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Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 18315. (Read 26720873 times)

legendary
Activity: 1708
Merit: 1049
either
1. the hypothetical bad miners are consciously, permanently jeopardizing the blockchain, which would only make sense if the amount they are being paid for attacking it is superior to their total investment + expected returns.  these are not "extremely small costs" but very large amounts, given the already concentrated nature of mining.

Remember that ample blockchain space reduces the fees needed. Plus the "costs" are nothing if the external actors are involved in the trillion dollar market.

Every day 1800 bitcoins are mined. These cost only 1 million bucks. And you need only a fraction of that, per day, to pull of an attack.

Banks and payment companies, process tens of billions per day. They have manipulated multi-trillion dollar markets like the precious metals. Their sizes are ridiculously high - if they want to attack BTC. There is no cost that is too high. The only thing that there is is whether this attack is visible or not (they don't want "banks are scared" type of publicity), and the cost of preparedness for the next "iteration" of BTC.

For every attack you do, you burn one card where your opponent is then more prepared. You only want to use your attacks wisely and in a timely manner.

Quote
2. the hypothetical bad miners aim to make some cash on the side by colluding with the attacker, but will only do as much of it consistent with not permanently undermining the blockchain, their total investment and their expected returns. furthermore, corrupt miners running pools must bloat the blockchain in non-evident way, or they would lose hashrate. hence their spamming must be to some extent limited.
+
[EDIT: in fact, all corrupt miners must be cautious with their spamming or risk having their blocks orphaned as jbreher below notes; that the attacker would pay for the orphaned blocks is irrelevant as orphaned blocks do not make it to the blockchain and therefore cannot bloat it.]

Addressed above to jbreher (plus the GPU enhancement scenario).
legendary
Activity: 1708
Merit: 1049
In this case, if you allow miners the liberty to include as large blocks as they like, an external actor that hates bitcoin can just say to a miner "you know what? I'll pay you more fees than what the others are making, and if your block is orphaned, I'll pay that too - just make sure to put in there as many txs as you like".

At that point, the enemy of bitcoin who has employed "bad miners" for very little money (compared to the multi-billion dollar interests of banks/payment companies/governments), can bloat bitcoin to death for extremely small costs.

Just because the miners (in this hypothetical) are allowed to create blocks as large as they desire, does not mean that other miners are forced to accept those blocks as valid. If such a large block (presumably the result of your bribe above) is deemed detrimental to the system by the other miners (i.e., detrimental to these other miners' interests), these other miners are incentivized to orphan that block. Resulting in no problem to the network. The 'problem' solves itself.

Not really.

1) The network is being spammed every day - even with stated spam attacks and stress tests. These blocks are now sitting in the blockchain as bloat. If the rejection scenario actually happened, they wouldn't be sitting in there.

2) Let's asssume I'm the exo-attacker and plan to do what I laid above. I also hire a programmer, modify bitcoin core to use GPU for validating big blocks, the ability to process blocks is raised significantly, and then release that software as open source so that miners will use it to "speed up new block verification and help scale bitcoin".

By employing GPU power *and* the fact that network propagation between the large miners is good, there is no valid reason for others to reject very big blocks because I've also given them the tools to process them. I mean the (other) miner is not going to need minutes to process them, so why not?

(this could happen too:)
3) The larger the miner, the biggest the incentive to accept even bigger blocks so that they can crush the opposition who can't handle them. It's like corporate cartel forming. You lower the price (to your detriment) until others fall out of the market. And then you raise the price. You can do the same with blocks. You accept the largest blocks possible, so that those who can't catch up fall behind. It's their problem, not yours. The less they mine, the more you earn.


All these things are fucked up scenarios. Personally, I like to think as an attacker - not a wishful thinker. I want to think the worst that could happen so that I can prepare for it. Not make good assumptions and leave "holes" that trucks can drive through.

So, if I were the banks, what would I do to bitcoin? One of the things I'd do, would be to bloat it to unusable levels, increasing centralization and decreasing the ability of people to adopt it directly - forcing them through centralized means. But the 1MB is an obstacle to this attack vector. So I would have to "raise awareness" (=divide the community) in order for parts of the community to ...demand the rope with which they'll get hanged (in our case "big blocks"). And these blocks are useless except for spamming. Every day, tens of thousands of txs are processed for 0 to 0.01$ per tx. If there was actual demand, this wouldn't be happening.

Satoshi said to increase it when we are closer to needing it. Need is a very specific word. The blockchain covering every possible spamming tx with near zero fees is not a need. Increases should be in line with actual demand. IMO the network should operate by balancing

a) the covering of legit txs
b) room for expansion or spikes
c) covering of low-priority txs and even some spam, when there is no (b).

