Proof of Work simply facilitates existing capital to proportionately take over the network and supply.
It becomes notibly problematic if the total distribution is produced within a small window of time, locking out entire swaths of the population to be at the whim of horders (assuming there would be a genuine demand for the supply).
Like any other product or service, when you exchange your money for BTC all that has happened is someone decided to sell you BTC and you gave them money.
BTCs exchange rate is dependent on someone else offering money. If there's a market panic, the price quickly drops due to a race to beat other orders.
Satoshi actually used a manipulative log curve for his minting algorhythm which effectively created a ponzi style distribution scheme. The majority of BTC was produced to the small userbase for minimal effort, whereas time passes the computational work and wattage required to produce coins for late adopters increases as presumably more users discover the system.
Satoshi easily could have chosen a linear algorithm anticipating additional work input with more users, instead he designed a system to exploit late adopters.
The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.
>Satoshi easily could have chosen a linear algorithm anticipating additional work input with more users, instead he designed a system to exploit late adopters.
Are you suggesting he provides a bigger reward for work as time goes on, thereby providing more currency later in the piece?
That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth (strong libertarian influence, anti-bank ethos being kinda the cornerstone of the origins of bitcoin).
His plan was that the transaction fees would be what sustains the miners due to bitcoin being worth a lot once the block reward was low. The deflationary nature was not "manipulative" in the way you are implying, it was done in order to slowly wind down the reward and currency generation so eventually the transaction fees were the purpose for mining.
>The aspect of Bitcoins having a limited supply is mostly ineffective, as all the features of Bitcoin are now available in other service networks which are including more advanced features and better ASIC resistant algos.
Whether or not this is true is neither here nor there, the effectiveness is non consequential when it comes to the intent. He was not attempting to exploit late adopters.
>Are you suggesting he provides a bigger reward for work as time goes on, thereby providing more currency later in the piece?
Yes.
The minting design Satoshi choose merely granted a few users the majority of the supply for the least amount of work. They can then horde and hope to sell at a profit to late adopters.
>That would be counter-intuitive to the idea of bitcoin as a fixed store of wealth
No, the total supply remains the same. Distribution and production is the issue. The linear curve should align to match the energy and work input, assuming that is representative of additional users joining the network.
Fixed store of wealth is even more difficult to achieve, as users must trust the design to be desirable.
>No, the total supply remains the same. Distribution and production is the issue. The linear curve should align to match the energy and work input, assuming that is representative of additional users joining the network.
Fixed store of wealth is even more difficult to achieve, as users must trust the design to be desirable.
I understand what you are saying (even if I disagree with the concept), but I think you are missing that this was created as a run away from the GFC, heavy inflation would run a counter to what libertarians and anti-global economics people would believe in.
I didn't say anything about your particular opinion on wealth distribution on crypto, I'm just saying your opinion that satoshi was attempting to exploit people is baseless.
Even with the decrease in the mining reward over time, Bitcoin mining is now consuming enough energy to power a small county. I'm not convinced that having the mining reward increase over time to provide more reward to later miners would be a wise feature in any way.
As Satoshis minting algo was used, why should one user receive significantly more coins for such low effort simply for running the software at an early date?
The end result is early users exploiting users who join the network after them. Ponzi style.
Because at the point he started the network the coins were worthless, he got paid less per block than someone who mines a block today even though the mining reward is 1/4 of what it was in 2009.
No, this is purely the internal economic model of bitcoin production concerning work/energy/value input versus output to workers.
Imagine someone tells you they've created a money printing machine that prints 21m BTC, and they design the machine to give them most of the BTC and when it arrives in your town the man says "well it looks like the rules have changed now and your work isn't worth as much as my work because you encountered the magic box after me"
The users who ran the software on the network in 2010 required much less value input to generate bitcoins. Acording to Satoshis design, a user running the software now on an identical computer would not produce the same rewards for their work. This is essentially an intentional ponzi design.
Users who aquired bitcoins for low capital input are incentized to psychologically convince late adopters to purchase their bitcoins for more than it cost to produce and acquire.
The rule change was fully known about in advance, it didn't suprise anyone. And you could contend that the work is now worth more. For a long time mining was economically unrewarding, miners created a blockchain and provided it with power at their own cost and without any guarantee of success or return. Those who joined later were joining when their work would be immediately rewarded with profit because it became economically feasible to mine. These late arrivers actually pushed out a lot of the early miners by using more powerful and efficient equipment. So they may have taken more of a capital risk but less of a risk in terms of knowing a return was possible and would repay their investment.
If later comers took more capital risk, in what way did they take less risk, exactly?
The semantics matter here. Perhaps the later comers were more opportunistic and optimistic about the likelihood of achieving a favorable return. But they had to take more risk, since they were later to the party and risked more capital (as you noted).
