded in brown?
(b) If the answer to both questions in (a) is "yes," then the question is whether it is even possible to enforce a production quota without a strong organization or government willing to use force if necessary.
Smooth is also correct, however, that just because the spam block has a finite cost and that a fee market exists, it doesn't necessarily mean that the fees will be the "right" fees to keep people who want to run Bitcoin nodes on low-cost hardware with slow internet connections happy, for example. As the chart above shows, both transaction fees and spam costs (measured in bitcoins) decrease as the propagation impedance of the network improves.
This relates to the question of externalities.
(a) Does retaining the block size limit as an anti-spam measure (i.e., a production quota above the free market production Q*) result in a negative externality? If so, is it worth it to implement a production quota below Q* and suffer a loss of economic activity equal to the region shaded in brown?
(b) If the answer to both questions in (a) is "yes," then the question is whether it is even possible to enforce a production quota without a strong organization or government willing to use force if necessary.
On another note: I am actually interested in the Litecoin solution regarding spam.
https://www.reddit.com/r/Bitcoin/comments/3ci25k/the_current_spam_attack_on_bitcoin_is_not/
Quote
This spam attack is not economically feasible on the Litecoin network. I will explain why.
Here's one of txns that is spamming the network: https://blockchain.info/tx/1ec8370b2527045f41131530b8af51ca15a404e06775e41294f2f91fa085e9d5
For creating 34 economically unfeasible to redeem UTXOs, the spammer only had to pay 0.000299 btc ($0.08). In order to clean up all these spammy UTXOs, you needed a nice pool to mine this huge transaction for free. And the only reason why the pool was able to was because the spammer sent these coins to simple brain wallets! If these were random addresses, they would stick around in the UTXO set forever! (or until each BTC is worth a lot)
The reason why Litecoin is immune to this attack is because Litecoin was attacked in a similar fashion (though to a much smaller degree) years ago. And I noticed this flaw in Bitcoin and patched it in Litecoin. There's code in Bitcoin that says if someone sends a tiny amount of coins to an output, make sure that he pays the mintxfee. This makes sense because you wouldn't want someone creating "dust" spam by sending small amount of coins. BUT the code still only enforces the same mintxfee if you send to many small outputs. The fix is simple: require a mintxfee for each tiny output.
Because of this fix, Litecoin's UTXO set is much more manageable than Bitcoin's. But the pull request for this that I created against the bitcoin codebase was rejected 3 years ago: https://github.com/bitcoin/bitcoin/pull/1536
One of the reasons why I created Litecoin was because it was hard for someone like me (who was a nobody back then) to make any changes to Bitcoin. Having a different set of developers take the code in a different direction can only be good for the resiliency of the whole cryptocurrency movement. And that is why there is value in altcoins.
Here's one of txns that is spamming the network: https://blockchain.info/tx/1ec8370b2527045f41131530b8af51ca15a404e06775e41294f2f91fa085e9d5
For creating 34 economically unfeasible to redeem UTXOs, the spammer only had to pay 0.000299 btc ($0.08). In order to clean up all these spammy UTXOs, you needed a nice pool to mine this huge transaction for free. And the only reason why the pool was able to was because the spammer sent these coins to simple brain wallets! If these were random addresses, they would stick around in the UTXO set forever! (or until each BTC is worth a lot)
The reason why Litecoin is immune to this attack is because Litecoin was attacked in a similar fashion (though to a much smaller degree) years ago. And I noticed this flaw in Bitcoin and patched it in Litecoin. There's code in Bitcoin that says if someone sends a tiny amount of coins to an output, make sure that he pays the mintxfee. This makes sense because you wouldn't want someone creating "dust" spam by sending small amount of coins. BUT the code still only enforces the same mintxfee if you send to many small outputs. The fix is simple: require a mintxfee for each tiny output.
Because of this fix, Litecoin's UTXO set is much more manageable than Bitcoin's. But the pull request for this that I created against the bitcoin codebase was rejected 3 years ago: https://github.com/bitcoin/bitcoin/pull/1536
One of the reasons why I created Litecoin was because it was hard for someone like me (who was a nobody back then) to make any changes to Bitcoin. Having a different set of developers take the code in a different direction can only be good for the resiliency of the whole cryptocurrency movement. And that is why there is value in altcoins.
If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?
Supply and demand take some time to adapt, spam attacks can be instantaneous and targeted to achieve Denial of Service during a particular time span to maximize annoyance.
