Gold collapsing. Bitcoin UP.

theZerg

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Aug 28, 2015
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you nailed it in 2012, kudos.

you should have taken advantage of this to anticipate 21inc :)
Honestly I have reservations about 21's business model (what little we can figure out about it). The volume of the Bitcoin "drip" to each device is unknowable due to the presence of efficient "surplus energy" mining capacity as I outlined 2012. So the entire business model is predicated on the belief that these devices can make enough Bitcoin to pay for their own IoT (and BS's profit).

If I was doing it, I would not have wasted my time on the ASIC. Instead I would have focused on a secure micro-txn wallet with a "drip" from Blockstream. So the consumer pays BS $10 via a credit card and that money is dripped as bitcoin into all the IoT devices that consumer buys. Then the IoT device uses that Bitcoin to pay for whatever it needs.

But I'm guessing that the original idea of the ASIC was that someone large purchases the IP (including a secure HW wallet) and integrates it into their next ARM chip release. That would be a different gamble because the incremental cost would be pennies or less (just a slightly larger chip).
 

cypherdoc

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Aug 26, 2015
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@theZerg

few things:

1. 21 is not full of BS (Blockstream :))
2. mining just provides liquidity, even if unprofitable. oil to grease the system.
3. taking cc's for btc could be considered MSB.
4. 21 wants to coordinate all these devices which may or may not be a good thing (i think good) in that they are all communicating in some way at least thru 21 with them operating as perhaps some LN hub.
5. the asic + continuous BTC stream encourages an entirely different and potentially much more decentralized mini-mining model for the long term, assuming other pools might do the same as 21.
6. as i indicated in my above post, this might sort of return mining back to the laptop days when we could mine with a cpu (unprofitably if you solely think of ROI) except with an all-in-one system where you can make your own digital store to send/rec (value add on) w/o having to resort to an exchange.
7. who knows, it might be more mining efficient if the theory proves true that cooling and labor cost is reduced substantially by spreading out mining over thousands/millions of locations vs centralized wearhouses and millions of device owners vs 3 guys on cots.
 
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cypherdoc

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apparently:

0.16 Joules / GHs = Best efficiency on the market right now.
 

Mengerian

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Aug 29, 2015
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Has anyone been keeping track of how many blocks (out of the last 1000) have been indicating support for BIP100? There appears to be many.

Seems to me that miners indicating BIP100 support before the software is written or deployed could cause strange things to happen if and when BIP100 supporting nodes are actually deployed. If the number of "BIP100 blocks" is above the triggering threshold, it could trigger immediately, or very quickly, as it is rolled out, potentially causing a blockchain fork.

It is strange how people are upset about Bitcoin XT, and consider it "hostile". But XT is out in the open running code that can will actually implement the behaviour it is advertising. The "BIP100 miners", on the other hand, are indicating support for a feature which, as far as I know, is not actually implemented, or even fully defined yet! That, to me, seems far riskier.
 

cypherdoc

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uh oh. more trouble:

 

theZerg

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Oops wrote thay fast any other moment I would not confuse 21 with BS...

Putting mining back in consumers hands is a great goal... for bitcoin. But not a business model.

These IoT devices MUST have a way to load them... otherwise you wouldn't be able to ad-free browse, close your garage door or whatever if the device cant mine coins fast enough. And we have no idea how many coins it will mine. I think you might get around money xmitter laws either by low quantity or because the coins are moved to a specific device for a specific purpose.
 

solex

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Aug 22, 2015
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@Mengerian
I'm really not too worried about BIP100 because I think the block limit is better under the control of the miners than Core Dev (excluding Gavin, Mike and Jeff). We have just witnessed how the devs are obviously brilliant at software engineering but naive at economics. They are prepared to accept voodoo theories, such as attempting to force Bitcoin to become a settlement layer with sky high fees, which is a huge gamble unlikely to work. They also seem to have conflicting interests with 3rd-party off-chain services.

At least we know the miners want Bitcoin to succeed, and they see that main-chain scaling is the simplest and safest approach. As Peter R has pointed out, the risk with BIP100 is similar to the original 51% attack risk, which has long been accepted by Bitcoiners. Even today the majority of miners could decide to reject all blocks below 200KB or blocks larger than 600KB, for example.

