Gold collapsing. Bitcoin UP.

AdrianX

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Aug 28, 2015
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This is relevant. the white paper was wrong and needs to be updated. what needs to change is the definition of the valid chain.

If you can convince with PR and lobbying that the valid chain in not necessarily the one that has valid blocks and valid transactions as described in section 5. Then you can redefine the valid chain to be the one that has a transaction limit because the majority agree it is the valid chain.

valid transactions do not require they be limited to a total of 1MB, in fact the consensus rules apply to valid transactions and blocks before the limit existed. The limit does not define valid transactions or blocks, it is a cartel rule that requires cooperation and agreement to remove.
 
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awemany

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Aug 19, 2015
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@Roger_Murdock : Yes, fully agreed. Let me further emphasize one word in your quote above:

"We consider the scenario of an attacker trying to generate an alternate chain faster than the honest chain."

The attacker is the one with the minority HP.

I have also seen Greg say (paraphrasing) "we do not have SPV yet", because according him, SPV is only in existence if all of the sections in the SPV section are fulfilled. It is actually related to what you write above, but see below. Specifically Greg argued in the past that this section:

As such, the verification is reliable as long as honest nodes control the network, but is more
vulnerable if the network is overpowered by an attacker. While network nodes can verify
transactions for themselves, the simplified method can be fooled by an attacker's fabricated
transactions for as long as the attacker can continue to overpower the network. One strategy to
protect against this would be to accept alerts from network nodes when they detect an invalid
block, prompting the user's software to download the full block and alerted transactions to
confirm the inconsistency. Businesses that receive frequent payments will probably still want to
run their own nodes for more independent security and quicker verification.
means that all mentioned parts are mandatory to implement (especially of course before any on-chain scaling takes place). Whereas I read this section as clearly optional, an outlook towards what could be done:
One strategy [...] would be [...]
Oh and note again: Initially, and when you start with the Core brainwashed-mindset in that section it sounds like attackers are those that arbitrarily and forever overpower the network (>50%):
... but is more vulnerable if the network is overpowered by an attacker.
However, if you read on, you find this:
can be fooled by an attacker's fabricated transactions for as long as the attacker can continue to overpower the network.
Emphasis mine.

It gets even more clear with the alerts part.

And SPV as-is works fine when you wait until everything is deep down in the chain. Which basically means it has a different risk profile to 'full nodes', but that's something we knew all along.

Basically, an attacker to Satoshi is someone who mines a bad block or two, and can temporary, due to chance, get >50% of blocks. But clearly isn't in the long-term majority, with majority of HP and electricity available.

It also simply has to be that way, because with the majority of HP being against the system, it simply won't work.

Yes, in theory there could be a 'firing of the miners' if they misbehave in unison. But as @Zangelbert Bingledack says, this makes the whole POW-security cryptocurrency concept questionable.

Some of us have been there or close to that in the darkest moments of "bigblockism" (around the HK consensus), but in the end most of us have been persistent enough to go on and help grow the sane side of HP.

And the Core trolls with their UASF fetish aren't the majority by any meaning of the word.
 

go1111111

Active Member
@go1111111
1) Higher than optimal fees actually reduce miner revenue, as has probably been discussed here. Intelligent profit-seeking ensures optimal fees.
It would be a pretty remarkable coincidence if this were true. If you have a justification or link to a previous justification, I'd be very curious to see it.

When you hire a CEO to oversee the company that you own, just because it's approximately in his interest to maximize the value of your company doesn't mean your incentives are perfectly aligned.

Consider this example demand curve: every block, 100,000 people are willing to pay $0.01 per tx, 50,000 people are willing to pay $0.05, 20,000 people are willing to pay $0.20, and 10,000 people are willing to pay $0.50.

If miners set block size capacity at 179,999, then they make $1,799.99 in fees. If miners set capacity at 79,999, then they make $3,999.95 in fees. If capacity is 29,999, miners make $5999.80. If capacity is 9,999, miners make $4,999.50. In this example, short term fees are maximized at a capacity of 29,999.

Your argument seems to be that there's some theoretical reason why the negative effect on future fees and/or Bitcoin price must always be greater than increased fees from constraining capacity.

I don't think such a theoretical reason exists, but note that even if this were true, there's still the issue of miners inherently having short term incentives because mining is a commodity business where profits will go to zero.

I think the particular failure mode for the cartel arrangement you mentioned is that members can fake that they are not using all their hashpower but then just "got lucky" sometimes or are bringing on more hashpower "while keeping all these [photo] ASICs in reserve, not running, as per the cartel terms." It just moves the problem (for a would-be cartel designer) around.
No sane cartel would actually allow individual members to keep the blocks that they individually mined. Block rewards would be divided according to the negotiating power / hash rate of the cartel members before they dialed down their hash power.

