<unnamed>

Public Key

npub1swfeusu3ua9trup00qcnrgc2yndksyvgku4epk5tec7u4fmrez6qxpul5t

Profile Code

nprofile1qqsg8yu7gwg7wj437qhhsvf35v9zfkmgzxytw2usm29uu0w25a3u3dqpz3mhxue69uhhyetvv9ujuerpd46hxtnfduqs6amnwvaz7tmwdaejumr0dsa2y5nj

Publishing to

relay.damus.io

nos.lol

Last Notes

2023-06-07 17:59:20 UTC

- reply

📅 Original date posted:2017-04-06
📝 Original message:> Ethically, this situation has some similarities to the DAO fork.
There are no similarities.
The DAO fork was against the principles of cryptocurrencies: a change of
the ledger done in violation of pre-agreed rules. The whole point of
cryptocurrency is to avoid shit like that. (E.g. a central banker changing
ledger as he wants.)
Greg's proposal is in line with the principles of cryptocurrencies:
PoW-based cryptocurrency can work only if there is a competition between
miners, which requires all miners to have equal access to the technology.
The notion that Bitmain is entitled to future profits is completely
ridiculous. Every investment has a risk, and doing unusual stuff which
boosts your profits is associated with increased risk. Developers just need
to make sure all miners are on equal grounds, as that's the whole point of
the protocol. If Bitmain loses their profits because of that it's really
just Bitmain's problem.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20170406/622850e0/attachment.html>

2023-06-07 17:59:20 UTC

- reply

📅 Original date posted:2017-04-06
📝 Original message:> Ethically, this situation has some similarities to the DAO fork.
Much better analogy:
1. An ISV make software which makes use of an undocumented OS feature.
2. That feature is no longer present in the next OS release.
3. ISV suffers losses because its software cannot work under new OS, and
thus people stop buying it.
I think 99% of programmers would agree that this loss was inflicted by a
bad decision of ISV, and not by OS vendor changing OS internals. Relying on
undocumented features is something you do on your own risk.
I think it is ethically unambiguous to everyone who isn't on Bitmain's
payroll.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20170406/5645efed/attachment.html>

2023-06-07 15:35:58 UTC

- reply

📅 Original date posted:2015-05-31
📝 Original message:> That orphan rate increase will go to whoever is producing the 20MB blocks,
> NOT you.
>
This depends on how miners are connected.
E.g. suppose there are three miners, A and B have fast connectivity between
then, and C has a slow network.
Suppose that A miners a block and B receives it in 1 second. C receives it
in 6 seconds.
This means that blocks mined by C during these ~5 seconds will be orphaned
because B gets A's block first.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150531/500f47c7/attachment.html>

2023-06-07 15:35:58 UTC

- reply

📅 Original date posted:2015-05-31
📝 Original message:>
> Yes, if you are on a slow network then you are at a (slight) disadvantage.
> So?
>
Chun mentioned that his pool is on a slow network, and thus bigger blocks
give it an disadvantage. (Orphan rate is proportional to block size.)
You said that no, on contrary those who make big blocks have a disadvantage.
And now you say that yes, this disadvantage exist.
Did you just lie to Chun?
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150601/28766322/attachment.html>

2023-06-07 15:33:57 UTC

- reply

📅 Original date posted:2015-05-08
📝 Original message:Adaptive schedules, i.e. those where block size limit depends not only on
block height, but on other parameters as well, are surely attractive in the
sense that the system can adapt to the actual use, but they also open a
possibility of a manipulation.
E.g. one of mining companies might try to bankrupt other companies by
making mining non-profitable. To do that they will accept transactions with
ridiculously low fees (e.g. 1 satoshi per transaction). Of course, they
will suffer losees themselves, but the they might be able to survive that
if they have access to financial resources. (E.g. companies backed by banks
and such will have an advantage).
Once competitors close down their mining operations, they can drive fees
upwards.
So if you don't want to open room for manipulation (which is very hard to
analyze), it is better to have a block size hard limit which depends only
on block height.
On top of that there might be a soft limit which is enforced by the
majority of miners.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150508/e290f012/attachment.html>

