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Which type of curren(t) do you want to see(cy)? An analysis of the intention behind bitcoin(s). Part 3
Part 1 Part 2 So I have been subbed to /bitcoin since it had less than two thousand subs but haven't posted there in years. I think I took a break from researching bitcoin to take a foray into the world of conspiracy around 2014 and only got back in to it around the beginning of 2017 but with a bit of sense of skepticism and cynicism about everything. I think I returned to /bitcoin around that time but there had been a rift that had emerged in the community between those that said that bitcoin was censoring any discussion around big blocks but then also just censorship in general. This lead to the formation of /btc which became the main spot for big blockers to gather to talk about protocol development. Following the fork of Bitcoin Cash and SegWit (BTC) in August 2017 the camps were further divided when the fence sitters were denied their SegWit2x compromise. Many from the fence sitters then deferred back to the incumbent bitcoin as citing muh network effect, liquidity, and hashpower while some who felt betrayed by the failure of getting S2X through went to support BCH for some attempt at on chain scaling rather than through pegged side chains or Lightning Network. Bitcoin cash initially went with a modest doubling of the blocksize to 2MB but implemented some other features like a new more rapidly adjusting difficulty algorithm to protect themselves against hashpower fluctuations from the majority chain. In about July of that year I had seen what I potentially thought was someone LARPing on /biz/ but screencapped, that segwit2x which was scheduled for november 2017 would be called off and then hashpower would switch to BCH causing congestion and chain death spiral on BTC and BCH would pump massively. I was partial to the idea as the game theory and incentives on a big block bitcoin should attract miners. About a month after SegWit2x was indeed called off while the BTC blockchain was hugely congested, BCH went through a violent pump reaching 0.5 BTC/BCH on a European exchange called Kraken while it also pumped ridiculously on American exchange coinbase. Shortly afterwards the market took a giant dump all over those people who bought the top and it has since retraced to roughly 30:1 or so now. After that pump though BCH kind of gained some bagholders I guess who started to learn the talking points presented by personalities like Roger Ver, Jihan Wu, Peter Rizun and Amaury Sechet. Craig S Wright by this time had been outed as Satoshi but had in 2016 publicly failed to convince the public with the cryptographic proof he provided. To which he later published the article I don't have the courage to prove I am the bitcoin creator. In essence this allowed many to disregard anything he offered to the crypto community though his company nChain was very much interested in providing the technical support to scale what he saw as the true implementation of bitcoin. Following debate around a set of planned protocol upgrades between a bitcoin node implementation by his company nChain and the developers of another client Bitcoin ABC (adjustable block cap), the two parties both dug their heels in and wouldn't compromise. As it became clear that a fork was imminent there was a lot of vitriol tossed out towards Wright, another big billionaire backer Calvin Ayre and other personalities like Roger Ver and Jihan Wu. Craig's credibility was disregarded because of his failure to provide convincing cryptographic proof but still people who wanted to pursue the protocol upgrades that nChain were planning (as it best followed their interpretation of the bitcoin white paper) pursued his variant, while others who followed the socia consensus deferred to the positions of their personalities like Wu, Ver, and Sechet but even developers from Ethereum and other protocols chimed in to convince everyone that CSW is a fraud. This was referred to as the hash war and was the first time that the bitcoin protocol had been contentiously hard forked. Hashpower is the CPU cycles you can commit to the Proof of Work function in bitcoin and the majority will generate the longest chain as they have the most proof of work. To win the contentious hard fork legitimately and make sure your chain will always be safe going forward you need to maintain your version of the blockchain with 51% of the hashpower on the network and force the other parties to continue to spend money on building a blockchain that is never going to be inserted in to the majority chain. As well as this you need to convince exchanges that you have the majority chain and have them feel safe to accept deposits and withdrawals so that they don't lose money in the chaos. This is how it would play out if both parties acted according to the rules of bitcoin and the Nakamoto Consensus. There was a lot of shit talking between the two parties on social media with Craig Wright making a number of claims such as "you split, we bankrupt you" "I don't care if there is no ability to move coins to an exchange for a year" and other such warnings not to engage in foul play.. To explain this aftermath is quite tedious so It might be better to defer to this video for the in depth analysis but basically Roger Ver had to rent hashpower that was supposed to be mining BTC from his mining farm bitcoin.com, Jihan Wu did the same from his Bitmain Mining Farm which was a violation of his fiduciary duty as the CEO of a company preparing for an IPO. In this video of a livestream during the hashwar where Andreas Brekken admits to basically colluding with exchange owners like Coinbase, Kraken (exchange Roger Ver invested in), Bitfinex and others to release a patched ABC client to the exchanges and introducing "checkpoints" in to the BCH blockchain (which he even says is arguably "centralisation") in order to prevent deep reorgs of the BCH blockchain. >"We knew we were going to win in 30 mins we had the victory because of these checkpoints that we released to a cartel of friendly businesses in a patch so then we just sat around drinking beers all day". By releasing a patched client that has code in it to prevent deep reorgs by having the client refer to a checkpoint from a block mined by someone who supported BCHABC if another group of hash power was to try to insert a new chain history, this cartel of exchanges and mining farm operators conspired in private to change the nature of the bitcoin protocol and Nakamoto Consensus. Since the fork there have been a number of other