Gold collapsing. Bitcoin UP.

[adamstgbit]

sure, but core have poeple hanging on because of segwit's effective blocksize increase and promise of 2MB later down the line.

supporters will probably continue to support them even if they disagree with the long term plan, because of the short term block space increase that is coming "very soon" TM .

but I can FEEL the tension rise, segwit better deliver its 1.75 - 2MB effective increase OR ELSE!

 

[cypherdoc]

@Justus Ranvier & Kristov's great OBPP wallet survey:

file:///home/no/Downloads/OBPP%20Bitcoin%20Wallet%20Privacy%20Rating%20Report%202nd%20Edition%20-%20March%202016.pdf

note: Mycelium does have built-in Tor service which should have taken them further up the list.

 

[ladoga]

I can FEEL the tension rise, segwit better deliver its 1.75 - 2MB effective increase OR ELSE!

I hope so. I'm slightly worried that were are already past the peak transaction rate. That the tension is easing and the money (and people) are already moving away from Bitcoin.

With no users even 1 MB will be plenty.

 

[cypherdoc]

"The attack requires measuring a few thousand ECDSA signatures. How this may be done depends on the particular application being attacked. For example, in Bitcoin micropayment channels, which allow making lightweight out-of-blockchain automated payments for an ongoing service, each payment requires an ECDSA signature."

https://www.cs.tau.ac.il/~tromer/mobilesc/

I thought this was interesting. As I understand LN payment channel tx's, you're using the same private keys over and over again to update the tx as the subscriber progressively signs over the amount deposited into the channel to a newspaper for instance. This could easily get up to the thousands of tx updates depending on how many articles one reads per day. As well, other usages involve bidirectionality of payment updates increasing the number of signatures required even more.

 

[freetrader]

Digitsu has announced the On-chain Scaling conf (May 27-29, 2-day online conference) on Bitcoin Classic slack:

Announcing the OnChain Scaling Conference! As Bitcoin faces its first growing pains and active debate about the future of the network continues, the need for open dialog is becoming more important than ever. The purpose of this conference is to bring focus to specific scaling solutions that will help scale Bitcoin on-chain. Although many interesting approaches to scaling involve off-chain or second layer networks, On-chain innovations are also important as they have a direct effect on growing the Bitcoin network’s adoption in the near-term without introducing new economic variables.

Thus, the primary theme of this Scaling Bitcoin On-Chain conference is designed to discuss solutions to scale Bitcoin’s on-chain capacity, resiliency, and security.

We are now gathering feedback on the topics that the public would like to be covered at the OnChain conference, please take a look and give us your feedback on what you would like to hear about!

Please join us in #onchain-scaling channel to discuss!

New Consider.it site with OnChain scaling conference topics. Help choose your favourite topics to be included in the conference agenda!

https://on-chain-conf.consider.it/

 

[molecular]

@AdrianX, @Roger_Murdock: and that is how you create a fractional reserve above bitcoin with no enforceable upper bound (21m)

I've been having the suspicion LN would allow fractional reserve 'banking' on bitcoin, but my vision is still foggy. Can anyone offer a clear understanding and argument of how that could look like?
[doublepost=1458915506][/doublepost]

4.6% has turned to 6.3% in a matter of days!

bullish?

not sure if statistically sound enough, but the last 24 hours only show 2.8% (http://nodecounter.com/#block_explorer). Slush hasn't found a classic block for 2 days.

Hopefully just bad luck.

 

[adamstgbit]

not sure if statistically sound enough, but the last 24 hours only show 2.8%(http://nodecounter.com/#block_explorer). Slush hasn't found a classic block for 2 days.

Hopefully just bad luck.

ya i noticed this 24 hour number goes up and down alot the other day it was at 9%

 

[cypherdoc]

I've been having the suspicion LN would allow fractional reserve 'banking' on bitcoin, but my vision is still foggy. Can anyone offer a clear understanding and argument of how that could look like?
[doublepost=1458915506][/doublepost]

not sure if statistically sound enough, but the last 24 hours only show 2.8% (http://nodecounter.com/#block_explorer). Slush hasn't found a classic block for 2 days.

