Hello My Name is Praxeology Guy

[praxeology]

=== Introduction ===

Hi. You can call me Praxeology Guy, praxeology, or prax. I'm an Austrian School economist (mises.org). I'm also a software engineer and a philosopher. I want more competition in money and better money options so that myself and the whole world can benefit from more efficient trading.

My purpose for coming here is to informally propose improvements and help to fully explore the consequences of proposed policy changes.

You may have recently seen me on irc #bitcoin, a fraction of my posts on the heavily moderated bitcoin-dev mailing list, and a few posts on bitcointalk.org.

=== Allegiance ===

I pledge allegiance to verifiable money policy.

I like Bitcoin technology because it allows us to create our own money and money policy, despite the powers-that-be central bankers' wishes to have a monopoly on money. I want sound money where I can have some reasonable cost method to ensure that the money policies are being followed.

I like Bitcoin Core because they are trying to create a system of money that has a very low cost to verify that the ledger is in accordance to one's money supply policy.

I like Bitcoin Unlimited because it explores the possibility of having a higher cost-to-verify system that may also be secure enough from corruption and the powers-that-be... while being able to handle higher on-main-chain transaction throughput.

=== How are you doing? Whats up? AMA ===

How are you doing? Whats up? Ask me anything. Even your philosophical ones, there is no bounds. If your question interests me, I'll bite and maybe answer your greatest life mysteries. Please don't be offended, I'm not here to dictate your thoughts. I offer you my ideas, which you are free to question and verify for yourself.

Would all the computers in the world explode if Bitcoin was forked? What is the meaning of life? Ask away.

Cheers,
Praxeology Guy

 

[AdrianX]

I like Bitcoin Core because they are trying to create a system of money that has a very low cost to verify that the ledger is in accordance to one's money supply policy.

I like Bitcoin Unlimited because it explores the possibility of having a higher cost-to-verify system that may also be secure enough from corruption and the powers-that-be... while being able to handle higher on-main-chain transaction throughput.

Hi @praxeology welcome I'd like to challenge that assumption and get you feedback on actual costs to run a node. Have you seen https://bitnodes.21.co/ on the home page they have an interactive world map that show all the relay nodes. You can pick any city and literally see the number of nodes in that city. Here in Vancouver Canada there are 17 nodes and I estimate over 10,000 bitcoin users, I can't convince bitcoin users to run a node because it's cheap, apparently that's not why people run nodes, and my friends that don't use bitcoin have no will to run a node at all.

In India there are an estimated 50,000 - 400,000 bitcoin users over 350 million internet users and just 5 nodes, and 100'000's of businesses and home internet connections capable of handling 16MB per 10 minute transaction capacity.

The average web page today is approximately 2MB, most internet users have the minimum viable internet connection. I am yet to see an internet users who has internet assess, persist on downloading an average web page that takes just under 20 minutes, approximating the minimum internet connection to run a full node on the bitcoin network today.

My home internet connection being the basic I am willing to pay for can not get any cheaper yet it is capable of handling the equivalent of 25MB worth of transactions every 10 minutes and costs approximately $40 per month. The average home internet connection can handle approximately 16MB of transactions every 10 minutes. I believe one can assume the average home connection is not going to get any cheaper regardless of weather there is a block limit of 1MB or 16MB. In the future I expect internet connections should get faster not cheaper.

Should Core's goal be to limit transaction capacity to reduce the cost of running a node there will be negative externalities. For one, high demand for the limited transaction capacity will force the market to pay a higher rate per transaction, at some point an equilibrium will be reached and the market will find an alternate service for a more cost effective price - that's how markets drive innovation.

Core are unlikely to succeed in creating a limited transaction bitcoin network, I would argue impossible while investors see value in allowing more users, as new users create demand for the coins the investors wish to sell.

Should Core succeed in limiting capacity with increasing demand one can expect to pay $10, $40 or over $100 to perform a native bitcoin transaction, Core developers are on record saying such fees are well withing the realm of potability, and are not alarming.

As a user I get no benefit from running a node that costs $40 per month when I can not afford to pay the $40 per transaction. So I've concluded that limiting transaction capacity to reduce the cost of a node just creates demand for competing solutions and is not a viable option for bitcoin, what do you think?

Bitcoin Unlimited on the other hand just allows the transaction capacity to expand to the optimum capacity of the existing network at no extra additional cost to run a node.

 

[praxeology]

Hello @AdrianX,

Thanks for the thoughtful reply. I've also done similar analysis of the costs and motivation an pretty much came to the same conclusions.

Funny, your point, about how the tx fees may become so high that even the poor people with crappy internet connections who they are working so hard to allow to fully verify... will not even want to use their money. Ironic.

=== Detailed Reply On your Analysis ===

I agree with your analysis. That is why I think that Bitcoin Unlimited policy should be activated (via fork of course, I highly doubt Core will accept your larger blocks). I think that Bitcoin can and should handle a lot more users. It is a shame in my opinion, that transaction throughput is limited in Bitcoin, resulting in higher tx fees and lower usage... just so that people with crappy internet connections can fully verify the blocks. It is preventing a great number of people from using Bitcoin, just for the sake of a few.

I agree, people are moving to using other distributed currencies because the fees are too high in Bitcoin. I agree that poor people who can't afford a faster internet connection probably aren't going to use Bitcoin if its tx fees are so high. Only rich people would, and they can afford a higher speed internet connection. Unless say Core's Lightning Network and Sidechain and ???? future invention really pan out... who knows?