BCH clients that have come up that require funding and have their own ideas about what things to implement on the BCH chain. What began to emerge was actually not necessarily an intention of scaling bitcoin but rather to implement Schnorr signatures to obfuscate transactions and to date the ABC client still has a default blocksize of 2MB but advertised as 16MB. What this demonstrates for BCH is that through the collusion, the cartel can immediately get a favourable outcome from the developers to keep their businesses secure and from the personalities/developers to work on obfuscating records of transactions on the chain rather than scaling their protocol. After the SegWit fork, many from the BCH camp alleged that through the funding to Blockstream from AXA and groups that tied to the Bilderbergs, Blockstream would be beholden to the legacy banking and would be a spoke and hub centralised model, so naturally many of the "down with central banks anarcho capitalist types" had gathered in the BCH community. Through these sympathies it seems that people have been susceptible to being sold things like coin mixing and obfuscation with developers offering their opinions about how money needs to be anonymous to stop the evil government and central banks despite ideas like Mises’ Regression Theorem, which claims that in order for something to be money in the most proper sense, it must be traceable to an originally non-monetary barter commodity such as gold. What this suggests is that there is an underlying intent from the people that have mechanisms to exert their will upon the protocol of bitcoin and that if obfuscation is their first priority rather than working on creating a scalable platform, this demonstrates that they don't wish to actually be global money but more so something that makes it easier to move money that you don't want seen. Roger Ver has often expressed sentiments of injustice about the treatment of Silk Road found Ross Ulbricht and donated a large amount of money to a fund for his defence. I initially got in to bitcoin seeking out the Silk Road and though I only wanted to test it to buy small quantities of mdma, lsd, and mescaline back in 2011 there was all sorts of criminal activity on there like scam manuals, counterfeits, ID, Credit Card info, and other darknet markets like armoury were selling pretty crazy weapons. It has been alleged by Craig Wright that in his capacity as a digital forensics expert he was involved with tracing bitcoin that was used to fund the trafficking of 12-16 year olds on the silk road. There have been attempts at debunking such claims by saying that silk road was moderated for such stuff by Ulbricht and others, but one only has to take a look in to the premise of pizza gate to understand that there it may be possible to hide in plain site with certain code words for utilising the market services and escrow of websites like the silk road. The recent pedo bust from South Korea demonstrates the importance of being able to track bitcoin transactions and if the first thing BCH wanted to do after separating itself from Satoshi's Vision and running on developer and cartel agendas was to implement obfuscation methods, this type of criminal activity will only proliferate. Questions one must ask oneself then are things like why do they want this first? Are some of these developers, personalities and cartel businesses sitting on coins that they know are tarnished from the silk road and want to implement obfuscation practices so they can actually cash in some of the value they are unable to access? Merchants from the silk road 1 are still being caught even as recently as this year when they attempted to move coins that were known to have moved through the silk road. Chain analytics are only becoming more and more powerful and the records can never be changed under the original bitcoin protocol but with developer induced protocol changes like Schnorr signatures, and coinjoin it may be possible to start laundering these coins out in to circulation. I must admit with the cynicism I had towards government and law enforcement and my enjoying controlled substances occasionally I was sympathetic to Ross and donated to his legal fund back in the day and for many years claimed that I wouldn't pay my taxes when I wanted to cash out of bitcoin. I think many people in the space possess this same kind of mentality and subsequently can be preyed upon by people who wish to do much more in the obfuscation than dodge tax and party. Another interesting observation is that despite the fact that btc spun off as a result of censorship around big block scaling on bitcoin, that subreddit itself has engaged in plenty of censorship for basically anyone who wants to discuss the ideas presented by Dr Craig Wright on that sub. When I posted my part 2 of this series in there a week ago I was immediately met with intense negativity and ad hominems so as to discourage others from reading the submission and my post history was immediately throttled to 1 comment every 10 mins. This is not quite as bad as cryptocurrency where my post made it through the new queue to gather some upvotes and a discussion started but I was immediately banned from that sub for 7 days for reason "Content standards - you're making accusations based on no evidence just a dump of links that do nothing to justify your claims except maybe trustnodes link (which has posted fabricated information about this subreddit mods) and a Reddit post. Keep the conspiracy theories in /conspiracy" My post was also kept at zero in bitcoin and conspiracy so technically btc was the least censored besides C_S_T. In addition to the throttling I was also flagged by the u/BsvAlertBot which says whether or not a user has a questionable amount of activity in BSV subreddits and then a break down of your percentages. This was done in response to combat the "toxic trolls" of BSV but within bitcoincashSV there are many users that have migrated from what was originally supposed to be a uncensored subreddit to discuss bitcoin and many such as u/cryptacritic17 has have switched sides after having been made to essentially DOXX themselves in btc to prove that they aren't a toxic troll for raising criticisms of the way certain things are handled within that coin and development groups. Other prominent users such as u/jim-btc have been banned for impersonating another user which was in actual fact himself and he has uploaded evidence of him being in control of said account to the blockchain. Mod Log, Mod Damage Control, Mod Narrative BTFO. Interestingly in the comments on the