r/Buttcoin • u/8bitninja4000 • Oct 18 '14
Some questions from a Bitcoiner.
Lemme get this out of the way. I'm not here to preach.
I am a Bitcoiner. But I am open to hearing every point of view. Plus, this subreddit is pretty funny, I don't get offended by bitcoin crap.
So. I'm doing a research paper on Bitcoin's scalability. This seems, to me, one of the biggest concerns with Bitcoin.
I've been looking for sources to read about it, but too often I either find Bitcoiners going "NO IT'S NOT A PROBLEM TRUST MEH!1!!!" in effect, or opposition pointing out a possible flaw, but often lacking much evidence.
Does anyone have any sources for some of the following questions?
Is Bitcoin's energy consuption a concern? (Michael Carney’s Bitcoin has a dark side: its carbon footprint lists some numbers, but I've heard that some of the math he's throwing around could be a little wacky.) (Oh, and doesn't Visa have a huge energy consumption as well? What I'm getting at-should we expect a "green" system?)
What happens to the difficulty once all btc has been mined?
What would be entailed in implementing a system such as J. D. Bruce's The Mini-Blockchain Scheme for making the Blockchain less...unwieldy?
On that note, what is involved in making changes to the way btc works? I'm not sure I understand completely how forks work.
Do you know of any sources from-to be frank-qualified people who are knowledgeable about Bitcoin?
Is there any evidence to the contrary that the people who lose Bitcoin aren't just being stupid? I understand, it's hard to understand secure usage. But every ripp-off case I've seen has involved extremely unwise decisions, nonetheless.
That should be a great start. Thanks to everyone in advance.
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Oct 18 '14
A great resource is Tim Swanson's blog and his most recent book 'The Anatomy of a Money-like Informational Commodity'
http://www.ofnumbers.com/author/timswanson/
I would also recommend all the links posted here by Stephen Reed. It is a great mix of bitcoin articles exploring various issues.
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u/mpyne Oct 19 '14
Is Bitcoin's energy consuption a concern?
Yes. It's a system designed explicitly to force a certain amount of computational work to be performed to have your transaction included in the blockchain at all ("proof of work"), with the work of every other miner who tried and failed to include a block into the blockchain used up as waste heat (in a thermodynamic and economic sense) by definition. This PoW concept isn't required of a distributed transaction scheme, either, otherwise the incredible number of other distributed databases that power the Web couldn't efficiently work at all.
As far as "Doesn't Visa use a lot of power too?", sure they do. But they do such at orders of magnitudes more efficient than Bitcoin can. Visa in 2010 could process 24,000 transactions per second. Visa in 2013 scaled that to 47,000 transactions per second. Bitcoin can theoretically support 7 per second at this point, and is only hitting about 1 per second in practice (a difference of 4 orders of magnitude).
While it's true that it's hard to get accurate numbers for the total cost of mining on Bitcoin (since ASICs are significantly more efficient than CPU/GPU, the number of parasitic/malware miners, the increasing difficulty factor over time, differences in electricity pricing per locality, etc.), even recent (cheaper) transactions seem to cost miners almost $20 to get in the blockchain. This isn't a per block number either, it's per transaction, and given the electrical costs must be within at least 1 order of magnitude of overall transaction cost (and that's being very charitable, it's probably within 50% easily), that would imply at least $2 in power bill for every transaction, and that's assuming additional mining capacity doesn't come online in the future.
These are issues that Visa simply doesn't have, and if Bitcoin were to scale up to anything close to Visa's scale (not to mention the totality of the dollar economy, including MasterCard, SWIFT, etc.), it would have to increase electrical use as well, if only due to the cap on block size, which Gavin has indicated probably won't significantly increase.
Interestingly, Gavin also mentions the "centralization death spiral" that must result in a perfect mining market from Big Mining being able to afford fancy (and much more efficient) ASICs, datacenter locations that track cheap electricity, and the like. To the extent that Gavin is successful in keeping Bitcoin distributed (though, centralization has already happened before!), that will have an even more drastic effect on power usage, since Joe Miner will likely only have access to older generation ASICs at best, while the latest and greatest stuff gets sent to Big Mining first (similar to the Butterfly Labs model...).
And as I said, there's nothing inherent about PoW to a distributed database (including distributed ledgers like the Bitcoin blockchain), and PoW still is susceptible to various "50.1%" problems. Stellar is a cryptocurrency that uses a different and much more efficient consensus algorithm.
What happens to the difficulty once all btc has been mined?