2023-06-07 15:33:45 UTC

- reply

📅 Original date posted:2015-05-30
📝 Original message:> Why 20 MB? Do you anticipate 20x transaction count growth in 2016?
>
> Do you anticipate linear growth?
>
It's safe to say that absolutely nobody can predict the actual growth with
any degree of an accuracy.
I believe that linear growth compares very favorably to other alternatives:
1. Exponential growth: Linear growth is better at modelling diminishing
returns, that is, risk that it grows too much is much smaller. At the same
time initially it will grow faster than reasonable exponential models.
E.g. linear year-over-year relative growth: 100% 50% 33% 25% ...10%
While exponential one which gives the same result in 10 years:
25% 25% ... 25%
This is on the same scale, but exponential starts slower than we want at
start (1.25 MB will be too little for 2016 as we already see fully filled 1
MB blocks), but goes a bit too fast in the long term. It's highly unlikely
we'll see bandwidth growing 10x each 10 years in the long term.
2. Single step increase: an obvious advantage is that linear growth gives
us time to adapt to near realities, time to change something if there is an
unwanted effects, etc. At the same a single step is not a long-term
solution.
While a slow-but-steady growth might be.
3. Adaptive solutions (e.g. limit depends on the last N blocks or something
of that nature):
The problem with them is that they are rather complex, and also:
3.1. prone to manipulation: somebody might try to push the limit if it
will favor him in future
3.2. possibility of a positive feedback loop.
3.3. possibility of an unhealthy game-theoretic dynamics
The main problem is that we do not understand game theoretic aspects of
bitcoin mining in presence of various real-world factors such as block
propagation delays. Thus we can't design a proper adaptive solution.
There is no perfect solution to this problem as we cannot predict the
future and our understanding is limited.
But among the 5 alternatives (linear, exponential, single step, adaptive,
no limit), linear seems to be the best option at this point as it's both
quite safe and doesn't stunt growth too much.
> bitcoin is really really small right now, any sign of real adoption could
make it grow 100x or even more in a matter of weeks.
This is certainly possible, but the thing is:
1) this can't be predicted;
2) this will be a serious problem for many bitcoind installations;
3) it's not necessarily a healthy thing, perhaps it will grow 100x in a
matter of weeks, and then will go to zero in matter of weeks as well.
So I don't think that sudden growth spurts is something we should take into
account on the planning stage. If anything we'd like to prevent them from
happening, slow growth is usually better.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150531/7511ce61/attachment.html>

2023-06-07 15:33:44 UTC

- reply

📅 Original date posted:2015-05-30
📝 Original message:> Why 2 MB ?
>
Why 20 MB? Do you anticipate 20x transaction count growth in 2016?
Why not grow it by 1 MB per year?
This is a safer option, I don't think that anybody claims that 2 MB blocks
will be a problem.
And in 10 years when we get to 10 MB we'll get more evidence as to whether
network can handle 10 MB blocks.
So this might be a solution which would satisfy both sides:
* people who are concerned about block size growth will have an
opportunity to stop it before it grows too much (e.g. with a soft fork),
* while people who want bigger blocks will get an equivalent of 25% per
year growth within the first 10 years, which isn't bad, is it?
So far I haven't heard any valid arguments against linear growth.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150531/29b010f3/attachment.html>

2023-06-07 15:30:13 UTC

- reply

📅 Original date posted:2015-02-12
📝 Original message:> "The approach" is how Bitcoin has always worked.
>
Mike, you're making "it worked before, and thus it will work in future"
kind of an argument.
It is an extremely shitty kind of an argument. And it can be used to
justify any kind of bullshit.
E.g. any scamcoin which haven't yet collapsed will work forever.
As I mentioned, it depends on scale. Highly sophisticated attacks are only
feasible when scale is sufficiently big.
I.e. when you have millions of dollars transacted each day it is one thing,
but if you process billions of dollars, it becomes a whole another matter.
The best way to profit from zero-confirmation payment disruption is through
derivatives: short-sell Bitcoin while performing this attack. But this kind
of an attack depends on a number of conditions:
1. highly liquid and reliable derivative market
2. sufficiently stable exchange rate
3. significant attack impact: lots of merchants relying on
zero-confirmation payments, and lots of customers paying this way
4. significant amounts of capital available to the attacker
These conditions are not yet met, and were never met in the Bitcoin's
history so far.
This is why I wrote "5 years from now", I believe that we might reach those
conditions around that time.
Direct impact of an attack might actually be low (but even if it is just
0.1%, 0.1% of 1 billion is 10 million, which isn't bad), but attacker might
profit from the panic it causes.
Note that I'm talking about situation where Bitcoin-aware PoS solutions are
deployed on a big scale, so cost of upgrade might be huge.
So anyway, in my opinion, it is actually great that Bitcoin is still
relatively small: we have an opportunity to analyze and improve things.
But you seem to be hostile to people who do that (and who do not share your
opinion), which is kinda uncool.
Also, you do not bother to back your intuition with rigorous reasoning,
while also attacking people who offer alternatives with non-rigorous
slipper-slope kind of arguments. Which is doubly uncool.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150212/c39d4998/attachment.html>

2023-06-07 15:30:11 UTC

- reply

📅 Original date posted:2015-02-12
📝 Original message:> Miners are *not* incentivised to earn the most money in the next block
> possible. They are incentivised to maximise their return on investment.
>
This would be right if you assume that all Bitcoin miners act as a single
entity. In that case it is true that that entity's goal is to maximize
overall ROI.
But each miner makes decisions on his own. Are you familiar with a concept
of Nash equilibrium, prisoner's dilemma, etc?
The fact that nobody is using this kind of a behavior right now doesn't
mean that we can rely on it.
For example, Peercoin was horribly broken in 6 months after its release
(e.g. people reported that they are able to generate 50 consecutive blocks
simply by bringing a cold wallet online) and yet nobody bothered to exploit
it, and it managed to acquire non-negligible "market cap".
So we have an empiric evidence that proof-of-stake miners are motivated to
keep network secure. So, maybe, we should switch to proof-of-stake, if it
was demonstrated that it is secure?
There are good reasons to not switch to proof-of-stake. Particularly, the
kind which is used in Peercoin is not game-theoretically sound. So even if
it works right now, it can fail in a big way once attackers will really get
around to it. An attack requires significant knowledge, effort and,
possibly, capital, so it might be only feasible on a certain scale.
So, well, anyway, suppose Peter Todd is the only person interested in
maintaining replace-by-fee patches right now, and you can talk him into
abandoning them.
OK, perhaps zero-confirmation payments will be de-facto secure for a couple
of years. And thus a lot of merchants will rely on zero-confirmation
payments protected by nothing but a belief in honest miners, as it is damn
convenient.
But, let's say, 5 years from now, some faction of miners who own
soon-to-be-obsolete equipment will decide to boost their profits with a
replace-by-fee pool and a corresponding wallet. They can market it as "1 of
10 hamburgers are free" if they have 10% of the total hashpower.
So would you take a responsibility for pushing the approach which isn't
game-theoretically sound?
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150212/b4b4de32/attachment.html>

2023-06-07 15:30:11 UTC

- reply

📅 Original date posted:2015-02-12
📝 Original message:> Yes, like any P2P network Bitcoin cannot work if a sufficiently large
> number of miners decide to attack it.
>
1. They won't be attacking Bitcoin, they will attack merchants who accept
payments with 0 confirmations. This attack has nothing to do with Bitcoin
consensus mechanism (as Bitcoin protocol doesn't provide a consensus over
mempool contents), thus it is not an attack on Bitcoin.
2. In the example I used, having 10% of hashpower is enough to offer 10%
success rate. Would you mind having 1 out of 10 hamburgers for free? If a
system can be attacked by a tiny fraction, it is a shitty system.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150212/a6b9081f/attachment.html>

2023-06-07 15:30:08 UTC

- reply

📅 Original date posted:2015-02-12
📝 Original message:> To remain useful as border router, the replace-by-fee patched core should
> only relay double spend if it actually replaces an earlier transaction, as
> otherwise the replace logic that is according to your commit more than just
> fee comparison, would have to be replicated in the proprietary stack and
> mempool might get out of sync with that of the border router.
>
Why don't you use getrawmempool RPC call to synchronize mempool contents?
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150212/d898c0e1/attachment.html>

