Gold collapsing. Bitcoin UP.

[Dusty]

I'm a miner, you don't get this simple fact

And where should I get this information, apart from the fact that you are trying to blame core for the loss you got using SPV mining?

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

Actually, while I accept minor soft forks without complaining too much, if I could choose, I would only dohard forks to ensure everybody runs the latest code. That would put out the network lazy people that don't want to update his node, or started one a long time ago and then forgot it is there.

By hard forking we could also fix bugs we are still keeping around just to be compatible with the first version of bitcoin (just think of the strand 0 in op_checkmultisig...)

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

How could you prove something that it's not even completely defined, let alone implemented and deployed?
[doublepost=1459967818][/doublepost]

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

That gets worse: if I understood right (I wouldn't bet on it), you have only a fixed amount of time to redeem your transaction (e.g.: 24 hours), and with small blocks and a large backlog, you would probably run out of time and lose your funds.
[doublepost=1459968069][/doublepost]

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.

Yes, I came to the same conclusion: if the cost to open a channel is too high because the block size is artificially kept small, then new users would by bitcoins that only exists in the LN because it would be anti-economical to bring them on the blockchain. You then would have class A bitcoins (on the blockchain) and class B bitcoins on the LN.

But I don't find this brings fractional reserve: a bitcoin on the LN is the same bitcoin on the blockchain, the total number remains the same.

 

[cypherdoc]

i don't normally like what Emin Sirer has to say given i don't think he has a good grasp on what motivates individual actors in the Bitcoin ecosystem, but recently he has been talking more sense:

The Cost of Complexity

In essence, some Bitcoin devs are considering a trick where they repurpose "anyone can spend" transactions into supporting something called segregated witnesses. To older versions of Bitcoin software deployed in the wild, it looks like someone is throwing cash, literally, into the air in a way where anyone can grab it and make it theirs. Except newer versions of software make sure that only the intended people catch it, if they have the right kind of signature, separated appropriately from the transaction so it can be transmitted, validated and stored, or discarded, independently. Amazingly, the old legacy software that is difficult to change sees that money got thrown into the air and got picked up by someone, while new software knew all along that it could only have been picked up by its intended recipient. It is, by every metric, a brilliant trick, and I have tremendous respect for the people who came up with it. Most of my brain feels that this is a brilliant trick, except my deja-vu neurons are screaming with "this is the exact same repurposing trick as in the phone switch." It's just across software versions in a distributed system, as opposed to different layers in a single OS [1].

As systems get bloated, the effort required to understand and change them grows exponentially. It's hard to get new developers interested in a software project if we force them to not just learn how it works, but also how it got there, because its process of evolution is so critical to the final shape it ended up in. They became engineers precisely because they were no good at history.

If a developer wasn't around to follow through the development of a given piece of software, they will find the final state of the code disagreeable, at odds with how a smart engineer would have designed it had they done it from scratch. So they'll be less likely to commit to and master the platform. This is not good for open source projects, which are constantly in need of more capable developers. Nor is it good for systems where a network effect is crucial to the system's success.

The Bitcoin segwit discussion has been cast in terms of hard versus soft forks, with many reasonable arguments on both sides. I hope this discussion makes it clear that it's not just soft vs. hard forks, but it's also soft forks versus diminished interest from future developers. These kinds of clever tricks incur, not a technical, but a social debt that strictly accrues over time.

http://hackingdistributed.com/2016/04/05/how-software-gets-bloated/

 

[johnyj]

And where should I get this information, apart from the fact that you are trying to blame core for the loss you got using SPV mining?

See? It's this attitude from core makes people leaving

How could you prove something that it's not even completely defined, let alone implemented and deployed?

The concept behind LN is prepaid card and merchant alliance, it has been around for at least decades, back to 1970s, and later adopted by telecom operators as telephone/sim card, and mostly abandoned later on due to their low revenue potential and high maintenance cost, it is still popular in developing countries
http://blog.unibulmerchantservices.com/a-brief-history-of-prepaid-cards/

 

[Norway]

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.

@Justus Ranvier
Can I print this out on a large, high quality paper, frame it and hang it over the mantelpiece in my future luxury cabin?

 

[albin]

But I don't find this brings fractional reserve: a bitcoin on the LN is the same bitcoin on the blockchain, the total number remains the same.

It doesn't necessarily create fractional reserve, but if there's no connection between outstanding liabilities to depositors and what's necessarily actually locked up in channels, then the temptation to maximize revenue by putting bitcoins in excess of what reserves they estimate they would need to work is extremely compelling, and in doing so they will have re-invented a bank.

