I know a lot of people think it would mean down. I, otoh, think it would mean a massive UP for Bitcoin. Just the way the charts are aligned right now tells me this. We've had an inexplicable 1.5 year decline in the price despite all sorts of good news. Yet we're down 90% or so while the stock market is way up at all time highs from money pumping and what looks like a top to me.

There's no doubt in my mind that Bitcoin is an alternative to everything fiat.

What is depressing is it has taken the prospect of negative nominal rates to start this. Negative real rates are what really matter, that is financial repression. We have had negative real rates for years, but most people seem OK with that. It is only when the nominal rate goes negative and people see that their balances will go down, that all of a sudden it's an issue.

An educated populace would have balked at negative real rates. That fact that we collectively didn't says a lot.

We do need to get larger transaction volume capability into Bitcoin before there's a legacy financial system meltdown.

Right now the infrastructure isn't capable of scaling to pick up the slack, and nobody's interested in fixing the resource allocation problem in a comprehensive way such that we could be ready for sudden, massive growth.

Apparently building appcoins based on MMT is more fun, or pays better, or something.

Not if people are trusting them. Only if people are constructing them or verifying them. So you have a tragedy of the commons where if you have this nice little hash you can use to cheaply verify transactions without processing all the data, while expecting "someone else" to do the heavy lifting, the network as a whole gets weaker.

I have to qualify that by saying I haven't looked that closely at the UXTO commitment proposals so my analysis may be slightly off, but I don't think so.

Last arguments for UTXO hashes, then I'll stop on it.

The reason I think bitcoin is going to have to add UTXO hashes at some point at simple, without them new nodes at some point will be forced to use centralized services that require trust to get going. In that scenario UTXO hashes strengthen bitcoin by providing a trustless mechanism for new nodes to get started.

In 30 years when Bitcoin has fully taken over, eliminated all fiat and gold, and ALL of mankind's transactions are on the blockchain (including machine-to-machine micropayments), the blockchain will be 100 Exabytes in size and grow by 10 Exabytes per year. Even if a new node is able to download this volume of data, processing the full history takes several CPU years. (I'm making up the numbers to make a point)

In such an environment starting a new node is both too costly and takes too long.

To fix this, centralized services appear that offer services to help new nodes start. These services will provide a node state for download that is valid as of xxxx block. This node state will have the full header history, the current UTXO set, and some number of random blocks to serve to others. With this download anyone can start a new node in minutes, instead of years.

Some of these centralized services are run by entities we like (such as blockchain.info) but others are run by entities we don't or shouldn't (such as the Bitcoin Foundation). But in either case, the practicality of starting a new node forces most people to trust some 3rd party entity .

UTXO hashes would eliminate this trust and enable new nodes to quickly start in a manner where they only have to trust the integrity of the blockchain (which is all you should need to trust). As argued in the above posts, I haven't seen a valid attack on them, even with a 51% miner attack.

The thing to remember is you don't need to hold the full chain to participate as a full node. That is why pruning works.

Once you have a valid node state as of xxx block, you only need the header chain and the UTXO set to FULLY validate the next block. Assuming your node's state is correct, you do not need the full history to validate the next block. Again this is why pruning works.

A UTXO set offers a faster method to reach a valid state as of xxx block.

Today the only method to reach a valid state is to download & validate the complete history. But once your node has done so, your node can delete that history and just save the UTXO set, and still validate all future transactions and blocks. This is exactly what nodes that prune do. But this method is very inefficient, it is not a problem today, but it will be if bitcoin succeeds.

As another example, with pruning it is possible that all nodes on the P2P network prune their history, and NO nodes on the network have a complete history individually. But each one would still be able to independently validate transactions and blocks. This is because they still have the valid UTXO set, the pruned history is not necessary.

http://www.nytimes.com/2015/05/03/magazine/how-bitcoin-is-disrupting-argentinas-economy.html?_r=0

"JPMorgan belongs to an association of big banks, the Clearing House, that has been confidentially putting together a “proof of concept” for a decentralized ledger, or blockchain, that would run on the computers of all the participating banks. According to people involved, this network, which is still in the conceptual phase, could allow instant transfers between accounts at all the member banks and eliminate the current risks involved in having billions of dollars in limbo for days at a time. For many bankers, the most valuable potential use of the blockchain is not small payments but very large ones, which account for the vast majority of the money moving around the world each day. The banks, though, are moving slowly, even as several start-ups are trying to use the Bitcoin blockchain to do the same thing on a global basis, cutting out the banks altogether."


When they inevitably realize that the only truly secure, decentralized blockchain is the original, well, you can't move "very large payments" with a 3.5 billion dollar marketcap. 

continuing to look the hell out:

just to memorialize the results of last poll: