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BTC Endgame

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Re: BTC Endgame

#251

Post by loceng »

nostrademons wrote: post #17

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it. Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. That they haven't is one reas…

"You only need game theory: as long as each participant has more to gain from allowing Bitcoin's continued existence than destroying it (and they can't subvert or destroy it in a way that will be invisible to other market participants), it will continue to exist."

The CCP doesn't allow Chinese citizens to own Bitcoin as far as I know - however they allow mining because it's generating revenue.

And of course, Bitcoin's continued existence by the "army of HODLers" is a non-brainer when you join an MLM - everyone who has adopted it will push for its price to go up (or return to the prior buy price) so they can realize a profit - until the latest adopters are left holding the bag.

Re: BTC Endgame

#252

Post by Robotbeat »

topranks wrote: post #242
Robotbeat wrote: post #198

Earlier quoted context omitted.

A million transactions per block would increase the block size to a Gigabyte or so. That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node. But even that is really not fully taking into account how expensive transactions would be. The current Bitcoin block size and block rate and transaction size limit the network to 7 transactions per second. There are over 7 bil…

If there were a million transactions per block (every 10 mins,) there would be a lot more than 7 per second.

Yes, about 1700 per second. Which is about the average number of Visa transactions when averaged over a whole year but still very small compared to what VisaNet is capable of (about 65,000 transactions per second)

I can’t find examples of number of cash transactions per second globally, but the Eurozone averages 1.2 cash transactions per person per day (and 0.3 card txs/person/day). Give that there are 7.8 billion people in the world, if each makes on average 1.2 cash transactions per day and 0.3 card transactions per day, that’s about 100,000 cash transactions per second and 25,000 card transactions per second.

Cash, of course, is trivially scalable. At current usage rates, VisaNet could handle all card transactions if everyone used cards as much as Europe. Total payments of about 125,000 per second is about 2 orders of magnitude greater than what a Bitcoin with 1000 fold increase in block size could do.

None of these systems is setup for micropayments. And increasing the Blocksize doesn’t change that. Visa or cash still seem far better for the small, casual payments Satoshi imagined Bitcoin would enable.

Re: BTC Endgame

#253

Post by [deleted] »

inopinatus wrote: post #144
nyolfen wrote: post #141

Earlier quoted context omitted.

if 51% of hash power were located in the US, the statement would have been about the US. it is not something special about china that makes this the case, only the fact that it is a sovereign state with the means and will to control activity in its territory, just like every other functioning state. one could also make the case that china might be more likely to intervene in such a way in the economic affairs of its…

No, China is not a person with a single will. The assumption/assertion that the mining equipment may as well all be sitting under MSS guard in Beijing is horsecrap.

[deleted]

Re: BTC Endgame

#254

Post by muskox2 »

byset wrote: post #148
mumblemumble wrote: post #31

Earlier quoted context omitted.

I would assume that the author meant to mean "growth in the supply of bitcoin." Which seems like a reasonable error to make, because printing money typically has an inflationary effect, even if it isn't technically synonymous with inflation. Maybe dilution is a better term? If all other factors could be held equal, then the real value of the ~6BTC reward for mining a block would, in effect, come from a tiny reduction…

It's not an error, it's a different (yet common) usage of the word "inflation" to mean expansion of the money supply, rather than the more common usage meaning a decrease in the purchasing power of money.

Of course, one usually leads to the other.

Re: BTC Endgame

#255

Post by Geee »

FridgeSeal wrote: post #230
Geee wrote: post #102

The defense is that there are thousands of other cryptocurrencies that would take Bitcoin's place. So the attackers wouldn't gain anything in the end.

Oh cool so my magical internet money that I’m meant to use as my main currency is essentially untrustworthy as an actual store of value, because I’m supposed to keep migrating to whatever the hasn’t-had-a-51%-attack-yet flavour of the month currency is?

You missed the point.

Re: BTC Endgame

#256

Post by CyberDildonics »

tromp wrote: post #231
WJW wrote: post #15

Earlier quoted context omitted.

I always wondered about that and perhaps someone here can explain. After bitcoin reaches its "full" volume, mining rewards will go away and the only way miner income can stay the same is if transaction fees rise to match. Since the competition of miners basically converges to "block reward is equal to electricity cost equivalent", this would mean transaction costs increase to an insanely huge amount. Not paying the l…

This is discussed in this bitcointalk thread [1]. By constraining the block size, bitcoin is developing a fee market where transactions have to bid up the fee in order to be included in the next few blocks. Without such a constraint, transactions would only pay around 1 cent to be included (just to cover network broadcast costs), and it's next to impossible to make up for that tiny fee with a huge tx volume. In the n…

Bitcoin talk is basically propaganda for the lightning network since everything that goes against increasing throughput is deleted.

