Gold collapsing. Bitcoin UP.

[Norway]

@lunar
I don't think the standard periodic difficulty adjustments on Bitcoin Cash was changed when the hardfork happened, and i don't think it changes by the Emergency Difficulty Adjustments. I believe it's every 2016 blocks all the way from the genesis block. But I could be wrong. Can anyone who looked at the code say how it is?

You say 400 Petahash/s disappeared after august the 8th. I'm not sure how you get your numbers. August 9th, the Bitcoin Segwit chain increased it's difficulty by 7,32%. Maybe this is the "missing" hashpower?

When you talk about the Chain Death Spiral, I think you should also mention the profitability on the two chains. I believe this is the key metric in a scenario where Bitcoin Segwit dies.

 

[Norway]

I get the feeling that the smallblockers have sent all their tanks to the other frontline to battle Segwit2x.
The pincer movement was invented in China. (Sun Tzu, "The Art of War").
[doublepost=1502454209][/doublepost]From Wikipedia:

Sun Tzu, in The Art of War, talked about the maneuver.[2] But he made the point to leave a surrounded enemy an escape route.[2] Otherwise, faced with death, a surrounded enemy would fight much harder.

 

[AdrianX]

My understanding is that ViaBTC did not sign the NYA, so they are free to support BCC as much as they want.

ViaBTC are on the list of supporters https://medium.com/@DCGco/bitcoin-scaling-agreement-at-consensus-2017-133521fe9a77

Interesting is this change, explains a lot BitGo is the system used to manager assets on Kraken and BitStamp

Note: BitGo was erroneously included in this initial published list. This has since been corrected.

 

[lunar]

Death Spiral. the earlier article is well worth a read too.

I think you should also mention the profitability on the two chains.

Yes, the article just faces the problem from one side. What happens to the legacy chain. I've a few well formed theories, as to the cause, method, and motives of who might create the imbalance in the first place.

They hinge around the slight gaming of the EDA, and the profitability point, at which miners would likely switch over chains. Problem is they are likely liable, or at least potentially slanderous. I don't want point fingers at groups or expose tactics that have yet to be played.

The solution could be a gentleman's agreement among the big miners to declare old Bitcoin as Too-Big-To-Fail (too fast).

It's worth nothing though, there are two sides to this story. The idea that a massive economic-reog back to august 1st, might benefit, from a ripping the plaster off quickly, instead of failing slowly.

especially as all eyes are elsewhere.

I get the feeling that the smallblockers have sent all their tanks to the other frontline to battle Segwit2x.

Robin Hood

Sorry, feeling cryptic today.

 

[adamstgbit]

Not at all. I am talking about the mother-frickin'-lovin' InterTubez.

What do we do if the internet is cut in two? What happens after the network rejoins? If longest chain wins, there is a lot of strife, true. And gnashing of teefuses. However, without this ability, we are left with two irreconcilable Bitcoins. Mucho worse-o.

very interesting.

but i dont see how nodes refusing to go back on blocks is going to hinder "the longest chain wins" thing. if the internet splits in 2 and there are 2 chain for a while, later down the line when the internet is well again, one of the 2 chain will be dropped and the other will continue to grow, i dont see where reorg comes into play here.

i still fail to see the point of reorg. IMO the proper "non-hostile-attack" way of doing reorg is forking and hoping to become the longest chain through mutual cooperation, rather then reorganizing previously valid blocks and forcing the existing network to yield to your hashpower.


edit: wait ,maybe your suggesting that when the internet comes back whole again, miners would go back to the point of the break and re-mine all the blocks and reorg all the TX that have happen on either side during the split. very interesting.

 

[albin]

Very deliberate Dragon's Den directive at the moment, along the lines of "I used to be pro-big block until I learned about Bitcoin", and "Anybody who isn't us is either crazy or a scammer".

 

[AdrianX]

very interesting.

but i dont see how nodes refusing to go back on blocks is going to hinder "the longest chain wins" thing. if the internet splits in 2 and there are 2 chain for a while, later down the line when the internet is well again, one of the 2 chain will be dropped and the other will continue to grow, i dont see where reorg comes into play here.

