An alternative link where I summarized why bitcoin is a ponzi scheme and the reason the 21 million coin limit makes it unarguably so:
https://bitcointalksearch.org/topic/m.3649398
Topic: Transactions Withholding Attack - page 8. (Read 27579 times)
since bitcoin is, itself, resistant to regulation.
Hahaha. Hahahahahahaha!
Again, I don't need to disprove your theory. I only need to point out objections. If you can't defend your theory, then you don't have one. I can prove that off-network transactions exist today, if I desire. I can tell you how to do some with a MtGox account, and I've done it many times before the Silk Road was brought down. Coin-mixers do them as a matter of their primary function. All that is required for them to grow in scope is for a market force to require them. Something as simple as a percentage rise in the transaction fee would be enough. A government crackdown would certainly do it.
I told you that offchain is irrelevant to whether my attack is an attack for onchain transactions.
Also offchain reintroduces 3rd party risk, which means government and courts will be involved. So same result and smell, the government gets control.
One. Mining as a secondary effect to electro-resistive heating. I.e. you can't undercut the miner who's rig heats his flat. There is also whole threads regarding using asics embeddeding into heat cable to warm pipes.
Of free energy and perpetual motion!
I didn't write "reduced" costs, I wrote "free" costs.
Two. The Wal-mart|McDonalds|Sears alliance versus the Target|BurgerKind|JCPenny union. Competing cartels can mine at a negative profit, because they're primary business is selling retail products, not mining for bitcoins.
Great you argue against cartel attack by citing an alliance of large corporations a "free" mining option.
As if they do it for free
That happened long before you think, but why couldn't Microsoft gain a regulatory capture advantage over Linux? Because it wasn't a company that could be regulated, it was simply the product of a new kind of development. Open source. Which turns out to be rather resistant to regulation by governments. Bitcoin is open source, and p2p, and distributed. All things deliberately designed to contribute to it's resitance to regulation.
And what do you think I am trying to do by explaining and defending this attack?
Fix it! With open source! And you are trying to stop me!
Great logic you have there.
I refuted you over at the other linked thread. The solution is never stop coin rewards. That also improves the distribution problem, which fixes the fact that BitCON can never be a currency, as I explained in my rebuttal at the other thread.
I digress that is off topic here but the point must be stated for the record
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.
Done now provide your solution to the problem in this thread
I digress that is off topic here but the point must be stated for the record
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
I asked you to post that in the linked thread that discuss why it is a ponzi scheme. And you have not refuted the reasons given in the thread I linked to. Indeed early adopters can only profit at the expense of late adopters. And they can't exit, because the investment has no value other than as a ponzi (no significant currency use). The statistics prove bitCON can never be a currency. Distribution is lacking and can't be fixed (not without offchain fractional reserves which means bankruptcy and government regulation). Read the linked thread for why. And reply there if you want to.
One thing that all of you have failed to do is argue why I shouldn't fix the attack?
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
OP assumes that something needs to be fixed when the Economic incentive to do so is not their as it would create an instability in the system
IT is after all an economic attack
That makes no sense to me. My proposed fix is to not stop coin rewards.
And that has the benefit of increasing distribution, and possibility making it a currency and not a ponzi scheme as bitcoin most unarguably is. If you want to refute that not-a-currency-and-is-a-ponzi point, do it in the linked thread, not off-topic here.
If you don't like an altcoin with coin rewards, then don't buy it.
I am not proposing to fix bitCON. They would never fix it any way.
Well if you can code a theoretical fix then propose it to the Dev team assuming they accept it as a real concern. (Why shouldn't I fix the attack?)
What is your proposed fix
Coin rewards and bonus blocks ?
And bitcoin is not a ponzi
I digress that is off topic here but the point must be stated for the record
Is Bitcoin a Ponzi scheme?
In a Ponzi Scheme, the founders persuade investors that they’ll profit. Bitcoin does not make such a guarantee. There is no central entity, just individuals building an economy.