picture uploaded to the blockchain you can see the spin to call him an SV shill when in actual fact he is just an OG bitcoiner that wanted bitcoin to scale as per the whitepaper. What is essentially going on in the Bitcoin space is that there is a battle of the protocols and a battle for social consensus. The incumbent BTC has majority of the attention and awareness as it is being backed by legacy banking and finance with In-Q-Tel and AXA funding blockstream as well as Epstein associates and MIT, but in the power vaccum that presented itself as to who would steward the big block variant, a posse of cryptoanarchists have gained control of the social media forums and attempted to exert their will upon what should essentially be a Set In Stone Protocol to create something that facilitates their economic activity (such as selling explosives online)) while attempting to leverage their position as moderators who control the social forum to spin their actions as something different (note memorydealers is Roger Ver). For all his tears for the children killed in wars, it seems that what cryptoanarchists such as u/memorydealers want is to delist/shut down governments and they will go to any efforts such as censorship to make sure that it is their implementation of bitcoin that will do that. Are we really going to have a better world with people easier able to hide transactions/launder money? Because of this power vacuum there also exists a number of different development groups but what is emerging now is that they are struggling for money to fund their development. The main engineering is done by self professed benevolent dictator Amaury Sechet (deadalnix) who in leaked telegram screen caps appears to be losing it as funding for development has dried up and money raised in an anarchist fashion wasn't compliant with laws around fundraising sources and FVNI (development society that manages BCH development and these donations) is run by known scammer David R Allen. David was founder of 2014 Israeli ICO Getgems (GEMZ) that scammed investors out of more than 2500 Bitcoins. The SV supported sky-lark who released this information has since deleted all their accounts but other users have claimed that sky-lark was sent personal details about themselves and pictures of their loved ones and subsequently deleted all their social media accounts afterwards. There are other shifty behaviours like hiring Japanese influencers to shill their coin, recruiting a Hayden Otto that up until 2018 was shilling Pascal Coin to become a major ambassador for BCH in the Australian city of Townsville. Townsville was claimed to be BCH city hosting a BCH conference there and claiming loads of adoption, but at the conference itself their idea of demonstrating adoption was handing a Point of Sale device to the bar to accept bitcoin payments but Otto actually just putting his credit card behind the bar to settle and he would keep the BCH that everyone paid. In the lead up to the conference the second top moderator of btc was added to the moderators of townsville to shill their coin but has ended up with the townsville subreddit wanting to ban all bitcoin talk from the subreddit. Many of the BCH developers are now infighting as funding dries up and they find themselves floundering with no vision of how to achieve scale or get actual real world adoption. Amaury has recently accused Peter Rizun of propagandising, told multiple users in the telegram to fuck off and from all accounts appears to be a malignant narcissist incapable of maintaining any kind of healthy relationship with people he is supposed to be working with. Peter Rizun has begun lurking in bitcoincashSV and recognising some of the ideas coming from BSV as having merit while Roger has started to distance himself from the creation of BCH. Interestingly at a point early in the BCH history Roger believed Dr Craig Wright was Satoshi, but once CSW wouldn't go along with their planned road map and revealed the fact he had patents on blockchain technology and wanted to go down a path that worked with Law, Roger retracted that statement and said he was tricked by Craig. He joined in on the faketoshi campaign and has been attempted to be sued by Dr Wright for libel in the UK to which Roger refused to engage citing grounds of jurisdiction. Ironically this avoidance of Roger to meet Dr Wright in court to defend his claims can be seen as the very argument against justice being served by private courts under an anarchocapitalist paradigm with essentially someone with resources simply being able to either flee a private court's jurisdiction or engage a team of lawyers that can bury any chances of an everyday person being able to get justice. There is much more going on with the BCH drama that can be explained in a single post but it is clear that some of the major personalities in the project are very much interested in having their ideals projected on to the technical implementation of the bitcoin protocol and have no qualms spouting rhetoric around the anti-censorship qualities of bitcoin/BCH while at the same time employing significant censorship on their social media forums to control what people are exposed to and getting rid of anyone who challenges their vision. I posit that were this coin to become a success, these "benevolent dictators" as they put it would love their new found positions of wealth/dominance yet if their behaviour to get there is anything to go by, would demonstrate the same power tripping practices of censorship, weasel acts, misleading people about adoption statistics and curating of the narrative. When the hashrate from Rogers bitcoin.com minging operation on BCH dropped dramatically and a lot of empty blocks were being mined, his employer and 2IC moderator u/BitcoinXio (who stepped in to replace roger as CEO) was in the sub informing everyone it was simply variance that was the reason when only a few days later it was revealed that they had reduced their hash power significantly. This is not appropriate behaviour for one of the primary enterprises engaged in stewarding BCH and encouraging adoption nor is the inability to be accountable for such dishonest practices as well. It seems bitcoin.com treats btc as their own personal spam page where Roger can ask for donations despite it being against the sub rules and spin/ban any challenge to the narrative they seek to create. Let's see how the censorship goes as I post this around a few of the same places as the last piece. Stay tuned for the next write up where I take a deep dive in to the coin that everyone doesn't want you to know about.
