Gold collapsing. Bitcoin UP.
- Thread starter cypherdoc
- Start date
yeah, we could very well start seeing a domino effect. i did smell panic:
http://www.zerohedge.com/news/2015-12-11/here-gate-2-13-billion-stone-lion-capital-suspends-redemptions
[doublepost=1449899455][/doublepost]all these ppl selling BTC's are gonna wish they still had them come Monday
http://www.zerohedge.com/news/2015-12-11/here-gate-2-13-billion-stone-lion-capital-suspends-redemptions
[doublepost=1449899455][/doublepost]all these ppl selling BTC's are gonna wish they still had them come Monday
I do apologise. This again turned into a far longer post than I imagined, but I'm trying to consider all angles. All comments are highly welcomed:
And we crash again, just as people start complaining about transaction delays, like clockwork.
Why do you think it is a terrible idea? We currently have an irreconcilable ideological difference between those who think that bitcoin should be a settlement system and those who think that we should scale while we have the subsidy so that security is provided by the number, not fee amount, of transactions.
I do not think these differences can be reconciled with gmax having publicly stated that he will continue working on/maintaining the 1mb chain even if everyone else moved over and he probably would have some perhaps 10-20% support. As such, if bitcoin scales through a hard-fork, there would be two chains in any scenario, with one of them eventually having a pretty low value, but perhaps more than litecoin as it probably would take the second place.
I find the current situation to be highly undesirable as we are effectively begging gmax to change his mind while he has unambiguously stated that not only will he not change his mind, but he will resist until the bitter end. Nonetheless we are still waiting for him to change his mind, pressuring him, and as any emperor, he entertains us at times by giving us the minimum increase of 2x and even that in some 6 months.
The miners on the other hand are like deer caught in the headlights and therefore have defaulted to no action claiming they are not the jury. Which means that we are basically going in the way of a settlement system with king gmax making proclamations, responding to public pressure by a minimal increase, and doing his emperor things.
With theymos having effectively taken control of the communication channels and seemingly impossible to remove regardless of how clear his scamming/thefts are made to the admins, with some miners now going as low as begging for 2-4-8 and even that denied, thus defaulting to no action, with gmax dead set on a settlement system, we can cry all we want about censorship, we can beg all we want for an increase, but we are effectively asking for permission from centralized entities who will do what they want as they always do and that is far from bitcoin.
Obviously, forking with a changed algo is not ideal, but I can see benefits. It would decentralize mining in an instant, allowing everyone to mine with their cpu, which would be a huge sell within and outside the bitcoin community as this would be the first time that the network effect is maintained while cpu mining is "liberated" to all. Security of course would be lower to begin with, but only for a few months as the hashrate race does its job. There would be a free, not fee, market choice and, most importantly, bitcoin would scale.
One would think that the only necessary step for the miners to take a positive step is a credible pre-announcement of ST (or whatever name such as OG, Classic, 3.0, ST for satoshi level transactions etc) as at that point things can become existentially unpredictable for the miners. For the hodlers there would be as good as no change as the value (combined or otherwise) would remain the same or increase in the medium and long term. For speculators there would be a bonanza if it gets to post pre-announcement stage. For bitcoin there would be incredible strength in showing to all, from Chinese peasants to USA presidents, that we do not ask for permission in this space.
I can see two ways of doing it. The first and ideal, far superior, way would be for someone credible to pre-announce ST and then exchanges to publicly announce that they will move over to it and that if they do move they will not go back so as to prevent QT miners from killing the chain by implementing BIP101 after the exchanges have moved thus creating utter chaos which is easily avoidable by exchanges proclaiming that they will not go back if they move. This would place miners on high alert and create the necessary momentum and pressure for a positive, rather than passive, decision. One would think that within days of such credible threat, a miner consensus would be achieved with a reasonable proposal acceptable to the supermajority such as perhaps bip101, but starting at 2mb together with SW but as a hardfork.
If instead the miners would still not reach a decision after the economic majority has made its will clear, and therefore has placed their entire livelihood in a credible and real danger, then that would show that there are some serious and fundamental problems in the bitcoin ecosystem and therefore that the benefits of the changed algo fork would far outweigh the dangers. I however consider this to be incredibly unlikely as miners are fundamentally profit motivated entities who have invested millions in their hardware and therefore would follow the users and if not the users are entitled to fork them off.
The second way would be more convoluted and perhaps unlikely to work, but on the other hand does not require anyone’s permission and allows for a wait and see and real life testing approach in regards to the implications of far lower day1 security. Someone could pre-announce the ST fork, but this time exchanges do not state that they will move over. In this case ST would in effect be an altcoin, but with the huge benefit of having bitcoin’s network effect as pre-fork coins can be used in either QT or ST chain.
