Gold collapsing. Bitcoin UP.

[go1111111]

So towards the blocksize limit, is counted 1)The normal transactions that go in the block 2)The part of the segwit transactions that have to go in the block and 3)1/4 of the segwit transactions that aren't in the block at all
....
Edit: Still having trouble believing that is the plan. What is the logical reason for the /4 ? Why are we being asked do swallow this with such poor information and communication?

The segwit transactions will still be "in the block", just in a new part of the block that's being added for segwit and only counts 1/4 toward the 1 MB limit.

The reason for the /4 is that signatures impose less cost on the network overall than non-signature tx data. Signatures can be pruned after being verified, so they don't have to be stored (not a big deal, IMO, since storage is cheap). Non-witness data (inputs) also tends to make the UTXO larger. It's basically making inputs more costly to create, and outputs cheaper to spend. This is supposed to reduce the UTXO size. There's some dispute about this though. Search on the Bitcoin Core slack channel for @TrevinHofmann and @elliotolds talking to each other and you will learn all about this stuff.

 

[awemany]

All that is needed a sufficiently useful side chain to be developed that can accept all of Bitcoin being siphoned off via a Peg. Then Bitcoin would discarded as the network value had been transferred to a "better" place - at least better for BS investors .

When the side chain is fully decentralized (including development resources!) and it happens organically, this might be considered just an upgrade to Bitcoin.

We need to make sure it doesn't happen under the reign of theymos & Blockstream and forced - by crippling the main chain, for example.

 

[Zarathustra]

Yes. Because the Classic block version is incremented then all the old XT nodes will keep observing the 1MB limit by not seeing the 750/1000 trigger.

2MB hard fork nodes now overtook soft fork nodes. 280:260

 

[sgbett]

Does anyone else think that once the Chinese miners have all agreed that they are upgrading to bigger blocks, taking the time to make sure everyone over the water knows won't really be a priority

 

[cypherdoc]

The segwit transactions will still be "in the block", just in a new part of the block that's being added for segwit and only counts 1/4 toward the 1 MB limit.

The reason for the /4 is that signatures impose less cost on the network overall than non-signature tx data. Signatures can be pruned after being verified, so they don't have to be stored (not a big deal, IMO, since storage is cheap). Non-witness data (inputs) also tends to make the UTXO larger. It's basically making inputs more costly to create, and outputs cheaper to spend. This is supposed to reduce the UTXO size. There's some dispute about this though. Search on the Bitcoin Core slack channel for @TrevinHofmann and @elliotolds talking to each other and you will learn all about this stuff.

I'd like to hear your explanation as to why this is.

 

[Richy_T]

The segwit transactions will still be "in the block", just in a new part of the block that's being added for segwit and only counts 1/4 toward the 1 MB limit.

The reason for the /4 is that signatures impose less cost on the network overall than non-signature tx data. Signatures can be pruned after being verified, so they don't have to be stored (not a big deal, IMO, since storage is cheap). Non-witness data (inputs) also tends to make the UTXO larger. It's basically making inputs more costly to create, and outputs cheaper to spend. This is supposed to reduce the UTXO size. There's some dispute about this though. Search on the Bitcoin Core slack channel for @TrevinHofmann and @elliotolds talking to each other and you will learn all about this stuff.

No, that is the reason for a *different* cost, arguably. I want to see some justification for the actual value of 1/4. The most I've seen is hand-wavery.

And in any case, that goes towards explaining the financial discount at best. Reducing the part of the block available for normal transactions not so much.

Doing this by fudging the calculation of the block size is an ugly hack. We have a max block size limit of 1MB but we're allowing blocks which are actually bigger than that? Except they won't be for older nodes. Awful, awful practices.

 

[sickpig]

just a quick one about SegWit's 1/4: there's no factual reason for such a number.

They pick 4MB as maximum block size. and from there you could derive a the famous

a +b/4 <= 1MB

in other words Core devs are ok with a max block size equal to 4MB.

Remember that witness data could be discarded only after the validation step. Than means that both base data (a) and witness data (b) as to be relayed.

ps sorry for my luck on contribution on that matter but it is quite a week.

