Gold collapsing. Bitcoin UP.

[Roger_Murdock]

It does however set the principle that whenever we are near hitting the limit, the cap will be increased. I think that is what the whole schism was about. If we all can establish that once the limit is hit, it will be increased, as some sort of fundamental principle, then the parameters don't really matter.

Honestly, this is my strong intuition and also why I'm not overly worried about this whole issue. I think this is sort of the Bitcoin equivalent of the idiotic U.S. debate over raising the "debt ceiling" -- lots of posturing and brinksmanship that amounts to nothing in the end because it always gets raised. If Mr. Bitcoin wants bigger blocks (and I think it's clear he does), Mr. Bitcoin will get bigger blocks. Look at that great animated gif from Peter R showing the distribution of block sizes over time and how Bitcoin has dealt with past "obstructions."

imgur.com/uPneQ5N,izo03ie


That provides at least some empirical evidence for the idea that the stream can be temporarily obstructed, but it cannot be blocked. That also makes intuitive sense to me. The greater the difference between the equilibrium block size and the artificial cap, the more "pressure" that's building up to clear the obstruction. Pressure is building up now. The dam will break.

 

[Zarathustra]

What happens if the world saves a few trillion dollars directly on energy over the next couple decades, plus the follow-on benefits, both economic, environmental, and possibly political? It's one of the things that makes me think that maybe we really can grow ourselves out of the current global debt overhang (which would be bittersweet, as we'd avoid more nasty financial stuff for a while, but at the same time, not have to fundamentally fix broken tax-and-spend political behavior).

Yes, but we should never forget, 'debt overhang' means on the other side receivables overhang.
Whenever debt disappears, receivables disappear as well.

To grow out of a debt overhang is in my opinion an oxymoron. The debt/gdp relation always becomes corrected in a depression (Kondratiew winter), when payables/receivables are disappearing faster than production. When the correction phase is over and the debt/GDP Relation is deep, a new growth cycle starts, but debt/receivables always grow faster than production, until it is over again ...
In the beginning of the growth phase 1 Dollar of additional debt creates one dollar of additional GDP, but that's not sustainable and is steadily reduced until the collaps.

 

[cypherdoc]

retailers dumping to new lows
[doublepost=1450469400][/doublepost]less than an hour to market close. looks like Janet isn't going to show up.

Bitcoin starting to make it's move early.
[doublepost=1450469591][/doublepost]USD looks like it's gonna end lower as well. might as well buy Bitcoin.
[doublepost=1450469776][/doublepost]oh my, $DJI making a break for it; DOWN.

 

[AdrianX]

@cliff

I think the solution is to have benevolent dictators* of each implementation, but have a plurality of implementations to choose from - on the market if necessary. That avoids both dev domineering and gridlock. Devs can only lord it over their own implementation; users never have to stand for being dictated at. It seems clear to me that this is the way it should be, and Mr. Bitcoin is starting to require people to understand this.

*an anachronistic term once there are multiple viable implementations!
[doublepost=1450443474,1450442403][/doublepost]

@sickpig

No mention of anything economics-related in the background or interests of any of these new Blockstream guys either. It's like it's not even on their radar. To BS it's apparently all just a software project.

Pondering the idea of Bitcoin governance? It's been rather fascinating for me. I think it’s worth viewing the idea of governance through the lenses of history.

The benevolent dictators, for each viable implementation, is a better form of governance than we have now, but ultimately it's just a version of Feudalism.

If one was to try map historical forms of governance to the idea of governing Bitcoin, it's obvious we'll have many implementations of the Bitcoin protocol. However practical a benevolent dictator is, it's not a practical form of governance for managing a global value accounting system no matter how many you have.

Nor is a governance model that naturally evolves through all the other forms of governance that culminated in the type democracy we have today, they are all dysfunctional.

One futurist who I admire for his fascination with technology and its implications is Douglass Adams.

He once wrote a skit on the history of forms of governance from the perspective of technology and how it’s been shaped by technology I read it in print around 1998 it was brilliant. (I've never been able to find it but he did present the idea in a talk he did in 1998 called the Many ages of Sand.)

Q – What is the fourth age of sand?