The problem is that until exchanges announce they will move over, it is unlikely it would gain any credibility, thus having far fewer users and thus much lower value, but still higher than litecoin’s due to maintaining bitcoin's network effects. The further problem is that as 100k transactions are made a day, for each day the fork continues more and more users are unable to interchangeably move their coins, thus making it less and less likely that exchanges would move as many more users would be against it due to their coins not being interchangeable. They could however always just sell their QT coins and buy ST ones.
The further problem is that until exchanges move it can be instantly killed by QT miners adopting BIP101. Thus making it a gamble, but probably a profitable one, at least in the short term.
The second option does have benefits however. It would allow the fork to be live tested with only gamblers/speculators on it, it would allow for a smoother transition, it would allow for free market voting and it would exert huge pressure on QT scaling and give exchanges the option of moving to ST, thus conclude the debate. Furthermore it is permissionless, so if there are profits to be made then you'd think someone would go ahead with it for good or ill.
Both options have drawbacks, with the first option’s main concern being day1 security. However, I cannot possibly imagine a lack of quick conclusion to this debate if exchanges stated that they will move to the ST fork and at this stage of the debate I do not think miners can credibly call them bluff. If miners do not take a positive action even then, then perhaps there is no choice, but to fork them off and without this credible threat I can not see miners taking a positive action after their comments at the workshop, therefore perhaps the economic majority has no choice but to offer this path.
On a side note, I find it interesting that no one has forked the chain with the intention of creating and maintaining a concurrent chain. Doing so is in effect creating a sidechain and seems to me superior to creating an altcoin through a genesis block, so I find it curious that no one has ever tried considering the huge potential profit and permissionless nature, which makes me wonder whether I am missing something.
And we crash again, just as people start complaining about transaction delays, like clockwork.
Why do you think it is a terrible idea? We currently have an irreconcilable ideological difference between those who think that bitcoin should be a settlement system and those who think that we should scale while we have the subsidy so that security is provided by the number, not fee amount, of transactions.
I do not think these differences can be reconciled with gmax having publicly stated that he will continue working on/maintaining the 1mb chain even if everyone else moved over and he probably would have some perhaps 10-20% support. As such, if bitcoin scales through a hard-fork, there would be two chains in any scenario, with one of them eventually having a pretty low value, but perhaps more than litecoin as it probably would take the second place.
I find the current situation to be highly undesirable as we are effectively begging gmax to change his mind while he has unambiguously stated that not only will he not change his mind, but he will resist until the bitter end. Nonetheless we are still waiting for him to change his mind, pressuring him, and as any emperor, he entertains us at times by giving us the minimum increase of 2x and even that in some 6 months.
The miners on the other hand are like deer caught in the headlights and therefore have defaulted to no action claiming they are not the jury. Which means that we are basically going in the way of a settlement system with king gmax making proclamations, responding to public pressure by a minimal increase, and doing his emperor things.
With theymos having effectively taken control of the communication channels and seemingly impossible to remove regardless of how clear his scamming/thefts are made to the admins, with some miners now going as low as begging for 2-4-8 and even that denied, thus defaulting to no action, with gmax dead set on a settlement system, we can cry all we want about censorship, we can beg all we want for an increase, but we are effectively asking for permission from centralized entities who will do what they want as they always do and that is far from bitcoin.
Obviously, forking with a changed algo is not ideal, but I can see benefits. It would decentralize mining in an instant, allowing everyone to mine with their cpu, which would be a huge sell within and outside the bitcoin community as this would be the first time that the network effect is maintained while cpu mining is "liberated" to all. Security of course would be lower to begin with, but only for a few months as the hashrate race does its job. There would be a free, not fee, market choice and, most importantly, bitcoin would scale.
One would think that the only necessary step for the miners to take a positive step is a credible pre-announcement of ST (or whatever name such as OG, Classic, 3.0, ST for satoshi level transactions etc) as at that point things can become existentially unpredictable for the miners. For the hodlers there would be as good as no change as the value (combined or otherwise) would remain the same or increase in the medium and long term. For speculators there would be a bonanza if it gets to post pre-announcement stage. For bitcoin there would be incredible strength in showing to all, from Chinese peasants to USA presidents, that we do not ask for permission in this space.
I can see two ways of doing it. The first and ideal, far superior, way would be for someone credible to pre-announce ST and then exchanges to publicly announce that they will move over to it and that if they do move they will not go back so as to prevent QT miners from killing the chain by implementing BIP101 after the exchanges have moved thus creating utter chaos which is easily avoidable by exchanges proclaiming that they will not go back if they move. This would place miners on high alert and create the necessary momentum and pressure for a positive, rather than passive, decision. One would think that within days of such credible threat, a miner consensus would be achieved with a reasonable proposal acceptable to the supermajority such as perhaps bip101, but starting at 2mb together with SW but as a hardfork.