Alternatively, you can just increase blocksize but demand a high tx fee as a minimum. Monero used adaptive block size and they quickly found out it doesn't work when spammed. So they raised the fees to pretty high per tx after their bloat attack, in order to stop it. It was a case of exo-attack, the external game theory. It was presumed to be an attack by an other altcoin (bytecoin) - so all the internal incentives / internal game theory of miners acting this and that, were useless, and the rule book had to be rewritten (high tx fees) to prevent external actors from attacking the coin. Why would I pretend that these things haven't happened or aren't happening in bitcoin? Why would I make best-case assumptions that everything will be fine? That's not how you make a robust cryptocurrency.
legendary
Activity: 3080
Merit: 1688
lose: unfind ... loose: untight
In this case, if you allow miners the liberty to include as large blocks as they like, an external actor that hates bitcoin can just say to a miner "you know what? I'll pay you more fees than what the others are making, and if your block is orphaned, I'll pay that too - just make sure to put in there as many txs as you like".

At that point, the enemy of bitcoin who has employed "bad miners" for very little money (compared to the multi-billion dollar interests of banks/payment companies/governments), can bloat bitcoin to death for extremely small costs.

Just because the miners (in this hypothetical) are allowed to create blocks as large as they desire, does not mean that other miners are foced to accept those blocks as valid. If such a large block (presumably the result of your bribe above) is deemed detrimental to the system by the other miners (i.e., detrimental to these other miners' interests), these other miners are incentivized to orphan that block. Resulting in no problem to the network. The 'problem' solves itself.
full member
Activity: 660
Merit: 101
Colletrix - Bridging the Physical and Virtual Worl
In this case, if you allow miners the liberty to include as large blocks as they like, an external actor that hates bitcoin can just say to a miner "you know what? I'll pay you more fees than what the others are making, and if your block is orphaned, I'll pay that too - just make sure to put in there as many txs as you like".

At that point, the enemy of bitcoin who has employed "bad miners" for very little money (compared to the multi-billion dollar interests of banks/payment companies/governments), can bloat bitcoin to death for extremely small costs.

This is the element that is lacking in the above analysis, overlooking the fact that it's not only the internal game theory, but also the external. The external enemies are far more dangerous. By giving them the tools to bloat bitcoin, they can centralize it and then make it even easier to attack - or even shut down.


either
1. the hypothetical bad miners are consciously, permanently jeopardizing the blockchain, which would only make sense if the amount they are being paid for attacking it is superior to their total investment + expected returns.  these are not "extremely small costs" but very large amounts, given the already concentrated nature of mining. under these conditions the attacker might as well start mining itself, which takes us back to the original 51% attack and its "internal" game theory.

or
2. the hypothetical bad miners aim to make some cash on the side by colluding with the attacker, but will only do as much of it consistent with not permanently undermining the blockchain, their total investment and their expected returns. furthermore, corrupt miners running pools must bloat the blockchain in non-evident way, or they would lose hashrate. hence their spamming must be to some extent limited.

[EDIT: in fact, all corrupt miners must be cautious with their spamming or risk having their blocks orphaned as jbreher below notes; that the attacker would pay for the orphaned blocks is irrelevant as orphaned blocks do not make it to the blockchain and therefore cannot bloat it.]

so the question becomes: can enough bloat be purchased from such venal miners consistent with actually putting the blockchain in permanent jeopardy? is this even a remotely probable scenario?

legendary
Activity: 3962
Merit: 11519
Self-Custody is a right. Say no to"Non-custodial"

The theory breaks down in a certain point.

Given low fees, tx demand can tend to infinite.
He argues that this is not the case due to miners not being incentivized to produce bigger blocks.

It also seems that any criticism that miners are not adequately incentivized to continue to mine bitcoin is not playing out in actuality, even after the reward halvening.  The hashrate continues to go up fairly steadily - sure there are periods of ups and downs, but the inclination remains upwards which tends to show that there continue to be a lot of resources put into bitcoin mining.

Now there are two components in the game theory of bitcoin. One is internal, the other is external.

The internal is the game theory that surrounds how the internal ecosystem works. For example 51% issues. Attacks of 51% do not make sense in the internal context (the 51% attacker devalues his coins because he attacked the system he is living in).

They do however make sense in the external context (ie, external actors to the bitcoin ecosystem, employing means to disrupt it - like attacking pools, renting hashpower etc). The external context has to do with threats to bitcoin from banks, governments, payment companies etc, all those who want to see bitcoin harmed.