Let me back up for a minute and talk about the way we communicate. Traditionally, we have a bunch of different ways in which we communicate with each other. One way is one-to-one; we talk to each other, have a conversation. Another is one-to-many, which I'm doing at the moment, or someone could stand up and sing a song, or announce we've got to go to war. Then we have many-to-one communication; we have a pretty patchy, clunky, not-really-working version we call democracy, but in a more primitive state I would stand up and say, 'OK, we're going to go to war' and some may shout back 'No we're not!' - and then we have many-to-many communication in the argument that breaks out afterwards!

In this century (and the previous century) we modelled one-to-one communications in the telephone, which I assume we are all familiar with. We have one-to-many communication - boy do we have an awful lot of that; broadcasting, publishing, journalism, etc. - we get information poured at us from all over the place and it's completely indiscriminate as to where it might land. It's curious, but we don't have to go very far back in our history until we find that all the information that reached us was relevant to us and therefore anything that happened, any news, whether it was about something that's actually happened to us, in the next house, or in the next village, within the boundary or within our horizon, it happened in our world and if we reacted to it the world reacted back. It was all relevant to us, so for example, if somebody had a terrible accident we could crowd round and really help. Nowadays, because of the plethora of one-to-many communication we have, if a plane crashes in India we may get terribly anxious about it but our anxiety doesn't have any impact. We're not very well able to distinguish between a terrible emergency that's happened to somebody a world away and something that's happened to someone round the corner. We can't really distinguish between them any more, which is why we get terribly upset by something that has happened to somebody in a soap opera that comes out of Hollywood and maybe less concerned when it's happened to our sister. We've all become twisted and disconnected and it's not surprising that we feel very stressed and alienated in the world because the world impacts on us but we don't impact the world. Then there's many-to-one; we have that, but not very well yet and there's not much of it about. Essentially, our democratic systems are a model of that and though they're not very good, they will improve dramatically.

But the fourth, the many-to-many, we didn't have at all before the coming of the Internet, which, of course, runs on fibre-optics. It's communication between us that forms the fourth age of sand. Take what I said earlier about the world not reacting to us when we react to it; I remember the first moment, a few years ago, at which I began to take the Internet seriously. It was a very, very silly thing. There was a guy, a computer research student at Carnegie Mellon, who liked to drink Dr Pepper Light. There was a drinks machine a couple of storeys away from him, where he used to regularly go and get his Dr Pepper, but the machine was often out of stock, so he had quite a few wasted journeys. Eventually he figured out, 'Hang on, there's a chip in there and I'm on a computer and there's a network running around the building, so why don't I just put the drinks machine on the network, then I can poll it from my terminal whenever I want and tell if I'm going to have a wasted journey or not?' So he connected the machine to the local network, but the local net was part of the Internet - so suddenly anyone in the world could see what was happening with this drinks machine. Now that may not be vital information but it turned out to be curiously fascinating; everyone started to know what was happening with the drinks machine. It began to develop, because in the chip in the machine didn't just say, 'The slot which has Dr Pepper Light is empty' but had all sorts of information; it said, 'There are 7 Cokes and 3 Diet Cokes, the temperature they are stored at is this and the last time they were loaded was that'. There was a lot of information in there, and there was one really fabulous piece of information: it turned out that if someone had put their 50 cents in and not pressed the button, i.e. if the machine was pregnant, then you could, from your computer terminal wherever you were in the world, log on to the drinks machine and drop that can! Somebody could be walking down the corridor when suddenly, 'bang!' - there was a Coca-Cola can! What caused that? - well obviously somebody 5,000 miles away! Now that was a very, very silly, but fascinating, story and what it said to me was that this was the first time that we could reach back into the world. It may not be terribly important that from 5,000 miles away you can reach into a University corridor and drop a Coca-Cola can but it's the first shot in the war of bringing to us a whole new way of communicating. So that, I think, is the fourth age of sand.

tl;dr governing has largely been a by-product of technology. With the internet we are moving into a new era of governance, it's many to many. It will supersede our current version of democracy which is a by-product of the peak of many to one communication technology.

I predict Bitcoin Unlimited will grow to be the dominant implementation if we as a community can brainstorm a new governance model one embodying the principals of many to many governance made possible with the internet technology we have today.

BU is already ahead of the Feudal dictator in that is proposed to be a Federation, however that also a floored governance model when one views its evolution through the lens of history.

