Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li]

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Miners are most likely to be  equally distributed between the two almost
same chains.
If one chain is faster, according to the difficulty adjustment scheme, it
will become more difficult to mine.
The two chain should have similar chain generation rates with similar
difficulty and similar length.
or the miners will be attracted to the chain easier to mine,
and more miners will make the chain generation rate increase and then,
after difficulty adjustment, harder to mine.
Equilibrium will be achieved.

All the above are based on one assumption: the two chains have the same
value initially or miners believe they will  have  the same value finally.

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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Eric Voskuil]

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On 01/22/2018 04:38 PM, Chaofan Li via bitcoin-dev wrote:
> Miners are most likely to be  equally distributed between the two almost
> same chains.

This is irrelevant as miners don't determine the utility of a money,
they anticipate it. However you don't have to accept this to recognize
the error of the argument below...

> If one chain is faster, according to the difficulty adjustment scheme,
> it will become more difficult to mine.

Mining difficulty controls the block period, not miner return on capital.

> The two chain should have similar chain generation rates with similar
> difficulty and similar length.

This is the consequence of the presumed common regulation of the block
period. It matters not how useful are either of the monies.

> or the miners will be attracted to the chain easier to mine, 
> and more miners will make the chain generation rate increase and then,
> after difficulty adjustment, harder to mine.

You are conflating difficulty with profitability. These are not the same
thing. A chain can be more difficult and less profitable and the
reverse. Profitability is controlled by competition, as it is in all
markets. Competition is controlled by the cost of capital, which is in
turn controlled by time preference. Mining seeks the same level of
profitability for any coin, regardless of how difficultly. This applies
to all industry - difficulty does not regulate profit, it's just a cost.

> Equilibrium will be achieved.> All the above are based on one assumption: the two chains have the same
> value initially or miners believe they will  have  the same value finally.

Actually the opposite is the case. Even if we could start at a point of
perfect equality, the smallest change in the number of merchants or
human perception of the money (as examples), would lead one to be
slightly better. All things being equal that alone would lead to
elimination of one money in favor of the other.

One money is inherently better than two, as there is an exchange cost
between them. In the absence of exchange controls the better money gets
used, and in this case that can simply be the result of a slightly
larger network (or perception of it).

e


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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li]

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The human perception of difference will be eliminated.
Will your bank tell you whether your balance means coins or paper money?
If wallets and exchanges only show the total amount of btc rather than
btc.0 and btc.1, there is no human perception difference.

Also note that one valid address is automatically valid on the other chain,
which means you can send money through any one chain. As long as one has
the private key, he/she can get the money anyway. So there is no difference
between number of merchants. The merchant ‘s address is valid on both
chains.

The exchange cost would be trivial. People don’t need to exchange two same
thing.

Chaofan



On Mon, Jan 22, 2018 at 10:57 PM Eric Voskuil <eric@voskuil.org> wrote:

> On 01/22/2018 04:38 PM, Chaofan Li via bitcoin-dev wrote:
> > Miners are most likely to be  equally distributed between the two almost
> > same chains.
>
> This is irrelevant as miners don't determine the utility of a money,
> they anticipate it. However you don't have to accept this to recognize
> the error of the argument below...
>
> > If one chain is faster, according to the difficulty adjustment scheme,
> > it will become more difficult to mine.
>
> Mining difficulty controls the block period, not miner return on capital.
>
> > The two chain should have similar chain generation rates with similar
> > difficulty and similar length.
>
> This is the consequence of the presumed common regulation of the block
> period. It matters not how useful are either of the monies.
>
> > or the miners will be attracted to the chain easier to mine,
> > and more miners will make the chain generation rate increase and then,
> > after difficulty adjustment, harder to mine.
>
> You are conflating difficulty with profitability. These are not the same
> thing. A chain can be more difficult and less profitable and the
> reverse. Profitability is controlled by competition, as it is in all
> markets. Competition is controlled by the cost of capital, which is in
> turn controlled by time preference. Mining seeks the same level of
> profitability for any coin, regardless of how difficultly. This applies
> to all industry - difficulty does not regulate profit, it's just a cost.
>
> > Equilibrium will be achieved.> All the above are based on one
> assumption: the two chains have the same
> > value initially or miners believe they will  have  the same value
> finally.
>
> Actually the opposite is the case. Even if we could start at a point of
> perfect equality, the smallest change in the number of merchants or
> human perception of the money (as examples), would lead one to be
> slightly better. All things being equal that alone would lead to
> elimination of one money in favor of the other.
>
> One money is inherently better than two, as there is an exchange cost
> between them. In the absence of exchange controls the better money gets
> used, and in this case that can simply be the result of a slightly
> larger network (or perception of it).
>
> e
>
>

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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[ZmnSCPxj]

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Good Morning Chaofan Li,

> The human perception of difference will be eliminated.
> Will your bank tell you whether your balance means coins or paper money?
> If wallets and exchanges only show the total amount of btc rather than btc.0 and btc.1, there is no human perception difference.

