23

There will definitely be a tragedy of the commons problem if things stand as they are now. This was discussed at some length here and elsewhere. There are some proposed ways to address this and make transaction fees nonzero (block size limit, hardcoded fees, insurance entities, mining cartel, gentleman's agreements which are maintained for fear defection ...


20

Mike Hearn just posted about how Network Assured Contracts handle this problem. I don't find an immediate flaw with this. This is how I understand the proposed solution: Anyone with an interest in a high hash rate (basically, anyone holding a large amount of coins), can initiate or cooperate on SIGHASH_ANYONECANPAY transactions. Those are an ...


15

I am just guessing here given the little I know about bitcoin and distributed databases. This comes down to the how CAP theorem applies to the bitcoin blockchain DB. CAP theorem states that it is impossible for a distributed computer system to simultaneously provide all three of the following guarantees: Consistency (all nodes see the same data at the ...


8

I've read some of the linked discussions, and it seems some of the participants fail to understand the basic economic theory of the marginal cost. In any high fixed-capital business, the net present value (NPV) determines the ROI (IRR) and determines the opportunity cost where investors apply their capital. Thus, in normal functioning markets, the lowest ...


7

Attention: Ambiguity! Note that the term (or abbreviation) "PoB" can be used differently. For example, some cryptocurrencies allow users to get some of their coins for provably burning money in Bitcoin, essentially deriving their values from Bitcoin's value by deriving their scarcities from Bitcoin's scarcity. Yeah, but what about my question? The idea ...


5

Multisig transaction types use standard CHECKMULTISIG opcodes (which have been present in Bitcoin since its initial release in January 2009) and P2SH addresses (standardized in BIP13 in October 2011). Both are very commonplace nowadays. Consensus changes sometimes happen in Bitcoin, to add features or improve security. However, to the best of my knowledge, ...


4

If you want to use an address, it would be nice to generate an address that can be verified by a human as obviously unspendable just by looking at the Base58. When you look at these addresses, you will say, "wow, that is obviously unspendable." 1CounterpartyXXXXXXXXXXXXXXXUWLpVr <- used by Counterparty 1ChancecoinXXXXXXXXXXXXXXXXXZELUFD <- used by ...


4

Public Service Mining seems quite plausible to me. In 40 years time one would hope that Bitcoin would have a large number of stakeholders who have a very strong incentive for the financial system to keep running smoothly. Those stakeholders I would expect to put non-zero effort into mining even for near-zero direct reward.


4

The blockchain is public, and every block has (amongst other things) the following information for each transaction (or it can be calculated): The size of the transaction, in bytes The fee paid by the initiator of the transaction Miners in future are likely to calculate the earnings per byte for each transaction when selecting which ones to include in a ...


4

This is possible through the use of a multiplier. For example, you could add it to Bitcoin as follows: You add a "currency multiplier" and "next currency multiplier" to the block header. All Bitcoin amounts presented are multiplied by this multiplier. You have a set of rules for how the next currency multiplier changes. For example, miners could be ...


4

The power to change the Bitcoin protocol depends on the willingness of the economic majority to adopt the changes. A wishlist exists of some changes that have been considered. If the change is one that devalues the currency, then those who hold coins or plan to hold them in the future will be less willing to adopt the change(s). Some suggestions have ...


4

No, because by design PoW is assigning relevance proportional to power usage. If the market pays N USD per day worth of BTC to miners (in subsidy + fees combined), then the mining ecosystem will converge towards spending N USD minus profit margins. Not all of those costs go to electricity (as there are also employment and hardware costs from failure and ...


3

With proof of burn, instead of pouring money into expensive computer equipment, you 'burn' coins by sending them to an address where they are irretrievable. By committing your coins to never-never land, you earn a lifetime privilege to mine on the system based on a random selection process. the more coin you burn more chance to mine the block.this is being ...


3

Think of the burning Bitcoin to create XCP in such a way: You take $1,000 of 20 dollar bill to the US Treasury Department, and US Treasury Department burns it, and mints 250 notes of 4 dollar bills for you.


3

I now see a much more urgent and catastrophic threat vector potentially circa 2016. Difficulty will tend to rise and fall such that the system-wide cost of mining is nearly the value of the coins mined (not perfectly but on a smoothed basis roughly true). Thus the lowest-cost marginal miners will earn the highest profits and rates-of-return. Thus, as ...