A ponzi scheme is a zero sum game. Early adopters can only profit at the expense of late adopters. Bitcoin has possible win-win outcomes. Early adopters profit from the rise in value. Late adopters, and indeed, society as a whole, benefit from the usefulness of a stable, fast, inexpensive, and widely accepted p2p currency.
The fact that early adopters benefit more doesn't alone make anything a Ponzi scheme. All good investments in successful companies have this quality.
One thing that all of you have failed to do is argue why I shouldn't fix the attack?
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
OP assumes that something needs to be fixed when the Economic incentive to do so is not their as it would create an instability in the system
IT is after all an economic attack
That makes no sense to me. My proposed fix is to not stop coin rewards.
And that has the benefit of increasing distribution, and possibility making it a currency and not a ponzi scheme as bitcoin most unarguably is. If you want to refute that not-a-currency-and-is-a-ponzi point, do it in the linked thread, not off-topic here.
If you don't like an altcoin with coin rewards, then don't buy it.
I am not proposing to fix bitCON. They would never fix it any way.
So assuming there's something worth worrying about here, what's to prevent the same thing from happening off the blockchain:
1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%
1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%
Extending on that the Amazon cartel would need to have a majority of the network to initiate the 50% attack and we would run into the Double Spend and reverse transaction problems which could be significantly worth more to the Cartel than transaction fees from withholding blocks
OP assumes that the 50% attack is not a greater risk if it can control the servers its not decentralized at less than 50%
Each node being independent and what not
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. Then put them on the blocks found by its own mining servers. This would starve the rest of the network of funding and eventually the cartel would be doing all the mining.
So assuming there's something worth worrying about here, what's to prevent the same thing from happening off the blockchain:
1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%
1. Cartel releases zero fee transactions.
2. Nobody outside the cartel gains from cartel transactions.
3. Cartel bribes people to come join their pool and get a percentage of sales as block reward.
4. 51%
One thing that all of you have failed to do is argue why I shouldn't fix the attack?
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. Just fix the problem, then nothing more to argue about.
OP assumes that something needs to be fixed when the Economic incentive to do so is not there as it would create an instability in the system
IT is after all an economic attack
One thing that all of you have failed to do is argue why I shouldn't fix the attack?
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.
Do you have a problem within fixing threats?
Sounds like you love to leave things broken.
So all this tit-for-tat is really a waste of my time. If we just fix the problem, then nothing more to argue about.
freedomno1, I don't respond to something written in jumbled way like that. Sorry. My time is valuable to me.
Fine edited it
Meat:
OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks
On the Postulation
OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)
Rebuttal:
It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.
OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
Rebuttal:
We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.
OPs viewpoint on the end result:
This would starve the rest of the network of funding (Postulation and Assumption)
Rebuttal:
Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability
OPs conclusion:
and thus eventually controlled by the government and thus back to fiat again. (Postulation)
Rebuttal:
This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned
I think I understand this attack, and will now summarize it in a form a five year old can understand:
http://www.youtube.com/watch?v=-vohNUTTx3A
http://www.youtube.com/watch?v=-vohNUTTx3A
Haha that is funny. I don't think the masses care enough for it to be $trillions in terms of the retail model. But I do get your deeper point which is innovation could create entirely new business models perhaps that are much more productive. Indeed cartels fail when the paradigm changes out from under them, e.g. Microsoft.
But I don't yet see retail changing, except we might someday be downloading and 3D printing and perhaps that would lower the capital requirement for retailing so much that it could disrupt amazon's lead.
But here is the thing. Amazon is not profitable now. They are already a front for someone who wants control of the market, not profit.
And the government will not give up their monopoly on money at any cost. Thus I can see the attack is already being formulated.
Bezos bought the Washington Post, so it means he must be part of or cowtail to the elite now. Mass media is definitely rubbing shoulders with the ilk of Bilderbergers.
I think I understand this attack, and will now summarize it in a form a five year old can understand:
http://www.youtube.com/watch?v=-vohNUTTx3A
http://www.youtube.com/watch?v=-vohNUTTx3A
freedomno1, I don't respond to something written in jumbled way like that. Sorry. My time is valuable to me.
