RE: Shocking Crisis Coming to Cryptocurrency (in Sept?)
Unlimited block sizes are not incentives compatible without an oligarchy in control of the mining:
“…we are able to prove that an equilibrium exists. However, it is one where miners include only a fraction of available transactions into their blocks. This results in a backlog of transactions whose size grows indefinitely with time. We confirm this result using simulation.”
And note that Byzcoin is not a solution to the above problem.
My understanding is both Bitcoin Cash and Core forks will eventually fail and Bitcoin will remain Satoshi’s original Bitcoin protocol (aka TRB) as explained in this blog and my prior blog.
But I am delighted that a lot of people think these two flawed forks will succeed, as it allows me to sell and obtain more of Satoshi’s Bitcoin, i.e. The Real Bitcoin.
Thanks for commenting on my blog, and I wish you the best with your decisions.
Edit: afaics, Monero’s block resizing algorithm does not resolve the scaling economics issues either.
And Bitcoin’s 0-confirmations become less secure as transaction fees revenue per block becomes more significant relative to the declining protocol determined block reward.
You do realize that satoshi himself planned to raise the block size limit to scale, right?
Satoshi put in the 1MB limit, then later made a post about what could be done without ever doing it in order to stop the push for a patch (see the linked thread). So IMO that post he made was a diversion, so people wouldn’t fret or focus on the fact that he had designed the game theory of Bitcoin such that it can never fork.
Sincerely I hope you don’t lose all your BTC. Think carefully.
"So IMO that post he made was a diversion"
That seems like quite a leap, and based entirely on your belief and not facts.
My simple, moderately priced desktop can easily handle 16MB blocks. Cox Communication is now offering 300mbps bandwidth and its only going up. Storage is now in the TBs.
What is your problem with bigger blocks?
The fact is that Satoshi put in the 1 MB limit. And then users in that thread I linked to were clamoring for (i.e. putting pressure on) Satoshi to accept a patch to increase the block size. The fact is that Satoshi replied to that thread and did not accept the patch and provided the excuse that it could be done in the future, but the fact is he never did and he disappeared a couple of months after that. Facts are facts.
Irrelevant. You seem to be ignoring the economic game theory. See my first reply to you where I quoted a research paper. You seem to be ignoring that research paper. Granted that research is only a model and a simulation, but I find it to be credible.
I want scaling, but not if it breaks Bitcoin. I depend on Bitcoin primarily to be the way to move value from fiat into our crypto ecosystem and provide a stable reference point for trading capital between altcoins; thus $10 transaction fees is not a problem for that use case. Note I am also working on my own altcoin which will scale. Steem also scales (but arguably not decentralized as it is arguably controlled by the whales).
If some cartel or mob-of-users could violate Bitcoin’s immutability (but you can’t as you will soon learn by losing your BTC on a fork), then they could also increase the 21 million coin supply in the future as well.
There is no specific block size increase that will be enough to handle the volume of transactions the Internet will need. It will need to be perpetually raised. And the only way to keep on raising it is to have an oligarchy in control of it. Unlimited block size would cause Bitcoin to become non-functional as is explained in the research paper I quoted for you. I know it does not make sense to simpletons, but I am actually a programmer who is capable of comprehending research.
Increasing the block size, decreases Bitcoin’s value from a finance analysis.
There is no clear consensus, thus it is dilutive.
The research I had quoted for you explains that the faster Bitcoin grows transaction revenue per block, the sooner the game theory kicks in for Bitcoin such that it stops working.
Keeping the block size small (discouraging transaction volume growth) delays the demise portended by that research; thus giving us more time while we try to find an altcoin technology which can scale decentralized. Maybe Bitcoin was only put here to help us get to through the imminent global economic crisis and not be permanently viable (the block reward is nearing 0 after next decade).
Do you realize that no other crypto has the same block limit and none of them are experiencing any of the problems you laid out?
We are not seeing those catastrophic effects in other proof-of-work altcoins (yet) because:
Does not apply to altcoins which employ proof-of-stake, such as Steem.
Many if not all other proof-of-work altcoins are controlled by an oligarchy of whales who makes their profits by raping the system in various sneaky ways, e.g. Dash’s and PIVX’s masternode scam snake oil marketed as being “decentralized governance” (governance can only be a corrupted power vacuum). Thus the incentives of transaction fees would be irrelevant presuming the whales maintain enough control over mining to maintain the lie of “decentralization”. The failure mode of course is when those whales are attacked (e.g. by the governments such as we see with BTE-e whale recently arrested in Greece on behalf of the USA and you can presume the Feds laid in wait to find a way to grab his private keys or can eventually use waterboarding torture to extract them). Centralized money always fails because money is inherently a decentralized free market valuation system:
The research explains that such catastrophic failure should not occur until the transaction revenue is significant (or probably greater than) the revenue from the block reward.
P.S.
I hope you will not be offended if I remark thatthe “do you realize” and “You do realize” seem to reflect an incorrect belief you may have about my lack of expertise (or maybe it is just your style of phrasing).I hope you know thatI’ve been knee deep into researching and discussing all such issues about blockchains and cryptocurrency nonstop 24 x 7 since 2013.Here are fixes for the broken links in the comment which I am replying to:
Bitcoin mining has never been as decentralized as it is today, and now bitcoin is even more decentralized with multiple implementations.
That's why I'm betting heavily on Dash. Dash is simply what real world governments should be modeled after. It has both top-down and bottom-up incentives, Rewards the miners and nodes equally and funds itself on it's own.
It is set to scale upto 400MB blocks. Almost non-existent Tx fees. PrivateSend and InstaSend(1.3 seconds for confirmation)
I also really like NEM. They are simply the proper cash alternatives. ETH, NEO, Waves, Sia, Factom, Maidsafe has different futures and I'm optimistic about them all
This (c.f. copy on Steem), this and this for your remedial edification! Which includes a link to the high school level math probability error which I found in the security model for InstantX. Similar vulnerabilities exist in the anonymity provided by the masternodes. And double-spends are theoretically trivial for the insider cartel.
Dash is entirely non-anti-fragile and can be insecure if the cartel fucks up, because it’s a centralized cartel controlled system via the insidious masternode compounding ROI which destroys the Nash Equilibrium of its proof-of-work and places the 51% control in the hands of the insider cartel. Unfortunately mostly humans can’t comprehend the exponential function, thus they fail to understand the significance of how the masternode revenues compound for the insiders who were first and entirely centralize the system (if it wasn’t already centralized by the fraud of the instamine or in PIVX’s case the fact that ICOs are also insider scams by surreptitiously selling the ICO to themselves).
Good grief man, you selected the most obnoxious scam with the worst technology in crypto for your favorite shitcoin.
I wrote in my recent blog:
Dash has one dev team and masternodes that only the very rich can buy. Bitcoin Cash has several different development teams.
You can start with 25 Dash instead of 1000. It's a bit like leasing waves but not built into the wallet and they do take a small portion of your masternode income as fees. That's $5000 for Dash and 1000 XEM for harvesting is about $3000
The thing is Dash dev team is not a charity. They are paid from the Dash network. 10% of all mined coins are allocated to development and stuff like this :https://www.dashforcenews.com/dash-aerosports-scott-farnsworth-business-adoption-strategies/
The dev team has heavy incentives and very good focus. They are practically a decentralized coperation. That's what appeals to me the most. They MEAN Business.