If instead the miners would still not reach a decision after the economic majority has made its will clear, and therefore has placed their entire livelihood in a credible and real danger, then that would show that there are some serious and fundamental problems in the bitcoin ecosystem and therefore that the benefits of the changed algo fork would far outweigh the dangers. I however consider this to be incredibly unlikely as miners are fundamentally profit motivated entities who have invested millions in their hardware and therefore would follow the users and if not the users are entitled to fork them off.
The second way would be more convoluted and perhaps unlikely to work, but on the other hand does not require anyone’s permission and allows for a wait and see and real life testing approach in regards to the implications of far lower day1 security. Someone could pre-announce the ST fork, but this time exchanges do not state that they will move over. In this case ST would in effect be an altcoin, but with the huge benefit of having bitcoin’s network effect as pre-fork coins can be used in either QT or ST chain.
The problem is that until exchanges announce they will move over, it is unlikely it would gain any credibility, thus having far fewer users and thus much lower value, but still higher than litecoin’s due to maintaining bitcoin's network effects. The further problem is that as 100k transactions are made a day, for each day the fork continues more and more users are unable to interchangeably move their coins, thus making it less and less likely that exchanges would move as many more users would be against it due to their coins not being interchangeable. They could however always just sell their QT coins and buy ST ones.
The further problem is that until exchanges move it can be instantly killed by QT miners adopting BIP101. Thus making it a gamble, but probably a profitable one, at least in the short term.
The second option does have benefits however. It would allow the fork to be live tested with only gamblers/speculators on it, it would allow for a smoother transition, it would allow for free market voting and it would exert huge pressure on QT scaling and give exchanges the option of moving to ST, thus conclude the debate. Furthermore it is permissionless, so if there are profits to be made then you'd think someone would go ahead with it for good or ill.
Both options have drawbacks, with the first option’s main concern being day1 security. However, I cannot possibly imagine a lack of quick conclusion to this debate if exchanges stated that they will move to the ST fork and at this stage of the debate I do not think miners can credibly call them bluff. If miners do not take a positive action even then, then perhaps there is no choice, but to fork them off and without this credible threat I can not see miners taking a positive action after their comments at the workshop, therefore perhaps the economic majority has no choice but to offer this path.
On a side note, I find it interesting that no one has forked the chain with the intention of creating and maintaining a concurrent chain. Doing so is in effect creating a sidechain and seems to me superior to creating an altcoin through a genesis block, so I find it curious that no one has ever tried considering the huge potential profit and permissionless nature, which makes me wonder whether I am missing something.
Transaction delays are a big issue, but today's "crash" (down to where we were, what, yesterday?) had nothing to do with that. It had to do with the price rising very far in a few days without testing its footing. Just the usual. The trend remains strongly UP. Exponentially in fact.
I think we've all indulged in it, but trying to pin small daily volatility on debate issues is a losing game. Small block adherents can just as easily point to the rise since Segwit was announced, equally meaninglessly. Volatility has been a nearly constant fact of Bitcoin for years, and will remain for quite some time. If we enter a major downtrend just as a huge amount of scaling complaints arise, then it will make sense to point to the price.
[doublepost=1449939879][/doublepost]@Aquent
It is probably true that big-time miners need merely get wind of a plan to change the hashing function in order to get spooked into action. That's one imposing Sword of Damocles.
I think we've all indulged in it, but trying to pin small daily volatility on debate issues is a losing game. Small block adherents can just as easily point to the rise since Segwit was announced, equally meaninglessly. Volatility has been a nearly constant fact of Bitcoin for years, and will remain for quite some time. If we enter a major downtrend just as a huge amount of scaling complaints arise, then it will make sense to point to the price.
[doublepost=1449939879][/doublepost]@Aquent
It is probably true that big-time miners need merely get wind of a plan to change the hashing function in order to get spooked into action. That's one imposing Sword of Damocles.
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albin
Active Member
- Nov 8, 2015
- 931
- 4,008
So is there actually a BIP that folks can review for segwit, now that it's been decreed for on high that softforking it will serve as the "scaling" solution? Or are BIPs now just red tape to encumber outsiders?
i love this article; because it largely reflects how i look at markets. large numbers of manipulators trying to strip as much money from the most players possible. which is why i always say that "most investors in cryptocurrencies will lose money":
http://www.zerohedge.com/news/2015-12-11/what-happens-monday
this last week and for many months prior, and esp Friday (yesterday), i was pounding this thread with stock charts b/c of the severe price action going on across the traditional fiat markets. i fill this thread up with that stuff mainly b/c i've always believed they play a significant role in the Bitcoin price action. i used to get alot of laughs about this belief, from no surprise the geeks, but i think it's pretty well been shown that this is true and the laughs have all gone away with the popularity of this thread as testimony.
anyways, by paying attention to the technicals and my cycle analysis while not knowing of events like Stone Lion Capital, Third Avenue, or Fridays upcoming option expiry, i find it fascinating how the market has spontaneously moved itself into position to inflict max pain around these upcoming events as hinted by my red little line violations. Interestingly enough, the FOMC meeting is this Wednesday, smack dab in the middle of what is likely going to be one of the most volatile weeks in years. Mondays price action which will take in Stone Lion, Wednesdays FOMC to decide on a promised rate hike, and Friday's option expiry with over a trillion on the line. which also interestingly enough has been reflecting itself in the ramping Bitcoin price and volatility. the article highlights this:
This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.
