Gold collapsing. Bitcoin UP.

[MoonShot]

You keep saying this over and over again, but it makes no sense. .... Raising the maximum blocksize limit does not have the same effect, though.

I cannot fathom how this "orphan risk cost" would work in practice. SInce production of blocks is a variable time measured in minutes, not miliseconds, then how could miners decide to add/ignore txn that take microseconds to append? and how could adding one txn be remotely linked to the loss of one block reward (+fees)?

Indeed, if time is critical and miners want to get on and solve the block asap then they would NOT do some calculation for each and every txn i.e. simple calculation would yield the most profit overall, not some vague marginal cost vs "orphan risk cost".

 

[Justus Ranvier]

No I do not. I want Bitcoin to be a system where a small minority of financial elites or any other kind of minority can prevent a hardfork. This is not control, it cannot impose changes but only prevent them. The reason we need this is to differentiate ourselves from the existing fiat system where elites can impose changes.

I'll assume for the sake of argument that you're being honest about your intentions.

You will never achieve that goal not only because it is impossible, but also because it directly contradicts itself.

A hard fork a synonym for the users of one currency deciding to switch to another currency. A minority which is capable of preventing a hard fork is a minority that can force the majority of Bitcoin users to continue using the currency against their will.

Not only do you not have the power to do this, but if you did have that power you would be demonstrating that Bitcoin is in fact identical to the existing fiat system where the elites can force the rest of the population into staying in a currency they don't wish to be in!

The biggest problem I've been wrestling with over the last few months is the question of why so many supposedly-intelligent people would fall for such an obvious self-defeating trap.

The best answer I can come up with is a combination of laziness, sunk cost fallacy, greed, and not being as intelligent as I originally thought.

As long as you never examine (laziness) the argument, "hard forks must be prevented at all cost because <reasons that are actual circular arguments>". then you have a very easy task if you want to protect Bitcoin: just prevent all hardforks.

The problem with this strategy is that it's the wrong action. Not only does 100% of the effort invested into this strategy fail to achieve it's goals, but it actively harms them because of opportunity cost.

Sometimes when people who have invested in a failed strategy start to suspect they made a mistake, the pain of realizing the loss is too great (sunk cost fallacy) so they refrain from realizing it. In the case of Bitcoin, they might want to avoid voicing their concerns because of the negative effect it could have on their career and/or Bitcoin holdings (greed).

There was never any path to victory for BItcoin other than convincing an economic majority of humans that Bitcoin's monetary features are superior to all alternatives (a limited transaction rate for the sake of preventing hard forks is not a useful monetary feature). If it's not possible to achieve this, then Bitcoin will fail.

All efforts motivated by a desire to avoid the work of deriving the features that separate good money from bad money and building the pool of work that will allow this knowledge to be promulgated to the general population are not only useless, but they actively get in the way of people who could be doing that work.

 

[cliff]

@79b79aa8: Interesting insight here - See underlined parts - I think there is quite a bit of truth here RE: potential impact of ETF.

AK: Right now the key event in Bitcoin will be not the blocksize quarrels or the halving. It’s the approval or disapproval of Winklevoss brothers’ application for bitcoin ETF in the US.

Americans are ready to pay twice as much for bitcoin because they do this through their broker and they don’t want to bring money to cryptocurrency exchange. There are different reasons, but the main is that people don’t want to risk. We think that if the Winklevoss’ application is approved, the bitcoin price can easily rise to 2 and even to 10 thousand dollars.
​

The ETF could be like a Coinbase in a way - a fine on-boarding vehicle for those just getting acquainted with BTC and for those who prefer the efficiency and safety (via insurance, etc) of a bank-like institution.
------------
Separate issue - I've been thinking about the impact of TX fees over the long-term. Suppose fees will never disappear and that they will continue to fluctuate based on demand for block space. It seems that as BTC use increases, its long-term viability may decrease - this is irrespective of fee size, but the impact may be compounded/accelerated if the avg fee increases over time.