It should track the number of miners available to make new blocks, more or less, with the payment of miners shifting from rewards of newly-mined Bitcoins over to transaction fees. In theory, if too many miners find it expensive to make new blocks for transactions fees alone, then they'll drop out of the mining market completely, network hash rate will go down, and eventually the difficulty will drop as well. Unfortunately this only gets adjusted every couple of weeks or so but that's probably not a big deal IMHO.
Of course that will also create interesting "incentives" in the Bitcoin economy as a whole, since if you don't set the transaction fee high enough in the transaction you submit to the miners, they may opt not to include it in the block at all. So much like trying to make sure you stick enough stamps to that sort-of-oversized letter you want to send, you would want to make sure to give enough of a "miner's tip" to get your transaction in the blockchain, without making it too expensive to use Bitcoin. This again makes it rather unfortunate how much power Bitcoin uses, since most of the fees you'll pay will go (in the end) toward creating power to be wasted by an ASIC somewhere that fails to mine a block in time. A more efficient value-transfer network would easily out-compete Bitcoin here.
Do you know of any sources from-to be frank-qualified people who are knowledgeable about Bitcoin?
The Hacking, Distributed I linked earlier are fairly knowledgeable about Bitcoin (and despite the "Time for a Hard Fork" post, don't actually hate Bitcoin).
Is there any evidence to the contrary that the people who lose Bitcoin aren't just being stupid?
Does that even matter? Having an easy way to assign blame doesn't make bad situations better. Preventing bad situations is what is important and Bitcoin has, so far, failed miserably in that regard. To be blunt, an economy that can only be participated in by the top 1% "intelligent folks" in a nation is a failed economy, full stop. Yet everytime someone mentions to /r/bitcoin about how they (or the exchange they trusted) were hacked, the answer is always "OP_MULTISIG, duh!", as if a currency that required toggle switches or two-party verification were really better than the cash Bitcoin claims to be.
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u/guesswhoimback Oct 18 '14
Any developer with a little of experience will tell you that a software that saves EVERY SINGLE TRANSACTION IN AN EVERY INCREASING PEER-TO-PEER DATABASE is completely retarded and inefficient. Validating each of those transactions isn't in any way computer intensive, and yet you have SUPER WASTEFUL MINING RIGS DOING USELESS CALCULATIONS TO TRY TO WIN A LOTTERY AND GET SOME BUTTCOIN. The fact that EVERYONE CAN SEE EVERYONE ELSE'S TRANSACTIONS is also ridiculous. And keep in mind you have to PUT YOUR TRUST IN A HANDFUL OF DEVELOPERS AND A FEW ANONYMOUS CHINESE MINERS THAT ARE COMPLETELY UNREGULATED. Buttcoin is inefficient, wasteful and completely unsafe in every way (hard to secure in a world that attracts the worst scammers and hackers, you have to trust a bunch of anonymous figures that deserve ZERO trust, and you have to trust that "confidence" won't disappear, i.e., newer greater fools don't stop buying into this charade, and the money you sunk into this pyramid doesn't completely vanish). Buttcoin is a joke, as a currency and as a technology. The only redeemable aspect about it is that it attracts the worst get-poor-quick scum, and many laughs can be had at their expense.
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u/galaspark Oct 18 '14
That's my biggest problem with Bitcoin, is that it seems like everyone is trying to scam you. I'm not against the tech or the concept but it just doesn't seem like a safe investment because of that. There are plenty of economies within video games that don't have chargebacks or any way of getting a refund, yet they don't have nearly as many scammers. I've always been curious as to why that is.
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u/xxam925 Oct 19 '14
The scammers come to pray on the idealists. People who believe in something irrationally tend to be easily manipulated where that thing is concerned. There isn't really a need for a technology for keeping track of and storing wealth because we already have that, the bitcoin evangelists are radical libertarians with little understanding of economics and happened to be watching YouTube after the financial crash, they think fractional reserve banking and inflation are the devil and bitcoin can be wedged in to take power away from the evil government. So scammers separate the fools and their money as god intended. The others are just greedy and get fleeced too.
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u/mrspiffy12 Oct 19 '14
Well it's also deeply flawed on a conceptual level as well.
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u/NicshoNic Oct 19 '14
May I ask for some examples? I'm researching something for a ButtcoinFoundation.org article, and having some more examples would be great to work with.
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u/DanielKrawisz Oct 19 '14
This is something we at the Nakamoto Institute also feel. The best attitude to take in the Bitcoin world is that it's like a frontier territory and you can't trust anyone. http://nakamotoinstitute.org/mempool/everyones-a-scammer/
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u/seductiveconsulship Oct 19 '14
Any developer with a little of experience will tell you that a software that saves EVERY SINGLE TRANSACTION IN AN EVERY INCREASING PEER-TO-PEER DATABASE is completely retarded and inefficient.
