[Cryptography] Satoshi's PGP key.

On 12/17/2015 04:05 AM, Jerry Leichter wrote: > Ah. So you think owning Bitcoins is a bad idea, then? At the moment, yes. I made some money on them, but I sold out. Satoshi has enough that s/he has a huge target painted on his/her butt, but even if you don't own enough for that to be an issue, it's still a bad idea. According to my math the protocol promotes mining consolidation, and the winning tactic for a consolidated miner amounts to a partial DDoS. Once anyone has more than 1 - 1/Phi of the mining power, and there is enough *actual* demand to fill more than half of each block on average, then even if everybody else behaves optimally (which they don't) that miner gets rich faster than all other miners (at a higher rate of return on expense) by keeping the blocks, on average, half full of transactions in order to force up the fees other people pay. It will cost the consolidating miner fees, of course, to prevent other miners from accepting tx below that fee level - but he'll get whatever share of them back that he's getting of the blocks, and he (and all other miners too) makes more money on all the other tx. In practice the tactic (durst call it an attack?) works even better than that, for two reasons: first because doing it even occasionally makes people reset their fees to "enough", and then those settings stay high even when the miner isn't inflating block chain traffic. Second because the consolidating miner has a cost advantage in being set-up where expenses are lower than average competition. Both factors dramatically reduce the amount of mining power required to reach the inflection point for consolidation and eventual monopoly. In China bitcoin mining is essentially a way to launder stolen tax money, (subsidized electricity is profligately used, courtesy of the taxpayers, and then re-emerges as bitcoins which the profligate users get to spend) so this stronger centralization dynamic is definitely in effect. Anyway, with the vast majority of bitcoin mining already being done in China, and the entity whom I suspect is or soon will be the consolidated miner present in that country masquerading as multiple pools in order to prevent a panic, I think the Chinese government is already in a position to allow or disallow pretty much any transaction they care to. When the masqerade fails, or when China exercises the coercion option, I expect bitcoin values to drop precipitously. Until then, it has become a sham. What Satoshi and Hal worked so hard to bring about, has already failed, and it makes me sad. Bear -------------- next part -------------- A non-text attachment was scrubbed... Name: 0x6FF42EB5.asc Type: application/pgp-keys Size: 3100 bytes Desc: not available URL: <http://www.metzdowd.com/pipermail/cryptography/attachments/20151218/14a9841d/attachment.key> -------------- next part -------------- A non-text attachment was scrubbed... Name: signature.asc Type: application/pgp-signature Size: 819 bytes Desc: OpenPGP digital signature URL: <http://www.metzdowd.com/pipermail/cryptography/attachments/20151218/14a9841d/attachment.sig>