Gold collapsing. Bitcoin UP.

[Justus Ranvier]

https://www.reddit.com/r/btc/comments/54w6ya/software_developer_pieter_hintjens_analysis_of/

 

[freetrader]

For those in the Bay area interested in Bcoin (new Bitcoin full node implementation), there's a meetup today:

http://www.meetup.com/SF-Bitcoin-Devs/events/234222724/

 

[jbreher]

We don't know to what extent big-blockers in China (like @Jihan) have been threatened by Blockstream/Core supporters already. There is a very real risk that if they don't go along, they could face significant repercussions.

I'm not sure I understand your point. What leverage is there? Anything other than 'generate the blockchain of which we approve, or we will stop transacting on the blockchain you are creating'? Isn't that the way it is supposed to work?

 

[Bagatell]

What leverage is there?

Lose the relay network?

 

[freetrader]

@jbreher:

What leverage is there?

I think - not sure - that the Bitcoin mining industry in China being in the hands of a few decision makers, it could be quite easy for dissidents to face severe retaliation business-wise. If their numbers are still relatively small percentage-wise (e.g. 20%), their opponents could easily orphan their blocks. Plus, they need to have good connections to local government officials and other exchanges. These ties could be cut by their opponents, leaving them in bureucratic difficulties. Maybe there are government-granted licenses that need upkeep too, I would be surprised if not.

There is hardly any grassroots economic activity around Bitcoin in that country, and these dissidents would find it difficult to stay in 'Bitcoin business' there if their mines or exchange were interfered with.

One could put that together with a potential threat of loss of software/systems support by the organization they've been working with closely, and maybe being frozen out of deals w.r.t. upcoming layer-2 / sidechain systems. I know if I were in the position of those businessmen, and had to weigh those things versus a relatively idealistic struggle to keep things more in line with Satoshi's vision for Bitcoin, I would probably find it a tough call too.

 

[jbreher]

If Bitcoin is subject to miner collusion in such a manner, it is already broken.

 

[Inca]

It is certainly broken. But it can be fixed.

As an aside does anyone have any experience with using lamport signatures or merkle tree signature schemes? I have an idea I would like to pursue.

EDIT: if you are a developer and interested in a project give me a PM..

 

[lunar]

@Justus Ranvier the two top posts in that thread are worth repeating. excellent article.

 

[cliff]

-------------------------------------
Gold collapsing. Bitcoin UP!
-------------------------------------
BTC | XAU (spot) | COMEX CG1
$605.49| $1320.15 | $1321
-------------------------------------
BTCswap(BFX) | BTCswap(Polo)
0.018% | 0.0587%
-------------------------------------
HashRate: 1.86 EH/s
MarketCap: $9,590,700,964
BTC Dominance: 79.2%
-------------------------------------
GBTC | SPDR Gold Trust ETF
$90.71 | $125.92
-------------------------------------
10YR Treas| Copper | Crude (WTI)
1.56% | $219.75/lb | $47.11/barrel
-------------------------------------
-------------------------------------

Crazy week. Hash rate way up. I added some coverage of the BTC Dominance rate and will add the Gemini daily auction results if there is interest (and if I can figure out how to reliably get that info without having to create a Gemini account).

@lunar - RE: 8btc.com - It wasn't one thing; looking at the topics being discussed, combined with the topics discussed in other forums, is an interesting window into the ecosystem.

 

[freetrader]

Can anyone make sense of this?

 

[cliff]

@freetrader - http://www.coindesk.com/regulators-block-sale-bitcoin-miner-avalon/

Subtle threat against miners, it looks like:
" 'Changing the proof-of-work function is a trivial detail for programmers, a temporary inconvenience for users, and permanently devastating for miners,' said Sztorc. 'They’re not in a position to make threats, which is the source of all power.' "

Doesn't the existence of BU or any other implementation besides Core solve this threat problem for the miners?

 

[freetrader]

@cliff : Hard to interpret the sentiment of @Jihan 's tweet, but my first impression was I sensed a bit of satisfaction that the competition had been stopped. (backdoor in this case could have meant backdoor of getting into mining equipment game?)

Looks more like use of regulators to stop competition - ref. my earlier post where I predicted this might be happening. I don't know anything about Shandong Luyitong / Canaan's attitude in the blocksize debate though.

 

[79b79aa8]

@cliff
the gemini auction data is being posted here: http://www.geminiauctions.com

 

[Peter R]

 

[taxed4ever]

@Peter R

I really liked your video, BU is winning the crowd all over!

 

[AdrianX]

@freetrader
Doesn't the existence of BU or any other implementation besides Core solve this threat problem for the miners?

No, not as I can tell but I imagine a treat to ones mining business is a motivation to diversify if you are an independent entity.

Diversification - as in selling ASICs in the marketplace has a 2 fold benefit it allows one to take power away from the effectiveness of the threat, and it brings in a new income stream.

It has another real downside and that is being an assassination target. Once such miner "fried cat" from ASICminer did do exactly that and diversified into selling very reliable and efficient ASICs and making all designs open souse. Unfortunately he mysteriously disappeared leaving his wife, friends and the employees of an extremely profitable and successful company bewildered.

 

[Norway]

Nice and simple video from @Tom Zander about onchain scaling:

 

[cliff]

@AdrianX - I like your answer. "Solve" was probably too strong of a word to use on my part. Let me ask a follow up to see if I understand now or am still deficient:

[parameters]

• Lets say @freetrader's project gets going.
• Lets also say Core decides to change the PoW algo in a way that is "permanently devastating" to miners (maybe the change is justified, maybe its not - irrelevant for this hypo).
• Finally, lets say that @freetrader doesn't change anything with his implementation following PoW change by Core.

[question]

Could the miners that were still mining with Core's implementation at the time of the PoW change carry on with their operations by switching to @freetrader's version?

Sorry if this is a noob question, but its still complicated stuff to me.

 

[freetrader]

@cliff : If they were to change the POW, Core would fork themselves off.

The miners could just maintain the Core software from prior to the fork themselves. As long as they maintain a sufficient "old-style Core" node network (pretty easy / low-cost) they could easily carry on their operations.

Only incentive to switch to a different (non-Core) fork would be for the features it might offer.
However, if the miners go with a pre-SW version and just up the block size, they could very well negate much of the public draw that current hard forks offer, while retaining their prime positions in the food chain, and making a "small block" Core fork look pretty uninteresting.

That said, the market is not oblivious of the risks of having most of the mining and related industries in one country, and if events like you sketched should ever come to pass, I'd guess Bitcoin would in for some extreme price turbulence, and then it's anyone's guess what might happen to its current miners.

 

[cliff]

@freetrader - Thanks! Finally, someone takes the softball so a point can be made (but you did give an answer a little different than what I expected - tis ok, it'll work).

So, the threat of PoW change by Core isn't actually "permanently devastating" in itself - the threat is largely about the risks associated with a loss of human capital (i.e., a specific dev team) than an inability to keep mining. The miners can use an older version or even switch to another implementation developed by any other competent team or even develop their own. Correct? The emergent property of consensus is the honeybadger here. We can conclude, then, the 'miners-have-no-power' argument is just fluff?