Hopefully just bad luck.

read that link to Rusty's article i posted above.

seems to me that a lot of value can change hands over and over bidirectionally in a LN PC w/o ever settling for long periods of time (depending on the time limit). as i mentioned above as well, a LN PC can be considered one large 0 conf tx and if for some reason it can't be closed out at the specified time, all that value can be lost by one or the other party. isn't that a form of leverage by the winner? and i think this can happen b/c the fundamental basis upon which LN PC's will be used is one based on full blocks and rising onchain fees which push tx's offchain to open these LN PC's. in that case, haven't we already seen that spam attacks work very well at jacking up the mempools causing significant delays and non-conf's onchain which act as an attack vector? Rusty just said that CPFP and RBF can't be used to escalate the close out tx fee that has already been pre-constructed thus forcing the parties to "shoot high" with their estimation of what that fee will be months down the line at close out, which may or may not be enough.

even so, it's amazing to me that we have a vaporware that doesn't yet have two major components worked out, even in principle, that is preventing a blocksize increase; closing fee assurances & a decentralized routing network.

 

[albin]

I've been having the suspicion LN would allow fractional reserve 'banking' on bitcoin, but my vision is still foggy. Can anyone offer a clear understanding and argument of how that could look like?

Lightning requires real-time network monitoring and at least RPC access to a full node to operate with respect to its game-theoretical requirements. There are ways to accomplish some of this without trust if malleability is gone, in the sense that you could hand-off pre-signed transactions to close the channel to a third party monitoring the network for you looking for chicanery.

But in reality we should all suspect that since there is little reason that doesn't completely strain all credulity that Lightning nodes won't centralize into a small number of very high-capacity hubs, it really stands to reason that real hubs will just dispense with all of this complicated Lightning-to-the-end-user stuff, and simply use Lightning as a way to settle between themselves, instead simply having a custodial relationship with the customer.

If this scenario came to pass, these hubs would be totally capable of creating paper bitcoins internally so long as they had enough reserves to settle external transfers.

 

[Inca]

@albin: bingo.

 

[cypherdoc]

Well, Brock Pierce certainly believes there has been a Fidelity Effect. And he's one of the most active and earliest of VC investors. Who the heck is Adam Backtrack to disagree?:

https://letstalkbitcoin.com/blog/post/epicenter-bitcoin-123-brock-pierce-from-digital-goods-to-digital-currency

 

[rocks]

Bitcoin is at risk of losing the digital-cash use-case as long as these guys are driving protocol development, no matter what happens with MAX_BLOCK_SIZE at this point.

sure, but core have poeple hanging on because of segwit's effective blocksize increase and promise of 2MB later down the line.

supporters will probably continue to support them even if they disagree with the long term plan, because of the short term block space increase that is coming "very soon" TM .

but I can FEEL the tension rise, segwit better deliver its 1.75 - 2MB effective increase OR ELSE!

The root problem is not the MAX_BLOCK_SIZE parameter, but the fact that the developers and miners in control are not implementing the solutions needed to scale. Long term this is required.

Classic can propose a simple 2MB bump because the code base is already ready for slightly larger blocks. But it is not ready for significantly larger blocks (20MB for example). Even if Classic's 2MB scaling wins, significant changes are needed in how the core client is structured and how miners communicate blocks to continue scaling. None of these are being addressed.

Let's say in 3 years we have 8MB blocks with the same basic client code base and miner communication. By then the next increase might not be possible by simply changing the MAX_BLOCK_SIZE paramenter, but require significant work and miners willing to make significant changes. The barrier to scale is now much higher and risky for miners and there is a lack of people/funds to do this (the miners should fund that development, which isn't happening)

Even if core loses this 2MB battle, by simply refusing to implement real scaling solutions they are setting themselves up to win the war.

I only first dug into the code base a few weeks ago to create the Satoshi's Bitcoin client and learned two things: 1) Bitcoin is a very simple application with less than 20K lines of main code and not hard at all to understand, 2) it was not written by people who understand scaling, for example there are coarse grain locks all over the place, internally the client needs to be broken down into discrete lockless services in order to handle much higher throughputs. The new crypto library doesn't cut it, the bottlenecks are elsewhere. Core devs I don't think understand how to write performance scaleable applications, that might be why they just gave up and kicked out Mike Hearn and others to force LN, when what should happen is they should be fired and a better team put in place.

 

[cypherdoc]

Lightning requires real-time network monitoring and at least RPC access to a full node to operate with respect to its game-theoretical requirements. There are ways to accomplish some of this without trust if malleability is gone, in the sense that you could hand-off pre-signed transactions to close the channel to a third party monitoring the network for you looking for chicanery.