More particularly, overtime the amount of wallets with balances less than the minimum TX fee will increase as usage increases. This does not seem sustainable w/o the use of physical btc or a secondary layer (no fees or very low fees obviously avoid or delay the effects). Having said that, I don't imagine that I'm the first one to think of this and there must be some folks who have explained why its not a problem or how the issue is solved (maybe this is just another [really obvious] way for explaining the blocksize debate that I've never really appreciated/understood?).

Pre-Empt - I don't think "scarcity" benefits associated with increasingly paralyzed coins is all that compelling w/o a good argument for why additional scarcity beyond the 21M coin limit is a healthy thing for the network. i.e., seems like the benefits of hoarding/savings have their own limit and can reach a point of diminishing returns.

No concern trolling here - just trying to wrap my head around this; I hope that I'm way off in my thinking here. Seems like there should be a way to estimate the effect of fees RE: coin paralysis at various points in the future under different scenarios, but I'm not really sure how to go about it. Any ideas to consider or articles to read?

 

[cypherdoc]

@Bloomie

tl;dr: my argument is this: if, as moderator of the Economics & Policy forum, you allow me to Move spam threads, why can’t i Move spam posts as well?

we have covered this issue via PM dozens of times

dozens? why do you exaggerate? below are the 11 PM’s i’ve sent to you about this spam situation covering 3 separate conversations since last October. note the first 2 (Oct, Jan) were simple inquiries by me triggered by my surprise that i couldn’t delete/move obvious advertising spam in this thread. the third did result in a back and forth disagreement btwn us on 5/9/16 and was triggered by my not understanding your reasoning. since i seem to be more present here in this thread, my only desire here is to allow me to deal with spam more immediately without having to wait the sometimes 24h or more for you to get to it. and i’m talking about the spam that the guys report to me or that is blatantly obvious. not @NashGuy or @jonny1000 type posts at all. i find it distracting and am concerned about some of the links leading to malware. i’ve already stated for many years that i am totally anti-censorship and have never demonstrated any tendency to want such a power. esp after what happened to this thread after thermos. so for you to infer otherwise to everyone here is a low blow. also after considering your arguments to my initial PM’s below, i thought it was reasonable not to have me delete spam posts but simply to be able to move it to the same part of the forum (Meta) where i move spam threads. i hardly find that an unreasonable request.

No, I will not give you access to the server or the forum's backend.

why would you characterize a simple request to be able to move posts out of GCBU as such? where did i ever ask you about having special access to a server or backend? everything i’ve said about this issue is below in my PM's. i simply want to be able to Move (not delete) spam out of this thread.

If you continue this, like you have over the past few months, then we should reconsider your moderatorship, which is mostly a vanity title anyway, as there is almost no moderating that needs to be done in this sub-forum.

you’ve threatened me before about this. why the authoritarianism? of course, only after i brought the thread here that jump started this forum. which is the truth as barely anything was happening here before GCBU arrived. everyone should know that @Bloomie solicited me on XT-IRC several times last year July to bring this thread here after it got locked on BCT b/c he knew we could jump start his forum. after several overtures, i told him i would if i could be moderator of my thread so as to physically take the position away from a possible censor. now the issue for me is simply one of me being able to move spam posts out of GCBU. you say it would create more work for you; if that’s true, why the inconsistency btwn me being able to move threads and posts to the same Meta forum? also, why would thermos accept a situation where, by letting his mods delete/move spam, it would lead to more work for him? not that he and his mods should be a standard, mind you. the one good thing about those other places though is that we never see real spam posts or threads b/c the mods are allowed to delete/move that stuff. that’s kinda what i’d like to achieve here if possible. it’s only when they over step to censor opinion where the problems begin. and i would never do that.

for free

really? what do all these ads we see around here do then?

here are my 11 PM’s over 3 separate conversations to @Bloomie about this subject. certainly not dozens. i can’t copy/paste his exact responses b/c i know he’d be pissed if i did: https://bitco.in/forum/threads/this-vs-forum-bitcoin-com.84/#post-1578:

10/31/15

Is there a reason I can't move or delete this post in my thread? It's blatant advertising spam and I already moved his new thread in this forum over to Off Topic.

https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-82#post-2977

1/2/16

I still don't get why I have moderator privileges to move entire threads to Off Topic but can't delete spam posts in my gold thread? https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-225#post-8380

1/2/16

I did? I'd like them back, if so, only to deal with advertising posts like this.

