Gold collapsing. Bitcoin UP.

[cypherdoc]

good news from the private blockchain front. i'd bet they were using Tim Swanson as a consultant:

Start-Up With Bitcoin in Its DNA Stumbles on Fund-Raising Trail

http://www.nytimes.com/2015/12/29/business/dealbook/cash-call-for-a-new-technology.html?smid=tw-share&_r=2

 

[Bagatell]

If Jeff does not take lead this thing is dead in my view.

Nah. (Nice if he did though)

 

[Peter R]

I've been pretty impressed with what @theZerg has done so far -- working on the code, releasing at this time (which seems perfect timing), and getting this thing going.

I am super impressed with everything @theZerg has done. We certainly couldn't have got to where we are today without his enormous efforts.

I've noticed that there's this strange thing that always happens when a project starts to take off: suddenly it seems that you should have dotted more i's and crossed more t's! But if you had done that, you would have missed the momentum and energy that was building. When you finally released, no one would have cared. So I think everything is going very well. In fact, healthy criticism is good. It indicates that there's interest in the project from experts and it allows us to show the world that we can improve.

It's his baby...

I disagree and I think @theZerg would disagree too. This project was a grassroots community effort and everyone here contributed. The coding--although no small effort--was just a single rung on the ladder we've been climbing since we were kicked out of bitcointalk.org in the summertime. A lot has transpired--both the seen and the unseen--to get us to where we are. I suspect more is happening than any of us individually know.

For a project to succeed, we want the best people for the publicly-visible roles. If @Gavin Andresen would consider running for President that would be fantastic! If Jeff Garzik would consider running for Lead Developer, that would be unbelievable!! Bringing in the right people to help the project succeed makes things better for everyone. It's better to play a modest role in a project that helps to change the world than it is to play a large role in a project that no one cares about.

 

[Peter R]

Crazy, we just had an earthquake here in Vancouver. My apartment building was swaying back and forth. I've never been in an earthquake before.

 

[Bloomie]

Apparently it's 4.8-magnitude. Glad you're safe, Peter.

 

[Bagatell]

http://earthquake.usgs.gov/earthquakes/map/ says M4.9

Stay safe.

 

[albin]

I'm not very familiar with the background on this issue, so I'm curious if anybody has some good info on it: why isn't it a no-brainer to hardfork to include a hash of a canonically-ordered utxo set resulting from the broadcasted block in the header?

Seems like that would facilitate bootstrapping new nodes without any of the current pruning node procedure, and it would (for better or worse) eliminate headers-only mining?

 

[Peter R]

Man if that was a 4.8 or 4.9, I'd hate to feel a 7 or an 8! I thought I was hallucinating! I was like hmm...why do I feel like I'm accelerating back and forth while my lamp bangs into my window?

 

[Inca]

First, @Peter R I hope you are alright!

Second: you all probably should read this disgusting post from Pieter Wuille on the developer list. To think this guy is one of the few people deciding the future of the Core bitcoin client is frankly outrageous and that I actually thought he had some principles.

Some highlights:

Some people have called the prospect of limited block space and the development of a fee market a change in policy compared to the past. I respectfully disagree with that. Bitcoin Core is not running the Bitcoin economy, and its developers have no authority to set its rules. Change in economics is always happening, and should be expected. Worse, intervening in consensus changes would make the ecosystem more dependent on the group taking that decision, not less.

They call it a change in policy of the past because that is what it clearly is. But he thinks change is always happening and should be expected. Er, no.

Oh well let's carry on and see what pearls he has thought up about consensus:

So to point out what I consider obvious: if Bitcoin requires central control over its rules by a group of developers, it is completely uninteresting to me. Consensus changes should be done using consensus, and the default in case of controversy is no change.

Well bitcoin must be completely uninteresting to Pieter if he thinks this! Consensus changes should be done using consensus. Tautology at its best.

