Gold collapsing. Bitcoin UP.

[cypherdoc]

@albin

I've always argued that most people will lose money investing in cryptocurrency (>95%). That's because it's so hard to understand along with the tricky aspects of a fixed supply currency and it's effects on the merchant economy (hodlers win) .

He obviously has taken the diversification route which makes sense on its face except the first generation of merchants/startups for the most part are getting wiped out as expected since the urge to save is so great. I bet he is way under water on his investments as a result. What this does unfortunately is turn some of Bitcoins greatest proponents against it as they feel they are supposed to make a killing. Thus, there must be something wrong with Bitcoin that needs changing. Out of sheer desperation. That's what I think is happening with the increasing frequency of his miniblockists podcasts.

My advice all along, go where the money (strength) is; the coin itself.

 

[Justus Ranvier]

Trace Mayer is becoming more and more pathetic.

If the rumors are true, I hope the vulture capitalist shenanigans he supposedly put Armory through come to light someday.

 

[cypherdoc]

Alan Reiner is a gem of a guy.

He helped me immensely back in the day and I helped him with donations.

It would be a shame if Armory didn't make it. @JustusRanvier you should tell us what you're hearing.

 

[Justus Ranvier]

I'll wait until and unless somebody from Armory publicly says something that either confirms or refutes what I've heard.

 

[cypherdoc]

plus, coins have an infinite supply backing them; fiat supply that is.

you can see why we're going to the moon:

 

[rocks]

I hope mining companies don't go from apparently being mostly uneducated on what they are actually doing towards killing Bitcoin by even more idiotic small block entrenchment.

With a narrow mind, they could think that they have a viable business model and investments (code, website, etc...) that needs protection (1MB staying in place).

It is unfortunately my impression that many miners have to be burned badly, by a seriously collapsing Bitcoin price, before they actually start to get a clue how that thing works that they are using.

I have to admit I am becoming worried regarding the mining community's ability to make smart decisions for Bitcoin's long-term health.

What has happened is success in mining is not determined by a better ability to run a node/pool or a better understanding of bitcoin, but instead is determined by having access to the cheapest electricity available. If you look at the largest mining farms, they are all in very low cost electricity regions.

This is an artifact of the coinbase payout dominating fees. If the block reward was instead dominated by fees, then part of being a successful miner would require the ability to write or configure nodes to maximize the # of transactions included while minimizing orphan risk with other miners. This would result in miners developing concepts such as thin blocks, IBLT or weak blocks on their own, instead of waiting for core to get around to it.

But by having the coinbase payout negate fees, success in mining is reduced primarily to access to low cost electricity. This is a problem because now incompetent miners are not at a disadvantage to more competent miners, and as a result mining does not shift towards the most competent miners who figure out how to capture more fees. We end up with miners in China saying they can't handle 2MB blocks because they lack network, when all they have to do is run stratum on-site and connect to a remote node in a datacenter. "But hey, I'm just mining for the coinbase so I don't have to care."

What we are left with is hoping that individual miners will switch pools to the pools that make better choices out of personal preference not economic need, but I doubt >50% of miners care enough which makes this unlikely.

A much better situation would be if some pools made more money because they figured out how to capture more transaction fees. If this was the case most individual miners would quickly switch to the better pools.

TL;DR Because of the coinbase dominating fees, miners do not have an economic incentive to be more competent and include more transactions. We are left hoping miners make the "right" choices based not on economics but personal preference. That is not reliable and is a problem.

 

[cypherdoc]

let's see LN compete with Bobby Lee and BTCC prioritization!

free tx's and insta-mining prioritization when needed!

 

[Bloomie]

Guys, media embedding is a third-party plugin and is not in the forum's core code. It's entirely possible that it's going to show bugs on some combinations of browsers and operating systems, especially if the version of the browser is very recent. I am subscribed to the author's updates and will keep an eye on them.

 

[cypherdoc]

@rocks

well, this is why we all want bigger blocks so that miners outside of China can leverage their superior bandwidth and construct bigger blocks over time so as to capture more tx fees as the reward decreases. we are still in the negotiating phase of this inevitable transition where the whole world cannot be forced to wait for a corrupt Blockstream core dev and the centralized Chinese miners.

we're starting to see things happen with Bitpay and CB making noise and outright moves in preparation. over time, miners will be forced to pay attention to fee and tx selection. mining will decentralize.

