Thursday, August 24, 2017

BitcoinCash difficulty algorithm problems

BitcoinCash allows a drop in difficulty down to 1/4 if the last 5 blocks took > 12 hours. But the rise in difficulty takes 2016 blocks (two weeks if the difficulty matches hashrate) like bitcoin. They did this so that difficulty could drop quickly after the fork. But this asymmetry (long time to adjust up, but short time to adjust down) is causing unexpected feedback that will cause oscillations that could cause too many coins to be issued and the price go towards zero until there is a fork to fix it.

This is how it starts and why it gets worse: Assume price is stable and difficulty matches hashrate correctly. If for some reason price relative to bitcoin falls at the end of a set of 2016 blocks, some will jump ship but next difficulty adjustment will still be too high because it is a long averaging window. A short rolling averaging window would not have caused a problem (and does not even need the attempted BCH "fix" to get difficulty lower). But as it is, difficulty will be too high for the next block, so miners are still discouraged from mining. The slower issuance of coins may actually support price, but maybe he longer solve times, seen as a problem, can cause an even more negative effect on price. If price falls a little more due to this, the threshold of mining profitability may be passed, so a flood of miners could exit, causing really long solvetimes. This can cause the price to drop even further due to not being able to get transactions to go through. So REALLY long solvetime could occur. As soon as the 5 blocks take more than 12 hours, difficulty in the next 2016 set (only the 3rd in this sequence) will go to 1/4. remember difficulty in the 2nd block had actually dropped a little, so the 1/4 is not fixing an accidental 4x increase in difficulty. Suddenly, it is really profitable to mine, unless the price also dropped to 1/4. Let's say it had dropped to 1/2 or less. So the blocks will come at a fast rate. But as soon as that 2016 set ends, difficulty will be massive in the 4th set of 2016 blocks, and the price may be even lower due to people seeing the problem and due to too many coins being mined too quickly and sold. No longer have long solvetimes is "fixed" for that set, but it is only replace by the opposite problem. The 4th set will have very high difficulty and last maybe only 5 blocks as it will take too long to solve, then the 6th block will get the difficulty down to 1/4. If there was more than 4x increase in hashrate due to miners jumping on, then 1/4 downward change may not be a lower difficulty than it was in the 3rd set of 2016. The price should also be worse. These two effects may reduce the oscillation. But notice it depends on a huge number suddenly jumping on AND a worse price, and this is the best case scenario for reducing the size of the oscillations. The alternative of larger oscillations will also have a negative effect on price. So it's an unavoidable downward pressure on price. I saw a buy/sell opportunity in BCH and made good on it. This is actually looking like an impending buying opportunity, right before a fork that fixes it.

A huge part of this is that BCH miners can go back and forth to BTC. But notice large BTC miners have no place to go if there was a similar problem in BTC. It's kind of another reason 1 big coin naturally results.


edit:

Summary
Causes:
1) Asymmetrical math in how difficulty rises verses falls.
2) There is a threshold to mining profitability, so that only a minor fall in price can cause many miners to jump ship
3) Miners can switch back to BTC while waiting for the difficulty to fall which magnifies the problem caused by 2).
3) 1 and 2 may not have been a problem if it was a short rolling average window to determine the difficulty instead of being like BTC and suddenly changing every 2016 blocks.
4) This problem erodes price from reducing the quality of the coin by have 2 hour solvetimes if not issuing too many coins too quickly.

Friday, August 11, 2017

Strong Drink mix for Parkinson's

I have been putting together a really strong drink. I guess it's about $15 a day, with most of the cost being in the powder extracts, $2 to $3 per day each, straight from China in bulk.

12 oz pomegranate juice from Hispanic store (not the expensive POM)

added sweet concentrates:

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black cherry concentrate 12 g

black molasses 12 g (sugar cane juice after most of the white sugar is removed)

Jallab 12 g (Arabic grape skin extract plus others)

powder 10:1 extracts:

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blueberry extract 12 g (my eyesight sharpened enough to not need my barely-needed glasses in 4 days)

strawberry extract 12 g

apple peel extract 12 g

tangerine peel extract 12 g

Citrus flavonoids with animal studies in PD, bought from china in bulk.

These doses are 1/4 the human-equivalent doses because the studies are "shock" studies on the animals by which I mean they are very short term to see how the chemicals work in response to PD-like toxin challenges.

