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Battle Over Bitcoin: China Backs US Startup Coinbase And US Falls Behind In Virtual Currencies.
Indeed, virtual currencies are nothing new to the Chinese. For example, more than 100 million people on the social platform QQ have used the Q coin for more than 10 years. And after China’s state-run China Central Television, or CCTV, ran a half-hour-long documentary on bitcoins, downloads of apps for processing and “mining” bitcoins soared in the world’s second largest economy. Bitcoin, long the plaything of the Western ubernerd, now appears poised to grow substantially in China and other markets, like the euro zone, where government meddling in native currency valuations has left many distrustful of the money in their bank accounts. Americans don’t have this problem -- yet. And that may be a problem in itself. According to bitcoin proponents, if the U.S. tries to ignore the nascent currency, writing it off as a financial fad with less value than the seemingly stable dollar, Americans risk ceding to the Chinese and others control of the future of what could be the most disruptive force in monetary exchanges since the credit card. In turn, the dollar and the ability of the U.S. to navigate global currency conflicts could be seriously weakened. “Here’s the bottom line: Bitcoin has much higher popularity outside the U.S. and much higher potential outside the U.S.,” observed Andreas M. Antonopoulos of the Bitcoin Foundation. “If you go to an American and say, ‘Hey, there’s this new thing, bitcoin,’ they say, ‘Well, what’s wrong with the dollar?’ That question is different in other countries.” Bitcoins are a finite, Web-based currency created in 2009 by a group of hackers working under the nom-de-Internet Satoshi Nakamoto. Exactly 10,952,975 bitcoins are in circulation, all of which have been purchased on exchange networks or mined. The currency is mined using software that processes transactions on the bitcoin network, adding groups of transactions, called blocks, to the chain. Miners are paid about 25 bitcoins per block. That digital money can then be used to purchase a variety of goods online, from legitimate software to heroin on the infamous virtual black-market Silk Road. Bitcoin surged in value to $266 last month, thrusting the currency into the mainstream spotlight as investment poured in from sources as diverse as the hapless Brothers Winklevoss (of Facebook infamy) and Union Capital Ventures principal Fred Wilson (an early investor in Zynga, Twitter, and Kickstarter). Suddenly, everyone was talking about buying bitcoins. But the bubble burst in late April, and in the U.S. at least, bitcoin faded from the news. That was not the case in China, where Antonopoulos said downloads of bitcoin clients have eclipsed those in the U.S. Bitcoins are mined in several steps. After downloading a bitcoin client, such as Coinbase (which serves as a wallet in which to store the bits of code that constitute the digital money), miners often join pools where they share computing power to decode algorithms in which bitcoins are hidden. The concept of bitcoins and bitcoin mining is cryptic for many people, even some otherwise forward-thinking American investors. The irony is that, for now, American startups are leading the bitcoin charge, and the U.S. government was the first to issue guidance on using the currency as payment -- a seemingly tacit recognition of bitcoin’s validity as legal tender. Why China Poses A Threat Feng Li, the IDG partner who chose to fund Coinbase, said the Chinese have yearned for access to a virtual currency since the central government cracked down on the use of Q coins. Q coins were introduced in March 2002 by Tencent Holdings Ltd. (HKG:0700), the parent company of the country’s most popular instant-messaging service, QQ , and they currently average an annual transaction value of more than 1 billion yuan ($163 million). That value is growing at about 15 to 25 percent each year. Q coins, purchased with yuan, are predominantly used to buy virtual products and services in QQ and its related online games and social media. Originally, Tencent regulations prevented Q coins from being traded between users or converted back to yuan, but allowed users to trade points and purchase Q coins with their game accounts, then use the black market to convert them into cash. That caused concerns at the People’s Bank of China, China’s central bank. In January 2007, converting game points to Q coins was banned, and Tencent reiterated that Q coins constitute a product, not a currency, which seemed to satisfy the concerns. “There has already been proof with the Q coin,” Feng said of the Chinese likeliness to start using bitcoin. “It’s been very well circulated and very well adopted.” Already, shops on Taobao -- the Chinese equivalent to eBay Inc. (NASDAQ:EBAY), owned by Alibaba.com Ltd. (HKG:1688) -- accept bitcoins as payment for goods, as does the similar service, Tencent’s PaiPai.com. The Chinese are embracing bitcoins in other ways. The first bitcoin fund began to raise money in June, with the goal of raising 20 million yuan. The fund’s investment threshold is 10,000 yuan, and it will mature in four years. Q coin’s popularity isn’t the only reason bitcoin has appeal in China. As it turns out, China is the perfect place for bitcoin mining. While much of the developed world is well into the transition from personal computers to mobile devices, China’s PC market is still thriving, which provides the necessary computing power to run a successful business converting electricity into mined coins. Price caps on electricity already create wasteful use of energy in China, so running a code-crunching computer for hours on end isn’t as costly an investment as it would be in the U.S. And so-called “gold-mining” or “gold-farming” businesses already exist in China’s cybersphere. None of that will come as a surprise to any “World of Warcraft” player: Gamers in Chinese urban sweatshops are known to sit in front of glowing blue screens for hours, slaughtering players in the game for their spoils or mining gold deposits found in the sprawling milieu of Blizzard Entertainment’s international blockbuster. Those treasures are then sold to players in the game for real money. China has a heavily controlled currency, which also makes bitcoin attractive. “The more controlled the currency is, the harder the transactions are, the more friction there is in the national currency, the more appealing the coin is,” Antonopoulos said, noted that the most appealing place to use bitcoin would be a country whose economy is a veritable train wreck -- like Zimbabwe, except that the southern African nation lacks the necessary technology. “I would say China is perfect,” he said. “It’s got the penetration, it’s