5/9/16

as moderator of the Economics & Policy forum, can i get privileges to Delete spam posts like the one clogging up my thread?

5/9/16

yes, we did, and i still don't quite get it. as you said, you're not always around and i think i've demonstrated that i'm not an unreasonable mod. and those spam posts are distracting and annoying to other posters. i get that you want to delete the acct simultaneously but that isn't a complete explanation. i could delete a spam post, report the acct to you, and then you could delete it.

how about at least Moving it, like i can with spam threads?

5/9/16

why do you think mods on other forums are allowed to delete posts?

5/9/16

of course not. you asked why i said your answer is incomplete. you gave reasons that don't make sense to me. if they did make sense, then why would other forums allow their mods to delete posts if this was such a reasonable position? that's what i don't get.

the only posts i'd like to delete are the spam posts i've reported to you. do you see any evidence of posts that i would like to delete otherwise? no one's attacking me in my thread and no one argues with me and i don't with them. why would you even infer that?

i've told you why i'd like to delete spam posts; you're not always around and it's distracting. i always notice these spam posts before you do so it would seem rational for me to deal with them w/o having to bother you since i am a mod of that forum.

5/9/16

what about my request to Move spam?

5/9/16

how is that consistent with me being able to move threads?

5/9/16

if you trust me to move threads, why can't i move posts?

5/9/16

i'm sorry i identified an inconsistency in your arguments. funny thing is, my intent was only to "help you" by dealing with spam in a reasonable way. i don't need to delete anything; moving spam posts would be equally useful for both of us. nothing in my request is unreasonable.

 

[Peter R]

... If orphan risk cost is 50% of miner revenue, then "things break down" yes, this does not really imply much about the orphan rate itself....

Can you explain how orphan risk could be 50% of miner revenue and the orphan rate not also be very high?

 

[79b79aa8]

@cypherdoc

i suppose @Bloomie 's point is that even if you wouldn't abuse supermod power, you could, which is bad enough, both in principle and given what we've seen in the space. in addition, it's a power you may not want to have, as you could be criticized for it even if you don't wield it. in any event, the spam has not become a serious issue, there is little of it and there is a report button.

thanks to both of you for making possible and sustaining this great thread.

 

[bitsko]

Yes, thank you @Bloomie and @cypherdoc for the space and content.

 

[pekatete]

@cypherdoc @Bloomie - I concur with @79b79aa8 in regard to the level of spam in this thread to warrant a daily weeding. I suppose if the spam rate increased then a more frequent visitor to the thread / forum (should super mod not be able to attend) would have to be assigned the task of weeding the spam.

Though by all accounts it is @cypherdoc 's thread, given his / her level of engagement in the thread's content and how easily lines could be blurred, I'd suggest should the line be crossed with regard to spam rates, a person that is not greatly involved in participating in the thread would be a better candidate for pruning the spam.

Saying that, what a thread!

 

[freetrader]

@cypherdocthanks to both of you for making possible and sustaining this great thread.

... and forum, @Bloomie. No doubt a lot of thankless work that we mostly don't see.
My feedback is that the level of spam is really low. Occasionally sometime swamps a couple of threads, but it's quickly cleaned up and I have only had to use the Ignore twice or so in my entire time on this forum.

 

[lunar]

I want Bitcoin to be a system where a small minority of financial elites or any other kind of minority can prevent a hardfork. This is not control, it cannot impose changes but only prevent them. The reason we need this is to differentiate ourselves from the existing fiat system where elites can impose changes.

