Gold collapsing. Bitcoin UP.

[Richy_T]

Let's see who can make the most nuclear bombs and win the race. Obviously Russia was winning for a while (They made far more nuclear bombs that the US) - just before they went bankrupt.

Your first sentence is incorrect but the rest of this text reveals the truth of it. Command and control economies are pretty awful when taken to the level of the USSR and if you get into a spending war with them, they just can't keep it up in the long term. See also the space race. The aim is not to win, it's to still be standing when your opponent collapses in a heap. Kinda like a real war, really.

 

[rocks]

I'm not sure I agree (depending on the meaning of "augmentation"). I'm still a proponent of a "purely monetary blockchain" (including payments, of course). That's what the bitcoin experiment is about and I have no problem seeing ethereum try to eat the other cakes.

I'm not against the bitcoin blockchain being used for non-monetary purposes, as long as it doesn't make the "base layer" unecessarily more complex. It should be kept simple. Big, but simple.

I'm not sure trying to onboard as many "features" into bitcoin (cash) as possible is a good route. The chain itself ("layer 0") should offer enough capacity and versatility to enable those "features" to be implemented on top of it, of course.

Fully agree against making things unnecessarily complex and maintaining the monetary block chain as the focus. That said the entire concept of payments, from what they are to what initiates them (notice I didn't say who), will likely change significantly over the coming decades. Bitcoin as programmable money can evolve with these changes, but only if we let it.

I have done work with multiple startups and noticed they usually fall into one of two broad types. The first tries to make something that already exists better. While the second tries to create something entirely new that no one has or uses today. Most tend to fall into the first type because they are the easiest to identify and have clear existing markets with known sizes to go after, however they tend to be less successful in my experience because it is hard to replace something that already exists. Fewer fall into the second type largely because it is considered difficult to develop entire new markets from scratch, but those that succeed here become the real success cases.

Bitcoin is in the first category, it is a better version of money, something which already exists today.

Ethereum is in the second category, it is an entirely new concept and requires the development of entirely new home grown use cases.

Now compare transaction growth between the two, I seriously question how much of an impact the 1mb limit had and believe Ethereum would have taken over in terms of transaction volume at some point in the next year or so regardless.

And the reason is simple, the things you can do with Ethereum you can't do with anything else. For a while my favorite pizza place accepted bitcoin, but eventually they stopped due to low volume because there exist other options to do the same thing (credit cards, cash). However with Ethereum there is no replacement if you need one of their use cases.

Ethereum BTW also has a monetary payment aspect, so if you believe in network effects how do you think a static Bitcoin will compete?

I am not saying Ethereum's mechanisms need to be brought into Bitcoin, there is space for multiple chains that serve different purposes.

However, I am saying if Bitcoin is going to succeed as a better form of money it will need to stay in front of how payments are evolving and this likely will require supporting over time some (small) number of transaction types that serve different purposes, some of which enable things you can't do today. For example I just started to catch up on the bitcoin-ml list and there was a discussion on flex transactions vs. the current binary format. I'd argue if both have valid use cases that can not be done with the other, why not support both (this is just for the purpose of an example, I'm not saying I see the need for both here).

And to help enable this and reduce complexity is the fact that SPV wallets do not have to upgrade and support all transaction types. Only miners and full nodes need to upgrade over time to support all transaction types, SPV wallets only need to understand the transaction type they care about. This enables the network to upgrade over time to support new transaction types, while most end users do not need to do anything.

This is what I meant augmenting bitcoin with new useful functionality. I could envision Bitcoin in 20 years supporting 4-5 unique transaction mechanisms each of which support different use cases of interest (the original script, with more op codes re-activated, as one of them).
[doublepost=1504764166,1504763359][/doublepost]BTW, I went to /r/bitcoin and bitcointalk last week. WOW those places have changed from 2012-13. It is amazing (frightening) how the general consciousness has done a complete 180. Gavin is considered evil, Satoshi either never existed or did exist but was wrong on just about everything and stole anything that worked from Adam.