got the smartphones, it’s got the Internet and the people are familiar with virtual currencies. And, it’s got the not-as-appealing national currency.” Regulation In The U.S. Guidance issued in March by the U.S. Treasury Department said that companies issuing or exchanging online cash, including bitcoin, would be subject to the same scrutiny as traditional firms such as the Western Union Co. (NYSE:WU) to prevent money laundering. Less than two months later, the Department of Homeland Security proved that edict had teeth. Federal officials obtained a warrant Tuesday to seize an account tied to Mt.Gox, the Tokyo-based exchange company that handles about 80 percent of all bitcoin trades. Authorities accused Mt.Gox’s U.S. subsidiary, Mutum Sigillum LLC, of failing to register as a money-services company with the Treasury’s Financial Crimes Enforcement Network. An account held by the online-payments firm Dwolla was subsequently seized. Many feared the warrant execution could cast a chill over the bitcoin industry as a sector centered on a borderless, decentralized money came under the scrutiny of the federal government. That proved not to be the case, Coinbase’s Ehrsam said. “For bitcoin to go mainstream, or as it goes mainstream, it will be used in a higher and higher amount of transactions,” he said, adding that Coinbase is registered as a money-services firm. “There’s no way there will be all this money flowing through an unregulated system.” Chris Larsen -- the CEO of OpenCoin, a fellow San Francisco-based payment platform that processes most national currencies as well as bitcoin and its own virtual cash, Ripple -- agreed. “They definitely are regulating them, [and] we actually think that’s a really good thing for the industry,” he told IBTimes. “I thought the guidance was a good idea. One of the things the guidelines seem to make clear for the first time is that a virtual currency could be used for goods and services.” The Price Of Regulation But such regulation is a slippery slope, said Jerry Brito, a senior research fellow at the Mercatus Center at George Mason University. Perhaps it begins with measures to prevent money-laundering, he said. But what measures would the government take to prevent the untraceable currency from being used for child pornography or human trafficking? “Bitcoin has the potential to be a disruptive technology that would be beneficial to the economy, and we don’t want to kill off that potential to get at the other potential for bad stuff,” he observed. Brito, who plans to speak next month at a conference on virtual currencies organized by the National Center for Missing and Exploited Children, added: “We’re already the first country to enforce money-laundering laws against bitcoin. But the U.S. would be shooting itself in the foot if it went too far [with regulations] and either outlawed bitcoin or made the legal guidelines impossible to comply with.” Will China Step In? So far, Chinese bitcoin merchants have little to fear. For many, the CCTV segment on bitcoin seemed to be a signal from Beijing, which heavily controls the channel’s content, that the currency is worth exploring. Some of those interviewed speculated that the Communist Party wants to see bitcoin stockpiled in China, allowing the government to invest in it if, or when, the dollar is shaken from its perch as the world’s reserve currency. It remains to be seen whether -- or, more likely, when -- China will intervene in the trade of bitcoin in its own economy. But for the U.S. to experience widespread adoption of the currency, which is considered a necessary step for gaining a grasp on the bitcoin market, limited government control will have to allow the money, like the Internet that birthed it, to develop organically.
Condensed version of the epic Fred Ehrsam/Troll #UASF/Vitalik Tweetstorms
Best read to the beat of the Hamilton soundtrack...
1/ Cryptocurrencies create strong tribalism. Once you own a currency, your incentives are to make that currency go up in value. 2/ Crypto tribalism can be seen on reddit every day. Subreddits generate and report news that support their holdings. 3/ Crypto tribalism plays out in two common ways: 1) people promoting their own currency and 2) people discrediting other currencies. 4/ People promoting their own currency is evidenced by the imbalance of positive to negative news about a currency on its own subreddit. 5/ People discrediting other currencies is evidenced by /bitcoin trashing Ethereum because it is seen as a threat. 6/ Your perspective on reality is warped by your holdings. So important to remain vigilant by monitoring yourself. 7/ To stay out of this trap, never hold so much of one currency that accepting an alternate reality is too painful to think about. 8/ Gains from going all in on one currency are outweighed by losses from sacrificing an open mind and missing the next. 9/ At this stage of crypto it’s unclear that one currency gaining value causes another to lose value. So tribalism is largely wasted energy. 10/ It’s likely different blockchains are best at doing different things in the long run. 11/ So best to keep and open mind so you can experience the best the blockchain multiverse has to offer!
I, Troll #UASF:
No. 1/ POW is zero sum, there can be only one system. Crypto "tribalism" is practiced by scammers regarding scams. There can be only one POW sys 2/ tem, it is literally thermodynamicly guaranteed. A token is solely a requirement to incentivize POW. POW is energy consumption, 3/ energy is a zero-sum game, POW is too. That dynamic is guaranteed by physical law. Everything else is a matter of commitment structure. 4/ There is only the need for ONE POW system that merkelizes things into a commitment structure for validation. Anything can be rooted in it 5/ People who preach this "many coins for many roles" nonsense failure to grasp the most basic truth about what POW is and how it works. 6/ Other systems are testbeds, scams, or both. Thermodynamics guarantees energy consumption will converge to a singular POW system. 7/ Anyone who is actually paying attention realizes it is just a matter of structure and externality management regarding new functionality. 8/ You make these kinds of statements to try to seem "reasonable" by appealing to the human desire to avoid conflict. Conflict is natural. 9/ All these kinds of statements do is show that you refuse to acknowledge nature. POW is zero-sum, this is guaranteed. Bitcoin is not biology. Consensus is an impossible problem. POW "solves" it through the introduction of thermodynamic opportunity cost.
[email protected] you want to explain for the 101th time why this is a dead wrong misconception or shall I?
I, Troll #UASF:
Why don't you, he blocked me ages ago.
Academics have never said that consensus is impossible.