 

[awemany]

I have to say I find this both insightful and I chuckled while reading this:

 

[steffen]

This fascinating piece of history (The Corbett Report part 1 of 2) gives a good background for understanding what is happening in the bitcoin industry - even without being about bitcoin!

 

[cypherdoc]

just a quick one about SegWit's 1/4: there's no factual reason for such a number.

They pick 4MB as maximum block size. and from there you could derive a the famous

a +b/4 <= 1MB

in other words Core devs are ok with a max block size equal to 4MB.

Remember that witness data could be discarded only after the validation step. Than means that both base data (a) and witness data (b) as to be relayed.

ps sorry for my luck on contribution on that matter but it is quite a week.

Yes, they could've picked 5mb, if they thought the network could safely handle it, and the discount would then have been 80%
[doublepost=1454683058][/doublepost]Or, IOW, b/5 to get that 5mb block soft forked back down to 1mb.

 

[cypherdoc]

[doublepost=1454686478][/doublepost]Classic nodes up to 218.

 

[cypherdoc]

@bracek

no doubt there is trouble afoot in the real economy. i've been painstakingly documenting that in my Dow charts for the last year or so.

as for Maloney's specific charts, most of the moves appear correlated with the Fed raising interest rates in Dec:

1. that Total Capital chart looks too dramatic to me. occasionally you'll see even one of these gvt charts get revised later on to either correct an error or smooth it over (tinfoil). let's see if it changes in the next month or so. it doesn't seem likely they'd have to spend 1/3 of their capital to buy assets to prop price w/o some sort of public announcement. otoh, it could represent the fact that they had to buy UST's to raise interest rates back in Dec. still seems like too much.

2. the Comex gold holdings have been decreasing for years. and like i've argued, that doesn't mean the price has to go up and it still doesn't. yes, HSBC & whomever, may be stock piling gold in anticipation of some event but that doesn't mean they're right to do so. in fact, we know China has been doing the same thing since around 2009-10 and that hasn't worked out so well for them. remember Gordon Brown liguidating all of the UK's gold back in 2000 or so? central bankers aren't necessarily great market technicians. as Comex gold holdings drop, futures contracts can still be forced settled in cash as opposed to taking possession. also, an overlying deflation in the real economy like what i've argued has been going on since 2011 (the gold peak) can still force a price decrease, as i think most gold is bought with leverage.

i'll comment on the other charts as i find time.

 

[YarkoL]

http://satoshiroundtable.org/

Should someone book a place?

 

[sgbett]

as if gold is going down!? i mean its not like there has been a monumental (inflation adjusted) double top

 

[awemany]

Bitcoin has a hugely sized block already

... as in: The size of the mental road block stopping progress on the maxblocksize parameter...

Sigh.

 

[Mengerian]

The reason for the /4 is that signatures impose less cost on the network overall than non-signature tx data.

There are some counter-arguments to these points though:

Signatures can be pruned after being verified, so they don't have to be stored (not a big deal, IMO, since storage is cheap).

The storage cost of signatures is cheaper, but the computation cost is higher. Signature data takes more time and CPU cycles to validate. Who decided that storage cost should take precedence over CPU/validation cost?

Non-witness data (inputs) also tends to make the UTXO larger. It's basically making inputs more costly to create, and outputs cheaper to spend. This is supposed to reduce the UTXO size.

Doesn't it also make it costly to shrink the UTXO? But even if does encourage shrinking the UTXO, updating the UTXO is a core function of Bitcoin. The ease with which we can make changes to the UTXO is one of the core monetary properties of Bitcoin that makes it valuable. So making it arbitrarily more costly is detrimental to Bitcoin value.

Edit: Still having trouble believing that is the plan. What is the logical reason for the /4 ? Why are we being asked do swallow this with such poor information and communication?

Yup. I think we're on the same wavelength now

The major problem with this scheme is that it's completely arbitrary. Miners should select transaction based on the fees and actual costs such as bandwidth, storage cost, validation time and orphaning risk. These costs should be assessed by each miner and the trade-offs between them worked out in the market, not by an arbitrary formula.