Someone will need to write a book someday, Thermos was better at changing history than Stalin ever was.

 

[Justus Ranvier]

Has anyone modeled the situations in which the Core chain could die? It's not as simple as miners just switching chains.

The final 100 mined blocks will never be spendable, so every miner has an incentive to make sure none of the blocks they mine fall within that range.

Their strategies for accomplishing this are:

1. Make sure the Core chain never stops advancing
2. Abandon the Core chain at least 100 blocks earlier than the last Core miner

Strategy 1 breaks down at some Cash:Core exchange rate where the opportunity cost of staying exceeds the cost of writing off unmatured blocks.

Strategy 2 is not one that can be achieved by all miners, and would involve the miners who are planning to defect doing their best to convince other miners to stay in.

 

[adamstgbit]

@Justus Ranvier

Secret option #3

miners implement a POW change, in that case all the miners get to abandon the Core chain And it keeps on advancing after they do.

 

[Justus Ranvier]

It's a game of hot potato: everybody wants to get someone else to mine those 100 unspendable blocks.

 

[lunar]

@Richy_T I'm not very well versed on the cold war history, but the "lets see who can make the most bombs" was more of a reference to how it played out in public. My impression was that once the USA realised they had enough bombs to destroy everything, it became a game of economic trickery, convincing the USSR to build way more than they needed and hence bankrupt them? Is this wrong?

@rocks

There's quite a few new revelations you might have missed wrt Bitcoin and it's deep structure. Basically it's Turing complete, which if i've understood the chat correctly means the 2PDA (push down automata) structure, allows all sorts of interesting programming. I think it's very basic machine code or a state machine, and needs a complier and an entirely new coding language, something nChain has been hinting they have in the pipeline.

RyanXcharles talks about it here
and there's a treasure chest of ideas to be found on their blog. https://nchain.com/en/blog/

Basically everything Ethereum can do Bitcoin can do too, and more, similar possibly to WolframAlpha. edit : https://en.wikipedia.org/wiki/Wolfram_Mathematica
We just need vastly bigger blocks.

https://nchain.com/en/blog/

 

[adamstgbit]

It's a game of hot potato: everybody wants to get someone else to mine those 100 unspendable blocks.

the trick is to throw the hot potato at a completely different group of poeple - POW change

 

[AdrianX]

Regarding @Justus Ranvier's post I'd mine the Core chain in relation to the value that could be extracted I'd work to maximize difficulty down and if I found the chain being abandoned which is the most likely outcome I'd cut my losses fast.

I expect investors on exchanges and futures markets may try and encourage mineral by forcing up the price of available supply to encourage them to mine to fulfill demand.

It'll be like a dangling carrot only it'll be similar to schrodinger's cat, if you ever catch up.
[doublepost=1504837960][/doublepost]Mmm without reply protection I can't see the scenario I envisioned playing out. This is going to be crazy.

 

[Jonathan Vaage]

Bitcoin Collapsing. Tether UP?

I'd imagine Thethers are heavily utilized for leveraged trading and a bunch of margin calls triggered by the BTC price plunge are behind this.

Wonder how many traders actually understand the counterparty risk associated with this Flight to Safety™?

 

[Justus Ranvier]

The counterparty risk has always been infinite, since there is no counterparty who promises to redeem Tethers.

 

[Dusty]

Typical tether users do not need a counterparty: its usage is to temporary move their position from crypto to fiat without leaving the fiat on the exchange (like it's happening right now).

As soon as they decide to return to crypto they transfer them back to the exchange, they buy and they withdraw (cryptos) from the exchange.

This way they minimize the time they leave money (fiat and/or crypto) on the exchanges and its related risk.

 

[albin]

@Dusty

At the risk of being pedantic, Tether itself is the custody risk in that scenario, because Tethers are IOUs without intrinsic value (unlike native crypto coins), although the market for sure can price them higher or lower than par value due to an aggregate calculus of utility vs risk compared to bank account dollars held by crypto exchange in custody.