In order to have a system that is resilient, you must be able to have a game theory that is both internally and externally robust. External robustness is an ideal... a dream (due to the resources external actors have at their disposal)... but at least you don't have to make it easy for them.

In this case, if you allow miners the liberty to include as large blocks as they like, an external actor that hates bitcoin can just say to a miner "you know what? I'll pay you more fees than what the others are making, and if your block is orphaned, I'll pay that too - just make sure to put in there as many txs as you like".

At that point, the enemy of bitcoin who has employed "bad miners" for very little money (compared to the multi-billion dollar interests of banks/payment companies/governments), can bloat bitcoin to death for extremely small costs.

This is the element that is lacking in the above analysis, overlooking the fact that it's not only the internal game theory, but also the external. The external enemies are far more dangerous. By giving them the tools to bloat bitcoin, they can centralize it and then make it even easier to attack - or even shut down.

Thanks for that framing AlexGR.  Even though I remain uncertain whether your framing captures all of the incentives or the security vulnerabilities, any of us who continue to study bitcoin and aspire towards its ultimate success need to recognize that any attempts at quick and ill thought out solutions, such as radically increasing the blocksize limit, when such blocksize limit increase is not needed, put bitcoin in a place of vulnerability.  

Therefore in the end, many proponents of bitcoin, already recognize that bitcoin had been fairly robustly designed from the start, and ANY kind of change to its fundamentals should be made only after thorough vetting, testing and assurance that such changes fall into the realm of non-controversial, otherwise, we may end up in a position kind of like that other unnamed coin that is mysteriously still being pumped almost as if it were bitcoin 2.0  (when many quasi-informed bitcoiners recognize that the other unnamed coin remains too centralized, too mutable, and accordingly not secure enough from either of the internal or external attacks that you outline).
legendary
Activity: 1708
Merit: 1049

The theory breaks down in a certain point.

Given low fees, tx demand can tend to infinite.
He argues that this is not the case due to miners not being incentivized to produce bigger blocks.

Now there are two components in the game theory of bitcoin. One is internal, the other is external.

The internal is the game theory that surrounds how the internal ecosystem works. For example 51% issues. Attacks of 51% do not make sense in the internal context (the 51% attacker devalues his coins because he attacked the system he is living in).

They do however make sense in the external context (ie, external actors to the bitcoin ecosystem, employing means to disrupt it - like attacking pools, renting hashpower etc). The external context has to do with threats to bitcoin from banks, governments, payment companies etc, all those who want to see bitcoin harmed.

In order to have a system that is resilient, you must be able to have a game theory that is both internally and externally robust. External robustness is an ideal... a dream (due to the resources external actors have at their disposal)... but at least you don't have to make it easy for them.

In this case, if you allow miners the liberty to include as large blocks as they like, an external actor that hates bitcoin can just say to a miner "you know what? I'll pay you more fees than what the others are making, and if your block is orphaned, I'll pay that too - just make sure to put in there as many txs as you like".

At that point, the enemy of bitcoin who has employed "bad miners" for very little money (compared to the multi-billion dollar interests of banks/payment companies/governments), can bloat bitcoin to death for extremely small costs.

This is the element that is lacking in the above analysis, overlooking the fact that it's not only the internal game theory, but also the external. The external enemies are far more dangerous. By giving them the tools to bloat bitcoin, they can centralize it and then make it even easier to attack - or even shut down.
legendary
Activity: 3962
Merit: 11519
Self-Custody is a right. Say no to"Non-custodial"

Peter Rizun looks like, sounds like, and has the name of a Matt Groening character.

Just an observation. Not a comment on his speech.


I'll have to change my avatar. 


1st:  That talk is a bit more than one year old, and quite a lot has happened in the bitcoin space since then

2nd:  The content of the speech seems to start from the premise of wanting to argue that there is something wrong with the current blocksize limit and to suggest that there is some kind of problem with it (surely prior to seg wit)

3rd:  Peter:  I understand that there continue to be a lot of folks arguing for an increase in the blocksize limit, and you seem to continue to be in that camp.  Are you going to argue that your September 2015 presentation is still currently applicable to bitcoin's current situation?  Do you still continue to believe that bitcoin is in some debilitated state because of its current developments and it's reluctance to increase the blocksize limit (seemingly on different logical grounds than those you presented a year ago)?  Surely, you seemed to be arguing that there is some kind of mathematical and logical need to increase the blocksize limit, but doesn't it seem that the urgency of such considerations is not as great as what you had been presenting them to be, and really seg wit remains a fairly non-controversial implementation that is significantly addressing scaling issues, at least in the short to medium term (which could likely be a few years into the future, in spite of some folks, possibly you included, still likely arguing that a hard blocksize limit is actually necessary)?
legendary
Activity: 1162
Merit: 1010

Peter Rizun looks like, sounds like, and has the name of a Matt Groening character.