My personal opinion is that we - as a community - should indeed let a fee market develop, and rather sooner than later, and that "kicking the can down the road" is an incredibly dangerous precedent: if we are willing to go through the risk of a hard fork because of a fear of change of economics, then I believe that community is not ready to deal with change at all.

Ah now to the important bits. His personal opinion is that we really need to make bitcoin unecessarily more expensive sooner rather than later. Trying to put of this trivial change in the codebase to allow bitcoin to grow further is an incredibly dangerous precedent! The next amazing twist of logic - if the community want a hard fork because they see the clear-as-day economic checkpoint approaching then the community is wrong and we should instead do nothing!

And finally, an olive branch to show that his opinion is not set in stone regarding the blocksize:

Again, this does not mean the block size needs to be fixed forever, but its intent should be growing with the evolution of technology, not a panic reaction because a fear of change.

I don't call years of disagreement and now many months with the entire ecosystem being at total loggerheads with a few dev's at the Core project (who mainly work for blockstream) a panic at all.

Bitcoin Unlimited is not a panic reaction. It is a market solution to a poisoned open source client.

 

[Erdogan]

Hey everyone.

A thought occurred to me the other day and I would appreciate your feedback. If there are miners with a lot hash power but low bandwidth... and presumably that low bandwidth is not easily fixable... (so goes the story about many Chinese miners)... doesn't this present a *tremendous* opportunity for an American/European miner to essentially go "long" on hash power and get a highly leveraged return?

Standard mining investment calculus assumes that you if you build a large data center with X PH/s and the network total was Y PH/s, then the new hash rate is (X+Y) PH/s (i.e., you don't assume that other people will shut off their rigs just because you turn yours on). This is an approximation, but probably a reasonable one under *normal* circumstances.

But now there's an opportunity that didn't exist before. If a high bandwidth (i.e., American/Eurpoean) miner (or mining collective) builds enough hash power to activate a big blocks, in a such a way that low bandwidth miners can't keep up, then instead of adding to the total hash rate, they will simply replace the hash rate previously contributed low bandwidth miners. As a result, the potential returns on investment would be *much* greater: a capital investment that might have previously given you 20% of the network hash power might now give you 30% or 40% of the hash power (depending on how many low bandwidth miners drop off).

Since I don't trade on margin, I probably shouldn't use such metaphors, but the above feels to me like a kind of "short squeeze": you need to invest enough capital to trigger the margin calls, but once you do, you reap an enormous reward.

You may be right, but we do not want someone to choose the winners and the losers. We want the market to decide. Expensive power? Fix it or leave the job to someone else. Crappy lines? Fix it or leave the job to someone else. Cheap power and good communications, but not mining? Consider entering the business.

 

[Zarathustra]

I am not sure either Gavin or Jeff want to be the main developer or even the president. (Although if they want to run for those positions, kudos to them. . the more running the better.)

I respect both of them; they've both done a lot for bitcoin. However, neither of them seem that interested. They both seem quite tired and worn out. (Which I don't blame them for being.)

I would rather they work hard on XT and make XT a really good implementation and let Bitcoin Unlimited attract a lot of new blood and developers. The whole idea of bitcoin unlimited is that it's a community effort with a bottom-up governance style. . . let's not ask for a messiah to come and save the day.

I've been pretty impressed with what @theZerg has done so far -- working on the code, releasing at this time (which seems perfect timing), and getting this thing going. It's his baby and I think he'd be able to carry us on to a much greater piece of the implementation pie and a break through of this block-size impasse.

Yes, we are not the Jeffs, we are the zerg! We are not beggars. If Jeff wants to join our project, great. But he is a late adopter who collaborated too long with those totalitarian traitors of a libertarian project. We didn't. Most of Jeffs posts are placed on r/bitcoin until he discovered that they (core) are not interested in even the smallest possible compromise. It shouldn't be honored with a benevolent dictator position in our project at this time. That's too early. Such a position has to be deserved. Our benevolent dictator should be one (or three) of us early adopters of our project. Just my 2 cents.

