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Cryptocurrency in the 2020s

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Re: Cryptocurrency in the 2020s

#251

Post by foepys »

pixelperfect wrote: post #224
foepys wrote: post #208

Earlier quoted context omitted.

The Lightning Network is a pipedream of ivory tower developers. People who think LN can scale Bitcoin into a global currency rivaling USD and EUR either don't understand LN or are lying on purpose. Fact is that each LN "channel" needs a committed amount of Bitcoin that can only be withdrawn by closing the channel. If you want your Bitcoins "secured" in you wallet, you need to close the channel. Otherwise you will - b…

Do you think people should stop working on LN? I think it's a good way to scale right now, regardless of whether or not it can theoretically handle the transactions of hundreds of millions of people. There are probably going to be some big entities in the Lightning Network ("lightning service providers") that average users use to open channels in exchange for a fee. These LSPs need to closely monitor for malicious tr…

You cannot distinguish between good or bad transactions. Malicious actors can create as many channels and addresses as they want because it's decentralized and "trustless". Anybody can join and leave the network as they want.

But even if there was a way to identify bad actors, what you describe as "big entities" already exists. They are called banks, just you described one with more steps and that's a lot more complicated.

Re: Cryptocurrency in the 2020s

#252

Post by lawn »

SkyMarshal wrote: post #244
lawn wrote: post #217

Earlier quoted context omitted.

What you meant to say is the propaganda has tried, and quite successfully, to make his opinions seem less informed each year. It's funny you say that pro block-size increase people don't understand the decentralization, privacy and reliability trade-off, while the people against a block-size increase have never defined or quantified these trade-offs. And very often they also have the notion that "everyone must run a…

It’s a complex socio-economic-technical system, which probably can’t be perfectly quantified. Same as with the weather or the larger economy. We can understand it to some degree, but lack of perfectly predictive models does not invalidate these concerns, as you imply. “Everyone must run a full node” is aspirational but not realistic. It’s nevertheless extremely valuable to continue working on ways of reducing the exp…

> It’s nevertheless extremely valuable to continue working on ways of reducing the expense of running full nodes.

And nobody will claim otherwise. But there's always a trade-off, and focusing only on reducing the expense is severely misguided.

> Throwing caution to wind so Bitcoin can have fast payments Now at the expense of failing at sound money later is short-sighted and irresponsible.

The funny thing is, the inaction of the Bitcoin devs have made it fail at one of the core features of money. You cannot consider it to be acceptable, as fees are so expensive they price out a lot of people. Money should be easy to move around, and you should be able to buy large and small things with it.

Yet this is somehow preferable, because doing otherwise would make Bitcoin "fail at sound money", whatever that means.

Re: Cryptocurrency in the 2020s

#253

Post by thebean11 »

danans wrote: post #250
thebean11 wrote: post #248

Earlier quoted context omitted.

Taking over the entire supply chain is completely impossible though, black markets will always exist, and not just for simple raw materials. Another aspect of crypto is the ability to simply leave the oppressor's territory, taking your money with you. I'm absolutely not saying this is a perfect solution, or that government is powerless in this situation, but it seems hand wavey to say they'll just seize control of ev…

> Taking over the entire supply chain is completely impossible though And it's unnecessary. Black markets exist today and always will. The state would need to merely take over the major suppliers of raw inputs to all products, and major finished products, and that will be enough to keep crypto only relevant on the margins. If black markets become a problem due to crime (i.e. the mafia) they can be dealt with using la…

> The state would need to merely take over the major suppliers of raw inputs to all products, and major finished products, and that will be enough to keep crypto only relevant on the margins.

Very hard bordering on impossible

> You will have to find a place with effectively no state

Why no state? I'm sure plenty of states would be happy to let you transact in crypto as long as you're willing to pay taxes. In fact, transacting in crypto isn't even necessary, all you need is the ability to convert crypto to local currency periodically.

Re: Cryptocurrency in the 2020s

#254

Post by hnews_account_1 »

dane-pgp wrote: post #245
hnews_account_1 wrote: post #231

Earlier quoted context omitted.

> (He also didn't say anything about "lightning network transactions".) Correct. I'm not going by what Satoshi said, but by what development the bitcoin core team is aiming to create now. > If blocks had been 10 times bigger, the blockchain would still be less than 3 TB Correct. The aim of the project is to keep it as small as possible. 3 TB may not seem prohibitive today, but that's because there's hardly been any u…

So you admit that increasing the block size by 10x would solve the current congestion/fees problem without needing the complexity and changed incentive structure of the Lightning network, and that bitcoin doesn't compete with Visa/Mastercard yet so it doesn't need a 30 TB blockchain (which would fit on two hard drives, which many consumers have). To give an analogy, it's like saying that there should be a law limitin…

> So you admit that increasing the block size by 10x would solve the current congestion/fees problem without needing the complexity and changed incentive structure of the Lightning network,

I don't think so. That also requires a faster cycling of transactions than the current 10 minute round. But yes, obv a larger number of transactions can fit into the block so throughput will increase.