 

[JVWVU]

http://www.marketwatch.com/story/this-is-how-much-money-exists-in-the-entire-world-in-one-chart-2015-12-18?dist=countdown

Puts Bitcoin in perspective, if we are right then OMG!

 

[AdrianX]

@JVWVU lots of obstetrical to overcome, the potential is there. We just need to see if Bitcoin is worthy.

On the menu today is how to govern Bitcoin, catalysed as the block size debate.

 

[rocks]

I agree with you entirely.

But sometimes we have to grind out political solutions to move the debate forward.

Once the clowns in Core accept a scaling solution then they have demonstrated that

1) hard forking is no longer the FUD disaster we were sold by blockstream/maxwell
2) for a year or two we will likely push the economic cap above Peter R's magic number allowing bitcoin to grow organically and fight another day.

Furthermore it actually moves bitcoin onto the path of scaling again and it will be far, far easier to hard fork again in the future. Plus it gives time to 'clean house' at Core of some of the conflicts of interest and philosophy disabling an honest development process and allows alternate implementations a chance to grow and become influential to solidify the protocol in areas that are still open to attack such as RBF.

Next challenge is to get this hard fork to happen as soon as possible. The usual crowd will be calling for 'late 2016, early 2017' and delaying as hard as possible.

Agree with all of these points.

My concern though is that 8MB might be harder to push past than 1MB. Today's client can easily handle more than 1MB without impacting orphan rates too much. This is why I think the sentiment we've seen from Chinese miners have been OK with a limited blocksize increase.

But at 8MB I think we will see real miner resistance to move the cap up even if all the users want to. The reasons have to do with expected orphan rates using the current block transmission methods.

To get past 8MB we need things such as IBLT and weak blocks implemented and running in practice already.

With automatic scaling as BIP101 provides, since everyone knows the schedule it puts pressure to implement those scaling solutions right away. But if we just go with a 2-4-8 proposal, then the pressure to implement scaling solutions is reduced and core development can continue to focus on their side projects.

That is what an automatic scaling solution provides, focus and pressure to implement scaling solutions today because of the schedule put in place. Without that I am worried IBLT and weak blocks (and other scaling projects) will continue to be put to the side.

 

[cypherdoc]

nice dive into the close. and i thought this week was good; next week is gonna be better:

so here's the deal.

it appears to me that the Fed has lost control. this wasn't supposed to happen. raise rates and markets were supposed to cheer and rage onwards and upwards. that's not happening and it looks to me like we're going to first get a rate raise and then a rate cut. wow, great strategy, Janet. that'll instill alot of confidence. each Fed governor has their crisis. Greenspan had his in 2001, Bernank had his 2008, and now Yellen should get hers.

Bitcoin is a safe haven guys. not only that, but if we get this block size issue resolved, it has the chance to become a new revolutionary monetary system.

we've thoroughly penetrated that first little red line and are now sitting on the 2nd. come Monday we could go thru that setting alarms off round the world. it doesn't have to happen Monday but eventually i think it will happen. and soon:

 

[JVWVU]

@JVWVU lots of obstetrical to overcome, the potential is there. We just need to see if Bitcoin is worthy.

On the menu today is how to govern Bitcoin, catalysed as the block size debate.

Problem with the block size debate is their to many "smart" people with their own agendas, and not any reasonable people who are negotiators to handle these people.

 

[Mengerian]

Stumbled across this video from earlier this year, thought you folks might enjoy. Hits on a bunch of good talking points in a short video (6:37).

Haven't heard from Naval Ravikant in a while. A couple years ago, he was one of the VCs who said that buying the "underlying asset" was the best way to invest in bitcoin, rather than investing in startups. Hope he held.

Key quote: "The great firewall of China will fall"

 

[solex]

Agree with all of these points.

My concern though is that 8MB might be harder to push past than 1MB. Today's client can easily handle more than 1MB without impacting orphan rates too much. This is why I think the sentiment we've seen from Chinese miners have been OK with a limited blocksize increase.

But at 8MB I think we will see real miner resistance to move the cap up even if all the users want to. The reasons have to do with expected orphan rates using the current block transmission methods.

To get past 8MB we need things such as IBLT and weak blocks implemented and running in practice already.

With automatic scaling as BIP101 provides, since everyone knows the schedule it puts pressure to implement those scaling solutions right away. But if we just go with a 2-4-8 proposal, then the pressure to implement scaling solutions is reduced and core development can continue to focus on their side projects.

That is what an automatic scaling solution provides, focus and pressure to implement scaling solutions today because of the schedule put in place. Without that I am worried IBLT and weak blocks (and other scaling projects) will continue to be put to the side.

@rocks
I share your concern and I have been a big fan of IBLT since Gavin wrote his blog-post describing it. I do think that Jeff deserves full support as he is doing what we wanted all along which was to make Core adopt a position of flexibility. As long as BIP101 remains active in XT then the ecosystem should slowly drift across if BIP202 (or similar) proves inadequate. SW does not help block propagation efficiency so there will always be pressure for IBLT deployment.

 

[Zangelbert Bingledack]

@AdrianX

Even if what I described is a type of feudalism, non-territorial feudalism is quite a different animal than the territorial feudalism we see in history, because users get to choose. It's a type of panarchy.

On Bitcoin Governance

The governance model implied by competing implementations hashed out through prediction markets (fork arbitrage) has been called "futarchy," or decentralized governance by prediction markets.

The benevolent dictator label, besides being a misnomer when users can freely choose among the implementations, is further weakened by the fact that each thing the dictator dictates is merely a suggestion. Even without competing implementations, users can simply refuse to download the new version the "dictator" offers.

So, to name things more accurately, a multiple implementation environment results in "a host of benevolent offerers providing upgrade choices." The more choices, the less sway any one benevolent offerer has, since users don't have to rely on or trust any one of them to provide quality, value-additive software.

Furthermore, with fork arbitrage introducing the futarchy dynamic, users needn't even trust their own judgment nor their own ad hoc polling of experts and forum buzz to decide which upgrade to use like they do now. They can rely on the market choice made by the prediction market functioning through fork arbitrage of coin futures in each fork on the exchanges.

With a rich enough ecosystem of developers and offerings, this becomes pure anarchic decentralized decision-making - complete user choice with no devs able to dictate anything.

Yet you're right that Bitcoin Unlimited takes it one step further: as far as parameters like blocksize, users don't even have to download anything. They can simply adjust the settings on the fly. They don't need to hope and pray that some dev offers a 17MB blocksize cap (say this is their preferred cap size), they can just set it on their own. This accomplishes at least three significant things:

1) It relaxes the requirement for ecosystem richness; you don't need thousands of devs offering implementations with every possible flavor and permutation of settings in order to let the user have complete control over such parameters as the blocksize cap.

2) It streamlines the process of vetting implementations; instead of the only dev offering your preferred 17MB blocksize cap being some unknown dude who might have inserted something malicious, forcing you to either review the code yourself or wait for credible vetting from trusted experts, you can simply change the setting yourself.

3) No download time; change settings on the fly. Great for emergencies, and great for miners and businesses who can't afford downtime.

In total, my view is then a panarchic futarchy of many competing implementations with benevolent code offerers to choose from, with prediction markets enabled through on-exchange fork arbing to help users make wise choices, but with the market likely favoring BU-style implementations that allow easy user adjustment of whatever parameters it makes sense to have be user-adjustable.

Consensus (governance) in the network then emerges based on users' settings in their clients as a first resort and fork-arbitrage futarchy as a last resort. For something like blocksize, user settings alone should probably be enough to have it qualify as a market process.

This market-like flexibility may even be able to smooth over some of the brokenness @Justus Ranvier mentioned until it can be fixed more directly.

(One could argue it would be nice for users to be able to look to prediction markets for guidance on their optimal blocksize settings as well, but then again maybe their settings are personal enough, involving the unique tradeoffs of their own situations and cost-benefit analyses, as well as dynamic enough, that taking it to a formal prediction market wouldn't be necessary nor useful.)

 

[Zangelbert Bingledack]

That is what an automatic scaling solution provides, focus and pressure to implement scaling solutions today because of the schedule put in place. Without that I am worried IBLT and weak blocks (and other scaling projects) will continue to be put to the side.

This really turns Greg, Luke, and Peter Todd's "we need to keep blocksize caps low to incentivize optimizations" on its head. Greg even admitted this was his ultimate reason for wanting low caps. Lean optimization and all that. Well it seems to me you've just cut the ground out from underneath that whole notion. Optimization is incentivized by both low caps and high caps (both caps below Q* and caps well above Q*), but only the latter is optimization toward winning!