Block size adjustment idea - expedience fees + difficulty scaling proportional to block size (+ fee pool) | Natanael | Mar 30 2017
Natanael on Mar 30 2017: I had these following ideas as I was thinking about how to allow larger blocks without incentivizing the creation of excessively large blocks. I don't know how much of this is novel, I'd appreciate if anybody could link to any relevant prior art. I'm making no claims on this, anything novel in here is directly released into public domain. In short, I'm trying to rely on simple but direct incentives to improve the behavior of Bitcoin. Feedback requested. Some simulations requested, see below if you're willing to help. Any questions are welcome. Expedience fees. Softfork compatible. You want to really make sure your transaction gets processed quickly? Transactions could have a second fee type, a specially labeled anyone-can-spend output with an op_return value defining a "best-before" block number and some function describing the decline of the fee value for every future block, such that before block N the miners can claim the full expedience fee + the standard fee (if any), between block N+1 and N+X the miner can claim a reduced expedience fee + standard fee, afterwards only the standard fee. When a transaction is processed late such that not the full expedience fee can be claimed, the remainder of the expedience fee output is returned to the specified address among the inputs/outputs (could be something like in#3 for the address used by the 3rd UTXO input). This would have to be done for all remaining expedience fees within the last transaction in the block, inserted there by the miner. These additional UTXO:s does increase overhead somewhat, but hopefully not by too much. If we're going to modify the transaction syntax eventually, then we could take the chance to design for this to reduce overhead. My current best idea for how to handle returned expedience fees in multiuser transactions (coinjoin, etc) is to donate it to an agreed upon address. For recurring donation addresses (the fee pool included!), this reduces the number of return UTXO:s in the fee processing transaction. The default client policy may be to split the entire fee across an expedience fee and a fee pool donation, where the donation part becomes larger the later the transaction gets processed. This is expected to slow down the average inclusion speed of already delayed transactions, but they remain profitable to include. The dynamics here is simple, a miner is incentivized to process a transaction with an expedience fee before a standard fee of the same value-per-bit in order to not reduce the total value of the available fees of all standing transactions they can process. The longer they wait, the less total fees available. Sidenote: a steady stream of expedience fees reduces the profitability of block withholding attacks (!), at some threshold it should make it entirely unprofitable vs standard mining. This is due to the increased risk of losing valuable expedience fees added after you finished your first block (as the available value will be reduced in your block #2, vs what other miners can claim while still mining on that previous block). (Can somebody verify this with simulations?) Fee pool. Softfork compatible. We want to smooth out fee payments too for the future when the subsidy drops, to prevent deliberate forking to steal fees. We can introduce a designated P2SH anyone-can-spend fee pool address. The miner can never claim the full fees from his block or claim the full amount in the pool, only some percentage of both. The remainder goes back into the pool (this might be done at the end of the same expedience fee processing transaction described above). Anybody can deliberately pay to the pool. The fee pool is intended to act as a "buffer" such that it remains profitable to not try to steal fees but to just mine normally, even during relatively extreme fee value variance (consider the end of a big international shopping weekend). The fee value claimed by the miners between blocks is allowed to vary, but we want to avoid order-of-magnitude size variation (10x). We do however want the effect of expedience fees to have an impact. Perhaps some logarithmic function can smooth it out? Forcing larger fees to be distributed over longer time periods? Block size dependent difficulty scaling. Hardfork required. Larger blocks means greater difficulty - but it doesn't scale linearly, rather a little less than linearly. That means miners can take a penalty in difficulty to claim a greater number of high fee transactions in the same amount of time (effectively increasing "block size bitrate"), increasing their profits. When such profitable fees aren't available, they have to reduce block size. In other words, the users literally pay miners to increase block size (or don't pay, which reduces it). (Sidenote: I am in favor of combining this with the idea of a 32 MB max blocksize (or larger), with softforked scheduled lower size caps (perhaps starting at 4 MB max) that grows according to a schedule. This reduces the risk of rapidly increasing load before we have functional second layer scaling in place.) In order for a miner to profit from adding additional transactions, their fees must exceed the calculated cost of the resulting difficulty penalty to make it worth it to create a larger block. Such loads are expected during international shopping weekends. With only a few available high value transactions the incentive becomes the reverse, to create a smaller block with lower difficulty to faster claim those fees. To keep the average 10 minute block rate and to let this mechanism shift the "block size bitrate" as according to the fee justified block size changes, we set an Expected blocksize value that changes over time, and we change the difficulty target into the Standard difficulty target, where each block