===================================

nobiletin 500 mg

naringin 300 mg

tangeretin 100 mg

Other stuff in pills with strong animal and epidemiological evidence for PD and ability to absorb and cross blood brain barrier (pills not in the drink):

====================

black tea extract

green tea extract

grape seed extract

fisetin

(inosine to be added)

The American producer of patented fisetin is not clear that it is pure fisetin and the brand is hiding details about what it is, so I'll spend 1/3 as much to get pure fisetin from China and then sell the excess on ebay. Inosine in bulk is also 1/3 the cost from china.

Canola mayonnaise, the bomb!

Broccoli, Sardines, home-made very yeasty beer, olive oil

1 hour exercise, then drink it to absorb the sugar.

Tuesday, August 8, 2017

Potential value of bitcoin, empires, and taxes

M3 is roughly "all cash". For US dollars, it's about $30 trillion. The rest of the world I'll estimate at $25 trillion because the Euro is about $12 T in USD. I expect bitcoin and alts to roughly follow this ratio, so BTC would be compared to dollars. so the max would be 30T/21M = $1.5M per BTC. As this happens, dollars all over the world will come flooding home making them worthless, so it's more important for Americans to switch early than in other countries, to maintain current lifestyle. The ability to print dollars and the growing world economy accepting them has been the biggest boon any country has ever seen. We were basically allowed to print them as fast as the world's economy grew. We spent half the surplus on a military which pushed and supported the use of the dollar, enabling stability and exchangeability in the same way MicroSoft "helped" software. Bitcoin is the Linux of money. Wealth will be more evenly distributed as the dollar monopoly in currency ceases.

Not just the U.S. but all governments will lose power to control if they lose control of the currency that their citizens demand. Countries enforce a currency by demanding taxes and legal disputes be settled in their dollars. Empires use currency to enslave other countries. So countries can start their own cryptocoin, enabling them to enforce law more directly and automatically extract taxes by being privy to every transaction. This would relegate BTC to replacing only gold for private holders, which is $7T, $350,000/BTC, but potentially a lot more since a lot of countries want to be more fair in international exchange instead of being stuck with the dollar. Gold is harder to move so there's a great desire to switch to BTC. Also, buying stuff directly from other countries instead of Amazon will need BTC, which is a "black market" as far as the U.S. government will be concerned. It takes away their power as the dollars come home. They can make it illegal to import things from other countries without dollars. The U.S. desperately needs dollars to stay out of the country. When foreigners like the Chinese government start giving us wads of dollars to get BTC, that is NOT the time to switch back to dollars. That is the end of the U.S. as the world power. That is when great powers fall: they spend too much on military to support a coin or gold, lose their skills at production due to enslaving people in the distant lands (via the coin supported by the military), then find themselves powerless as their coin collapses. In the case of Spain getting gold, they just spent it all, then the armada fell and Britain's superior skill at ship building took over. There is also the possibility that BTC will be a basis for establishing ownership of assets and enforcing smart contracts, again putting it well over the $1M/BTC range. I do not expect it to go over $500,000 in 20 years. If it reaches $100,000 it will be a primary way of buying $1M beach houses as old money finds itself increasingly poor and BTC millionaires start looking for something to do with their gains.

50x = $150k/BTC does not need BTC to be lucky. It only needs to be the best idea. When BTC reaches $150k it will be because it is starting to be used as an international standard for trade. It will be because dollars are coming home which will make them lose all their value. The U.S. government will then have to decide to cancel all social security and most government expenses (pollution, law, roads, retirements) and foreign debts, or print money (hyperinflation). That will not stop the inflation because there will be 3x more dollars inside the U.S. from foreigner not wanting them. If it takes 15 years, that will be 7% inflation plus our current 3%. 10% inflation is far from hyperinflation, but still a disaster. Actually the disaster was letting there be a "balance of payments" surplus the past 50 years which means more money going out (via free trade, military, and dept) than what was coming in. This results in erosion of the country's ability to support itself. Free trade is a disaster if it makes the balance of payments worse. The U.S. (like China) got out from under enslavement of a foreign currency by enacting trade tariffs. China's devaluation of currency is in effect a trade tariff on the external world's imports which forces its people to work harder and develop more skill. I believe the U.S. is sophisticated enough not to have hyperinflation. When it reaches $150k, it is NOT the time the sell, but a time to keep holding, unless you see a better option. But I think a capped-quantity coin is not a good solution and not the solution the rest of the world will want due to late-comers being at a disadvantage. But unless a new coin lets smartphones determine their own time via the stars or random or 3rd party consensus trust, and combine it with a local trust network to decentralize the coin (protecting it from big miners), BTC may be the best option. This is because all alts subject to 51% can be destroyed via simple forward-stamping timestamps, and if BTC miners are hodlers, they will soon find it more profitable to destroy alts than to mine, forcing more money into a few coins. They may even use their BTC value gains to buy more equipment to retain power by destroying alts instead of mining BTC. The miners may turn into BTC's military. This is what happens to all empires: they win by might is right until all the slave countries figure out a way to get out from under the coin that controls them. The coin is backed by a military. Coins are how governments exert control. Some argue BTC has no government, that devs are not really in control. However that may be, anyone who holds BTC will be the new lords, enslaving the late comers, backed by our military, the miners. At least this is our best-case scenario in our search for personal profit.