I'm not particularly worried that discussing the cartel issue will turn into a 'merry-go-round', as the theory of cartels is pretty well developed, and it's known that they can work when defection can be easily detected and punished. Detection/punishment are very simple for Bitcoin mining cartels, because the blocks that get mined are there for all to see. However, I'm happy to keep the discussion focused on whether the block size that maximizes miner value must always equal the block size that maximizes total value to the community (or the value that maximizes Bitcoin price).
 
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awemany

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Aug 19, 2015
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@albin: Fair point, I take that back, they probably in some contrived, weaseling-their-way-out didn't really agree to BIP100.

However, the 32MB limit that was in there was the direct result of discussions with Blockstream. I think I asked jgarzik at the time and that was his answer: "Blockstream.". Can't find that right now. His submission on this:

 
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xhiggy

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Mar 29, 2016
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Consider this example demand curve: every block, 100,000 people are willing to pay $0.01 per tx, 50,000 people are willing to pay $0.05, 20,000 people are willing to pay $0.20, and 10,000 people are willing to pay $0.50.
It seems like the community would benefit from some public research on assumptions like this.
 

79b79aa8

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Sep 22, 2015
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@awemany
If some variant of BIP 100 is acceptable to them, then we're entitled to a pretty big explanation for why we've been catfished so hard for years.
the goal is not to extract an explanation from BS Core. the goal is to make explanations coming from them irrelevant.

adam back thinks one of his roles is to protect bitcoin from market forces. he thinks that what has until now been the reference implementation provides important checks and balances -- in particular it prevents miners from running software that allows blocksize growth. incidentally, he runs a company whose business model depends on the outcome of those checks and balances.

however, we are not faced with a software development problem that depends on a solution from BS Core. rather, with an eminently solvable coordination problem among miners. that is all.
 

Zangelbert Bingledack

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Aug 29, 2015
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@go1111111

Unless I'm missing something, my next answer would be rehashing some basic market dynamics (as would the answer to the idea that profits tending toward zero causes any short-term motivation). Am I missing something - anyone?
[doublepost=1494300346][/doublepost]This guy continues to make eminent sense:
"some notable cryptographers have pushed the narrative that full nodes are somehow protected against the mining majority attacking, which is obviously not the case."

Why has this point been missed all these years?

I notice in the quote @awemany posted above, Greg's interoretation of Satoshi seems to switch around between ostensibly talking about 51% attacks ("overpowered by an attacker") and "invalid" blocks, but of course 51% attacks are done with *valid* blocks, not invalid ones. And there is no protection; if the 51% attacker wants to mess up the ledger - i.e., isn't BTC profit-oriented - we're screwed no matter how many "full nodes" we have.

Another equivocation seems to be between "nodes" and miners. If full nodes don't actually play a roll in the network per se (qua mining network), they aren't really "nodes" of said network, more just users tapping into that network.

Can these slippery equivocations Greg has baked into his wording (and that have become inured into a fixture in the linguistic landscape of the Bitcoin community) have singlehandedly created this whole false debate?
 
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go1111111

Active Member
@go1111111

Unless I'm missing something, my next answer would be rehashing some basic market dynamics (as would the answer to the idea that profits tending toward zero causes any short-term motivation). Am I missing something - anyone?
Can you try to state what your argument would be concisely and with minimal explanation, then? As if you're explaining just the gist to an econ professor who has the background to fill in any details. I'm curious how you'd argue it since me disagreeing with you is pretty rare.
 

Justus Ranvier

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Aug 28, 2015
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"some notable cryptographers have pushed the narrative that full nodes are somehow protected against the mining majority attacking, which is obviously not the case."

Why has this point been missed all these years?

I notice in the Greg quote @awemany posted above, he seems to switch around between ostensibly talking about 51% attacks ("overpowered by an attacker") and "invalid" blocks, but of course 51% attacks are done with *valid* blocks, not invalid ones. And there is no protection; if the 51% attacker wants to mess up the ledger - i.e., isn't BTC profit-oriented - we're screwed no matter how many "full nodes" we have.

Another equivocation seems to be between "nodes" and miners. If full nodes don't actually play a roll in the network per se (qua mining network), they aren't really "nodes" of said network, more just users tapping into that network.

Can these slippery equivocations Greg has baked into his wording (and that have become inured into a fixture in the linguistic landscape of the Bitcoin community) have singlehandedly created this whole false debate?
It's impossible to have meaningful discussions without clear definitions, and words like "centralization" and "attack" standing alone are anything but.

The term "51% attack" means nothing.

Develop a formal threat model and you'll come up with several failure modes, but none of them will end up being called "51% attack" because that term is not sufficiently precise.
 