This returns my initial question.

What ensures that a paper money with "10 Dollar" on it, is same as 10 coins each with "1 Dollar" on it?

This is the principle of fungibility, and means I can exchange a paper with "10 Dollar" on it for 10 coins with "1 Dollar" on it, because by government fiat, such an exchange is valid for all cases.

What ensures that btc.0 and btc.1 are indistinguishable from a human perception?

> Also note that one valid address is automatically valid on the other chain, which means you can send money through any one chain. As long as one has the private key, he/she can get the money anyway. So there is no difference between number of merchants. The merchant ‘s address is valid on both chains.
>
> The exchange cost would be trivial. People don’t need to exchange two same thing.

You are talking about sidechains.  In every sidechain proposal, there is always some mechanism (SPV proof-of-work, drivechain proof-of-voting, proof-of-mainstake...) that ensures that a sidechain coin is exchangeable for a mainchain coin, and from there, that every sidechain coin is exchangeable for every other sidechain coin.  I.e. that a smart contract with "1 BTC" on it is exchangeable for a mainchain UTXO of value "1 BTC".

A mere split is not enough.  As I brought up, what makes your proposal different from 2X, BCash, etc.?

Regards,
ZmnSCPxj

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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li]

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Hi ZmnSCPxj,


On Mon, Jan 29, 2018 at 9:32 PM, ZmnSCPxj wrote:
>What ensures that a paper money with "10 Dollar" on it, is same as 10
coins each with "1 Dollar" on it?
>This is the principle of fungibility, and means I can exchange a paper
with "10 Dollar" on it for 10 coins with "1 Dollar" on it, because by
government fiat, such an exchange is valid for all cases.
>What ensures that btc.0 and btc.1 are indistinguishable from a human
perception?

This is a good question. Does anyone think about why the bitcoins generated
from different blocks have the same value? Some of them are still
distinguishable ( if they are not combined with others sent out).  Would
the bitcoins that can be traced back to the block where it was generated
be worth different from others ?   If one day Satoshi released
his/her/their bitcoins  , would the bitcoins from the first several blocks
mined by Satoshi be worth more?

I think for fungibility, it is not like either it has fungibility or it has
no fungibility. There should be a value of fungibility (e.g. from 0 to 1)
that can be measured or evaluated.

Chaofan

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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Ilan Oh]

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How do you handle the mining on each chain ?

The chain with the most mining power will tend to have more value.

Also blocks are not mined equally and 1 chain will be longer than the other
thus faster thus more valuable.

It seems to be a sidechain proposal with the exact same protocol.

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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Mark Friedenbach]

> On Jan 22, 2018, at 11:01 AM, Ilan Oh via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
> 
> The chain with the most mining power will tend to have more value.

I believe you have the causality on that backwards. The tokens which are worth more value will attract more mining hash rate. Miners respond to cash-out value, they don’t set it.

Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Eric Voskuil]

This is true but confuses people because obviously miners must commit capital to mining before any block space can exist to have value. The reason for the misunderstanding is that miners don’t simply respond, they anticipate. All production, and therefore capital investment, is the result of anticipation of future returns, not an attempt to chase past returns.

The first miner anticipated that the then-worthless “tokens” he was mining would have a future value. Turns out he was right. Others have been wrong, which is the nature of betting on future prices. But if nobody does it, there are no products.

e

> On Jan 22, 2018, at 11:59, Mark Friedenbach via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
> 
> 
>> On Jan 22, 2018, at 11:01 AM, Ilan Oh via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote:
>> 
>> The chain with the most mining power will tend to have more value.
> 
> I believe you have the causality on that backwards. The tokens which are worth more value will attract more mining hash rate. Miners respond to cash-out value, they don’t set it.
> 
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