robzrob Posted December 5, 2013 Posted December 5, 2013 Is this going to be a problem? http://www.youtube.com/watch?v=PfeA94BedQI
Bulbasaur Posted December 5, 2013 Posted December 5, 2013 I can't get past his opening salvo. Let's look at his style of "argument:" "This is obviously a speculative bubble, and like all bubbles it will pop. Anybody who has any economic sense at all can see that." In other words, if you disagree with my bald assertion you're clearly an idiot. This kind of language is a big red flag for bad arguments and prejudiced thinking. As for the blockchain, it does indeed take a long time to download the blockchain for a new installation. However, it is not necessary for everyone to download the blockchain. This is another red flag that this guy has no idea what he's talking about: "Somewhere along the way, Bitcoin will have to be restructured to allow individuals to use the network without downloading the entire blockchain." This already exists as the general case; many (most?) of the popular wallets don't require you to actually download the blockchain. The problem was also easy enough to forsee that it was addressed in the original whitepaper: 7. Reclaiming Disk Space Once the latest transaction in a coin is buried under enough blocks, the spent transactions before it can be discarded to save disk space. To facilitate this without breaking the block's hash, transactions are hashed in a Merkle Tree [7][2][5], with only the root included in the block's hash. Old blocks can then be compacted by stubbing off branches of the tree. The interior hashes do not need to be stored. So this is by no means some new insight that had been overlooked.
PoopMeat Posted December 5, 2013 Posted December 5, 2013 No offense but stormcloudgathering is not a person I'd want to get accurate information from. At that I thought bitcoins capped the amount of information that can be contained in a blockchain though I'm not sure how big that cap is.
Wesley Posted December 6, 2013 Posted December 6, 2013 0.9 update is starting to help solve this problem, and if necessary, more updates will be made to reduce this as a problem. It is software and it is called updates. Bitcoin is not ready for mainstream yet and has growing pains, but when it is this will not be a problem.
Magenta Posted December 6, 2013 Posted December 6, 2013 I will quote the video and respond with my thoughts in real time, pausing the video after each quote to type a response, not taking the entire video into account, thus preserving stream-of-consciousness and simplifying things for me. "Rising from around $200 to over $1,000 ... this is obviously a speculative bubble. It will pop" Skepticism is healthy and there is a possibility that bitcoin is in a bubble. But price alone is nowhere near enough information to reach a conclusion. What if there were only 5 bitcoins available? That would mean the total value of the currency/protocol increased from $1,000 to $5,000. That's a tiny increase. In terms of percentage, it may be large, but in absolute terms, it is small. StormCloudsGathering (SCG) does not discuss absolute terms. Given Bitcoin's relative youth, it is not surprising for it to have rapid growth. Start-up companies also have rapid growth, but that doesn't make them a "bubble." And to define "bubble", let's say "overvalued". To conclude that something is "overvalued", you have to provide an estimated value and compare it to its actual value. What SCG's estimated value of bitcoin? What is SCG's stated actual value of bitcoin? Keep in mind, price is not a value. Price*Units is a value, but how many units of bitcoins exist? We know how many have been mined, but how many have been lost or forgotten? How many units remain? "Anybody who has any economic sense at all can see that" That's not an argument, that's simply calling those who disagree with you stupid. "Bitcoin is not scalable [due to blockchain size]" This is a FAQ and was addressed in the original whitepaper - the introduction to bitcoin written by its creator and released when bitcoin was launched. http://bitcoin.org/bitcoin.pdf See Section 7. Reclaiming Disk Space. This is just one of many possibilities for this problem, others discussed regularly on discussion forums likewww.BitcoinTalk.org and www.Reddit.com/r/Bitcoin. For some simple solutions that don't involve advanced functions like the above mentioned Merkle Tree: -- You don't have to download the entire blockchain. There are already bitcoin clients like Multibit, Electrum, and eWallets like Coinbase and Blockchain.info that store the blockchain for you on servers -- Storage capacities increase rapidly as technology advances. Do you know how much data is uploaded to YouTube.com alone every second? A quick Google search showed that YouTube uploads over 1,000 hours of video every minute. That doesn't even include how much is downloaded to the billions of viewers every month, nor the amount that is shuffled around due to editing and processing. If somebody explained the data usage of YouTube to you when the internet was 5 years old (let's say late 1980s), you'd think they're crazy, but here we are. "Of course, the average user will be unable to participate long before that happens [the blockchain reaches terabytes in size]. Somewhere along the way, Bitcoin will have to be restructured to allow individuals to use the network without downloading the entire blockchain". Bitcoin doesn't need to be restructured to allow, this - it is already possible. "Making the shift will involve introducing a degree of centralization" This is bad compared to what? Currencies and payment protocols that are entirely centralized? A better decentralized currency/protocol? Centralization offers convenience. If you want the convenience of a server-hosted blockchain, you can use those clients. If you want to download your own blockchain, you can do that. And you'll be able to continue to do that, as mentioned above. "Super nodes would handle the blockchain for you". OK, he gets into the super nodes now. Those are how the above mentioned server-hosed blockchain services currently work. "and you would communicate with the super node in order to deposit and withdraw, essentially like a Bitcoin bank". This is hugely different from a bank. A super node does not hold your coins. A super node does not have a monopoly on moving your coins, you could use any super node. You could leave the super node system at any time and run the blockchain yourself. The super node does not mine blocks (secure and confirm transactions), it only communicates them. He discusses that it would be easy to bring super nodes under regulatory control. How? Supernodes do not determine transactions, they merely broadcast them. They are like wifi repeaters. If they try to send out incorrect information, they will be denied by the system. Miners determine transactions. Now, a 51% attack on miners is an actual threat, but it does not appear to be a large threat from the research I've done. This is another top-5 FAQ that is discussed all over the internet. Here is a snippet from the original whitepaper: "The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth." "What's the takeaway here? Don't treat Bitcoins as a stable, long-term investment". Does SCG think he is presenting new information here? Bitcoin is a equivalent to a start-up that has barely moved out of somebody's garage and SCG is saying "woah, this isn't like Wal-Mart stock".
Wesley Posted December 6, 2013 Posted December 6, 2013 -- You don't have to download the entire blockchain. There are already bitcoin clients like Multibit, Electrum, and eWallets like Coinbase and Blockchain.info that store the blockchain for you on servers I would like to highlight this portion. I would generally advise against web wallets except for petty cash or amounts you are actively in process of spending, however you can download desktop clients that also allow very quick start-up time and no blockchain download. Not to mention that any moderate to large amounts of bitcoin should be in cold storage which obviously does not even need a client at any time until maybe when you are looking to spend the coins.
robzrob Posted December 7, 2013 Author Posted December 7, 2013 Thanks all. I thought I'd read the whole of the original paper on BTC, but I obviously didn't take it all in.
Auriion Posted December 9, 2013 Posted December 9, 2013 I came to this thread to answer this question: Is the fact that the size of the blockchain is getting increasingly larger a good reason to disregard bitcoin as a valid currency? Judging from the feedback here, the answer appears to be: No, for the following reasons: You don't need to download the entire block chain. Servers that provide full blockchain services have no control over the bitcoin supply. Bitcoin does some excellent size management and is continuing to better optimize its disk space. Memory technology and data transfer rates continue to go up in size and speed; further staving off the effect of an enormous blockchain. Thanks Bulbasaur, Wesley, and Magenta!
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