Gold collapsing. Bitcoin UP.

Dusty

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Mar 14, 2016
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What does the section named "Relies on segwit malleability fixes" means in the slide?
 

cypherdoc

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Aug 26, 2015
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<--"Blockstream LN hub."
 
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Dusty

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Mar 14, 2016
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Hey @albin
When Lightning Network is released, who here is ready to lock away a year's salary in a Starbucks payment channel in order to scale?
https://www.reddit.com/r/btc/comments/4dklt7/when_lightning_network_is_released_who_here_is/
The proposed scenario is not completely correct:
  • They recommend to lock at most 20-30$ in a payment channel (don't ask me why: in my opinion that's impossible with a small blocksize)
  • If LN works as (they) expect, when you lock your money in the payment channel you can use it for most of every other merchant that uses LN because of payment routing: for example if your channel is with starbucks and you need to pay a music download on another site, if there is a channel between that site and starbucks LN will use it, so your payment will go through without opening another channel
  • While I agree that BS will try to develop an hub with many payment channels and getting fees for all of them that's not so easily done because for every channel they have to lock up money. So if they want to create 1 million channels with 50$ each they need to lock 50 million $: not very practical!
 
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Norway

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Sep 29, 2015
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cypherdoc

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R3's protocol "Corda", by Richard G Brown (CTO of R3):

http://r3cev.com/blog/2016/4/4/introducing-r3-corda-a-distributed-ledger-designed-for-financial-services

This is a very interesting read. Grab a cup of coffee and enjoy. These guys figured out that they don't really need "blockchain technology", and just made a protocol for what banks need today to make their internal communication more effective.
that doesn't sound like anything special at_all. not surprisingly, as i've never thought highly of Brown's understanding of Bitcoin. note that this design doesn't even mention the concept of Sound Money, which i happen to believe is the major driving force behind Bitcoin's success. it will be fun to see these guys twist in the wind in the coming years.
 

Norway

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Sep 29, 2015
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@cypherdoc
I think it's a very important article. Because R3 is the top level of banks' effort in exploring and developing "blockchain technology". And when they have to program the code to make it work for banks, they end up with something that has nothing to do with blockchain. It's just a one-to-one (+ regulator peeking peer) protocol for communicating debt and contracts.

They keep the term "distributed ledger", but it's only distributed between the two parties of the contract.

This is the beginning of the end of the "blockchain but not bitcoin" hype.

I think Brown understand bitcoin very well. And he has taken the R3 project to a place where it's useful for banks and not related to blockchains.

Bitcoin not affected. ;)
 

cypherdoc

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Aug 26, 2015
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@Norway

i agree completely.

reading that article was actually very comforting as the concepts in R3 are now realized to be totally orthogonal to Bitcoin concepts and philosophy. quite right; Bitcoin not affected.

but we actually knew that here in this thread a long time ago.
 

JVWVU

Active Member
Oct 10, 2015
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@cypherdoc
I think it's a very important article. Because R3 is the top level of banks' effort in exploring and developing "blockchain technology". And when they have to program the code to make it work for banks, they end up with something that has nothing to do with blockchain. It's just a one-to-one (+ regulator peeking peer) protocol for communicating debt and contracts.

They keep the term "distributed ledger", but it's only distributed between the two parties of the contract.

This is the beginning of the end of the "blockchain but not bitcoin" hype.

I think Brown understand bitcoin very well. And he has taken the R3 project to a place where it's useful for banks and not related to blockchains.

Bitcoin not affected. ;)
And as a banker invester I am happy, making banks more profitable makes me more dividends.
 
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cypherdoc

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Aug 26, 2015
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core dev keeps saying, "we've always changed things with soft forks. this time is no different". well, Mike Hearn:

It’s worth noting that Satoshi did not use the phrase “hard fork”; presumably the notion that any other kind of fork might exist didn’t occur to him. The idea of a soft fork wasn’t around back then, and rightly so, as the concept is itself deeply flawed: in a correctly functioning Bitcoin network no soft forks should ever happen.


https://medium.com/@octskyward/on-consensus-and-forks-c6a050c792e7#.szqn97ku1
 

albin

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Nov 8, 2015
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They recommend to lock at most 20-30$ in a payment channel (don't ask me why: in my opinion that's impossible with a small blocksize)
The solution to this problem is that they simply only have channels open with other hubs, and you get bitcoins from them by buying IOU entries on their side in fiat. In this scenario there doesn't need to actually be Lightning-to-the-end-user, and this is where the slippery slope to fractional reserve can happen in my opinion. It's ironic to me that in reality, a centralized LN is exactly the same use-case as Liquid. Or maybe it's not so ironic.
 

Justus Ranvier

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Aug 28, 2015
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@cypherdoc I'd recommend not taking apparent misunderstandings of sound money concepts at face value. The difference between an economy based on money creation and one based on sound money is not merely academic - it's a life-or death environmental difference.

An economy that contains money creation is an environment that favours a parasitical survival strategy based on win-lose economic transactions.

An economy without money creation is an environment that favours productive survival strategy that's based on win-win economic transactions.

If we create a sound money economy, the producers will prosper as never before but the parasites will face metaphorical (and sometimes literal) death. When bankers, politicians, and traditional economists talk about how the economy will collapse if the credit inflation process stops they are 100% correct - their economy will collapse and it will be a catastrophic for them.