I for one, if i had been paid in BTC and after 6 confirmations shipped $100K of product would not accept a reorg. i imagine the other 2000 transactions that happened every 20 minus would feel the same way, and say lets just use this chain posibly? A reorg would be devastating. with a long difficulty adjustment it is not a big problem.

 

[adamstgbit]

Very deliberate Dragon's Den directive at the moment, along the lines of "I used to be pro-big block until I learned about Bitcoin", and "Anybody who isn't us is either crazy or a scammer".

thats the sad state of things.
new poeple coming into bitcoin for the first time dont have the luxury of having seen the debate evolve.
if you're "learning about bitcoin" consisted of a couple days of reading various forums, chances are you've read a lot of bullshit, and you probably buy the narrative that bitcoin is fundamentally broken / will never exceed 1MB and needs a second layer desperately.

 

[jbreher]

if the internet splits in 2 and there are 2 chain for a while, later down the line when the internet is well again, one of the 2 chain will be dropped and the other will continue to grow, i dont see where reorg comes into play here.

I think you're maybe getting it in your edit. When 'one of the 2 chains will be dropped', that is exactly that chain experiencing a deep reorg.

 

[spunky]

@lunar I wish I could say I produced those graphs, they are lovely. I like the way you think about the agreement not specifying which deployment chain!

 

[spunky]

This is a game of economics. May the best tech win, be it an emergency PoW change or a planned block size increase. Either way, from where I'm sitting: bitcoin is undefined.

 

[witly]

The solution could be a gentleman's agreement among the big miners to declare old Bitcoin as Too-Big-To-Fail (too fast). An agreement to let Bitcoin Segwit die slowly and bring up the Bitcoin Cash ecosystem smoothly.

If this is indeed the case, then the minors will not put too much effort to push the 2X part of s2x right?
[doublepost=1502535262][/doublepost]Just curious, will @cypherdoc support BCC or s2x?

 

[79b79aa8]

once more: segregated witness is a trojan horse.

 

[yrral86]

Bitcoin Core hash power is decreasing.

 

[Norway]

Death Spiral. the earlier article is well worth a read too.

Ah, great read! I love these blogs about the strategy in the space right now. I like the "disease" metaphor.

That said, I have two issues I disagree with in this blog.

or they believe that the coins will be worth more in the future.

Miners are always 1 Shapeshift away from the other "coin". You don't have to believe in it long term to mine it.

This increase in block time affects the mining profitability.

No, it doesn't directly. But an increase in block time could affect the price and then the mining profitability. But not directly.

I will read your latest blog "Smoke And Mirrors and A Good Game of Poker" later. Looking forward to that. https://bitcoinandtheblockchain.blogspot.no/2017/08/smoke-and-mirrors-and-good-game-of-poker.html

I would also recommend this:
https://medium.com/@john.s.millibit/cashing-out-of-bitcoin-72ffe6226ab4

 

[adamstgbit]

I think you're maybe getting it in your edit. When 'one of the 2 chains will be dropped', that is exactly that chain experiencing a deep reorg.

in a sense tho both chains didnt reorg, one chain stopped being extended and the other kept growing.
The rule "nodes never allow the reorg of there blocks >6conf " isn't broken, users must explicitly drop one chain in favor of another, by updating there software.
i'm concerned about a malicious reorg attack on bitcoin cash, and i find myself wondering why nodes even allow for reorg. in the event a >6 blocks deep reorg is truly needed, having to update the software is a small price to pay, to get "reorg protection".

 

[bluemoon]

The solution could be a gentleman's agreement among the big miners to declare old Bitcoin as Too-Big-To-Fail (too fast). An agreement to let Bitcoin Segwit die slowly and bring up the Bitcoin Cash ecosystem smoothly.

This seems about right to me. The miners cannot let the old Bitcoin fail until Bitcoin Cash has a high enough value to support them all, even if they must mine the old Bitcoin at a loss.

Until recently I was mostly content to ride Bitcoin's ups and downs; the risk of near term total failure never seemed that great. Now, I believe the risk of failure (of both chains) to be much higher: the legacy Bitcoin can enter a state of Death Chain Spiral paralysis (great articles @lunar) while at the same time Bitcoin Cash proves unable to support the mining base, which crashes into bankruptcy leaving a mini-bitcoin and the field open for an alternative crypto to dominate.