3

There are a few things one needs to consider: Bitcoin software is bound to change. It will be adapted to new systems, hardware, and so forth. Expecting a program from now to work 100 years from now is probably not going to happen. Bitcoin protocol probably will change, but the change will be less drastic. For example, block size might get changed. If a ...


3

The present algorithm for public-key/private key cryptogrophy won't survive the invention of quantum computers. It will likely be deprcated in a few decades. If you don't update at that point people with quantum computer will be able to calculate your private key and spend your coins.


3

With pruning as envisioned today, only spent outputs are pruned. By making a small transaction and never spending it, you can keep the encoded data intact. In the future it may be that unspent outputs will still be pruned if they're old and low-value, for example as suggested here, in which case you can still extend the life of your message by putting it in ...


3

If there are to be people that only mine Bitcoins for living, mining has to be profitable. However, it needn't be only profitable through transaction fees and block rewards. People could subsidize the miners if needed be. Moreover, miners could be providing some paid services while mining - for example giving priority to certain transactions, embedding some ...


3

The security of the Bitcoin network is dependant on the financial incentives built into mining. This means that the amount of energy used to secure the network is not really important, it is the cost of that energy that is important! To make this more obvious, think about what you would need to consider when planning to majority-attack the network: how much ...


2

As long as no changes are done to the structure of the block header, the ASICs should work just fine. There are some proposed changes that could alter it, like protecting the block chain against pre-mining, or adding a new field to the block header. So yes, when the ASIC miners become the majority it will be hard to push those changes unless Bitcoin faces ...


2

Most merchants accepting Bitcoin transactions require six confirmations, so if there is no connectivity then, of course, there would not be any confirmations. So while continuous connectivity isn't required to use bitcoin in commerce, at least sporadic connectivity is. For merchants who accept on 0/unconfirmed (e.g., retail), the rely on protection from ...


2

Yes, market-based transaction fees can scale. It has already been proven by Western Union, bank wires, etc. The market for transferring money is huge and people are already picking which service to use based on fees, among other things. So it has been proven to scale to the size of the current world economy. And I don't see any reason why it won't keep ...


2

The signature covers everything except the signature itself. Since the signature and public key make up the input script for the most common payment type (pay-to-pubkey-hash), the input script is not part of the signed data. This means the input script can be modified and not break the signed transaction as long as the new input script is equivalent to the ...


2

An interesting scenario occurs if severance happens when the network very close to a 2016 block. When mined 2016 block in most powerfully mined network fragment, a new hash rate is computed there -- likely 4x easier than current hash rate. Thus instead of 1 block per 200 minutes (at 5% mining power local to network shard) 1 block per 50 minutes will get ...


2

Here is an additional answer about what you can do if you control all fully validating nodes (but not necessarily all nodes that don't validate): Anything Bitcoin's security rests on auditing by full nodes. It is directly what prevents them from accepting fraudulent payments, and indirectly what makes it uneconomical for miners to produce invalid blocks (...


2

Whenever I am looking into an ICO, there are some things I generally take into consideration. 1. Team -Make sure the team is real, and verifiable. Check linkedin, or other sites to verify the teams identity. 2. Token allocation and funding -Check their practices and see if they are common. Pundix’s ICO is a great example. Removing total investments as ...


1

50 different views of the current state of the network develop. I'm going to assume that 5% of mining power is also in NYC. What happens is that when the network problems are lifted, the NYC blockchain instantly "wins". Every other miner loses all of their work. Consequently, there is zero reason to mine unless you will win the race. However, a funny thing ...


1

You always can spend bitcoins for which you own the private key. No matter upgrades, versions, protocol changes. If you have your private key then you can get / calculate / derive the then-current key to open your Bitcoin wallet. May be things become obsolete, like floppy drives. What's more important is that hash functions used now may be broken at some ...


1

In the event of a loss in bitcoin mining capacity, it is my understanding that the network would respond within 2 weeks be decreasing the difficulty required (that is, increase the size of the SHA result pool that can produce a valid bitcoin.) The result would be that less effort would be needed to produce bitcoins, so bitcoin mining would be profitable ...


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