2023-06-07 15:27:05 UTC

- reply

📅 Original date posted:2014-11-03
📝 Original message:> For those following this thread, we have now written a paper
> describing the side-chains, 2-way pegs and compact SPV proofs.
> (With additional authors Andrew Poelstra & Andrew Miller).
>
> http://blockstream.com/sidechains.pdf
Haven't seen any material discussion of this paper in this mailing list, so
I'll start.
(Otherwise, I've seen Peter Todd's reaction on reddit.)
This paper fails to demonstrate that sidechains are anything more than a
wishful thinking.
It can be distilled down to this:
"We want such and such features, hence we'll use DMMS, the same thing
Bitcoin uses, thus it will be secure!"
Um, no.
Alt-coins also use DMMS, but aren't as secure as Bitcoin.
So DMMS does not work by itself, it is a mechanism to secure a blockchain
using economic incentives.
The sidechains paper does not mention this, as far as I can tell.
In my opinion, this is not acceptable. If you're making a proposal, you
need to describe what conditions are required for it to work.
Authors are clearly aware of the problem and mention it in section 6
"Future directions" 6.1. "Hashpower attack resistance".
The problem is they do not make it clear that the proposal just makes no
sense until this is solved.
In the discussions on reddit I've noticed that pretty much everybody
believes that release of sidechains paper implies that the proposal is
complete and now we are just waiting the implementation.
It doesn't help that the paper itself tries to sweep the problem under the
rug and has misleading statements.
Particularly, I'm talking about section "4.2. Fraudulent transfers":
"Reorganisations of arbitrary depth are in principle possible, which could
allow an attacker to
completely transfer coins between sidechains before causing a
reorganisation longer than the contest
period on the sending chain to undo its half of the transfer. ... If the
attacker is allowed to return the transferred coins to the original
chain, he would increase the number of coins in his possession at the
expense of other users of the sidechain.
Before discussing how to handle this, we observe that this risk can be made
arbitrarily small by
simply increasing the contest period for transfers."
Wow, really? Is this risk stochastic?
The first sentence implies that attacker is able to cause a reorganization
of an arbitrary depth, but the rest of the section implies that
reorganizations are a naturally occurring phenomenon.
All in all, I find this paper really disappointing. It's going to be
influential (9 co-authors, many of which are regarded as Bitcoin core
developers, must be good!) and hyped, and thus might focus research on an
area which is fundamentally flawed.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141103/d46df6bb/attachment.html>

2023-06-07 15:27:00 UTC

- reply

📅 Original date posted:2014-10-28
📝 Original message:> This thread is, in my opinion, a waste of time. It's yet again
> another perennial bikeshedding proposal brought up many times since at
> least 2011, suggesting random changes for
> non-existing(/not-yet-existing) issues.
>
> There is a lot more complexity to the system than the subsidy schedule.
>
Well, the main question is what makes Bitcoin secure.
It is secured by proofs of work which are produced by miners.
Miners have economic incentives to play by the rules; in simple terms, that
is more profitable than performing attacks.
So the question is, why and when it works? It would be nice to know the
boundaries, no?
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141028/33741ecb/attachment.html>

2023-06-07 15:26:48 UTC

- reply

📅 Original date posted:2014-10-25
📝 Original message:> For the sake of argument, lets assume that somehow (quite unlikely)
Why is it unlikely? Do you believe that the cost of electricity cannot be
higher than expected mining revenue?
Or do you expect miners to keep mining when it costs them money?
> half the mining equipment gets shut off.
> The amount of hashes/second is such that it is currently, lets just say,
> quite
> secure against any takeover.
>
The equipment won't be simply turned off, it will be up for grabs.
Please check this web sites:
https://nicehash.com/
https://www.multipool.us/
One can use them in the same way he uses normal mining pools, and they
switch between different chains.
Say, multipool.us can switch between BTC and PPC (Peercoin).
Mining BTC will be less profitable after a halving, so a miner who is
willing to maximize his profits might use multipool to auto-switch to
something more profitable.
Which might be attack-on-Bitcoin.
E.g. if 60% of bitcoin's total hashrate is available via "multipools", one
can try to pull of a double-spending attack.
> Your document makes a long series of assumptions about how this can turn
> out
> bad with each individually is implausible, together are just fiction.
>
It sounds like you failed to grasp even basics.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141025/2daacf00/attachment.html>

