Gold collapsing. Bitcoin UP.

[Christoph Bergmann]

Oh, are we back into bubble time?

This is my favorite Bitcoin chart:
https://blockchain.info/de/charts/cost-per-transaction?timespan=all

It calculates the price of a single Bitcoin transaction by dividing the miner's income in dollar by the number of daily transactions. Whenever this chart peaks, we are in a bubble. It peaked in June / July 2011 to 10-40 Dollar and in late 2013 to 40-80 dollar. When it reaches low levels, you usually are at a good time to buy: In January 2013, possibly the best buying opportunity ever, it was as low as 1-2 dollar, and in July 2016, after the halfing, it dropped to 4 dollar. Until now Bitcoiin never had a period in which "transaction costs" beyond 10 dollar have been sustainable.

In May 2017 it exceeded this line. In June it reached 20 Dollar / transaction, with a peak at 30 Dollar. There is some room left to reach a real bubble - it looks more like the little April 2013 bubble - but until the number of transactions can't raise again, there is little chance that this line finds a level which has been sustainable before without a drop in the price.

Usually we had three parameters to influence this chart:
- Number of transactions
- Price
- Mining reward

If these factors made "transaction costs" of below ten dollar, the system was sustainable. If the costs have been below 5 dollar, it was a good buying opportunity.

As you know, our "blocks must be full" wizards eliminated one factor of this formula ...

 

[molecular]

@Christoph Bergmann: great chart, I agree

Usually we had three parameters to influence this chart:
- Number of transactions
- Price
- Mining reward

If these factors made "transaction costs" of below ten dollar, the system was sustainable. If the costs have been below 5 dollar, it was a good buying opportunity.

As you know, our "blocks must be full" wizards eliminated one factor of this formula ...

Which one? Number of transactions?

I don't think it's eliminated sustainably, I don't think that's possible. As people leave bitcoin for other solutions, blocks will not be full all the time any more and core will probably introduce some kind of dynamic solution (coded up by luke using constants from the bible) chasing the blocksize downwards to make the blocks full again .

This could continue until only the header fits in the block, maybe with the coinbase tx. Only then will the Number of Transactions finally be stabilized (at 1 tx per 10 minutes) and the blocks always full.

 

[Christoph Bergmann]

Yes, I did not mean eliminate. Freeze or ceile out might be the better term.

Hehehe, I like this forecast. But your longterm solution is incorrect. We need to use CLTV - created by the hard work of Peter Todd - to set a random value when the coinbase transaction can be confirmed, so that a fee market will emerge.

 

[Roger_Murdock]

Nice post by @Peter R:

Inflation is NOT required for a transaction fee market without a block size limit to exist

 

[lunar]

I know i've gone a bit futuristic recently. It's just the Blocksize debate is so boring, it's all been said. What we are dealing with is now clear, it's simply an attack to block on-chain scaling, by any means available, and whoever is behind it, has some significant means. So looking forward, It's this big picture stuff that really piques my interest. This from csw slack conversation today.

"Wallets in the next 10 years will incorporate deep neural networks, complex mathematical systems for recognising patterns in vast amounts of data.
The future is not just about using one new technique. It's about combining techniques, from machine learning to crowd-sourcing to the blockchain.

Parallelised deep learning will enable secure meshed control of multiple systems that integrate and trade.
Self-funding AI bots that execute trades without emotion, rationally placing and closing trades based on evolving rule sets with perfect discipline will help manage our finances, companies and households
Smart agents that link and control the internet of things will enable secure decentralised swarm based systems to interact

The number of intelligent objects connected to the internet has exceeded the number of people on the planet.
By 2020, there will be 50 to 100 billion devices connected to the internet, as smart sensors become more present.
By 2025 these will be smart agents in an extended mesh

Bitcoin and the underlying technologies are the key to fuelling all of this.

Systems will evolve. The best code will spawn new versions that will fund or fade. With micro-services and modular design, this will enable the growth of new forms of software that aligns to the needs of the user.

Bitcoin provides the framework and system to allow this"

On scaling, "Those who cannot remember the past are condemned to repeat it" George Santayana
imho Blockstream should be tried for crimes against humanity.
https://en.wikipedia.org/wiki/Areopagitica

​

 

[sgbett]

The elegance of bitcoin's proof-of-work algorithm and zero-conf instant borderless transactions also amazed me all those years ago - no middlemen!

I remember, and I still believe.

 

[satoshis_sockpuppet]

Looks as if Antpool turned their new mining farm on (again, and possibly some more), https://api.blockchain.info/charts/preview/hash-rate.png?start=1468267267&lang=de&h=810&w=1440

EC over 55 % for the last 24 hours. Bizarre to see such a jump. But great. How can one not be bullish about Bitcoin when seeing the hashrate graph?
[doublepost=1499803583][/doublepost]Oh, and as a Bitcoin maximalist and hodler it's funny watching the altcoin bloodbath.