must reach a Scaled difficulty target . In terms of math we do something like this: Scaled difficulty = Standard difficulty * f(blocksize), where f would likely be some logarithmic function, and blocksize is defined in terms of units of Expected blocksize (a block 1.5x larger than Expected blocksize gets a value of 1.5). When we retarget the Standard difficulty and Expected blocksize we do this: Standard difficulty = Network hashrate per 10 minutes (approximately same as before, but now we take the Scaled difficulty of the last period's previous blocks into consideration) Standard blocksize = Recent average effective block bitrate = (sum of recent (weighted!) block sizes / length of timeperiod) / number of blocks in a retargeting period. Thus, generating larger blocks drives up the long term standard block bitrate, smaller blocks reduces it, in both cases we strive to average 1 block per 10 minutes. Combining this with expedience fees makes it even more effective; There's always a cutoff for where a miner stops including unprocessed transactions and let the rest remain for the next block. For standard fees, this would result in a fairly static block size and transactions backlog. With expedience fees your transaction can bypass standard fees with same value-per-bit, as explained above, because otherwise the miners reduces the value of their future expected fees. The more people that do this, the greater incentive to not delay transactions and instead increase the blocksize. (Can somebody help with the math here? I want simulations of this.) (Sidenote: I'm in favor of RBF, replace-by-fee. This makes the above work much more smoothly. Anybody relying on the security of unconfirmed transactions for any significant value have to rely on some kind of incentive protected multisignature transaction, including LN type second layer schemes. The other option is just not secure.) If load is low then you can add a high expedience fee to incentivize the creation of a smaller block with your transaction, since difficulty will be reduced for the smaller block. This means the miner has a higher chance of beating the competition. Adding additional lower fee transactions may reduce his average value-per-bit to become less profitable. Miners simply aim to maximize their fees-per-bit, while also paying as little as possible in mining costs. To make this work as intended for those willing to explicitly pay to reduce block size, one could tag such an expedience fee with a maximum allowed blocksize (where the fee will be claimed in such a smaller block if it is the more profitable option), such that it won't be countered by others making more high expedience fees to increase blocksize. Note: I'm not particularly in favor of this idea, just mentioning the possibility. -------------- next part -------------- An HTML attachment was scrubbed... URL: http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20170330/823b7763/attachment.html original: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-March/013885.html
Mining in a small pool is statistically as profitable as in a big pool, regardless of difficulty increases
I've performed the following simulations in response to http://www.reddit.com/Bitcoin/comments/2828s9/i_own_a_large_mining_operation_ill_explain_why_i/, where it was claimed that exponentially increasing difficulty shifts the advantage towards larger pools. Variance for a smaller pool is bigger: http://imgur.com/PX4WEpT but average earnings are the same: http://imgur.com/d7kUOPu Code: http://pastebin.com/vighJ8MZ Update: there doesn't seem to be that big of a difference in variance for pools of different sizes either: standard deviation for 50% pool, 15% increase, total btc after 4 months = +/- 1.11% std dev for 20% pool, 15% increase, total btc after 4 months = +/- 2.03% std dev for 50% pool, 15% increase, total btc after 36 months = +/- 0.97% std dev for 20% pool, 15% increase, total btc after 36 months = +/- 1.7% Update: as nmgafter pointed out in his comment, this is a simplified model. In practice, larger pools benefit slightly from network latency (regardless of changes in difficulty), and I attempted to estimate this effect in my reply to him:
an 8 second network-wide lag would cause 8/600 = 1.33% orphaned block rate. In turn, assuming all pools are honest and not withholding blocks, this would make the 50% pool mine ~0.4% faster than the 20% pool (0.0133 * (0.5-0.2) = 0.00399)
Update: results with no difficulty increase for comparison: std dev for 50% pool, no increase, total btc after 4 months = +/- 0.79% std dev for 20% pool, no increase, total btc after 4 months = +/- 1.57%
newbie lurker - some BTC impressions from the non-initiated
Disclaimer: Work in computer field, wanted to take a look at BTC as an investment, or mining it. It was a bit hard to get things going (considering I'm not a PC user newbie or something) and because I came in late, it was disappointing to realise mining without ASICs etc is essentially pointless, unless I mine an altcoin via CPU or GPU (mostly pointless), or perhaps take a chance on a less-adopted purchase like eth. I get it of course though, cheap power, early adoption, increasing difficulty, limited coins. I tried to read up anyway.. recently, I guess the drama with Craig Wright drew me in (I mean, it's quite the tale/effort) - to see what the latest state of things were. I was considering buying some BTC now its come down from the maximum height it was at. I've also been seriously considering buying a chunk of Litecoin, given it mirrors BTC value movements and has a higher quantity (though I worry about its adoption and always being seen as second-rate to BTC perhaps?) All that said, I just wanted to share some first impressions, from someone coming from Fiat to BTC and trying to make it feel OK. Don't burn me and I know some are invalid...it's just me communicating an initial perception.
