Bitcoin Forum

Hello Everyone,

I present to you a 'premise' and a 'proposal' for a better future cryptocurrency, I have spent a few days formulating this in my mind and then on paper. Its a long post and fairly technical, but spend a few minutes following the logic trail and let me know what you think. Criticisms most welcome!


Proof of Work (Bitcoin)

• - Energy intensive. Not ecological.
  - Centralization. Unfair wealth distribution.
  - Unsustainable, may not scale.
  - Transaction fees not mandatory
  - Reducing block rewards
  - Commercial Mining
  - 51% attack threat

Proof of Stake (Eth/Nxt,NEM):

• - Not trustless
  - No verifiable longest chain.
  - No 'work' involved
  - Blockchain can fork
  - No single source of truth, history can be re-written
  - Checkpoints need trust.
  - Economic inequality, rich get richer.
  - Centralization, attack, total collapse.

What I've gathered so far:

• - Work (wastage?) is inevitable.
  - Transaction fees are necessary.
  - Mining is essential economically.
  - Monetarism - controlled inflation
  - 100% premined will not work eventually.
  - Fungibility is essential, but so is transparency. Ideally should offer flexibility, like ShadowCash does; Monero cannot be mainstream.

Proposing a modified "Proof of Activity" (hybridized PoW/PoS)

Gist:
First shortlist lucky miners to sign next block based on stake (even distribution; weighted on stake ); next offer them a 'work' i.e. a complex math problem, (ASIC 'resistant', not asic proof), the first one to solve gets to sign the block and gets the reward.
In reality there is no prior shortlisting and handing them a math problem.
Each node is able to quickly self verify if it qualifies for the stake based lottery**( explained below) and if 'yes', it can begin solving the math problem**(explained below).

------------------------------------------------------------------

Stake based selection:

Design Considerations:

• 1 - Give weight-age to stake/investment.
  2 - Reward 'activity', securing the network.
  3 - Balance 1 & 2 such that Miners will NOT consider diversifying investment into accounts.
  4 - Prevent centralization to possible extent.

Algorithm:

• L = Chain window length , e.g. 50
  N = circular counter (1-50), changes with each block
  BhX= Hash of Block N, in base-62, 64 digit long
  BhY = Hash of Block (L-N), in base-62, 64 digit long
  A = node's address in base 62.

Each node performs,

• M (mash) =  Fa(BhX,BhY), number in base-62, 64 digit long.  i.e. Add the two base-62 BhX & BhY, apply modulo '%' to limit length to 64.
  Ss (score)= Fcb(M,A) , see link for the basic game, https://www.rosettacode.org/wiki/Bulls_and_cows , but extended as below:
  - alphanumeric matching in same position will gather 3 points.
  - alphabet matching in same position but different cases (upper,lower) will gather 2 points.
  - alphanumeric matching in different position will gather 1 point.

• V = UTXOs of node's address 'A' in currency units.
  
  Dfs = Difficulty factor(stake), range 0.0 to 1.0
  
  Q = Dfs * 62 - (log (V) / log (√2))
  

Note:

• - So you can interpret Q value as number of character matches a node is able to find.
  - Scroll to the end to find a sample tabulation of V & Q values, for Dfs of 1.0 (unlikely to be used)

A match can gather either of 1,2 or 3 points. So on average a match accumulates 2 points.

if (Ss > 2*Q) then mine();

------------------------------------------------------------------

Proof of Work:

Design Considerations:

• 1 - Common everyday computers / miners should be able to participate.
  2 - Do not use existing ASIC friendly algorithms
  3 - Solving should be limited to heuristic techniques at best.
  4 - The obvious difficult to solve, but easy to verify.
  5 - Invent one, because its fun
  

Algorithm:

• Imagine an everyday number lock, only this one has 62 wheels instead of 3.
  Each wheel/dial has 62 unique digits/characters, A-Za-z0-9.
  Each wheel is NOT independent, so turning each wheel affects other wheels.
  Moving a (any) wheel by 1 step up, moves all the following (progressing to the right) wheels in different number of steps, following some (Fibonacci?) pattern ,and also alternating Up and Down. It also wraps around until it reaches the neighbor on the left.
  Also consider the wheels can be turned on Y axis too, and they have similar effects of moving their neighbors below them alternating Left and Right.
  Now, the node is supposed to come up with a short route to align numbers on the pseudo 3 dimensional wheel such that,
  

• Sw = Score for work done.
  Dw = Difficulty for work/mining
  CoR = values of a single column or row that is potentially matching to the address A, based on the scoring system described above (Bulls and Cows based)

• Sw = Fcb(CoR,A)
  
  If Sw > Dw  sign next block and claim block reward.

Of course this should be easy to verify by the remaining nodes as the winning miner will publish the path(Pt) to align the dials which contain the interested CoR,
The path could be an unoptimized string in this format:

• N = Column/Row number
  Di = Up/Down
  St = Steps to move, min 1 to max 10
  

[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St],[N][Di][St]

• Pt = Path to align the dials, limited to 16 instructions.
  pCoR = pointer to CoR, contains the column number or row number of the winning combination.

***sample tabulation of V & Q values, for Dfs of 1.0.
 

• 62    10
  61    14
  60    20
  59    28
  58    40
  57    56
  56    79
  55    111
  54    156
  53    220
  52    311
  51    438
  50    617
  49    871
  48    1,228
  47    1,731
  46    2,441
  45    3,441
  44    4,852
  43    6,842
  42    9,647
  41    13,602
  40    19,179
  39    27,042
  38    38,129
  37    53,762
  36    75,805
  35    106,885
  34    150,708
  33    212,498
  32    299,622
  31    422,467
  30    595,678
  29    839,906
  28    1,184,268
  27    1,669,817
  26    2,354,442
  25    3,319,764
  24    4,680,867
  23    6,600,022
  22    9,306,031
  21    13,121,504
  20    18,501,321
  19    26,086,862
  18    36,782,476
  17    51,863,291
  16    73,127,240
  15    103,109,408
  14    145,384,266
  13    204,991,815
  12    289,038,459
  11    407,544,227
  10    574,637,360
  9    810,238,677
  8    1,142,436,535

It is nice proposal and ideas, unfortunately it is suitable for developers of coins
but the problem are there the developers whom accept your proposal?
It is need much discussion about your ideas include weakness of your theory.
Or I think you must make altcoins that suitable with your ideas and proposal
i don't know about that and i am not developers of coin.

Let's wait until there are developers or other users whom has knowledge
building altcoins and I hope it is not becoming scam coins.

What your proposal actually does, is to reduce the "waste" by limiting the competition.  However, purely monetary-wise, the "waste" of PoW is necessary to KILL the seigniorage.  The very idea that someone could EARN more than a competitive margin (determined by the market) by minting coins, and hence profit from seigniorage, is always problematic with a monetary system.  The bitcoin-like PoW kills all that, up to a competitive margin, which is considered the reward for maintaining the network running.  The fact that bitcoin's PoW system is wasteful, is monetary-wise a necessity.  All new value created by the minting of coins should be destroyed.

If you do not do that, you get the PoS paradigm, where new coins created will give their almost net gain to the one allowed to mint them.  The problem with any PoS mechanism is that you get the compound interest formula in one way or another: the more you have, the more you will get.  If you "top off" the reward, you will incite big stake holders to make sybil accounts.  And if you do not top off the reward, you will get the compound interest formula.

Now, the compound interest formula diverges.  Take just any randomly distributed set of stakes, and apply long enough the compound interest formula to it, and you'll end up having one account reaching more than 90%, more than 99%, more than 99.99% ... of the total amount of coins in the system.  That can take a long time, of course depending on the "interest rate".  But it will end up centralizing all coins into one entity.

In fact, PoW diverges in the same way, but much, much slower, because the "interest" in PoW is the margin, which is determined by economies of scale, and at least, most of the "benefit" got wasted, so nobody got immensely rich with it.

With PoS you get a rich king ; with PoW you get a gardian of the biggest rubble pile.
If you combine both, you'll get a kind of rich king sitting on a rubble pile.

PoW is a failure, energy wise and Centralization caused by economics,
their are no ways to solve it , it is an evolutionary dead end.

PoS , the longest chain with the most difficulty does win,
I don't know why so many people can't grasp that.

Nothing at stake is a load of bullshit , by G. Maxwell .
What else do you expect from a BTC/Monero/LN Supporter.
An imaginary problem, that is a non issue.
https://bitcointalk.org/index.php?topic=1709776.0

PoS as the consensus system is perfect,
the problem comes when you try to make a consensus system into a Interest Bearing Savings Account.

The only solution is to switch PoS to an ultra low inflation rate.  ;)
Which everyone complains won't work, because their is no reason for stakers to defend the network,
to which I will reply , the stakers will have a greater reason to stake even an ultra low inflation PoS coin, than BTC Full Node operators currently have.  ;)

 8)

I am indeed trying to reduce the waste by selectively allowing only a subset of miners to compete for the next block. I am aware of the divergence behavior of POS, I was trying to balance the 'Stake' to 'Work' and I think divergence can be controlled to a reasonable degree.


In the PoA that I proposed,  lets say there are 1000 stake holders in the network, the selection algorithm selects only say 333 stakeholders for the mining effort to sign the next block. The remaining 666 are idling.
We have no choice but to offer relatively easier 'work' to miners with bigger account balances. If we don't give weightage(does not have to be linear) to their balances, they would diversify their account balance in multiple mining rigs (farms) will all churn away useful resources. Instead they can now sit back and enjoy the dividends from a single miner.

Maybe I am missing something here but,

• - The concern of having offered easier work to the rich is not something that needs to be solved. Everyone's money is working as hard as anybody elses. How can we selectively target one's(rich) money to perform less efficiently in earning dividends?
   - If one rich miner has 50% of the entire wealth, and the rest share the remaining 50%, if after a few years of PoA, if the wealth distribution remains the same 50%-50%, is it still a concern?
   - Are you saying that you'd rather have the rich burn money/resources by mining (securing the network) to safeguard their prior investment, thus diminishing their wealth?

What are your thoughts on Block rewards & transaction fees? How should they be ideally?
I am trying to find ways to destroy money as well. Is this sensible?

Its challenging to solve this in a economically stable yet, remain secure (long-range,sybil, forking) and ecological.

In pure PoS, there is no difficulty.  What you are talking about is a mixture of PoS and PoW, like the OP presents, that is, there is a PoS mechanism that *allows a limited number of stake holders* to compete PoW-wise for a block.


Indeed.


Well, the "inflation rate" is the coin creation rate in the end.  No matter what emission scheme you use, you will get a significant inflation rate in the beginning, or you have to start with a pre-mine.

What a restrictive PoW scheme does (like the OP presents, and like you do, even though you call it PoS) is to avoid full competition for the seigniorage, so that not most of the seigniorage is burned.  By restricting the number of competitors for each block, you avoid that they enter into competition to the level of where all the seigniorage is wasted, so that stake holders can pocket in the remaining seigniorage.  In order to reduce the divergence of this "interest bearing savings account" which you nevertheless create, you propose a very low inflation rate.  However, that very low inflation rate could be applied to a pure PoW system too.  The only thing you trade off is "interest bearing savings account" (that HAS to absorb all the non-burned seigniorage) versus "wasting more electricity and burning all seigniorage".

In other words, in as much as you render less efficient the centralisation due to economies of scale for the second aspect, you render more efficient the divergence of the compound interest formula of the interest bearing savings account.