Thursday, August 3, 2017

Shaking marbles in a jar as a bare-bones model of evolution, A.I., and economics

"...that we give off heat is not accidental, but essential. For this is precisely the manner in which we dispose of the surplus entropy we continually produce in our physical life process. This seems to suggest that the higher temperature of the warm-blooded animal includes the advantage of enabling it to get rid of its entropy at a quicker rate, so that it can afford a more intense life process. ... [But] the parallelism between body temperature and 'intensity of life', which I believe to exist, may have to be accounted for more directly by van't Hoff’s law: the higher temperature itself speeds up the chemical reactions involved in living."      
- Erwin Schrodinger, What is Life?
Physical evolution in its simplest form is shaking a jar of randomly-packed marbles in a gravitational field. In short, cyclic energy injected into a "closed thermodynamic system" results in entropy being released to the universe as black body radiation (more low-energy photons go out than high-energy photons came in, keeping a constant internal energy balance). Since entropy is a conserved quantity, the entropy inside the container is reduced (a feature of closed thermodynamic systems but not for "isolated" systems). A reduction in entropy exhibits itself as a higher degree of order by becoming more densely packed, harder, and repeating patterns.

The physics of shaking marbles in a jar
When you randomly and slowly place marbles in a jar they will pack with about 56% fill ratio, leaving 44% space. If you shake them afterwards, starting first with hard and then softer shakes, they will pack with > 63%. The harder shakes allow for the bottom layer to form first. The softer shakes allow the higher levels to settle without upsetting the lower levels. This is what the moon has done to Earth: it was initially a lot closer and is getting further away each year. The highest theoretical packing is 75%. Random forces in shaking do not have this effect. Non-random shaking can be thought of as a "periodic" or "semi-periodic" force (or energy injection). For packing differently sized and shaped particles much higher packing can be achieved by adding heat while lowering pressure, then raise pressure as the heat drops, and then repeat, but lowering the temperature and pressure each time (see "Simulated annealing"). The heat checks particle-orientation options while the pressure that follows secures and compacts the solutions. The pressure is a force like gravity. The heat is the shaking.

Chemical bonds
The reduction in entropy in the products of life can be measured via molar aka specific entropy. There exists in chemistry potential energy gradients due to charges that causes atoms and molecules to acquire lower-entropy states due to sticking better than previous arrangements, very much like the previous sections's packing.  Again, the excess entropy is released to the universe. The cycle of seasons (surface temperature variation) caused by the collision that created the moon and the moon itself cause a shaking of the atoms and molecules that assists the discovery of the "tighter packings". A side effect of the moon and seasons is more lightning strikes, ocean vents, tides, and ore concentrations, all of which are lower-entropy events that are believed to have assisted the development of life.

Correlation between the jar and life on Earth
The Sun, moon, and Earth's rotation are the initial source of non-random energy coming into the biosphere. The "non-random" (low entropy) placement of the moon's mass away from the Earth has been crucial for life's development (Isaac Asimov once discussed this). Its effect has decreased with time as the moon has gotten further away each year. The effect of the moon is apparent to NASA's life-hunters: the most promising places seem to involve an external gravitational force periodically affecting a celestial body (usually moons close to a planet). Water is important as it helps atoms and molecules find lower-entropy arrangements as in the marbles being somewhat "fluid" in a jar.  The Sun is more important via photosynthesis these days, but  life probably initially capitalized on (or extracted?) the low entropy accident of the moon's initial placement, and axis tilt. I calculated in a previous post that today the Sun is providing 150x more energy than the yearly loss in Earth's rotational energy due to the moon, but at the beginning of life, the moon was >3x closer with >9x more gravitational effect, and the Earth was turning a lot faster. My calculation (from available data) indicated the moon provided about 20% of what the Sun was providing. This is a "mass moving" quality of energy rather than simple "heating" provided by the Sun. The combination may have been crucial: periodic heating was a "periodic shaking" at the molecular level while the "mass moving" shaking provided a larger-scale directional force to where the resulting molecules would go. There might be a parallel here with government providing a macro-scale container and forcing function to individual micro "high-energy" (thermal agitation) market transactions.