What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied "stop loss" level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.
the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years.
whether this stop loss level actually gets triggered or not, i strongly believe in hazards like this becoming self fulfilling as they strip so much money from so many ppl. if i had to guess though, i think it will happen as i've already shown how all indices, except the Dow, have violated their little red line supports. and that itself is an interesting separate point. if you're the PPT, which index costs the least to manipulate (only 30 stocks) and has the highest public awareness? why, the Dow! in that sense, it makes sense it is lagging the others from pumping. otoh, it doesn't have to be so tinfoil. maybe it's b/c those 30 stocks are among the strongest of all US companies. afterall, it IS a manipulated index as i believe everyone of those 30 didn't exist as part of the index just a few decades ago (the weak get swapped out). this is why my technical analysis follows the Dow and not the S&P. also, i believe the public awareness more relates to the Dow than S&P despite the latter being a a more diverse indicator mathematically to follow.
anyways, the tug of war is going to be epic this coming week and we'll see which manipulators "win". i'm ready with my DXD and Bitcoin (flat on gold and silver) so i'll be mostly eating popcorn watching the show. it's gonna be fun.
edit: here's another fun manipulating factor: Max-Pain:
here's the SPY futures contract which will inflict max pain at 207 only considering yesterday's close...
...according to this calculator:
http://maximum-pain.com/options/max-pain/
personally, i won't care what happens with the stock mkt b/c all this volatility will only help Bitcoin ramp as suggested by the GBTC chart, up 8.62% on Friday:
http://www.zerohedge.com/news/2015-12-11/what-happens-monday
this last week and for many months prior, and esp Friday (yesterday), i was pounding this thread with stock charts b/c of the severe price action going on across the traditional fiat markets. i fill this thread up with that stuff mainly b/c i've always believed they play a significant role in the Bitcoin price action. i used to get alot of laughs about this belief, from no surprise the geeks, but i think it's pretty well been shown that this is true and the laughs have all gone away with the popularity of this thread as testimony.
anyways, by paying attention to the technicals and my cycle analysis while not knowing of events like Stone Lion Capital, Third Avenue, or Fridays upcoming option expiry, i find it fascinating how the market has spontaneously moved itself into position to inflict max pain around these upcoming events as hinted by my red little line violations. Interestingly enough, the FOMC meeting is this Wednesday, smack dab in the middle of what is likely going to be one of the most volatile weeks in years. Mondays price action which will take in Stone Lion, Wednesdays FOMC to decide on a promised rate hike, and Friday's option expiry with over a trillion on the line. which also interestingly enough has been reflecting itself in the ramping Bitcoin price and volatility. the article highlights this:
This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.
What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied "stop loss" level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.
the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years.
whether this stop loss level actually gets triggered or not, i strongly believe in hazards like this becoming self fulfilling as they strip so much money from so many ppl. if i had to guess though, i think it will happen as i've already shown how all indices, except the Dow, have violated their little red line supports. and that itself is an interesting separate point. if you're the PPT, which index costs the least to manipulate (only 30 stocks) and has the highest public awareness? why, the Dow! in that sense, it makes sense it is lagging the others from pumping. otoh, it doesn't have to be so tinfoil. maybe it's b/c those 30 stocks are among the strongest of all US companies. afterall, it IS a manipulated index as i believe everyone of those 30 didn't exist as part of the index just a few decades ago (the weak get swapped out). this is why my technical analysis follows the Dow and not the S&P. also, i believe the public awareness more relates to the Dow than S&P despite the latter being a a more diverse indicator mathematically to follow.
anyways, the tug of war is going to be epic this coming week and we'll see which manipulators "win". i'm ready with my DXD and Bitcoin (flat on gold and silver) so i'll be mostly eating popcorn watching the show. it's gonna be fun.
edit: here's another fun manipulating factor: Max-Pain:
here's the SPY futures contract which will inflict max pain at 207 only considering yesterday's close...
...according to this calculator:
http://maximum-pain.com/options/max-pain/
personally, i won't care what happens with the stock mkt b/c all this volatility will only help Bitcoin ramp as suggested by the GBTC chart, up 8.62% on Friday:
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VeritasSapere
Active Member
- Nov 16, 2015
- 511
- 1,266
First of all part of what gives Bitcoin its value is its security because of proof or work. There is a massive infrastructure already build up for the manufacturing of ASICS, this is important for the decentralization of mining overall. Proof of work cryptocurrencies will always naturally evolve towards ASICS, especially as its market cap increases.
There are many miners that would support BU, including myself, I am presently supporting BIP101 through my hashing power. Increasing the overall size of the SHA256 ASICS manufacturing would be beneficial for both chains and would lead to greater mining decentralization overall. Maybe the two chains do need to exist side by side in order for the merits of the big block chain to prove itself over time in the market. Over the long run even if we do not have a mining majority they could still move back to us at any time. I think this is critical and that whatever we do we should keep the same mining algorithm, it is part of what defines Bitcoin in my opinion, if we leave the miners behind we are abandoning a very important aspect of this experiment that still requires more time to fully play out.
I suppose in a worst case scenario which I do not think would happen we could always choose to refuse to upgrade at the next hard fork, that way we can split and the big blockchain will be able to prove itself in the market. I do not think that this will happen though, if our theories about how Bitcoin should work are correct then we should gain more momentum soon. This scenario can not continue forever, as transaction volume rises it is going to put more pressure on the market to increase the blocksize. It is difficult to read but I think the community is rather divided at the moment, which at least means we are not a small minority.
It is an interesting observation that it is the next hard fork that might present us with such an opportunity, which is why I prefer hard forks for political reasons. This could also be why Core is so afraid of hard forks and why I believe more freedom minded people prefer them.
Bitcoin is the grand experiment, and it is reliant on certain premises based on game theory, psychology and economics. If the miners fail to follow the economic majority over the long run then the incentive structure of Bitcoin has proven itself to be flawed, in that case it would be futile repeating the same experiment since the outcome would most likely be the same, at that point I would be looking very closely at the alternative cryptocurrencies which have all sorts of possible innovations to the problems that Bitcoin is experiencing. I still think Bitcoin will triumph, I think our theories on governance and incentive are correct. The vision of Satoshi will proof itself to be correct, part of the beauty behind this vision is how incentives are aligned towards good, I do think we are on the right side history, it might just require more patience and diligence.
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*sigh* I feel like we're all in the dark (or maybe I am just in the dark)... what IS going on? I am assuming that Coinbase, BitPay, Bitstamp, KNC Miner, 21 Inc, and various other parties are frequently meeting right now and working out a plan to put together enough mining power for BIP101 (and or a marketing strategy to convince other miners), but I have no idea... I would be very disappointed to learn that they are just each doing their own thing and hoping this problem will take care of itself.
Somebody reassure me!
Somebody reassure me!
yes, this is correct. all that infrastructure can't just be thrown away. that, by itself, would probably be enough to destroy Bitcoin
yes, BU needs to be released ASAP, hopefully in a form that is acceptable to the greatest part of the community. there is still some disagreement on this.
that is exactly why BS is so afraid of hard forking. the majority of the community, imo, wouldn't go along with the upgrade and they risk losing their power by the fracturing. so they won't but instead force a soft fork despite the spaghetti-like code that results from it. all the while sneaking in their favorite new opcodes and monetary policy.
yes, if the financial incentive structure does not prove to apply to Bitcoin mining, then the project has indeed failed and so has cryptocurrency. i've said several times before that that would be it for me. i wouldn't dare trust another project.
the reason i know Maxwell is wrong and bad for the project is that every interaction i've ever had with him has been a bad one. his attitude is one of authoritarianism and non-compromise. of course, it could be me though. however, i am not the only one who think this. he is a Bitcoin Bear. his judgments in areas of economics and social fairness is despicable and full of obfuscation. note his formation of Blockstream and his refusal to reveal his financial incentive structure while criticizing me for not revealing mine with #CuzHashfastClawback. i strongly believe he is bad news and ProHashing is right; he needs to be forked from the project.
Finally found where Anonymint was talking about Greg:
https://bitcointalk.org/index.php?topic=68655.msg11527544#msg11527544
- Aug 22, 2015
- 1,558
- 4,695
I can see only one initiative which just might succeed in the short-term. Jonathan Toomin is canvassing support for a one-off increase to 3MB. He is in China for another week, and being a miner obviously has a rapport with the Chinese miners, who are pragmatists, and think a small bump in the limit is quite sensible. They have said previously that 8MB is OK, so they are likely to agree with a bump to 3MB.*sigh* I feel like we're all in the dark (or maybe I am just in the dark)... what IS going on? I am assuming that Coinbase, BitPay, Bitstamp, KNC Miner, 21 Inc, and various other parties are frequently meeting right now and working out a plan to put together enough mining power for BIP101 (and or a marketing strategy to convince other miners), but I have no idea... I would be very disappointed to learn that they are just each doing their own thing and hoping this problem will take care of itself.
Somebody reassure me!
This is far from ideal. But the important thing is to keep the ecosystem growing and the price climbing, and more users coming on-board. With Core Dev's SW this would give a 6x capacity increase for standard tx. If Bitcoin can get 6x bigger then the momentum for permanent scaling solutions can only build in the meantime.
