I am rebuking a video on Bloomberg. The following is brutal technological analysis condemnation of BU (i.e. BCH and BSV).
Bitcoin Unlimited (aka BU, unified aspects of BCH and BSV) has two parameters Excessive Blocksize (EB) and Acceptance Depth (AD) for emergent consensus on the block size. Essentially they’re attempting an adaptive blocksize with a different algorithm which is roughly analogous to Monero’s adaptive block size, with the difference being that AFAIK Monero effectively places a centralized upper bound on the block size with centralized control over the minimum transaction fee. BU’s AD protocol should effectively limit the maximum orphan rate (i.e. chain will eventually converge and not diverge) due to the lack of a predefined Schelling point, but that’s still going to be a much higher orphan rate than a hard block size limit (e.g. Bitcoin’s 1 MB) which has dire mining efficiency ramifications which means BU can’t compete with Satoshi’s v0.5.3 protocol for the best store-of-value:
I stated in the past and will reiterate for the first time on this blog, that Satoshi didn’t want the riff-raff on the store-of-value block chain because they are too vulnerable to the business cycle, because due to the power-law distribution of wealth, they expend a greater portion of their net worth. Thus a scaling block chain will be subject to much greater volatility of transaction demand and txn fees. So the problem is if the adaptive block size protocol is designed to change slowly (high inertia) then when transaction volume craters, the chain becomes very insecure (as the protocol-dictated block reward declines via the halvings, especially if the valuation is not growing as fast due to being an inferior store-of-value for the reason already stated). Conversely if the block size adaptation is designed to change quickly, then the system be turned into a yoyo with DDoS attacks (i.e. miner can add as many transactions to a block as he wants to paying the txn fees to self).
Thus the only way to make a secure and viable unlimited transaction volume scaling chain is to have a perpetual mining reward independent from the txn fees, as Monero has done but BCH and BSV have not. Remember I explained already that’s not really a higher rate of debasement for most people.
My other concern with BU’s adaptive block size game theory is that without the centralized minimum transaction fee algorithm that Monero has, then a miner with significant percentage (not even 51% needed) of the system hashrate, can effectively drive (over an extended period of time) the Schelling point as high or low of a size as desired. I would have to model this, but I am confident the attacker will require less than 25% of the systemic hashrate to control the block size as described.
Thus I conclude that adaptive block sizes require centralization. But centralization is the antithesis of secure, trustless, and permissionless.
So what’s the purpose of Litecoin then if it doesn’t have perpetual debasement and thus can’t be a reliable transaction scaling coin? And given the lack of trustlessness in LN such as on Litecoin. One idea I have is that there’s needs to be some chain that can do DEX with Core, so that when Core is forked off, then it’s possible to sell Core without needing to comply with KYC on an exchange. Also in case the exchanges freeze trading on Core. But AFAIK Litecoin doesn’t have this DEX feature. So maybe there is some other reason?
I replied:
@jbreher wrote:
Funny. Shelby had been copying me in PM on most of the recent traffic, yet neglected to include me in this one. Whatevs.
Maximum 15 msgs daily limit reached. Not intended to exclude you. I am making a brief concerted effort here and now (soon to disappear again) to convince you that BSV and BCH are scams:
http://trilema.com/2016/to-the-dao-and-the-ethereum-community-fuck-you/
That said, it is a reasonable point. However, it kind of flies in the face of the probability that Satoshi -- whomever he/she/they may be -- likely has ownership of something on the order of 1Million BTC, BCH, BSV, BTG, etc... Exercised or not, the option remains a locus of centralization.
The power-law distribution is inviolable, yet it doesn’t logically follow that Satoshi would design a system that requires him to doxx himself, make himself culpable for unleashing a system that is going to be perceived as a huge threat to the nation-states eventually:
https://steemit.com/bitcoin/@anonymint/ps65tg
https://steemit.com/bitcoin/@anonymint/secrets-of-bitcoin-s-dystopian-valuation-model
Nor design the game theory such that his own stash (or anyone else’s) would require any obvious centralization to protect the immutability of the system. All those who think Core is not altcoin, are going to learn this the hard way by being impoverished.
Nevermind the fact the Shelby has from time to time reversed tack on things he was adamant were settled gospel.
As I learn. Bitcoin is like an onion, keeping peeling off layers of new understanding. So it was not designed by some programmer in his garage. Bitcoin is very, very deep:
Wow! Much clearer to me now […] But it didn't make sense to me until now. HSIOW on the grand crypto timing scheme of things; this will be absolutely epic when it happens. I'm hoping that you've made a mistake somewhere that could derail from this prediction, but I'm 90% sure you are correct.
One thing's for sure, the tech oligarchs (Google, Amazon, FB, etc) are all buying into bitcoin right now. They're paying higher prices than you or me, but they have a lot more money to do so too. To them 8K is but what a penny is to us. They may end up owning nearly all of the original BTC while trying to shove their FB GlobalCoin Keynesian economic model down our throats. Amazon has already made serious inroads to seizing the means of production from which they can implement capital controls.
They will likely ending up owning Core with 3 addresses only, because they’re not reading this. Shssh don’t tell them. Because I bet the global elite want to bankrupt the large social media companies also, to make them even more dependent on the banksters. Or perhaps you’re correct that this coming SegWit donations event is the way the transfer of ownership of Bitcoin from the idiots to the $billionaires who have served the global elite.
I'm thinking that once the Segwit booty exceeds 50% of the total BTC in existence, that's when it will happen. If I could just mathematically model the flow into segwit somehow, I might be able to extrapolate when.
At the 50% mark, the value of BTC Core and BTC legacy will be equal which turns this into something similar to a PoS situation where the majority BTC legacy is assured control.
Plausible conjecture.
EDIT: There’s some speculation about the reason for Satoshi Dice’s transaction spam capabilities. Perhaps the true purpose once it was bought by trilema.com’s MPEx, was to demonstrate that any attempt to make an adaptive block size (without centralized control over the mining) would be defeated by a clone of Satoshi Dice.
RE: Secrets of Bitcoin’s Dystopian Valuation Model