> 30 TB blockchain (which would fit on two hard drives, which many consumers have)

1) I don't know if you understand who "consumers" are. 30 TB is far, faaaaaar away from what a normal consumer has. Most of us have a laptop at most and that limits us to 1 TB storage. I personally have a lot of cloud storage, but I'm not the average consumer. I'm highly tech savvy compared to the normal person. So go out and talk to people not in tech and see what their tech specs look like. If they can't match up to you, they still need to be able to process transactions.

2) I didn't say it doesn't need a 30TB blockchain. You're completely misunderstanding my point. I'm saying your glib observation of "oh it's 300GB now, it can scale up to 3TB if it's bigger" is highly ill informed. If you push it only 1 order of magnitude, you're going from 3TB to 30TB and it becomes untenable. Now instead if it was 10KB and scaled to 10MB, it obv makes no difference even with 3 orders of magnitude.

3) You're also not understanding the larger picture. If all transactions in history have to be stored in the blockchain, it requires scaling to become less than linear (or at max, linear) to keep up with consumer storage expectations. It doesn't matter what the size of the blockchain is now (as long as it's within say 1TB that the average consumer can access). It matters how big it gets when there are billions of transactions flowing through it every day. So by that account, even 250GB is a very big number because once we hit billions of transactions, unless the relationship is inverse exponential, we'll breach limits long before touching that point.

> You're trying to prevent a problem that won't exist

The problem that won't exist of billions of transactions passing through the blockchain? Possibly if we had off chain solutions, yes. Which we do in very early stages. If not, the problem is very very real.

Re: Cryptocurrency in the 2020s

#255

Post by heptathorp »

kerkeslager wrote: post #249
heptathorp wrote: post #236

Earlier quoted context omitted.

>You know the transaction exists, and at some point (i.e. after a certain number of blocks), if the transaction isn't included in the chain, you can conclude with reasonable certainty that the transaction is being intentionally orphaned. This allows you to reject the chain that doesn't include the transaction as invalid, and choose the longest chain that does include it. So you are going to reorg after many blocks (e…

It delays finality, but it doesn't kill it. Reorgs are already possible, this is why we currently wait for some number of confirmations (6 last time I checked) to say a transaction is complete. Adding the condition of requiring all transactions you've received to be included in a chain means that you need to wait for more confirmations to reach the same level of confidence that the chain is final, but it doesn't mean…

Good points, thanks.

Followup question: how does a node coming online know not to trust China's (longer, censoring) chain? It wasn't online to have the transaction in its mempool, so it doesn't know to check for it in the longest chain.

I think it would need to check all candidate blocks with lower heights to see if their chains contain any transactions that aren't in a longer chain.

What happens if I mine off of a very old block and include my own transaction in it, and present it to you... how do you distinguish between what I just did vs the longer chain having censored the transaction this whole time?

Re: Cryptocurrency in the 2020s

#256

Post by danans »

thebean11 wrote: post #253
danans wrote: post #250

Earlier quoted context omitted.

> Taking over the entire supply chain is completely impossible though And it's unnecessary. Black markets exist today and always will. The state would need to merely take over the major suppliers of raw inputs to all products, and major finished products, and that will be enough to keep crypto only relevant on the margins. If black markets become a problem due to crime (i.e. the mafia) they can be dealt with using la…

> The state would need to merely take over the major suppliers of raw inputs to all products, and major finished products, and that will be enough to keep crypto only relevant on the margins. Very hard bordering on impossible > You will have to find a place with effectively no state Why no state? I'm sure plenty of states would be happy to let you transact in crypto as long as you're willing to pay taxes. In fact, tr…

> I'm sure plenty of states would be happy to let you transact in crypto as long as you're willing to pay taxes.

What is the point of cryptocurrency if your freedom can be impinged upon by being compelled to pay taxes? What's the point of it isn't the primary medium of exchange? If it's not that, then it's just a deflationary store of value, functioning like gold, which nobody uses for daily transactions, therefore of limited value.

Why would that state accommodate your ability to convert crypto into local currency that they ultimately control? The only rationale would be to hurt their presumptive rival: the state you fled.

And more importantly, even if that works at the individual level for you and a few others who work that kind of deal with a state, how does that model scale to populations of multiple 10s of millions?

Another state may allow a few people to make that personal optimization in their territory, but they won't negotiate such agreements with millions of people. If you are a rare wealthy person able to strike such a deal with a state, you are then effectively an oligarch, and part of the state power structure.

States are made of people, and people only trust other people who they believe have skin in the game.