@Aquent
There is no need to change the mining algorithm to break away from miners who don't accept larger blocks or BIP101. Instead you can just hard fork what clients accept as valid blocks.
In todays situation, if a majority of miners refuse to mine BIP101 blocks, but most users want them, users can decide to only accept BIP101 blocks starting on X date. Even if only 25% of miners follow, you have a chain of BIP101 blocks being built for use. And although the hash rate drop causes 40 minute blocks till the next adjustment, with the 8x increase in block size the system can process more transactions right away.
This is what the exchanges and merchant processors should do. Release a community client maintained by themselves that is the standard client plus it only accepts BIP101 by X date, and let everyone know that is the chain they will all follow.
It would result in an economic split which is fine, the split will repair itself fairly quickly with one side winning.
There is no need to change the mining algorithm to break away from miners who don't accept larger blocks or BIP101. Instead you can just hard fork what clients accept as valid blocks.
In todays situation, if a majority of miners refuse to mine BIP101 blocks, but most users want them, users can decide to only accept BIP101 blocks starting on X date. Even if only 25% of miners follow, you have a chain of BIP101 blocks being built for use. And although the hash rate drop causes 40 minute blocks till the next adjustment, with the 8x increase in block size the system can process more transactions right away.
This is what the exchanges and merchant processors should do. Release a community client maintained by themselves that is the standard client plus it only accepts BIP101 by X date, and let everyone know that is the chain they will all follow.
It would result in an economic split which is fine, the split will repair itself fairly quickly with one side winning.
- Aug 29, 2015
- 536
- 2,597
We often talk about how the "economic majority" ultimately controls the development of Bitcoin, and sets its course for the future. But how exactly does this work, and what are the mechanisms? I think that there are a few ways that this control can be channeled, and it is interesting and potentially useful to think through these mechanisms. I see these mechanisms falling into three categories, analogous to @cypherdoc 's "three buckets" of bitcoin investment.
1) Direct buying of bitcoin. @Justus Ranvier has made the point that price of bitcoin, and ultimately support for its value at any point in time, stems from net buyers. In other words, from productive people who produce more than they consume and choose to save some of the difference in bitcoin. Large holders of bitcoin have limited influence, it is the marginal buyer or seller who moves the price. The specific mechanisms by which investor action exerts its control over the system has been described by Daniel Krawitz (http://nakamotoinstitute.org/mempool/who-controls-bitcoin/) and by @Zangelbert Bingledack with his concept of fork arbitrage.
2) Mining. Miners control the day-to-day functioning of the system, determining which transactions gets put into blocks, and shich blocks get built upon in the blockchain. Already some businesses like BTCC (BTC China) have integrated operations including mining which allows them to favour their own transactions for inclusion in blocks. There is no reason other businesses (eg. Coinbase) couldn't get involved in mining and employ their mining operation to try to steer consensus in directions they favour. Conceptually, it is not even necessary to directly run mining operations either, one could simply pay miners to perform certain actions, such as mining blocks that support BIP101, or whatever. From the perspective of a large bitcoin holder, additional buying might have limited effect at the margin. But spending some bitcoin to influence the direction of mining, even a fairly modest amount relative to the rest of their holdings, could be a way to greatly increase the value of the bitcoin they already hold.
3) Development. For this bucket, I am thinking about both programmers who implement software directly interacting with the Bitcoin network, as well as people building companies and products in the space. This is another example of how productive people are the ones who ultimately shape the future in a free market. This influence can be very far reaching with long lasting effects. Skilled and prolific coders can have disproportionate impact, for instance I would say the Peter Wiulle has far more long term influence on the system than an investor who buys $1000 of bitcoin per day. It seems reasonable that large companies, and large investors in the space hire skilled programmers to forward developments they favour. This is also a way that individuals can choose to exert significant influence, you just need a little skill and motivation.
And finally the "bonus" category: Ideas. Not only is it possible for ideas to change the world, in the long run they are the only thing that can! What we are all doing here, trying to understand things, exploring concepts, using reason and evidence, trying to untangle the strings of cause and effect. In some ways some of the discussion might seem like pointless philosophizing. But it is only by striving for a better understanding of reality that we can hope that our actions will have a reasonable likelihood of achieving the ends we desire.
1) Direct buying of bitcoin. @Justus Ranvier has made the point that price of bitcoin, and ultimately support for its value at any point in time, stems from net buyers. In other words, from productive people who produce more than they consume and choose to save some of the difference in bitcoin. Large holders of bitcoin have limited influence, it is the marginal buyer or seller who moves the price. The specific mechanisms by which investor action exerts its control over the system has been described by Daniel Krawitz (http://nakamotoinstitute.org/mempool/who-controls-bitcoin/) and by @Zangelbert Bingledack with his concept of fork arbitrage.