Right now the average transaction costs $25 and the throughput is about 1.5 KB/s (900KB block every 10 minutes on average). The entire blockchain over 11 years takes up about $6 of hard drive space. It is technically trivial for the few people who need to sync with the actual chain of any cryptocurrency to do it. There is no universe where people use bitcoin for normal transactions now or in the future.

There is also no reason to use a complicated second layer that still has to go through the bitcoin chain when other cryptocurrencies can be used more easily, more directly and much more securely.

People are not going to pay $25 fees for anything other than speculation, there is no utility for normal transaction and plenty of competition.

Right now that only makes up 14% of the total mining reward. A year ago fees only made up 0.3% of the mining reward.

For mining fees to ever take over, there needs to be a lot more transactions.

Then there is the volatility of combining both the price and transaction fees. When the price goes down, the transaction fees dip even lower. Three months ago the average transaction was 1/20th the price.

If the mining reward goes down rapidly to 1/20th of what it was before the block time can adjust, mining should go down to match. Then blocks will be created more slowly and the time to the block reward will be pushed into the future. This might make the average fee price go up since the transaction throughput will go down. I'm not sure what effect this will have on the network since it might mean miners monitor transactions and wait until there are enough out there to make their chance at finding a block worth turning their mining on.

Re: BTC Endgame

#257

Post by Geee »

kasparkallas wrote: post #224
Geee wrote: post #102

The defense is that there are thousands of other cryptocurrencies that would take Bitcoin's place. So the attackers wouldn't gain anything in the end.

What if the attacker is invested in other cryptocurrencies? Think outside the box.

Governments are the only entities who could try to attack Bitcoin if they collaborated. The only motivation would be to stop the network, not to make gains in other cryptocurrencies.

Re: BTC Endgame

#258

Post by jki275 »

sgeisler wrote: post #247
fanciestManimal wrote: post #61

Earlier quoted context omitted.

It's an unsolved problem, and all solutions would require a majority of the mining pool to get on board. You could periodically increase the block size, splitting the transaction fee among more transactions. Although larger blocks make it more difficult to produce hashes, so more power would be consumed, thus increasing the transaction fees further. You could change the block reward such that there's a larger block r…

> You could periodically increase the block size It's unclear if that would solve the problem. If BTC becomes a global store of value (which it seems to be in the process of), the avg. transaction value goes up and with it the fees that can potentially be paid. The block size cap ensures that there is a fee market if there's enough demand for transactions, so that not everyone simply pays the minimum fee. If you incr…

If the miners decided to change, it would change. They control enough of the chain that it wouldn’t matter. Not many people run full nodes.

Re: BTC Endgame

#259

Post by bitxbitxbitcoin »

WJW wrote: post #15
paulgb wrote: post #2

The linked Medium posts have a bit more content https://joekelly100.medium.com/how-to-kill-bitcoin-part-1-is... Note that this is from last July, when the price of BTC was significantly lower and thus the price of the attack is likely higher now. That said, this becomes more feasible in the long-run when mining is purely funded by transaction fees. Something I don’t see talked about much is the fact that, although Bi…

I always wondered about that and perhaps someone here can explain. After bitcoin reaches its "full" volume, mining rewards will go away and the only way miner income can stay the same is if transaction fees rise to match. Since the competition of miners basically converges to "block reward is equal to electricity cost equivalent", this would mean transaction costs increase to an insanely huge amount. Not paying the l…

I don't think it's a problem at all: There have already been blocks in the past where the transaction fee portion of the miner reward was higher than the block reward.

Re: BTC Endgame

#260

Post by conqueso »

nostrademons wrote: post #17

You don't need a DoS attack under the assumptions of this project. It's already assumed that you control ~80% of hash rate, so you execute a 51% attack that mass double-spends coins and destroy all confidence in the integrity of the currency. Poof, nobody uses it. Note that China already controls ~65% of Bitcoin hash rate, so if they wanted to execute this right now, they probably could. That they haven't is one reas…

> That they haven't is one reason I'm bullish on cryptocurrency, and specifically Ethereum and Stellar

I'm curious why you are bullish on those 2 specifically?

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