It's not wise to underestimate the capabilities of the people who pursue the parasitical economic strategy - they are as skilled at producing deception and exploitation as the people who pursue the productive strategy are at creating economic value.

We're only going to get a sound money economy if the producers are as comitted to ending the way of life of the parasites as the paracites are committed to preserving it.
 
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albin

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Nov 8, 2015
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Suppose that LN does in fact work out they way they intend, but there is hub centralization (which I still can't see not being extremely plausible), and suppose they even totally nail how the routing should work.

Doesn't this expose the Bitcoin network to a potentially massive negative economic externality? (And this is a real one, not Adam Back misunderstanding that having a copy of the utxo set is an economic good for a participant that gets utility out of running a node)

Suppose you have a fairly large hub, and there is some kind of connectivity problem, be it technical, DDoS, whatever. Wouldn't this potentially trigger a run on the hub where everyone with current open channels is going to look to close them out to protect themselves? If that were to transpire, I don't think it's implausible that such an event could cause radical transaction backlog on the main chain, especially proportional to how much scaling they're getting out of Lightning on average. Suddenly you can DoS the entire Bitcoin network simply by attacking a large hub, which is a cascading failure mode that then makes all other hubs economically-insecure by calling into question whether channels can actually be enforced in time.

I think that's something to be a lot more careful about than just worrying about dust tx's.
 
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cypherdoc

Well-Known Member
Aug 26, 2015
5,257
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@cypherdoc I'd recommend not taking apparent misunderstandings of sound money concepts at face value. The difference between an economy based on money creation and one based on sound money is not merely academic - it's a life-or death environmental difference.

An economy that contains money creation is an environment that favours a parasitical survival strategy based on win-lose economic transactions.

An economy without money creation is an environment that favours productive survival strategy that's based on win-win economic transactions.

If we create a sound money economy, the producers will prosper as never before but the parasites will face metaphorical (and sometimes literal) death. When bankers, politicians, and traditional economists talk about how the economy will collapse if the credit inflation process stops they are 100% correct - their economy will collapse and it will be a catastrophic for them.

It's not wise to underestimate the capabilities of the people who pursue the parasitical economic strategy - they are as skilled at producing deception and exploitation as the people who pursue the productive strategy are at creating economic value.

We're only going to get a sound money economy if the producers are as comitted to ending the way of live of the parasites as the paracites are committed to preserving it.
really, really well said @Justus Ranvier
[doublepost=1459964658][/doublepost]lol

http://www.zerohedge.com/news/2016-04-06/greeks-confiscate-largest-amount-gold-ever-smuggled
[doublepost=1459964829][/doublepost]
Suppose that LN does in fact work out they way they intend, but there is hub centralization (which I still can't see being extremely plausible), and suppose they even totally nail how the routing should work.

Doesn't this expose the Bitcoin network to a potentially massive negative economic externality? (And this is a real one, not Adam Back misunderstanding that having a copy of the utxo set is an economic good for a participant that gets utility out of running a node)

Suppose you have a fairly large hub, and there is some kind of connectivity problem, be it technical, DDoS, whatever. Wouldn't this potentially trigger a run on the hub where everyone with current open channels is going to look to close them out to protect themselves? If that were to transpire, I don't think it's implausible that such an event could cause radical transaction backlog on the main chain, especially proportional to how much scaling they're getting out of Lightning on average. Suddenly you can DoS the entire Bitcoin network simply by attacking a large hub, which is a cascading failure mode that then makes all other hubs economically-insecure by calling into question whether channels can actually be enforced in time.

I think that's something to be a lot more careful about than just worrying about dust tx's.
hence, the 3 mo spam attack i talked about the other day in 5y by early adopters with coin bought in the single digits after we get back from @Norway's house.
 

johnyj

Member
Mar 3, 2016
89
189
First: who is "me" and "you"?
I'm a miner, you don't get this simple fact
[doublepost=1459965357][/doublepost]
core dev keeps saying, "we've always changed things with soft forks. this time is no different". well, Mike Hearn:

It’s worth noting that Satoshi did not use the phrase “hard fork”; presumably the notion that any other kind of fork might exist didn’t occur to him. The idea of a soft fork wasn’t around back then, and rightly so, as the concept is itself deeply flawed: in a correctly functioning Bitcoin network no soft forks should ever happen.

https://medium.com/@octskyward/on-consensus-and-forks-c6a050c792e7#.szqn97ku1
The soft fork practice is based on the same logic that Dusty holds: 99% of nodes are not capable of understanding what is going on, thus they deserve to be fooled into believing the new version does the same thing as before
[doublepost=1459965856,1459964963][/doublepost]
Suppose that LN does in fact work out they way they intend, but there is hub centralization (which I still can't see being extremely plausible), and suppose they even totally nail how the routing should work.

Doesn't this expose the Bitcoin network to a potentially massive negative economic externality? (And this is a real one, not Adam Back misunderstanding that having a copy of the utxo set is an economic good for a participant that gets utility out of running a node)
LN's payment channel model has been proved that have very little practical use, it mostly benefits centralized exchanges where they do large amount of clearing every day

Unfortunately this kind of transactions are the most in China (Chinese are not allowed to use bitcoin as currency, the only thing they do is speculating about its price on exchanges, and move coins between exchanges and web wallet providers), so they might benefit a lot from Blockstream's solution, so their community support it as a whole
 
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