Gold collapsing. Bitcoin UP.

[AdrianX]

a typical scenario would be: I change 1 bitcoin for 1 million storj, then I rent space on the (storj) network, or I rent my space, doing (potentially) thousands of transactions and after some time (maybe 1 week, or maybe one year), if you don't need any more the storj services, or if you gained many side-coins, you take them back on the bitcoin chain.

@Dusty it's this typical application I find problematic and inconsistent with the the benefits provided by a better money.

The demand for storj service is a result of the benefits I get by using it. The risk I take by consuming the service may be miniscule, but no the less I'm paying for a service I expect to receive. I have to trust they will deliver - if there service is not delivers their reputation is destroid.

As a consumer, I don't want to trust in the integrity of the money, I evaluate the risk based on the reputation of the service and the capital expense to consume it.

If the sidechain storjCoin was 100% as secure as bitcoin it does nothing to improve the trust I need to place in the service I buy.

What it does as a sidechain is creates friction, there are transfer costs to switch chains, it enables an additional layer for speculation cost and it distorts the market evaluation of the service, and it degrades the security cost of bitcoin the better money I want.

If storj used bitcoin or functions as a 100% altcoin the friction does not affect the money supply, bitcoin security or the service. The trust I have to put in the service is the same regardless of whether or not it's a sidechain that's 100% as secure as bitcoin.

You may be able to enlighten me, but I can only think of 3 reasons to buy sidechain storjCoin. 1) to consume the service, and 2 to speculate on demand and 3 leverage transfer friction. (I'm assuming that there is 0% inflation in sidechain storjCoin, - note that's not a guaranteed of the sidechain.)

In the later cases of speculating sidechain storjCoin by buying it just becomes an added layer of friction and rewards speculators at the cost of investors. An investor would be defined as someone who takes on risk to contribute to storj business model. Given it's an open protocol it would be someone who provides bandwidth and hard drive space to earn a reward.

In the case of sidechain storjCoin, a speculator is speculating on the demand for storjCoin, the speculator sends the wrong market signals to the investors, when he buys he sends a signal to investors that there is more demand than there is, (investors adjust inappropriately,) and when there is increased demand for the service the speculator artificially distorts the demand for the service by adjusting the supply of storjCoin.

If it was allowed to float on a market and not pegged to bitcoin the trust would be the same and investors would be able to better adjust to supply and demand for the service. (speculator and investor would be on an equal footing.)

If we look at actual services on the market today, the problem that LN and sidechains propose to solve is almost nonexistent unless your a speculator who wants no risk. Take my ISP fro example. My ISP says they provide a good service so they are willing to put their money where their mouth is and risk providing me with 1 month's worth of service in advance of payment. At the end of the month I pay the bill. To make better use of capital they will take payment in advance for 1 year and give me a discount. The reality is I trust them and they trust me. We don't need the money to provide an extra layer of trust. But rather we need the money to be more trustworthy. We need simple money to make better investments in the real world.

The money can be made to honor bad agreements, but that does not remove the needed to trust in the business. I want the money velocity to increase, I don't want it locked up, and out of circulation where the lack of velocity affects its security.

 

[AdrianX]

In fact, LN transactions are just normal bitcoin transactions, the only difference is that you produce (potentially) thousands of them but you broadcast only the last one of them on the bitcoin blockchain, the settling one.

What makes bitcoin good money is it's the first practical implementation of the the idea that Money is Memory that's not centrally controlled to gain some network effect. While I like the Idea of LN, it's good for buying coffee and other such irelavant sundries. What makes Bitcoin Bitcoin is the Blockchain, somthing LN removes from Bitcoin transactions. .

It's wrong to change Bitcoin to accommodate LN and then claim LN is Bitcoin. It's not.

LN should compete with Changetip and every other idea out there, on top of the bitcoin network.

If I'm going to do business in the real world, I need my transactions to be visible on the Blockchain that's what makes Bitcoin work, the fact it's good money because it's the best Memory.

I can't trust a money I can't understand, and it's my understanding of the existing money system that creates demand for Bitcoin. LN creates so many variations and new user cases that it becomes more complex than the existing money system, and the ramifications are it erodes trust and utility.

 

[Justus Ranvier]

@AdrianX Appcoins have never made sense, and they weren't intended to.

http://nakamotoinstitute.org/mempool/appcoins-are-snake-oil/

They've been promoted by scam artists who just don't give a shit.

 

[adamstgbit]

@cypherdoc : "Its going to be a long hard fight."

No problem.

 

[Inca]

'This is where we hold them. This is where we fight. This is where they die.'

 

[Dusty]

@Dusty
I don't think that's true. I have given the example before

I'm sorry, I suppose I subscribed to the thread too late: I'm very interested in LN criticism (I've many on my part): if you can point me to the right message I'll be grateful.

where multiples of the initial deposit value can change hands bidirectionally before the closing tx.

Well, that's the whole point of the LN, isn't? Do as many offchain txs before settling on the more expensive bitcoin blockchain.

It seems easy to spam attack a closing tx when blocks are full. That's like leverage and is certainly not secure.

Yes, full blocks are a big threat to the LN, and in particular to big hubs: that's why I find bigger blocks useful for every kind of evolution of Bitcoin.

 

[cypherdoc]

@Norway, I hope that's not the 300 (Core devs) ;-)

@cypherdoc : I object to using 'nerds' in a derogatory fashion. Let's just stick with 'corrupt devs'.

I realized that I shouldn't characterize all devs and nerds that way when I wrote that. It's just that I made up that meme years ago that has played out imo:

"The geeks fail to understand that which they hath created."

Corrupt devs is more accurate for sure.