Also the cost to achieve a high-fee DoS spam attack is relatively low compared to the world-wide disruption it can cause, it's actually negligible compared to a traditional advertising campaign with the same global reach.
My take on the issue:
Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.
Why does spam have to be expensive? if transactions are zero fee, then miners have no incentive to include them, so they'll just get filtered out and apply some mempool clearing system that forgets them after a certain time. If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?
Because the miners incentives are not aligned with those of the network in a free floating block size scenario
There is actually research indicating that this is not the case in the presence of a block reward. https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf (Thanks to binaryFate for letting me know about this article). Essentially the miners will not include spam unless the fee meets a certain threshold because it increases the probability of orphan blocks.
The article doesn't really disagree with what brg444 said above (I didn't read the entire chain of previous quotes). It says miners won't include arbitrarily much spam at an arbitrarily low price, because there will indeed be a functioning market where block space has a well-defined price. That is not the same as concluding that the resulting block size will be one that non-miner stakeholders (or anyone really) are happy with, much less that such a size is in some sense socially optimal.
My take on the issue:
Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.
Why does spam have to be expensive? if transactions are zero fee, then miners have no incentive to include them, so they'll just get filtered out and apply some mempool clearing system that forgets them after a certain time. If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?
Because the miners incentives are not aligned with those of the network in a free floating block size scenario
There is actually research indicating that this is not the case in the presence of a block reward. https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf (Thanks to binaryFate for letting me know about this article). Essentially the miners will not include spam unless the fee meets a certain threshold because it increases the probability of orphan blocks. The tricky part, where the above is very likely true, is in the absence of a block reward. On another note: I am actually interested in the Litecoin solution regarding spam.
My take on the issue:
Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.
Why does spam have to be expensive? if transactions are zero fee, then miners have no incentive to include them, so they'll just get filtered out and apply some mempool clearing system that forgets them after a certain time. If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?
Because the miners incentives are not aligned with those of the network in a free floating block size scenario
My take on the issue:
Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.
Why does spam have to be expensive? if transactions are zero fee, then miners have no incentive to include them, so they'll just get filtered out and apply some mempool clearing system that forgets them after a certain time. If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?
My take on the issue: I cannot see any validity in the speech of those who claim that the 1MB cap was designed to be forever. Actually, many a supposed friend of Bitcoin has shown himself to be a globalist agent during the debate, by claiming incredulities regarding the issue.
However, even if the current situation is untenable, it does not mean that every attempt to resolve it is the correct one that should be acted upon. Agents around this corner as well.
However, even if the current situation is untenable, it does not mean that every attempt to resolve it is the correct one that should be acted upon. Agents around this corner as well.
While the block reward is still in place there are many reasonable solutions that are "good enough". For example the quadratic penalty function in Cryptonote (Monero) or even relying on the probalility of orphan blocks to create a fee market that deters spam. The difficulty is that this blocksize debate has raised an even more fundamental question: How does one secure the network after the emission runs out? Monero has solved this with a fixed tail emission, Dogecoin also has a tail emission and so do many POS coins (Peercoin for example); however this is a non starter for Bitcoin because of the social covenant. Furthermore a fixed blocksize may even not provide for a fee market to develop, in the absence of a block reward, as the current "stress tests" are demonstrating. The small block crowd are by the way also making some very valid points.
The best I have seen to date is BIP 100 with a 50% threshold, and much higher starting limits; however this is dependent on external market factors (other crypto currencies, fiat payment methods etc.) to keep the "mining cartel" from raising the fees with no limit. I have been researching this issue for over three years and unfortunatly the more I look into this, the more discouraged about the future of Bitcoin I become.
What is needed here is a solution that allows for a dynamic blocksize limit that will respond to market forces allowing a fee market to develop, in the absence of block rewards. I am not saying that such a solution is not possible, I have simply not found it. Pending a solution, a bear I remain.
My take on the issue:
Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.
My take on the issue: I cannot see any validity in the speech of those who claim that the 1MB cap was designed to be forever. Actually, many a supposed friend of Bitcoin has shown himself to be a globalist agent during the debate, by claiming incredulities regarding the issue.
However, even if the current situation is untenable, it does not mean that every attempt to resolve it is the correct one that should be acted upon. Agents around this corner as well.
However, even if the current situation is untenable, it does not mean that every attempt to resolve it is the correct one that should be acted upon. Agents around this corner as well.