But in reality we should all suspect that since there is little reason that doesn't completely strain all credulity that Lightning nodes won't centralize into a small number of very high-capacity hubs, it really stands to reason that real hubs will just dispense with all of this complicated Lightning-to-the-end-user stuff, and simply use Lightning as a way to settle between themselves, instead simply having a custodial relationship with the customer.

If this scenario came to pass, these hubs would be totally capable of creating paper bitcoins internally so long as they had enough reserves to settle external transfers.

thx for putting the final touches on this for me.

you're exactly right, the LN hubs themselves will take the most profitable and easiest of shortcuts; be a fractionally reserved clearing house for their clients to skim fees, either transparently or more likely opaquely. just like Liquid has for SC's. in that sense, maybe we don't have to worry. i know that i, as an avg user i believe, would never trust that centralized model and simply will refuse to use it. i made the same argument for SC's last summer in the old gold thread. and i think we're seeing that play out in Liquid. i shouldn't worry so much about these competing offchain solutions. they don't have a chance against Bitcoin mainchain.

so in that sense, we need to concentrate our battle on allowing Bitcoin mainchain to scale thru the blocksize increases.

which brings up another interesting pt that i've seen claimed by certain economic academic papers in the past. and that is how a country can never grow it's own economy if it ever resorted back to the gold std or evoked a fixed supply currency. the argument being that this type of money would be deflationary causing it's ppl to hodl and not support surrounding businesses and growth. maybe that is what we're seeing play out here in Bitcoin today in the big picture and why we won't have to ultimately worry about coersion from small blockists in general and Blockstream for profit more specifically. they can't ultimately win this battle against deflationary fixed supply Bitcoin mainchain. the urge to hodl and use the most secure mainchain may be overwhelming. if so, we can all just sit back and watch as the carnage eventually sets in on these for profit conflicted entities trying to change Bitcoin economics. which explains exactly why they are targeting so many angles to squeeze tx's from onchain to offchain.

assuming offchain solns lose, what about the flipside argument though? that Bitcoin itself is doomed to not succeed b/c of it's deflationary nature? i used to worry about this. but i'd remind everyone here that i've always dislike this term in describing Bitcoin. deflationary sounds negative to me in general and really isn't something i want for Bitcoin. i also don't think that is what it is. i used to think i didn't want to see the protocol change at_all, not even a blocksize increase. but as i've gotten to understand Bitcoin better over the years, it is obvious to me that it can function as a payment platform as well as a SOV. that's b/c it brings to the table properties we have never seen before in history; the ability to cross borders in an instant, be decentralized and thus not be governed by conflicted state actors. i still think it has those basic properties even tho those assumptions are being challenged somewhat today. this is why i haven't bailed. the great thing about Bitcoin, even today, is that it can serve both as a SOV and a payment platform simultaneously. compared to gold it is a no brainer. i can tell you from experience it takes a long time to both accumulate gold/silver and then liquidate it. you certainly can't trade it for anything related to everyday use and in suporting a local economy. i've already told the story about how i almost broke my back carrying bags of junk silver to the dealer when liquidating years ago. in contrast, look how easy and instantaneously you can liquidate Bitcoin despite it being a SOV. it's amazing. in this sense, i do believe Bitcoin could be adopted by a country and used to grow a thriving economy despite what Wences and Andreas say. we have plenty of evidence that hodlers will buy goods as the price rises. we also have evidence that Bitcoin businesses actively seek out Bitcoin supporting economies. why not enjoy the fruits of one's appreciating investment by spending it as the price rises? this is what we actually do see as shown in studies by Bitpay and in tech in general. this is not your typical deflationary currency as described by these academics. Bitcoin is something new and revolutionary.

 

[cypherdoc]

Well this is good:

https://siteanalytics.compete.com/bitcoin.org/#.VvWZAC9lDfs

 

[satoshis_sockpuppet]

@cypherdoc I'm not so sure that this is good.
I think I saw somewhere that the frequency of bitcoin related posts on reddit is declining as well. So the declining number of bitcoin.org visitors could just be an expression of an declining interest in bitcoin in general..

 

[solex]

@satoshis_sockpuppet
Yes. I suspect that the decline can be put down to the rise of ETH as much as the dissatisfaction with thermos domains.

