Gold collapsing. Bitcoin UP.

[satoshis_sockpuppet]

On the plus side it is nice seeing all those transaction fees in the mempool, certainly does lend credence to the theory of a high volume low cost network.

https://blockchain.info/en/unconfirmed-transactions

I have mixed feelings about the transaction volume, on the one hand it increases the pressure for change on the other hand this is really hurting the Bitcoin we all love. We are at 37k unconfirmed transactions at the time of writing this, gulp.

It has to happen sometime anyway. Better we get done with it now.

 

[rocks]

The block limit issue will be solved one way or the other

Many of us have taken this position for granted for a long time now, partly because it was the original plan and partly it is such an obvious path to take.

But given what has happened so far on the miner side, I think we need to realize there is a non-trivial chance that the block limit issue will not be resolved or at least not resolved in an adequate time frame before damage is done.

I just made some small transfers to Coinbase just in case and the network's behavior was obviously already impacting me and Coinbase as well. Normally transactions for me have been instantaneous and free (because they're high priority), Coinbase also has always swept deposited coins right away within one block, and they have done so by sweeping each deposit individually (for example if you make 3 separate deposit transactions, coinbase will create 3 sweep transactions).

Well this time the network behaved differently, a couple transactions were processed for free but took some time, another transaction has high priority (several BTC held 2 years with 1 input) but the network kept rejecting it and I finally gave up and added a fee, but it still took a while. Interestingly coinbase now took some time to sweep the transactions and did the sweep as part of a larger transaction with multiple other inputs.

This tells me even coinbase is having problems and is having to change as the network changes. I don't see how this ends well. They always say do not invest more than you can lose, well I did not get into Bitcoin as an early adopter, most of my coins were purchased in fall 2013 and smaller amounts throughout the 2014/15 drop. (the amount I bought in 2012 was trivial and I still kick myself).

I've always seen BTC as a buy and hold asset as it would eventually win because I believed in the vision, so I could stomach the long drops. But this is different, the vision and usability for Bitcoin is potentially changing. Half of my stake is in for the long haul, but the other half I am questioning as it is not money I'm comfortable losing. Given what is happening a rebalancing is probably in order for many people. If Bitcoin still goes to the moon, well half of a moon is still a lot, but if Bitcoin crashes at least I'll have come out slightly ahead.

 

[VeritasSapere]

@rocks Diversifying your investments is always a good bet, I have been invested in the altcoins since I first got involved in Bitcoin. I am also not an extremely early adopter, so we have to be cautious and realistic with our investments.

 

[yrral86]

Many of us have taken this position for granted for a long time now, partly because it was the original plan and partly it is such an obvious path to take.

But given what has happened so far on the miner side, I think we need to realize there is a non-trivial chance that the block limit issue will not be resolved or at least not resolved in an adequate time frame before damage is done.

I just made some small transfers to Coinbase just in case and the network's behavior was obviously already impacting me and Coinbase as well. Normally transactions for me have been instantaneous and free (because they're high priority), Coinbase also has always swept deposited coins right away within one block, and they have done so by sweeping each deposit individually (for example if you make 3 separate deposit transactions, coinbase will create 3 sweep transactions).

Well this time the network behaved differently, a couple transactions were processed for free but took some time, another transaction has high priority (several BTC held 2 years with 1 input) but the network kept rejecting it and I finally gave up and added a fee, but it still took a while. Interestingly coinbase now took some time to sweep the transactions and did the sweep as part of a larger transaction with multiple other inputs.

This tells me even coinbase is having problems and is having to change as the network changes. I don't see how this ends well. They always say do not invest more than you can lose, well I did not get into Bitcoin as an early adopter, most of my coins were purchased in fall 2013 and smaller amounts throughout the 2014/15 drop. (the amount I bought in 2012 was trivial and I still kick myself).

I've always seen BTC as a buy and hold asset as it would eventually win because I believed in the vision, so I could stomach the long drops. But this is different, the vision and usability for Bitcoin is potentially changing. Half of my stake is in for the long haul, but the other half I am questioning as it is not money I'm comfortable losing. Given what is happening a rebalancing is probably in order for many people. If Bitcoin still goes to the moon, well half of a moon is still a lot, but if Bitcoin crashes at least I'll have come out slightly ahead.

I would bet your concerns are common. Yet, price is holding up fairly well. That makes me bullish. As cypherdoc says, most people will lose money on crypto.

 

[VeritasSapere]

I think the price not crashing because of this blocksize issue is a good bet, since if it did I reckon the miners would almost immediately increase the blocksize, which would then correct the price again. This is what they are incentivized to do, I am sure they would react to a price crash especially if it can be clearly attributed to full blocks.

Like I said before I think this is one of the few things we can rely on. The price staying the same while the altcoins slowly overtake Bitcoin would be a more worst case scenario, since in that case the miners might not be punished enough for their failure to act. They might be able to maintain the illusion for long enough so that Bitcoin ceases to be the dominant cryptocurrency, though I do think this is more unlikely.

