Quote from: Wind_FURY on February 05, 2018, 05:54:26 AM

But there has to be value there. A value in immutability and censorship resistance, right? It is in my belief that that is where Bitcoin's brilliance came from. Together with trustlessness and decentralization, as originally designed.

There are two levels of "belief" in a speculative token. One is the "speculative" belief: is someone going to be willing to pay me value later for the thing I am considering acquiring against value ? That's of course the essential thing: the belief in its value. If that value is derived from economic utility, I would say that its value has a fundamental. If not, it is purely speculative.

The other level is of course, that one believes that the system used, is going to work IN PRACTICE. Exactly how it is working, doesn't really matter. There may be security and privacy considerations that may induce you to consider these. You have to have confidence in the thing working, and in the thing allowing you to do what you want to do. If you don't have confidence, you won't use it.

I think people have this thing of decentralization totally upside down.

What we actually want is to be able to use the system and be relatively confident that it works correctly, right ? So, practical immutability and censorship resistance should be, *in practice* be guaranteed. We know that these aspects are theoretically, even in bitcoin, actually, not guaranteed at all, but that, for all practical purposes, they will be respected simply because the entities able to overthrow these aspects, are also the entities that get most profit from this business, so them colluding (even if they could, easily) is most probably not going to happen. This "most probably not going to happen" is now realized by the market. In the beginning, when bitcoin was VERY small, it was realized by the passion and integrity of the people starting this. Somewhat later it was most probably realized by effective decentralization. By now, the financial investments are such, that it is the market that makes that this is not going to happen. And, who knows, maybe later, it may be law enforcement that will make that it is not going to happen, if bitcoin is a legal tender and the world reserve currency, totally centralized by the united nations mining consortium who has requisitioned 55% of all electrical power on the planet as bitcoin mining tax (joking).

In other words, the *game-theoretical technology* used to make the thing work correctly doesn't really matter, from the moment that it works. Right now, bitcoin is not decentralized if by decentralized, one understands that a MASSIVE collusion of so many different entities is necessary to make the system go out of its "good working" conditions, that this is very, very hard to do. If 4 guys in a room come to an agreement, they can decide things in bitcoin. But they won't, because their business depends on bitcoin being loved in the market.

However, I agree that this is just a practical engineering mindset. As such, I don't like fake religion-like dogmatic constraints on design that do not stand the test of scrutiny. I get insulted a lot because I'm interrogating the dogma's of that religion, but I can't help it, I don't like bogus stories. I like to inquire in the profound reasons for things. Religious attitudes that force design are a bad idea. If they work out, they are dangerous ; and if not, they are the origin of downfall. Nature doesn't lie, in the end. What I witness with bitcoin is that some "principle" has been leveraged to a level where it is killing the very system: a false notion of decentralization.

My opinion is that bitcoin, as it was originally designed by Satoshi, only needed a high level of decentralization at a certain point (say, 2011-2013) to have it function correctly. In 2010, it was just a "game between geeks, under Satoshi's central control" ; from 2013 onward, it is an industrial endeavour with so much investment at stake by the oligarchy that commands, that the market is now the guarantee for its correct functioning, together with the bit of decentralisation that remains. I'm absolutely profoundly convinced that the story about "many full nodes" is technical, cryptographic and economic BS, and this is where religion inducing bad design was evident: this is responsible for bitcoin's loss of the crypto currency market monopoly. This is exactly the kind of example where some "holy principle that isn't there, or isn't needed in practice, induces a lot of practical problems". And remember, people want this to work in practice in the first place, before talking about great principles.

However, at the same time, there's now the development of the LN technology (or was it the other way around ?). I think that this can have interesting applications, but most probably not what it is sold for (in the same way as bitcoin). I see the LN as a solution that was looking for a problem that was then created for it, but the LN is good technology that may do other things than bring a solution to a non-existing problem that became a problem when one needed it to become a problem in order to be able to propose the solution, if you see what I mean. But in the mean time, a problem has been created where there wasn't one, so now we have to hope that the LN will solve it, after all !

The real problem of bitcoin, however, isn't in this. The real problem of bitcoin is its huge waste of economic value. One tends to think that bitcoin is a zero-sum game, but it isn't: it is very very lossy. The value economically wasted by PoW is extracted from the system to go nowhere. In the long run, that's not sustainable.

In a certain way, the whole block size drama was a *simulation* of what this actually means, to have to waste a lot of economic value. The high fees that put off people, here for block size reasons, is an example of how value will need to flow out of the system. Now, you can say: "but with the LN, we will have many more transactions for the same fee !" Or: "with big blocks we wouldn't have such high fees !" But that's missing the point. If bitcoin needs to be secure with PoW, it needs to spend a sizeable fraction of its value in proof of work. That value needs to come from somewhere: from its users. No matter how, technically, the value is taken from the users, it needs to flow out of the system, and literally in hot air.

At a certain point, this cost will become prohibitive, if there are other, just as practical, just as secure for all practical purposes, systems in competition. One can try to sell that other religious dogma, that "you need to waste because that brings value" but that's such an economic idiocy that sooner or later, one will find out that it doesn't hold.

As to the problem of censor resistance, I think that not decentralization, but anonymity is the answer. In monero for instance, even if mining were done by one single entity, it couldn't censor any transaction, because there's no way to know which one to censor. In monero, only the payer and the payee know the transaction. You can't sensor "an address".