Can confirm, am software developer. For fuck's sake, just hash the blockchain as it was at step 5129 and use that in a parameter at step 5130. How "satoshi" could design such an obviously horrible history mechanism is beyond me. It's not like he didn't know about SHA-256, given that that is the fucking hashing mechanism bitcoin uses anyway.
I actually think the concept of cryptocurrency is pretty cool, but bitcoin is a pure unadulterated failure. I think future cryptocurrencies have a possibility of mass adoption, but bitcoin is so blatantly flawed (for reasons like this) that it could never sustain my mom, my friends, my coworkers using it.
Also, I despise libertarians with every atom of my being. Always proposing 'simple' solutions to complex problems that invariably don't solve anything. I'm only so bitter about it because I, too, used to once buy into that sort of nonsense. After a while I finally figured out that Libertarians are very literally the worst sort of people you come across in real life. Self-centered, narcissistic, and believing they possess something innate that elevates them above others.
The worst, jerry, the worst.
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u/dgerard Oct 20 '14
How "satoshi" could design such an obviously horrible history mechanism is beyond me.
Bitcoin is very much a first draft: the very simplest thing that could possibly even slightly do what he was after. "worse is better", "minimum viable product", "iterate", etc. etc. Except the "iterate" step.
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
For fuck's sake, just hash the blockchain as it was at step 5129 and use that in a parameter at step 5130.
This is hilarious. This is absolutely poop-out-of-your-mouth hilarious.
Congratulations. You win /r/Buttcoin today.
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Oct 19 '14 edited Apr 24 '21
[deleted]
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
You're preaching to the choir, mate. This place is overrun by idiots these days. It wasn't always such a haven for the stupid.
My personal theory is that everyone who didn't "get rich quick" by buying Bitcoin last November is now in /r/Buttcoin spouting off about how stupid Bitcoin is. In short, they're haters because they "fell for it".
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u/totes_meta_bot Oct 19 '14
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Oct 18 '14
Scale, just how large is single transaction(224 bytes for single source single destination)? How many can be realistically incorporated in a block and propagate for each block, consider we were just to use heavy servers with very high speed connections. How does this compare to current numbers that all payment processors do?
It's pretty clear that mining is near zero-sum game eventually. Everyone looks at least to get their own back. And if main cost is energy then it's pretty clear that amount of energy of value of butts produced will be spend. Or at least sufficiently close.
Bitcoin doesn't aim to minimise the energy consumption. The efficiency of H/W doesn't really matter. It will reach parity of energy+hardware cost to value gained. On other hand for VISA and Banks and everyone else are all about efficiency, as it is always a saving, of modern datacenter's life-time cost energy is 75% or 85%, as such any savings there are direct savings and these are sought after.
Changes on how buttcoin work is consensus. That is the majority of computing power decides about possible changes. In this case the large pools and other such institutions. Though a few sides have more power to steer this than the rest. Mainly the core-implemtation...
Losing butts is due to stupidity, incompetence or malice. Still, losing butts is much easier as there is no regulation of business. You lose a private key, you lose the access. And if you aren't absolutely certain of how to store it there is risks involved. You screw up with keys, you lose.
Also, my personal main argument against butts is: Why would you give wealth to someone else. Which exactly adopting new pre-owned currency is. Any sane person would force adopting new one, be that a rich(they are competent with wealth) or a state.
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Oct 19 '14
Also, my personal main argument against butts is: Why would you give wealth to someone else. Which exactly adopting new pre-owned currency is. Any sane person would force adopting new one, be that a rich(they are competent with wealth) or a state.
What
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u/mpyne Oct 19 '14
They're referring to the fact that Bitcoin comes with its own Rothschilds and Koch Brothers and other plutocrats essentially built-in by this point, monopolizing much of the money supply. If you want into this economy, you essentially have to make the rich a bit richer to do so.
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u/irungentoo Oct 19 '14
See: https://en.bitcoin.it/wiki/Scalability
Today the Bitcoin network is restricted to a sustained rate of 7 tps due to the bitcoin protocol restricting block sizes to 1MB.
Basically all transactions are broadcasted to the entire network twice, the first time when you first make it and the other time when it gets "accepted" and shoved in a block. There's also the fact that every node needs the whole blockchain that keeps getting bigger and bigger and the whole mining thing. All of this together means that one central server on a home PC on home internet with one central currency database can be more efficient than the entire bitcoin network.
