Gold collapsing. Bitcoin UP.

albin

Active Member
Nov 8, 2015
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Some possibly unfair bashing, but I've had this feeling for a really long time that might warrant some /u/ydtm level research.

If you've seen The Big Lebowski, notice how the protagonist kind of routinely regurgitates the verbiage of people around him without an authentic understanding (for largely comedic value), for example "this aggression will not stand", "coitus", "in the parlance of our times", etc.

Now listen to pretty much anything Adam Back has to say, find the person or persons in the ecosystem most closely associated with that particular issue or argument and check out what they have to say, and tell me Adam Back isn't just doing exactly the same thing as some mediocre second-hander co-opting jargon he doesn't seem to really completely understand.
 

cypherdoc

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Aug 26, 2015
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@tynwald

thanks for verifying something I've anyways suspected from the video Q&A when pieter dodged the 4 Mb question. Why do small blockists always say that "everyone loves SW" when its obviously not true?
 

cypherdoc

Well-Known Member
Aug 26, 2015
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@王英清:

I wonder what your perspective is on this development and how it will affect Bitcoin in China:

http://www.nasdaq.com/article/china-joins-the-blockchain-race-with-chinaledger-alliance-cm614734

Of course, East and West are interrelated, so I'm also curious how you view this will affect Bitcoin internationally.
i made a post a few days ago about how i though R3 could only be a good thing for Bitcoin by serving as a stepping stone for banks to eventually explore Bitcoin itself. all this talk about "blockchain" serves to raise awareness of Bitcoin and allows banks and IT companies to experiment with the concept w/o undercutting their national currencies. and that's ok for now; until they discover that "real" security and utility can only come from a "buy in" from the masses. private blockchains won't allow individual participation in security, such as setting up full nodes to assist in record keeping and transmission of tx's worldwide. security will only come from "signing" by the involved institutions trying to perpetuate a blockchain and this sacrifices not only security but integrity. integrity in the sense of the controlling centralized institutions changing the record/ledger when convenient. as i and others have said for years, they will just be shared SQL databases btwn a few institutions that "trust" each other. extending this entire concept to China is a good thing in raising awareness there in Bitcoin concepts and creating competition even tho it's at the private blockchain level. as the article states, coding expertise is scarce in China, which surprises me to a degree. this initiative should change that, which will be a good thing in bringing more competition to core dev coding. it also will bring an ever increasing awareness to the Chinese people. we'll probably see more Bitcoin nodes popping up in China in the near future.

as far as Bitcoin mining in China? i think the Chinese gvt is not so ignorant as to realize that blockchain may not work. it's unproven and anyone with half a brain realizes that gvts and banks are avoiding the real question that Bitcoin asks; that of the integrity of money. aka Sound Money that i always preach about. they know that Bitcoin is a revolution coming from the masses and that it has the potential to change everything about central banking broadly and the USD reserve status more specifically. i don't think China would mind unseating the dollar. if they can't have the yuan become the next reserve currency (i don't think they can) then a neutral reserve currency would be the next best thing. and since China holds the lead today in Bitcoin mining, they shouldn't want to change that, just in case. if in several years it becomes clearer that Bitcoin is gaining traction, they actually might want to facilitate and grow mining. it's about hedging and maintaining a lead.
[doublepost=1462723755,1462722845][/doublepost]here's a nice f/u to the ChinaLedger article:

Garzik calls it “Bitcoin with a training wheel.”

https://www.cryptocoinsnews.com/jeff-garziks-stealthy-ploy-to-get-bitcoin-onto-private-blockchains/