I suspect there is a real risk Bitcoin Cash suffers a fatal (e.g. reorg?) attack to maintain the stability of the legacy chain.

These estimates are hardly scientific, but currently I put the prospects of medium term success of SW2x and Bitcoin Cash at 35% each and the chance neither succeeds at 30%.

I guess that means I'm optimistic?!

 

[lunar]

Those are not actually my blog posts, in case people were getting the wrong impression. I have been thinking about this scenario quite a bit for the last month, and I posted them because Patrick has pretty much independently, come to the same conclusions as myself, and explains the scenario very well.

Bitcoin is dead, Long live Bitcoin.

The solution could be a gentleman's agreement among the big miners to declare old Bitcoin as Too-Big-To-Fail (too fast).

This is essentially forming a cartel and we all know what happens to those in a free market. Sure If they have any sense they'll want all the value from the legacy chain to syphon back into the BCC main chain when it becomes profitable, rather than flood into alts or fiat. How to do this in a controlled manner though is another story. My guess is it's probably too difficult?

@bluemoon Thing to note, is the >1200 PH (maybe 1500) we saw on the 1stAug. The majority of that is not in play right now, but I it's clearly pro BCC and quite likely to move across as soon as BCC becomes profitable. The effect on the Segwit chain will be quite an increase in block discovery time. That's lots of hashpower to attempt an attack on. (very expensive)

This is my favourite paragraph. Fully agree.

Beware Smoke And Mirrors
There is much going on behind the scenes. Nothing is what it appears. Hashing power is being used to influence and manipulate the market. The high BTC price is great for those wanting to sell their BTC and accumulate BCH. This will result in a major wealth transfer from those holding BTC to those holding BCH. I believe that the true Bitcoin will flip from BTC to BCH but that is just my opinion.

As for the Bitcoin price
https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87
"Tether claimed that the supply of tethers would not increase until their banking problem was solved, yet the supply of Tethers has actually increased by 482% since this announcement." This excludes the 80 millions tethers created at the very end of July.

Not a good time to be buying legacy bitcoin. (Segwitcoin)

 

[Bloomie]

A collection of emails between Mike Hearn and Satoshi has been published by /u/CipherionX

Email 1
Email 2
Email 3
Email 4
Email 5

 

[bluemoon]

This is essentially forming a cartel and we all know what happens to those in a free market. Sure If they have any sense they'll want all the value from the legacy chain to syphon back into the BCC main chain when it becomes profitable, rather than flood into alts or fiat. How to do this in a controlled manner though is another story. My guess is it's probably too difficult?

The whole situation is fraught with risk. Managing a flip from BTC to BCC in a controlled manner is probably too difficult for anyone.

Cartel or not, profitable or not, BCC cannot support the miners until it has a high enough value. If BCC became profitable with say blocks every 10 minutes and a difficulty 10% of the legacy chain, then if the miners moved to it en masse we would see blocks each minute and a difficulty reset after about a day, putting BCC difficulty back to that of the legacy chain and likely destroying its profitability: the miners are forced to support the legacy chain until it sinks under them because that is the closest they can come to acting in a controlled manner.

Even if, as I hope, BCC gains considerable value, in the volatility involved in getting there we may see a mining bloodbath. If there is a mining bloodbath we end up with a mini-bitcoin in hashpower terms, diminishing blockchain security, possibly affecting value.

@bluemoon Thing to note, is the >1200 PH (maybe 1500) we saw on the 1stAug. The majority of that is not in play right now, but I it's clearly pro BCC and quite likely to move across as soon as BCC becomes profitable. The effect on the Segwit chain will be quite an increase in block discovery time. That's lots of hashpower to attempt an attack on. (very expensive)

I agree, but the stakes are very high and may drive desperate behaviour.

I agree also about the smoke and mirrors. What is really going on is very hard to fathom, perhaps for everyone involved.

I too am hopeful of a BTC to BCC flip, but I doubt it will be clean or without pain; and while necessary for BCC's success, a flip is not itself success.

Thanks for the heads up on Tether; I had no idea.

I am in the middle of a 7 week walk across Scandinavia with only intermittent wifi trying to keep abreast of developments and manage my risk: I bought a laptop last week to add to my load. Thanks to everyone for their helpful posts. Fun times!