Just an observation. Not a comment on his speech.


I'll have to change my avatar. 
legendary
Activity: 1554
Merit: 1014
Make Bitcoin glow with ENIAC

Peter Rizun looks like, sounds like, and has the name of a Matt Groening character.

Just an observation. Not a comment on his speech.
hero member
Activity: 737
Merit: 500
legendary
Activity: 3962
Merit: 11519
Self-Custody is a right. Say no to"Non-custodial"
If not considering the volume taking place on chinese exchanges today Poloniex is the leading exchange (USD).
https://coinmarketcap.com/currencies/bitcoin/#markets

But Bitcoin is dead, who cares? Cool

Run Bitcoin Run!

I thought that this thread was about USD/BTC?

If you look at your link, the lead in USD is USD/ETH... , so you are seeming a bit off topic and especially when you are not qualifying your observation in such a way to clarify what you are asserting, exactly.



I think Adam was conservative with the USD to look more serious... he would have probably named it BTC vs All resources of planet Earth & SolarSistem.Co ... Cheesy Cheesy Cheesy


You are correct, the second would have likely been a better catch all.
legendary
Activity: 3962
Merit: 11519
Self-Custody is a right. Say no to"Non-custodial"


I could give a ratt's ass about the various disgruntled comments regarding either my style or content.

[...] our viewpoints regarding bitcoin and our approach to investing in it (or not, supposedly, in the case of Stolfi).  So, if you, or anyone else are getting caught up in style and/or length of post, and believe that those factors indicate any material substance, then you (and those like minded superficial posters) are a bunch of fucking loonies.   Roll Eyes Roll Eyes    Cheesy

[...]




Finally you said something useful I can comment on...

And to be more blunt... Investing can be achieved in multiple ways! For example the most important 2 things you can do (or 3 depending how you view it) are to convince others to get involved and to create a shortage or a void that sucks everything around it, drawing from the exchanges and convincing it in to cold storage... or enhancing that void by creating your own business by accepting mostly bitcoin for your services or product(s) and having all the excess in to a cold storage that would create the same effect. But now the problem is divided in 2 or 3 things... from who you should get those coins? For example if you take them from someone off-exchange, you might have no immediate impact. So basically you would need to draw and suck dry from the desperate to create that shortage/void/demand. Take from someone who cannot live without bitcoin.  Roll Eyes


Sure those kinds of described actions can be helpful in expanding the bitcoin space and useage, yet each person has to decide for himself the extent to which he wants to buy, sell or otherwise be involved in bitcoin. 

If you learn about bitcoin, and you believe that it is a good thing, then at minimum you should attempt to allocate a reasonable amount of bitcoin for yourself 1% to 10% of your asset investment allocated towards bitcoin could be reasonable depending upon the level of your bullishness, and your other personal financial circumstances.

In essence, I would suggest that you establish a comfortable position towards yourself, lead by example, and then allow others to chose the level to which they want to get involved.  For the most part, I would not recommend attempting to proselytize others, but that is just me.  If they are receptive to learn about bitcoin and to hear about your investments, then fine, no problem sharing information with them.  On the other hand, I have no problem with people who are out there and proselytizing because some of those kinds of folks are going to exist in any kind of wide spread adoption.
hero member
Activity: 1876
Merit: 612
Plant 1xTree for each Satoshi earned!
If not considering the volume taking place on chinese exchanges today Poloniex is the leading exchange (USD).
https://coinmarketcap.com/currencies/bitcoin/#markets

But Bitcoin is dead, who cares? Cool

Run Bitcoin Run!

I thought that this thread was about USD/BTC?

If you look at your link, the lead in USD is USD/ETH... , so you are seeming a bit off topic and especially when you are not qualifying your observation in such a way to clarify what you are asserting, exactly.



I think Adam was conservative with the USD to look more serious... he would have probably named it BTC vs All resources of planet Earth & SolarSistem.Co ... Cheesy Cheesy Cheesy
legendary
Activity: 2310
Merit: 1422
If not considering the volume taking place on chinese exchanges today Poloniex is the leading exchange (USD).
https://coinmarketcap.com/currencies/bitcoin/#markets

But Bitcoin is dead, who cares? Cool

Run Bitcoin Run!