2) Mining. Miners control the day-to-day functioning of the system, determining which transactions gets put into blocks, and shich blocks get built upon in the blockchain. Already some businesses like BTCC (BTC China) have integrated operations including mining which allows them to favour their own transactions for inclusion in blocks. There is no reason other businesses (eg. Coinbase) couldn't get involved in mining and employ their mining operation to try to steer consensus in directions they favour. Conceptually, it is not even necessary to directly run mining operations either, one could simply pay miners to perform certain actions, such as mining blocks that support BIP101, or whatever. From the perspective of a large bitcoin holder, additional buying might have limited effect at the margin. But spending some bitcoin to influence the direction of mining, even a fairly modest amount relative to the rest of their holdings, could be a way to greatly increase the value of the bitcoin they already hold.
3) Development. For this bucket, I am thinking about both programmers who implement software directly interacting with the Bitcoin network, as well as people building companies and products in the space. This is another example of how productive people are the ones who ultimately shape the future in a free market. This influence can be very far reaching with long lasting effects. Skilled and prolific coders can have disproportionate impact, for instance I would say the Peter Wiulle has far more long term influence on the system than an investor who buys $1000 of bitcoin per day. It seems reasonable that large companies, and large investors in the space hire skilled programmers to forward developments they favour. This is also a way that individuals can choose to exert significant influence, you just need a little skill and motivation.
And finally the "bonus" category: Ideas. Not only is it possible for ideas to change the world, in the long run they are the only thing that can! What we are all doing here, trying to understand things, exploring concepts, using reason and evidence, trying to untangle the strings of cause and effect. In some ways some of the discussion might seem like pointless philosophizing. But it is only by striving for a better understanding of reality that we can hope that our actions will have a reasonable likelihood of achieving the ends we desire.
And at base, economically, Bitcoin is just a set of UTXOs and private keys controling them - i.e., a ledger - a record of who provided value to whom and who had more insight, foresight, and strength of conviction forged in the fires of gigantic surges and crashes over the years, distilled and rarefied through an endless parade of altcoin distractions, technical scares, and schemes like Pirateat40 Bitcoinica, and ASICMiner coaxing away people's coins.
@cypherdoc's aphorism "most people will lose money in this space" functions as an ever-intensifying Great Filter, a crucible out of which a mature economy is formed where the pork has been trimmed off and only the most efficient, most insightful, most prescient, most economically literate, most positively imperturbable investors survive. These make the most effective stewards of the ledger going forward, naturally representing the entire array of disciplines necessary for full understanding of Bitcoin.
Far from being a merely arbitrary distribution of wealth, the ledger as it stands is thus incredibly valuable compared to a clean slate, and even if people like Anonymint are right that Bitcoin is "irredeemably doomed bloatware spaghetti code that can never scale," an entirely new protocol can take over the ledger maintenance function if need be. If the current protocol flounders and somehow cannot be fixed, economic pressure builds for any "altcoin" to be released as a spinoff using the Bitcoin ledger, since a huge functioning economy would be on board with it from Day 1.
This is why I'm not worried about the future. My only concern is the short term, because I would really like to see a surge above the all-time high within the next few months to end the two-year bear market.
@cypherdoc's aphorism "most people will lose money in this space" functions as an ever-intensifying Great Filter, a crucible out of which a mature economy is formed where the pork has been trimmed off and only the most efficient, most insightful, most prescient, most economically literate, most positively imperturbable investors survive. These make the most effective stewards of the ledger going forward, naturally representing the entire array of disciplines necessary for full understanding of Bitcoin.
Far from being a merely arbitrary distribution of wealth, the ledger as it stands is thus incredibly valuable compared to a clean slate, and even if people like Anonymint are right that Bitcoin is "irredeemably doomed bloatware spaghetti code that can never scale," an entirely new protocol can take over the ledger maintenance function if need be. If the current protocol flounders and somehow cannot be fixed, economic pressure builds for any "altcoin" to be released as a spinoff using the Bitcoin ledger, since a huge functioning economy would be on board with it from Day 1.
This is why I'm not worried about the future. My only concern is the short term, because I would really like to see a surge above the all-time high within the next few months to end the two-year bear market.
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kyuupichan
Member
- Oct 3, 2015
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https://blockchain.info/block/000000000000000000dc3448688b7cea3484ae23a950b799cdffbbc028ae386d
This kind of block drives me mad. Why do miners mine this shit? Someone sending themselves hundreds of dust outputs. It clearly serves no purpose other than to crowd others out.
This kind of block drives me mad. Why do miners mine this shit? Someone sending themselves hundreds of dust outputs. It clearly serves no purpose other than to crowd others out.
Zarathustra
Well-Known Member
- Aug 28, 2015
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Chamath is both eloquent and highly intelligent and is building upon being in the 'right place at the right time' to grow his capital in spectacular fashion.
