Gold collapsing. Bitcoin UP.

[awemany]

I went looking into libsecp256k1 a while back to see if the improvements were invented by core or had been created elsewhere and just integrated but couldn't get a good handle on that. I did notice that, when looking at the commits, compared to other contributors (one in particular), Maxwell's were much fewer and more janitorial in nature. Not that there's anything wrong with that but I've seen some commenters talk as if he's some kind of coding god and brought us libsecp256k1 all by himself.

Along remotely similar lines: While looking into the current way bitcoind can already do an UTXO hash, as available through gettxoutsetinfo, I found a short discussion on BCT: https://archive.fo/lEpEh

In it, someone comes up with the idea to 'just XOR the UTXO hashes together'. Greg gave an answer that I tried to parse and I'd really like to have the input of some people better-versed in cryptography than the relative layman that I certainly am:

and xor all the hashes together to get the final value.

Congrats, you win today's failed cryptography trophy. That kind of structure is trivially to second preimage attacks using wagners algorithm for solutions to the subset sum problem. Order independent accumulators are a tricky subject, the only that I'm aware of that have any real argument for security have huge hashes and are very slow.

Now:

• I don't question the unwiseness of using XOR to combine hashes, among other things because hash(thing) ^ hash(thing) == 0
  
• However, I don't see anything really trivial here
• However, 'Wagner's algorithm' must be shorthand for an algorithm that I still fail to find
• However, any algorithm will still be exponential in the number of hashes or the number of bits to zero. I fail to see how e.g. dynamic programming as a common scheme to solve it (typical CS homework) would be a successful attack on this, because it basically degrades to brute-forcing

Can anyone enlighten me, please? Or is this indeed -as it appears to me now- elaborate bullshitting?
@albin:

@awemany

WRT the issue of utxo set, is it really true that blocksize is the actual primary driver of growth?

Isn't it entirely possible that the bitcoin price drives the size of the utxo set, by making smaller denomination outputs economically meaningful?

Yes, that sounds very reasonable. I always wanted to instrument my bitcoind to make more analyses on the typical age/value of UTXOs spend, and on exactly such correlations like UTXO growth vs. price. This might also be a way to get clues about the growth of our userbase.

Yesterday, I saw that we have just short of 200mio transactions made in total on the network, and about 45mio UTXOs. (Which also means that there's less than 45mio Bitcoiners, but that's probably a gross overestimation...)
In any case, that means on average, over the lifespan of Bitcoin, we have just every fourth transaction creating an UTXO. I don't think that's too bad, that's IMO a quite low 'UTXO creation ratio'. Especially given that so far we'd expect Bitcoin to grow strongly in user base (and thus that's reflected a lot more in the UTXO set).

With your assumption (that one could look at the data to prove/disprove), constraining the UTXO set size would thus go against the dynamics for a higher price and against the dynamics for a larger user base.
Sounds familiar, doesn't it?

Finally, I just wrote this on Reddit and I think everyone would get a clearer picture if we'd start to divide the 'people interested in Bitcoin' into various faction exerting different pulls on the direction this beast is taking. I am personally aligned with several factions (user, holder, miner) to varying degrees. After I wrote that, it once more appears clear as day to me that we've been played by outsiders for the last couple years.

 

[molecular]

There's a widespread misconception on reddit and such about "BU activation". How to best answer?

There's also a lot of uncertainty (even angst) visible about what will happen and what people will need to do to "protect" their coins and "be on the right fork" hinting at a very low level of understanding. It's good to see in a way because it shows we're really tapping into new crowds here. It also makes apparent the need for more education.

Are there any easy-to-read concise explanations we can link to?

 

[Bagatell]

After I wrote that, it once more appears clear as day to me that we've been played by outsiders for the last couple years.

Tinfoil is vastly underated.

 

[BldSwtTrs]

I don't know for sure but I suspect he had some compelling reason to retire that name.

I doubt he'd completely abandon the space though.