2023-06-07 15:26:46 UTC

- reply

📅 Original date posted:2014-10-25
📝 Original message:> We had a halving, and it was a non-event.
> Is there some reason to believe next time will be different?
>
Yes.
When the market is rapidly growing, margins can be relatively high because
of limited amounts of capital being invested, or introduction of more
efficient technologies.
However, we should expect market to become more mature with time, and a
mature market will result in lower margins.
The halving can do much more damage when margins are relatively small.
Besides that, there is a difference in ecosystem maturity:
1. Back in 2012, miners weren't so focused on profits, as Bitcoin was
highly experimental: some were mining for the hell of it (it was a novelty
thing back then), others wanted to secure the network, others did it
because it was hard to obtain bitcoins by other means. But now miners are
mostly profit-motivated: they buy expensive dedicated mining equipment and
want to maximize profits. As you might know, at one point ghash.io reached
50% hashrate, and miners didn't care about it enough to switch to a
different pool.
2. Back in 2012, we didn't have multipools. Multipools automatically
switches between mining different alt-chains to maximize miners' profits.
Miners who use multipools do not care how their hashrate is used as long as
they profit off it.
Particularly, check https://nicehash.com/ -- you can easily buy hashrate to
attack a smaller alt-coin, for example.
If the halving will result in a significant hashrate drop (and we did
observe hashrate drop in 2012, although it wasn't that big), it might be
possible to buy enough hashpower to attack Bitcoin.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141025/d828d84e/attachment.html>

2023-06-07 15:26:46 UTC

- reply

📅 Original date posted:2014-10-25
📝 Original message:> The hashpower market is maturing in the direction of
> financial instruments, where the owner of the hashpower is not
> necessarily the one receiving income. These are becoming tradeable
instruments,
Meni Rosenfeld issued tradeable mining bonds back in 2012:
https://bitcointalk.org/index.php?topic=65569.0
So this is hardly new stuff. But it definitely won't help.
The contract specifies how many bitcoins bondholder would get depending on
difficulty and other factors.
But, usually, bondholder doesn't care (and cannot check) where these
bitcoins come from.
Thus the owner of the mining equipment can temporarily turn off that
equipment off, and instead buy them on the market, as he needs to spend
less money than he would spend on electricity. Then he can pocket the
difference.
> Simplistic models cannot predict what hashpower does in the face of
> business-to-business medium- and long-term contracts.
>
Ah, yes, let's forget game theory, business people know it better!
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141025/4ce59ce0/attachment.html>

2023-06-07 15:26:45 UTC

- reply

📅 Original date posted:2014-10-25
📝 Original message:> "Flag day" herd behavior like this is unlikely for well informed and
> well prepared market participants.
>
It is simply rational to turn your mining device off until difficulty
adjusts.
Keeping mining for 2+ weeks when it costs you money is an altruistic
behavior, we shouldn't rely on this.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141025/f10e3bf5/attachment.html>