 

[Dusty]

See? It's this attitude from core makes people leaving

So I suppose I should use your attitude then:

I'm a miner, you don't get this simple fact

Please note that was your reply to a simple, civilized response from my part.

The concept behind LN is prepaid card and merchant alliance, it has been around for at least decades, back to 1970s, and later adopted by telecom operators as telephone/sim card, and mostly abandoned later on due to their low revenue potential and high maintenance cost, it is still popular in developing countries http://blog.unibulmerchantservices.com/a-brief-history-of-prepaid-cards/

No matter how many times you say wrong things, they still remain wrong.

I've already explained why: while LN and prepaid cards have some things in common (mainly to explain a new and difficult concept to a non-technical guy), they also differ for a few, but important properties:

• You can have back the credit you do not use: that's impossible with usual prepaid cards

• You can use the credit you have in the channel with A with whoever else happen to have another channel with A, either directly or even undirectly, i.e. via other channels of other users connected to it. That is also impossible with most of the prepaid cards, particularly if you buy a card with company A and you want to use it with a company B that is competing with A.

If the LN and its complex routing scheme works in practice (we will not know until it's widely deployed) the latest property could be very important and useful.
[doublepost=1459969889][/doublepost]

It doesn't necessarily create fractional reserve, but if there's no connection between outstanding liabilities to depositors and what's necessarily actually locked up in channels, then the temptation to maximize revenue by putting bitcoins in excess of what reserves they estimate they would need to work is extremely compelling, and in doing so they will have re-invented a bank.

Yes, I agree.

 

[Justus Ranvier]

It doesn't necessarily create fractional reserve, but if there's no connection between outstanding liabilities to depositors and what's necessarily actually locked up in channels, then the temptation to maximize revenue by putting bitcoins in excess of what reserves they estimate they would need to work is extremely compelling, and in doing so they will have re-invented a bank.

This is especially effective if the block size limit makes a run on the bank impossible due to insufficient transaction capability for real withdrawals.

 

[albin]

I had a thought about maybe how to tackle the question of whether LN moves IOUs, and the answer is of course it does, but the reason is because signed Bitcoin transactions themselves literally are promissory notes, just that get redeemed programmatically. The actual underlying asset is controlling the utxo set entry. The analogy gets even more compelling considering that your normal Bitcoin tx is exactly a demand note, and timelocks introduce another set of terms that promissory notes already routinely implement.

 

[AdrianX]

This interview with Jeff Garzik does give me faith that Bitcoin will survive the Block Stream hack.

He's mature enough to avoid the loaded questions and expresses great understanding of the situation. well done.

He outlines my biggest concern with Small Blockheads decentralization ideas he consistently defines how a limited block size results in centralization. @ 14:48

[doublepost=1459972058,1459971187][/doublepost]

It doesn't necessarily create fractional reserve, but if there's no connection between outstanding liabilities to depositors and what's necessarily actually locked up in channels, then the temptation to maximize revenue by putting bitcoins in excess of what reserves they estimate they would need to work is extremely compelling, and in doing so they will have re-invented a bank.

Bang on, I think there is enough data out there to effectively run a fractional reserve banking system with a asset settlement layer like Bitcoin and never actually settle. As @Justus Ranvier points out settlement could be effectively prevented from honoring real withdraws due to limited block space, and Wizard crypto could provide the justification that it was irrelevant.

 

[jbreher]

@cypherdoc
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.

Quoted for quoteworthiness.

eta: oops - I see Norway beat me to it.

 

[Zarathustra]

Seriously? I hardly equate living one-third to one-fourth as many years, and being physically miserable the entire time* to be 'good times'. I hardly think I am alone in this preference.

*maybe the end of the physical misery is the benefit of an early death?

Physical misery ...

 

[cypherdoc]

This interview with Jeff Garzik does give me faith that Bitcoin will survive the Block Stream hack.

He's mature enough to avoid the loaded questions and expresses great understanding of the situation. well done.

He outlines my biggest concern with Small Blockheads decentralization ideas he consistently defines how a limited block size results in centralization. @ 14:48

[doublepost=1459972058,1459971187][/doublepost]
Bang on, I think there is enough data out there to effectively run a fractional reserve banking system with a asset settlement layer like Bitcoin and never actually settle. As @Justus Ranvier points out settlement could be effectively prevented from honoring real withdraws due to limited block space, and Wizard crypto could provide the justification that it was irrelevant.

as Adam recently tweeted, apparently CSV allows these LN tx's to move back and forth forever within the pmt channel.

 

[AdrianX]

Nice comeback @Zarathustra in practice I agree with a lot of your opinions but they are a little radical.

That image says a lot given I recently read that we've reached the stage where over 50% of the world's population is overnourished (a result of cheap calories not nutrition) and 20% undernourished.

