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Bitcoin-assets 21-01-2015 minus some distractions
kim@kopti:~/tmp$ cat ba-21-01-2015.txt | grep -v ben_vulpes | grep -v asciilifeform | grep -v lobbes | grep -v "^$" | gpg --clearsign
Hash: SHA1
18:00:01 gavinandresen: howdy y'all
18:00:54 kakobrekla: hi
18:01:28 felipelalli: hi!
18:02:11 gavinandresen: I came here so you can tell me how I’m going to ruin bitcoin (again…)
18:03:06 davout: gavinandresen: hello
18:03:15 kakobrekla:
18:03:15 assbot: Logged on 21-01-2015 16:54:23; mircea_popescu: ima be back in ~3 hours.
18:08:28 felipelalli: gavinandresen: when was the first time that you have "ruined" bitcoin?
18:08:53 gavinandresen: felipelalli: when we did BIP16 to make multisig wallets easy to deploy
18:09:49 gavinandresen: … that was a soft fork, not a hard fork, but it still caused people to accuse me of trying to destroy Bitcoin
18:09:55 davout: felipelalli: that was a soft fork
18:10:30 felipelalli: thank you
18:11:24 gavinandresen: a soft fork means miners must upgrade, or their blocks will be rejected.
18:11:39 gavinandresen: a hard fork means everybody running a full node must upgrade, or they will be on a different chain
18:12:02 gavinandresen: MP will bring all the drama :-) I try hard to be drama-free.
18:12:30 felipelalli: davout: nice explanation. It gives a good article in
18:13:41 felipelalli: increase the 21M max coins is possible through a hard fork?
18:13:43 assbot: Proposed DERSIG BIP ... ( )
18:14:49 gavinandresen: okey dokey, then we might not have much to talk about if you want to stick with OpenSSL bugs that were included in the protocol by mistake.
18:16:00 felipelalli: gavinandresen: theymos said: << (...) Make the change now, but have it take place at a particular date or block number 2 years in the future. Then when the change actually happens, everyone will already be updated because almost no one uses 2-year-old software. Yes, 2 years is a long time, but we'll survive. >> is that possible and why it is a good or bad idea?
18:16:44 gavinandresen: felipelalli: that’d be a fine way to roll out the change; I think gmaxwell and sipa prefer that plan.
18:17:09 assbot: Trust relationship from user assbot to user felipelalli: Level 1: 0, Level 2: 1 via 1 connections. | |
18:17:34 kakobrekla: that like "dont worry we have 2 years to 'fight'" and then "o shit did we miss it?" 2 years later.
18:17:41 felipelalli: gavinandresen: do you prefer different? If yes, why?
18:17:47 assbot: Request successful, get your OTP:
18:17:55 davout: gavinandresen: "okey dokey, then we might not have much to talk about if you want to stick with OpenSSL bugs that were included in the protocol by mistake." <<< actually i distinctly remember mike hearn telling me how that particular bug was part of the protocol and how it somehow justified not putting any effort towards actually specifying anything, in a spec, not in code
18:18:40 assbot: Successfully added a rating of -1 for felipelalli with note: snr penalty
18:18:44 assbot: [MPEX] [S.MPOE] 64000 @ 0.00047807 = 30.5965 BTC [-] {2}
18:19:51 kakobrekla: well at least down works.
18:20:25 davout: that escalated rather quickly
18:21:24 assbot: ..::[ The Bitcoin Foundation ]::.. ... ( )
18:23:26 Pierre_Rochard: my main disagreement is on the economics side, you say “ Limit the number of transactions that can happen on the Bitcoin blockchain, and instead of paying higher fees people will perform their transactions somewhere else.”
18:24:06 Pierre_Rochard: My response to that is two-fold: if maximizing revenue to miners is our goal, then shifting marginal demand to substitutes is fine.
18:25:02 Pierre_Rochard: Second, there is distance between the total transaction costs of Bitcoin vs the substitutes. So there’s inelasticity in demand
18:26:43 Pierre_Rochard: So here’s my hypothesis: if we allow the network to hit the block size limit, then we’ll see the transaction fee revenue growth *accelerate*, up until the point that substitution begins happening in earnest, then the fee revenue growth will *decelerate* or stall.