The arguments, the rage, the drama between Blockstream and core and whomever else, the religious undertones from that guy who wears the hat (I can't even remember his name despite posting really annoyed about him the other day)...all of these, really really turns off the home wannabe 'investor' like myself, and I can imagine the general public too, as well as institutional investors, when we come to looking at BTC as an investment vehicle. I'm honestly scared to buy BTC. From the point of view, of how will all these things get resolved, without any detrimental effect on my stored value? Let me explain a little
The personalities and the basic infighting over the protocol(s). This has the potential to cause loss of value to the currency. This doesn't appear to be resolving. What am I to think? 2Mb blocks, soon?
The delays and problems with the network transaction rate. I want to know I can send the BTC reliably, easily, between wallets or accounts etc. I don't know that right now. The horror stories of no confirmations, stuck transactions (incorrectly calculated fees), and various other extensive delays, are horrifying to someone like myself who doesn't have a fortune to invest (/lose/get stuck in limbo)
Exchange credibility. again let me explain... If a bank exists in Australia it has to meet a lot of regulatory requirements, including guaranteeing customer deposits, holding insurance of various forms, not over-leveraging, etc. This means that the number of actual banks that fail (and result in all customers losing all funds) is miniscule. Mt Gox is hardly an isolated incident. In 2 weeks I've found literally - 20+ current issues happening, from people waiting extended periods of time to cash out from BTC to USD, or BTC to AUD, to $79 just going missing from an exchange account (explanation was bank charges when moving the converted fiat value around). Total loss of access to coins (stolen, shutdown, run). While this might statistically be 'rare' (compared to # of users), the severity when it happens is very high.
As a value store. OK great, if I bought big anywhere before what 2010, I'm rolling in money now, and if I bought big at just the wrong time, I'm only down 70%. In theory that's not bad, from a gambling/probability perspective. However - as a value store, this variability is terrifying. I can put $1million into USD or AUD in a government-guaranteed savings account and feel very safe that this money will retain on the high side of 90% of its value or increase perhaps 5-10% value. The risk of total loss is near-zero. This gives me the comfort level needed to store real value in this way. BTC moving between $350 - $850 wildly with no apparent definitive reason (it's not like a stock where a company has made an announcement and rises rapidly/retains most afterwards), causes me to not want to use it as a store of value. The loss possibility is too high, the stress from experiencing the variance is too high.
The Numeracy of it. $100 sounds nice, it's 100 of something right? $1 sounds OK, it's at least a whole number. It's quite obvious $1,000 is starting to become a lot, and $1,000,000 even more so. This is the reason that when you see a very devalued currency, it seems laughable. Like paying 36,721,941.06 bellarussian rubles per month in rent, doesn't seem 'right' to most people. Because we're used to the metric system. Bitcoin has a problem here for 'everyday' usage. Devs/enthusiasts wildly proclaim No! What! It's just 0.01 BTC! you can divide it up to 100,000 times (or whatever the resolution really is). BTC will reach $35,000 per coin! OK if it does. The problem's worse. 1BTC means I will spend for example, 0.0013428 BTC on petrol today. Does that really sound reasonable to you? I don't think society is quite at the point yet where it's like Black Mirror and we have a huge number of 'credits' on our screen. Even then, I'd want to see the decimal point somewhere else. Working for 3.5BTC per year for example, is not a nice sounding thing. OK sure you say, let's make another unit. Call it... mBTC. It will be 1,000th of a BTC. So in the future when BTC is $35,000 USD, one mBTC will be $3.50(USD equiv). The USD will inflate, more than BTC, since BTC is not inflationary. This potential increase in Bitcoin's value (some argue, increasing forever) means the required Unit for small daily purchases continues to change. mBTC will work for $35k BTC's but it won't work for $350k BTCs.