[doublepost=1462723961][/doublepost]He goes on: “The private networks, once you get them on Bitcoin technology, it’s very easy to upgrade them to a public network from a private network. That’s my halfway stealthy strategy to get Bitcoin into large institutions. And it’s an amusing game where sometimes you have to just change the name from Bitcoin to blockchain and all of the sudden they’re happy again.” For now, large institutions have not shown much interest in the Bitcoin itself.
[doublepost=1462724951][/doublepost]hmm, of all the core devs, Garzik is the most level headed when it comes to understanding Bitcoin from the business side and acting upon it. yes, BitSat was a failure but that's a concept that will come. at least he tried. Bloq otoh could become quite a force in core development with time. one could argue that Maxwell has also been successful from the business side with Blockstream and their $76M but i don't think that's true. for instance, most of what he says from the economic side of things is usually dead wrong or ignorant. he and the other core devs (& Back) also have a totalitarian attitude. if that's too extreme for you then it IS fair to say he (Maxwell) doesn't know how to get along with ppl. and when push came to shove, why did he choose Blocktream vs Bitcoin (giving up his commit rights)? but back to Garzik:

“They don’t have this depth and technical expertise in terms of blockchain like we do,” Garzik said. “Outside of Blockstream, we have the most core developers on our team of the other companies. The differentiators are expertise, software and as well as being on the market and being well-known.”

his long time experience with RedHat surely is a big advantage with open source tech. and his position on the blocksize debate has been more intuitive and compromising compared to Blockstream. as i said before, the more participation and competition that enters the Bitcoin space, the better.

i wish him and Bloq the best of luck.
[doublepost=1462725341][/doublepost]btw, Garzik is the second major player in the Bitcoin space that has admitted that they will help the private blockchain space perpetuate their fallacy, as long as they get paid. Sam Cole was the other one. at least these two are honest about it; guys like Tim Swanson are not.
 

Richy_T

Well-Known Member
Dec 27, 2015
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Yes, but as I tried to explain in my post, to verify a signature you need the public key and bitcoin adresses do not expose them (since it's sha160 hashed).
So when you sign a message with your wallet you create a signature that includes both the ECC signature and a parameter used to recover the pubkey associated with the address.
Ah, good information. And clarifies something I was wondering about.
 

freetrader

Moderator
Staff member
Dec 16, 2015
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@cypherdoc : Garzik is funny, and though I'm rooting for his strategy I can't help wondering how successful it will be.
coding expertise is scarce in China
This notion also surprised me, especially because China always ranks very highly in international programming contests [1], and clearly has a huge base of talent.
It must be something to do with insufficient awareness (or attractiveness?) of Bitcoin as a development arena. I've little doubt that Bitcoin Core is seen as the dominant development project, but at least initiatives like ChinaLedger open a national discussion for digital currency related developments.

@王英清: is there large awareness of various implementations and wallet software for Bitcoin in China? Do you see a longterm survival / prospering of Bitcoin in the face of government-run digital currencies?

[1] https://en.wikipedia.org/wiki/ACM_International_Collegiate_Programming_Contest
 
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Richy_T

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Dec 27, 2015
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Can someone please confirm how fees are calculated with SW?
I believe it's not how fees are calculated but how priority is calculated which is based on fee included and the byte size of the transaction. The byte size is now a lie for segwit transactions and can lead to a segwit transaction of the same or even a larger size than a regular transaction getting a higher priority.

This is less of an issue if blocks aren't full, of course.

Miners may use their own prioritization code, of course but this is not directly supported in the standard Core client and thus miners are unlikely to use this by default (This is just another argument for modularization, BTW).

Miners might realize they're throwing money away using this scheme and switch to something but sadly, once segwit soft fork activates, a lot of the damage has been done since every client going forward will need to include code to support the segwit blocks which are forever in the blockchain.
 

cypherdoc

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Aug 26, 2015
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Richy_T

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Unlimited deserves far more nodes than it has and it would have, if there was and is not this crazy narrative "Running any software beside core will make you loose money".
There has also been a focus on Classic recently which has taken many nodes from Unlimited. Hopefully it will be temporary but I can see why it's happening.
 

Inca

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Aug 28, 2015
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What is apparently important is building up bitcoin as an asset class and store of value first, with usefulness as a medium of exchange coming distant second. Thoughts from the floor on this? My view would be that bitcoin is a perfect digital sound money substitute for gold and actually one of the great strengths of bitcoin is that it can be both a frictionless payment system and a concomitant store of value.

