Quote from: tvbcof on January 20, 2015, 07:17:55 AM

Quote from: jonald_fyookball on January 20, 2015, 05:28:30 AM

Quote from: tvbcof on January 20, 2015, 01:18:15 AM

Quote from: davout on January 19, 2015, 10:37:52 PM

Quote from: tvbcof on January 19, 2015, 10:11:57 PM

Bitcoin is economically broken at the fundamental level with respect to support reward for POW. This because it will always approach net zero no matter what.

PoW is economically broken because the margins tend towards zero? Seriously?

Yes. It means that to attack Bitcoin one must only make the reward higher to do so. And if the reward for supporting Bitcoin tends toward zero the cost of doing so is fairly minimal.

Not exactly... because even if the net profit tends toward slightly above breakeven, the gross rewards still ensure a high network hashrate which cannot be attacked without suffering major financial losses.
Still makes more sense to participate in the network (or not at all) than to attack it.

Several points:

- With any significant fluctuation in value we should expect a fair percentage of mining to be below net zero.

- I would not rule out a 'major financial loss' being acceptable to some who could be threatened by competition from a successful Bitcoin.

- Being able to accurately predict the future (say, because you are going to implement an attack and it will probably be successful in achieving a result) could offer ways to realize a significant reward which would offset some costs.

- How much sense it makes to power-down vs. to participate in an attack depends a great deal on whether you have gear which might be useful in the future or is likely to be at the end of it's useful life. This depends on, among other things, the technological landscape, the likely future of Bitcoin, and the jurisdictional issues on one's locale.

All that said, you well could be right. Your gross v. net observations are good ones. I would not bet that my concerns are terribly valid. This is theoretical hand-waving mostly, and I always like to play devil's advocate.

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I would point out that a system collapse is not the only kind of attack and probably not the most likely one. I would consider tainting to be very much an attack and probably terminal for the system. Certainly it would be terminal for my interest in it (though my coins and transactions are clean so I would just register and liquidate at the first whiff of trouble here...and it is the thing I watch for most closely.) Here is something I could easily see happening:

- govt works with a partner to do some sort of licence and registration service.

- partner runs infrastructure to efficiently communicate {color}-listed transactions, authorize clean block formations, or whatever implementation works. (I've wondered aloud whether the new Inverse Bloom Filter Lookup Tables could help here.)

- govt makes regulations that all miners must comply at the risk of confiscation of gear and/or other mild punishments. Or perhaps just a tax break.

- govt coordinates with other governments to follow more or less the same pattern and use the same tech partner(s). The only business model I could see for 'Coin Validation' (who seems to be at least playing dead) was this.

Really the biggest argument I see against something like that would be that A) Bitcoin in it's present form is really pretty useful as a honeypot, and B) attacks of this nature would just provoke development of a more hardened system.

The same weakness in terms of minimal profits I outlined above exists here, however, and just as much of a factor. It would be more easy for a miner to capitulate (rather than shut down) because a fair fraction of the population (and even plenty of Bitcoiners perhaps!) would see it as a good thing. Gotta do something about all those evil terrorists, druggies, pedos, etc you know.

Since the only point in question was a matter of profits, I was curious why you decided to rant further in this thread. Then I remembered having asked a question about your feelings about PoW mining. Of course I won't quote the entire thread here, but you answered it nicely here.

Quote from: outahere on January 20, 2015, 06:41:30 AM

Quote from: tvbcof on January 20, 2015, 06:26:34 AM

Certainly I'd want fewer unknowns and more knows before I was very comfortable with huge fraction of my net worth riding on Bitcoin.

What variables would you like to know to make you cofortable?