They said a consensus algo guaranteed to finish in a finite number of rounds in an async network is impossible (FLP impossibility)
Consensus algos that probabilistically finish within some finite expected number of rounds do exist (see dominic williams' work)
In an asynchronous network, the bound on byzantine fault tolerance is 33%. In a synchronous network, the bound is 50%-ε (see DLS paper)
Bitcoin's PoW takes a bit of work to fit into the typical academic model of consensus because it uses hashpower, not discrete nodes...
If network latency is d, then fault tolerance is somewhere close to d/(10 minutes+2d)
This means that in an asynchronous network (no network latency bounds) fault tolerance of PoW approaches zero.
You can totally have synchronous traditional consensus algos with similar properties (eg. see our chain-based PoS, or Iddo Bentov's work)
What's unique about PoW is not that it's a new consensus algorithm, it's that it's a new way of determining who gets to participate.
Plus economic incentives. Satoshi's innovation was not consensus, it's public cryptoeconomic consensus.
You can actually use PoW to determine who participates, and PBFT or honey badger as the consensus algo. Such combinations are possible.
Conclusion: there are 2 separate axes
i. what the consensus algo is (chain-based, pbft..) ii. who participates (PoW, PoS, consortium)
.14. Arguably a third axis being the incentivization model
I, Troll #UASF:
All of those are interconnected in a way you cannot disentangle in the manner you just did. For academic curiosity, yes, in practice, no. The structure of the chain or ledger itself feeds into the latency and upper limits of such, which affect the incentives and stability of.. the entire consensus process. You cannot genuinely carve those out into separate abstractions and ignore their interrelations. That is incredibly disingenuous. This is not university. They are all part of the whole, which functions as a whole. Structure feeds into participation feeds into incentives.
Ah, but disentangling is often useful. Because you can do things like determine optimal incentivization structures for any consensus algo. eg. I've had the result for a year that if you see two competing sister blocks, neither should get a reward. This fixes selfish mining. And others at IC3 have also discovered this independently. These kinds of insights you can get by analyzing consensus algos and incentivization in the abstract.
I, Troll #UASF:
What implications in practice will this have on membership and incentives in exchange for more complexity?
It makes incentives better, reducing the risk medium-sized pools will do nasty stuff.
I, Troll #UASF:
How so? The current incentives seem to do so just fine. As well, how do you avoid penalizing legit orphan races?
As well, how do you avoid penalizing legit orphan races?
Give both the main-chain block and the stale a reward of 0.5 then.
I think the Berlin Wall Principle will end up applying to Blockstream as well: (1) The Berlin Wall took *longer* than everyone expected to come tumbling down. (2) When it did finally come tumbling down, it happened *faster* than anyone expected (ie, in a matter of days) - and everyone was shocked.
Centralization is a double-edged sword. So far, centralization (and intertia, and laziness, and caution) has been favoring Blockstream. But if and when a congestion crisis comes, then the tide is gonna turn pretty quickly - and Blockstream's monopoly in terms of "code running on the network" is gonna evaporate quicker than anyone expected. How will this happen? Like this: Bitcoin is going to go into a crisis - not just the current agonizing slow-motion swamp of centralized fascist governance, but a real-time honking red alert involving a clogged-up network, with people freaking out screaming from the rooftops that millions of dollars in transactions are in limbo due to some pointless fucked-up 1 MB "blocksize limit". And at that point, people are going to get rid of the damn piece of broken cripple-code, immediately. End of story. Slow to crumble, fast to collapse Up till now, the Bitcoin governance crisis has been like slowly sinking into a swamp of quicksand. But once a real-time congestion crisis actually hits (and online forums become dominated by posts screaming "my transaction is stuck in limbo!!!"), then all the previous bullshit and bloviating from economic idiots about "fee markets" and "soft hard forks" or whatever other nonsense will be instantly forgotten. And at that point, there will be only 2 things that can happen:
Either Bitcoin dies, and $7 billion dollars in investor wealth evaporates into thin air; or
The simplest and safest "good enough" on-chain scaling upgrade gets rolled out ASAP - ie, we will get bigger blocks so fast it will make your head spin.
You don't need Blockstream - they need you When push comes to shove, people are going to remember pretty damn quick that open-source code is easy to patch. People are going to remember that you don't have to fly to meetings in Hong Kong or on some secret Caribbean island ... or post on Reddit for hours ... or spend hundreds of thousands of dollars on devs ... in order to simply change a constant in your code from 1000000 to 2000000. Eventually, we are going to remember what vote-with-your-CPU consensus looks like Remember all those hours you wasted on reddit? Remember all that time you wasted in some hidden downvoted sub-thread debating with some snarky little toxic troll who'd wandered over from a censored Milgram experiment forum full of brainwashed circlejerkers and foot-stomping fascists whose only adrenaline rush and power trip in life had evidently been when they would run around bloviating gibberish like "fee markets!" or "Austrian!" to the self-selected bunch of ignorant submissive sycophants who hadn't been banned from r\bitcoin yet? Well, when the real crisis hits, all that trivial online drama isn't going to matter any more. When the inevitable congestion crisis finally comes, it's only going to take a couple of mining pools plus a couple of exchanges to make a simple life-or-death business decision to un-install Blockstream's artificially crippled code and instead install code that has actually been upgraded to deal with the reality of mining and the marketplace - and then we're all going to see what actual vote-with-your-CPU consensus really looks like (instead of vote-with-your-sockpuppet pseudo-consensus on Reddit). This upgraded code could be Classic, or Unlimited, or even a modded version Core - it doesn't really matter. Code is code and money is money, and when push comes to shove, investors and miners aren't going to give a damn what some overpaid economic idiot from Blockstream said at some meeting in Hong Kong once, or what some fascist poisonous astroturfing shill-bot posted a million times on Reddit. Things usually move slow in Bitcoin-land - except when they move fast For an example of how fast the tide can turn, just look at a couple of major events from the past two days: (1) Coinbase is suddenly saying that:
Bitcoin looks a lot like hard-to-use antiquated assembly code - and Ethereum looks like an easy-to-use modern programming language;
Blockstream with its toxic, opaque and oppressive culture is scaring away all the new devs - who are flocking to alt-coins like Ethereum which has a healthy, transparent and welcoming culture.