 

[AdrianX]

Bitcoin is on a trajectory where developers are making themselves relent. Jorge Stolfi puts it quite distinctly below. The incumbent developers hold some false beliefs as gospel and if changed it will destroy their relevance, one possibility is this cognitive dissonance leads them to believe they are doing good, and are needed in a position of power to manage bitcoin each time they break an economic balance of incentives.​

 

[AdrianX]

To the point made above, the most prominent BS/Core developers advocate for cretin type of centralized control one where he is in control, and competing implementations are conditioner private parties. This quote in reference to the Segwit2X proposal - including Segwit which Greg Maxwell advocated for and a 2MB native transaction capacity increase which he opposes.

If Bitcoin fails by handing control over the private parties like this, I'll create something new or work on something else... throwing good efforts down what I believe to be a dead end would be a my waste of time. http://archive.is/E5t4v

The emphases added to highlight how fundamentally he's opposed to scaling native bitcoin in support of his efforts to fix ongoing problems created by limiting native transaction capacity to 1MB.

 

[Peter R]

Bitcoin Unlimited just launched a new website that allows you to "adopt" a BU node just by sending $10 to a QR code:

https://adoptanode.com

Reddit thread:

https://www.reddit.com/r/btc/comments/6mvlqo/new_website_allows_you_to_adopt_a_bitcoin/

Huge thanks to Sina Habibian for his hard work on this!

 

[AdrianX]

Thanks for the notice @Peter R the first question that came to mind was $10 adopts a node for how long?

When looking at this chart https://coin.dance/nodes/all you see Bitcoin Classic get a lot of nodes and then they drop off, when viewing this data objectively it makes me think the Classic effort was not a grass roots effort. I would be discouraged to see BU nodes do the same.

I'm thinking it is unrealistic to expect a $10 investment to be running a node for the next 5 or 10 years, so how much time does $10 buy? that info should be easily available.

I think if there is some uncatalogued capital from this initiative it would be worth while running a ad campaign to advertise it. Even partnering with someone like bread wallet who allows you to select your own node for your SPV wallet.

 

[lunar]

https://www.bitcoinabc.org/

​

 

[Zarathustra]

(...) The works of genius cannot be fully enjoyed except by those who are themselves of the privileged order. The first recognition of them, however, when they exist without authority to support them, demands considerable superiority of mind.

When the reader takes all this into consideration, he should be surprised, not that great work is so late in winning reputation, but that it wins it at all. And as a matter of fact, fame comes only by a slow and complex process. The stupid person is by degrees forced, and as it were, tamed, into recognizing the superiority of one who stands immediately above him; this one in his turn bows before some one else; and so it goes on until the weight of the votes gradually prevail over their number; and this is just the condition of all genuine, in other words, deserved fame. But until then, the greatest genius, even after he has passed his time of trial, stands like a king amidst a crowd of his own subjects, who do not know him by sight and therefore will not do his behests; unless, indeed, his chief ministers of state are in his train. For no subordinate official can be the direct recipient of the royal commands, as he knows only the signature of his immediate superior; and this is repeated all the way up into the highest ranks, where the under-secretary attests the minister’s signature, and the minister that of the king. There are analogous stages to be passed before a genius can attain widespread fame. This is why his reputation most easily comes to a standstill at the very outset; because the highest authorities, of whom there can be but few, are most frequently not to be found; but the further down he goes in the scale the more numerous are those who take the word from above, so that his fame is no more arrested.

We must console ourselves for this state of things by reflecting that it is really fortunate that the greater number of men do not form a judgment on their own responsibility, but merely take it on authority. For what sort of criticism should we have on Plato and Kant, Homer, Shakespeare and Goethe, if every man were to form his opinion by what he really has and enjoys of these writers, instead of being forced by authority to speak of them in a fit and proper way, however little he may really feel what he says. Unless something of this kind took place, it would be impossible for true merit, in any high sphere, to attain fame at all. At the same time it is also fortunate that every man has just so much critical power of his own as is necessary for recognizing the superiority of those who are placed immediately over him, and for following their lead. This means that the many come in the end to submit to the authority of the few; and there results that hierarchy of critical judgments on which is based the possibility of a steady, and eventually wide-reaching, fame.

The lowest class in the community is quite impervious to the merits of a great genius; and for these people there is nothing left but the monument raised to him, which, by the impression it produces on their senses, awakes in them a dim idea of the man’s greatness.

Arthur Schopenhauer

http://insomnia.ac/essays/on_criticism/

 

[molecular]

I have to say I'm a bit sad this thread has gone down in volume (not to discredit the recent posts, en contraire).

I know most of the discussion is happening in bitcoin_unlimited slack and btcchat slack and I joined both of these after the conference. I tried to hang out there, but it's just too much volume to wade through and somehow I can't seem to become friends with the slack interface for some reason.

Honestly, currently the most intersting place for me is r/btc.

Maybe we could somehow try to revive this thread a little.

 

[Norway]

@Peter R Adopted a node

 

[AdrianX]

Here is a question for those that follow the slack, and those that visit here regularly, what's your take on the probability of events following all these proposals.

This reddit post below seems like a rational outcome given current signaling and release dates.


I give it the highest probability just because the status quo has momentum.

I think there is a strong possibility that if BIP148 triggers before segwit2X then the UASF (bitcoin ABC) will kick in and trigger a segwit2X failure or a fork.

The result could be 3 possible bitcoin forks, or a failure of any 2. I don't have the collective reasoning of many inputs so I give UAHF a greater probability of success than the UASF given the economics of small blocks.

If UASF is allowed to trigger before segwit2X then I predict it will do a PoW change to stay viable, and be a good way for bitcoin to rid itself of some toxic trolls.

The UAHF being a minority fork would need significant PR to stay viable, and may also result in a PoW change to stay viable if it doesn't secure enough economic support to attack miners.

 

[Mengerian]

@AdrianX Generally agreed on the scenarios you lay out.

Regarding UAHF (which should have a better name), it is extremely unlikely do a POW change. At most, it might do a difficulty re-set if it doesn't attract enough hash power at the beginning. It is being done in cooperation with miners, so they are not going to make their own hardware unable to mine that chain.

 

[awemany]

I find it quite worrisome to outright scary that apparently quite a few SegWit supporters have a myopic view on topics like the UTXO growth:


Even if you think you like SegWit, there's so many alternatives to constraining the growth of Bitcoin, while still optimizing resource consumption.

Bitcrust shows that current UTXO problems of Bitcoin Core are an implementation detail.

UTXO coalescing could give you huge UTXO sets with constant storage, for just a logarithmic increase in bandwidth per transaction, and arguably without even touching the 'consensus layer'.

"This is without alternatives." are the words of politicians trying to shepherd sheeple into the politician's preferred 'solution'. Which usually goes along with rent seeking.

 

[Mengerian]

Preventing UTXO growth is basically saying "I like to prevent Bitcoin's success."

- @awemany

This is such an important point, it needs to be repeated far and wide.

People talk about UTXO growth as if it's just a technical annoyance. But it's the Ledger of everyone's holding. And if we want Bitcoin to grow in adoption, the ledger needs to grow.

I'd like Bitcoin to grow massively in adoption. And for those new adopters to hold their coins, the ledger, represented by the UTXO set, needs to grow massively too!

 

[lunar]

@AdrianX .

I give Segwit 2x the highest probability just because the status quo has momentum.

The result could be 3 possible bitcoin forks, or a failure of any 2. I don't have the collective reasoning of many inputs so I give UAHF a greater probability of success than the UASF given the economics of small blocks.

If UASF is allowed to trigger before segwit2X then I predict it will do a PoW change to stay viable, and be a good way for bitcoin to rid itself of some toxic trolls.

The UAHF being a minority fork would need significant PR to stay viable, and may also result in a PoW change to stay viable if it doesn't secure enough economic support to attack miners.

Just cleaning this up a bit, in an attempt to make sense of it all. Seems like we have 5 possible forks? With the most PoW longest chain being bitcoin.

• BU with EC and a simple increased blocksize. - Really needs 51%+ to be effective.
• Main chain stays dominant - all other forks are minor and become altcoins.
• Segwit 2x - Currently most likely scenario, needs 80% hash.
• UASF - Will fork of aug 1st to segwit only, may change PoW.
• UAHF - Will fork of aug 1st to increased blocksize.

The interactions between each depend on the miners and make it a bit difficult to predict which will win.

Segwit 2x looks like it's going according to plan, meaning the 336 block signalling period will need 80% hash from 21st july onwards (2 maybe 3 possible activation periods prior to august 1st.) However if one pool with +8% hash defects in this period, we get the three way fight between Mainchain/UASF/UAHF all the while there is BU in the background waiting for more than +51% support to consider activation.

What happens if Seg 2x activates prior to aug 1st, will UASF join in, or will it still go it's own PoW way? Will UAHF carry on and fork on aug 1st regardless of other options, with larger blocks and a decent hash rate, Tx will process and it should survive.... So many questions.

I'm officially calling this situation a 'Cluster Fork' and it's particularly irritating as the line from BSCore has always been we must avoid controversial forks all cost. They truly are the absolute worst of people.
[doublepost=1500070162,1500069558][/doublepost]@awemany "Preventing UTXO growth is basically saying "I like to prevent Bitcoin's success." This is spot on, and yet another FUD tactic from BScore equivalent to the 1MB or we will loose decentralisation.