You have a "quantity of seigniorage" to handle (namely, ALL the coins apart from a premine), and you can divide this in an amount of "interest bearing" and an amount of "burning PoW", but both mechanisms have in them, a divergence towards centralisation: the first one is obvious (compound interest), the second one is more involved (economies of scale).

If you want less of the second, you'll get more of the first.  And "lowering the inflation rate" only stretches this thing in time.

I'm sure there can be optimisations, to find the right combination between "value appreciation of the market cap of the coin", "inflation rate", and the cursor between "interest" and "PoW", to push the point of centralisation as far as possible in the future, but it will happen.

At least, the PoW scheme has the advantage of wasting almost all seigniorage and securing maximally the network.


But bitcoin full node operators have absolutely no "weight" or importance in the security of the bitcoin network (apart fluidifying a bit more the transmission of data).  It is a big misunderstanding that bitcoin full nodes contribute to any form of network security.  If they don't mine, they aren't worth anything.  In the bitcoin network, only the miners and the users matter.  The miners for the chain, and the users for the market cap.  You could take out all non-mining nodes, and that wouldn't change much (apart for some latencies in the network when transmitting transactions).

My idea is that purely monetary wise, this waste is essential.  The economies of scale that lead to centralisation are a problem, but the waste is needed to kill off the seigniorage.

iam coin user interest , previllage, like this POS coin
because us POS coin only stake in wallet can return coin
if pow must mining and high quality hardware can get coin

I just realize if that's like the critical criticism for bitcoin.  :o

Target is the BlockSpeed.

PoW Difficulty
Difficulty is a measure of how difficult it is to find a hash below a given target.

PoS Difficulty
Difficulty is a measure of how difficult it is to Stake a Block of Coins below a given target.
https://github.com/novacoin-project/novacoin/wiki/Proof-of-stake





Could PoW be done with an extremly low inflations, sure no dispute there.
However due to the economics involved it won't be, PoW mining energy & ASICS requirements costs are constantly growing for a successful PoW coin, because it is PoW it will become unaffordable.
PoS does not have the economic flaws of an ever increasing energy price or ASICS purchases, which is why it is the only method that will currently work. :)



Hmm, my understanding was ASICS only process the PoW calculations, They don't maintain Blockchain ,
Only Full Nodes maintain the blockchain where others can download it, without the blockchain you have no transaction history.
No transaction history no BTC.  ;)
http://www.coindesk.com/bitcoin-nodes-need/


https://en.bitcoin.it/wiki/Full_node


 8)

When Satoshi considered full nodes, he considered them to be mining too.



https://en.bitcoin.it/wiki/Full_node


Ask yourself what happens if:

1) all non-mining full nodes are in disagreement with a block
2) 70% of all mining nodes are in agreement with that block.

Answer: the mining nodes decide, and whether the non-mining full nodes reject those blocks or not, doesn't matter.  You, as a user, can decide (because you run a full node, or because you contact a full node) that the currently used block chain is not in agreement with the bitcoin rules, but that doesn't matter, the miners decide and make the chain.  If full nodes reject that chain, this doesn't matter.  They will just stop updating their local version of the chain, but no "good" chain will appear out of nothing.

In other words, full non-mining nodes can be aware that the rules aren't followed (that they have changed, in other words, that bitcoin has forked, in other words) but apart from noticing that, they can't do anything about it.

Users can still send their transactions directly to the mining nodes, if the non-mining nodes don't agree.

It depends,
if 70% of the mining ASICS agree the block award is 36 BTC per block, then the full nodes will block its entry into the blockchain.
Mining ASICS will fork off and Full Nodes will protect the BlockChain from corruption.  :D

Or if the Full Nodes detect that the coins have already been spent, it will deny its entry into the blockchain, (Preventing a double spend.)

if 70% of the mining ASICS agree and the block reward is 12.5 BTC, then the Full Node finds it meets all configured criteria , then it will allow its entry into the blockchain.

Miners Power is to control which Transactions are in a block , Full Nodes Prevent them from cheating the reward systems and easily counterfeiting coins with double spends. ;)


 8)

FYI:
https://en.bitcoin.it/wiki/Full_node

FYI2:  I think you should read the following. You confusing a node with an asic.


FYI3:
In Proof of Stake , All Nodes that can stake are Full Nodes.
Same Validation principle as PoW Full Nodes, say a Staker modifies his individual software to produce 3X the amount of coins per block,
he will generate a Block , but all of the other PoS Wallets will deny his block entry into the blockchain, because it fails group consensus.  :)
He will only generate Orphans all day.

And how would they do that ?  They will *observe* corruption, but what can they do about it ?  They cannot add any block.  They cannot make any forked chain (if they do, then they become mining nodes, which we supposed they weren't).

What does a non-mining, full node actually do, apart from verifying FOR HIMSELF whether the block chain that is distributed elsewhere actually corresponds to his own standards and wishes, or not ?  Once you see that the block chain that you downloaded from peers, doesn't correspond to what you thought it had to be, you can only refuse to use it, but that's about it.

Of course, when I talk about miners, I'm talking about the FULL NODES that mine (whether they are individual miners, or pools).  I'm not talking about JUST the mining hardware. I'm talking about the node that takes the decision on what block chain to build the next block.

Let us do a gedanken experiment.  Again, in what follows, the what I call a miner is the mining node, that decides on what block to work, on top of what chain.  THOSE are the (only) nodes that matter, as I will show.  A non-mining node (as I have one at home) doesn't have the slightest bit of "consensus power".

A fundamental modification of the protocol is proposed (like you say, the 36 BTC per block reward).  

We consider this:

EDIT: oops, I messed up, which made this incomprehensible.  Options corrected.

1) most miners are against it, but most non mining full nodes want to apply it, and users don't want want it.

2) most miners are against it, but most non mining full nodes want to apply it, and users want it.

3) most miners are in favor of it, but most non mining full nodes don't want it, and users want it.

4) most miners are in favor of it, but most non mining full nodes don't want it, and users don't want it.


What happens ?

In case 1, miners will still continue to mine normal block awards.  Most non-mining full nodes, who updated their code, will reject the block chain miners produce.  As users want it this way, they will short-circuit the non-mining nodes, and send their transactions directly to the mining nodes.  --> non-mining nodes don't matter.  Market cap is normal.

In case 2: miners will still continue to mine normal block awards.  Most non-mining full nodes, who updated their code, will reject the block chain miners produce.  If users send their transactions to mining or non-mining nodes, it doesn't matter, in the end these transactions will get caught by miners, who will mine it with normal rewards.  If users are pissed off because they didn't want this, they can simply sell their coins, and the market cap plunges.  --> non-mining nodes don' t matter, market cap plunges.

In case 3: same as case 1, except that this time, miners now mine high-reward blocks.  Same conclusion: non-mining nodes don't matter, market cap is normal.

In case 4: same as case 2, except that this time, miners now mine high-reward blocks.  Same conclusion: non-mining nodes don't matter, market cap plunges.

In other words: miners determine the protocol ; users determine the market cap.  Non-mining nodes don't matter.  When users are in disagreement with the miners, they leave, and the market cap plunges.  When the users are in agreement with the miners, both work together and keep up the transactions and the market cap.  Whatever think non-mining nodes doesn't matter.



The point is that no-one gives a shit about what block chain a non-mining node decides to accept or not, apart the owner of that node.  What matters is the chain on which a mining node works, and whether that node receives user transactions (directly) or not.

A block chain is a relationship between those writing the chain (the mining nodes) and those using it (the users).  The non-mining nodes can help in the transmission of the data, but in as much as they don't agree, it is as if they were simply switched off.

I would like to point to a few issues here:


In my opinion, there is absolutely no need for a GROWING mining cost for a PoW coin.   Ideally, the PoW cost is exactly equal to the *market value* of the coins being mined and the fees collected minus a small margin.  Let us concentrate on the coins being mined.  If the emission scheme is such that the number of coins emitted is not falling proportionally to the market appreciation of a single coin, then of course, the market value of the block reward increases, and HENCE the cost of PoW has to increase (as it has to be almost the reward value).  This has been the case with bitcoin: the market value of a block reward has increased over time, so the cost of mining had to increase too.  This is because the bitcoin emission scheme is TOO SLOW as compared to its market appreciation.  If the amount of coins mined dropped faster than the market appreciated a coin, then the mining cost would decrease, as it wouldn't be competitive to mine at higher cost than the block reward.

Suppose, for instance, that instead of a halving every 4 years, bitcoin had a halving every 4 months.  Then the amount of PoW waste right now would be way, way lower.  It isn't even said that there would have been ASICS.  It is simply so that the VALUE of a block reward is so high in bitcoin, that a lot of value has to be wasted in PoW.

On the other hand, if we would have a very slow emission scheme, where, say, the inflation rate would be 0.01% per year, then there too, there would be much less PoW cost: it would amount to the market cap divided by 10 000.  If it were bitcoin's market cap, it would result in a waste of about 1.5 million dollars a year at this point.   However, in as much as such a coin would appreciate a lot, even 0.01% of the market cap could mean a huge waste in the far future.

I tend to disagree. If the richest stakeholder will eventually own the whole currency (thanks to compound interests), then the consensus system will also become centralized.
In a standard PoS currency, wealth has a direct impact on consensus power. Decoupling stake and voting power seems possible though:
https://bitcointalk.org/index.php?topic=1702796.msg17071444#msg17071444
https://bitcointalk.org/index.php?topic=1719396.msg17216444#msg17216444

Another approach would be a negative interest scheme that requires people to mint blocks in order to not lose money over time. The number of blocks that a stakeholder needs to build per time period would depend on his stake.

My "indeed" pointed to the problem, not to the "system is perfect" :-)

In fact, PoS would be a good system if there were NO REWARD (which is nothing else but an "interest bearing savings account").  But then it begs the question, because how do you do the coin emission then ?


But again, how do you do coin emission ?  Where do the coins go that are "taxed" from the non-minting stake holders ?  Are they simply destroyed ?  (deflationary currency) ?  That makes the emission problem even worse: you start with no coins, and you have to destroy some ?

We are thinking here about "who takes the burden of securing the chain".  But that's just one problem.  The real monetary problem is "how do you do coin emission" ?  I have to say that I find PoW very well thought off in this respect: it solves both issues: it destroys seigniorage (so that coin emission is not "making a privileged rich" and hence renders that coin emission credible and acceptable) and at the same time it secures the chain. 
The downside is the centralisation that happens when too much gain is made through economies of scale, like bitcoin illustrates.  Another downside is that the PoW becomes insanely wasteful if the emission scheme doesn't correspond well to the coin appreciation, so that there are too important block rewards which must be burned (like with bitcoin).

I don't see how PoS can help with coin emission without becoming an "interest bearing savings account" which leads to terrible divergence due to the compound interest formula.  PoS CAN work to secure the chain if it is combined with some PoW, but that's not the hard part.  The hard part is coin emission.

PoS works fine. MINT is a good example of this.

You may explain the advantage of simpler?

@Dinofelis,

Full Nodes perform a Validation of whether the Block meet the software code's criteria.
They Don't have to create any new blocks, to perform that function, what they do is Deny Blocks that fail the standards criteria.

The miner does the work, but the Full Nodes act as Quality Control, refusing blocks that Fail the Standards programed in the code,
you seem to have a blind spot on this.