His departure coincides with his argument with Bloomie about his moderators role and especially the moderation power over this thread. I found Bloomie very inelegant with cypherdoc and he might have been upset because of that.

 

[Zarathustra]

People save for the future, and for their children's future, out of their own self interest. They do this to try to work towards a better lifestyle, to put their kids through college, or whatever. Or maybe to buy tools and equipment to make their work easier.

People do this every day, just look around.

To save, they need to produce more than they consume and save the difference. This frees up resources to be allocated to longer production processes.

Yes, nationalized homines sapientes (= homo oeconomicus / citizen) need those savings.
Non-nationalized homines sapientes (= homo sapiens) doesn't need such savings. And that's the reason why he doesn't produce those ever growing savings.
Zero growth.
The citizen (homo oeconomicus) is a destroyer. The homo sapiens isn't. He is self-sufficient.

The war lords and their cheerleaders (church and state) destroyed the communities and with it the self-sufficiency of the homo sapiens, who has been collectivised and transformed into a creature that is dependent on collectivist redistribution.

As soon as another tribe in Brasil or everywhere else gets nationalized and integrated, he is forced to produce those ever growing surpluses too.

It's the debt, stupid ....

https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-489#post-17874

 

[BldSwtTrs]

Nobody is force to grow endebted.

If states exist where there is surplus it's become it's the surplus that makes states possible.

If surplus happenned within some tribes and not in other it's because the former were more inventive than the latter and discovered way to increase their productivity.

 

[Zarathustra]

Tribes don't produce growing surplus. They still produce the same amount as 100'000 years ago, while the civilization produces the hundredfold amount compared with 200 years ago. They grow a million times faster. Even Wikipedia learned that civilization means expansionism.

A civilization, or civilisation (see spelling differences), is any complex society characterized by urban development, social stratification, symbolic communication forms (typically, writing systems), and a perceived separation from and domination over the natural environment by a cultural elite.[1][2][3][4][5][6][7][8] Civilizations are intimately associated with and often further defined by other socio-politico-economic characteristics, including centralization, the domestication of both humans and other organisms, specialization of labour, culturally ingrained ideologies of progress and supremacism, monumental architecture, taxation, societal dependence upon farming as an agricultural practice, and expansionism.

https://en.wikipedia.org/wiki/Civilization

 

[BldSwtTrs]

That's not because there is civilisation surplus producing on one side, and stateless tribes without surplus on the other side, that you can conclude the cause of surplus is the state violence.

Cultural norms have evolved differently between tribes.

Tribes which relaxed the norm of sharing produced surplus, which initiated the beginning of the civilisation process (and the state is a byproduct of the civilisation process).

 

[Mengerian]

Non-nationalized homines sapientes (= homo sapiens) doesn't need such savings.

If the state ceased to exist, I would certainly keep saving and planning for the future.

You have the causality backwards. The economic surplus enables the existence of the state, not the other way around.

If states exist where there is surplus it's become it's the surplus that makes states possible.

Exactly!

 

[Zarathustra]

@Mengerian

> If the state ceased to exist, I would certainly keep saving and planning for the future.

Yes, of course, because you are enforced to do it. The self-sufficient communities are destroyed and therefore you are dependent on savings (which is debt!) and interacting with aliens.You can't exist anymore without collectivist redistribution. How does it feel?

> You have the causality backwards. The economic surplus enables the existence of the state, not the other way around.

No, it's the Austrian Theology that has the causality backwards, as Graeber and Dr. Paul C. Martin showed.

“Our standard account of monetary history is precisely backward,” writes David Graeber in Debt: The First 5,000 Years. “We did not begin with barter, discover money and then eventually develop credit systems. It happened precisely the other way around.”

An economy (= collectivism) starts with debt. The first debt is the debt of those who organized the system of Organized Violence (= priests and war lords, aka church and state). They indebted themselves to soldiers. This is the birth of the tragedy, the end of the community (anarchy) and the start of the society/economy/collectivism/citizenship/war (hierarchy/patriarchy).