 

[Zangelbert Bingledack]

Here's why a lot of free marketeers are still small blockists:

• The first-order free market position on the blocksize cap is not a high cap (insofar as a high cap is also a market intervention *forcing* acceptance of large blocks in unmodded Core clients) but letting the market decide the cap.
• The second-order free market position is, "Probably there is a natural economic cap that is low enough to keep Bitcoin working well," but that one takes more faith as the mechanisms are less clear (though @Peter R and @theZerg's research work are changing that).

So there's a great opportunity for BU to pick up small blockists as well, in that we just have a different view about the *predicted outcome* of the market process, not about whether to determine blocksize caps by a market process. Small blockists can run BU because they believe it will guard against Core getting taken over by big blockists in the future, even as big blockists run it for the opposite reason, and people on the fence run it because they know the market is smarter than they are.

The debate becomes merely academic.

@chriswilmer Great point about the investment opportunity for non-Chinese miners.

@cypherdoc Great point about the gamesmanship.

@Peter R That's worse than any I experienced in Japan, even the 2011 quake wasn't that strong where I was. Hope all is OK!
[doublepost=1451473346,1451472573][/doublepost]@Erdogan In a way, what Chris is describing *is* the market deciding.

 

[Melbustus]

good news from the private blockchain front. i'd bet they were using Tim Swanson as a consultant:

Start-Up With Bitcoin in Its DNA Stumbles on Fund-Raising Trail

http://www.nytimes.com/2015/12/29/business/dealbook/cash-call-for-a-new-technology.html?smid=tw-share&_r=2

Swanson was an advisor to Hyperledger, which Digital Asset Holdings acquired earlier this year.
[doublepost=1451478874,1451477795][/doublepost]Here's Preston Byrne of Eris Industries, purveyor of private blockchains, with an article in Coindesk discussing private chains in 2016: http://www.coindesk.com/four-boring-predictions-for-private-blockchains-in-2016/

Complete with various anti-bitcoin snark and misrepresentations, including a snide (and inaccurate) reference to bitcoin's "three transaction-per-second throughput limits".

 

[Erdogan]

The blockchain technology diversion. It will hold them (and bitcoin value) back for a while. What we can do, as always, is lay on the sofa, get up to write to-da-moon on the terminal sometimes, wait.

 

[JVWVU]

This is just winning at twitter

 

[lunar]

BIP102 as a soft fork.

Or firm/forced fork whatever your take on it.

https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-December/012153.html

The basic idea is that post-fork blocks are constructed in such a way
they can be mapped to valid blocks under the pre-fork rules. BIP102s
is a softfork in the sense that post-fork miners are still creating a
valid chain under the old rules, albeit indirectly.

Ps r/bitcoin has lost over 4000 subscribers in the last 2 weeks. 176 000 down to 172 000

 

[cypherdoc]

Man if that was a 4.8 or 4.9, I'd hate to feel a 7 or an 8! I thought I was hallucinating! I was like hmm...why do I feel like I'm accelerating back and forth while my lamp bangs into my window?

I lived through the 1989 6.9 quake. That was a doozy.

 

[Aquent]

Yes, we are not the Jeffs, we are the zerg! We are not beggars. If Jeff wants to join our project, great. But he is a late adopter who collaborated too long with those totalitarian traitors of a libertarian project. We didn't. Most of Jeffs posts are placed on r/bitcoin until he discovered that they (core) are not interested in even the smallest possible compromise. It shouldn't be honored with a benevolent dictator position in our project at this time. That's too early. Such a position has to be deserved. Our benevolent dictator should be one (or three) of us early adopters of our project. Just my 2 cents.

I don't think bitcoin unlimited is a dictatorship. We have a constitution which sets a procedure for elections as well as a no vote of confidence. That makes it a constitutional democracy.