I do think that BIP100 is flawed in that the activation level of 90% or 95% (uncertain) is too high, and may never trigger, although it could reach 75% very fast, which is more like BIP101's activation level. The limit still defaults to 1MB after activation and won't change until the next difficulty period, and not all BIP100 support text in the coinbase is a valid format for the voting, so there is time for non-mining nodes to upgrade.

Note, BIP100 allows 21% to freeze the limit, which makes more likely another hard-fork, also the 32MB limit is unhelpful.
 
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cypherdoc

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Aug 26, 2015
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running the newsletter for the time i did was a great insight into the ease with which running a digital business can be done using Bitcoin. and i didn't need to know anyone's identity, store any info except for an email, pseudonym, and an address for them to send payment. and it was instant even for guys on the other side of the world. someone would send me a pm, i'd send an address back, they'd send payment along with an email, and they were instantly getting updates. it was great.

this Bitcoin computer will allow the same things for many ppl willing and able to come up with a good idea to sell. that will expand the economy and create usages for coin we've never conceived of. it's brilliant.
 
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Melbustus

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Aug 28, 2015
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In case anyone hasn't seen this yet, here's Balaji (CEO of 21) speaking at YCombinator in 2013:

"Voice vs Exit" - (watch the whole 16mins)

"What I think of as one of the most important things over the next ten years is to use technology to reduce the barriers to exit."

I think this gives pretty good insight into his thinking and world-view, and by extension, 21's DNA.
 

cypherdoc

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Aug 26, 2015
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as i was warning about last Friday, we now have a full on short term sell signal on the Dow. all the other indices look similar as you'd expect:

 

Peter R

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Find a hole in this argument that "proves" that the block size limit will be eventually be raised:

If the block size limit remains to the right of Q*, then it doesn't really matter what the limit is because it does not affect the free market dynamics. However, if the limit falls to the left of Q*, then the economic pressure due to the deadweight loss will eventually cause a protocol fork that moves the limit back to the right of Q*. In other words, the market cannot enforce a production quota that the market itself disagrees with. (This also means that, except over the short term, it is not possible to use the block size limit to drive fees upwards.)

EDIT: @molecular pointed out that it is also possible that the economic pressure is relieved by people exiting the currency system, thereby dropping the demand curve such that Q* falls back to the left side of Qmax. This has no effect on the claim that it is not possible to use a block size limit to drive up fees.

 
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solex

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Aug 22, 2015
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Yep. I think those charts are getting famous!

@Peter R
The problem is one of co-ordination. It's fine in theory for the whole market to say "we need to handle more volume" but the problem in practice is that individual market participants can't act unilaterally because they will isolate themselves from the market.

This is the consensus model which makes Bitcoin anti-fragile and bitcoins a solid SoV.

Ossification is setting in and will only get worse until all changes are in layer 2, actually built upon the consensus model. Fortunately the block limit is probably the only thing which must be changed in layer 1.
 
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cypherdoc

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China manufacturing contracts at fastest pace in more than 6 years


China
’s crucial manufacturing sector is having its worst month since the depths of the global financial crisis in early 2009, according to a preliminary reading of a closely watched factory survey.
The flash reading of the Caixin China general manufacturing purchasing managers’ index dropped to 47 points in September, down from 47.3 in August, marking the worst performance for the sector in 78 months.

Another month of particularly weak Chinese data in September could convince the Fed to hold off again from interest rate “lift-off” when it meets near the end of next month.

Every component of the Caixin flash PMI, from new orders to prices to employment, showed signs of worsening deterioration in the manufacturing sector in September.

http://www.ft.com/cms/s/0/b91cc3cc-61a6-11e5-9846-de406ccb37f2.html#axzz3mRLGZxVy
 
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sickpig

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Aug 28, 2015
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Yep. I think those charts are getting famous!

(snip)

Ossification is setting in and will only get worse until all changes are in layer 2, actually built upon the consensus model. Fortunately the block limit is probably the only thing which must be changed in layer 1.
to me it would be important if we were able to improve bitcoin fungibility at layer 1 before the final feature freeze.
 

sickpig

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Aug 28, 2015
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apparently:

0.16 Joules / GHs = Best efficiency on the market right now.
yes, it is. only bitmain's last chip come close to this, if memory serves it should be something like 0.23-0.26 Joules/GHsGHs.

One last thing worth noting, the 21inc "bitcoin computer" is capable of running a full node and comes with the blockchains preloaded.

so the device will contribute also to the network decentralization.

edit: fix bitmain consumption values
 
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