 

[BldSwtTrs]

"An economy (= collectivism) starts with debt. The first debt is the debt of those who organized the system of Organized Violence (= priests and war lords, aka church and state). They indebted themselves to soldiers. This is the birth of the tragedy, the end of the community and the start of the society/economy/collectivism."
Reciprocity is part of human nature.

Even within tribes there were debts, but there was no need to keep track of them because everybody knew one another.

The tracking of debt become necessary when people start to interact with a number of people higher than the Dunbar limit.

Debt didnt appear with organized violence. Debt appeared when a human help another human for the first time.

Violence if anything allows you to no pay debt.

 

[Zarathustra]

His departure coincides with his argument with Bloomie about his moderators role and especially the moderation power over this thread. I found Bloomie very inelegant with cypherdoc and he might have been upset because of that.

There is something more. He also disappeared from reddit and twitter. Where is rocks? Where is u/hellobitcoinworld? Where ist John Blocke? Many prominent BU supporters disappeared mysteriously.
Don't forget, this is civilization, which is organized violence and war.
[doublepost=1486311946,1486311237][/doublepost]

Even within tribes there were debts, but there was no need to keep track of them because everybody knew one another.

The tracking of debt become necessary when people start to interact with a number of people higher than the Dunbar limit.

Exactly. To track debt beyond Dunbars Numbers, you need organized violence. q.e.d.

Graeber: “Say a king wishes to support a standing army of 50,000 men. Under ancient or medieval conditions, feeding such a force was an enormous problem… On the other hand, if one simply hands out coins to soldiers and then demands that every family in the kingdom was obliged to pay one of those coins back to you [to pay taxes], one would, in one blow, turn one’s entire national economy into a vast machine for the provisioning of soldiers, since now every family, in order to get their hands on the coins, must find some way to contribute to the general effort to provide soldiers with the things they want.”

Very well said. "Must find some way to contribute to the general effort to provide soldiers with the things they want." Now you see where the surplus production is coming from.

Dr. Paul C. Martin came to the same conclusion, but many years before Graeber:

Private property as de iure institution needs a foregoing state to come into existence. The state needs foregoing power and foregoing power needs armed force. The ultimate “foundation of the economy” thus is the weapon, where possession and property are identical because the possession of it guarantees property of it. Armed force starts additional production (surplus, tribute). The first taxes are contributions of material for the production of attack weapons (copper, tin). Thus non-circulating money begins. Taxes as “census” and money are the same.

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

 

[sickpig]

If at least one miner implements [Parallel Validation], the effect of aberrant blocks is nullified. Further, any such miner who implements this will win over any other miner who spins too long in trying to validate an aberrant block. The incentives already ensure this 'problem' gets resolved.

you nailed it!

And even @haq4good got it right:

 

[Richy_T]

Isn't it entirely possible that the bitcoin price drives the size of the utxo set, by making smaller denomination outputs economically meaningful?

Yes. Price and adoption. Which are linked.

I think with some of these things, asking which drives which is asking the wrong question. They are in a feedback loop. Which means messing with it is a risky proposition.

 

[albin]

@Richy_T

I'm going to start thinking about ways to analyze this kind of data, because I have a suspicion this is a very especially weak link in their handwaving edifice. Seems like some serious grounds to challenge correlation vs causation.

Another tangential aspect I'm curious about is RBF vs CPFP for bumping tx fees to speed confirmation (which admittedly is a useful feature if you can avoid "vandalizing" zero conf). The typical objection to CPFP is that it's inefficient by requiring a whole 2nd transaction, but arguing from the Core handwaving of externalities framework:

- The second CPFP tx is paid for identically to any other transaction and accepting this cost is completely opt-in

- The result is utxo set - neutral when this is done explicitly for the purposes of tx fee bumping (as opposed to a natural optimization of miner revs when this happens just from tx's organically changing hands fast)

- RBF imposes an externality cost on relay nodes by spamming incrementally-different versions of a tx that is not in any way contained by fees.