As for Jeff, he has publicly supported a blocksize increase since early on I believe. He may have kept his "enemies" closer perhaps to very effectively show their true intentions as he did by having even his minimal compromise of 2mb rejected. Thus starting what I think is the beginning of the end of the war.

However, we have no where near won. We have to persuade the whole ecosystem to upgrade to BU and that is a huge task. Any little fault and we fail and with our failure comes core dominance and with core dominance comes settlement nonsense.

I will be brutally honest, and I apologise for it in advance, but I want our project to succeed so I feel I have no choice. While @theZerg actually stood up and coded BU for which he deserves huge respect, he himself says that he has "no prior Bitcoin software experience".

I think therefore Gavin was right to bring us down to earth as people may have used the software in trust of our recommendation. We are dealing with money here, with people's savings, some six billion dollars worth. We need to be absolutely certain that there is no unintentional bug or people lose their hard earned money as well as send bitcoin's reputation into the drain.

The situation we are in therefore means that, unfortunately, we have a moral imperative to warn individuals to not actually use the nodes because it has not been vigorously tested or peer reviewed and to only treat it as a protest vote at this point.

Obviously that is not in any way @theZerg's fault. It is not his fault he doesn't have any prior bitcoin software experience, it is not his fault no developer reviewed his coded or made suggestions etc, it's not his fault others have not tested it and so in. To the contrary he actually deserves huge respect.

We do not know if these developers knew about the project though. @cypherdoc for example stated somewhere to not "hit" Gavin with BU yet. Now they know and we very much hope they want to contribute and even take lead and perhaps we can even help by lobbying them.

Because, if this node is to be actually used and have any chance of replacing core thus making BU a runaway success, we need trusted known experts with years of experience who know how to lead an open source software project like BU who can test the code, review the code, foster trust and make sure that every one's money is absolutely safe.

Now people are using such terms as begg or whatever. I'd say lobby. I think we need to lobby Jeff and others to give us the experience and leadership we need to take this thing to the world stage and give the knock out punch and that is exactly what I personally am going to do because I do not care about egos or emotional baggage or anything like that.

Respect where due, of course, but what is right for the project, for bitcoin, and for us all as I see it has primacy for me over anything else. And I doubt that anyone can reasonably argue with the suggestion that what is right for the project right now is someone with actual experience of leading an open source project who intimately knows the code and it's many potential bugs.

 

[VeritasSapere]

Shower Thought 3 - RE: Bitcoin as a Settlement Layer is NO BUENO.

Let me lay out a few different hypothetical future scenarios and then explain why I think a settlement layer world is not so good - I think it will be obvious, though.

1. Bob has a small business along the seashore that generates its revenue during the summer in a tourist town. Bob takes out a business loan in the business' loan, with a personal guarantee, to get the business through the winter months and for start-of-season inventory (this is common in the industry and in Bob's area). The business services the business loan with one payment at the end of the tourist season. The loan is secured with a deed of trust recorded against the business' building, which the business owns. The deed of trust (DOT) is recorded on block chain and the debt associated with the DOT is serviced via bitcoin payments.
2. Bob and Camilla are going to purchase their first home. The closing is in 3 days. The closing company is going to record the transaction on the blockchain and the downpayment will be via bitcoin. The closing company requires that the buyer's payment arrive no later than 24hrs prior to closing. Failure of payment to arrive will result in a default under the purchase contract and will result in Bob and Camilla losing their earnest money downpayment of $5,000 (personal check delivered to seller's realtor in drive way of home immediately after attending an open house).
3. USA must make an annual payment on Treasury Bonds owned by China. Payment must arrive by 12:00am 1/1/2021 or US will be in default, its credit rating jeopardized, etc. Payment is always made via Bitcoin b/c blockchain transparency etc.

In the three hypos above, settlement has to occur by a certain time period or the sender will be subject to something bad (but it could easily the payee experiences something bad as well due to settlement timing). Settlement delays and the possibility thereof raises the prospect of a few types of problems with the small block perspective.