So tell you what , Prove me wrong Generate a Block that has 15.5 BTC as a PoW reward instead of the 12.5 reward and get it accepted in the blockchain.
You can't do it because even if the miners agreed, the non mining Full Nodes will Block it because it fails the standard.
It keeps individuals from cheating the group.


 8)

Ultra Low Inflation rate, of .0005% per year will stop a coin from being an interest bearing savings account,
even someone with 100 million coins will only be able to generate ~1.37 coin per day.

Adding a dead end like PoW to PoS is a waste of resources,
Every hybrid , the PoS becomes the dominate over PoW, because of the economics.


 8)

That must be why so many of the top coins are PoS, right? Ohyea, none in the top five are, and in the top ten there's not really a pure PoS coin either (I'll give you that dash and steem are PoS variants).

Both the points above are simply FALSE assumptions. I suspected this earlier but no one gave a satisfying response on this thread, this link below corroborates my suspicion.


https://www.reddit.com/r/ethereum/comments/3fi4fb/why_pos_is_not_inherently_inflationary/?st=ixr00erx&sh=b936ff82

To summarize,

- PoA is truly a better solution if not great. Wherein the first step is POS(filtering based on stake) then POW(mining/work), in fact the subsequent POW part is needed mainly to secure the block chain i.e. avoiding check points and such trust mechanisms.
- The economics of pure POS seems sound to me. Where it falters, if at all, due to how consensus is reached, making it susceptible to attacks & forking.
- In fact centralization is worse in pure POW systems.
- Premine is NOT good.
- Mining with decent block rewards under PoA is good & safe for all.
- Pure Math can securing the network, pure trustless.
- Transaction fees are NOT mandatory.
- PoA does address the defeciencies of the pure POW & pure POS systems.

In fact if all miners(active/working stakeholders) are earning in the same ratio, then no one is getting poorer or richer. The non working stakeholders are getting poorer relatively, but that is desired of course.
The only thing that offsets this is transaction fees; trans fees are typically a tip and never a % of the amount. This leads to financial 'osmosis', tiny transaction fees slowly begin to concentrate to rich account holders. This is because the majority are poor or middleclass and the transaction volume contribution is much higher as compared to the minority rich. This phenomena might take years or decades to lead to concerning divergence, but it will eventually happen. So transaction fees must be ideally abolished, or at most make it optional with a cap. But never do what NXT did, the worst thing possible -> https://nxtwiki.org/wiki/FAQ#Why_are_transaction_fees_so_high.3F

So the "Rich gets richer in POS" theory is only because of this concept of transaction fees. Can we simply remove it? Short answer NO.
We need to detect loops in the transaction chains so that malicious parties don't take advantage of this, Blockchain bloat if we are lucky, or a cyclic attack of money moving from A->B and B-A over and over.

I know everything you tell me, and I have read that several times, but my whole point is: if all non-mining nodes reject a block, SO WHAT ?   It is as if these non-mining nodes are simply not there, that's all.  Users can still send their transactions DIRECTLY to mining nodes, and mining nodes DON'T CARE what non-mining nodes may say.

Yes, 90% of all non-mining nodes may scream "invalid block !  invalid block !".  So what ?  If the miners decide to build the rest of the chain on that "invalid block" because they like it, what do these non-mining nodes have to say ?  The only thing they can observe is that from that point on, there's no valid (according to their rules) block chain any more.  But the users don't care, and the mining nodes don't care, if they agree.  The users still send their transactions to the mining nodes (directly, because the non-mining nodes may not transmit it eventually), and the mining nodes continue building the block chain that the non-mining nodes consider invalid.  Again, so what ?


Well, then I'm a mining node (I'm making a block) if a majority of my peer MINING NODES decides so, it will get accepted, even if 90% of non-mining nodes reject it.  My peers will build onto my block.  And the non mining nodes will scream that it is a non-valid chain, and we don't care.


Yes, and so what if they reject it ?  What happens ?  They don't put it on their own version of the block chain.  So what ?

Just because you're an ass , does not mean the rest of the world is your toilet paper.  ;)

PoW was the 1st consensus method, just because the majority of people have yet to understand PoW is an evolutionary dead end,  

Thomas Edison Believed their would be a DC PowerPlant every 3 miles or so to power our homes.
Tesla Believed in AC where the Power Plants could be hundreds of miles away.
The Answer was apparent, but the people of that generation argued for DC over AC for years.
Until the advantages of AC over DC power could no longer be denied.

The Answer here is also Apparent, PoS will Succeed PoW,
but there are always those that want to argue and hold on to the weaker version, just because they knew about it first.
When ASICS draw so much Power it matches a small state , Reality will hit home even for PoW diehards.  :D


 8)

Yes, you are right, if the only earnings are "inflationary earnings".  You then simply apply at the same time an "inflationary "tax" (a depreciation) of all coins, and an "inflationary interest".  This is in fact the "punishment for those that do not mine": their coins get depreciated because of the debasement by inflation, and they can just break even by minting according to their stake.

I made the mistake by considering a finite supply of coins, and an interest-bearing savings account.  *then* you get this divergence.  

I'm not sure, though, how it works out with transaction fees.  One can say the same, if people pay transaction fees, proportional to the amounts transmitted.  In this case, "non-moving" money will collect relatively more from the transaction pot than it re-distributes, and hence a non-moving amount of coins will get a higher interest rate, and hence WILL diverge.

Let us say that our rich guy with 50% of the coins, never moves his coins and hence, never pays transaction fees.  He gets 50% of the inflation, and also 50% of all transaction fees.  But he never pays a transaction fee, because his coins never move.  The remaining 50% gets also 50% of the inflation, capture also 50% of the transaction fees, but PAY ALL the transaction fees.  So in fact, there's a transmission of transaction fees from these 50% "poor" guys to the rich guy.  After a while, the rich guy has hence, say, 55% of the coins, and the poor guys, 45%.  And so on.

There is also another effect.  If you are a small coin holder, then you may not mind "minting".  If you are only using the crypto to buy stuff (which is the goal, isn't it !), then maybe the small inflationary loss you suffer doesn't matter.  It amounts to a few tens of dollars or so.  So you do not go through the hassle of setting up a running minting node.  If you are a rich guy, you won't let those important earnings (maybe we're talking about millions of dollars) get lost. 

So rich guys will be more careful in minting all the time than poor guys, and they can invest somewhat more in making sure their minting machinery works smoothly.  We're again having some economies of scale here.

Agree, that is why I suggested a zero transaction fee scheme. But realized the problems associated too. Not sure if loop detection and curbing of some sort improves it.
I am trying to determine all possible problems areas with reasonable solution approaches/feasibility for each first. Finally if it all makes sense to me (& some of us) I plan to embark on a new PoA project.  ;)

Like I said you have a blind spot, and are totally wrong in your understanding.
So mine a block with a different reward that the fixed reward and Post a transaction to show it is included in the blockchain.
Because until you do that , I am going to tell you , that you are completely & utterly wrong every time you repeat this nonsense.


 8)

In fact, transaction fees are essential in the working of a block chain.  Whoever is mining/minting, has absolutely no incentive to make bigger blocks and to include transactions.  If ever there is "competition", a bigger block is always problematic compared to a smaller block, so there needs to be an incentive to make bigger blocks.

On the other hand, doing a transaction must cost something, or otherwise, there's no reason NOT to send out billions of transactions, which would explode the chain and the network.  There can be malicious (DoS) style attacks on the system, but also, as a way to find anonymity, it might be useful to do billions of transactions and mixings if it doesn't cost anything.

So transaction fees are necessary on both sides: on the miner/minter side to motivate to make bigger blocks (with the cost that comes with it) ; on the user side to limit the amount of transactions, because it costs resources in chain room and network activity.

With PoW, there's no problem with transaction fees.

My idea is that PoW is not a bad solution, but that ASIC centralisation has to be avoided.  I think that the easiest way to do so, is to have complex PoW schemes, that change regularly over time (forking).

I can't do that because the MINER NODES don't agree.  So the test you propose illustrates my point: the MINER nodes decide on the protocol, because they MAKE THE BLOCK CHAIN.  If the large majority of miner nodes were to agree (which they don't in your proposal), there would not be the slightest problem for me to do so (like they do).
Whether the non-mining nodes agree or not, doesn't matter.

I will propose something else: YOU decide that your non-mining node will not accept blocks containing a transaction that I will send out.  So your "quality assessment" REFUSES that block.  If my transaction gets included in a block, what will your screaming node now do, apart from not accepting the rest of the block chain any more ?   Who is now annoyed by this node saying "NO! NOT VALID!" ?  Apart from yourself ?

Suppose now that you set up 100 000 such nodes on amazon.  You clearly have the large majority of non-mining nodes in your hands.  They ALL scream "non valid block".  So what ?

Like I said , you keep missing it.

Full Nodes agreed or disagree to update their blockchain based on the rules setup in the software code.
It does not matter what the Mining Pools want to do, if it fails the standards set in the software, the Full Nodes will orphan it.

Example,
There is a security issue with allowing coins to be generated too far ahead of the accurate time, which allows a coin generated at a future time to create more hashs and outstake everyone not faking their time. A security update was installed in the wallet code that Blocks ALL COINS created above a few minutes.
Does not matter how high the amount of coins , the difficulty , what changes are made to your individual code , or anything else, that block will be denied access for 1 reason , by all peers, it time is too far from the accurate time. No one has to generate a block to stop it, the Node's Software code will ignore it and never allow it to be included in the blockchain.

https://www.reddit.com/r/Bitcoin/comments/24645i/psa_the_amount_of_full_bitcoin_nodes_is_dropping/


 8)

FYI:
There are no Mining Nodes, there are mining pools of ASICS, (which don't maintain a blockchain),
There are only Full Nodes and the Mining Pools have to communicate with a Full Node , to request they add their new found block with transactions to the blockchain.
No Full Nodes and your Mining pools are Worthless.  ;)

https://books.google.com/books?id=IXmrBQAAQBAJ&pg=PA211&lpg=PA211&dq=BTC+mining+Pools+do+I+need+to+run+a+full+node&source=bl&ots=9AfWjsGmLT&sig=DmvzPcyEC3zYv2CATOBotIvRv8c&hl=en&sa=X&ved=0ahUKEwinlOXU_rbRAhUM6SYKHUvAA_cQ6AEITTAG#v=onepage&q=BTC%20mining%20Pools%20do%20I%20need%20to%20run%20a%20full%20node&f=false

@100KN

I have watched alot of coins, and have yet to see one Hybrid that maintained a balance between PoS & PoW for Coin generation.

PoS always has increased coin production over PoW, within a year or 2, without fail.
Tekcoin is one example, it is a hybrid with almost no PoW generation.

ZEIT & Mintcoin dropped PoW, because of security problems of being a hybrid. (Why we both became PoS only.)
https://bitcointalk.org/index.php?topic=551861.0

The Centralization issues of economics for PoW can't be solved.
(The Rich will always have the Best ASICS.)

The problem with PoS is users treat it like a interest bearing savings account, which kills its marketcap.
(Only real issue, with PoS, and the one , I plan on solving when ZEIT moves to ultra low inflation rate in ~ April 2017.)  ;)

What I am telling you is combining the two algorithms won't make a better coin, it just adds to your security concerns.  :P

But if you still decide to push ahead with your PoA, I wish you good luck.  :)


 8)

Full non-mining nodes don't "orphan" anything.  Orphaning means that miners decide to build on a previous block and neglect the orphaned block.