Quote
The cartel can give 0-confirmation transactions to its customers, because these are going to be repeat customers because the cartel covers so much commerce.
Everyone can give 0-confirm transactions to their customers. That's a question of business risk, not capacity. It happens now. Please search for the fast-transaction problem and/or the vending machine problem.
Don't play dumb just to obfuscate the point.
The point is the cartel doesn't have delay transactions for its customers when it withholds them from the other miners.
YES IT DOES! The nature of the protocol requires that the cartel delay transaction processing for it's customers because it withholds them from other miners. There is no way to avoid it! That's what you can't wrap your head around!
INCORRECT!
You still didn't get the point.
The customer will never care that the transaction is delayed into the blockchain (delayed until the cartel's mining servers wins a block in the proof-of-work), because Amazon will give their customers 0-confirmation access to what they purchased.
So that delay is irrelevant.
Whereas when the non-cartel transactions are delayed because the cartel's mining servers don't include them in their blocks, the non-cartel customers using a normal bitcoin client will notice the delays.
So thus this drives the system towards competing cartels which can offer 0-confirmations due to repeat customers.
Then cartels merge to increase profits.
Same old shit that happens over and over in history.
freedomno1, I can't read that. It is very poorly formatted and worded. Click Edit and improve or I will ignore it.
No edit required
(But I edited anyways should be clearer now it was basically a restatement of your own statement) I just sorted your points into assumptions postulation facts and statements you made.
I copied your OP to the bone then added brackets where I thought your points fit
To that extent I put a (postulation) (assumption) (hypothesis) in Brackets after each of your sentences and left your OP untouched
If you can't read your own OP after each sentence then it is your poorly worded formatting
Carrying on I then evaluated each of your sentences in the categories below
Your Assumptions
Your Hypothesis
Your Postulation
Then provided a rebuttal to each assumption or postulation you made
Nice and organized
freedomno1, I can't read that. It is very poorly formatted and worded. Click Edit and improve or I will ignore it.
Feel like poking at this somewhat amusing
Breaks it down into assumptions postulation hypothesis statements and fact
Transactions Withholding Attack
November 17, 2013, 07:22:44 AM
Reply with quote #1
I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.
I think it is an economic attack (Assumption) so I place it in the Economics forum.
Also because I don't get good reception from Bitcoin developers (Assumption) when I try to post in the developers forums.
Lets see if they ignore this thread or come post to refute it. I doubt they will. (Assumption)
Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. (Fact) The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. (Postulation and Assumption)
Then put them on the blocks found by its own mining servers. (Assumption (Heavy Centralization)
This would starve the rest of the network of funding (Postulation and Assumption)
and eventually the cartel would be doing all the mining. (Assumption)
They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers. (Assumption and Postulation)
That is the same as turning Bitcoin into a centralized currency, (Statement) and thus eventually controlled by the government and thus back to fiat again. (Postulation)
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. (Assumption and Postulation) Once they adopt one, they will stay with that one due to inertia and network effects. (Assumption)
Thus I see Bitcoin is doomed and it is not a solution to anything long-term, (Postulation) although short-term it shows us what might be possible with decentralized currencies if we were to improve them. (Statement)
Well that was amusing
On the Assumptions
OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks
On the Postulation
OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)
Rebuttal:
It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.
OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
Rebuttal:
We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.
OPs viewpoint on the end result:
This would starve the rest of the network of funding (Postulation and Assumption)
Rebuttal:
Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability
OPs conclusion:
and thus eventually controlled by the government and thus back to fiat again. (Postulation)
Rebuttal:
This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned
___
Sort of interesting but runs into a lot of assumptions and postulation that make it weaker when broken down through a case by case point analysis
Also it was mostly restating your points and your presumptions when you made your statements not really breaking any of your points down rather than clarifying your position
Seems clearer to me maybe it will be clearer to the thread too have fun you all
Breaks it down into assumptions postulation hypothesis statements and fact
Transactions Withholding Attack
November 17, 2013, 07:22:44 AM
Reply with quote #1
I have been mentioning this postulated attack on Bitcoin for months in various posts of mine. I figured it was time to give it a thread, so we can discuss it.