You will never achieve that goal not only because it is impossible, but also because it directly contradicts itself.

Thank you. @Justus Ranvier It's something I wish more people understood.

@jonny1000 says " I want to system where a minority can prevent a hardfork (change)"
this = "I want a system that the richest and most powerful minority can prevent change and thus control humanities money" - Doh !

I think the issue comes from a lack of understanding on the true nature of money. MONEY IS THE COMMUNICATION OF VALUE. (over distance and time) Nothing more.

Post bitcoin - (the analogue to digital conversion of money) - money becomes open source code, as such it will, over time, become the perfect tool for the communication of value. (perfect digital money) (becasue you CANNOT stop people from running the code that benefits them the most)

principle properties of ideal money
1. General Acceptability 2. Portability 3. Indestructibility or Durability 4. Homogeneity (fungibility) 5. Divisibility 6. Malleability (used to mean physical form, but post blockchain this means digital)
7. Recognisable 8. Store of value.

At first glance these properties seem to require money to be some fixed thing. (tick all the boxes and we have perfect money) This is simply not true for digital money. You could probably make examples for each case but just to make the point i'll choose. 4

4 Homogeneity (fungibilty) all units should be equally valued and recognisable. There are already attempts to blacklist and identify coins owners if this ever becomes pernicious, coins will loose this property. By being able to prevent a hardfork jonny's argument is essentially saying that 'now and forevermore there is no scenario, that will require a hardfork to fix bitcoin fungibility. (or any other property)

If you are the rich and powerful to game this is simple - Manufacture an externality that favors you, (some coins good, others bad) and that only a hardfork could remedy. - - prevent hardfork - - profit

If you prevent hardforks, bitcoin can't become perfect money, another digital coin will evolve to fill this gap - hint nobody knows the exact form perfect digital money will take, as it doesn't exist yet.

The only practical way to prevent a minority of financial elites or any other kind of minority taking control of bitcoin (the Original 51% attack) is to have the rules of the majority be overpowering. Don't fight change embrace it, let the evolutionary pull towards perfect money happen and do everything to make bitcoin ruled by the majority. All efforts to the contrary will slow this progress, and as such, I believe are an attack.

 

[Justus Ranvier]

I think the issue comes from a lack of understanding on the true nature of money. MONEY IS THE COMMUNICATION OF VALUE. (over distance and time) Nothing more.

Kind of, but not really.

The biggest problem I have with that explanation is that "value" is a verb, not a noun. Just because in English we can form grammatically-correct sentences that turn arbitrary verbs into nouns doesn't mean those sentences meaningful. You can probably get away with it using that way if you always remember that value (noun) is a placeholder for some other, more coherent concept, but it's better to just stop using the word "value" as a noun to reduce the possibilities for errors in thinking.

Maybe we need a few more steps in order to get from the current understanding to @DanielKrawisz's explanation of monetary behaviour.

Most humans engage in social accounting. This is as simple as, "my neighbour helped me when I needed a favour, so I should probably help him when he requires a similar favour."

Humans are very good at this type of accounting and keeping track of the relative value of favours.

Monetary behaviour happens when a group of humans decide to start using a tool (currency) to universalize their social accounting.

Describing a movement of currency as a communication of value is terribly imprecise. The information being communicated is the fact that the spender of the currency has performed more favours for others than he has received, and so the recipient can safely give the spender a product or service without inadvertently helping a non-reciprocating parasite (free rider).

This explains why the cardinal sin of monetary behaviour is the creation of new currency units, and why the parasites love expanding currency supplies. An expanding money supply allows the free riders to consume without producing and thus circumvent the entire reason for having monetary behaviour in the first place.

 

[Aquent]

The biggest problem I've been wrestling with over the last few months is the question of why so many supposedly-intelligent people would fall for such an obvious self-defeating trap.