Apologies, consistent was not the correct word to convey my meaning. The reward schedule is consistent but the reward itself is pre-determined, known by all participants, it was set out from the beginning. There was no attempt to hide the idea until a certain proportion of the BTC was mined by the creator.
Penalising late adopters is just the reverse of rewarding early adopters and bitcoin needed early adopters to keep the network alive so it makes sense to reward them. I dont really buy that late adopters are being penalised though.
If you design a system for mass adoption that exploits the masses and only benefits a tiny group of people and you publish your blueprints and claim the details were available, that doesn't change the fact that you've already literally taken the money supply and run.
Why Bitcoin forks? Exchanges would be where the fraud happens. MtGOX was insolvent and yet they inflated the price of Bitcoin across all exchanges. Bitfinex is alleged to be engaging in the same market manipulation through margin wash trades and their central bank scheme of free Tether minting.
Bitcoin forks are funny because it's decentralized software with a shared database history from the time of the fork. After an update, users can choose to use one or the other. Unfortunately the incentives are warped for miners and devs, so users might not have the best possible design.
There's an excessive amount of propaganda surrounding cryptocoins because "investors" need to psychologically lure you in to buy their supply, which they've acquired for significantly lower value, lower capital, and lower computational work then you if you're starting after them.
Because supporters of Bitcoin Core want to dis-credit Bitcoin Cash and the way they are doing it is by promoting a bunch of increasingly scummy Bitcoin forks. Then they say hey look these forks are all scams. Bitcoin Cash is a fork there for it too is a scam. Nothing could be further from the truth though.
Agree, bitcoin cash from my experience has been more useful than bitcoin. I was able to send bitcoin cash without any fee at all and was able to get it confirmed in the next block mined.
It looks like bitcoin cash is going to be extremely useful for doing daily type transactions (ie. low dollar transactions etc.)
Ver rode the Cash band-wagon to help his position of control over the ecosystem, as did many others. Hundreds of millions of value was created — and a lot instantly lost — in a day. It's been pumped over and over again by mining pools looking to make a quick buck while the difficulty is low as well.
That is where the "scam" lies. It isn't discrediting BCH — BCH already did that to itself.
Here is an example of a typical clueless Bitcoin investor with irrational hate toward a prominent player in the space who did nothing more than express their genuinely held opinion.
Well, good job at assuming incorrectly. You wouldn't know by my comment that I've been in the space since '11, or that I've contributed to the codebase (however slightly).
Nope, you just see a completely pragmatic view of Ver's actions as an attack, probably formed on the r/btc sub (that he mods).
I love how you say "completely clueless" too — because it's ironically you.
Because forks were necessary for their plan. The exchanges we're definitely in on it. Adding futures for forks? Is there any doubt that they were colluding?
The core developers (employed by Blockstream) have intentionally kept the block size at 1MB in order to support the product they're attempting to develop (lightening network layers) which lets them facilitate federated payment processors siphoning fees out.
It's a red herring to claim larger blocks increase centralization when it's just data storage. Drives are cheap. Centralization already happened once sha256 ASIC hardware was produced enmasse, preventing normal users from earning block rewards. The Bitcoin devs are lost in political dogmas, rather than improving the software for users.
There are hundreds of Core developers; only about 6 of them are related to Blockstream. Your conspiracy theory does not hold up to reality.
> have intentionally kept the block size at 1MB
The block size has already been lifted to 2MB-4MB with SegWit.
> Blockstream ... support the product they're attempting to develop (lightening network layers)
Lightning Network was invented by people that have nothing to do with Blockstream, who founded their own company for that: https://lightning.engineering/team.html
There are 5 different teams developing Lightning Network implementations. Blockstream is merely responsible for the C implementation, they have no special control over Lightning.
> It's a red herring to claim larger blocks increase centralization when it's just data storage.
It's not just storage; the main issues are bandwidth, latency and IBD time. There are very real engineering limitations and trade-offs that have been discussed in depth over the years that you're just brushing off here. It's not as simple as you make it appear.
Mate, please, stop with the Blockstream FUD. Blockstream make up only 20% of commits on Bitcoin. Find another strawman.
There is not a 1MB limit, the limit was lifted with the implementation of segwit, as it changed the counting mechanism to weight instead of size, as a result, you can now push upto 3.7MB worth of tx into a block.
Your proposition is wrong and people like you who constantly spout it should be called out and shamed like the fucking charlatans that you are. Blockstream has no financial interest in having Segwit, LN or anything else implemented. They have DEFENSIVE patents against the technology to stop trolls from holding up the development process. Please, locate yourself to Google Patents and search for Blockstream, then consult their Open Patents disclosure for further confirmation that you are wrong and have taken the bait of companies who have an interest in deriding the current decisions of Core.