It seems completely obvious to me that, after an initial bootstrapping phase, for a digital token to retain a store of value it must have utility. The more people who use bitcoin as a medium of exchange the more it will function as a store of value.

Taking this to extremes if we have 1 billion people transacting with bitcoin then by necessity it will take on a vastly larger market capitalisation and store of value. In contrast if bitcoin is used by 100,000 people as a digital gold then that doesn't necessarily follow. Lejitz is basically saying that we don't need to focus on usage of bitcoin as a payment network (and by extension, user numbers and scaling is unimportant) because SoV is the only thing that matters.

It seems like the small block brigade of which the OP is a rabid member fail spectacularly at logic because currency utility and store of value are entwined and inseparable components to bitcoin. We would still be using gold if it allowed a frictionless medium of exchange - the fact it doesn't allowed governments to steal with inflation via central banking with fiat currency.
 

Peter R

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Aug 28, 2015
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Yes, but as I tried to explain in my post, to verify a signature you need the public key and bitcoin adresses do not expose them (since it's sha160 hashed).
So when you sign a message with your wallet you create a signature that includes both the ECC signature and a parameter used to recover the pubkey associated with the address.
It depends if you're talking about a Bitcoin-signed message or the signature included in Bitcoin transaction. The latter includes the pubkey while the former does not.

As pointed in on p. 47 of this document from Certicom (http://www.secg.org/sec1-v2.pdf), it is possible to recover the pubkey from the signature alone (actually, it is ambiguous to one of two pubkeys). The Bitcoin-signed message protocol takes advantages of this, which is why the resulting signatures are so short. It appears that Satoshi did not know this when he designed Bitcoin, and thus bitcoin transactions unnecessarily include the pubkey as part of the signature.
 

Dusty

Active Member
Mar 14, 2016
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what is the "parameter"?
It's a technical matter, you can find an implementation here:
https://github.com/bitcoinjs/bitcoinjs-lib/blob/master/src/ecdsa.js#L165
The relevant crypto-theory is in section 4.1.6 of this document (page 47):
http://www.secg.org/sec1-v2.pdf
[doublepost=1462730629][/doublepost]
It appears that Satoshi did not know this when he designed Bitcoin, and thus bitcoin transactions unnecessarily include the pubkey as part of the signature
That's exactly what I was wondering. My new question then is: why don't use this property in SW?
Maybe the problem is the fact that the pubkey is not recovered deterministicly but you have a small number of candidates and you have to identify one of them to avoid checking all of them (and losen the security, together with the time for the verification).
 

Peter R

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Aug 28, 2015
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@Dusty: I'm not sure; maybe they are using it in SW. It seems it would make sense to do so.

Regarding the small number of candidate pubkeys, for us there would only ever be two. The way this is dealt with for Bitcoin signed messages, is that the first byte of a Bitcoin-signed message signature specifies which one of the two pubkeys should be considered (and also specifies whether the Bitcoin address corresponds to a compressed or uncompressed pubkey). In other words, the pubkey ambiguity is not a problem.
 

freetrader

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Staff member
Dec 16, 2015
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Interesting proposal for supporting alternative mining network with low/zero fee transactions:

https://www.reddit.com/r/bitcoin_uncensored/comments/4iff6r/backpay_proposal_how_users_can_impact_a_change_in/

It seems fairly roundabout, and strange that a 4-year old user with apparently no posting history submitted it. Could it be that the user deleted his complete previous history to reset his account?

Anyway, it seemed worth another consideration although I thought I'd seen similar proposals (less rigorously described) before.

I guess my first objection would be that Corps could easily handle such transactions as well - nothing to stop them adding an option for it to steal support at only the cost of the lost fees. It would also necessitate keeping a whitelist of pools to support when transacting, which seems kludgy. Although I have not redone the math, I think with current alternative mining support (let's say 5%) the take-off phase might involve exceptionally poor confirmation times for such transactions.
 
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