We shouldn't lose sight of the very nascent nature of this technology or the many loopholes it necessarily has at this stage. It is barely seven years old. When computers were seven years old, they were carried out by, mostly, women, calculating stuff by hand. Failure is to be expected, in my view, because we are in trial and error, as we always are. This saga has presented a potentially clear error, but through it, it has too strengthened the entire ecosystem, for it has provided invaluable knowledge which advances the whole space.

It just happens to be that the ecosystem is not bitcoin, as, with hindsight, should have been expected, but the whole space. Perhaps we could have not said that a year or two ago though.

In short, knowledge is gained through experience. There are no aprioris that encompass the whole scene. No one can come down from heaven and provide an entire ecosystem. We must, necessarily, evolve from little to much.

The sunk cost fallacy does add complications, but, it is a fallacy for a reason and I presume the way evolution must necessarily work.

We'll see on the first, but, at this stage, I can not quite see a move. Miners have no development team that commands some level of trust. The practical and realist Hearn left. Andresen has been sidelined. The rest control r/bitcoin, IRC and many other social media platforms. Even if they do manage, the lessons are obvious for all who have skill.

It's far too late, at this point, as was obvious it would be, and perhaps it being so is best at this stage. Voice and reason lost in the short term. The reasons it lost have been learned. So, man, must evolve and, for those with skill, they must necessarily go where they are wanted and welcomed.

 

[lunar]

@Justus Ranvier

Agreed 100%.

imprecise language is a huge issue. What would you suggest?

Money is the communication of Worth? Quality ?

Essentially I mean a metric unit of value.

 

[Zarathustra]

Not only do you not have the power to do this, but if you did have that power you would be demonstrating that Bitcoin is in fact identical to the existing fiat system where the elites can force the rest of the population into staying in a currency they don't wish to be in!

I think that's not how organisms work. An organism is never ruled by single organs. All organs and cells together control the organism.

The biggest problem I've been wrestling with over the last few months is the question of why so many supposedly-intelligent people would fall for such an obvious self-defeating trap.

Yes. "So many people". So many people hanging around at r/NorthKorea. Not just an elite.

"Censorship or stalling wouldn't be effective, if users and businesses stopped running Core."

 

[Zangelbert Bingledack]

Bitcoin is also not ruled by the majority, because we must ask, "The majority of what?" Current stakeholders, prospective stakeholders, stakeholders who understand money?

Minority rule is worst of all, but majority rule would also leave open the populist attack. Forking with the possibility of a persistent split is the only way to avoid both threats. It is the only way to allow people who understand money to retain Bitcoin in a form that will ultimately succeed, regardless of the vicissitudes of short-term market and community sentiment.

For example, Core can be lost in its minority small block position while a fork for Keynesians can be lost in its majority inflationary position, either or both perhaps at times even exceeding the market cap of what most of us in this thread would call "true Bitcoin" or the branch most likely to succeed long term. All three ledger copies can coexist until people see the light and come rushing back into our version. We are laughing in the end.

 

[Justus Ranvier]

@lunar Money is a measurement of yet-to-be-reciprocated altruism.

Based on your interactions with them, your friends and neighbours know if they can trust that if they do something for you today that you'll return the favour tomorrow, and that affects their willingness to provide you with resources.

Monetary behaviour expresses that knowledge in objective form (currency) so the information can be accurately transmitted to people outside the social circle from which it originated.

 

[satoshis_sockpuppet]

Jihans assessment of luke-jr's "HF" interpretation:

 

[Zangelbert Bingledack]

Just because in English we can form grammatically-correct sentences that turn arbitrary verbs into nouns doesn't mean those sentences meaningful.

That one sentence alone - taken seriously - is enough to dispel or clean up most of the misguided ideas in philosophy in general, with far-reaching implications in math, physics, economics, and other fields.

 

[Justus Ranvier]

@Zangelbert Bingledack The ability of people to use language to convince themselves of their own bullshit is why we need logic and the scientific method.

 

[jbreher]

No I am not. I am talking about miner revenue and costs. If orphan risk cost is 50% of miner revenue, then "things break down" yes, this does not really imply much about the orphan rate itself.