I'm confused about the security. It's one thing to have a hash-based peer to peer system with an effective crypto scheme - but when the end user of this system, is subject to processes and systems that are by nature difficult to understand, this makes them prone to human-induced insecurity. A little like a highly-complex password policy on a network that results in users handwriting their password on a post-it note. Also at first I thought...Paper wallets (so I'm just printing my keys now? how the heck is that secure unless I lock it up in a safe? this is not security. Can anyone copy my keys and use them?). I don't need people to answer about how paper wallets work because I did end up reading up on it, I'm explaining my initial confusion and questions. Same went for electronic offline wallet systems, versus online wallets, versus exchanges that hold your coins, verus sending them to an offline computer. I mean really. If this was a commercial line of products the product manager would slap the developers and say STANDARDISE! how are you expecting people to seriously adopt this. Open platforms and software can (and should!) still create, drive, and adhere to standards.
Anyway, I digress, I still bought a small portion of some BTC (I mean..I'm not an IDIOT ;p). But - the things I went through - given I already know the general field quite well - and the thoughts, concerns, etc I had, do mean investing in this currency is going to be tough for a period of time that is perhaps longer than some of the estimates I see. I noticed its picking up a lot in the mainstream retail industry (places accepting BTC) which will help a lot. However the sorts of things listed above, do need to get sorted. As an aside, not preaching here, but there's a reason most commercial companies don't allow their development teams to run the company, and I have to say these reasons are really showing through at the moment in the BTC arena. Just because as a group BTC supporters are generally anti-centralisation, doesn't mean you have to be anti-standards, or anti-organisation. Also to prevent unnecessary criticism and infighting, it's wise for there to be a common public image and an agreed upon set of standards, not this bickering, public infighting, dramatic stuff going on all the time. Blockchains and their usage is stealing BTC's thunder a little lately too. I hope the BTC players can get things back on track a bit. The problems are making it all too easy for talented devs to go to Blockchain projects and leave the drama behind. DISCLAIMER2: I apologise for misunderstanding, offensive comments, please don't steal my dog and burn my pet bird in retribution. Just throwing out there first impressions. I know I probably also misunderstand the 'security' of fiat and make many other potentially grave errors, but what I'm doing here, is communicating my first perceptions which I think will be shared by some, and unfortunately, for most people, perception=reality
edit: Apparently I'm wrong about some of the technical details below. The general gist is still the same (p2pool.org is misleading people into thinking that it's something it's now, people on bitcoin are helping them in that "for the good of the community"), but I was wrong about exactly what p2pool is. Read the comments for a long technical discussion on this. I'm not the only one who made this mistake. This shit is confusing. So as you've all read through this ghashing of teeth, p2pool mining is the new savior to the bitconomy. It offers the benefits of pool mining (lower variance and thus higher payout given difficulty increases) while not giving centralized control of the pool to any single actor. However, p2pool his wicked hard to set up. As far as I can tell, it requires actually writing custom code to get most nodes mining on p2pool. So as usual, the perfect technology is done in due to major user experience design flaws; in this case, requiring that users be software engineers. But, as you've also noticed, posts are popping up saying how easy it is to set up p2pool. What gives? Well, p2pool.org is the first google hit for "p2pool". It's a website that explains in simple terms that all you have to do to start mining on p2pool.org is point your miner at their address, just as you would with any other pool. Easy peasy! Fuck you and your "hard to connect" FUD. But did you see the trick? It's hidden right in front of you. P2pool.org is not the same thing as p2pool. It's another centralized mining pool just like any other, except it adopted the name of a decentralized technology! It's as easy to use as a regular pool because it is one Yes, the anonymous titans of SEO who run p2pool.org claim to point their node to the p2pool network, but this just forces another trust issue, the very thing Bitcoin was meant to solve, because they can change that at any time. Is it better than running on ghash? Yes for now, and that's why even those bitcoiners who know better still point to p2pool.org whenever p2pool difficulty comes up. But regardless of their intentions, they're shilling for a scam pool. A pool that purposefully misleads it's users into thinking that it is something that it is not. And that's the beautiful irony of p2pool mining.