It is fascinating to hear from someone like him that very soon the vast majority of the world is going to be accessing the web on smartphone based devices at low cost. The infrastructure that internet protocols like bitcoin (and the internet itself) depend upon is literally being created right now all around the world! Such opportunity! Developing nations may be late to the party but I suspect they will skip the legacy telecommunications and banking infrastructure the West uses to actually very rapidly have better and more modern systems which we ('the West') struggle to initially understand.
Where bitcoin fits into this I don't know. I still honestly believe that it will emerge as a global phenomenon in the next few years, with little pockets of activity all around the world building to an imbalance in supply and demand which drives the price and further Western adoption predominantly as a value store. I envision this as a series of bubbles with a major price appreciation driven by vehicles such as the ETF which finally allows Western Joe Public in.
I worry about those in charge of the Core implementation being plain wrong in their approach to growing bitcoin. If you have to use the lightning network to access bitcoin services then that is yet another layer of abstraction away from discovery for a new user in Indonesia who can use a conventional fiat payment app intuitively with ease already to transfer value.
Don't get me wrong additional payment layers are essential if bitcoin becomes so popular that globally it finds heavy usage. But that is probably an extreme outcome and therefore designing bitcoin for that outcome in a way which damages the current value proposition and worse by damaging bitcoin functionality (increasing fees, long waits for transactions to confirm, implementation of double spending through RBF) is absolutely crazy.
In my more sceptical and paranoid moments I wonder how I would stop bitcoin if i were the central banking powers that be. Disrupt the program into irrelevence by poisoning the heart of the project, the code would be the place to start.
Perhaps industry and the ecosystem should create a developer fund and fork Core with invitations to the main developers in the space. This would allow an opportunity to sever their ties to conflict of interests such as Blockstream. If they really want to make decisions which affect the protocol then they shouldn't be working for companies which directly benefit those decisions. The core developers should come out and say honestly what they expect from bitcoin as a payment platform and payment protocol over the next 5 years and how they intend to capacity plan during that time.
How crazy is it that we have developers altering bitcoin against the wishes of 99% of the community of users who actually give the currency monetary value. Unbelievable.
/rant
It is fascinating to hear from someone like him that very soon the vast majority of the world is going to be accessing the web on smartphone based devices at low cost. The infrastructure that internet protocols like bitcoin (and the internet itself) depend upon is literally being created right now all around the world! Such opportunity! Developing nations may be late to the party but I suspect they will skip the legacy telecommunications and banking infrastructure the West uses to actually very rapidly have better and more modern systems which we ('the West') struggle to initially understand.
Where bitcoin fits into this I don't know. I still honestly believe that it will emerge as a global phenomenon in the next few years, with little pockets of activity all around the world building to an imbalance in supply and demand which drives the price and further Western adoption predominantly as a value store. I envision this as a series of bubbles with a major price appreciation driven by vehicles such as the ETF which finally allows Western Joe Public in.
I worry about those in charge of the Core implementation being plain wrong in their approach to growing bitcoin. If you have to use the lightning network to access bitcoin services then that is yet another layer of abstraction away from discovery for a new user in Indonesia who can use a conventional fiat payment app intuitively with ease already to transfer value.
Don't get me wrong additional payment layers are essential if bitcoin becomes so popular that globally it finds heavy usage. But that is probably an extreme outcome and therefore designing bitcoin for that outcome in a way which damages the current value proposition and worse by damaging bitcoin functionality (increasing fees, long waits for transactions to confirm, implementation of double spending through RBF) is absolutely crazy.
In my more sceptical and paranoid moments I wonder how I would stop bitcoin if i were the central banking powers that be. Disrupt the program into irrelevence by poisoning the heart of the project, the code would be the place to start.
Perhaps industry and the ecosystem should create a developer fund and fork Core with invitations to the main developers in the space. This would allow an opportunity to sever their ties to conflict of interests such as Blockstream. If they really want to make decisions which affect the protocol then they shouldn't be working for companies which directly benefit those decisions. The core developers should come out and say honestly what they expect from bitcoin as a payment platform and payment protocol over the next 5 years and how they intend to capacity plan during that time.
How crazy is it that we have developers altering bitcoin against the wishes of 99% of the community of users who actually give the currency monetary value. Unbelievable.
/rant
VeritasSapere
Active Member
- Nov 16, 2015
- 511
- 1,266
I have managed to describe a theory of Bitcoin governance in a few sentences:
Consensus is an emergent property which flows from the will of the economic majority. Proof of work is the best way to measure this consensus. The pools act as proxy for the miners, the pools behave in a similar way to representatives within a representative democracy. Then in turn the miners act as a proxy for the economic majority. Since the miners are incentivized to follow the economic majority. In effect the economic majority rules Bitcoin, in other words the market rules Bitcoin. Bitcoin relies on the economic self-interest of the masses to govern consensus.
This is in direct conflict with the concept of Bitcoin being ruled by mathematics and science and or a group of technocrats. These are irreconcilable view points, this I believe is what is also at the heart of this disagreement.
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