 

[AdrianX]

@AdrianX Appcoins have never made sense, and they weren't intended to.

http://nakamotoinstitute.org/mempool/appcoins-are-snake-oil/

They've been promoted by scam artists who just don't give a shit.

I'm in agreement, but an App Coin as a side chain makes even less sense.

 

[Christoph Bergmann]

I'm sorry, I suppose I subscribed to the thread too late: I'm very interested in LN criticism (I've many on my part): if you can point me to the right message I'll be grateful.


Well, that's the whole point of the LN, isn't? Do as many offchain txs before settling on the more expensive bitcoin blockchain.

Yes, full blocks are a big threat to the LN, and in particular to big hubs: that's why I find bigger blocks useful for every kind of evolution of Bitcoin.

I think first and major problem with LN is that you have to criticize it if you argue for bigger blocks. Always. There is no discussion about scaling, classic and bigger blocks where you don't meet the argumet: "But LN here and LN there".

In fact most people here I think have no problem with LN and like it very much to get live. But since it is not here, and since some people use it as an argument for not scaling bitcoin now, it's not very popular and people here became good devil's advocates.

 

[Dusty]

I'm in agreement, but a App Coin as a side chain makes even less sense.

Well, in every system where you offer a service (may it be something like storj, or maybe something like amazon ec2, or an advertising network, or whatever) you need some kind of accounting.

Then you have two choices: charge some credit in the system, and trust it for good behaviour (that's fine, it's the actual model and it works well enough), but you can also imagine a system where you do not need to trust it.

Having this choice can be better in some scenarios, so I don't see why to dismiss it altogether.
Also, all other conditions met, if you can choose between them with no drawbacks, I don't see why anybody would choose to trust, if you don't have to.

I think first and major problem with LN is that you have to criticize it if you argue for bigger blocks. Always. There is no discussion about scaling, classic and bigger blocks where you don't meet the argumet: "But LN here and LN there".

Actually, everytime I argue with a smallblocker about LN I say "LN is probably great, but to work as intended it needs very big blocks".

That infuriates them.
But it's true

 

[Justus Ranvier]

Then you have two choices: charge some credit in the system, and trust it for good behaviour (that's fine, it's the actual model and it works well enough), but you can also imagine a system where you do not need to trust it.

You left out the option of charging money. You know, like just about every other business on the planet.

Grocery stores don't need their own currencies, and neither do online storage services.

There are people who make up convoluted arguments to justify their desire to make money on an appcoin pump & dump, but their desire for easy profit should not be confused for something more than it is.

 

[sickpig]

@Dusty

Actually, everytime I argue with a smallblocker about LN I say "LN is probably great, but to work as intended it needs very big blocks".

That infuriates them.
But it's true

it is extremely true.

just have a look at page 12 of Tadge Dryja's slides used for his talk at HK scaling bitcoin conf.

As you can see even in the best "software" conditions LN will suffice to serves 8.3 million users a per year, if max block size will remain equal to 1MB.

Currently LN implementations can use only OP_CLTV and this means 20K user per year.

Another funny thing is that with a max block size of 32 MB LN will fullfill the neeed of only 280 million users per year.

 

[Dusty]

You left out the option of charging money. You know, like just about every other business on the planet.

Actually that was my very first option (a subset of "charge credit in the system"), and as I said, that's how things works now, and it's fine.

Grocery stores don't need their own currencies, and neither do online storage services.

That's certainly true for groceries, anyway it's not necessarily true for a system that could pay you sub-cent earnings.
There are now systems of this kind, but you have to trust them, and as such, they can't interoperate between them, only directly you with them.

There are people who make up convoluted arguments to justify their desire to make money on an appcoin pump & dump, but their desire for easy profit should not be confused for something more than it is.

I agree completely, I can't understand the relevance on what I'm talking about.

 

[Justus Ranvier]

I agree completely, I can't understand the relevance on what I'm talking about.

Your description sounded a lot like how Factom tried to argue that their system absolutely required a separate token (which they could pre-sell, of course) rather than just having the servers charge bitcoins.

"Charge credit in the system" is a pretty clunky way to refer to billing customers for products/services. When a barber cuts your hair and you pay him for the service rendered, there's no kind of special accounting other than the payment itself that needs to happen.

 

[freetrader]

"Kraken is asking whether to release MtGox data, PLEASE VOTE, this is important"

https://www.reddit.com/r/mtgoxinsolvency/comments/4ciwuf/should_the_mtgox_bankruptcy_trustee_release_the/

 

[Dusty]

"Charge credit in the system" is a pretty clunky way to refer to billing customers for products/services. When a barber cuts your hair and you pay him for the service rendered, there's no kind of special accounting other than the payment itself that needs to happen.

You seems to voluntarily trying to avoid the example I gave multiple times, and I don't understand why: while I completely agree that the usual way of paying for something can continue as is, I fail to see while this could be possible (or desirable) with new kind of activities that could pay (or accept) fractions of a penny.

These new kind of activities are certainly more apt to the Internet than the groceries.

 

[Justus Ranvier]

activities that could pay (or accept) fractions of a penny.

Bitcoin can already do that.

 

[albin]

Do we have any idea what the Core contingency plan might be should SF SW never activate? I imagine they have to have some strategy other than Maxwell threatening to quit again.

 

[cypherdoc]

Let Bitcoin burn?

 

[AdrianX]

Do we have any idea what the Core contingency plan might be should SF SW never activate? I imagine they have to have some strategy other than Maxwell threatening to quit again.

I don't know if you understood the strategy, it goes like this: SW first then 2MB HF, it wasn't presented as negotiable.

The solution is to cut Core out of the loop entirely, those developers who are development focused and not political fundamentalists will join the new Bitcoin development team, or implement SW.