You seem to miss the fact that non-mining full nodes don't contribute anything, when users and miner nodes agree.

Tell me again how your 100 000 amazon nodes who "orphan" a block will influence what so ever.

OK , your Blinders are still on .

THERE ARE NO MINING NODES.  ASICS DO NOT STORE THE BLOCKCHAIN!

MINING POOLS COMMUNICATE WITH FULL NODES TO GET THEIR BLOCKS ADDED TO THE BLOCKCHAIN.

NO FULL NODES, NO BLOCKCHAIN, NO BTC, GET IT!!!.

If you bothered to read that google books link , it would be apparent to you.  :P


 8)

Of course not.  Every mining pool, or individual miner, has a specific full node which it uses *to decide on what chain to build*.  THIS node is what I call a "mining node", the one the miner is using.  It are the rules on THAT NODE, which the miner has in hand and which he uses to decide on what chain to mine, that I'm talking about when I talk about a miner node of course.

Imagine Joe having a mining pool.  In other words, he has:
1) set up a full node
2) set up some software that will dispatch hashing tasks to his customer-ASIC mining hardware owners, which results he uses to make blocks that are VALID ACCORDING TO THE RULES ON HIS FULL NODE.
3) He needs to decide what block he will construct, and on what other block he will construct.  This, he will do as a function of what his full node tells him is the current state of the block chain.
If his full node has other rules (for instance higher block rewards) than non-mining nodes, then of course his own mined blocks will be accepted by his own node, but not by the non-mining nodes.

However, in as much as most other mining pool nodes use also his set of rules, they (that is to say, THEIR FULL NODES) will accept his block just as well AND WILL BUILD UPON IT, even though these blocks are rejected by the non-mining nodes.

Amongst themselves, the mining pools and their own nodes will make a block chain that is in agreement with THEIR rules, and there will NOT be any growing block chain around that is in agreement with the rules of the non-mining nodes, which will hence come to a grinding halt.

You are saying that miners don't have a node.  Of course they have to have a node, in order to DECIDE on what block to work, what blocks eventually to orphan and so on.  There is a DECISION to be made.  The node that makes that decision is the mining node.  It is not the owner of asics that does this: he just gets his task from the pool, and returns the results he obtains.  It is the "owner of the node and the task distribution software (the pool software)" that I call "the miner node.  He can at will, use the rules he wants to accept, or not, a block chain, and to BUILD A BLOCK OF TRANSACTIONS of his choice.

In order for this to work, one needs:

1) that the ASIC owners are in agreement with the mining pool rules (otherwise, they won't continue to work for that mining pool)
2) that most pools, representing most hashing rate, are in agreement amongst themselves on the rules
3) that the users of the coin are mostly in agreement with these rules

And that's all.

If there are now a lot of people that set up non-mining nodes that do not agree with these rules, and hence, reject about any block that comes from these miners, DOESN'T MATTER.

https://www.reddit.com/r/Bitcoin/comments/3f3meb/what_is_the_difference_between_mining_and/

I love POW vs POS..  ::)

I like POS consensus (a lot as it happens).. BUT..

The thing about a POS coin is that I can replicate the EXACT same security of a POS coin for nothing. And this is really the ONLY thing that gives a coin it's value.

Say there is a network of 100 nodes, securing a POS coin.

I can get 100 computers, copy the coin distribution, and run it with EXACTLY the same security. No problem.

I cannot do that with a POW coin. (you need all the ASIC/Hashing hardware)

I think POS definitely has a place, but it's not as a PUBLIC coin. It's FAR MORE USEFUL as a group/organisation/company PRIVATE tool. Where the value is ONLY relevant to the people running that particular network. Like a private ETH chain(once POS introduced) running the company as a DAO.

POS is a tool. Like Email is a tool. Anyone should be able to use it.

Saying GMAIL's protocol is 'inherently' more valuable than HOTMAIL/YAHOOMAIL etc etc or any other email provider just doesn't make sense.

There are so many technical errors in this thread, that the entire thread should just be ignored. It is misinformation.

Neither PoW nor PoS will be suitable because they both become centralized. Ditto any hybrid.

We need something else. Stay tuned...

Also due to stake grinding attacks, PoS can be PoW in disguise.


Incorrect. Transaction fees make the consensus diverge. You need to catch up on the latest research.

I agree that you must have the right incentives on both sides but I doubt that transaction fees are the only (or the best) way of achieving that goal.

For example you could impose a rule that only blocks containing a certain number of transactions/or total transaction amount are valid.

On the other hand, you may stipulate a certain minimum coin age for a coin to be moved to another address or something like that.

I think you're right.

You may not be the only one working on a solution. :)

There are ways of protecting a PoS coin against stake grinding attacks, as described here: http://www.neucoin.org/en/whitepaper/download (pages 32-36).
Do you also refute them as flawed?

Interesting. Can you point us to the latest research on this topic please?

I don't see how, if transactions are free (don't cost anything to the one giving the transaction order), you can avoid to get billions of transactions broadcast, "just for the fun of it" or for other reasons.  Also, if I were a miner/minter, it would in any case be more profitable for me to fill blocks with *my own transactions* than with other people's transactions (because I generate them myself and there's no network delay and so on).

I don't see how these problems can be solved without:
1) a cost if you want to transact
2) a gain if you include a genuine transaction for the miner in some way.

One should always avoid "hard numbers" such as block length, number of transactions, amount of transactions etc... because then your solution cannot scale (unless you fiddle manually with the parameters, which is similar to "manual price setting", instead of a market discovering the price).


That would kill the "currency" aspect of the crypto.  A currency must be able to be transmitted immediately.  You're then turning the crypto into a hoarding stuff.


I think that this is correct when the rules are graved in stone.  When the rules can change (regular hard forks for instance) then the time needed for the divergent drives to do their evil deed may be too long and can be killed by a change.


[/quote]

I'm also interested in finding out what's wrong with transaction fees (apart the obvious divergence they cause with PoS).

But more to the point, I don't see what's wrong with "making the consensus diverge".  In fact, my idea is that a constantly hardforking, and splitting currency is a quite good crypto: it causes inflation, it kills "graving rules in stone", it avoids people thinking that the coin will go to the moon (so they don't hoard it), and it should add fluidity and flexibility.
There is no danger of "centralisation" because of the continuous splitting of the currency, that's simply not worth it.

We would then really have a currency, and not some "digital gold".

 I dont think you understood the basic working principles of the PoA that I proposed.
Let me explain again in an oversimplified sentence. PoS is the first stage to shortlist miners, actual mining i.e  signing blocks & corresponding coin generation happens in the subsequent PoW step only!

This is how you gave an old man a Migraine.  :P
http://i.dailymail.co.uk/i/pix/2013/03/04/article-2287618-052C8CC0000005DC-545_634x441.jpg

Stop calling them Mining Nodes, they are not Mining Nodes,
All of those are FULL NODES.  None of the BTC NODES MINE ANYTHING, that stopped when ASICS MINING began.

All a mining pool does is submit their block to any Full Node, and it is either accepted or rejected based on the software code the Full Node is running.
If accepted it passes it to other Full Nodes and becomes part of the blockchain.
A mining pool can run a full node or just point to one that they don't control.
But either way it is not a mining node as the nodes themselves no longer mine, the ASICS do all of the Mining.

 8)

FYI:
What I originally said, was the miners (even over 51%) can't submit blocks into the blockchain that breaks the rules set up by the Full Nodes, why you want to argue with that is a mystery.  :P

Hmm,
OK,

So you're wanting to use PoS as nothing more than a way to choose a group, and then let only that group fight it out to submit a PoW Block.

That is different than everyone else hybrid coins.  :)

Seems to me, it will be easy for a rich guy to buy up enough coins to keep themselves on the shortlist of miners, and from their mine enough with PoW to stay on top.
But who knows , reality and predictions don't always match.
I will bet your chain difficulty numbers will be very odd.
So what is your timetable for release, so we see what this puppy is like in reality.

 8)

decred (https://bitcointalk.org/index.php?topic=1290358.0) is PoA

So you mean a 51% Sybil attack of the number of full nodes is enough to succeed, and all that "hash rate security" stuff is just made up ?
There are about 6000 full nodes in the bitcoin network.  If tomorrow, I install 15000 nodes with my modified rules, I take over the bitcoin network, because I now dictate the consensus, because my new rules are on a large majority of Full Nodes ?  On the other hand, you think that if 90% of hash rate switches to a new protocol that is not supported by 5500 of the 6000 nodes, they cannot do a 51% attack ?
It seems to me that you've totally misunderstood the importance of the relationship between mining and consensus.  

It seems that you have a confusion between "owners of ASICS" and "miners".  Miners are those who *decide what block chain they accept to add their block to, and what block content, according to what rules, they construct*.

Now, in order even to think to do so, they have to set up a full node, that picks of course the block chain to their likings (according to their rules, on which they decide to build), and that will, OF COURSE, accept a block as they make it (they will construct of course a block that is in agreement with their own rules).  They also need a full node to maintain a list of waiting transactions they will include into their blocks they are going to build.  These transactions have to agree to THEIR RULES.
In other words, everything that a miner has to do, corresponds to the function of a full node in which he programmed the rules HE wants concerning the block chain he's accepting, the transactions he's accepting, and the block structure he's accepting.  Without such a full node, the miner cannot even decide on what block chain to build, how to make his block and what transactions to put inside.  In other words, the full node of the miner is the essence of his mining strategy.

The miner (the miner node owner) also needs to perform a lot of hashes to find a block *according to his own rules*.  Now, he can possess that hashing hardware himself, or he can BUY HASHING POWER from people owning "Mining rigs" and pay them with coins. These people owning mining rigs can of course refuse to sell him their hashing power, because they will most probably be paid in exactly that coin they're mining (although that is by no means necessary: someone selling hash power for ETH could just as well be paid in bitcoin for his submitted hash power, but that contains a lot of exchange risk).

In as much as a miner node buys hashing power from several rig owners, that's called a mining pool.

And now the point is: in as much as a large majority of mining pools (miner node owners) have agreed on a certain set of rules, and their miner rig partners agree with that and sell them their hashing power *that's all that is having influence on the consensus*.  If these people agree amongst themselves to modify the rules programmed in the full nodes they use as their mining strategy, then, whether 1 million other, non-mining nodes exist and agree or don't agree, doesn't matter.  These other, non-mining, full nodes will simply see that the block chain that is being build, isn't valid to their rules, and stop downloading blocks.  And that's it.  Users that want to see their transactions, should send them directly to the mining nodes, and should find the block chain on that full node, which will run according to the consensus protocol between the miner nodes.  

The *only* thing that maintains consensus on the rules is the miner strategy (build into the full nodes that determine this mining strategy) that can apply more than 51% of the hash rate.
If 51% of the hash rate can be applied to a miner strategy built into a different full node, then that is now the new set of rules ; whether all other nodes agree or not.  If they don't, they simply come to a grinding halt.

@dinofelis

What I originally said, was the miners (even over 51%) can't submit blocks into the blockchain that breaks the rules set up by the Full Nodes, why you want to argue with that is a mystery.  :P

You want to post a novel, feel free, it won't change the facts, like I said if you want me to believe the nonsense you are sprouting.

Prove me wrong Generate a Block that has 15.5 BTC as a PoW reward instead of the 12.5 reward and get it accepted in the blockchain.
You can't do it because even if the miners agreed, the non mining Full Nodes will Block it because it fails the standard.