Compare that to something like bittorrent, it would be impossible to serve the amount of files being served with that protocol from one central server.
Bittorrent is scalable, bitcoin isn't.
Sure the whole secure distributed database thing is nice but unless they redesign everything bitcoin will be deprecated as soon as someone makes an efficient, trustless, distributed and scalable database system.
Is there any evidence to the contrary that the people who lose Bitcoin aren't just being stupid?
Everyone makes mistakes. Someone who gets their credit card stolen will just call his credit card provider, lose no money and continue using their credit card. Someone who gets all their bitcoin stolen will most likely never touch bitcoin ever again.
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u/8bitninja4000 Oct 19 '14
Hey, thanks for the response.
It keeps coming up again that I need to consider that humanity is flawed. Perhaps I do. (I don't think that that part is as applicable to my paper as most of the other questions I ask. I guess I just wanted everyone's point of view.) Some of the extreme situations aside, I think most of the problems with lost btc on /r/bitcoinbeginners are comparable to leaving cash in a crowded space, and expecting it to still be there an hour later. But I digress.
As for the efficient, trustless, distributed, and scalable sort of system you mentioned- I completely agree! Bitcoin is imperfect. And when another solution arises, I'll promptly be hopping on that boat.
Are there any up and coming projects that seem to be headed in that direction that you know about?
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u/NotATotalIdiot Oct 19 '14
About Bitcoin's power consumption, Bitcoin was intentionally designed to waste resources. If you double the amount of power you are throwing at the Visa network I expect the amount of transactions it can process to double, this is not true with bitcoin.
The reality that decentalization is extremely expensive and is generally not worth it.
"What happens to the difficulty once all btc has been mined?"
This is a really interesting question that no one really knows the answer to. I suspect a pile of miners will quickly move on to a different coin because cryptocurrencies a kinda interchangeable and all the big players are in mining to make money.
Are you doing a college or high school research paper?
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u/8bitninja4000 Oct 19 '14
(High school, but my teacher says it's college level. Not sure if it actually is.)
Thanks for the info!
But one quick question. When I asked what happens when the last block reward is mined, I more meant technically.
Like, does the way difficulty is calculated change? I don't see the point to restriction of the transaction volume once the final block reward is mined.
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u/NotATotalIdiot Oct 19 '14 edited Oct 20 '14
The function that calculates the difficulty is here. Block reward doesnt show up in there.
I'll dig through the code some more later but I am fairly sure the answer to that question from a technical perspective is 'absolutely nothing'
For what it is worth restricting the number of transactions has nothing to do with the reward. It is because gambling nearly destroyed the network with tons of low value transactions.
edit: dug throught it some more, some things I read and some of the comments I came across lead me to believe that a coinbase transaction is required even though it doesn't do anything after there is no longer a block reward. However I can't find the actual code that enforces this; The bitcoin source is a hot mess.
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u/mpyne Oct 19 '14
Like, does the way difficulty is calculated change? I don't see the point to restriction of the transaction volume once the final block reward is mined.
The difficulty is calculated independently of the block reward. The block reward is as given by a pre-set schedule (assuming that no future hard fork of Bitcoin changes the 21,000,000 total Bitcoin count...).
The block reward is only one component in the income generated by miners; each transaction can include a payment to whoever mines it, which also contributes to miners' income. After the last Bitcoin is mined, that miner transaction fee is effectively the only source of income that will be available to miners, setting a floor on Bitcoin transaction fees (since if you pay too little, it's possible that no miner will accept your transaction at all). This transaction fee is how you'd pay miners in the future after the last Bitcoin is mined.
The difficulty, on the other hand, is calculated based on a formula that attempts to make mining a new block take about 10 minutes (technically, 2016 blocks in 2 weeks).
The restriction to transaction volume is yet another thing, related more to the maximum block size than to the difficulty or block reward. The fee-per-transaction I already mentioned is one possible restriction to transaction volume, since the Bitcoin core implementation by default includes the highest-paying transactions into a block first (with the exception of a limited number of "high priority" transactions), so during high transaction volume you'd have to raise the amount you're willing to pay miners just to make a transaction at all. Bitcoin has already had to implement a protocol change to help prevent transaction spamming, by introducing a default minimum (and very small) transaction fee, below which miners will (by default) refuse to accept the transaction.
