Hey, I completely agree with you Holliday.  I just didn't like the way sharky said that people paying with debit/credit cards only care about instant gratification and don't care about the fees.

I disagree.  Tell me, how else are you going to solve physical point-of-sale with Bitcoin?

This is really reprehensible.

For those who are missing the context— goat was running some secretive business that looked like it was either a HYIP front or a money laundering operation that was attracting a lot of miners with its wild returns (it was subsequently shut down after a lot of people started asking questions; and his primary competition has more recently vanished with a bunch of people's funds).  I was concerned that people were joining in eager for the BIG MONEY without being aware of the risks in whatever they were getting involved in. I tried to get some confidence in private that what he was doing wasn't going to result in a bunch of overly credulous bitcoiners getting ripped off or arrested but Goat did not respond.

I posted in public basically outlining the risks— e.g. that people receiving funds from him should be asking sharp questions about the origins of the money because if the funds were being laundered for child porn, arms, or drug deals law enforcement may be knocking at the door of the people receiving the funds. Goat's response was to put up a _bounty_ of several hundred BTC for someone to fabricate evidence of me being involved in these activities.   Is this the kind of person you want to do business with?

He removed the bounty after I started inquiring about collecting it myself— after I'd started on fabricating some evidence too. Bummer.

Apparently some other forum moderator was already investigating him because someone with a very similar name to Goat's business had been trying to sell Thailand sourced child porn on the forums. I wasn't aware of this but I guess my inquiry struck a nerve. Goat also put up a similar bounty about the moderator investigating this, though I believe it was closed as just a coincidence.

In any case, any time we interact he's sure to spread these BS rumors, I don't mind too much because it just makes another example of what a despicable person he is and why no one should do any business with him.

What do you mean bisection of the hash rate? Difficulty is adjusted automatically so block creation moves toward the target regardless of hash rate. I think you meant bisection of miners, which would make more sense. But even that is problematic. How do you split miners mining coins into two halves? Mining, like Bitcoin, is decentralized.


Now multi-minute propagation is interesting, and something I hadn't considered for Bitcoin or Litecoin, so I can see your point. Invalid blocks do result currently with Bitcoin from latency of miners learning of found blocks elsewhere due to the network effect.

This problem should worsen as Bitcoin adoption grows and the network expands. So this could conceivably be a problem for Bitcoin, Litecoin, or any cryptocurrency with a block creation around 10 minutes or less on average. Mining invalid blocks is a waste of resources for miners, which would be a disincentive where there is supposed to be incentive. Frequently occurring invalid blocks also complicates trust in confirmations.

However, I think there is a simple solution. It's in everyone's best interest to know of a valid found block as soon as possible. This way work can start on the next block with minimal wasted resources for no reward. While it's not called for in the protocol I think there can be developed what I'd call mining block references or MBRs. This is simply one or more online resources (nodes or sites) where miners can report and check for found blocks. Since all miners (or a significant number anyway) would reference only a few nodes, polling say every few seconds, communication of found blocks could be near instantaneous regardless of network size.

The network effect exists now because Bitcoin is designed to be decentralized. However, smart centralization of some aspects, especially non-critical functions like this can be beneficial. Note this doesn't change the protocol. It's just a reference on top of how things already work. Satoshi's white paper says "When a node finds a proof-of-work, it broadcasts the block to all nodes." It doesn't say how to broadcast that information to all nodes. I think optimization of that is easily accomplished with MBRs.

No, that's not true. Confirmation simply let's you know a certain amount of computational work went into the block with your transaction, and the more confirmations you have the less likely it is that block will turn out to be invalid. Regardless of how fast the block is found you can have extremely large amounts of computational power necessary to have found it.

In other words, if Litcoin's network was already the same size as Bitcoin's network, and assuming there was no problem with invalid blocks due to network latency, then 1 Litcoin confirmation would be about equal to 1 Bitcoin confirmation.

We are using the current version of Bitcoin the community agrees is Bitcoin. That doesn't mean it's the same as it always was.

For example, my understanding is that early on a software issue allowed someone to generate a transaction giving their address millions of valid coins. The bug was patched and code was added to ignore the block with that transaction as well as all subsequent blocks after it. This change required everybody to upgrade - users, merchants, and miners - which everyone did and life went on. So we are not using that original Bitcoin, but something else we still call Bitcoin using some of the blockchain from that early version.

If you make a change incompatible with the blockchain, like changing the number of coins scheduled to be created then those coins (like Litecoin or others) will be rejected by the network. Of course, Litecoin is really still just Bitcoin, just another version.

Block propagation times are currently roughly proportional to block size, so it's actually an incentive to mine smaller blocks. I know Luke-Jr has limited the number of transactions he puts into his pool's blocks for exactly this reason. The interesting part is that for a given transaction rate, the average block size is going to be roughly proportional to the time between blocks - so you can have a faster block rate with smaller blocks, or a slower block rate with bigger ones, and in theory they should converge roughly the same.

Interesting point. I agree.

Still, with MBRs as I suggest none of that matters; block size would be irrelevant to propagation. You get rid of the network effect which is where the latency builds.

There is a hard-coded block size limit. There is often many blocks worth of transactions waiting to be included in a block, even now.

Miners are the gatekeeper to the blockchain, they generally use the standard inclusion rules of Bitcoin, but can also modify the Bitcoin client to prioritize or limit transactions. Every single transaction that is included in a block is going to be stored on tens of thousands of computers forever; transactions use many more resources than simply a millisecond of a miner's time. Bitcoin fee and priority rules currently only discourage the spammiest of spam transactions from being sent, which is why you still see things like the hundreds of thousands of .00000001 BTC payments that satoshidice has sent in the past several months.