I did not think of this until it was recently pointed out by @VeritasSapere, @Melbustus and others, that the limiting of tx volume can become like a self-fulfilling prophesy, or the proverbial frog in water which is slowly heating up. We are not seeing all the Bitcoin volume which is being turned away. New users and companies will already be sitting on their hands waiting for a cryptocurrency to arrive that they can leverage. Todd alone must have extinguished a huge amount of interest by telling companies to not use Bitcoin because it "can't scale", "is a settlement layer". Some listened to him because of his status as an expert. Some didn't and went ahead, but now, with no spare capacity, who is going to make a major investment in a new business case involving BTC?

 

[Lee Adams]

https://www.bitcoinhk.org/bitcoin-lecture-series/episode-1-upgrading-bitcoin-segregated-witness

Ok which of you said this at 1:17:xx???

"It also assumes that blocks are almost full"

The assumption is there is an actual fight for space. If nobody is using bitcoin anymore that 50% [optimisation] will probably not be realised... because nobody will care!"

 

[albin]

Doesn't the Maxwellian argument that Bitcoin has to operate at blocksize capacity in order to "pay for its security" suggest that losing users degrades security? Ultimately if we're permanently at 1MB + whatever size the witness hack provides, but because they've decimated the network effects and say only 500k traffic peak still remains, isn't Core being monumentally irresponsible big blockist troglodytes according to their own logic, jeopardizing the long-term security of Bitcoin by having such a huge blocksize that can't create their conception of a "fee market" and "fee pressure"?
[doublepost=1458947022,1458946148][/doublepost]@cypherdoc

Now that I think about it, the plausible hard money failure modes are EXACTLY what Peter Todd advocated in the 2013 propaganda video for repurposing blocksize cap.

Ordinarily of course people should experiment with whatever Bitcoin arrangements or systems they want, but I feel the situation right now is far more insidious than even what Peter Todd hoped for in 2013, because Lightning is obviously being used as a political rationale to take away access to on-chain tx for the typical individual.

I'm flabbergasted that this class of actor gets so wrapped up in esoteric, overcomplicated, half-baked speculative security attacks that have no relevance in any organized threat model methodology, yet fairly straightforward non-technical (or at least tangentially informed by the technical characteristics) failure modes of economics or business are not only summarily dismissed, but then villainized and connected to "conspiracy theory".

 

[Lee Adams]

https://www.bitcoinhk.org/bitcoin-lecture-series/episode-1-upgrading-bitcoin-segregated-witness

Ok which of you said this at 1:17:xx???

"It also assumes that blocks are almost full"

The assumption is there is an actual fight for space. If nobody is using bitcoin anymore that 50% [optimisation] will probably not be realised... because nobody will care!"

I'm going to give Dr Lau the benefit of the doubt and say that English is not his first language and he was struggling to understand the questions, but the fact this guy is the co-author of BIP 141 (segwit) is extremely worrying. The questions seemed to completely throw him. I also notice that the 75% and 95% activations of seg wit have now been changed to 'TDB' (sp)!

 

[AdrianX]

@albin

Doesn't the Maxwellian argument that Bitcoin has to operate at blocksize capacity in order to "pay for its security" suggest that losing users degrades security? Ultimately if we're permanently at 1MB + whatever size the witness hack provides, but because they've decimated the network effects and say only 500k traffic peak still remains, isn't Core being monumentally irresponsible big blockist troglodytes according to their own logic, jeopardizing the long-term security of Bitcoin by having such a huge blocksize that can't create their conception of a "fee market" and "fee pressure"?

It just happens to be that blocks no matter how big they are, are always 100% full (the exceptions are when blocks may be full of other info like Bible quotes or third party scripts)

Bumping into the 1MB limit doesn't make blocks full, it just means blocks size is limited.

The Maxwellian argument you present is correct security scales to block capacity (size).

Where it breaks down is limiting capacity limits utility and stunts network growth.

The system security always scales to the size of the block. And block size is always a reflection of the utility. The security is dependent on block growth to increase scales of economic in transaction fees that funds security.

This fee market cult has a misguided understand of growth. Growth is not some magic force. It's fundamentally driven by and dependant on the demand for better money.

The ultimate function of better money is the need for a global indisputable memory ledger. Making money do all sorts of other things doesn't increase its primary utility - if anything it dilutes it makes it more difficult to understand and trust.

We may need better stock exchanges, better contracts, better money exchange, better decentralized scripting services, better databases, better autonomous companies and better certificates, etc.

But the most import fundamental technology we need is just better money. Entrepreneurs make all those other thing, all they need is just better money.

The quantum shifts happens when we get better money. All that other stuff is at best an incremental improvement, and it's not the role or the responsibility of the money to provided those services.