Of course the good devs are flocking to Ethereum now. Any smart dev can see from a mile away that it would be suicide to try to contribute to Core/Blockstream - Blockstream don't want any new coders or new ideas, they are insular and insecure and they feel downright threatened by new coders with fresh ideas. They've shown this over and over again, eg:
when they repeatedly freaked out and went nuclear and refused to compromise whenever any dev made a simple safe scaling proposal, like 20 MB blocks, or 8 MB blocks, or 4 MB blocks, or 2 MB blocks, or Adaptive Blocks, etc etc.
scaring all the good devs and a lot of investors into alt-coins.
Blockstream has backed themselves into a corner At this point, people are starting to realize that Blockstream is a led by desperate and incompetent dead-enders. (There are some great coders over there such as Pieter Wuille - and Greg Maxwell is also a great Bitcoin coder, but he is toxic as a "leader".) Blockstream can't do capacity planning, they can't do threat assessment, they can't innovate, they can't prioritize, and they can't communicate. In the end, they're only destroying themselves - by censoring debate, and ostracizing existing innovators (eg, Mike Hearn and Gavin Andresen) - and scaring away potential new innovators. Remember, Blockstream != Bitcoin It's important to remember that Blockstream cannot destroy Bitcoin - any more than Mt Gox could. Once Blockstream is thoroughly discredited in the eyes of the Bitcoin community and the media, as "the company that almost strangled the Bitcoin network by trying to force blocks to be smaller than the average web page" - it's gonna be time for honey-badger jokes all over again. Blockstream's gargantuan conflicts-of-interest will be their downfall Blockstream is funded by insurance giant AXA - a company whose CEO is the head of the friggin' Bilderberg Group. (He's scheduled to move from CEO of AXA to CEO of HSBC soon. Out of the frying pan and into the fire.) AXA doesn't even want cryptocurrency to succeed anyways, because half of the 1 trillion dollars of so-called "assets" on their fraudulent balance sheet is actually nothing more than toxic debt-backed worthless derivatives garbage. (AXA has more derivatives than any other insurance company.) In other words, AXA's balance sheet will be exposed as worthless and the company will become insolvent (just like Lehman Brothers and AIG did in 2008) once real money like Bitcoin actually becomes dominant in the world economy - which will "uber" and knock down the whole teetering $1.2 quadrillion derivatives casino. Hmm... AIG... a giant insurance group whose alleged "assets" turned out to be just a worthless pile of toxic debt-backed derivatives on the legacy ledger of fantasy fiat, AIG who triggered the 2008 financial near-meltdown... Who does AIG remind me of... Oh yeah AXA... So let's put AXA in charge of paying for Bitcoin development! What could possibly go wrong?!? Blockstream's owners HATE Bitcoin Never forget:
This is the probably the most gigantic CONFLICT OF INTEREST in the history of economics. And it's something to think about, as we sit here wondering for years why Blockstream is not only failing to scale Bitcoin - but it's also actively trying to SABOTAGE anyone ELSE who tries to scale Bitcoin as well. So, be patient - and optimistic Viewed from one perspective, the fact that this blocksize battle has dragged on for years can be very depressing. But, viewed from another perspective, the fact that it's still going on is positive - because, for example, nobody really dares to say anymore that "blocks should be 1 MB" - since repeated studies have shown that the current hardware and infrastructure could easily handle 3-4 MB blocks, and Core/Blockstream's own precious SegWit soft-fork is going to need 3-4 MB blocks anyways. Plus, the only "strengths" that Blockstream had on its side actually turn out to be pretty weak upon closer scrutiny (money from investors like AXA who hate cryptocurrency, censorship from domain squatters who only know how to destroy communities, snark from sockpuppets who can't argue their way out of a wet paper bag on uncensored forums). In fact, if you were part of Blockstream, you'd be pretty demoralized that a rag-tag bunch of big-blocks supporters has been chipping away at you for the past few years, creating new forums, creating new coins, creating new products and services, exposing the economic ignorance of small-block dead-enders - and all the while, Blockstream hasn't been able to deliver on any of its so-called scaling roadmap. If it hadn't been for a few historical accidents (cheap energy behind the Great Firewall of China, plus the other "linguistic" firewall that has prevented many people in the Chinese-speaking community from seeing how much of the community actually rejects Blockstream, plus the other accidental fact that bigger blocks involve generalizing Bitcoin, which mathematically happens to require a hard fork), then Blockstream would not have been able to control Bitcoin development as long as it has. Yeah, they have done routine maintenance stuff and efficiency upgrades, like rewriting libsecp256k, which is great, and much appreciated - and Pieter Wuille's SegWit would be a great refactoring and clean-up of the code (if we don't let Luke-Jr poison it by packaging it as a soft-fork) - but the network also needs some simple, safe scaling. And the network is going to get simple, safe scaling - whenever it decides that it really, really wants it. And there's nothing that Blockstream can do to block that.
These 25 top-voted posts from r/btc this week show that users and miners are working on real solutions to help Bitcoin move forward, while Core/Blockstream are obstructing progress and losing support. Please help spread this information (including translating for the Chinese-speaking community)!
Antpool Will Not Run SegWit Without Block Size Increase Hard Fork
Leaders of Core had a childish little selfish tantrum about wanting to work on what cool stuff they wanted to build and wouldn't listen. It would have been relatively safe and easy to introduce the 2mb HF if it was progressed collectively and collaboratively with good will by all parties. All of this could have been avoided long ago. There is one person who is very influential who we know to be adamant about blocks being confined to 1mb.
