Gold collapsing. Bitcoin UP.

[cypherdoc]

-315

That's not good

 

[AdrianX]

So still need to catch up since the move, but I though this was crazy news 5% increase in total hash and another 7% predicted over the following 2 weeks. That's a big investment chewing of over 10% of the total hash infrastructure.

Usually I'd say very bullish anyone know where it came from is this just past info showing up on the network?

 

[Justus Ranvier]

Another way is that that grey area is unmet demand that an alt-coin will soon fill.

Probably explains why so many of the people opposed to lifting the block size limit in 2013 were into Litecoin.

 

[cypherdoc]

Absolutely. But that's a very static way of thinking about it. Another way is that that grey area is unmet demand that an alt-coin will soon fill.

Or that Blockstream wants to fill with SC's and LN at the expense of centralization.

 

[cypherdoc]

The continued slow grind down beating and increasing volatility of the market is causing Bitcoin to turn up.

 

[cypherdoc]

So still need to catch up since the move, but I though this was crazy news 5% increase in total hash and another 7% predicted over the following 2 weeks. That's a big investment chewing of over 10% of the total hash infrastructure.

Usually I'd say very bullish anyone know where it came from is this just past info showing up on the network?

Wasnt there news of 16nm becoming a reality?

 

[AdrianX]

@cypherdoc yip the have some very efficient hardware coming online this could be it. I'd expect to see it materializes under an IP belonging to them. Still exciting that's a big investment.

 

[cypherdoc]

@AdrianX

Yeah and it's investments like that which will prevent a large miner from abusing the very system he is benefiting from.

This is not pie in the sky thinking. Bitcoin turns traditional economic reasoning/assumptions on its head because of the soundness of its fixed money supply. Be careful you don't get trapped into the prevailing thinking of the current fiat system which involves plenty of fraud and bailouts at all levels.

 

[cypherdoc]

-345

That's really not good

 

[yrral86]

That ramp though.... setting up the bull trap?

 

[cypherdoc]

Two Types of Production Quotas (Block size limits)

I met over lunch with a Masters of Economics student from UBC to discuss Bitcoin. He brought up a great point about how the block size limit serves as a "production quota." He explained to me how we can use the supply and demand curves from my fee market paper to show that if the production quota is below the natural equilibrium block size (Q*), that economic theory suggests we suffer a "deadweight loss" of economic activity equal to the area shaded brown in the lower chart below.


I don't have an economics background, but my understanding is that a production quota that distorts the free market dynamics (lower chart) can only be of a net social good if it serves to reduce or eliminate some negative externality, and the net loss of economic activity is outweighed by the net gain from reducing that externality. (I suppose the small-blockers could argue that the negative externality is "centralization" or "insufficient hash power for security.")

Censored from /r/bitcoin, re-posted to /r/bitcoinxt:
https://www.reddit.com/r/bitcoinxt/comments/3jn0pg/illustration_for_two_types_of_production_quotas/

That seems like a very realistic graphical representation of what's going on.

 

[sickpig]

@Peter R both Peter Todd and Jeff Garzik twetted that their presentations was accepted, do you have any news about yours?

 

[Peter R]

Yes, it was accepted.

Apparently I still need to wait to find out how long I have to speak and in "what format" <-- whatever that means.

 

[cypherdoc]

Huge news and congratulations Peter! Wow!

 

[Emperor Bob]

The "format" thing is whether or not they make you wear a beer cup hat.

 

[sickpig]

Yes, it was accepted.

Apparently I still need to wait to find out how long I have to speak and in "what format" <-- whatever that means.

I'm really glad! kudos.

 

[cypherdoc]

hmm, i think some presenters ought to consider voluntarily donning a bear cup hat during their presentation...

 

[Bloomie]

Congrats, Peter. Break a leg.

 

[Justus Ranvier]

I've spent some time considering Bitcoin's security model in depth to try to figure out what kind of guarantees it actually delivers.

As part of that process, I've tried to work out how much, if any, protection from double spending and censorship Bitcoin users would have if there was just one miner producing all the blocks.

The double spending side actually looks fairly good. Proof of work means that a miner has to pay a cost to orphan their own block. The cost is a irrecoverable expenditure of electricity they would not otherwise need to pay if they mine honestly.

Well, that's true if you assume that a miner loses revenue if they choose to mining a smaller number of sequential blocks than the maximum they could for a given electricity expenditure.

That is only true if some portion of the miner's revenue is tied to a specific block height. That portion of miner revenue is the minimum incentive against double spending.

As long as the fraction of miner revenue that is tied to the block height is non-zero, then Bitcoin's double spending resistance is non-zero, even in the case of a single miner with 100% of the hashing power.

Right now the block subsidy is the only source of miner revenue which meets this criteria. Future methods of paying for security (assurance contracts, etc) would need to be tied to specific block heights in order to perform the same security function as the block subsidy.

See also: https://bitcointalk.org/index.php?topic=130222.msg1401763#msg1401763

 

[cypherdoc]

@JustusRanvier

Another simpler and more reliable source of block revenue per block height is obviously escalating tx fees according to the original satoshi vision. why do we even let talk occur that forces these fees offchain?