Gold collapsing. Bitcoin UP.

[79b79aa8]

one thing we've discovered is that, despite early hype to the contrary, smart contracts won't bypass the legal system. complex investment schemes like the DAO will not function outside the purview of the regulators and the courts. still, smart contracts could at the very least be useful for regimenting routine digital transactions, for example those that will arise with the internet of things and with ever increasing automation. however, in order to function in that way, the contracts need to be fool-proof, their behavior completely predictable, so that the lawyers never have to come into play. another thing we've found out is that the etherium platform fails spectacularly in this second regard.

we have also been reminded that the creator(s) of bitcoin clearly anticipated both the promise and the perils of smart contracts, and decided that unleashing P2P cash was the obvious priority.

 

[steffen]

Interesting article, especially the list of patent application titles and their implications.

https://next.ft.com/content/2991f289-4533-38a3-bc88-4bbe56e6458c

 

[lunar]

For smart contracts to disrupt the legal industry by replacing lawyers as counselors and advocates, they'd need to massively empower the people that ordinarily seek independent third-party advice

Personal opinions on this.

Smart contracts like paper money are a prior communication of value, dependant on certain conditions being met. The common law principle is something that has been frequently overlooked becasue programmers either don't grasp this, lack the skill required to codify potential outcomes or worse decide they can force an outcome because their code dictates it.

My point is that we are in the business of communicating value between humans. Theoretically the free market of codified ideas should trend towards and build the perfect value signalling tools.

Something BSCore would do well to remember, is that attempting to control humans with code is doomed to failure. (either the code will not be used or the friction will increase until better code is adopted) Instead the goal should be to express the spectrum of all human needs (ideal money and common law) in the most eloquent way available.

Satoshi implicitly understood this which is why Bitcoin reunites the promise to pay (contract) with the payment itself (value), much as gold had done for millennia. The ideal money we are hoping to create has no tax to transfer between users (this is a friction on the system)

News flash.. Bitcoin is not perfect, (it's just the best we have to date)

This is becasue we have to pay for the security of the network. What is the minimum required to secure the system? Nobody knows, but one thing is for sure, due to free market competition it will trend to this value over time. If extra friction is added to the system (here's looking at you blocksize limit) One of two outcomes is inevitable. Either code will be adopted to overcome this friction (transaction fees) or use cases and users will migrate to a network without such friction (alt-coins) then Metcalfs law and tipping points will take care of the rest. Bye bye Bitcoin, hello New Coin.

I feel smart contracts not only face the same issues but also the massively more complex ones within the myriad outcomes of human necessity. The successful recipe should attempt to codify not just 'common law' but 'IDEAL common law'. If that sounds difficult, welcome to the machine.

 

[tynwald]

Does anybody who follows this thread work for a bitcoin-related company as their day job? I lost my job about 3 weeks ago, and have sent my resume to just about every big blockchain business, including Coinbase, Xapo, Blockchain.info, 21, etc. I have not gotten a single response. Are blockchain companies simply not hiring anybody or are the jobs just so competitive?

where are you based? what are your key skills and previous few roles @ Bitcoin companies?

 

[cypherdoc]

Another way to conceptualize these smart contracts, as has been mentioned in this thread a couple of times before in regards to LN, is as a larger form of a 0 conf tx. The problem with those are that circumstances and expectations can change between the time that parties open the tx and the time before it closes/clears/executes. Not to mention that it can execute in a totally unpredictable way, like a hack. In the case of a LN payment channel, or smart contract, lots of value can change hands before the opening coin amount finalizes in a time dependent manner, which has always concerned me. With full mempools and high fees, a spam attack could easily short circuit many channel closures.

Bitcoin imo was always meant to be p2p cash first and foremost. A "push" technology that can even be seen to not want to expose public keys for more than an instant during a tx if you use a new change key so as to limit a quantum attack. Given that ecash's primary purpose is to serve the people, this works perfectly well for small daily tx's and even for the more occasional large ones. Smart contracting though would probably be used for large sums over longer time periods more often putting them at higher risk of targeted hacking, such as we've seen with the DAO.

one thing we've discovered is that, despite early hype to the contrary, smart contracts won't bypass the legal system. complex investment schemes like the DAO will not function outside the purview of the regulators and the courts. still, smart contracts could at the very least be useful for regimenting routine digital transactions, for example those that will arise with the internet of things and with ever increasing automation. however, in order to function in that way, the contracts need to be fool-proof, their behavior completely predictable, so that the lawyers never have to come into play. another thing we've found out is that the etherium platform fails spectacularly in this second regard.

we have also been reminded that the creator(s) of bitcoin clearly anticipated both the promise and the perils of smart contracts, and decided that unleashing P2P cash was the obvious priority.

 

[lunar]

What a shit show. Condolences to all concerned.