Hardfork in July 2017 will be too late. If you read the statement by Peter "I don't have a clue about economics" Todd you might start to puke. “Unfortunately Bitcoin simply doesn't scale well" How about you start to tell what exactly doesn't scale you fuckhead? P.S.: The blockchain is growing indefinitely, if you don't like that fact you should choose something else than cryptocurrencies or come up with a better way.
This is classic narrowmindedness on PT's part. He'd also be the first one to say that the internet is not sustainable as it produces exponentially more and more data. These guys are fucking idiots and really have no idea what they are talking about, all they see is "BLOAT!" and "TOO BIG FOR CURRENT NODES!" then react accordingly without even thinking about the fact that Bitcoin's usefulness mitigates these limiting factors almost entirely.
People are starting to realize how toxic Gregory Maxwell is to Bitcoin, saying there are plenty of other coders who could do crypto and networking, and "he drives away more talent than he can attract." Plus, he has a 10-year record of damaging open-source projects, going back to Wikipedia in 2006.
There are limits on routing table sizes, but they are not top-down-specified-in-a-standards-document protocol limits. They are organic limits that arise from whatever hardware is available and from the (sometimes very contentious!) interaction of the engineers keeping the Internet backbone up and running.
We've long established that the 1mb limit (or their refusal to remove it) has absolutely nothing to do with technical concerns. It's a political matter, whose raison d'être we can only infer. Time to stop the bullshit and the [s]quabbling. Chinese miners wake up! Time to try something new. It quite literally can't be worse than what's going on right now.
Bitcoin has become embroiled in debate over the block size - an important topic for the health of the network, but not something that should halt progress in a young and rapidly developing field. The developer community in Bitcoin feels fairly dormant. Bitcoin never really made it past the stage of simple wallets and exchanges. Bitcoin’s “leadership” is ... toxic. Greg Maxwell, technical leader of Blockstream which employs a solid chunk of Core developers, recently referred to other Core developers who were working with miners on a block size compromise as “well-meaning dips***s.”
This was a good sobering read. It is also worth noting that Coinbase was left with little choice but to broaden its offerings given the current state of Bitcoin usability ... When BS hijacked BTC away from being money, it screwed a lot of business and usage plans. ... Praise be to the free market and the market place of ideas.
REPOST from 12/2015: "If there are only 20 seats on the bus and 25 people that want to ride, there is no ticket price where everyone gets a seat. Capacity problems can't be fixed with a 'fee market'; they are fixed by adding seats, which in this case means raising the blocksize cap." – Vibr8gKiwi
By the way, this shows that a certain other trending OP from today: Why all the disinformation? Full blocks DO NOT matter, what matters is transaction fees. Currently $0.05 ...is total bullshit. But that other OP was posted in an echo-chamber of censorship (r\bitcoin). That is dangerous (for them), because it allows them to enjoy the illusion that they are right - when in reality, they are wrong, because they are ignoring the fact that full blocks DO matter: because the overflow goes elsewhere (into fiat, into alts, etc.).
Bitcoin exchange and wallet service Coinbase is adding support for ether, the native cryptocurrency of the Ethereum network. ...
This is quite significant. I would interpret this as a loss of confidence in Blockstream to provide what customers need in a timely manner. While Blockstream wastes time figuring out how to stuff all the world's transaction data into their beloved tiny blocks, the market will move on to solutions that can actually scale and can scale NOW.
Opinions on Gavin over there are variously: 1 - Why aren't you coding for Core? 2 - Which agency do you work for? 3 - Haha classic suxxor A very telling series of questions that the false agenda has fermented and sunk in.
It's actually kind of brilliant ! Think about it: no need for super dangerous hard forks, and not even soft forks. No new code needed, no testing, nothing. All it took was 2-3 years of endless stalling, organizing some fake conventions, a bit of character assassination and demonization here and there, nothing major. Done. It was actually very well-thought-out. Congratulations and hat off to nullcadam3us and all their drones.
Bitcoin is a giant, global "Consensus-tron" based on a fundamental meta-rule: "51% Consensus based on Greed / Self-Interest" ("Nakamoto Consensus"). Blockstream/Core is trying change this meta-rule, to make it "95% Consensus" ("Extreme Consensus") - the MOST CONTENTIOUS change conceivable in Bitcoin The main characteristic of Bitcoin is that it is basically a kind of global "consensus-producing machine" or "Consensus-tron" - which runs based on a fundamental meta-rule of "51% Consensus + Greed / Self-Interest" - also called "Nakamoto Consensus". Recently, Blockstream has started trying to quietly change this fundamental meta-rule of Bitcoin based on "51% Consensus + Greed / Self-Interest" ("Nakamoto Consensus"). Instead, they have proposed a totally different meta-rule based on "95% Consensus" - which they like to call "Strong Consensus", but a better name would probably be "Extreme Consensus", to show what an extreme change it would be.
Every binary vote has an opposite side. 95% consensus is actually 5% consensus of the opposing team. Would you like a 5% consensus system? No? Then you wouldn't like a 95% consensus system. That's why 50% is the only valid threshold -- because it's the only one that makes both sides equal.
Continuing on this road , soon Coinbase and Circle will probably allow to send and receive Ether, and Coinbase and Bitpay will offer the option to pay in Ether. At that point Gregonomic fee pressure will go out of the window. The first mover led the ground work, but it's not an exclusive advantage. Bitcoin needs to wake up from the Blockstream-induced coma !!!
This is so painfully obvious. The users do not want a "fee market". Blockstream is absolutely hell-bent on giving us one, despite there being no need for a "fee market" at this point in time. Therefore the free market will do its job and provide an alternative to Bitcoin, and the users will move to the alternative where they will get what they actually want.