Hopefully the pressure and the unpleasant reality of Core's "fee market" will be enough to bring about the change.

 

[solex]

The price staying the same while the altcoins slowly overtake Bitcoin would be a more worst case scenario, since in that case the miners might not be punished enough for their failure to act.

This is exactly my fear too, and only slowly coming to the realization that it may well play out this way with BTC at a long plateau in the $300-$450 range. ETH at 8% of BTC market-cap and kudos to @Matthew Light for having an open mind and taking action. Perhaps now is a good time to take profits, but I am sure that BS/Core will do everything to keep the ETH long-trade alive.

Big question for BitFury, Antpool, F2Pool, BTCC, KnC, 21Co: "How good is your massive SHA256 investment at mining ETH?"

 

[AdrianX]

in my humble opinion softforks should be forbidden.

edit: I could be wrong of course.

it's not that they should be forbidden, it's that they should be recognised for what they are - a change to Bitcoin that can be enforced through political will and PR.

Effective soft forks require universal agreement, at the moment soft forks are enforced by convincing miners to run them and then using political influence to keep the miners on your development path. Nodes run them because they are good bitcoin citizens. Core is concerned with losing influence because if miners use another implementation some of the 'Soft Fork" tech my get trimmed in time.

Soft Forks should be no more than modules, and their deployment free of any coercion. Ultimately they are dangerous if they are run without question and particularly so if the infrastructure becomes dependant on them. Mike H set the bar with Lighthouse when it comes to soft forks in my mind that's how it's done.

Bitcoin Core should be nothing but the basic kernel, Blockstream Core a commercial soft fork.

I've begun to despise the term, as the incumbent Core (Blockstream) developers are of the opinion any changes to bitcoin is fair game so long as you don't change the consensus rules.

They then use that definition to implement whatever they want and limit blockchain growth, knowing full well when they hit a dead end they're going to bundle a bunch of changes into consensus rules when they consent to blockchain growth.

 

[Bagatell]

 

[rocks]

I would bet your concerns are common. Yet, price is holding up fairly well. That makes me bullish.

I think the vast majority of the bitcoin market has zero idea what is happening right now. Almost no one pays close attention to the day-to-day happenings. /r/btc has on average 200 users at a given time and probably <5K active users, that is nothing.

Most people won't notice there is a problem until they experience it. Then they will look and see massive in-fighting and think "oh, s**t maybe I should sell". The fact that by then moving coins to exchanges is harder than it was before will be confirmation for most people.

There needs to be a more credible alternative available for users who want to follow satoshi's vision on the chain that exists, and at this point at least one option needs to be available that does not depend on miners who's attitudes have proved quite concerning. The market of users have a multitude of options to determine their own destiny and break out of centralized control.

As cypherdoc says, most people will lose money on crypto.

If Bitcoin ends up failing, that statement will definitely be true....

 

[JVWVU]

People wont realize there is an issue until they try to move funds and have to wait on confirmations because their wallet default setting is less than a fee market setting. This is the regular guy, we here know that we have to add to get priority access.

My issues are in third world countries and thus making Bitcoin have to use a sidechain to make it competitive.

I dont have any issues buying, using bitcoin to buy things, and then HODLing Bitcoin as I use Coinbase as a third party I trust. But imo the goal of bitcoin was to not have that option until the capabilities of Bitcoin where restricted and then a fee market would have been needed. We arent constricted by computers, software, or networks we are constricted by Blockstream trying to become THE THIRD PARTY MARKET.

 

[AdrianX]

@rocks I like your last post, I agree with it too, my reaction to this debate was to adjust my holdings fortunately I started well before Mick dropped his bomb. infact I started trading a little after the sidechains paper was released.

My biggest concern is we knew early on that bitcoin would come under attack. Much early debate was exactly who, when and how, it now seems evident to me bitcoin is experiencing such an attack.

In response to your last paragraph. I'm committed to the primary satoshi vision until it's not a viable solution, at this time I don't know if I'm falling victim to manipulation and whether or not Satoshis vision is not more resilient that it appears. I don't think it's time to make other arrangements this is worth fighting for, but as @satoshis_sockpuppet said, the alternate solution needs to produce a credible threat to those who are behaving irrational (threatening the miners with an algorithm change in his example)

To be honest, I'm not ready to make plans to abandon ship, I'm leaning more to the idea that we should push for the viability of the primary version. I think the average bitcoiner who has skin in the game has a better understanding of the situation playing out now than the masses who don't own bitcoin.

If I look at the active users on r/bitcoin (~500) v r/btc (~200) I think it may be possible to break the barrier of ignorance. But yes this is getting rather upsetting, and I'm very frustrated with the exuberance and ignorance of those who hold positions of influence.

 

[Bagatell]

I'm very frustrated with the exuberance and ignorance of those who hold positions of influence.

Which is this?

 

[AdrianX]

@Bagatell - many those who hold influence that haven't exactly projected sensitivity to the issues or a solid understanding of Bitcoin, mainly theymos, BTCC and Bitfury, many of the Core developers, and their employer Blockstream.