Re: Cryptocurrency in the 2020s

#257

Post by thebean11 »

danans wrote: post #256
thebean11 wrote: post #253

Earlier quoted context omitted.

> The state would need to merely take over the major suppliers of raw inputs to all products, and major finished products, and that will be enough to keep crypto only relevant on the margins. Very hard bordering on impossible > You will have to find a place with effectively no state Why no state? I'm sure plenty of states would be happy to let you transact in crypto as long as you're willing to pay taxes. In fact, tr…

> I'm sure plenty of states would be happy to let you transact in crypto as long as you're willing to pay taxes. What is the point of cryptocurrency if your freedom can be impinged upon by being compelled to pay taxes? What's the point of it isn't the primary medium of exchange? If it's not that, then it's just a deflationary store of value, functioning like gold, which nobody uses for daily transactions, therefore o…

What's the point if it's not the primary medium? I just gave you an example, taking my money elsewhere. Bank accounts can be frozen.

I think you're moving the goalpost from "crypto grants me more financial freedom" to "crypto makes me literally untouchable by governments". Nobody here is claiming the latter. I have no idea where you even got the tax evasion angle from anything I said.

Re: Cryptocurrency in the 2020s

#258

Post by nootropicat »

thebean11 wrote: post #237
nootropicat wrote: post #214

Earlier quoted context omitted.

>There would be the Chinese censored branch and the uncensored branch everyone else is using Every fork is vulnerable to the same attack, which is why such a switch doesn't make sense. There's no way to prevent Chinese miners from mining on the "Western" bitcoin if it's the more profitable option. The censorship can be easily made reactive: first, all Chinese miners have to register and report their hash power. If th…

Reusing the same attack would just result in a never-ending series of offshoots from the "western" chain. If anything that would guarantee that the uncensored chain stays dominant, as all of the forks would be quicky abandoned for the next

You can't expect people to fork every week to a new network. This is at best a one time deal, and if it doesn't work, that's it.

Re: Cryptocurrency in the 2020s

#259

Post by nootropicat »

kerkeslager wrote: post #235
nootropicat wrote: post #214

Earlier quoted context omitted.

>There would be the Chinese censored branch and the uncensored branch everyone else is using Every fork is vulnerable to the same attack, which is why such a switch doesn't make sense. There's no way to prevent Chinese miners from mining on the "Western" bitcoin if it's the more profitable option. The censorship can be easily made reactive: first, all Chinese miners have to register and report their hash power. If th…

> Every fork is vulnerable to the same attack, which is why such a switch doesn't make sense. No, it wouldn't. I don't think you're understanding the solution I'm proposing. There isn't an amount of computing power that allows you to submit invalid blocks.

I assumed you meant manually. This method isn't possible to automate under PoW, because any such actions require global time, but PoW is what provides time itself, creating a contradiction. What this means in practice is network splits.

>you know the transaction exists, and at some point (i.e. after a certain number of blocks), if the transaction isn't included in the chain, you can conclude with reasonable certainty that the transaction is being intentionally orphaned. This allows you to reject the chain that doesn't include the transaction as invalid

as what would happen is nodes that were online and observed the situation would follow one chain, but everyone else that joins later wouldn't be able to confirm that censorship actually happened, and follow another. If you have a solution that solves it, you solved the fundamental problem - absolute order - some other way and PoW becomes completely superfluous.

Then there's a problem of: what happens when there are contradictory transactions on two different chains at once? How do you decide which one is valid? This gets complex very fast.

If you want to try tackling the censorship issue in an automated way, you have to move away from PoW to a more typical consensus algorithm with online identities. In the simplest case, if all (ever - no new ones) network participants are online all the time, the problem becomes trivial and something close to your solution would work.

Re: Cryptocurrency in the 2020s

#260

Post by mundo »

moduspol wrote: post #158
mundo wrote: post #142

Earlier quoted context omitted.

Correct me if I'm misunderstanding things, but Lightning Network means off-chain transactions, right? Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? And in practice, that means traditional financial services companies and their KYC-compliant customers, which is the exact 180 degree opposite of the originally envisioned use case. From where I sit, it seems lik…

It's complicated, and I'm not sold on the Lightning Network as the future, but > Which can be be reneged on if one party is malicious, meaning they'll only occur between trusted parties? This is not correct. My understanding is essentially each party is tying up Bitcoin as being between them on the blockchain, then trading cryptographically verifiable assertions of each other off-chain about what the latest status of…

> My understanding is...

That's how two finserv companies would transact off-chain with each other, but when I go to buy a cup of coffee with a bitcoin, I'm not opening up a payment channel with them for one transaction, that would defeat the whole point. The coffee shop will use a payment processor, who isn't going to deal with me off-chain unless I'm the KYC'd customer of them or some other finserv they trust. (please correct me if I'm wrong here)

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