 

[AdrianX]

plus, coins have an infinite supply backing them; fiat supply that is.

you can see why we're going to the moon:

I'd like to see the chart on the left in log scale, and see the last 5 years relative to bitcoin.

 

[rocks]

well, this is why we all want bigger blocks so that miners outside of China can leverage their superior bandwidth and construct bigger blocks over time so as to capture more tx fees as the reward decreases. we are still in the negotiating phase of this inevitable transition where the whole world cannot be forced to wait for a corrupt Blockstream core dev and the centralized Chinese miners.

A problem is I could re-phrase your statement above to say "We want Chinese miners to agree to mine larger blocks, so that more competent miners can become more profitable than you and out compete you".

The problem today is more than 50% of mining might be in the less competent or don't care category, because the coinbase payout enables them to be so. However at the same time we need mining agreement to adopt BIP101 or something similar.

Bitpay, coinbase and 99% of users could all decide to adopt larger blocks. But if 51% of the miners refuse and only build on 1MB or less blocks, then we are stuck on a 1MB chain. That is the way mining based security works.

In the end we need miner buy in, but I've started to become worried about gaining that buy in.

 

[Zangelbert Bingledack]

@rocks

If miners don't wise up in time, investors will slap them with a lower BTC price, or better, refuse to buy their mined Corecoins when XT or BU forks happen. Miners are the first line of defense, but if they fail the ball goes to investors. They'll learn very quickly which side their bread is buttered on if they don't have an innate understanding of this now.

EDIT: In some sense this is just another way of saying that the blocksize issue hasn't come down to the wire yet. When it does and there is widespread community perception that the cap is shackling the bull, miners will wake up and realize that their coinbase coins are gonna get devalued or not surge as high as they could have. Hopefully we can avoid an aborted rocket launch by getting fork arbitrage happening so that it's only Corecoins that sell off. My sense is that Core will give itself a reprieve by raising the cap modestly soonish.

 

[AdrianX]

A problem is I could re-phrase your statement above to say "We want Chinese miners to agree to mine larger blocks, so that more competent miners can become more profitable than you and out compete you".

The problem today is more than 50% of mining might be in the less competent or don't care category, because the coinbase payout enables them to be so. However at the same time we need mining agreement to adopt BIP101 or something similar.

Bitpay, coinbase and 99% of users could all decide to adopt larger blocks. But if 51% of the miners refuse and only build on 1MB or less blocks, then we are stuck on a 1MB chain. That is the way mining based security works.

In the end we need miner buy in, but I've started to become worried about gaining that buy in.

The reality is, it's the network that has the value. Miners want to move with where the value for the coins they mine is.

The problem is the Relay Network gives them too much power, they can order blocks between themselves leaving the network of nodes to play catch-up. if it was the network of nodes that determined valid blocks, miners would have no choice but the flow network consensus.

Satoshi's design can only work in the long run if it's the nodes who validate blocks and miners mine on the consensus of blocks based on the network of nodes.

 

[cypherdoc]

@AdrianX

yeah, so someone should take Corallo out and get him permanently drunk while we take down the relay network?

@rocks

i believe the miners aren't that dumb. it's great that they are focusing on just getting rewards right now; that's what will keep blocksize under control when BU gets going. also, sequestering mining deep within the jungles of China near waterfalls keeps them well away from the US military while Bitcoin bootstraps. furthermore, you can see they have the bigger picture in mind when they initially voted for 8MB blocks. they know in the long run that tx's need to be processed and that their income will eventually depend on them. we were so close with XT until dumbass Garzik introduced 100. what a stupid unnecessary move. you heard Marshall Long say in his AMA the only reason he likes it is b/c it gives him more control; that's it. oh well, i doubt 100 goes anywhere anyways. and then the comment today from BTCC about prioritization "b/c blocksize inc is going nowhere". we're in transition. don't lose hope.

 

[cypherdoc]

in your face Todd and miniblockists!:

[doublepost=1448065995][/doublepost]
which suggests Bitcoin is poorly governed.
[doublepost=1448066645,1448065688][/doublepost]surprisingly little trolling by the miniblockists in this thread:

https://www.reddit.com/r/Bitcoin/comments/3tkhu4/btcc_launches_priority_blockchain_transactions/

 

[ladoga]

That is awesome and hopefully indicates how ecosystem participants are going to proceed. Coinbase indicated they had backup plans if blockstream did not move. Maybe this is it.