 

[Zarathustra]

 

[molecular]

@awemany

WRT the issue of utxo set, is it really true that blocksize is the actual primary driver of growth?

blocksize as a direct driver of anything does not make sense to me. As "enabler" maybe, but the driver is popular demand.

@awemanyIsn't it entirely possible that the bitcoin price drives the size of the utxo set, by making smaller denomination outputs economically meaningful?

maybe indirectly somehow. But directly? How? Just because it makes "economic sense" doesn't lead me to split my 10 BTC utxo into smaller chunks, does it? Maybe a higher price triggers large holders to sell to fresh blood, but that's just "growth of userbase".

I'd say both price and utxo set size are driven generally by the size of the userbase or maybe more generally some "amount of use" measure (might be interesting to go in to detail regarding types of use?)

 

[albin]

@molecular

That's a good point, maybe it's more that price sets the realistic upper bound.

 

[Richy_T]

Yes, that sounds very reasonable. I always wanted to instrument my bitcoind to make more analyses on the typical age/value of UTXOs spend, and on exactly such correlations like UTXO growth vs. price. This might also be a way to get clues about the growth of our userbase.

If you enable indexing, you can run analysis against the existing blockchain (effectively maintaining your own UTXO set) fairly simply.
[doublepost=1486323667][/doublepost]

His departure coincides with his argument with Bloomie about his moderators role and especially the moderation power over this thread. I found Bloomie very inelegant with cypherdoc and he might have been upset because of that.

I dunno. It seemed a bit contrived to me. Almost like he was deliberately looking for a reason to make an exit. I have no idea why he would do that though.
[doublepost=1486324209,1486323448][/doublepost]

I'd say both price and utxo set size are driven generally by the size of the userbase or maybe more generally some "amount of use" measure (might be interesting to go in to detail regarding types of use?)

I expect if one analyzed this effect, one would probably come out with something that looked a lot like Metcalf's law. Which would be a good affirmation of it. Just as in physics, you can often predict things with the law of conservation of energy/momentum but the truth lies in the underlying physical interactions.

 

[Peter R]

I've been pushing the idea that LN isn't really a panacea for scaling the number of users because the UTXO set scales with size of the user base with or without LN. Instead, LN (if it can be made to work) is potentially a way to scale the number of transactions per user. I think by pushing this idea, we can win some of the people fooled into thinking that LN would permit massive scaling of the user base while simultaneously keeping the cost to run a node low.

When debating with the small blockers, I get one of two response:

1. Yes, we already knew this. LN was never promoted as a way to scale the user base.

2. No, you're wrong. More on-chain transactions means more UTXOs.

I think it should be possible to convince group 2 that there's an error in their thinking, and perhaps help win them to the side of on-chain scaling. I think they realize that new UTXOs are created every time an on-chain transaction is made, but they don't recognize that on-chain transactions also destroy existing UTXOs.

There must exist an equilibrium where--for a given wallet under normal usage patterns--UTXOs are being destroyed as quickly as they are being created. That is, the average number of UTXOs in a given wallet no longer increases nor decreases regardless of how many additional transactions are made. Anyone see any problems with this argument?

If the argument is sound, then, to first approximation, reducing the volume of transactions that a user makes (e.g., by moving transactions to LN) only reduces the "time constant" at which the wallet approaches this equilibrium--but it doesn't directly affect the equilibrium number of UTXOs.*

(I wonder if I can easily plot the number of UTXOs controlled by my BreadWallet over time. I've used it for a few years now, so if my theory is correct, it's probably reached a sort of equilibrium.)

*Of course, you could argue that usage patterns may be different with LN compared to without it, and that may lead to more or less UTXOs in equilibrium, but that's a second order effect. The first order effect is that the UTXO set size grows with the number of users.