Zangelbert Bingledack

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Aug 29, 2015
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@Justus Ranvier

Sorry, by "51% attack" I meant mining and withholding blocks then releasing them to get ahead of the existing chain in order to do a bunch of doublespends.

EDIT: I don't think I used the word "centralization," so I assume you're saying Greg uses slippery wording, which was also my point.

@go1111111

Not sure what the inferential distance is here, so it's not so easy to write something short ("economics professor" doesn't really mean anything to me), and I don't see these being common objections among bitcoiners. Perhaps I missed your original angle? It feels like the debates I had in 2012 about whether Bitcoin can actually work.
 
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go1111111

Active Member
@Zangelbert Bingledack Hm, OK. I find your claim that the incentives between miners and users are perfectly aligned extremely bold and counter to basic economic theory.

I think this is important because the amount of deference that forum members here are comfortable giving to miners is one of the things that makes small blockers wary of increasing the block size. Yet putting so much trust in miners is not necessary to persuasively argue for large blocks.

As a large blocker myself, I think it would be useful to have this discussion, in the hopes that it would reduce the harm I see being done to the big-block cause whenever big-blockers make false economic claims.

If you're not up for discussing: does anyone else want to defend Zangelbert's position? @Peter R?
 

79b79aa8

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Sep 22, 2015
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can you state the question clearly? ZB's assumption seems to be no more than: miners are profit-maximizers (i.e. rational, in the parlance). that is to say: other things being equal, they will, largely through a process of trial and error, converge towards the most profitable combination of transaction price and number of transactions processed per block.
 
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AdrianX

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Aug 28, 2015
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bitco.in
If full nodes don't actually play a roll in the network per se (qua mining network), they aren't really "nodes" of said network, more just users tapping into that network.
they help relay transactions, but that said it will be only a few that are effective and significant, the less the efficient and connected other nodes still help validate transactions before they are relaid to miners.
 
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go1111111

Active Member
@79b79aa8 , I believe Zangelbert is claiming one of these things:

(1) It is always in the rational interest of miners to do whatever maximizes the BTC price.

or maybe..

(2) It is always in the rational interest of miners to do whatever would be best for users.

I'm not entirely clear on whether the claim is #1, or #2, or something slightly different. Both are wrong for reasons I've outlined before. Even though people making this type of claim are closer to the truth than Core when it comes to economics, they go too far in the opposite direction and ignore some legitimate misalignment of incentives.

Possibly relevant info for others following the thread: I wrote the Market Governance FAQ (https://bitcoindebates.miraheze.org/wiki/Market_Governance_FAQ), which contains a decent amount of economic reasoning that you probably agree with. If you think based on my recent claims that I don't understand basic economics, hopefully skimming that FAQ will at least compel you to think hard about my claims instead of dismissing them.
 

Zangelbert Bingledack

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Aug 29, 2015
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Woohoo!
[doublepost=1494398086,1494397056][/doublepost]@go1111111 The claim being discussed is your statement here:
If miners can get 20% more profit for themselves by making Bitcoin as a whole 5% less valuable, they'll do it unless they sufficiently fear a user activated fork.
On this, all I wanted to know is whether you had any convincing leads on how miners could do that, but the leads you mentioned don't seem likely to pan out. I don't really see a need to think through how to defeat each scenario unless others find them convincing. Seems cleaner to rest my case as it is.

Also, it's not that we are comfortable leaving things up to the miners, but rather that there really isn't any choice in the matter as long as we are assuming Bitcoin works without major modifications to its basic design. (That doesn't mean we shouldn't try to make their job easier.)
 

Zangelbert Bingledack

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Aug 29, 2015
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I think I've finally taken in the full significance of what @Roger_Murdock and @awemany were discussing above. Greg and friends have taken SPV to be incomplete because they have interpreted "overpowered by an attacker" in the SPV section of the whitepaper to mean a majority hashpower "attacker" (which is an oxymoron, or else a "Bitcoin's basic assumption has been broken" doomsday scenario) rather than a minority hashpower one. Therefore we need more full nodes, therefore big blocks are bad.

Having an interesting discussion on this with CSW :)

https://pastebin.com/gjsGpBb9

He adds that Segwit breaks the usual profit motive of miners to validate, potentially making the "overpowered by an attacker" situation permanent.
 

awemany

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Aug 19, 2015
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@Zangelbert Bingledack : I assert that Greg strategically misreads the whitepaper. He's trying to spin it, quite clearly.

Similar to how supreme court judges are prone to read fancy and sometimes diametrically wrong stuff into a country's constitution, because they have been elected by a certain political party.

With the difference that Greg is not a supreme court judge, that there is no supreme court in Bitcoin - except the Blockchain itself - and that everyone can read and interpret the whitepaper him or herself and form their own opinion.

And they should. Sadly, many fail to even read it.
 

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