As the moon gets further away, the entropy of the Earth-moon system is increasing due to a volume increase. The Earth's rotation rate is slowing, giving some energy to the moon in order for it to get further away, but a much larger percent is used to churn the air, seas, and mantle via the moon's gravity. To what extent were an excess of ocean vents present (where the oldest known life fossils have been found) due to the moon churning the mantle? The second oldest place fossilized life has been found is in bays with ocean tidal zones, which is more obviously assisted by the moon. To what extent would our massive economic machine not have been possible if the moon had not churned the mantle enough to make more low-entropy ore concentrations possible via volcanic activity?  Most commodity production that is crucial to our economics depends massively on concentrations of things like metal ores and good soil.

DNA is a very low entropy crystal that lasts a long time, as should be expected form the thermodynamics of Earth described above. It is important to keep in mind genes have no force of their own. They are just enzymes. Only energy gradients can move them and help them to make copies. The copies are in some sense lower entropy (a "copy" is almost by definition lower entropy). Certainly DNA crystals are lower entropy than a random arrangement of those same atoms and molecules in soil and air. This requires tapping into an external source of low entropy (for a given temperature and pressure). My thesis here is that the moon and seasons have been re-injecting lower entropy and thereby made life more pervasive.

If there had not been a collision that created the moon, the Earth would have still been rotating (giving a daily cycle of temperature changes and resulting air current "forces") and water, so it's far from clear the moon was a necessary condition.

Correlation to artificial intelligence
A large part of A.I. in finding solutions to complex problems is starting with random values in neural nets, Bayesian probabilities, and genetic algorithms. The "marbles" are the neural nodes, Bayesian nodes, or genes. You typically start with random values and give the program computational energy (shaking) for the nodes or genes to request CPU time and memory (energy) while they are under a system-wide A.I. algorithmic constraint (the jar). The "shaking" has to be periodic (low entropy), not random. A good parallel in A.I. is competing against a copy of itself in games.  Non-efficient solutions will show many patterns in the node weights, probabilities, or genes. The patterns may be eliminated for condensing the node weights, probabilities, and genes into a smaller set of nodes that is more random on a per weight/probability/gene basis. This is like taking marbles out of the jar which is less entropy by a factor of roughly equal to N2/N1 (this is exact if it's a specific molar entropy) and it allows a smaller jar which is also less entropy by a factor described at the note at the bottom.

Correlation to economics
The A.I. must have some sort of direct, implied, or unnoticed limited-quantity currency that corresponds to the amount of CPU time (FLOPS) and memory that is available, if there is a limit on them. The currency is the energy being transmitted from the jar (the algorithm constraints) to each marble (the weight/probability change or gene replication). The CPU time and memory are kinetic and potential energies. The hardware itself is a potential energy. The currency quantity corresponds to computing quantity. If the hardware increases then the currency can be expanded by the algorithm (the government) to keep constant value so that nothing else in the algorithm needs to change. This is like increasing the level of shaking: the currency is the amount of energy being transferred from marble to marble from the jar. The energy comes from the governing jar or A.I via the permission granted by possession of the currency and eventually goes back to it (taxes). In my jar there is no currency I can point to except the energy itself. Although the energy coming in and size of the jar may not change, the entropy of the system gets smaller as it gets more efficient. The lower entropy means better command, control, and strength that is typically used to increase the incoming energy, the "size of the jar", and the number of "marbles". If the allowable nodes or genes are increased, then the value of the currency per node or gene decreases by that same proportion if the hardware has not improved because they will have to compete to get the same computer time and memory. So the currency quantity needs to decrease if the currency should represent the same amount of FLOPs and byte space.

In other words, for contracts to remain valid, the currency quantity should change in proportion to the energy per person that is under the system's control.

Physics note: All other things being equal, the entropy increase of the moon getting further away is S=S2-S1 where S1=a*[ln(b*V1) + c] where V is the volume of the Earth-moon system and a, b, and c are constants. There is rotational energy decrease and gravitational energy increase, but these are internal energies that do not change the kinetic energy of the system (that could have affected the entropy) because the Earth's temperature is about a constant. But those lost energies do emit a lot of entropy away from the system as waste heat. As another example important to the following: harder materials have lower entropy due to the atoms having fewer places per volume that they can occupy. Specifically, for a single harmonic oscillator (in a solid) S=k*ln(kT/hf + 1) where f is frequency of the oscillations which is higher for stronger bonds.