 

[cypherdoc]

101 really is the way to go, if not BU:

https://www.reddit.com/r/bitcoinxt/comments/3xed45/a_comparison_of_bip202_bip101_growth_rates/

 

[lunar]

If we all can establish that once the limit is hit, it will be increased, as some sort of fundamental principle, then the parameters don't really matter.

Block size inertia coefficient ;-)

@Melbustus @cypherdoc

We touched on this back in september. As more renewables come online energy that is 'free' (already achieved ROI) or surplus at certain times of day, can and should be considered as stored potential energy. A mining chip is essentially a transformer. This to me is the last hurdle for a fully p2p economy decentralised power. Solar, wind or whatever is good in your local environment, can for the first time be bought and sold freely depending on supply and demand of a fully p2p economy.

It's good for the planet bad news for miners, as I can't see mining economies of scale competing with decentralised 'free energy' and sums up why I believe we should not be too worried long term about 'mining centralisation'

Paraphrased from september

@Melbustus

Lets say you have a hydro turbine ruining on your local river, sufficient to supply the entire farm during the day, but consistently running surplus during the night. You could store some of this in a battery form, but as we live off grid the rest goes to waste. With the bitcoin transistor model You now effectively have a way to convert this surplus energy into stored transportable 'digital potential energy'. (aka bitcoin)

This is a fascinating concept and it's mid boggling to think as we progress energy can be stored digitally. (so long as someone on your grid can sell it back when you need it) There is a convergence happening here. Data, Energy, Value, Information and possibly even Speech are becoming freely convertible commodities.

The three hundred 'upvotes' for your idea gives you sufficient satoshis to convert into a new seal or washer for the hydro turbine. How mad is that ?

This is the way of the future in europe at least. Probably most large man made surfaces will have the ability to collect solar energy eg roads carparks and rooftops

http://www.theguardian.com/world/2015/mar/20/france-decrees-new-rooftops-must-be-covered-in-plants-or-solar-panels

 

[cypherdoc]

@lunarboy

And I'm sure you remember @Peter R reporting his convo with the Chinese miner who views Bitcoin as an energy currency. And then the guy who views every water heater as a temporary energy sink for the excess heat created by mining.

Very interesting long term thinking.

 

[kyuupichan]

I predict we see a new alliance of Core developers with a new implementation of bitcoin which is openly supported by exchanges, payment processors and miners. A rapid uptake of this implementation by nodes and miners would signal the end of this fiasco and force Maxwell out of bitcoin entirely or eat humble pie and hopefully still develop beneficial layers like lightning which will have a place in the future - just not yet.

Careful, Maxwell wouldn't find Bitcoin with a higher limit "interesting". Like Bitcoin exists and needs to grow in order to tickle his interest.

 

[Zangelbert Bingledack]

@lunarboy

Mind=blown! This should be the next 21BC app. *A bitcoin miner is a battery.* Functionally, at least in many cases. It could be the answer to the battery problem in general in various situations. Because if you have access to both normal power plant power and your own solar cells, you can mine with the excess during sunny times and use the proceeds to pay for power from the plant at non-sunny times. From the homeowner's perspective, it's as good as a battery. (Better, even, because it doesn't drain over time and has infinite capacity.)

21BC also lets you "send power via email" in the sense that you can send someone satoshis and they can use them to buy power from any 21BC-owning neighbor who has excess power, provided the power grid is connected that way, in a private unregulated transaction.

Imagine a neighborhood where many people have solar panels and many people have 21BC chips in at least one device. Even if you yourself didn't have a solar panel installed, you could buy power from your neighbors' solar during sunny times for cheap and only pay monopoly power company rates at night and other non-sunny times.

Automate all this and the buyer won't even notice the process because they'll simply use the cheapest source of power at any given time. Sellers might have to set their preferred prices, or they can just set the system to optimize for max satoshi income, whether at any given moment that is achieved by directing excess solar power to mining or to selling it to the highest bidder in the neighborhood. Everyone benefits (except the power company).

Of course you don't need the 21BC, but it can be a turnkey solution and if 21.co considers the possibilities here they may want to get on it.

