Bitcoin Forum

Two side of any coin including cryptocoin.

Quark is the first rather successful effort to make a cryptocurrency according to macroeconomic theory and human experience in this field. In fact Satoshi made bitcoin as a program not a money. His ideas in computer science are brilliant but economic ones are rather amateur. To name a few economic flaws:

Large average transaction time. Considering the security there is no difference between 10 1-minute blocks and a 10-minute one. It’s equally difficult to find either of them and reverse a transaction. But for end user it’s better to have freedom of choice in security-time trade-off.

Lame hashing algorythm which produce ASIC mining industry with huge entering treshold and centralization.

Economically weak initial distribution model, resulting with degradation of miners from partners in decentralized consensuns as a mechanizm of network self-control to profit-seeking looters who give a crap on benefits of cryptocurrency, paradigm-shift and thw whole cryptocoin idea.

One could find others but these are the most conserning ones in our time, roughly 5 years since Bitcoin genesis block.

Quark tried to solve this issues and offered the following:

30 sec block time which results in average transaction confirmation time in range of 10-15 sec which is appropriate for an everyday trade.

6 “non-NSA” hashes which provide a better realization of “one CPU equals one vote” rule completely forgotten in SHA256 or Scrypt-secured coins (“one ASIC datacenter equals one vote”).

Fast inintial distribution model with 0.5% inflation rate in long run. It should secure investors and supportes funds from devaluation through new coin minting and coin mass growing.

Excluding fast block time which is proven working, other measures mostly do solve issues they intend to solve but produce other problems and challenges.

Right now [27 of May 2014] the main problem for Quark is completely hoppible situation in mining. Pool coinmine.pl generate from 60% to 70% of blocks and we have roughly 500 i7-class CPUs hashing ATM. So, we could experience a 51% attack virtually at any moment. And even assuming pool operator completely honest it’s very easy for someone to DDOS the location of major hashrate and attack Quark with no more than half a thousand CPUs. It’s a small botnet or a not very large corporate network -- e.g. Microsoft has 1200 000 server nodes, Google -- 800 000. The reason for such a pathetic situation is generally the initial coin distribution model, which generate very few Quarks, not enough to feed profit-seeking commercial miners. Just an other side of one of the greatest advantage of Quark.

Considering this we can conclude that right now Quark is unsecure at all and it would be highly unreasonable to use it for large transactions.



To fight this we of course could use new pools, donation mining, but these are half-measures. We can’t gather more computing power than a large corporate network on a donation basis.

The problem is fundamental and will stay long-term, so the solution must be fundamental. I think the only viable option is Proof-of-Stake (PoS), the form of mining when a probability of block generation increases dramatically with increase of coins in the wallet of miner. TO day this technology has already proven itself with a several years of operating in probably a hundred of coins. I know no serious issues reported or acknowledged security concerns.

Moreover, PoS is viable economically, as it reward long-term coin supportes and provide income on capital. Also PoS stimulate people to maintain full nodes which favorably affects network integrity and security.

Still, PoS is not ideal because it give a significant share of block and coin generation to coin bags with large wallets. But it could be adjusted to reduce such factor. For example the network could provide even tiny amount of coins generated this way and the process will be still continuing since the costs is almost zero. Or amount of PoS generated coins and/or probability of block finding may be depend nonlinear from wallet. Anyway we could find some intelligent and economically justified solution.

I believe the community must reach a consensus on this matter. We can’t build a succesful coin without an appropriate security basis. And we need to prove the world that we are able to handle such security problems.

I agree PoS solves a lot of problems, namely the security of the network.
This is an opportunity to implement a fairer distribution of stake rewards based on wallet size.
We could have a max stake reward based on wallet sizes of say 200,000.
Such that if someone has 100,000 coins stakes at 0.4%: (400 coins), someone who has 200,000 coins would receive a max stake at 0.4% (800 coins.) someone who has 300,000 coins would receive a max stake at ~0.266% (800 coins)
Large wallet holder receives the full 0.4% stake on their first 200k coins only.
This gives incentive for smaller wallet holders to stake (and secure the network) increasing decentralization and doesn't reward super large wallet holders 'unfairly'.

Guys, I appreciate the discussion and voting on POS, but do realize that this is not the only way to do things, it does come with its own set of issues, and it is NOT a trivial undertaking. I have multiple times posted the list below with the intention of sparking discussion on alternative measures to implement to ensure blockchain security. Please join me in discussing these and other alternatives that you can think of as well.

*1. Jackpot related mining rewards - if we can get the Grotto Lotto jackpots raised then we can produce mining incentive by paying people indirectly through grotto lotto. This is a stop gap solution until our valuation is high enough.

Proposed Goal - 20K starting point for jackpots each month going forward. We need help funding this.

*2. Mining software that allows easy access to GPU mining on multipools that pay out in Quark and that also donate 10-20% of mining power to the Quark network. There is a practical means of implementation of this - I may have found someone to code this for us now.

We have a community member now actively looking at doing this for us

*3. ? Merge mined coin. Lots of issues including constant dumping, the fact that its value is tied to investment,which would be hard to obtain if all it is is a mining token for Quark.