Bitcoin users are speaking out, and they want bigger blocks. Compare these 2 OPs: r\bitcoin: "Full blocks DO NOT matter, what matters is transaction fees" (100 upvotes) vs btc: "Capacity problems can't be fixed with a 'fee market'; they can only be fixed by raising the blocksize cap" (200 upvotes)
The block size issue has turned me off to bitcoin entirely, I no longer evangelize, no longer buy or use them. Blockstream has destroyed all the good-will I had for Bitcoin. Once the block sizes are larger, and continue rising with use, I'll be interested again. until then, Bitcoin can wallow in the fail
Damn fucking straight, the larger block side has been compromising for over a year and they have refused to compromise from day one. Now is not the time to compromise, now is the time to sweep them aside as they have brought nothing to the table. These devs shouldn't even be given the time of day considering their open contempt for larger blocks and the miners should be finding devs that will give them what they need, rather than trying to negotiate with asshats that refuse to negotiate.
"It's truly funny how blockstream are dead against 2mb of block data using traditional transactions along with linear signature validation... but blindly think that 2.85mb of segwit + confidential payment codes + other features is acceptable." And also funny that their roadmap allows for 5.7mb blocks when blockstream decide its ok for the hard fork.. yet they cant explain what network bandwidth restrictions are currently preventing 2mb now but weirdly and suddenly not an issue for 5.7mb next year...
It's a matter of ego and politics. From a computer science standpoint, Adam Back wanted the 2-4-8 mb scaling originally, which would have been completely safe (and smart). Segwit is required for the Lightning Network and some other things Blockstream wants to centralize and profit from. No better way to get something you need in there than making it necessary for scaling and saying it's the best solution. Segwit is a backwards approach compared to the easier and cleaner solution of increasing the blocksize
maaku7: "I don't know anyone who is actually working on a hard fork right now (although I'm sure someone is). Keep in mind very few core developers were at the HK meeting and that 'agreement' is mostly not acceptable to those who were not there." The Hongkong Farce. Great job Core and Chinese/Georgian 'miners'!
HF will never happen unless miners switch client. The problem is miners still trust Adam & Co. The day Mike Hearn left, he told me: "Both Adam Back and Gregory Maxwell are extremely skilled manipulators, timewasters and both of them have been caught lying red handed. I strongly suggest you just ignore both of them. I do not plan to take part in Bitcoin related discussions further". From my experience, Adam will tell you whatever you want to hear, but do something different behind your back. Just look at his presentations he gave to the miners and others, they are full of lies and inaccuracies. This isn't rocket science. I just can't understand why people keep buying bullshit from a guy who's not even a core dev, but president of a company that only benefits from making sure Bitcoin itself is crippled so people are forced offchain.
That was known opinion by Mark [Friedenbach, maaku7]. He said right after HK that it is not Core's agreement, that individual developers there were not representatives for Core. And that the HF block limit increase is not an option. I don't know what are miners still expecting and waiting for.
There's more than enough developer talent in the Bitcoin space to ensure a hard fork comes off successfully, but the Core developers have divided the community with lies to make it more difficult to pull off. Instead of helping achieve it, they have created community-wide FUD.
My opinion is that we can't have Blockstream at all involved in Bitcoin any longer. If you keep them involved, even after a blocksize increase, we will suffer in the future. Similar to malware, you have to remove it.
Hearn describes in the interview how people in the developer scene do not truly want the cryptocurrency to be decentralized.
“They say they want so, but that’s not what they want. Bitcoin is a young, unripened Democracy, in which a group of developers hold the power. And this group is desperately trying to prevent a real vote on the future of Bitcoin.” ... “[They] won’t vote against Core, because [they’ve] been told voting is dangerous,” Hearn elucidates. “The miners are not per se against proposals to increase the capacity, such as something like Bitcoin Classic wants. The miners refuse to vote. At this point, some developers, including myself, lost interest, because we realized it no longer was a debate about the block size. Suddenly it was trying to convince Chinese people democracy is a good thing.”
~ Mike Hearn
Sadly, he sounds like the voice of reason in a world gone mad.
I think the Berlin Wall Principle will end up applying to Blockstream as well: (1) The Berlin Wall took longer than everyone expected to come tumbling down. (2) When it did finally come tumbling down, it happened faster than anyone expected (ie, in a matter of days) - and everyone was shocked.
When push comes to shove, people are going to remember pretty damn quick that open-source code is easy to patch. People are going to remember that you don't have to fly to meetings in Hong Kong or on some secret Caribbean island ... or post on Reddit for hours ... or spend hundreds of thousands of dollars on devs ... in order to simply change a constant in your code from 1000000 to 2000000.
This is so true. I mean, look at the logic. If $0.01 is not enough, and everyone sets it at $1.00, then it is still not enough because the number of transactions at the 'higher' price is still too many and blocks are still full with transactions being ignored.
The core devs (Wladimir and Maxwell) do not care about the price of bitcoin. They do not care to give investors a clear indication of what capacity will be in the near or mid future. This is contrary to the fact that everything else is known. Roger Ver is right. Investors (Hodlers) are a large part of what makes bitcoin valuable. Without a clear indication of what capacity is going to be in the future there is no clear indication of what the worth of Bitcoin actually is.
Unfortunately, I know of multiple companies with more than 100,000,000 users that have put their bitcoin integration on hold because there isn't enough current capacity in the Bitcoin network for their users to start using Bitcoin. Instead they are looking at options other than Bitcoin.