=== But... the Issue of Users who do want to Cheaply Verify ===

But there are users who do have crappy internet connections who want to be able to fully verify the blocks. And I have concern that there may be run-away centralization when miners control the block size... and centralization can lead to corruption. So for those people, and the centralization concern, I also think that Bitcoin Core with a more limited block size should exist. It is a different use case, that requires a different policy.

=== My Preference ===

The goals of the two different groups are in an resolvable contradiction with only one chain. Why not instead of compromise, fork?

For me, increasing the block size, and furthermore, giving miners the control over it, is an experiment that I consider worthwhile, but I'm not about to put all of my eggs in that basket. I want to have my money in both options.

FYI, I'm a huge fan of having TONS of currencies all competing at the same time with each other, all for different use cases and special interest groups. I love competition... its really unfortunate that there is currently a monopoly on money printing in most countries... mostly enforced by the US Federal Government.

It would be impossible to figure out which Policy is the best Policy without trying them. There would be little motivation for the miners and the developers to improve their money if there was no competition. Competition results in decreased transaction fees and better money transfer efficiency all around. So in this I am trying to convince you that its probably not worthwhile to convince me that I should give up on my desire for the limited block Policy to be around.

I'd rather you guys faced the fact that there is a demand for both Policies. That you would fork to support your user base: a large number of people who want to transact with lower tx fees sooner rather than later (or if ever).

=== Re: Centralization and Verificatoin: Auditing Solution ===

On the topic of centralization risk... I thought of how a centralized operation who's tx bandwidth is so high most can't afford to verify... thought of how such could be audited/verified.

An auditor could go to the miner's facility and be supplied with an in-house network connection where they can verify the blockchain with a set of some random bitcoin accounts*. The auditor could verify that the blockchian's ledger balances are consistent with his account* data.

* I realize that Bitcoin doesn't have accounts, I'm just trying to have a freaking layman conversation here.

Cheers,
Praxeology Guy

 

[bitsko]

Hello.

Did you do the post to the bitcoin dev mailing list wherein it said 100 million dollars?

Do you still believe that?

 

[praxeology]

bitsko,

I am the author of https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-April/014042.html.

I'm not sure exactly what you are referring to, in asking me if I "believe that".

I do think that people in the world today in total could be making a profit on the order of $100 million USD per year due to covert asicboost mining. I don't have direct evidence that they are doing it. I just have evidence that: they have the ability, have been doing things that result in their continued ability to do it, and of course the profit motive.

I would also personally prefer to have my purchasing power in a money where there was competition in mining. Such results in higher real work done per block, higher security, lesser chance of future 51% attack. Government enforced monopoly on mining profits via conscription contracts (patents) results in a group of miners who get paid unnecessarily extra for the patent instead of securing against 51% attack. Why would I want that over slightly changing PoW policy to prevent covert asicboost?

 

[bitsko]

The reason that I ask if you still 'believe that' is that the conclusion that this post from Guy Corem draws is radically different.

https://medium.com/@vcorem/the-real-savings-from-asicboost-to-bitmaintech-ff265c2d305b

I cannot say whether you had ill intent, rather I don't like to think it to be the case, however I watched the phrase 100 Million fly back and forth in the community catching peoples attention and raising their ire against Bitmain, with what appears to be inaccurate maths. Even Andreas said 100 Million in his talk about asicboost. If you see fault in Guy Corem's estimate, I would like to hear that out.

Cheers.

 

[praxeology]

Guy Corem's estimate only looks at "BitmainTech directly control 500 PH/s of S9 machines".

========================================
Guy Corem's estimate is only looking at S9 machines:
========================================

gmaxwell claims that the S7 also has the asicboost functionality. Furthermore, S5+ is at 2250 MH/J, S7 is at 4000 MH/J, and S9 is at 10182 MH/J... unlikely that anyone is mining on anything other than S7 in any significant quantity today. Sure there is BitFury, but they are calling for SegWit. Maybe they are using covert asicboost as well, who knows? What is the market share of Avalon? Almost nothing? Their latest generation is only marginally better than the S7.

========================================
Guy Corem's estimate is only looking at BitmainTech directly controlled machines:
========================================

Using https://coin.dance/blocks

SegWit signalling: 35% F2Pool, Bitfury, BTCC, Slush, Others...

BU signalling: 39% Antpool, BTC.top, ViaBTC, Bitcoin.com, BitClub, GBMiners, Canoe, Slush

Running Core, not Signalling: 21% HaoBTC, BW Pool, BTC.com, Others

But how can we estimate what percent of those pools are using asicboost? Maybe all of the BU signalers, and half of the non-signalers? That would be about 50% of the hashpower. Maybe some of the SegWit signalling miners are also using asicboost?

Maybe all of the large mining operators are using asicboost... and its only the people who are running small operations at home or wherever that are not using asicboost?

Maybe its just the pools that have strong ties to BitmainTech?

========================================

I have no idea where Guy Corem got his numbers from. I don't know why he only considered S9s, when S7s also have asicboost capability. Guy Corem only considered BitmainTech operated miners, I considered any large mining operation, and particularly BU signalling ones.

But sure, my number is just speculation. Who knows what the exact number is? We have no idea, because its covert. $100m USD/year is possible if 50% of the total hashrate is using asciboost. That is all I am claiming.

========================================

As for how much profits the operators of BitmainTech could be gaining from asicboost...

Which of the pools are operated by or are in some fraction owned by the operators of AntPool? In those pools, how much of the hashrate is from hardware controlled by them rather than independent remote operations?

 

[praxeology]

Hey look, you guys already quoted me in discussion with gmaxwell on your MEME FACTORY thread (talking about his usage of the word "fiat"): "https://bitco.in/forum/threads/meme-factory.1172/page-5#post-35009"



Maybe this forum should put the post anchor at the top of the post (instead of the bottom).