 

[AdrianX]

When the side chain is fully decentralized (including development resources!) and it happens organically, this might be considered just an upgrade to Bitcoin.

We need to make sure it doesn't happen under the reign of theymos & Blockstream and forced - by crippling the main chain, for example.

@awemany it's not just an upgrade or a case of better tech being favored.

The vast majority of economic wealth is controlled by those who believe in the monetarist theory's of inflation. They're not hard money advocates, in fact they're empowered by inflation if they know it or not.

Bitcoin grows because it is better money and at some point the incumbents have to accept that and transfer into bitcoin.

Sidechains offer the incumbents a risk free upgrade from bitcoin without having to accept the bitcoin rules.

The two way peg will allow bitcoin holders to arbitrage. During the buy in to the sidechain bitcoiners can cash out go back to bitcoin, but at some point it's conceivable that a sidechain will develop a greater network effect than bitcoin.

It's also conceivable that such a sidechain has an optimum inflation rate to satisfy the monetarists.

And it's conceivable that bitcoiners treat it like fiat today just cashing out temporarily but there are no guarantees that the fees will always be in favor of bitcoin and that contracts don't lock bitcoin up in a sidechain until such time as bitcoin's security model is degraded.

 

[Richy_T]

I'm not sure what I think about this...

Some months ago, I brought up that for all the complaints about Hearn's XT "phoning home" (to obtain the list of Tor addresses) Bitcoin also did so when it attempted to get its external address. (Correct according to the Wiki).

Peter Todd then responded that Bitcoin no longer phoned home. (Note: not "No longer phones home in this way"). I took him at his word and even downvoted my own post and comment.

Yet when Bitcoin starts it has a list of nodes it contacts to get another list of nodes that allow it to join the network. For testnet, one of these nodes happens to be testnet-seed.bitcoin.petertodd.org

https://www.reddit.com/r/bitcoinxt/comments/3iodgu/on_the_loss_of_privacy_from_downloading_a_list_of/

 

[cypherdoc]

There are some counter-arguments to these points though:

The storage cost of signatures is cheaper, but the computation cost is higher. Signature data takes more time and CPU cycles to validate. Who decided that storage cost should take precedence over CPU/validation cost?

don't forget the extra BW costs to relay all these multisig tx's around with resulting blocks btwn 1-4MB in size

Doesn't it also make it costly to shrink the UTXO?

can you explain what you mean here?

But even if does encourage shrinking the UTXO, updating the UTXO is a core function of Bitcoin. The ease with which we can make changes to the UTXO is one of the core monetary properties of Bitcoin that makes it valuable. So making it arbitrarily more costly is detrimental to Bitcoin value.

agreed

Yup. I think we're on the same wavelength now

The major problem with this scheme is that it's completely arbitrary. Miners should select transaction based on the fees and actual costs such as bandwidth, storage cost, validation time and orphaning risk. These costs should be assessed by each miner and the trade-offs between them worked out in the market, not by an arbitrary formula.

yes we are now.

 

[Richy_T]

The major problem with this scheme is that it's completely arbitrary. Miners should select transaction based on the fees and actual costs such as bandwidth, storage cost, validation time and orphaning risk. These costs should be assessed by each miner and the trade-offs between them worked out in the market, not by an arbitrary formula.

It also makes the actual (in practice) block size limit completely unpredictable. a+b/4<1mb could be anything from 1mb to what, 4mb depending on the transactions. I mean, it's arbitrary anyway but then it becomes randomized and, in practice, stays at 1 until critical mass is achieved.

I'm starting to see why they decided to have this as a consensus rule rather than simply an economic one. It becomes harder for miners to alter for themselves (Changing 1/4 to 3/4 for example). Though they could still calculate priority separately. Perhaps this is something that BU/Classic/XT could offer if they decide to implement segwit (Though I'm hoping things go otherwise).
[doublepost=1454699496][/doublepost]

Yup. I think we're on the same wavelength now

I think Core should be sponsored by thedailywtf.com or, given the gobs of money they've got, vice versa.