18:27:42 davout: Pierre_Rochard: shut up and stop making so much sense
18:27:43 Pierre_Rochard: that would indicate that demand is inelastic, and it would tell us where the upper bound on bitcoin tx fees roughly is
18:27:54 Pierre_Rochard: all else equal
18:29:22 gavinandresen: Pierre_Rochard: I think you’re confusing the limit miners self-impose with the hard-coded upper limit
18:29:28 Pierre_Rochard: Now this part may be controversial for some members of b-a, but it’s at the point where fee revenue growth decelerates that the block size should be increased *marginally*, if the goal is to maximize fee revenue
18:29:36 davout: gavinandresen: why would miners impose a self limit?
18:29:51 gavinandresen: davout: today, because bigger blocks take a while to propagate.
18:29:54 Pierre_Rochard: gavinandresen: I think the limit that miners self-impose would not hold. I think we see that today
18:30:02 Pierre_Rochard: !up gavinandresen
18:30:06 davout: isn't there a plan to make block propagation O(1) by using headers-first?
18:30:30 gavinandresen: davout: when that is fixed by protocol changes, they will have some minimum costs to processing transations plus a little profit
18:30:57 assbot: [MPEX] [S.MPOE] 62448 @ 0.00048429 = 30.2429 BTC [+] {2}
18:31:10 davout: gavinandresen: you're not really answering the question regarding headers-first
18:31:34 gavinandresen: davout: sorry, missed, the question, real-world distraction…
18:32:12 gavinandresen: davout: oh, the IBLT stuff? yes, that’d make propagation O(1), and that’s what I mean when I say “when that is fixed by protocol changes"
18:35:01 gavinandresen: Pierre_Rochard: if Satoshi hadn’t slapped on a 1MB blocksize limit, would you be lobbying for a hardfork now to impose one?
18:35:10 gavinandresen: … execuse me, soft fork....
18:35:15 Pierre_Rochard: gavinandresen: yes, I would
18:35:25 artifexd: !s rsa backdoor
18:35:27 assbot: 5 results for 'rsa backdoor' :
18:35:37 gavinandresen: Pierre_Rochard: ok, exactly what would you propose?
18:36:42 artifexd: Yeah. I found the article through my own education. I wanted to see if it had already been discussed in here.
18:36:56 Pierre_Rochard: gavinandresen: that we don’t increase the limit until we see what happens to total fee revenue growth after a few months of full blocks
18:37:46 gavinandresen: Pierre_Rochard: I think we’re there:
18:37:47 assbot: The Myth Of The Megabyte Bitcoin Block ... ( )
18:38:38 gavinandresen: Pierre_Rochard: the 0.10 release’s wallet code includes floating fees, so over the next couple months we should get a much better idea of what is happening fee-wise.
18:38:45 Pierre_Rochard: then let’s stay there for six months to collect the data
18:38:48 Pierre_Rochard: ^ great
18:39:16 gavinandresen: Pierre_Rochard: what information will we get that will influence how large to make blocks?
18:40:14 gavinandresen: Pierre_Rochard: … I misstated: that will influence the maximum possible block size....
18:41:16 Pierre_Rochard: gavinandresen: fee revenue growth, if it accelerates then demand for btc transactions is relatively inelastic, the point at which it declerates indicates where substitution starts happening. If it’s right away, then you’re right on the economics. If its after a period of faster growth, then we can see what bitcoin transaction fee the market will bear before switching to substitutes
18:42:56 gavinandresen: Pierre_Rochard: but why would we want to hit the “then substitutes start happening” when we’re in Bitcoin’s infancy?
18:43:16 gavinandresen: Pierre_Rochard: Seems to me it is better to do everything we can to encourage widespread adoption right now.
18:43:32 Pierre_Rochard: gavinandresen: because the substitution would just be happening at the margin
18:44:22 gavinandresen: Pierre_Rochard: But we’d get probably at least six months, maybe a year or two of substitution because it takes time to roll out a hard forking change
18:44:40 Pierre_Rochard: gavinandresen: I think Bitcoin’s overall value proposition is so overwhelming that what’s hampering Bitcoin adoption is not tx fees, it’s just the Lindy effect of it being around long enough
18:45:22 gavinandresen: Pierre_Rochard: okey dokey. What if you’re wrong?
18:46:19 Pierre_Rochard: gavinandresen: then we see an acceleration of adoption of an altcoin / altcoins in general and react accordingly
18:46:28 gavinandresen: Pierre_Rochard: But you just said you want to let fees go up high enough so, at the margin, some people ARE turned away.
18:47:06 Pierre_Rochard: gavinandresen: that’s right, that’s the signal to increase the block size limit
18:47:13 gavinandresen: Pierre_Rochard: So, lets say we do see fees rise. How far do we let them rise? Who decides?
18:48:37 Pierre_Rochard: gavinandresen: at some point they stop rising because they’re too high for the marginal transactor
18:49:03 Pierre_Rochard: gavinandresen: in theory the miners would decide, in practice the core devs
18:50:12 gavinandresen: Pierre_Rochard: unfortunately, the experience for the marginal transactor is terrible: their transactions just never, ever confirm. Their coins get tied up…
18:50:53 gavinandresen: Pierre_Rochard: if wallets could deal with that I’d be more open to running the experiment, although I still think it is a terrible idea to shut out ANY reasonable use cases at this early stage of Bitocn’s life
18:52:10 gavinandresen: Pierre_Rochard: You started with a premise that I reject, by the way: I do not believe that a goal should be to maximize miner revenue
18:52:34 gavinandresen: Pierre_Rochard: I believe the goal should be to maximize the value of Bitcoin for everybody
18:52:34 Pierre_Rochard: gavinandresen: I think that our disagreement on that premise precludes agreeing on anything downstream of that
18:53:01 gavinandresen: Pierre_Rochard: you’re probably right. Are you a miner yourself?
18:53:46 kakobrekla:
18:53:46 assbot: Logged on 11-01-2015 22:33:39; kakobrekla: how do other envision the future when reward goes towards 0. either a btc is worth half a planet or the fees amount per block go up a few orders of magnitude or network is dead
18:53:54 kakobrekla: which ?
18:54:05 Pierre_Rochard: gavinandresen: I am not. I just see a “too low” long term hash rate as the greatest risk of ruin Bitcoin faces, and it ought to be minimized before all other considerations
18:56:42 gavinandresen: Pierre_Rochard: what do you think of my argument that hash rate and fees are apples and oranges? That people will substitute away from fee-paying transactions to other solutions that use the block chain, which means trying to maximize fees means no guarantee that there will be enough hash rate to secure the chain?
18:57:27 kakobrekla: >altcoins, sidechains
18:57:51 gavinandresen: not altcoins— centralized services like Coinbase. Or sidechains.
18:58:23 assbot: [MPEX] [S.MPOE] 2500 @ 0.00049015 = 1.2254 BTC [+]
18:58:29 kakobrekla: coinbase and the like can be *poof* gone in one day
18:59:41 kakobrekla: too slow i am, this cake is hindering me
19:00:46 Pierre_Rochard: gavinandresen: If I understand your argument correctly, you’re saying that the elasticity of demand is so great that fee maximization will be insufficient anyway, so try finding another solution now. That’s a pretty good argument, I think we should see what happens to fee revenue growth to validate it. If, say, the average fee goes up to 0.0004 btc and doesn’t budge from there, but anecdotally we hear that
19:00:47 Pierre_Rochard: off-blockchain transactions are taking off, then your argument will have won the day
19:01:56 assbot: Trust relationship from user assbot to user gavinandresen: Level 1: 0, Level 2: 1 via 1 connections. | |
19:01:58 kakobrekla: and i wasnt even insulting.