If orphan risk cost is 50% of miner revenue, then half the 'solved' blocks are being orphaned, no? Or do you have some other definition of 'orphan risk cost'?

Sorry I do not understand your point here. It is pretty clear two miners in the same location may have lower propagation times between them than one on the other side of the world. It is pretty logical, isn't it?

Yes, but a single 'miner' is often geographically distributed itself - not in the same location. Further, you ignore my latter assertion that, should it take considerable time for miner A's block to propagate to the majority of the network, miner B's block, perhaps actually mined later in time, if propagated quicker to the majority of the network, may orphan miner A's block.

If retarded propagation was in any way a net benefit, miners would merely insert gratuitous latency before announcing their blocks. Whether maxblocksize were tiny or huge.

I do not, you seem not to understand my point. The logical thing to do is keep adding transactions up to the point where the fee on the most marginal transaction is equal to the marginal orphan risk cost. At the same time it is logical for wallets to only pay a fee which is a small premium to the expected marginal orphan risk cost. This dangerous dynamic ensures orphan risk costs are high relative to revenue.

You are correct - I no not understand your point. Why do you think that the point where marginal orphaning risk is equal to marginal additional fee has anything to do with the point where absolute orphan risk cost is equal to absolute income? These two curve crossings are not the same.

This is ALL I am saying. We should not have the fee market driven by orphan risk. Whenever I make this point it is constantly misrepresented as if I am saying something else.

I still think you are saying something else. I am not _intentionally_ misrepresenting you. Care to explain further?

I think wasted work is the most understood one.

In what way is 'wasted work' any sort of a threat to the system?

I do not think the orphan risk cost would be high. I even put RELATIVE TO MINING REVENUE in big letters, in a desperate attempt to avoid people misrepresenting me, it did not work.

Ohhkaaay.... Why do you think that orphan risk cost would be high RELATIVE TO MINING REVENUE?

The limit as in the major point of competition in the industry, driving decision making. If you do not think it would be, answer me this question:

Why would wallets pay a fee any higher than a small premium over the expected marginal orphan risk?

Because miners will have no incentive unless there is profit. I don't know where mining margins will come to equilibrium, but many old-school industries shoot for ~7% net. Accordingly, if we ever equilibriate, I assume that wallets will trend towards paying about a single digit percent more than that point where the fee would equal the expected marginal orphan risk. So I am with you so far, I believe. The additional step that I don't get is why you think that this implies this is the point where total orphan risk cost is equal to total mining revenue.

Oh - if that is your definition of 'pushed right to the limit', then yes. I fully expect that the system will be driven by each miner making a series of decisions that result in him 'pushing right up to the limit', as defined in that manner. Why do you think this is a problem?

[doublepost=1469270212][/doublepost]

No I do not. I want Bitcoin to be a system where a small minority of financial elites or any other kind of minority can prevent a hardfork. This is not control, it cannot impose changes but only prevent them. The reason we need this is to differentiate ourselves from the existing fiat system where elites can impose changes.

Stop pretending that because I want a minority to prevent a HF that I want a minority in control.

I realize that this is for cypherdoc, but....
But any change is ok as long as it is a soft fork? No, I'm not following the logic behind your desire.

Now you think changing the limit to 2MB would be keeping things the same don't you?

I recognize that bumping maxblocksize above the point that it affects most generated blocks is a technical change. However, it would _maintaining_ the _economic_ dynamics. And in my mind (despite being a technologist) when it comes to the criteria that should drive the design of _money_, the economic should take precedence over the technical.

And I realize this is not a point you are making in this particular post, but The SegWit Omnibus Changeset is far and away a greater technical change to Bitcoin that a simple bump to maxblocksize. On a fundamental level. While still imbued with its own quirky economic changes.

You think keeping 1MB is a change? If you think that then that is the disagreement, stop misrepresenting the other side.

That is merely one element of the disagreement that I seem to have with the Core adherents.