This could be the next trillion-dollar idea for a business able to execute. It could even be what gets Tesla into Bitcoin.

Note also that this allows people to buy higher-output solar panels, knowing that their money won't go to waste since they can recoup any and all excess costs through mining. Less need to rightsize your purchase, and less deadweight loss if you end up needing less power than you thought. Some might have read earlier in the post and thought, "You don't need the mining units in order to send BTC and use it to buy surplus power from your neighbor," but it's the very fact that your neighbors were able to buy a bigger solar panel (because they can mine with any excess) that allowed them to have plenty of excess to sell to the buyers.

If someone tweets an idea like this @balajis, Balaji Srinivasan is almost sure to retweet it. He retweets every mention of the 21BC. And so many people follow his twitter that the idea is sure to spill into the meme-o-sphere and some dev will build something.

 

[Zarathustra]

@Zarathustra: I was inspired by your nick to look for a Nietzsche quote I faintly remembered, but I unfortunately cannot find it. It is along the lines of 'very soon, man will strive for rule over the whole planet'.

I can't help but wonder whether this part of Nietzsche's prediction of world history is actually coming to an end.

Ruling the whole world through means of direct war and violence has come to end end since the invention of nuclear weapons.

Ruling the whole world through means of indirect power (fiat money) may have been made impossible by the Internet and Bitcoin.

@awemany

Nietzsche said many things.;-) For example in "Also sprach Zarathustra", the Good Book, the book of books:

Zarathustra, however, looked at the people and wondered. Then he spake thus:

Man is a rope stretched between the animal and the Superman—a rope over an abyss.

A dangerous crossing, a dangerous wayfaring, a dangerous looking-back, a dangerous trembling and halting.

What is great in man is that he is a bridge and not a goal: what is lovable in man is that he is an OVER-GOING and a DOWN-GOING.

I love those that know not how to live except as down-goers, for they are the over-goers.

I love the great despisers, because they are the great adorers, and arrows of longing for the other shore.

I love those who do not first seek a reason beyond the stars for going down and being sacrifices, but sacrifice themselves to the earth, that the earth of the Superman may hereafter arrive.

I love him who liveth in order to know, and seeketh to know in order that the Superman may hereafter live. Thus seeketh he his own down-going.

I love him who laboureth and inventeth, that he may build the house for the Superman, and prepare for him earth, animal, and plant: for thus seeketh he his own down-going.

I love him who loveth his virtue: for virtue is the will to down-going, and an arrow of longing.

I love him who reserveth no share of spirit for himself, but wanteth to be wholly the spirit of his virtue: thus walketh he as spirit over the bridge.

I love him who maketh his virtue his inclination and destiny: thus, for the sake of his virtue, he is willing to live on, or live no more.

I love him who desireth not too many virtues. One virtue is more of a virtue than two, because it is more of a knot for one's destiny to cling to.

I love him whose soul is lavish, who wanteth no thanks and doth not give back: for he always bestoweth, and desireth not to keep for himself.

I love him who is ashamed when the dice fall in his favour, and who then asketh: "Am I a dishonest player?"—for he is willing to succumb.

I love him who scattereth golden words in advance of his deeds, and always doeth more than he promiseth: for he seeketh his own down-going.

I love him who justifieth the future ones, and redeemeth the past ones: for he is willing to succumb through the present ones.

I love him who chasteneth his God, because he loveth his God: for he must succumb through the wrath of his God.

I love him whose soul is deep even in the wounding, and may succumb through a small matter: thus goeth he willingly over the bridge.

I love him whose soul is so overfull that he forgetteth himself, and all things are in him: thus all things become his down-going.

I love him who is of a free spirit and a free heart: thus is his head only the bowels of his heart; his heart, however, causeth his down-going.

I love all who are like heavy drops falling one by one out of the dark cloud that lowereth over man: they herald the coming of the lightning, and succumb as heralds.

Lo, I am a herald of the lightning, and a heavy drop out of the cloud: the lightning, however, is the SUPERMAN.—

 

[kyuupichan]

I've just read the scam accusations about DeathAndTaxes / Gerald Davis on the old forum. Quite shocking; I thought he was awesome, and long wondered why he had just disappeared. A sad day for me; he had my trust as one of the few upright people in this community. It seems I was wrong.