First, currently in the US, wires (Fedwire) settle very predictably and according to clear guidelines: https://www.frbservices.org/files/regulations/pdf/operating_circular_6_07122012.pdf. With a data-cap fee market (that's what it is - a cap on the flow of information), payees do not have the certainty of cheap (or cheaper than fedwire) settlement in 10 min on average or 2 x per day etc.. In stead, Payees will have to pay a fee for a chance at riding the rails. This is way too unpredictable. Why use it? Furthermore, payments and fund transfer systems, including settlement times, are regulated generally (US). Are we sure bitcoin as settlement will be permitted? See here: https://www.law.cornell.edu/ucc/4/

Second, and related to the first point, it may be colossally arrogant to assume there will be a market for block space when sending bitcoin is subject to the sender successfully biding in a competitive fee market. This comports with nobody's experience to date in wiring funds? It will not compute.

Third, even were there to be a fee market, the fees may be too cost prohibitive and the timing of settlements may be too unpredictable for it to make sense for important transactions. I wouldn't expect any big non-bitcoin companies to use it its consumer offerings (e.g., title companies, closing companies, payroll companies, etc.). See my earlier post on Race Notice jurisdictions in the real property conveyance context. Therefore, I'm not sure a fee market would be sustainable over the long-term. I would expect long-term equilibrium in this market to reflect less than 1MB in block space demand. This would mean bitcoin has stagnated or remains a fringe thing for geeks and libertarians. Who exactly is Bitcoin being designed for in a fee market world? It can't be for businesses that are concerned about cash flow, which is like all businesses.

Finally, and worst of all, a fee market can be manipulated. In hypo 3 above, what if an adversary knew approximately when a payment was going to be made etc. (based on cash flow cycles, spies, etc)? For example, what if NKorea hired a bunch of hackers to spam the network to artificially pump the tx fee or to just make it impossible for the US' TBill interest payments to arrive in time (assume NK can fill the blocks for a full month prior to the US' payment's settlement date (this would effect everyone trying to use bitcoin during that time period). This type of attack could be used by a variety of actors and at various scales.

Overall, the only way I could see a fee-market settlement layer working for Bitcoin is with a bunch of complicated side products or counter-operations that hedge the risks associated with payments not settling in time. The market for these products, and therefore bitcoin, will be small. For example, people/businesses/banks/govts may need to buy transaction insurance (or an endorsement on some other policy) for non-settlement of payments due to block size - I can't see insurance companies covering these losses and not making them subjection to a coverage exclusion as a default option in a standard insurance policy. These products are cool and all, and I look forward to working with them, but they shouldn't be a primary thing Bitcoin brings with it (Hmmm, would this change fungibility? My BTC is only worth that amount in my wallet less tx fees, which are variable - i.e., what I can buy with it, excluding fees).

You made good points, I still think that Bitcoin can be a settlement network and a currency, however only if the blocksize is raised. Without doing this Bitcoin would just be an obscure and fringe currency, I can not see Bitcoin even gaining the required adoption necessary for it to become a more important settlement network under a limited blocksize. This is what makes the small blockist argument such a severe case of false equivalence. Making us choose between currency and settlement network when in truth it is a choice between nothing and everything.

It is interesting to point out that the very existence of Bitcoin as a currency might even make the use of settlement networks completely obsolete. Why do we even need settlement networks when everyone can simply send value of any amount directly, quickly and cheaply.

Bitcoin is a revolution, it will profoundly change the way the world works. This might be why some people are still trying to force Bitcoin into the narrow conceptions of the old world of centralized authority and settlement networks. Bitcoin is inclusive not exclusive. Bitcoin is for the people by the people, its use should not be restricted to the financial elite, this is the old paradigm of thinking that Bitcoin has saved us from. Let us be brave as we step into this new world, stand by our convictions and remember that Bitcoin has gifted us the freedom of choice. The only way that we can lose this freedom is by willingly giving it up, lets hold on tight and never let go. The future of humanity depends on this, let us create a world that we can all be proud of. Let freedom reign supreme and the human spirit will prosper today and far into the future.