Until then your arguments on the subject are mute.

 8)

I already replied to that.  I can't do that because the miners do not agree.  They will not build upon my block, and hence it will get orphaned, simply because they don't consider the chain with that block valid.   Your "requested proof" is a counter factual straw man.

You really are claiming that a 51% attack is not possible even if 80% of all miners and hash rate agree upon the attack.
And you are claiming that, on the other hand, a 51% attack is easily done by a sybil attack of non-mining full nodes.  It is sufficient to start up a large quantity of non-mining nodes implementing the new rules, and they take over the network.

As such, you are essentially denying the whole security of any PoW crypto, including bitcoin.  You have in other words, a fundamental misunderstanding of the nature of the consensus mechanism in PoW.

I never claimed miners could not pull off a 51% attack,
(That is your confusion, so don't try and tell me what I said, when you are having so much trouble understanding what I am saying to you.)
The Chinese Mining pools can pull off a 51% attack as they have 67% of the hash.

But they can only 51% attack , if they follow the rules of the Full Nodes software code, as long as they follow those standards they can, if they deviate like trying to mine blocks with a higher reward, all of those non-standard blocks will be denied.

Before you write a book with imaginary scenarios, read the above again, What I just said is accurate.

 8)

It is correct that if you have more than 51% of hash power at your disposal, you can, entirely while playing according to the original rules, "rewrite" part of the already included blocks in a chain.  So you are right there, that one can do a 51% attack while remaining within the original rules, but just orphaning a series of recent blocks, and do them over with more hashing power, so that this new chain becomes the dominant one, still according to the rules.

So my argument wasn't proving the error in your reasoning (which is still there).  Sorry about that. 

My simple argument is that the mining nodes (sooner or later you will have to admit that there are such things, because they are the essence of mining strategy) are the ones that make the rules, and that the non-mining nodes have nothing to say about it.

*in practice* it is not a good idea for a mining consortium to go against the rules of the non-mining nodes, but that has nothing to do with their "safeguarding the block chain rules".  This is rather because most non-mining nodes are also user nodes.   The miners depend on the user's approval in order for them to maintain the market cap.  Miners wouldn't like to chase away users, because then the market cap plummets, and hence their source of profit dries up.  So miners are not going to change the rules against the wishes of the users, but only for reasons of market cap.

However, if the miner nodes decide to change the rules, that is, change the way they are going to build the block chain, then there's nothing that non-mining nodes can do about it, apart from noticing, and not updating.  Non-mining nodes are not being the "guards" of what so ever, apart from informing their owner that visibly, the miners decided to change the rules.

You should really understand that, before thinking about the dynamics of consensus.  Non-mining nodes have strictly no power, apart from the power to inform that its rules are not respected, something nobody cares about.

That's not necessarily true. I cannot see any disincentive to discard transactions that you already received before finding/creating the block. If the block size is fixed and place holders are mandatory to use (instead of real transactions), there would be no effect on network delay. Of course this is not a stable Nash equilibrium since you'd have 0 incentive and 0 disincentive.

Agreed. What about automatically adjusting the parameters by some predefined function similar to hash difficulty in Bitcoin?

I don't think so. Transactions in Bitcoin already have a confirmation time of like an hour. So, it's not useful for fast transactions anyway. Adding a small minimum coin age (of some blocks or tens of minutes) to this wouldn't change anything.

I'm not arguing that I have proposed a viable alternative for transactions fees. And I share your point that a blockchain must have the right incentives to protect against transaction spamming. However, I'm not convinced that only transactions fees and no other mechanism can achieve that goal.

I'm currently working on a blockchain concept that directly addresses the issue of Sybil nodes by limiting the creation of new accounts (which will thus have an economic value). In such a setting, you could have a transaction limit per account instead of transaction fees.

Hello.

I'm not really into this tech stuff you talk in here but I have noticed that one
coin is using this feature of mining limited number of accounts.
Don't know if this is what you meant  but please check here could be  something that could help you

https://bitcointalk.org/index.php?topic=1583719.0

This.  You say it better than I do, but it is what I intended to say.  The slightest bit of motivation in one way or another can make the outcome flip.  For instance, there is not the slightest "punishment" for excluding users you might not like.  Now, if miners decide to boycott a user, they pay a price (the fees that user wants to pay).  If there's nothing to win, the smallest intend can be applied at no cost.

BTW, block size limits are a bad idea in all cases in my opinion.  Making big blocks more expensive in one way or another, is a good idea because they use resources, but the market should determine that price, and no "hard limit".  Bitcoin is wrong on this one.


Yes.  But I think there is a perfect "parameter settter": the market.  In fact, mining a bigger block HAS a price, because it takes some extra computing to do so, it takes extra network traffic, and hence, it makes a miner's chances to get a big block through somewhat lower. 

I think that Monero's fixed block size vs price cost is misguided in this respect.  It is better than the stupid hard limit in bitcoin, but it still imposes a fixed price and doesn't let the market decide.



Ah, ok.  I thought you meant long times, like weeks or months.  Agreed.


Well, I haven't studied that in detail, but I don't see how it can be anything much different than a fee.  You have two aspects:
1) to avoid what we discussed in the beginning of this message, there should be a (small) incentive for the miner to include a transaction, or "boycotting a user" is too easy.
2) to avoid chain spamming, there should be a (small) cost to the person wanting to do a transaction.

I find it quite logical that 2) compensates 1).  And that's a fee.

That fee should be free, in the sense that if there is an intention to boycott a specific user, then that user can "up" his fees to bribe at least one miner to accept his transactions, making the boycotters lose out.  Of course, it becomes harder to boycott users if the system is anonymous, so maybe this is not really a concern.


I don't see how you can ever do that, without requiring real-world identities.  Of course, you could make the creation of an account a PoW thing, so that one is limited by the cost of its creation. 
But me thinks that it is a bad idea to limit the number of accounts: that will kill all anonymity in the long run.

Is there any coin that already does this?

I also believe in markets and it's an interesting idea to leverage the market for deciding about system parameters.

Well, using PoW for account creation would be a possibility, though my proposal doesn't rely on PoW at all: https://bitcointalk.org/index.php?topic=1719396.msg17365846#msg17365846 (please disregard my first post in the thread).

I don't think that using multiple accounts is a sufficient way to have anonymity, and prefer Zero Knowlegde (like in Zcash) over coin mixing/onion routing schemes as used in CoinJoin, Monero and the likes.

Monero has such a thing, the block size reward penalty.

http://monero.stackexchange.com/questions/1067/block-reward-penalties-and-dynamic-block-size

I find it a bit clumsy, but at least it is there.

That looks funny.  Your "child accounts" act in fact like a kind of second token, of which you need PoS to mint the first (base) token of the chain and also to "mint" child accounts (the second token), and there's an opposite PoS relationship in that you need some base tokens to "fill" the child account (second token).    Aren't you afraid of a serious divergence of PoS of child accounts in the hands of a few ?  I see your system as a kind of "double PoS" with feedback between the two, for two different tokens: base tokens (the "currency") and mint tokens (the "child accounts").

I think you got the gist of it.

As for the concentration of child accounts, I think there is an incentive to sell child accounts since they should have an economic value and your interest/reward does not depend on the number of your accounts you own (but on your total stake). Of course, a stakeholder might decide to keep all the child accounts for himself. However, this would only allow him to retain his relative minting power since the minting power of a single account is reduced as more and more accounts are built (and in use).

So, if a stakeholder owns 5% of the minting power at the beginning, all he can do by not selling accounts is keeping his share of 5 %. To increase his power to the point of reaching the majority, he would not only need to buy a lot of new child accounts but it would also take him a long time since only a limited accounts are created. If the coin has been in existence for 5 years, even an attacker who can outbid all other users would need at least another 5 years to take control over the currency (and to achieve this, all stakeholders must be willing to sell their child accounts). The aim is that the coin gets invincible over time.

I am traveling so better replies will follow after the weekend.

Quickly note that whitepaper points about that when the Byzantine agreement (1/3) threshold is exceeded, then stake grinding becomes plausible. This is because above the Byzantine threshold, there is nothing sustaining a reference point because Byzantine agreement is self-referential.

Will elaborate later and on the other points.

Edit: also I need to study that whitepaper more. I think it is referring to success of a 51% attack. But I need to analyze if much less stake could still enable grinding attacks that give a disportionate reward to the attacker.

Note I was already aware of that whitepaper, but hadn't studied in depth.

I'm pretty sure folks are talking past each other.  Let me see if I can help.

When a user comes along and connects to an available full node (how did they find it?) in order to transmit a transaction or check on the confirmations of one then it makes all the difference in the world which one they connect to.  Connecting to my compliant full node will get them to "the" "right" blockchain.  Connecting to a "bad guys" full node will get them a different view.  Ah, perhaps this is where the confusion comes in.  Users don't connect to mining systems per se.  Although a mining system without a full node somewhere in the mix is a pretty weird idea.

It is the mining systems that build on top of previous blocks that determine the forward growth of "the" blockchain.  I suppose errant/malicious systems can fork off and build another blockchain but the one with the greatest difficulty wins (given comparable reachability) as far as the users go.  Full nodes that don't mine can ignore (let's not call it reject) anything they want but will just end up participating less and less.

I run an unmodified full node; it entertains me to do so.  I don't turn on mining due to the noise of the fan mostly and concerns about the cost of electricity and system wear and tear (besides which my dumb CPU ain't likely to win the race to the next block ever against all those darn ASICs).  Despite the lack of mining, I feel happy about my contribution to the Bitcoin world -- I configured my full node to allow 60 connections (8 outbound/52 inbound) and upload 100's of GBs every month.

If a block comes along that violates the rules then it will be ignored by my full node.  It will also be ignored by all compliant full nodes.  Eventually if/when another block comes along that is legit then it will be accepted.  But make no mistake, ignoring a block does nothing per se.  Yes, it won't be propagated but it doesn't need to be.  The "bad guys" can forward it themselves without my help.

If a large enough fraction of the mining systems are configured to break the rules then they will overwhelm the mining systems trying to remain compliant.  My full node won't agree with the errant ones and so it will follow along with the compliant ones.  But following does nothing as such to help fight back the "bad guys".

Well now from the users' point of view the full nodes do matter.  Depending on which one they happen to connect to makes all the difference.  If they connect to more than one then they can compare and select from the "stronger" blockchain.  I suppose a user could also check themselves if the blocks are compliant to one degree or another (darn good idea).  That way (except for propagation) they don't need to trust the full nodes.  Well, to the degree that the user doesn't check every last detail they do have to trust the full node(s).

Thank you.  You explained it extremely well.  I put in bold what was the essence of what I was trying to say, but you put it much better in words.

I agree that making the point that "non-mining full nodes" don't matter is somewhat abstract, because in most cases, there's a link between those full nodes and the users, as you correctly point out.  But the very act of setting up a non-mining full node doesn't PROTECT in any way, and certainly doesn't coerce in any way, the "rules".  It only INFORMS all people looking at that full node about the block chain being in agreement with 'the rules' or not, but it can't, as you very well put, do anything about it beyond *informing* people.

Non-mining full nodes are important if someone would simply like to "sneak in a bad block" (for instance, one that doesn't even has enough PoW).  Full nodes will see it.