 

[cypherdoc]

@lunar Wow, no kidding. My favorite comment so far:

 

[steffen]

My Bitcoin Unlimited 0.12 had crashed. I restarted it a few minutes ago and it displayed this message:
"Warning: This version is obsolete. upgrade required!"

What is happening? No new version seem to be available. Are the smallblockers fucking with us?

https://drive.google.com/open?id=0B2yBDEE4Ctf0dE0tVDdTd2FGRnc

Edit: Link to screendump added.

 

[cypherdoc]

Another way to conceptualize these smart contracts, as has been mentioned in this thread a couple of times before in regards to LN, is as a larger form of a 0 conf tx. The problem with those are that circumstances and expectations can change between the time that parties open the tx and the time before it closes/clears/executes. Not to mention that it can execute in a totally unpredictable way, like a hack. In the case of a LN payment channel, or smart contract, lots of value can change hands before the opening coin amount finalizes in a time dependent manner, which has always concerned me. With full mempools and high fees, a spam attack could easily short circuit many channel closures.

Bitcoin imo was always meant to be p2p cash first and foremost. A "push" technology that can even be seen to not want to expose public keys for more than an instant during a tx if you use a new change key so as to limit a quantum attack. Given that ecash's primary purpose is to serve the people, this works perfectly well for small daily tx's and even for the more occasional large ones. Smart contracting though would probably be used for large sums over longer time periods more often putting them at higher risk of targeted hacking, such as we've seen with the DAO.

to clarify further, unlike a Bitcoin p2p tx which has proven itself to be secure and where the coin is the bearer instrument itself, a smart contract forces you to relinquish control over your funds for a period of time which exposes it to a hack or change in sentiment or intent of the parties involved. now, Eth and Dao coders will tell you that you have complete control over your money and that it is completely safe and secure. but that's not necessarily the case as we've seen with this Dao hack. those coders would have to be on the level of a Satoshi to make such a claim and have the benefit of 7.5 yrs of a proven security track record. i know i sound like i'm placing an unfair burden of proof upon these coders when i say that but what i'm saying is the unfortunate truth of the matter. not only that, but this thread has shown many times over that knowledge and experience in many other disciplines is necessary to understand the economics and incentives behind Bitcoin. much of what makes Bitcoin work in the first place is it's emphasis on Sound Money. that's why you continually hear me drone on about this concept. i think it is key to understanding why it works. smart contracts are an extension of this concept that may or may not work. i've always felt they were putting the horse before the cart, as Bitcoin has not yet achieved mass adoption.

furthermor, i often get the sense that young coders live in their own worlds completely oblivious to how the real harsh world works. they sit there and think that a simple disclaimer on their websites which state something like, "all terms and conditions are enforced by code only and are not subject to common law. either accept these terms or go f*ck yourself. you have no power here". lol.
[doublepost=1466604740][/doublepost]

My Bitcoin Unlimited 0.12 had crashed. I restarted it a few minutes ago and it displayed this message:
"Warning: This version is obsolete. upgrade required!"

What is happening? No new version seem to be available. Are the smallblockers fucking with us?

isn't that what Thomas Zander was complaining about yesterday? kore has essentially released a HF forcing everyone to upgrade to it's new release? i could be wrong about this.

 

[AdrianX]

great post @lunar

My 2 satoshis on the ideas of Smart Contracts: the added utility is meh a nice innovation, cool we going to see some new products with the IoT. My biggest concern are we going to see Smart Contracts systemized with ideas like the Lightening Network and BS/Core and their descendants attempt to control the money.

The real problem that's solved, and the paradigm shifting benefits and value that is created by the cryptocurrenciesis is just better money, that's going to redefine social hierarchies, redistribute wealth and lift entire nations out of poverty.

Better money will put the power to generate wealth back in the hands of producers, and that's going to change everything. Just having access to better money will solve many of the world's most pressing problems, those related to exponential growth and environmental erosion, wealth inequality and generally our quality of life.

 

[sickpig]

My Bitcoin Unlimited 0.12 had crashed. I restarted it a few minutes ago and it displayed this message:
"Warning: This version is obsolete. upgrade required!"

What is happening? No new version seem to be available. Are the smallblockers fucking with us?

I don't think the crash is related to the message you're seeing.

The fact is that a few soft forks are in the process of being activated, namely:

BIP 68 - Relative lock-time using consensus-enforced sequence numbers
BIP 112 - CHECKSEQUENCEVERIFY
BIP 113 - Median time-past as endpoint for lock-time calculations

of those BIP 112 will be activated after block #419328 (see: https://bitcoincore.org/en/2016/06/21/csv-softfork-instructions/)

BU is just informing you that your node is going to receive a cut in its abilities to validate transactions since it won't be able to validate the new op_codes introduced by the aforementioned soft-forks.