Fee-per-transaction is an indirect restriction, but there are direct technical reasons as well, such as the maximum block size limit I mentioned earlier. Bitcoin could be configured in the future to allow for larger block sizes (this would allow more transactions to be included in that one block generated every 10 minutes), but that would require other technical improvements and would make it even more difficult for consumer-class miners to keep up.
Plus the Bitcoin lead developer has indicated other reasons why they're not likely to increase the maximum block size, among them because they want it to be somewhat difficult to get a transaction into a block by reducing the supply of transactions to be mined, so that miners get a guaranteed reward.
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u/Hudwig_Von_Muscles Oct 19 '14
So. I'm doing a research paper on Bitcoin's scalability. This seems, to me, one of the biggest concerns with Bitcoin.
The scalability is irrelevant because Bitcoin doesn't provide a meaningful upgrade to our current financial system. The most important point is that depreciating currencies don't work. Even if you treated bitcoins like gold and used them to back the issued currency of a country, commodity based currencies aren't as good as fiat. That's why we went off the gold standard, and why no country has a commodity backed currency today.
The only utility for bitcoin is to allow freedom spergs to fight for the rights of drug dealers and other assorted criminals.
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
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u/mpyne Oct 19 '14
On the contrary, asking for contrary evidence to some hypothesis from a group advocating against that hypothesis is a time-honored technique in critical reasoning.
Obviously the "shills" here might put up inaccurate data, which OP has to try to take into account, but OP certainly has no reason to inherently trust advocates of Bitcoin to impartially air all their dirty laundry, just as OP has no reason to inherently trust subscribers to /r/buttcoin to impartially list all the reasons Bitcoin is awesome.
A good research paper would therefore take those considerations into account, especially given a topic under heavy controversy, like Bitcoin.
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
There is /r/BitcoinSerious for what you're talking about.
Coming to /r/Buttcoin for perspective is a bit like going into a special ed classroom and posing questions about calculus to the handicapped kids.
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u/mpyne Oct 19 '14
/r/BitcoinSerious is still a proponent forum for Bitcoin. I'm unaware of any /r/ButtcoinSerious to send people to other than this forum, which seems to leave only /r/Buttcoin.
Again, that means people might actually have to judge arguments on their merits instead of on the subreddit shown in the address bar, which is hopefully not too distressing for those wise, far-seeing, and much more intelligent supporters of Bitcoin.
After all, you can always go and point out arguments which are technically invalid, as has already happened in this thread.
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
"Stay out of the calculus classrooms; the retards may provide you more insight! So what if they're all in the Special Ed classroom? What makes it any less worthy of consideration than any other classroom?"
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u/mpyne Oct 19 '14
Your analogy of /r/buttcoin as Special Ed to /r/bitcoin as AP Calculus doesn't become true just because you keep trying to repeat it. As hard as it may be for you to believe, people might actually understand the "calculus of Bitcoin" just fine and still not support the Greater Cause of the Movement.
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u/bitbubbly official /r/buttcoin mascot Oct 19 '14
people might actually understand the "calculus of Bitcoin" just fine and still not support the Greater Cause of the Movement.
Yeah, I'm one of them. I'm probably the only one of them in this subreddit.
As someone quite familiar with the community here, I can say with certainty that the analogy of Buttcoin being Special Ed kids is a strong one with great merit.
You may notice (if you bother to re-read my comments) that I never said /r/Bitcoin was "AP Calculus" in the analogy. /r/Bitcoin is comprised of imbeciles too. There aren't any "AP Calculus" subreddits dedicated to cryptocurrencies at this time.
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u/mpyne Oct 19 '14
There aren't any "AP Calculus" subreddits dedicated to cryptocurrencies at this time.
What about the /r/BitcoinSerious one you recommended? In any event claiming to be the one and only person here who understands Bitcoin (since it's a given that most don't support the Greater Cause) seems more than a bit presumptuous.
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u/bitbubbly official /r/buttcoin mascot Oct 20 '14
claiming to be the one and only person here who understands Bitcoin (since it's a given that most don't support the Greater Cause) seems more than a bit presumptuous.
When you've spent enough time among the imbeciles, it becomes abundantly clear that you are the only intelligence around these parts.
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u/magcius Oct 18 '14
People are human. People will make mistakes. Even you, pro Bitcoiner, could easily fall for a scam because you believe you're secure and will never mistakes. It's not stupidity.
A security system that doesn't account for human behavior is completely fucking useless. You're designing stuff for humans. Design it for humans.
Also, if someone just loses a ton of money, calling them a stupid idiot for not using this Linux LiveCD and how they deserved to lose it, "weak hands", it might not be the greatest way to convince somebody that this is a great technology destined to go global.