I thought that this thread was about USD/BTC?

If you look at your link, the lead in USD is USD/ETH... , so you are seeming a bit off topic and especially when you are not qualifying your observation in such a way to clarify what you are asserting, exactly.
If not considering the volume taking place on chinese exchanges today Poloniex is the leading exchange (USD).

There's virtually no USD involved with Poloniex. It's not really any more valid than chucking a Chinese exchange in there.

Yes you are both right. According to CoinGecko GDAX's the leading exchange for the BTC/USD
https://www.coingecko.com/en/coins/bitcoin/trading_exchanges

My bad, it happens

hero member
Activity: 1876
Merit: 612
Plant 1xTree for each Satoshi earned!


I could give a ratt's ass about the various disgruntled comments regarding either my style or content.

[...] our viewpoints regarding bitcoin and our approach to investing in it (or not, supposedly, in the case of Stolfi).  So, if you, or anyone else are getting caught up in style and/or length of post, and believe that those factors indicate any material substance, then you (and those like minded superficial posters) are a bunch of fucking loonies.   Roll Eyes Roll Eyes    Cheesy

[...]




Finally you said something useful I can comment on...

And to be more blunt... Investing can be achieved in multiple ways! For example the most important 2 things you can do (or 3 depending how you view it) are to convince others to get involved and to create a shortage or a void that sucks everything around it, drawing from the exchanges and convincing it in to cold storage... or enhancing that void by creating your own business by accepting mostly bitcoin for your services or product(s) and having all the excess in to a cold storage that would create the same effect. But now the problem is divided in 2 or 3 things... from who you should get those coins? For example if you take them from someone off-exchange, you might have no immediate impact. So basically you would need to draw and suck dry from the desperate to create that shortage/void/demand. Take from someone who cannot live without bitcoin.  Roll Eyes
legendary
Activity: 2842
Merit: 1511
I do wonder about these megatrolls. What an astonishing waste of life it is to write and agitate about something you hate. It's not going to change anything and you're throwing your precious life away while doing it.

Indeed, there is a terrible wastefulness in a human that chooses the life of a mosquito.
legendary
Activity: 3794
Merit: 5474

Stolfi is a celeb now. He even has his own following, most of whom don't even know they're being trolled.

Ah, Stolfi. Thing about him was, he was totally sincere. Can't even remember what his arguments were really, but he really believed them.

He stopped posting here after Bitcoin broke above $450 and went to $800. That demolished all his arguments in the short term at the very least. Whoever bought at $450 almost doubled their money, while Stolfi had been arguing they were getting ripped off. He was very vocal during the bear market, but disappeared during the bull market.

Because all paid trolls appear en mass during bear markets (to supposedly help the shorters, who are their friends) and completely disappear during bull runs (because no one would care anymore). Also, I'm pretty sure that many bear trolls on this sub also have bull shill accounts, and just switch sides whenever it is convenient for them to do so.  It's pretty easy to spot them in their writing style and tone, not to mention you can see which accounts suddenly appear or practically disappear during which periods.

Which is why I don't really trust the sincerity of anyone that is too overly vocal (either overly bullish or overly bearish) on this subforum.  At all.
legendary
Activity: 1596
Merit: 1061
Smile


noticed the walls are getting bigger and bigger



recent news article confirms bitcoin has the winning formula for future fintech

http://www.scmp.com/week-asia/business/article/2020094/fintech-next-frontier-hong-kongs-battle-singapore

i am so bullish
legendary
Activity: 929
Merit: 1000

Stolfi is a celeb now. He even has his own following, most of whom don't even know they're being trolled.

Ah, Stolfi. Thing about him was, he was totally sincere. Can't even remember what his arguments were really, but he really believed them.

He stopped posting here after Bitcoin broke above $450 and went to $800. That demolished all his arguments in the short term at the very least. Whoever bought at $450 almost doubled their money, while Stolfi had been arguing they were getting ripped off. He was very vocal during the bear market, but disappeared during the bull market.
legendary
Activity: 3962
Merit: 11519
Self-Custody is a right. Say no to"Non-custodial"
If not considering the volume taking place on chinese exchanges today Poloniex is the leading exchange (USD).
https://coinmarketcap.com/currencies/bitcoin/#markets

But Bitcoin is dead, who cares? Cool

Run Bitcoin Run!

I thought that this thread was about USD/BTC?

If you look at your link, the lead in USD is USD/ETH... , so you are seeming a bit off topic and especially when you are not qualifying your observation in such a way to clarify what you are asserting, exactly.
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