But I put myself in the somewhat abstract gedanken experiment where users and mining nodes on one hand, agreed upon another set of rules between themselves, and a "huge cloud of non mining nodes" on the other hand, wanting to maintain the "original rules" as "guardians of compliance", to illustrate the futility of the non-mining full nodes by themselves explicitly.  If users agree with miners and their (few) full nodes on a new set of rules, then no matter how many non-mining full nodes scream that this is not a correct block chain, this doesn't matter.  Users will  then connect to the few full nodes that DO have the new rules (the miner nodes), miners will mine according to those rules, and that's it.  The big crowd of full nodes that shouts that no such block is valid, simply come to a grinding halt, and never accept a block, and nobody cares.

But as you point out, that's a very artificial situation.  Most of the time, users set up their full nodes, and they do that to verify the block chain according to the rules that THEY want (the new ones, or the old ones, depending).  And indeed, users are important, because they determine, after all, the market value of the coin.  Miners will in fact mine according to the most profitable situation, which is strongly influenced by the market value set by the users.  The ETH/ETC split was a brilliant example of exactly how that went. 

Point of clarifications,
Only by running a Full Node Themselves.



This is where I have to disagree, with an otherwise well written post.
Say I am a Business running my own Full Node Regardless of what the rest of the network does.
Even if an evil majority overwhelm the majority of Nodes, my Honest Full Node will still refuse/ignore their blocks that don't match the standards on mine.
Which means , my system will Refuse/Ignore their DoubleSpend attempts, meaning I will not be shipping product or services to them that they never really paid for.
It will keep the bad guys from stealing from me with Fake coins.  ;)

Now if the evil majority keeps control of BTC, and I can no longer trust the BTC network
my choices become clear, immediately discontinue accepting any BTC for payment.
Back to Cash & Credit only or find a Crypto that can be trusted.
 
8)

FYI:   https://en.bitcoin.it/wiki/Full_node

We are also perfectly in agreement, but you are not just a "full node runner", but a "disgruntled user".  And you perfectly illustrate what I wanted to say: you're running of a full node hasn't stopped "the bad guys" (that is to say, the miners who decided upon a change of rule and who have the large majority of mining power attached to THEIR full nodes).  It has just INFORMED you that the block chain that is mainly being mined doesn't correspond to the rules you want.  As such, you stop USING it, your node comes essentially to a grinding halt, and you not using it any more removes market cap from the coin.  But you didn't stop anything.

In my case, I'm running a full node at home.  But it has an empty wallet.  I am a bitcoin user only for buying some bitcoin to spend them on some goods, I don't weight much on the market cap.  The day that the large majority consortium of miners decide upon a change of rules (and become "the bad guys") and implement those new rules in THEIR miner pool full nodes (in other words, the day that the "bad guys" decide on a hard fork), and I don't upgrade, because I am a "guardian of the immutability of the rules" with my empty full node, my full node will simply stop accepting blocks, *and that's it*.  Even if I had 100 000 such full nodes running, they would also simply stop accepting the forked chain, and come to a halt.  All users connected to those nodes would be informed that the blocks don't come any more.  In as much as they'd agree with the "bad guys fork", they'd have to connect directly to the few of their mining nodes.   And that's it.


This is the error in the reasoning here, of course.  If essentially all miners are the "evil ones" and they have an agreement with most of the users, then you can wait forever for these "miners to be overcome".   In other words, if the miners decide upon a hard fork, and hence become "evil miners" according to the above, no matter how many full nodes are refusing this hard fork, it won't change anything.


This is also wrong.  It is not because *full nodes* wouldn't be in agreement, but because USERS wouldn't be in agreement.  If users are in agreement with the hard fork, then the "disgruntled full nodes" don't matter.  That's my point.  The users will connect to the few full nodes that implement the hard fork and continue to use the coin ; the miners have agreed upon the hard fork too.  And whether there are now 100 000 full nodes that stop accepting that chain, doesn't matter.   The block chain is still mined by the miners, the users are still using it and maintaining the market cap, and the disgruntled "guardian nodes" simply stop working as they don't see a block chain that they accept as valid and which isn't produced.

But, as I said, this is an artificial situation.  In most cases, only users run full nodes.  So in as much as users agree with the hard fork, they UPDATE their full nodes.  And in as much as users do not agree with the hard fork, miners will not attempt to implement it as it will hurt market cap.

So in practice, most full nodes will be in agreement with the rules, even if those rules are forked, or not.

To me it looks that simple:

PoW
Most secure way, but expensive ( security = order  is expensive, think of entropy )
But does not really scale.
Use case is store of value.

PoS
Less secure ( a 51% attacker can rewrite the entire blockchain, ...) and less expensive.
Better scaling.
Use case is transaction.


Best use of both is in combination by side chains (PoS) settle into the PoW chain.

PoW is only as secure as who controls 51% of the ASICS.


Both PoS & PoW use Hard Coded Checkpoints built directly into the Software code, (Cheap Protection from Long Range History Attacks)
No Reorganization can happen past a checkpoint.  :)
So any wallet with even 1 checkpoint can never have it's entire blockchain rewritten.
Also some Coins employ a rolling checkpoint that will not reorg past a specific number,
Nxt is 720 blocks and Blackcoin is 500 blocks , after that number their chain is locked beyond rewrite.  ;)

 8)

You seem to have a problem in argumenting. 



"if all businesses disagree with the evil miners" is not a case I'm discussing.  I'm discussing the case where miners and users AGREE to change the rules, but ONLY a vast majority of non-mining full nodes don't and want to be "guardian of the protocol".




The argument of authority has no value.  It is not because "bitcoin experts" tell you something, that it has to be that way.  What those "bitcoin experts" are writing is perfectly true, under assumptions that I don't make, namely that there is a symbiosis between mining, nodes and users.  I make the explicit, and rather artificial hypothesis that non-mining full nodes are NOT agreeing with the consensus between users and miners.  As this is not the hypothesis that your bitcoin experts make, what they say is not relevant to my gedanken experiment.

But then the "authority" is the software writer, no ?  Why doesn't that software writer, who has visibly authority on the "check points" to write them in the code or not, keep the whole block chain and does all the signing off of the blocks ?  Then there's no reason to even do PoS.  The software writer can then be the central authority that has the "block chain" on his web site.
I'm talking about the hard-coded check points IN THE CODE other than the check on the genesis block here.

In the case of check points GENERATED by the wallet, there is a fundamental problem with wallet-generated "check points", in the following sense: in the case they are valid, they are useless, and in the case they are useful, they don't exist.  Let me explain. 

If you have a running wallet for a long time, you can of course regularly make BACKUPS of the block chain.  Now, it can be strange that suddenly, the block chain is re-written since 2 years ago.  You clearly see that there's something fishy.  Imagine a new bitcoin block chain being propagated which is totally different since 2014, even if it has more PoW than the one you have, you know there's something fishy.  *but that is because you already were running in 2014 !*  So only wallets running since 2014 can actually SEE that things were changed after the fact.  You can see your "backup" of your wallet of 2015 as a "check point".   Sure.

The point, however, is to a newcomer, he cannot know.  He simply sees a block chain, and another one, which diverge since 2014.  One (the modified one) has more PoW than the other one.   If I have to GENERATE ancient check points for both chains, I can of course, but they will not learn me anything.  Each chain, by itself, will give rise to perfectly valid but different check points in the past.

So what's left ?  Wel, the hard-coded check points in the code.  But imagine now that there are different wallets from different devs that one can download.  Some wallets have the hard-coded check point of the first chain, other wallets of the second chain.  Depending on the wallet I decide to install, I will accept one chain or the other.  On the authority of the programmer of the wallet.  And we're back to square one.

PoS needs checkpoints, because it is inherently "free of stake", or almost so.  In fact, there is a small, unwanted PoW stake to faking PoS.  It goes as follows:

Suppose that I possess 20% of all coins in a PoS coin.  Now, at a certain point, I make a transaction of 15% of my holdings, and I buy a luxury ship with it.  Of course, once this transaction is signed into a block, I only have 5% of stake any more.  But for blocks BEFORE that transaction, I have 20% of PoS. 

I can hence sign blocks NOT containing my transaction from a point before that transaction, using the normal PoS mechanism, in competition with the actual chain.   The problem is of course, that I only have 20% chance to sign a block.  So on average 4 out of 5 blocks cannot be signed by me.  At least, if the pseudo-random function works well, and assigns me as a signer 1 out of 5 times.   However, that pseudo-random function depends on the content of the signed blocks in many cases.  So I can apply a kind of PoW to change those blocks (including or excluding other people's transactions) until that block happens to generate ME again as the signee.  I have, on average, to try 5 different blocks to do so, if I have a stake of 20%.  So I need to perform about 5 times the normal work of others to sign off the entire rest of the chain, because "by coincidence" I'm always an allowed signee in the PoS lottery.

Please do your math correct and calc how much it costs to rearrange same amount of blocks within PoW vs PoS under a 51% attack.

Tip: Include hardware / longterm investment here (bitcoin Asics can mostly been profitable used ONLY to mine bitcoin) and separate this from fungible investments.

PoS is not that secure.

Yep,
the problem is you're too stupid to know when you lost.  :P
Which was a few posts ago actually.  :)

 8)

FYI:
This one to be exact https://bitcointalk.org/index.php?topic=1744718.msg17498545#msg17498545 .

Man , the stupid is running wild today.

Hard Coded Checkpoints research them , they completely protect a blockchain,
which is why PoW & PoS BOTH used them.

The Current BTC Transactions History of the last 12 hours (probably more)  can be rewritten on a whim by the Chinese Mining Pools.
(You call that secure.)  :D

I tell you like I tell the other theory mongers in these forums, PoS is so insecure and so easy for you to break,
Cut the BS, Pick one and show me , otherwise, I am just going to assume you are flaccid in your argument like good old Dino is.
(Feel Free and try and Destroy ZEIT it is proof of stake , it will be a good laugh for me.)

 8)


FYI:
Since we know for Certain the last 12 hours of Transaction History of BTC can be overwritten,
To prove PoS is less secure than POW, You are going to have to overwrite the last 15 hours or so of a PoS coin.
Like I said Take your best shot at ZEIT , I can always use a good laugh.

Hey does this Prove Proof of Stake is More Secure than PoW , when you can't do it.  :D

Really ?  Again, I challenge you to start up 100 000 bitcoin nodes on amazon using different rules, and see how much you can make the bitcoin network comply to your modifications (if you consider your modifications the actual rules you want to  "guard"), against the will of the users and the miners, which will show you the "power" of a non-mining full node majority.

Do you really think you will impose your rules by just firing up 100 000 bitcoin nodes ?

I challenge you to quit being an Asshat , you lost get over it.  ;)

 8)

I think you are falling in the self-referential trap of PoS.  It is not because you claim that I lost, that I did.  But given the fact that you think that you are the stake holder deciding on who lost, you take your own signing off of the statement that I lost as the true chain, don't you ;)

The point is that *you* lost since quite a while, but because you didn't even get the gedanken experiment that I proposed.  Now *I* sign off this statement because I think that I'm the stake holder here and I take THAT as the true chain.  How are we going to find out now what is the true chain ?

In your chain, you think you have the stake to sign that I lost the discussion, and in my chain, I think that I have the stake to sign that you lost the discussion.  How are we going to differentiate between my statement that you didn't get the point, and your statement that I didn't get the point ?   Is just stating so sufficient ?  Visibly not.