I think the plan for Bitcoin businesses is to do just this, probably in addition to convincing miners that Bitcoin is dead in the water if they don't join the cause.

If the 1 MB limit stays it destroys growth prospects of most if not all Bitcoin related businesses and dries up investments. They'd be forced to close operations and bring the rest of Bitcoin economy down with them. Miners shouldn't be too hard to convince if confronted with that.
[doublepost=1448068306,1448067146][/doublepost]Henry Brade, CEO of Denarium and Bittiraha.fi (Finland's largest bitcoin exchange and ATM operator) also supports larger blocks, specifically BIP 101.

So, to summarize my view: If a compromise solution that passes through the Core consensus method does not emerge from the Hong Kong scaling conference, and push comes to shove, I'm likely backing Gavin. Of all the implementations so far I like BIP101 best but my opinion is not locked in at all, it can change if there are solutions that achieve better consensus.

https://forum.bitcoin.com/ama-ask-me-anything/i-m-henry-brade-co-founder-and-ceo-of-denarium-and-bittiraha-fi-ask-me-anything-t2840-10.html#p8553

 

[rocks]

i believe the miners aren't that dumb. it's great that they are focusing on just getting rewards right now; that's what will keep blocksize under control when BU gets going. also, sequestering mining deep within the jungles of China near waterfalls keeps them well away from the US military while Bitcoin bootstraps. furthermore, you can see they have the bigger picture in mind when they initially voted for 8MB blocks. they know in the long run that tx's need to be processed and that their income will eventually depend on them. we were so close with XT until dumbass Garzik introduced 100. what a stupid unnecessary move. you heard Marshall Long say in his AMA the only reason he likes it is b/c it gives him more control; that's it. oh well, i doubt 100 goes anywhere anyways. and then the comment today from BTCC about prioritization "b/c blocksize inc is going nowhere". we're in transition. don't lose hope.

I remember some of them only cautiously accepted 8mb blocks and only if core accepted it. There seems to be a fear of doing anything "contentious" that might risk profits. This risk adversion becomes a problem if core devs keep the issue contentious, which I believe they will. Then it becomes hard for non mining ecosystem participants to force the issue.

Some also indicated they might not want to go higher than 8mb. Which means even if we get that then someone needs to implement thin blocks, iblt and weak blocks in order to keep scaling.

But who is going to do that? Core isn't and neither are the miners themselves.

Which if you think about it is shocking. Miners have not contributed to code development to scale to larger blocks, or even been involved in making proposals to do so. All the proposals I've seen have come from non miners.

This indicates a real problem, miners should be the ones investing in code to scale mining. That is how open source usually works, companies with profit potential invest in code that helps them. Blockstream is doing this, but miners aren't. Instead they are looking to others to write code so they can make more money, this is wrong and indicates a real problem.

 

[Zangelbert Bingledack]

surprisingly little trolling by the miniblockists in this thread:

https://www.reddit.com/r/Bitcoin/comments/3tkhu4/btcc_launches_priority_blockchain_transactions/

That's because their Core dev heroes are still flummoxed by this new development and haven't supplied any talking points for them to parrot.

 

[cypherdoc]

for a core dev like Todd to say this, "Indeed, which suggests Bitcoin is poorly designed" is truly outrageous and suggests he should resign. these guys are the worst stewards of Bitcoin and only look to advance their own agendas. look at his shameless plug for his RBF & CPFP proposals.

 

[albin]

This indicates a real problem, miners should be the ones investing in code to scale mining. That is how open source usually works, companies with profit potential invest in code that helps them. Blockstream is doing this, but miners aren't. Instead they are looking to others to write code so they can make more money, this is wrong and indicates a real problem.

This is a classic example:

https://github.com/bitcoin/bitcoin/issues/3658

Apparently this gentleman thinks Bitcoin devs are his personal helpdesk for facilitating his mining strategies / attacks.
[doublepost=1448076370][/doublepost]@cypherdoc

Next thing I expect is Todd to tweet that Paris attacks happened because we don't have RBF and CPFP.