I think it is an economic attack (Assumption) so I place it in the Economics forum.
Also because I don't get good reception from Bitcoin developers (Assumption) when I try to post in the developers forums.
Lets see if they ignore this thread or come post to refute it. I doubt they will. (Assumption)
Once Bitcoin's coin rewards decline to less than can pay for the miner's costs, e.g. <1% per annum debasement by 2033 and <0.2% by 2040, then transaction fees are supposed to fund miners. (Fact) The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)
But a cartel (e.g. Amazon.com) could for example harvest transactions from its vast network and keep them without forwarding them to other miners. (Postulation and Assumption)
Then put them on the blocks found by its own mining servers. (Assumption (Heavy Centralization)
This would starve the rest of the network of funding (Postulation and Assumption)
and eventually the cartel would be doing all the mining. (Assumption)
They could even offer 0% transaction fees (even refund mandatory tx fees) to entice more of the masses to process through their servers. (Assumption and Postulation)
That is the same as turning Bitcoin into a centralized currency, (Statement) and thus eventually controlled by the government and thus back to fiat again. (Postulation)
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
The problem is if we wait, it will be too late to undo and revert, because we only get one chance to create a digital currency that the masses adopt. (Assumption and Postulation) Once they adopt one, they will stay with that one due to inertia and network effects. (Assumption)
Thus I see Bitcoin is doomed and it is not a solution to anything long-term, (Postulation) although short-term it shows us what might be possible with decentralized currencies if we were to improve them. (Statement)
Well that was amusing
On the Assumptions
OP assumes it is an economic attack but we also must then assume that rational actors would fight against this attack
OP assumes that Bitcoin will be the only successful digital currency in a newly emerging field
OP assumes that new currencies or technologies built on top of bitcoin will not re-mediate the problem
OP assumes that the developers cannot understand the issue and therefore cannot fix it
OP assumes Centralization will occur and cartels will do all the mining and someone pulls txt fees from a decentralized network
OP assumes the txt fees are more incentive than the blocks
On the Postulation
OPs Hypothesis:
The following attack applies whether transactions are voluntary, variable, fixed, or mandatory-- it makes no difference. (Hypothesis)
Rebuttal:
It would make a difference as network participants in a voluntary system would need to have the incentive to still coexist with this regime in spite of it being an economic attack.
OPs Second Hypothesis:
Note this postulated attack wouldn't be possible for 20 years or so, so this is a long-term issue. (Hypothesis)
Rebuttal:
We are assuming that the time to centralization will take 20 years and that prices will not incentivize miners to keep building up network hash rate to secure the network, leading towards a monopolization that leads to the scenario below.
OPs viewpoint on the end result:
This would starve the rest of the network of funding (Postulation and Assumption)
Rebuttal:
Assuming that the network and bitcoins own value would not be put into jeopardy if a Collective was to initiate such action
There must be rationality in the Attack as it must maximize profit while promoting stability
OPs conclusion:
and thus eventually controlled by the government and thus back to fiat again. (Postulation)
Rebuttal:
This is an assumption that there will be no new developments or innovations in Bitcoin or Alternative Cryptocurrency occurring during this 20 year period.
That new and emerging technological innovation does not occur and is stagnant that groups will lack the innovative foresight to adapt and that bitcoin will become a failed experiment in crytocurrency because of the flaw you mentioned
___
Sort of interesting but runs into a lot of assumptions and postulation that make it weaker when broken down through a case by case point analysis
Also it was mostly restating your points and your presumptions when you made your statements not really breaking any of your points down rather than clarifying your position
Seems clearer to me maybe it will be clearer to the thread too have fun you all
Please address the question of whether you are being paid to spread fear re. bitcoin in order to influence the price.
Absolutely false. I would like to see an altcoin which fixes this attack.
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