BU will integrate such soft-forks the next time code will be rebased, see:

https://bitco.in/forum/threads/buip020-implement-bit-0-soft-forks-bips-9-68-112-113.1215/#post-22043

 

[steffen]

isn't that what Thomas Zander was complaining about yesterday? kore has essentially released a HF forcing everyone to upgrade to it's new release? i could be wrong about this.

I thought his problem was something related to P2Pool when I read it but my BU has nothing to do with that mining pool or any other pool. It is just a node accepting bigger blocks.

 

[AdrianX]

isn't that what Thomas Zander was complaining about yesterday? kore has essentially released a HF forcing everyone to upgrade to it's new release? i could be wrong about this.

That's what the CSV soft fork look like it'll be a hard fork in no time at all, centralized planning at the Core.

 

[freetrader]

EDIT 14 Mar 2017: since a lot of you are reading this old post after the 14 March 2017 BU node attack: the assert issue described below was fixed in BU. W.r.t. the 2017 incident, unfortunately an assert(0) was introduced in an unsafe manner in BU's early life, and that was exploited. A general review of the practice of having asserts in production code (which is still sadly the case in BU and Core today) and the risks and mitigations associated with the existing asserts is needed, as today's events show.

@steffen: Yeah, the warning has nothing to do with the crash, most likely.

I've had "sudden death" crashes of nodes before (Classic though), with no related error message in the debug.log, including one I reproduced a couple of days ago and for which Tom Zander pointed me at a fix he's integrated (would be in Classic v1.1.0 which he's released now):

https://github.com/bitcoinclassic/bitcoinclassic/pull/177/commits/8611bea574bd2f25469c046096e5a53b0cc04996

I don't know if BU has merged the above fix, but they should, it can cause spurious crashes if unfixed. There's probably others lurking in the code - what happened is that the assert() statement triggered, and it terminates the program without much further ado (and without a decent message being left in a log file).

The CSV soft-fork stuff is practically time-critical now, because the fork has locked-in and will activate at block 419328:

https://bitcoincore.org/en/2016/06/21/csv-softfork-instructions/

 

[cypherdoc]

great post @lunar

My 2 satoshis on the ideas of Smart Contracts: the added utility is meh a nice innovation, cool we going to see some new products with the IoT. My biggest concern are we going to see Smart Contracts systemized with ideas like the Lightening Network and BS/Core and their descendants attempt to control the money.

The real problem that's solved, and the paradigm shifting benefits and value that is created by the cryptocurrenciesis is just better money, that's going to redefine social hierarchies, redistribute wealth and lift entire nations out of poverty.

Better money will put the power to generate wealth back in the hands of producers, and that's going to change everything. Just having access to better money will solve many of the world's most pressing problems, those related to exponential growth and environmental erosion, wealth inequality and generally our quality of life.

furthermore, one of the purported benefits of smart contracting relates to trying to remove the burgeoning interface of lawyers and judicial regulation that exists today. i agree with this sentiment whole-heartedly. i just disagree with the solution. i would contend that excessive lawyer numbers and an over-reaching judicial system is a symptom of unsound fiat money that creates excesses everywhere you turn, with law being just one of them. with sound money, much of the speculation that exists in the world today would be reigned in and speculators would be turned into ordinary ppl havingto make prudent decisions in their lives once again. instead of gambling on derivatives and schemes that require excessive lawyering to enforce.

 

[sickpig]

of those BIP 112 will be activated after block #419328 (see: https://bitcoincore.org/en/2016/06/21/csv-softfork-instructions/)

for the lulz:

There is an ongoing soft fork of the Bitcoin consensus rules. While everything appears to be proceeding well, this article contains important information and checklists for miners and pool operators which must not be ignored.

If there is any doubt, miners and pool operators are welcome to contact us.

TL;DR

1. Check all your nodes have been upgraded to Bitcoin Core 0.12.1 or compatible software. This must happen before block #419328.
   
   
2. If you hardcode the block version please unset bit 0 of the version field before block 419328, or preferably stop hardcoding it and let bitcoind do it automatically.
   
   
3. Use a coinbase nSequence value of 0xffffffff will avoid any potential conflict with BIP68 and BIP113.
   
   
4. If you have to use a different nSequence value, you must follow the instructions carefully

i.e. there's no such a thing as soft-fork for miners!

 

[VeritasSapere]

My position on the situation with Ethereum now is that the developers are justified in presenting the community with any possible solutions they might come up with. If the majority of miners accept this change then it should be considered legitimate, since it would have come about from a simple mining majority deciding to change the rules of the protocol. This is no different to how we think Bitcoin should work, therefore the developers are justified in pushing out any code they might want and if the miners accept it, it should not be considered as a failure of Ethereum since Bitcoin would therefore also be vulnerable to this same "failure". Since they do share the same governance mechanism at this point.