Gregory Maxwell (nullc) & /bitcoin have deleted my posts They have also banned me from any discussion on their subreddit. I was simply posting that Gregory Maxwell (nullc) is lying when he says "the Chinese Bitcoin community stands behind us". This is false, they do not. In fact, a respected member from the Chinese Bitcoin community said this: "Do you know that what you are doing is harming bitcoin by spreading misinformation? I'm from China. I can just tell you the common sense in the Chinese Community of Bitcoin. No one likes BlockStream now! People in China all know that it is Greg Maxwell who is blocking bitcoin by limiting block size. I dare say, your company can never develop any business in China in the future."
Jihan of Antpool, great response in regards to Chinese Bitcoin discussion on /bitcoin I was banned from:
Maxwell, When you talking about "in fact", it smells like no fact. You are spreading very serious rumors about the mining network situation. Antpool has been connected to Relay Network and also testing a new network called Falcon after being invited. The total network orphan rate has been keeping lower and lower in the past months, which is an evidence that the network is working in a much better situation. Antpool in the past April have only 1 orphaned block, which is an evidence that there is no selfish mining situation - a selfish mining attack will generate higher orphan rate on both competitors and attackers. On the https://poolbench.antminer.link/, you can find ... the performance of a mining pool. (This is a third party site, this is fact.) Antpool and other mining pools had made the position clear as water since in the Hong Kong meeting, that SegWit+HF [is] coming as package. If you just realized right now, ... the communication problem inside Core, you cannot blame anyone else. We will not activ[ate] the SegWit until seeing the promised (by "individuals" yes I know Maxwell could not be represented) HF code being released in Bitcoin Core. If everything is progressed according the HK Consensus, the SegWit will not be stalled. The SegWit as a very th[o]rough improvement/change [and] will need to be carefully tested and reviewed after its release, at least for several months. During which time the HF can be proposed, defined, implemented and released. While the max blocksize limit lifting can be activated later, but as the code is already contained in the release, most of the economic nodes in the network will be compatible with the coming blocksize bumping up. Bitcoin is a worldwide economy infrastructure and it requires working together and moving forward. Greg, you need to have some self control from talking like a human flesh fascist propaganda machine, trying to attack anyone who disagree with you. Please don't tag those concerns as "pro-altcoin". (Another evidence of your problematic speaking style.) The concerns are genuine concerns. Some of the concerns coming from people who hold very large stake of Bitcoin since early time. Bitcoin is not the only cryptocurrency in the town. I also see some small blockers are very active in the competing coin development. You cannot use this methods to distinguish people at all. Then stop judging people's intention and unrelated behavior but focus on the problem itself. The only thing I have to add is that you can't wait for Mr. Maxwell and his company to deliver their promise. It is a toxic arrangement and we need to focus on looking past them, repairing the damage and working towards the future. When there are too many lies and scandal involved, you have to cut your losses and walk away. Investors around the world will be confident once we start making firm moves. Positive press from Forbes will help repair confidence with investors. Either way, thank you! We are all committed to working together.
In successful open-source software projects, the community should drive the code - not the other way around. Projects fail when "dead scripture" gets prioritized over "common sense". (Another excruciating analysis of Core/Blockstream's pathological fetishizing of a temporary 1MB anti-spam kludge)
The essence of Gavin's point reminded me of the things the Agile Manifesto was meant to address. ... The behaviour of Blockstream is like the most pathological cases of capital-E Enterprise software development I've seen.
Why is it not recognized that ANY block size limit is a hack on a hack Bitcoin will NOT work right until the size limit hack is removed entirely. The limit is being leveraged to justify many actions. All of which would be moot if the limit did not exist.
You're absolutely right. Miners have always regulated the size of their own blocks and still do. We see it in the form of excluding zero-fee transactions, SPV mining, spam filtering, etc. They will do the same without a limit. All in the name of maintaining profitability.
What’s On Crypto – News Week In Review | April 8th to 16th
32,000 Indians signed a petition against the ban on cryptocurrency. On Thursday, April 5, the central bank of India decided to ban transactions with crypto-currencies: financial institutions are obliged to stop the activity related to crypto-currencies for three months. On the same day, India’s crypto community compiled a petition addressing its central bank and prime minister, calling not to stifle the developing technology, but to create a legislative framework that would allow it to develop and exert a beneficial influence on the country’s economy. To date, more than 32,000 Indians signed a petition on change.org. Authors of the document draw attention to the fact that local crypto-exchange exchanges try to strictly adhere to established norms and many are already strengthening the standards of KYC. Also, the petition mentions the Central Bank’s plan to issue its own cryptocurrency. The protesters noted that the current CEO of Microsoft and Google are of Indian origin and, under a favourable environment, could create local Internet companies, hinting that the next generation of “technical geniuses” could go their way. Similar risks were also appealed to by Chinese crypto-entrepreneur, criticizing the prohibitive policies of his country and saying that China might miss the “new Amazon”. Earlier, in December, a petition to protest the announced restrictions amounted to the citizens of South Korea, and recently it became known that the Tax Administration, Ministry of Justice and the country’s financial regulators are discussing the possibility to lift the ban on the holding of the ICO. The mayor of Seoul noted, that after “terrible resistance” from the side of society, the government “seriously thought about” possible loosening. The Shanghai police interrupted the blocking conference. On Thursday, April 12, China had to host the Global Fintech & Blockchain China Summit 2018. However, around noon local time, the police interrupted morning session, ordering all participants and organizers to leave the event. The official reasons for the intervention are currently being specified, but according to the assumptions that appeared in the media and the Chinese social network Weibo, an ICO project was announced in the conference program, the investors of which lost a lot of money. They filed a complaint with the police. The organizing company, PTP International, denied these rumors, saying that the event was in full compliance with Chinese