Core is implementing a variety of changes in the future that will put many businesses against Core out of business.
Cross chain atomic swaps = exchanges
More private transactions = anyone doing blockchain analysis (lolgarzik)
Lightning Network = miners and anyone who processes transactions.
The most painful part of your opinion is that you can't extrapolate network rules and see that in the next 2 years, rewards are going to half, meaning that if we drop TX fees now, it will make it even harder to pull miners back. By implementing a simple situation for on-chain settlement, miners still make decent returns down the line.
Please, if you have any interest in Bitcoin, and have any decent brain about you, call people like this out for being the corporate sockpuppets they really are.
I don't have a leg in this debate. I just found it funny that you're both accusing each other of the same thing, and neither of you provided adequate sourcing so it's impossible for a layman/concerned bystander such as me to figure out who to believe.
Whilst I would usually agree with you, your comments about being a conspiracy theorist are IMO entirely wrong, look at the history of the account, the lifespan of it, and the threads it posts on. I agree that ad hominem is incorrect and pretty much always a bad way to argue, but you need to have some idea of context and the active measures that have recently been taken in this scaling "debate", there is straight up disinformation being circulated.
As far as I'm concerned, I did give facts, the segwit facts are correct. The loss of business is fact. The comment about chain rewards decreasing is fact.
Even if it is a sock puppet (and isn't your account pretty new?), humans are reading here, so my advice is to take the high ground if you want to convince people.
Can you explain why chain rewards decreasing are problematic.
Asic hardware is already bought, so mining still makes sense even if the rewards drop as the cost is sunk.
And in response to his fallacious proclamations that Blockstream controls core.
git shortlog -sn
4982 Wladimir J. van der Laan = Non-Blockstream
1446 Pieter Wuille = Blockstream
1101 Gavin Andresen = Non-Blockstream
639 Philip Kaufmann - Unsure
633 MarcoFalke - Non-Blockstream
559 Matt Corallo - Non-Blockstream
551 Cory Fields - Unsure
533 Jeff Garzik - Non-Blockstream
520 Jonas Schnelli - Non-Blockstream
330 Luke Dashjr - Blockstream
261 Gregory Maxwell - Blockstream
245 s_nakamoto - lol
208 Alex Morcos - Non-Blockstream
208 John Newbery - Non-Blockstream
197 Suhas Daftuar
131 practicalswift
113 Russell Yanofsky
113 fanquake
102 Peter Todd
95 Pavel Janík
86 Jorge Timón
74 Michael Ford
74 jtimon
70 Cozz Lovan
50 Patrick Strateman
40 Andrew Chow
36 João Barbosa
35 R E Broadley
34 Giel van Schijndel
32 BtcDrak
32 Eric Lombrozo
31 Daniel Kraft
30 Jeremy Rubin
29 Karl-Johan Alm
29 Nils Schneider
28 Gregory Sanders
27 Chris Moore
26 Satoshi Nakamoto
26 sirius-m
23 Johnson Lau
23 MeshCollider
23 instagibbs
21 Micha
20 dexX7
19 Warren Togami
19 gavinandresen
19 tcatm
Sorry if I didn't do them all, you're getting the idea, as you go further down the list the impact of the organisation backing them inevitably goes down.
The technical implementations and actions speak louder than words.
Bitcoin maximalists try to rationalize their design flaws, but ultimately it's simply software running a service. There are new teams working on improving designs and useful features meanwhile core has stagnated and stalled for years.
You're clearly emotionally and financially invested in advocating for a single cryptocurrency. Fortunately there are now many to choose from. :)
Proof of Steak mearly gives power to whomever has established wealth.
It is a marginal improvement over PoW, when the PoW algorithm is not computationally useful outside brute force hash lotteries and capital infrastructure race speculation.
Both PoS and PoW implementations should have heavy scrutiny on the distribution and minting rules for the base supply.
Yes, but the capacity of those stations is already used (for managing daily fluctuations) and there's not that much opportunity to build more, they require very specific conditions, are costly, and have a big effect on the environment.
As solar and wind grows, we will use more pumped hydro, but there won't be / can't be e.g. a tripling of it.
Throwing computational power at a PoW system for hash collisions is significantly more wasteful than simply reducing the cost of electricity itself or depositing the energy into a storage system for use at later in demand times.
If free energy needed to be expelled and couldn't be stored for some weird reason, it could be used to grind wheat, purify water, or run scientific computing to contribute to curing diseases rather than attempt to acquire speculative database tokens.
There's an irony in proof of work as means of producing a currency supply to thwart centralized financial institutions when the people with existing capital are in the most advantageous position to take over the minting and infrastructure of Proof of Work.
The difficulty curve often further benefits early miners to be taking minimal risk when the design is reverse logarithmic.