But, again.  If you have users and miners agreeing on set of rules A on one hand, and on the other hand a vast majority of full non-mining nodes agreeing (only) on rules B, then, the chain that is going to "work" is the chain with rules A, and B will get you nowhere.  As such, those full nodes, in agreement amongst themselves in majority, but in disagreement with users and miners, CANNOT GUARD the network from adopting rules A.

You Lost on this post  https://bitcointalk.org/index.php?topic=1744718.msg17498545#msg17498545 .

Everything else has just been your pathetic attempts at diffusion and sad ramblings.


 8)

FYI:
You're staring to remind me of this guy.  :D

https://cdn.meme.am/cache/instances/folder246/500x/60723246.jpg

Yes, cant fix stupid. So you say your hard coded nodes do all nice.

I give up. You win your pos coins. Go for!

Well you are smarter than Dino, at least you know when to quit.   ;)


 8)

You don't win an argument by quitting it and declaring yourself a winner, you know.  As I pointed out, that has too much of a self-referential PoS attitude :).

You didn't "win" any argument, because you never considered the gedanken experiment I proposed to you, and you are always including *something else* in your counter argument, hence not debunking my statement at all.
You only win an argument by pointing out the LOGICAL errors in the presented argument of the opponent with correct logical arguments.  No ad hominem, no self-referential declarations of victory, and no argument of authority is part of the class of logical arguments.

My gedanken experiment, which I agree, is artificial, proves clearly the futility of non-mining nodes BY THEMSELVES as "guardians of the rules": you can fire up 100 000 such nodes which "guard another set of rules", and that vast majority doesn't do zilch to the consensus, even if they all scream that their rules are not followed.  As such, non-mining nodes, even if they make up the vast majority, don't impose ANYTHING.  Which was my statement.  I never said anything else.

The consensus is made by "miners", where I understand by miner: the entity that *decides* upon which chain to build and hence also runs a (mining) full node ; people selling mining power to that miner (people owning asics) ; and users.

If these three classes of entities agree upon a set of rules, then THAT consensus will prevail.  Whatever the non-mining full nodes NOT BELONGING TO ONE OF THESE CLASSES may use as rules.

What is artificial in my gedanken experiment is of course to separate the USERS from the non-mining full nodes.  Most of the time, those running full nodes are also users.  And users ARE important in the consensus, because they determine the market cap, and hence also the revenues of the miners, and hence of course the miners will not go against the users.

In all your counter examples which are valid by themselves, you have to include or "disgruntled users" or "disgruntled miners" or "disgruntled mining power owners" with the full nodes you consider, to "show" that these nodes keep the consensus, and as such, your demonstration failed each time, because it didn't single out the non-mining non-user related full node as the consensus keeper, at all.

Again my proof that a large majority of non-mining, non-user related full nodes doesn't impose the consensus is simple: fire up 100 000 of them on amazon, and make them impose another rule set.  It won't work.  So their majority doesn't imply consensus. QED.

People need to stop wasting their time debating Kiklo, he is clearly an idiot.

@Dino,

I know, I won the argument and you lost.   :D
Logic gives me the ability to determine reality from your personal delusions.

I have come to understand your reasoning is completely flawed, when your ego is involved.  ;)

See that is the advantage to being logical instead of emotional,
I won the argument and you can never accept it, so there is no point to listening to your future whining on that subject ,
any response you want to make from now on relating to that subject is always this post. (The one that proved you wrong.)  :D
https://bitcointalk.org/index.php?topic=1744718.msg17498545#msg17498545


 8)

Here fixed that for you , Newbie.  :D

If you Love Dino Soooo Much, Maybe you should ask him out on a date.  ;)


 8)

Zero argument in this post.

The post you link to is no argument against my statement, because it starts with the premise that the *users* are not in agreement with the *bad miners*, an assumption that I explicitly do not make.  As I pointed out several times, each time that you think you have an argument for "non mining full nodes" to be "guardians of the rule set A", you give IN FACT an argument why it are USERS or MINERS that are the guardians of the rule set A (over the rule set B that the 'bad guys', that is to say, the miners and the users, actually want).

Until you explain me where my ultimate proof is logically flawed, you have lost the argument.  My proof goes as follows: if you think that non-mining full nodes impose the rule set, and bitcoin is now running on rule set A with, if I'm not wrong, something like 6000 full nodes, then fire up 100 000 full nodes with rule set B on Amazon, and see how the network will now comply to rule set B, the vast majority of the "guardians of the rules" according to you.

My statement in that gedanken experiment is that your 100 000 nodes will not get one single block, and will certainly not enforce their rules on the network.  As such, they have no power to do so.

All your arguments showed that full nodes DO INFORM their owners.  But in as much as these informed people are not miners, or are not users (that is, they do not determine the market cap), this fact doesn't influence the consensus.

Essentially, the consensus is made between the miners (building the block chain, using their mining nodes) and the users (setting the market cap).  How many OTHER full nodes are running that haven't anything to do with either, doesn't matter apart from some better network properties.

https://bitcointalk.org/index.php?topic=1744718.msg17498545#msg17498545
You Lose.  :D

 8)

Of course full nodes that don't mine will never get a block.  'Good' non-mining full nodes could enforce the rules, though, but only if it somehow happens that at least one 'good' node is between every conspiring 'evil' mining node so they would not be able to propigate blocks to eachother. Last I saw (which was a while ago), the large pools have a special semi-private "relay network" for their mining full nodes they use, and they could always directly connect to eachother. Users that actually want to get their transaction into a block (since non-mining full nodes don't make blocks) would have to connect to an evil node. There's also nothing stopping the 'evil' guys from popping 100 000 non-mining evil nodes on the network to make it easier for users to connect to the evil-net.

Indeed, you've got it.  It is too much seen as "evil guys vs good guys".  One should see it as "rule set A" vs "rule set B".  If users and miners agree on rule set B, then no matter how many non-mining full nodes only accept rule set A, this doesn't enforce rule set A at all (whether rule set A is the "historical" or the "new" rule set doesn't matter here).

You are right that IF there's a vast majority of non-mining full nodes with rule set A, then a user connecting RANDOMLY to just a full node will most probably only see a "stopped" block chain.  The user has to specify a miner node that follows rule set B in order to get his transactions through, and get the live block chain (according to rule set B).  So a vast swarm of disagreeing non-mining full nodes can somehow perturb a bit the network, until users configure their wallets to ignore them, and only go to rule-B miner nodes.

And in fact, this is a very good thing, because otherwise, the attack of launching 100 000 full nodes with a different rule set would impose that different rule set, which is against the very idea of PoW securing the block chain: a sybil attack with full nodes would be sufficient if it were true that non-mining full nodes impose their rule set.

Purely technically, as you point out, only miners need to agree amongst themselves to use rule set B, and then only a block chain according to rule set B will be built.  But, as was pointed out regularly, and as was used erroneously as an argument indicating the power of non-mining full nodes, miners will not want to alienate users.  Technically, they can, but economically, they would ruin themselves, because alienating the users who sustain the market cap, and who are finally the buyers of their minted coins would kill the revenue of the miners, as they will now technically mine coins nobody wants to buy.

But an army of non-mining full nodes, in disagreement with the miners (and the users) has no power to impose its rule set, whether that rule set is a "new" one (a kind of sybil attack with an army of nodes) or the "old one" (as "guardians of immutability").  They can at most initially perturb the communication of transactions and blocks, and will in the end be ignored.

That was my point.

Glad to see the part in blue finally sunk in.
In none of my references , did I infer the users were not part of the full nodes only the miners,
The Business Users combined with their own dedicated Full Nodes to the accepted standard of compliance,
can block the miners non-compliance thru ignoring their nonstandard blocks (which prevents theft of their Personal Business Inventory) & the Economics reprisals the miners would suffer from the Business dropping BTC.
Which was my point.

 8)

I'm delighted we found the users to help us see a fuller picture of dynamics.

Still the users have to find good verses bad full nodes or they could be misled.

• How do users reliably find good full nodes?
• How does a user evaluate the blocks provided to them?
  

Even full nodes face the first question.  I configure my full node with 60 connections (enough more than the default of only 8?) and just hope the builders of the software did a good job and that the network hasn't partitioned me away from the good ones.  I do manually compare to various public sources of the blockchain, e.g. blockchain.info, etc., and hope they aren't compromised.  My confidence in being able to reach apparently good nodes has built up over the years but I don't want to become complacent.  I do examine peers for misbehavior and disconnect or ban them if I don't like what I see.  I watch various news outlets including this forum for indications of trouble.  If I am left behind or worse misled for awhile then I hope that eventually I will find the good ones and catch up and if needed replace the crap from the bad ones.

This I know; my fiat-denominated holdings are debased without any real effective say or recourse.  The only redeeming fact is so is everyone else's so I don't lose ground.  I feel very badly for folks without any appreciable holdings; the poor get poorer relative to the rich.  Bitcoin, by the rules, can't be debased; this is one of the attractive features of Bitcoin over fiat for me.

I never contradicted that.   My point was simply that non-mining nodes have no way to impose their rules on the system.  That's all I said.   That holds.  In order to see the "power" or rather the absence of power of the full nodes, of course you have to "undo" them of all the other possible elements that might have power, so that these element's power is not confused and taken as a proof that it are the full nodes themselves that have this power.  As such, we have to, artificially, consider full nodes that have no links with users, nor with miners.  And then we see that these "naked" full nodes, even if they are in a large majority (because you fired 100 000 of them up on amazon), cannot impose their rules.

On the other hand, users, even with light weight wallets, DO impose their rules, through their decision to support, or not to support, the market cap.  They don't need to run a full node themselves, they can configure their light weight wallet to connect directly to the mining nodes that run their preferred version of the rules.  They do this by simply voting with their money, dumping the coins if they don't like it.

So users have power through their decisions to sustain, or not, the market cap and miners don't want to disgruntle them, because miners depend on the money spending/coin buying users to dump their coinbase on them.

All this was very clearly illustrated during the ETH/ETC split.

I would think it is simpler: can't you just connect directly to the mining pool node with whom you are in agreement concerning the rules, and that's the only connection you really need ?  Of course, the number of connections that this node accepts may be limited...


Well, it can't be debased until miners and users decide so.

In fact, and I'm very surprised that this didn't happen yet, I wonder how it comes that people create alt coins with a new genesis block, and not as a hard fork from bitcoin.   If you create an alt coin which is a hard fork from bitcoin (that is, which takes as initial distribution, the unspend outputs on the bitcoin block chain at a certain block number, and whose private keys can sign a single transaction on the altcoin's block chain) you do away with all the problems of premine, initial distribution and so on, and you buy this coin the whole bitcoin user base.
We've seen this with the ETC/ETH split: all ETH holders were now also ETC holders.  In the ETC/ETH split, the two coins are very similar, but there's no need: the forked-off coin can be entirely different, just like an altcoin is different.  The only thing that is taken from bitcoin is the user base and the initial distribution.  As such, there can even be no need for mining/minting the coin any further.

If ever this happens, and I don't see how this can not happen in the future, you have ACTUALLY the same effect as a debasement.  The bitcoin market cap will split over both coins (of course, initially with the large majority still on bitcoin).

Sound money doctrine is misguided, because it makes the assumption of a single, unique monetary asset.  When monetary assets are in competition, and can be created/forked/... then there's no such thing as a sound money doctrine, by the flexibility of the market for monetary assets, and the variability of the market cap of each asset.  The creation of new assets automatically debases the "fixed number" ones.