To counter some of the language that has been used. I do not think that returning the investors funds should be considered as a bailout, since no extra taxes or inflation is created in order to "bail out" the DAO. I think it has more in common with a bank robbery, where the stolen funds are simply returned to their rightful owners.

Secondly I have heard people call it a rollback, equating it with what that would look like in Bitcoin, it is not a rollback, if any transactions are reversed or anyone else besides from the DAO token holders are effected by this fork I would be strongly against it. At this point I am empathetic with both sides of the argument, I would be happy with either outcome, since it is just a case of miners voting in order to change the rules of the protocol which in this case also extends to the Ethereum smart contracts themselves. I do not consider this to be a bad thing but a feature of the protocol itself. For the people out there that thought that they could have immutable contracts outside of any other legal jurisdiction or without any further outside interpretation or intervention then I do think their narrative might be broken, which is not a problem for my ideology at least.

I still support Ethereum and I do not think that all smart contracts on the platform are presently broken, the DigixDAO is doing fine for instance. I even think that Ethereum is still sound money, though not as sound as Bitcoin presently is of course @cypherdoc.

 

[cypherdoc]

furthermore, one of the purported benefits of smart contracting relates to trying to remove the burgeoning interface of lawyers and judicial regulation that exists today. i agree with this sentiment whole-heartedly. i just disagree with the solution. i would contend that excessive lawyer numbers and an over-reaching judicial system is a symptom of unsound fiat money that creates excesses everywhere you turn, with law being just one of them. with sound money, much of the speculation that exists in the world today would be reigned in and speculators would be turned into ordinary ppl havingto make prudent decisions in their lives once again. instead of gambling on derivatives and schemes that require excessive lawyering to enforce.

i hesitate to say this, as it will probably draw lotsa hate, but Ethereum & the DAO itself could be viewed in this light as just another money making scheme that's taking advantage of unsound fiat money...

sure, i'm willing to accept the proposition that this is not the case, but you have to consider that Ethereum's smart contracting is based on an unsound foundation; the securing of digital data outside of Bitcoin. we all know that data can be copied. we also know that most, if not all code, can be hacked. Bitcoin was the first to prove this is not the case; but only under a certain set of circumstances. this DAO event is showing that this bar that Bitcoin has created is extremely high.

for what it's worth, i am not against the concept of smart contracting in general. but i have always been dismayed at the premature push towards developing this tech as Bitcoin hasn't really even gotten off the ground yet as an established currency or unit of acct. we're almost there but i wish the community would've shown more patience in achieving this aspect first before pushing ahead with smart contracting. once Bitcoin is established, then smart contracting makes sense and would probably achieve higher levels of success.
[doublepost=1466612199][/doublepost]i'm sorry, but when i listen to this guy Griff Green, i simply cringe:

https://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-297-the-death-of-thedao-part-one
[doublepost=1466612532,1466611710][/doublepost]

Will Ethereum complete the trifecta of fail - ICO, future switch to PoS, bailout - and become a billion-dollar spreadsheet?

Note how these are actually intertwined. The ICO/premine ensures founders have a ton of power, especially after the switch to PoS, which ensures they can push through a bailout to help themselves and their friends. They can also control the timing of the move to PoS to their benefit. The ICO ensured they got paid before the system had to actually function as intended, so that issues can be responded to in an ad-hoc manner to keep the pump going by maintaining PR image. No real long-term plan, no conviction, just keep those plates spinning.

If you simply imagine what the best way for insiders to make the most money is, then everything that has happened so far starts making a lot more sense.

this pretty much sums it up.

Vitalik simply printed up a crapload of ether and sold it to investors w/o even publishing final code or concepts nor allowing a competition to mine those ether. contrast with Satoshi. published working code and then opened up mining to anyone who had the foresight to get in. i kick myself to this day (not so much) for having read about Bitcoin in 2009, only to dismiss it as some sort of scheme. i'm just lucky for keeping an eye on it and finally taking the jump relatively early compared to most.
[doublepost=1466612794][/doublepost]haven't commented on this for a while but note the divergence. still clinging to DXD and DZZ:

[doublepost=1466613440][/doublepost]nice perspective by Jerry Brito:

https://coincenter.org/2016/06/lets-take-deep-breath-fsoc-reports-warning/#.V2q62KNTArg.twitter
[doublepost=1466613658][/doublepost]where does one go to short Ethereum? note the lower highs and lower lows:

 

[cliff]

@cypherdoc "[The] bar that Bitcoin has created is extremely high."

^ Exactly. This might be one of the most important lessons here.

 

[cypherdoc]

note, Nordstrom's still looking sick: