I think I've had enough of this BS. I warned the OP early that there was much to be learned on this topic by simply reading the forum and using the search function. Apparently no one bothered to attempt it, because I keep seeing tired arguments that have long been settled.
This thread shall be locked.
Beeblebrox, learn to do some research before you start spouting crap about a complex subject for which you do not understand. If, after some effort on your part, you still do not understand why you are wrong; ask again politely in the Bitcoin Discussion section, and I have no doubt you will get the clear answers you seek. Too many of the old salts here are not going to bother to post in the newbie section, or even read your complaints, to expect that the best responses are going to be found here.
Topic: The fundamental flaw in bitcoin (Read 2289 times)
I'll nuke your little account out of spite.
Where can I donate to make this feature a reality? Make it a max donation of BTC0.01 per donator, but when the donation for a particular offender hits BTC1.0, KABOOOOOOOOM. Could be a good way to generate some income for the board. :-)
The board gets plenty of income from donations. It's ran by those 'early adopters' and we aren't exactly hurting.
bitcoin is almost exclusively used the moment because it can be used over the internet to transact with remote entities
Source?
really? Do you not believe this without a source? How about this for a source--- ME!!
(If you not happy with that read one of the many 100's of articles extolling the use of bitcoin as an INTERNET currency and how it can be used to do things like an internet shopping (ie: non-physical), or foreign money transfer etc.)
You are making a claim as to why bitcoin is being used, not how. I happen to believe it is due to its decentralized nature and I'm asking you to provide evidence to support your claim.
BTW, you still haven't addressed some of my other questions.
So you believe the the majority of all the bitcoin transactions (about 60000/day currently) are happening between people in the same room? really?? Well the blockchain tells me otherwise-- the largest single source of transactions is Satashosi Dice and I'm rather confident in believing that all the people placeing bets on it are NOT in the same room. Also another large source is the money flowing in and out of MtGox-- likewise I'm sure that these people are not all in a room in a Japan somewhere.
The sad part is that I've had to explain this to you!!! This is why I haven't bothered with your other questions-- why should I waste my time answering and explaining things which are blatantly obvious!!!
I've presented my case and have defended it against all criticism leveled at it. Simply put, the transaction fee model will not generate enough fees to secure the system once off-chain transactions become the predominate method to exchange coins.
It's 4:00 in the morning here, I've been up all night. I'm going to bed. Goodnight/day to you whereever you are.
Remote attestion takes care of that. With remote attestion, I can be guaranteed that your computer is running a particular piece of software. That software in this case would be the wallet generating one-- if it is open source then I can review the code to make sure that it nevers gives out the key, but only puts it in the wallet which gets passed around. If this wallet is tampered with to reveal the key then the DRM software reveals to the next person receiving the wallet that it has been tampered with.
Aha. This might actually work.Yes, a fee gets paid. However, it ONLY gets paid ONCE (at the time when casasuis loads the coin) all other subsequent transactions that involve the physical exchange of coins are *completely* free!
While it's true that the mining fee only gets paid when the wallet "leaves" the blockchain and when it's cashed in again, there is still an associated cost with doing the transactions in the new Bitcoin2 system. Actually processing the transactions. And this would only happen once Bitcoin v.1 transaction processing gets overly expensive, thus attracting more miners due to the payouts, and then making the offline transactions less of a cost-saver. 
bitcoin is almost exclusively used the moment because it can be used over the internet to transact with remote entities
Source?
really? Do you not believe this without a source? How about this for a source--- ME!!
(If you not happy with that read one of the many 100's of articles extolling the use of bitcoin as an INTERNET currency and how it can be used to do things like an internet shopping (ie: non-physical), or foreign money transfer etc.)
You are making a claim as to why bitcoin is being used, not how. I happen to believe it is due to its decentralized nature and I'm asking you to provide evidence to support your claim.
BTW, you still haven't addressed some of my other questions.
bitcoin is almost exclusively used the moment because it can be used over the internet to transact with remote entities
Source?
really? Do you not believe this without a source? How about this for a source--- ME!!
(If you're not happy with that read one of the many 100's of articles extolling the use of bitcoin as an INTERNET currency and how it can be used to do things like an internet shopping (ie: non-physical, non-local), or foreign money transfer etc.)
bitcoin is almost exclusively used the moment because it can be used over the internet to transact with remote entities
Source?
Yes, a fee gets paid. However, it ONLY gets paid ONCE (at the time when casasuis loads the coin) all other subsequent transactions that involve the physical exchange of coins are *completely* free!
No, you misunderstood. I'm saying, Casacius Coins exist yet they haven't supplanted the current system.
They haven't supplanted the current system becuase they are physical. A physical coin at the current adoption rates of bitcoin is pretty useless- you can't use it anywhere because nobody physically located near you accepts them (bitcoin is almost exclusively used the moment because it can be used over the internet to transact with remote entities). Also they require extra expense (you pay a premium to get them).
What I'm talking about it in 2,3,4+ years time when some bright spark invents an electronic version of casascius coin.
It doesn't work because off-chain transaction happen independant of the miners. There are physical coins call casascius coins that have a bitcoin stored in them. (you can buy them off the internet, search for casascius coin)-- you can phyiscally give these coins to someone who can then give to someone else who can then give them to someone else, etc...... none of the transactions are being recorded in the block chain and hence there is no fee involved.
I do accept the existence of off-chain tx but IMO off-chain tx will always represent a small minority of all tx, for risk reasons. If I were to become the lucky recipient of 50,000BTC one day, I would certainly want that to be recorded within the block chain. If I were given a physical coin worth 50,000BTC what assurance would I have that the other party doesn't have an identical coin in his pocket? He can then potentially claim the funds within the network before me.
I'll nuke your little account out of spite.
Where can I donate to make this feature a reality? Make it a max donation of BTC0.01 per donator, but when the donation for a particular offender hits BTC1.0, KABOOOOOOOOM. Could be a good way to generate some income for the board. :-)
OP raises an interesting point. Why pay mining fees, when you can perform off-chain transactions? One way to answer this is: because off-chain transactions inevitably involve some cost and some risk. Paying a transaction fee to the miner may be cheaper, faster, and more secure than performing an off-chain transaction. This "may be" is what will create a competitive market that defines the fees depending on particular payer's needs.
On chain transactions won't be cheaper. It definitely won't be faster (some transaction currently take upto an hour to complete)- electronic off-chain transactions would be instant. It *just* might be more secure, however, the vast number of transactions involve small amounts of money (ie: <$20) so who really cares about it being super,super,duper secure compared to super,duper secure when the amount it small?
Let's be realistic here. Nobody, is going to wait around for 10mins+ to confirm a transaction for a cup of coffee and a donut that is 99.999999% secure when you have the option for an instant exchange that is 99.999%.
Yes, a fee gets paid. However, it ONLY gets paid ONCE (at the time when casasuis loads the coin) all other subsequent transactions that involve the physical exchange of coins are *completely* free!
No, you misunderstood. I'm saying, Casacius Coins exist yet they haven't supplanted the current system.
Hello, beeblebrox, I am also new here.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
ie: The transaction fee model will not support the cost of block creation. Bitcoin will lose hashing power in the future when block reward coin generation drops off faster than the increase in bitcoin price.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
It doesn't work because off-chain transaction happen independant of the miners. There are physical coins call casascius coins that have a bitcoin stored in them. (you can buy them off the internet, search for casascius coin)-- you can phyiscally give these coins to someone who can then give to someone else who can then give them to someone else, etc...... none of the transactions are being recorded in the block chain and hence there is no fee involved.
That doesn't answer the question. Casascius coins exist and transaction fees are still being paid. There are advantages and disadvantages to using off-chain transactions. You have yet to demonstrate how the advantages outweigh the disadvantages to anyone's satisfaction.
Yes, a fee gets paid. However, it ONLY gets paid ONCE (at the time when casasuis loads the coin) all other subsequent transactions that involve the physical exchange of coins are *completely* free!
Hello, beeblebrox, I am also new here.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
ie: The transaction fee model will not support the cost of block creation. Bitcoin will lose hashing power in the future when block reward coin generation drops off faster than the increase in bitcoin price.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
It doesn't work because off-chain transaction happen independant of the miners. There are physical coins call casascius coins that have a bitcoin stored in them. (you can buy them off the internet, search for casascius coin)-- you can phyiscally give these coins to someone who can then give to someone else who can then give them to someone else, etc...... none of the transactions are being recorded in the block chain and hence there is no fee involved.
That doesn't answer the question. Casascius coins exist and transaction fees are still being paid. There are advantages and disadvantages to using off-chain transactions. You have yet to demonstrate how the advantages outweigh the disadvantages to anyone's satisfaction.
Hello, beeblebrox, I am also new here.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
ie: The transaction fee model will not support the cost of block creation. Bitcoin will lose hashing power in the future when block reward coin generation drops off faster than the increase in bitcoin price.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
It doesn't work because off-chain transaction happen independant of the miners. There are physical coins call casascius coins that have a bitcoin stored in them. (you can buy them off the internet, search for casascius coin)-- you can phyiscally give these coins to someone who can then give to someone else who can then give them to someone else, etc...... none of the transactions are being recorded in the block chain and hence there is no fee involved.
That is exactly what I'm talking about..
(.....)
Once it is common, then I'm willing to bet that someone will use it to exchange bitcoins.
I see your point more clearly now. Call it "Offline tamper resistant exchange of Bitcoin wallets using trusted computing: A system that guarantees nobody before you has looked at the private key." or something like that. (.....)
Once it is common, then I'm willing to bet that someone will use it to exchange bitcoins.
Unfortunately, I think it either might have to be built into the protocol itself, or we're back to a central issuer again. Since the bitcoin client lets you know the private key when you generate your wallet, you'd need some trusted third party to generate the exchangable wallets for you, and provide you with some system that guarantees that nobody else looked at the private key before you "break the seal" and spend it.
So we're back to trusting a third party (some kind of bank) or rewriting the current protocol. It might be feasible in the future, but I think the people who are working on electronic cash (denominated in actual USD) will get there before Bitcoin does....
You don't require a trusted third party. Remote attestion takes care of that. With remote attestion, I can be guaranteed that your computer is running a particular piece of software. That software in this case would be the wallet generating one-- if it is open source then I can review the code to make sure that it nevers gives out the key, but only puts it in the wallet which gets passed around. If this wallet is tampered with to reveal the key then the DRM software reveals to the next person receiving the wallet that it has been tampered with.
It dosen't require any change to the bitcoin protocol to do this.
Hello, beeblebrox, I am also new here.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
ie: The transaction fee model will not support the cost of block creation. Bitcoin will lose hashing power in the future when block reward coin generation drops off faster than the increase in bitcoin price.
Why wouldn't the tx fee model work? Surely this is a market forces thing. Miners won't operate (for extended periods of time) at a loss, so they will only accept tx's with sufficiently high fees attached. Tx fees will therefore be dictated by the efficiency with which miners can operate. Miners (or more likely mining farms) with low overheads will be more competitive and can therefore accept lower fees, stealing market share from their competitors.
OP raises an interesting point. Why pay mining fees, when you can perform off-chain transactions? One way to answer this is: because off-chain transactions inevitably involve some cost and some risk. Paying a transaction fee to the miner may be cheaper, faster, and more secure than performing an off-chain transaction. This "may be" is what will create a competitive market that defines the fees depending on particular payer's needs.
That is exactly what I'm talking about..
(.....)
Once it is common, then I'm willing to bet that someone will use it to exchange bitcoins.
I see your point more clearly now. Call it "Offline tamper resistant exchange of Bitcoin wallets using trusted computing: A system that guarantees nobody before you has looked at the private key." or something like that. (.....)
Once it is common, then I'm willing to bet that someone will use it to exchange bitcoins.
Unfortunately, I think it either might have to be built into the protocol itself, or we're back to a central issuer again. Since the bitcoin client lets you know the private key when you generate your wallet, you'd need some trusted third party to generate the exchangable wallets for you, and provide you with some system that guarantees that nobody else looked at the private key before you "break the seal" and spend it.
So we're back to trusting a third party (some kind of bank) or rewriting the current protocol. It might be feasible in the future, but I think the people who are working on electronic cash (denominated in actual USD) will get there before Bitcoin does....
I'll grant you point 9, but nothing else. (By-the-way: these points weren't though out in depth they were on-the-spot thinking. So, the fact that I got a bit wrong is not surprising)
Why won't you grant anything but point 9? How were my rebuttals insufficient?
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