P2Pool is a distributed mining pool. First, consider checking out the P2Pool Wiki for the latest information. I think it would help to briefly explain it in terms of differences between p2pool, traditional pools, and solo mining. Solo Mining When you solo mine Myriadcoin, you have control of all aspects of mining. You decide which transactions get included in your block and you decide where the block reward goes (usually you decide to send it to one of your own addresses). However, unless you have a very large mining operation, you'll be highly affected by variance. For example: At a the current difficulty (sha256)(516419), the average time for a 15 GH/s miner to find a block is just over 2 weeks. And it is not uncommon for you to take 3-4x longer than the average occasionally when you are unlucky. As a result, you can go long stretches without earning anything. Traditional Pooled Mining To solve the problem of high variance, the mining pools were created. In a traditional mining pool, many people all agree to combine their mining efforts and split the rewards according to their contributions. A sufficiently large pool may then have enough combined mining power that their average time to find a block may only be a couple hours instead of a couple weeks. As each block is found the block reward is distributed between the pool's miners. Each miner then gets smaller payments more regularly instead of one large 500 myriadcoin payment every few weeks. In a traditional pool, the pool operator sets up a website that miners connect to to receive mining work at a much lower difficulty so that each miner will find a valid solution every few seconds. These easy solutions, or "shares" are counted and rewards are distributed based on the proportion of shares that each miner found using one of several reward schemes. In the traditional pool, the pool operator is the one who decides what transactions go into each block and how the rewards are distributed. Typically, the pool sends all rewards to itself and then pays miners out of the pool's funds periodically. P2Pool P2Pool is sort of a cross between these two worlds. Like solo mining, p2pool miners are creating their own blocks and choosing which transactions go into blocks. Like pooled mining, rewards are shared between everyone who is part of the pool. With p2pool, each miner runs a p2pool node and these nodes form a peer to peer network amongst themselves similar to how crypto's, itself, does. Participants then connect their mining software to their local p2pool node and is given low difficulty work just as with a traditional pool. As each share is found, it is communicated to other miners on the p2pool p2p network so that all nodes are aware of who is contributing to the collective mining effort and in what capacity. Each share also includes the reward transaction that will be used in the event that a share ends up being a valid block. That reward transaction includes directly payments to all of the recent contributors to the p2pool network. So as blocks are found, contributors directly receive their payment just as they would have with solo mining. To ensure that everyone is playing fair, shares are assembled into a share chain in the same way that bitcoin blocks are assembled into a block chain. Each share that someone finds builds on all of the previous shares. All miners that are following the same set of established rules end up creating shares that other miners are willing to include in the share chain. Miners that don't follow the rules end up creating shares that get excluded from the main share chain and so they don't get paid when blocks are found by the other miners. In order to make it practical for nodes to be constantly passing shares around the p2p network, the share difficulty is tuned so that shares are only found 1 every 10 seconds across the entire p2pool network. The result is higher variance than at a traditional pool, but still much less variance than with solo mining. Summary In summary, the benefits over a traditional pool include...
Miners get paid directly and so do not have to trust a pool operator to eventually pay them.
Miners get to choose their own transactions.
There is no single person that has centralized control of the pool that can abuse the power of the combined mining capacity of the pool.
The drawbacks are higher variance than at traditional pools (particularly for small miners), and extra complexity in initial setup because miners have to install myriadcoin wallet instead of sending straight to exchange
Bitcoin mining tends to gravitate towards countries with cheap electricity. As Bitcoin mining is somewhat centralized, 10-15 mining companies have claimed the vast majority of network hash power. With many of these companies in the same country, only a number of countries mine and export a significant amount of bitcoins. China. China mines the most bitcoins and therefore ends up “exporting ... Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new units available to anybody who wishes to take part. An important difference is that the supply does not depend on the amount of mining. In general changing total miner hashpower does not change how many bitcoins are created over the long term. Difficulty The ... Difficulty explained. Difficulty refers to how hard it is to "crack" a block, and changes with the state of the entire bitcoin network. Higher difficulty means it's harder to crack a block, and so the same hash rate will produce less bitcoin than during times of lower difficulty. Difficulty needs to be factored in when trying to calculate earnings in bitcoin over time. This is entirely ... Bitcoin adjusts the mining difficulty parameter every 2016 blocks, but on August 1, 2017, Bitcoin Cash added an Emergency Difficulty Adjustment (EDA) algorithm that ran alongside the DAA. Bitcoin Mining Explained: All You Need to Know About the Modern Gold Rush. By Ankit Jain - 25 Oct 2019 ; Share: Bitcoin mining is deliberately made in such a way that it consumes resources and is difficult so that the number of blocks found each day by miners remains stable. Individual blocks must consist a proof of work to be considered valid. This proof of work is examined by other Bitcoin ...
Watch in 360 the inside of a nuclear reactor from the size of an atom with virtual reality - Duration: 3:42. EDF in the UK Recommended for you. 360° Bitcoin mining difficulty example. THIS IS CRAZY!! This is a great example of how fast the bitcoin community is upgrading their hardware and leaving my micro rig in the past. In this video I show you how to start mining Bitcoins with CGMiner and an account at your favorite miningpool. Get CGMiner at: https://bitcointalk.org/index.... What is crypto mining difficulty, how is it adjusted, what is the point of a block time? Vosk explains how the difficulty for mining a block reward is adjusted when mining Bitcoin on sha-256 or ... cryptocurrency mining difficulty explained - Cryptocurrency mining difficulty explained bitcoin catford bitcoin auction results greek transliteration iota subscript digibyte to usd dogecoin litecoin