 

[Inca]

I don't think bitcoin unlimited is a dictatorship. We have a constitution which sets a procedure for elections as well as a no vote of confidence. That makes it a constitutional democracy.

As for Jeff, he has publicly supported a blocksize increase since early on I believe. He may have kept his "enemies" closer perhaps to very effectively show their true intentions as he did by having even his minimal compromise of 2mb rejected. Thus starting what I think is the beginning of the end of the war.

However, we have no where near won. We have to persuade the whole ecosystem to upgrade to BU and that is a huge task. Any little fault and we fail and with our failure comes core dominance and with core dominance comes settlement nonsense.

I will be brutally honest, and I apologise for it in advance, but I want our project to succeed so I feel I have no choice. While @theZerg actually stood up and coded BU for which he deserves huge respect, he himself says that he has "no prior Bitcoin software experience".

I think therefore Gavin was right to bring us down to earth as people may have used the software in trust of our recommendation. We are dealing with money here, with people's savings, some six billion dollars worth. We need to be absolutely certain that there is no unintentional bug or people lose their hard earned money as well as send bitcoin's reputation into the drain.

The situation we are in therefore means that, unfortunately, we have a moral imperative to warn individuals to not actually use the nodes because it has not been vigorously tested or peer reviewed and to only treat it as a protest vote at this point.

Obviously that is not in any way @theZerg's fault. It is not his fault he doesn't have any prior bitcoin software experience, it is not his fault no developer reviewed his coded or made suggestions etc, it's not his fault others have not tested it and so in. To the contrary he actually deserves huge respect.

We do not know if these developers knew about the project though. @cypherdoc for example stated somewhere to not "hit" Gavin with BU yet. Now they know and we very much hope they want to contribute and even take lead and perhaps we can even help by lobbying them.

Because, if this node is to be actually used and have any chance of replacing core thus making BU a runaway success, we need trusted known experts with years of experience who know how to lead an open source software project like BU who can test the code, review the code, foster trust and make sure that every one's money is absolutely safe.

Now people are using such terms as begg or whatever. I'd say lobby. I think we need to lobby Jeff and others to give us the experience and leadership we need to take this thing to the world stage and give the knock out punch and that is exactly what I personally am going to do because I do not care about egos or emotional baggage or anything like that.

Respect where due, of course, but what is right for the project, for bitcoin, and for us all as I see it has primacy for me over anything else. And I doubt that anyone can reasonably argue with the suggestion that what is right for the project right now is someone with actual experience of leading an open source project who intimately knows the code and it's many potential bugs.

We all want BU to succeed. But XT already exists. What was originally a near monolithic network is fracturing and I would welcome more implementations with different consensus rules into the mix.

@theZerg has prior bitcoin experience of developing XT and let's be frank - there isn't really much actual coding to implement around this issue. We already have a working client that has been tested endlessly for seven years and this is just a few codefixes (though more testing is always a good thing and we should seek peer review).

I think it would be great if Gavin or Jeff came across to BU, but we do not need them as figureheads to build an excellent growing minority of nodes on the network who do not agree with the direction chosen by Core.

Another desirable outcome would be if they authored another fork which say set the maximum blocksize at 4mb straight out of the box with plans to integrate segwit/iblt/weak blocks etc going forward.

I personally think that the ecosystem is in broad agreement that Core is wrong but that perhaps XT was a little aggressive. So we take the middle ground. Either Core capitulates or the network forks them. The likely outcome is that Core sees that they cannot hold this position any longer as the network starts to shift and accepts a hard fork to a higher maximum blocksize to hold onto power. Ironically once we survive that hard fork with no major concerns then their power is effectively neutered as future hard forks will be no drama simple housekeeping affairs.