laws: “We are still investigating the reasons for the suspension, and at the moment the police refers to the security threat. We are thinking about possible compensation for the participants in the meeting. The conference was held in accordance with the Chinese regulations and did not include any ICO presentations, “PTP International said. The Golem computing platform has launched the core network. Golem, who collected 820,000 airs during the ICO in 2016 ($ 8.2 million at that time and about $ 340 million today), two years later presented a beta version of the main network, which in white paper isdescribed as “Copper Golem” – the first phase of the project. In the current format, a service based on the Ethereum block system allows computers to “rent” the unused energy of the CPU and create computer-generated images (CGIs) using the Blender software (including animation, visual effects, interactive 3D applications and video games). The interface directly associated with Blender allows you to purchase processing power for the Golem-GNT token. This release of the “Copper Golem” is designed to test the work of technology in real market conditions for real money. Golem software connects the providers of computing power with “customers” and sends small tasks to the provider, which will later be merged into P2P networks and presented as a single image, explains Golem CEO Julian Zavistovsky. In 2016 Golem represented one of the first generations of Ethereum-applications: “To underestimate the complexity of what we want to create is typical for software development in general, and especially for the blockbuster,” Zavistovsky says, explaining the protracted work on the project. According to white paper, the following, more progressive versions should be “Clay Golem”, “Stone Golem” and “Iron Golem”. Simultaneously with the release of the main network, the team announced the launch of a bounty program that will encourage developers to report on detected bugs. Gemini launches trading blocks for bitcoin and ether and can introduce a patented system that increases the security of transactions. On Thursday, at 9:30 am North American Eastern Time, the currency exchange, owned by the bitcoin-billionaires of the Winklevoss brothers, launched trading in blocks for the two leading crypto-currencies. The new option is designed primarily for institutional investors: the minimum threshold is 10 bitcoins and 100 airs. Bidding blocks are designed to provide an “additional source of liquidity”, allowing for large transactions outside the main book of orders. Also, due to the new function, buying or selling a large amount of cryptocurrency will not have a significant impact on its rate. As explained in exchange, “any user can place an order, indicating the type of transaction (purchase or sale), the amount, the minimum amount of filling and price limits.” Marketmakers will receive only information about the amount of the transaction, the minimum volume and the upper limit: if they decide to execute the transaction, the block will be filled. “In accordance with our obligations to maintain fair, transparent and regulated trading, block orders in electronic form will be instantly transferred to participating market makers, which will ensure the best execution of the transaction and setting prices for the participants of the program,” reads the website of the exchange. Also this week, Winklevoss IP, LLC received a patent to create a system that increases the security of transactions. Authors Andrew Laucius, Cem Paya and Eric Wiener describe “software for secure transaction processing in the cloud computing system”. The new development uses a combination of standard cryptographic techniques, including hash functions and digital signatures, and presumably can be applied on the Gemini exchange. The stakes of Basecoin and Carbon have successfully completed investment rounds. Intangible Labs, the creators of the “steel coin with the algorithmic central bank” Basecoin, collected $ 125 million during the tokenail on the SAFT system from March 22 to April 3 (according to the experts’ assumptions, this particular ICO format recently attracted the SEC’s attention). The organizers reported to the SEC on attracting this amount from 225 investors. Basecoin intends to avoid the inherent volatility of the crypto currency due to its provision with other digital assets: the oracles will monitor the prices of these assets, and the protocol should regulate the number of tokens so that the price of Basecoin remains stable. In addition to the “basecoins”, the startup is developing “basic bonds” and “basic shares” – crypto-currencies, which will support Basecoin, helping the protocol to manage the “money supply”. The project is supported by many large funds, including Andreessen Horowitz, Pantera Capital, PolyChain Capital and Digital Currency Group. Coinbase co-founder Fred Ehrsam took Basecoin to significant projects for the ecosystem: “It is obvious to me that the developers of the crypto-industry are interested in … a stable coin, ” Ehrsam said during the Token Summit II in San Francisco. On Thursday the completion of the seed round of funding announced another project of stablcoin is Carbon, which raised $ 2 million from such funds as General Catalyst, Digital Currency Group, FirstMark Capital, Plug and Play Ventures and The Fund. Like Basecoin, Carbon rejects the Tether reinforcement model for Fiat, replacing it with algorithmic monetary policy. “If we create a mechanism that is currently used by the Federal Reserve Bank, but we will make it decentralized, we will not need to trust the central government. We can just trust the code, “explained Carbon co-founder Connor Lin. The Carbon system includes two tokens: the stebblecoin itself, whose price should be $ 1, and a “credit token” that fluctuates in value, offsetting changes in demand. When the price of stebblecoin falls, an auction is held, during which anyone can give his token, thereby reducing the money supply and raising the price, and get a “credit token” instead. Later, when the price rises above $ 1 and the offer increases, holders of “credit tokens” will receive new steebles and this entire process is fully implemented by the algorithm. Start bitcoin cloud mining
Selbst einige Bitcoin-Entrepreneure denken, dass Mining ein Spiel für Trottel geworden ist. So sieht Fred Ehrsam, ehemaliger Händler von Goldman Sachs Inc. und Gründer des Bitcoin-Startups ... Fred Ehrsam, the co-founder of Coinbase has decided to take a break from the company's day-to-day operations. Read more... Fred Ehrsam, one of the founders of Coinbase, the leading Bitcoin company has decided to move on to brighter pastures.The cryptocurrency entrepreneur mentioned his intentions in a blog post three days ago. According to Fred, he will be stepping down from the current position in Coinbase by the end of January 2017. Fred Ehrsam Archives - CryptoCoin.News On a recent episode of the 1776 Podcast, Coinbase co-founder Fred Ehrsam and 1776 co-founder Evan Burfield discussed the concept of regulatory hacking in the context of Bitcoin.. Regulatory hacking is a philosophy that 1776, a business incubator based in Washington, D.C, has taken to heart, and the basic premise is to find new ways to change or circumvent regulations that slow down progress in ...
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