 

[Dusty]

Yes I know, but whether the risk of keeping coins in an exchange is higher of lower than keeping tethers is up for debate.
From what I know the typical tether user does not want to redeem usd because he want to enter the crypto world and stash BTCs (or other cryptos).
He just want to be able to trade exiting the positions and limiting exposure to exchanges failure.
If this is true it means that only a very small part of tether get redeemed and this lower the chances of its failure (even if it's a scam).

 

[Justus Ranvier]

If this is true it means that only a very small part of tether get redeemed and this lower the chances of its failure (even if it's a scam).

The lower the risk that a scam will be quickly detected, the higher the odds that it will be attempted.

 

[Dusty]

Justus: I agree (and I think tether is a scam), but until now it's still working fine while many exchanges in the meantime got busted (bitfinex, btc-e, others), so maybe in the eye of some investors the two risks are much different.

 

[albin]

This gives some insight in a small way into what Blockstream is up to.

One of the intentions for Liquid is to have functionality for tokenized IOUs like fiat currencies, etc, to be issued by exchanges and traded around through the sidechain.

Right now Tether has no variable costs related to transactions, since the infrastructure is the Bitcoin network via Omni, and the cost to move Tethers is paid to Bitcoin miners and not Tether itself.

On Liquid, the infrastructure costs are shifted to some extent to the federated exchanges, and Blockstream collects their taste of the action. This is a big improvement on the Tether model as far as revenue vs cost, and to some extent there is probably some regulatory arbitrage going on, in the sense that Blockstream collects money but can throw up their hands to even the most Bitlicense-y regulators crying "software-as-a-service", because they got useful idiot exchanges to take the regulatory risk issuing assets.

"The miners are the enemy" might be something a little more than just rhetoric about activating segwit!

 

[adamstgbit]

its neat to see this all figure itself out.
there so many ways of doing things, and bitcoin isn't committed to any one way, every which way is being tried, LTC and BTC atomic swaps, OMNI layer, SideChains, Liquid, Lighting, nChain is also doing somthing mysterious. what will work? what will work better? where is this all going?
we're about to see bitcoins' version of an industrial revolution, or somthing!

 

[Zarathustra]

Determinism stands like a rock in an environment of believers in determinism. Oh and I have a Deja Vu regarding this discussion, as if this all came up earlier.

Yes,
Determinism vs. Creationism,
Philosophy vs. Religion
Physics vs. Fiat Lux
Einstein, Laplace et al. vs. Charlatans (Paulus, Luke et al.)

Oh and I have a Deja Vu regarding this discussion, as if this all came up earlier.

Yes, but not as many deja vues as the Bitcoin Cash vs. Segshit/Segshit2x question. You shouldn't promote Segshit2x by claiming that the miners made a mistake by supporting our Spinoff.

 

[awemany]

Yes, but not as many deja vues as the Bitcoin Cash vs. Segshit/Segshit2x question. You shouldn't promote Segshit2x by claiming that the miners made a mistake by supporting our Spinoff.

If you want to issue reprimands against "wrong" opinions, I think you have a better place over at BCT.

 

[todu]

@todu : As you are moderator on /r/btc: Do you have a good explanation for this comment of mine just silently disappearing without notice:

https://archive.fo/fXVpX
https://archive.fo/g0AqE

Context: https://archive.fo/TikLX

(This was an answer to @Zarathustra )
[doublepost=1504082017][/doublepost]@Zarathustra: Disagree strongly. That's just the network effect of money and enemies within the system being routed around.

I'm sorry I missed this message. I thought that I would get an email automatically every time someone pings me in a message on this forum. If anyone knows if that's possible to enable and can tell me how, please do.

I checked your message and it got caught in the Automoderator filter. I approved your comment manually even though I'm ten days too late for it to matter. It's safest to send me a PM over Reddit in these situations because then I'll get a notification in my phone directly. Or for an even quicker response you could click the "message the moderators" button in the sidebar. I read those messages too and they too appear in my phone's notifications.