It seems like not such a good idea to have so many outgoing connections, as it's using up the scarce resource of 'full nodes with non-firewalled open incoming ports'. You may instead want to force the default amount of 8 connections to nodes with operators you trust and allow as many incoming connections to your machine as it can handle without causing high relaying delays.  I believe there are a few folks who are attempting to identify those that are connecting to unusually large amounts nodes, as such a technique can be used to discover the origin of transactions. There are some remaining fragments of a sanitized thread about this here: https://bitcointalk.org/index.php?topic=978088.0

Hmm, my outgoing is the default value of 8.  I changed total connections from 8 to 60, allowing for 52 incoming.  I would gladly reduce the outgoing below 8 if that is better.  I'd be really happy to force my outgoings to know/trusted entities but I kinda thought that would be counter to the whole idea of being trustless.

I certainly do not want to contribute to any weakening of Bitcoin.

Someone has got to enable incoming or who will the non-full node users connect to?  I configured by phone-based wallet to use just my full node.  It would be really nice if I could reserve a connection for just it but I usually don't have any trouble connecting pretty quickly.

In reality, if you use someone else's software to set up your full node (for instance, if you download bitcoin core) you are already not in a trustless situation, because you trust the author of the software.  Truly trustless would imply that you implement the rules yourself in your own full node software, according to the principles (the "rule set") that you intend to require.  In practice this is not feasible of course, but this simply illustrates the silliness of the concept of trustlessness when taken to the extreme. 

Well, if I were a miner that agreed with other miners and with a majority of users on a rule set, *against a whole bunch of non-mining full nodes that do not want this rule set*, I'd have all reasons to set up sufficient infrastructure to have my node accept thousands of incoming connections.  After all, if I'm a miner, I have enough resources to do so, no ?  Compared to the investment in the hashing resources that I have to own, or I have to rent, this network resource enabling me to allow users to connect to me or to a few of my peers seems small I' d think.
If we are, say, 5 mining pools owning 95% of hashing power agreeing on the rule set, we could set up each one of us, a big publicly known node that accepts a lot of incoming connections. 

I will quote from my upcoming whitepaper which refers you back to some posts I had already made on this forum:



See also this which I had published before to this forum in my decentralization thread:

https://gist.github.com/shelby3/c0d6e0ed132be7e4577df3663c81ee09

The world is not going to invest in an ecosystem controlled by whales. The entire point of crypto-currency is for it to not controlled by anyone.

Any resource will always become centralized. There is a power-law or exponential distribution of resources in nature. So to achieve decentralization, we can't design the security due to a resource, e.g. stake or mining hardware.

When people invest in open source it is because they know their investment can't be destroyed by some whales (who give preferences to certain protocol changes or whatever over time), because the source code is open and decentralized unlike closed source. Ditto with the Internet being decentralized (no one controls it), thus everyone is eager to invest in it.

The whales are also the weakest point that can be attacked by governments or whatever.

We need a new design that is inherently decentralized as controlled by the protocol. I plan to launch such a design health willing.

In my design, even with majority control over the stake of the system you could attempt censorship only (actually you could attempt a 51% attack but you'd need to convince the network that a natural fork had occurred due to a split in the network but this is implausible), but you'd end up on your own fork that the honest minority is ignoring (and additionally you would have destroyed some of your stake in the process). My system always converges consensus according to the rules of the protocol chosen by the transacting users who are honest (i.e. the honest users stay on the same fork).

Note propagation ordering is not objectively provable, but...a proxy is... (wait for the whitepaper).

A concept that is going to be introduced to blockchains is Byzantine fault detection (although it is not new in the literature external to blockchains). The following is in my whitepaper and it is a quote from a cited research paper:

Thanks for the links.

I agree that a blockchain design that relies on transaction fees as the sole incentive for miners can lead to a Tragedy of the Commons. However, transaction fees used in addition to some other reward (which is significantly greater than the average tx fees) don't suffer from this issue.

Alternatively, one could also think of having fixed-size or fixed-percentage tx fees which afaics wouldn't be exposed to the market failure you describe. If the transactions include a reference to a recent block (TaPoS), the blockchain would reveal how long (no. of blocks) it takes for a transaction to be included in a block. That information could be used to automatically adjust the tx fees similar to block difficulty so that the total fee market would eventually decide about the fees.

I agree with your statement for a) negotiable resources like financial stake or any kind of hardware and b) under the assumption that more resources mean more influence on the consensus and more rewards. As far as I can see, both conditions can be relaxed though.

For a) one can use non-negotiable resources that aren't prone to centralization. In a recent proposal (https://bitcointalk.org/index.php?topic=1719396.msg17365846#msg17365846), I suggest to restrict the creation of new minting accounts to a certain rate so that time (in the absolute sense, not work or computing time) becomes a limiting factor for an attacker that tries to gain more influence on the consensus. This adds an additional layer of security to my "dual token" PoS scheme since everybody's time is limited due the finiteness of life. And this security layer will asymptotically tend to infinity as more and more blocks (and minting accounts) are created.

To avoid b), all you need is a reward mechanism that destroys the coupling between resources and influence so that gaining more influence becomes unprofitable.

It's certainly desirable to have such a property. I'm asking myself to what extent a regular PoS could withstand a majority control over the stake by some adversary, at least with regard to users who have been online for a long period before the attack (letting new users aside). Altcoins like NXT or Peercoin are vulnerable to a double-spend attack if an attacker can build an alternative chain faster than the rest of the network. But what if we change the chain selection rules as follows?

- Each client keeps track of every received block and chain fork in a list.
- Every received block is scored by the client by comparing it with the blocks in the list. The score depends on the common prefix that the new chain shares with the existing chains. The more blocks the new chain has in common with highly scored chains, the higher score it will get. If the common prefix is low with regard to all other chains, or if the prefix is only high for chains with low scores, the new block will receive a low score.
- A weighted random function is used to select which chain to build on.
- Double-mining is prevented by some punitive scheme.
- Even if the attacker can build an alternative chain faster than the rest of the network, it's difficult for him to overtake the legitimate chain since his blocks will be scored down by the honest nodes.


What exactly do you mean by "propagation ordering", the fact that you cannot objectively prove which of two blocks was created first?

I m still very astonished that PoS promoters try to work against the laws of physics or restaurants:

There is no free lunch!

Security comes from order keeping and due to dissipation and entropy increase you just have to work! to keep that order and security.

With PoS there will be never such security since you can mine all day but spend nothing ( or very few) for work - despite PoS promoters work hard in mind to overcome simple laws, but you cant fix physics.

I wonder if there is some theorem out there like the CAP that describes what I mean?

If not, we should try formulate this here.


To PoS promoters: Go back to work!

Shows alot of asshats, think they know how stuff works, but at the end of the day , most of those asshats are just plain wrong.

We know PoW is an energy hog ,
We know PoW will Centralize due to economics (BTC, LTC & Doge already have centralized to China)

We hear alot of BullShit security horror stories about how easy it is to attack a PoS coin.

Yet , every time one of you genius rant about the death of PoS due to a security flaw.
I offer you ZEIT's exposed Proof of Stake jugular for you to Prove your ever so deadly theory.
You want to know what has happen each and every time, not a Damn Thing, because your imaginations and the real world are not the same fucking thing.

So again, if any of you brilliant asshats can take down a Proof of Stake coin with your scary laser beams.
ZEIT as always is waiting , bring it on, and break this coin with your attack or SHUT THE FUCK UP!

 8)

http://cdn.history.com/sites/2/2015/02/ask-history-what-does-it-mean-to-throw-down-the-gauntlet-iStock_000004692909Large-E.jpeg
https://cdn.meme.am/cache/instances/folder678/500x/53119678.jpg

Lol

Looks like you got hit and need some defensive now.

I ve already done your worst attack, I ve never invested into piece of shit and feels like majority is with me.

 sorry

Funny thing is,
We don't need you too, last thing I want to see is your lying butt profit when our coin succeeds.
Notice not if but When.

Like I said the only thing that happens from your security threats to PoS.
Not a Damn Thing,  It is like you don't even exist except to run your mouth spewing falsehoods.

 8)

I recently posted an article where I explain my approach in more detail. Would love to hear you opinion about it.
https://hackernoon.com/decentralized-objective-consensus-without-proof-of-work-a983a0489f0a#.r9fwu9non

It looks like this paper (https://www.esat.kuleuven.be/cosic/publications/article-2746.pdf) provides a solution to the problem.

The paper replaces Bitcoin's Longest Chain Rule by a Weighted Fork-Resolving Policy (FRP):
In a block race,
1. if one chain is longer than the others by no less than k blocks, a miner mines
on the longest chain;
2. otherwise the miner chooses the chain with the largest weight;
3. if the largest weight is achieved by multiple chains simultaneously, the miner
chooses one among them randomly

From a miner’s perspective, the weight of a chain is the number of its in time blocks plus the number of in time uncle hashes embedded in these in time blocks. Whether a block is in time is evaluated from the miner’s local perspective. A valid block is considered in time if (1) its height value is bigger than the miner’s local chain head or (2) its height is the same as the local chain head and it is received no later than τ after receiving the first block of this height. Conversely, a valid block is late if the receiving miner has received a block of the same height τ before receiving this block

An interesting result is that when k = ∞, the defense can prevent a malicious miner with more than 50% of mining power from taking over the network by sacrificing partition tolerance. Honest nodes (that are online) can thus withstand an attacker with >50% of the power as they would just continue to build their chain, while the attacker would land on its own fork.


What about new nodes joining the system? How can they decide which is the right chain in case of such forks?
"Objectively provable" would mean that you don't just rely on subjective scoring rules like the paper cited above. So, does your model really provide objectivity for newcomers?

Hm, I stumbled upon this thread and I see that it has not been posted to for some time while I think it is very interesting.
But I would like to point something out from an economic perspective since I have noticed that a lot of people are against the primary emission.

Fixed amount of an coin (ever to be in existence) is good, if you want to use it as a "value holder". By that I mean that it can be something in which you can invest and hold for a very long time hoping to save or hoping to have the rise in value.

However, if you are hoping for it to become a currency, which I think this community is thriving to accomplish, then the primary emission MUST exist.

Why?

Because if you have something of a fixed amount then this amount can be allocated only once and then only re-allocated along the time.
What happens is that the minority of the people accumulate the assets over the time (this will happen in any system and it is very hard to prevent it), while the rest is being used for trading.

However, what is lacking in this system is the ability of this currency to cover the "added value" - anything new that is imported into or designed inside the system - new production, new know-how, well shiny diamond - even new people that are being born. That is why the primary emission must exist and (feel free to call me a Keynesian) - regulated. Otherwise you will have a system like nowdays where the private bankers are basically controlling everything by controlling the supply chain of that, basically insignificant, without any real value, thing invented only to ease the trading process - money.

There are too problems with the primary emission however:
1. Inflation;
2. Regulation.

Inflation can be controled in some way, but it is not easy to do it. Mathematically, the inflation has to be a little higher then the overal progress - for example - if you have 4% of the rise of added value, the inflation should be around 5-6%. The very problem with the inflation is that the wages  usually don't follow the increase in prices....

Since the inflation, obviously, has to be regulated, the second problem is the regulation itself. It is not easy to be done in the correct way since every system is different and unique, and there is a question of that utopian thing called the "fair government". Just look what happened with the socialism.....

The blockchain technology could however do something to regulate this in the more responsible and decentralised manner. We have to discuss how and I like the idea of the OP that the systems could be combined to create something better.