 

[Erdogan]

On chain fees will never rise to 5 dollars. It simply won't happen. It is possible to hypothesise a working system now and one with LN with on chain fees and millions of users at 5 - 20$. But actually describing how we go from 0.05 - 0.10 $ to 5$ without value leaving the ecosystem for crypto which scales is another matter.

edit: @awemany or beer! i'd drink to that!

Imagine we have a transaction rate a million times the current rate, using giant blocks, better lines, better computing power and better storage, and invented and not yet invented optimizations on top of that - and still people demand more transactions.

Of course people will pay 5 dollars. Proof: they do now, to send 2000 USD from India to Argentina cost at least 5 dollars, it takes a week, and is not really final before a month or two has passed. Why would they not pay 5 USD for a service that is immediate, and final after an hour? Of course they will.

At that point there will be room for all sorts of lesser quality transactions, using more or less trust. They will appear even earlier, because they can supply added functionality like those the current credit and debit card companies do. They just need to make a service that cost less than 5 dollars per transaction, or have added qualities. It all depends on the demand for transactions.

Hopefully, the price will never be that high, because of those service companies.

 

[rocks]

@rocks I like your last post, I agree with it too, my reaction to this debate was to adjust my holdings fortunately I started well before Mick dropped his bomb. infact I started trading a little after the sidechains paper was released.

My biggest concern is we knew early on that bitcoin would come under attack. Much early debate was exactly who, when and how, it now seems evident to me bitcoin is experiencing such an attack.

In response to your last paragraph. I'm committed to the primary satoshi vision until it's not a viable solution, at this time I don't know if I'm falling victim to manipulation and whether or not Satoshis vision is not more resilient that it appears. I don't think it's time to make other arrangements this is worth fighting for, but as @satoshis_sockpuppet said, the alternate solution needs to produce a credible threat to those who are behaving irrationally (threatening the miners with an algorithm change in his example)

To be honest, I'm not ready to make plans to abandon ship, I'm leaning more to the idea that we should push for the viability of the primary version. I think the average bitcoiner who has skin in the game has a better understanding of the situation playing out now than the masses who don't own bitcoin.

If I look at the active users on r/bitcoin (~500) v r/btc (~200) I think it may be possible to break the barrier of ignorance. But yes this is getting rather upsetting, and I'm very frustrated with the exuberance and ignorance of those who hold positions of influence.

Agree fully. The problem comes down to how do users and the market influence Bitcoin and steer it in the direction users and the market wants it to go. What we are seeing is users and companies running Classic nodes has near zero influence and constant arguments has near zero influence.

The problem is these tools can simply be ignored by core devs and miners. Bitcoin is essentially on autopilot (as it was designed to be) and lives outside of external influence, including influence coming from users.

There are full fork tools available that either can not be ignored by miners, or at least enable users to pick their own path. I do feel it is going to come down to that now.

This is not something to be feared, the key advantage of Bitcoin escaping centralized control is that control is fleeting. Bitcoin is simply an open source publicly available database/ledger, any one or any group of individuals can take that ledger in any direction they choose, and this can function as a last resort for the market to choose its favored path. No other system enables users to pick up stakes and change the system to where they want it to go, that at a base level is Bitcoin's advantage.

We may find that for Bitcoin to live, it has to be re-born from time to time by being radically re-designed by a segment of the market, instead changing in a coordinated manner (the attempts so far). This is also part of Satoshi's design.

 

[albin]

This is patently arbitrary a standard, but I think psychologically the 80/20 "rule" has to hold for Bitcoin market share, or things might get really ugly.

@Bagateil

I have mixed feelings about Vitalik, so by no means is this some kind of assassination, but the area he's talking about happens to be an area I did some work as an undergrad in, and while it sounds impressive for him to invoke these concepts (which are indeed real concepts in this area), he's really just making a weak set of analogies as a sales pitch.

 

[megadeth]

@albin It is indeed worrying that alts market cap has balooned to what it is today. Hopefully the market is listening and reacts.

 

[cypherdoc]

 

[Erdogan]

@Richy_T I do not think the majority of miners are mining at a loss, the latest generations of equipment are still profitable, mining at a loss is essentially irrational. Furthermore these miners can not switch to the altcoins since they are using ASICs and there are no where near enough altcoins that use SHA256. SHA256 mining can even be seen as a single self balancing economy across several cryptocurrencies, the profitability of mining Bitcoin is already influenced by the existance of alternative SHA256 cryptocurrencies, in part due to the multipools, when Bitcoin becomes unprofitable for them they will have no where else to go.

They can not only look at the current top and bottom line. All investments depend on speculation in different directions; future power prices, future difficulty, future operation quality, future interest rate, future bitcoin price. They have to speculate, it is the nature of investments. So have they taken into account the halving? Probably. Have they discounted larger blocks? Maybe. Hashrate can go down, we have seen that, but mass exodus from mining due to halving? No. Some leaving because they do not want to reinvest? Probably, they leave room for others. Nothing earth-shaking is in the line.

 

[cypherdoc]