19:02:08 Pierre_Rochard: gavinandresen: but my intuition tells me such substitution won’t happen at such a low fee
19:02:55 gavinandresen: Pierre_Rochard: ok. I’d like to brainstorm more about how you would set the maximum block size— I don’t want the developers setting it every two months, but I dont’ see a way to make fee revenue per block drive it (because the real-world bitcoin exchange rate is so variable)
19:03:14 davout: gavinandresen: "oh, the IBLT stuff? yes, that’d make propagation O(1)" <<< so with that, there's no network bottleneck anymore, at least no real incentive for miners to keep blocks small, right?
19:03:20 assbot: Request successful, get your OTP:
19:03:46 assbot: Successfully added a rating of -5 for gavinandresen with note: broke bitcoin in too many ways to mention. inquire within.
19:04:10 kakobrekla: cmon he is still emitting
19:04:13 kakobrekla: !up gavinandresen
19:04:26 gavinandresen: davout: Miners would only have the meta-incentive of “we can collectively maximize revenue if we make blocks THIS big”
19:04:50 gavinandresen: davout: I have no idea if the would cooperate enough to make that happen.
19:05:19 gavinandresen: davout: ok, “patches welcome"
19:05:50 davout: gavinandresen: “patches welcome" <<< i don't use your wallet tbh
19:06:04 gavinandresen: davout: great! your wallet can do whatever it likes with respect to fees.
19:07:11 Pierre_Rochard: gavinandresen: the only way I see is to regularly test at what tx fee the substitution begins happening, and increase it at the margin (say 20%) whenever the top percentile of fees starts hitting it. Yes, that would involve perhaps semi-annual block size limit increases and an element of judgement. I still see it as a better solution than a much-too-high limit or a contrived algorithm
19:07:40 Pierre_Rochard: increase it at the margin (say 20%) < increase the block size limit
19:07:50 BingoBoingo: ;;bc,stats
19:07:54 gribble: Current Blocks: 339942 | Current Difficulty: 4.397166205608958E10 | Next Difficulty At Block: 340703 | Next Difficulty In: 761 blocks | Next Difficulty In About: 5 days, 13 hours, 18 minutes, and 49 seconds | Next Difficulty Estimate: 42292830486.1 | Estimated Percent Change: -3.81799
19:09:24 gavinandresen: Pierre_Rochard: can you define “much too high limit” ?
19:10:20 Pierre_Rochard: gavinandresen: one where there is no competition among transactors to get into a block
19:10:40 undata: right, one would have to reach that state to know
19:11:06 Pierre_Rochard: that is, competition that would at least attempt to maximize transaction fee revenue
19:11:30 gavinandresen: Pierre_Rochard: fee revenue measured in real prices, yes?
19:12:21 gavinandresen: Pierre_Rochard: … because driving up real Bitcoin prices is why I think we should do everything possible to encourage widespread adoption
19:12:23 Pierre_Rochard: gavinandresen: that’s actually a very interesting question because we currently live in a world where miner liabilities are in fiat prices, but in the future that may not be the case.
19:13:49 Pierre_Rochard: gavinandresen: right, that goes back to bitcoin’s adoption relative to other altcoins. when we see a divergence then we know there’s substitution going on
19:14:43 gavinandresen: Pierre_Rochard: I think if you went to a VC with a business plan of “We’re going to raise prices until we start losing customers” the VC would tell you that is a huge mistake if you’re a high-growth thing-a-ma-bob
19:15:46 xanthyos: the bible warned us about you gavinandresen
19:15:58 Pierre_Rochard: gavinandresen: I agree, but in this case I think Bitcoin’s competitive advantage is 100x, and transaction fees are a relatively small part of that, so if they were $0.50 instead of $0.05, adoption rate would decrease by let’s say 0.01%.
19:16:20 gavinandresen: Ok, if y’all are interested in keeping Bitcoin an exclusive little club… then okey dokey, we have a fundamental difference of opinion on where the project should go.
19:16:35 Pierre_Rochard: so it’s immaterial, yet that transaction fee revenue is super-important for the customers to know, long term this is a viable enterprise that can sustain itself
19:17:40 danielpbarron: gavinandresen, what did satoshi write in the very first block??
19:18:32 gavinandresen: I’ve gotta go. Pierre_Rochard, nice chatting with you.
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@danielpbarron danielpbarron commented Feb 18, 2015

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