Bitcoin currently has a serious long term fundamental problem; namely the 1 MB blocksize limit that prevents any meaningful growth of the Bitcoin network. The upside potential is actually capped at close to the current transaction rate by the protocol while there remains a very significant downside risk. The risk vs return ratio is makes very little sense at current prices. Until the blocksize issue is resolved in a manner that allows for the Bitcoin network to grow, I remain a bear.
TIL transaction growth = Bitcoin growth
Have you considered that maybe, just maybe, Bitcoin has more appeal than just as a payment network?
We're now sitting pretty at an average of 350kb blocks, where is this demand for growth you speak of?
Yes. Tenfold txs increase Spring 12 - Spring 13 (halving between). The small blocks of the small blockers (blockstreamers) will prevent that to repeat.
Bitcoin currently has a serious long term fundamental problem; namely the 1 MB blocksize limit that prevents any meaningful growth of the Bitcoin network. The upside potential is actually capped at close to the current transaction rate by the protocol while there remains a very significant downside risk. The risk vs return ratio is makes very little sense at current prices. Until the blocksize issue is resolved in a manner that allows for the Bitcoin network to grow, I remain a bear.
TIL transaction growth = Bitcoin growth
Have you considered that maybe, just maybe, Bitcoin has more appeal than just as a payment network?
We're now sitting pretty at an average of 350kb blocks, where is this demand for growth you speak of?
Sure, let's do that. So... past data shows transaction increase in the last year and a half but... where is the Bitcoin growth
Bitcoin currently has a serious long term fundamental problem; namely the 1 MB blocksize limit that prevents any meaningful growth of the Bitcoin network. The upside potential is actually capped at close to the current transaction rate by the protocol while there remains a very significant downside risk. The risk vs return ratio is makes very little sense at current prices. Until the blocksize issue is resolved in a manner that allows for the Bitcoin network to grow, I remain a bear.
TIL transaction growth = Bitcoin growth
Have you considered that maybe, just maybe, Bitcoin has more appeal than just as a payment network?
We're now sitting pretty at an average of 350kb blocks, where is this demand for growth you speak of?
Bitcoin currently has a serious long term fundamental problem; namely the 1 MB blocksize limit that prevents any meaningful growth of the Bitcoin network. The upside potential is actually capped at close to the current transaction rate by the protocol while there remains a very significant downside risk. The risk vs return ratio is makes very little sense at current prices. Until the blocksize issue is resolved in a manner that allows for the Bitcoin network to grow, I remain a bear.
TIL transaction growth = Bitcoin growth
Have you considered that maybe, just maybe, Bitcoin has more appeal than just as a payment network?
We're now sitting pretty at an average of 350kb blocks, where is this demand for growth you speak of?
Bitcoin currently has a serious long term fundamental problem; namely the 1 MB blocksize limit that prevents any meaningful growth of the Bitcoin network. The upside potential is actually capped at close to the current transaction rate by the protocol while there remains a very significant downside risk. The risk vs return ratio is makes very little sense at current prices. Until the blocksize issue is resolved in a manner that allows for the Bitcoin network to grow, I remain a bear.
...Not a bubble.
Nope, not at all...
..perfectly natural and sustainable growth.
Many investments are rocks. When you let go, they will fall back to ground. Some are balloons. When you let go, it will rise to the atmosphere. It is not easy for many to distinguish between those two. Also the balloons are susceptible to pricks. Trade wisely.
Haha, this one was prophetic. (Note the age of the post, and that the chart depicted went only to March, 2013, when it was discussed.) And that pricks indeed have been the cause for the downfall.
I constantly see posts and articles saying that the price of bitcoin id heavily manipulated. Would it it be fair to say that price manipulation is much more difficult on the large time scale? Would anyone be able to suppress or inflate price for years? Just in case some of you agree that TA based on longer time intervals may sometimes be more useful than based on the recent history, here is a graph of all available history of Bitcoin price.
https://i.imgur.com/myCjrkI.png
Haven't seen long term discussions here recently. Can anyone make smart guesses about long term future trends?
https://i.imgur.com/myCjrkI.png
Haven't seen long term discussions here recently. Can anyone make smart guesses about long term future trends?
Or people have made their sidebet on Monero when it still was cheap 
hm? It's not cheap any more?
Now, yes.
When BTC hits $1Million, probably not.
I don't think even that will push it anyhow
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