2023-06-07 15:26:44 UTC

- reply

📅 Original date posted:2014-10-25
📝 Original message:# Death by halving
## Summary
If miner's income margin are less than 50% (which is a healthy situation
when mining hardware is readily available), we might experience
catastrophic loss of hashpower (and, more importantly, catastrophic loss of
security) after reward halving.
## A simple model
Let's define miner's income margin as `MIM = (R-C_e)/R`, where R is the
total revenue miner receives over a period of time, and C_e is the cost of
electricity spent on mining over the same period of time. (Note that for
the sake of simplicity we do not take into account equipment costs,
amortization and other costs mining might incur.)
Also we will assume that transaction fees collected by miner are negligible
as compared to the subsidy.
Theorem 1. If for a certain miner MIM is less than 0.5 before subsidy
halving and bitcoin and electricity prices stay the same, then mining is no
longer profitable after the halving.
Indeed, suppose the revenue after the halving is R' = R/2.
MIM = (R-C_e)/R < 0.5
R/2 < C_e.
R' = R/2 < C_e.
If revenue after halving R' doesn't cover electricity cost, a rational
miner should stop mining, as it's cheaper to acquire bitcoins from the
market.
~~~
Under these assumptions, if the majority of miners have MIM less than 0.5,
Bitcoin is going to experience a significant loss of hashing power.
But are these assumptions reasonable? We need a study a more complex model
which takes into account changes in bitcoin price and difficulty changes
over time.
But, first, let's analyze significance of 'loss of hashpower'.
## Catastrophic loss of hashpower
Bitcoin security model relies on assumption that a malicious actor cannot
acquire more than 50% of network's current hashpower.
E.g. there is a table in Rosenfeld's _Analysis of Hashrate-Based Double
Spending_ paper which shows that as long as the malicious actor controls
only a small fraction of total hashpower, attacks have well-define costs.
But if the attacker-controlled hashrate is higher than 50%, attacks become
virtually costless, as the attacker receives double-spending revenue on top
of his mining revenue, and his risk is close to zero.
Note that the simple model described in the aforementioned paper doesn't
take into account attack's effect on the bitcoin price and the price of the
Bitcoin mining equipment. I hope that one day we'll see more elaborate
attack models, but in the meantime, we'll have to resort to hand-waving.
Consider a situation where almost all available hashpower is available for
a lease to the highest bidder on the open market. In this case someone who
owns sufficient capital could easily pull off an attack.
But why is hashpower not available on the market? Quite likely equipment
owners are aware of the fact that such an attack would make Bitcoin
useless, and thus worthless, which would also make their equipment
worthless. Thus they prefer to do mining for a known mining pools with good
track record.
(Although hashpower marketplaces exist: https://nicehash.com/ they aren't
particularly popular.)
Now let's consider a situation where mining bitcoins is no longer
profitable and the majority of hashpower became dormant, i.e. miners turned
off their equipment or went to mine something else. In this case equipment
is already nearly worthless, so people might as well lease it to the
highest bidder, thus enabling aforementioned attacks.
Alternatively, the attacker might buy obsolete mining equipment from people
who are no longer interested in mining.
## Taking into account the Bitcoin price
This is largely trivial, and thus is left as an exercise for the reader.
Let's just note that the Bitcoin subsidy halving is an event which is known
to market participants in advance, and thus it shouldn't result in
significant changes of the Bitcoin price,
## Changes in difficulty
Different mining devices have different efficiency. After the reward
halving mining on some of these devices becomes unprofitable, thus they
will drop out, which will result in a drop of mining difficulty.
We can greatly simplify calculations if we sum costs and rewards across all
miners, thus calculating average MIM before the halving: `MIM = 1 - C_e/R`.
Let's consider an equilibrium break-even situation where unprofitable
mining devices were turned off, thus resulting in the change in electricity
expenditures: `C_e' = r * C_e`. and average MIM after the halving `MIM' =
0`. In this case:
r * C_e = R/2
C_e / R = 1/2r
(1 - MIM) = 1/2r
r = 1/(2*(1-MIM))
Let's evaluate this formulate for different before-halving MIM:
1. If `MIM = 0.5`, then `r = 1/(2*0.5) = 1`, that is, all miners can remain
mining.
2. If `MIM = 0.25`, then `r = 1/(2*0.75) = 0.66`, the least efficient
miners consuming 33% of total electricity costs will drop out.
3. If `MIM = 0.1`, then `r = 1/(2*0.9) = 0.55`, total electricity costs
drop by 45%.
We can note that for the before-halving MIM>0, r is higher than 1/2, thus
less than half of total hashpower will drop out.
The worst-case situation is when before-halving MIM is close to zero and
mining devices, as well as cost of electricity in different places, are
nearly identical, in that case approximately a half of all hashpower will
drop out.
## MIM estimation
OK, what MIM do we expect in the long run? Is it going to be less than 50%
anyway?
We can expect that people will keep buying mining devices as long as it is
profitable.
Break-even condition: `R - C_e - P = 0`, where P is the price of a mining
device, R is the revenue it generates over its lifetime, and C_e is the
total cost of required electricity over its lifetime. In this case, `R =
C_e + P`, and thus:
MIM = 1 - C_e / (C_e + P)
`f = C_e / P` is a ratio of the cost of electricity to the cost of
hardware, `C_e = f * P`, and thus
MIM = 1 - f * P / (f * P + P) = 1 - f / (f + 1) = 1 / (1 + f)
MIM is less than 0.5 when f > 1.
Computing f is somewhat challenging even for a concrete device, as it's
useful lifetime is unknown.
Let's do some guesstimation:
Spondoolies Tech's SP35 Yukon unit consumes 3.5 KW and costs $4000. If it's
useful lifetime is more than 2 years and a cost of KWh is $0.1, the total