That coupled with some statistical research that shows obesity is more debilitating than cancer so yes it's not as comfortable as one my think.

Furthermore 1 in 5 North Americans suffer from mental health issues ie - stress unrelated to physical needs, with some new statistics recently published that social services are not working - in that poor people dieing approximately 13 years earlier than those with more income - where 50 years ago there was no statistical difference in longevity based on income.

I'm all for complex cooperation, it's the future, it resembles collectivism more so than individual anarchy. Thoe it's still anarchy by definition and sound Money is still the cornerstone.

the future is building on what is not moving backwards and undoing mistakes. So I don't agree we went astray 10,000 years ago but rather we've been learning and evolving ever since.

and to @jbreher point, while I like physical comforts they not necessary if one wants to live a content life. (3 Days in a hand made ice cave with no amenities in the mountains can give one a glimpse into how to prioritise. But for sure technology solves problems and there is a balance somewhere.

[doublepost=1459977210][/doublepost]

as Adam recently tweeted, apparently CSV allows these LN tx's to move back and forth forever within the pmt channel.

He's either working in the interests of those who depend on an inflating money supply, or he's evil.

 

[Zarathustra]

@AdrianX


> That image says a lot given I recently read that we've reached the stage
> where over 50% of the world's population is overnourished
> (a result of cheap calories not nutrition) and 20% undernourished.

Yes. That image shows the evolution of this species, including the final stage with the metamorphosis of the homo sapiens into the homo oeconomicus (= surplus producing tax slave).


> I'm all for complex cooperation, it's the future,

I'm not. I hate being enforced to interact economically with aliens, with TPTB, with people like Gregory Maxwell, Adam Back and Peter Todd, not to mention that catholizist collectivist psychopath.

I've seen the future, brother ...

Nevertheless I'm pro crypto. It's a weapon that will make nearly everything impossible that makes a society possible.

The Bitcoiners are going to totally destroy your society and your "laws"

https://bitcointalk.org/index.php?topic=470593.0

> the future is building on what is not moving backwards and undoing mistakes.
> So I don't agree we went astray 10,000 years ago but rather
> we've been learning and evolving ever since.

It is an evolutionary dead end if we are not able to overcome the society (surplus production). It's not the first species that learnt things that killed itself.

And I don't by the utopia of a prospering society without credit. To me that's fiction, ahistoric (austrian) science fiction. There is no such thing as an economy without debt. Debt (to TPTB) is the root of surplus production and growth. "The ultimate “foundation of the economy” thus is the weapon" (Dr. Paul C. Martin). It started everything. Tax debt leads automatically to money (= debt) creation. Beyond such an environment there is zero need and motivation to produce surplus and growth, and therefore never has been seen:

http://www.miprox.de/Wirtschaft_allgemein/Martin-Symp.pdf

 

[Lee Adams]

In essence, some Bitcoin devs are considering a trick where they repurpose "anyone can spend" transactions into supporting something called segregated witnesses.

That's what I thought at first, but the anyonecanspend trick was already used with P2SH. It is tried and tested! With that said, I think seg wit soft fork goes further, as recievers will not be able to stop themselves from getting segwit transactions that they do not agree with.

 

[cypherdoc]

@Lee Adams

SW also goes further by mandating a centrally planned 75% discount for SW outputs, witness data opening wide the script versioning system to much bigger more complex signatures, as well as other unknown attacks on ANYONECANSPEND.

 

[johnyj]

No matter how many times you say wrong things, they still remain wrong.

 

[Dusty]

That's what I thought at first, but the anyonecanspend trick was already used with P2SH

How so?
P2SH is a normal transaction where the output scriptPub has this form:
<OP_HASH160> <redeemScriptHash> <OP_EQUAL>

 

[johnyj]

This article explains most of my concern with a soft fork, worth reading!
http://hackingdistributed.com/2016/04/05/how-software-gets-bloated/

In my experience, software bloat almost always comes from smart, often the smartest, devs who are technically the most competent. Couple their abilities with a few narrowly interpreted constraints, a well-intentioned effort to save the day (specifically, to save today at the expense of tomorrow)
.
.
As systems get bloated, the effort required to understand and change them grows exponentially. It's hard to get new developers interested in a software project if we force them to not just learn how it works, but also how it got there, because its process of evolution is so critical to the final shape it ended up in. They became engineers precisely because they were no good at history

 

[freetrader]

Open letter to Roger Ver re: shadowbanning transparency on Reddit
https://forum.bitcoin.com/bitcoin-discussion/open-letter-to-roger-ver-re-shadowbanning-transparency-on-reddit-t6922.html

A little promotion for your well-written article in there too, @Aquent