expenditures on electricity will be at least $6135, thus for this device we
have `f > 6135/4000 > 1.5`.
If other devices which will be sold on the market will have similar specs,
we will have MIM lower than 0.5. (Well, no shit.)
## Conclusions
Reward halving is a deficiency in Bitcoin's design, but there is some hope
it won't be critical: in the equilibrium break-even situation hashpower
drop is less than 50%.
Hashrate might drop by more than 50% immediately after the halving (and
before difficulty is updated), thus a combination of the halving and slow
difficulty update pose a real threat.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20141025/00dbaebf/attachment.html>

2023-06-07 15:19:50 UTC

- reply

📅 Original date posted:2014-04-23
📝 Original message:>
> These sorts of proposals are all just ways of saying block chains kind of
> suck and we should go back to using trusted third parties.
>
No.
Different approaches have different trade-offs, and thus different areas of
applicability.
Proof-of-work's inherent disadvantage is that it takes some time until
transaction becomes practically irreversible. On the other hand, it has
advantages like neutrality, censorship-resistance, high degree of security,
etc.
TTP can be very efficient, but doesn't have advantages mentioned above.
It is possible to combine several different approaches into one hybrid
systems. For example, classic Bitcoin PoW blockchain can be used for
settlements, large transactions, savings and so on. While TTP-based payment
system will be used for small-value transaction like buying coffee.
In this case you get benefits of both approaches. Censorship-resistance is
irrelevant when one buys a cup of coffee with his pocket money, isn't it?
For some reason, instead of considering these hybrid solutions (which can
also address scalability problems), you want to make PoW-based system more
complex to be applicable for real-time transaction too.
This will, likely, weaken advantages provided by PoW, and also it won't
provide any hard guarantees, and, if implemented, will undermine
development of alternative solutions.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20140424/e3509046/attachment.html>

2023-06-07 15:19:33 UTC

- reply

📅 Original date posted:2014-04-23
📝 Original message:> And it still would. Non-collusive miners cast votes based on the outcome
> of their own attempts to double spend.
>
Individually rational strategy is to vote for coinbase reallocation on
every block.
Yes, in that case nobody will get reward. It is similar to prisoner's
dilemma: equilibrium has worst pay-off.
In practice that would mean that simple game-theoretic models are no longer
applicable, as they lead to absurd results.
> I'm using it in the same sense Satoshi used it. Honest miners work to
> prevent double spends. That's the entire justification for their existence.
> Miners that are deliberately trying to double spend are worse than useless.
>
Miners work to get rewards.
It absolutely doesn't matter whether they are deliberately trying to
double-spend or not: they won't be able to double-spend without a collusion.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20140423/94b5255c/attachment.html>

2023-06-07 15:19:32 UTC

- reply

📅 Original date posted:2014-04-23
📝 Original message:This is outright ridiculous.
Zero-confirmation double-spending is a small problem, and possible
solutions are known. (E.g. trusted third party + multi-sig addresses for
small-value transactions.)
On the other hand, protocol changes like described above might have
game-theoretical implications which are non-trivial and hard to understand.
The above approach works as long as the majority of hashpower is honest,
> defined to mean, working to stop double spending. This is the same security
> property as described in the white paper, thus this introduces no new
> security assumptions.
>
No. Bitcoin should work if miners are merely individually rational, i.e.
they try to maximize their pay-offs without colluding with others.
I guess word "honest" might have different meanings, that can be a source
of confusing.
1. Honest -- not trying to destroy bitcoin
2. Honest -- following rules which are not required by the protocol
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20140423/65999bd2/attachment.html>

2023-06-07 15:18:26 UTC

- reply

📅 Original date posted:2014-04-09
📝 Original message:>
> 1) It's more private. Bloom filters gives away quite accurate statistical
> information about what coins you own to whom ever you happen to be
> connected too. An attacker can easily use this to deanonymize you even if
> you don't reuse addresses; Tor does not help much against this attack.
>
There is also an option to download everything, but do only a very basic
surface validation (without keeping track of UTXOs).
You do not need a full node for that.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20140409/120496bf/attachment.html>

2023-06-07 15:17:29 UTC

- reply

📅 Original date posted:2014-04-07
📝 Original message:This is beyond ridiculous...
Color kernel which works with padding is still quite simple. I think we
have extra 10-50 lines of code to handle padding in coloredcoinlib.
Essentially we have a couple of lines like this :
value_wop = tx.outputs[oi].value - padding
(value_wop means "value without padding").
And then we have like 10 lines of code which selects padding for a
transaction.
That's not a lot of extra complexity. And it solves the problem once and
for all.
What you propose instead: "a different colored coin representing 10 shares,
and another one representing 100 shares (like the different denominations
of dollar bills)" is much more complex, and it won't work:
Suppose you have $100 coin, as a single coin.
How do you send $54.23?
That's simply impossible.
So you'd rather push complexity to higher levels (and create inconvenience
for end users, as you admitted yourself) than add 10-50 lines of code to
color kernel?
I just do not understand this.
But I'm not going to argue. I already wrote everything which I could write
on this topic.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20140407/9330b1bf/attachment.html>