I don't think this option is likely viable currently but would appreciate suggestions on implementation

Currently NO. Current situation is not the best, but POS is a tough question too with its own vices. Currently what comes in mind:
Forking issues, POS is really hard to maintain, it was proven buy quite a lot of coins. Getting in functioning correctly could be tough thing. This is very big concern, because at this stage if we would have forking issues this could effectively kill Quark and push it into oblivion. Currently QRK network is stable and never required dev to fix it. Its a big deal. Once we turn to POS problems can arise at any moment and without dedicated(not hired for one time) competent dev we could be unable to fix it at all.
Requires hardfork. This is also not a benefit. This requires all services to support our fork. And for example if coinmine.pl refuses to update than our POS is screwed.

Different emission model. POS will increase inflation and actually will eliminate one of Quarks USP - constant mining rate (or EQ reward as some calls it). In this terms Quark will lose its identity to an extent (there are quite a bit coins with POS+POW design and fast mining schedule - CGB for example)

So my point is that we should try everything in our capabilities to solve network security issue prior to hard forking to POS. Hardforking is always last resort, when everything else does not work, its obviously not the case as we are only starting to work towards fixing this issue. I invite everyone to join a discussion started by Vic
http://www.reddit.com/r/QuarkCoin/comments/26lj2g/hashrate_non_pos_supporting_measures/
Lets work together and look at the problem from different angles, only that way we can find optimal solution.

- PoS complicates the original simplicity of Quark.

if PoS provides for more security how come advanced check-pointing was conceived with PoS only?

No problem - ReRaise - but i have a further question  :

if PoS provides for more security how come advanced check-pointing was conceived with PoS only - do you think this was because of the experimental nature of PoS  ?

genuine question i appreciate your feedback -

PoS suffers from a "nothing at risk" problem.  An attacker can use coins they no longer have but did have at one point in the past to attack the network.  Actually there is no reason to not do this.

Because it isn't. PoS suffers from a "nothing at risk" problem.  An attacker can use coins they no longer have but did have at one point in the past to attack the network.  Actually there is no reason to not do this.  If the attacker is unsucessful well they lose nothing in the attempt and if they are successful they get all their coins "back" (that they may have lost, had stolen, or sold).  Checkpoints limit how far back the chain can be reorged but they don't solve the nothing at stake problem, only limit the extent of the damage.

What about this (https://bitcointalk.org/index.php?topic=604716)?

Quark achieved a pretty big goal, and now its time to "come back home" in a respect where we know what its all about, i see Quark as a reserve currency now, i will be using it as that also and people will see what we will achieve in the future.

in the end again when the price inevitably rises there will be those that never listened and we will move into a slight exuberance again.

honestly i see everything as it should be.

certainly some more pools with innovative incentives could help, but its  part of a decentralized community equilibrium, i just can't justify throwing that equilibrium out for a perceived threat based on a despair cycle.

Kolin, I agree on the point, that one shouldn´t act based on a short term emotion, but I strongly disagree with your opinion that everything is as it should be:

1. Currently we have a low hashrate which makes the coin susceptical for 51% attacks. Changes of difficulty will affect the hashrate but since the price is low it won´t lead to real improvements.
2. In fact, we aren´t a decentralized community: More than 51% of the hashrate is centered in one pool. Technical issues or abuse would affect Quark directly
3. There is no public long-term plan for core development, while there are some innovative concepts out there with development backing

What the community lacks is perspective and we won´t build that by pretending that things are fine. Even if Quarks´ core is solid and advanced I don´t think that this will be enough in the competition we currently
have in crypto. As you know, even good ideas won´t survive just for the sake of it, people need to adopt them and what they need is a smart concept with a convincing vision for the future. I think we need to work on the latter and we need to work on additional features like sidechains, smart contracts, colored coins. They may be gadgets right now, but they will be part of cryptos future.

What we should do in my opinion

1. Discuss POS/POW hybrid solutions that will allow us to keep a constant inflation and don´t give huge advantages for large wallets (maximum reward was mentioned, there are other possible solutions)
2. Find competent and dedicated developers who are willing to work with us for at least 2 years. Quark has much to offer when it comes to promotion and networking, I think we are way beyond the vast mayority of all coins. Combined with good developers this will allow for a major rise in adoption so there is a mutual interest.
3. Find ways to give the community full control and transparency with regard to the process of development. This will boost trust in long term support.

I agree that the major problem is not the code but the trust in the currency. We need to back the trust with some real assets. I say, let´s do it.

PoS provides:
-- additional security (different source of blocks)
-- reward for long-term adopters and holders
-- economical stimulus to maintain a full node

PoS if implemented won't spoil Quark monetary model (0.4% or 0.5% inflation p.a. is a little price)
PoS don't even connected with price or a position on a graphics. It's pure techical issue, an additional layer of security, an important one on a low hashrate.

And this is serious. Need to do some research.

1.Foundation buy different GPU miners and the community can buy shares/contracts. The shares can also be sold at QEX (like cryptsy is doing with the mine1 and mine2). The foundation creates a special page with mining statistics. Mining can be combined with more profitable coins. The payout of the contracts can be daily and is dependent what is mined and always in Quark.

2. Create a mining pool with different levels of hashing rates. If I mine with a I5 I don't want to be mixed with "heavy GPU" miners then my mining share is not visible anymore. In this way you make it also more fun for people who contributes with low hashing power (which I think is just as important for the distrbution as the miners who contribute with high hashing power)

if PoS provides for more security how come advanced check-pointing was conceived with PoS only - do you think this was because of the experimental nature of PoS  ?

Because it isn't. PoS suffers from a "nothing at risk" problem.  An attacker can use coins they no longer have but did have at one point in the past to attack the network.  Actually there is no reason to not do this.  If the attacker is unsucessful well they lose nothing in the attempt and if they are successful they get all their coins "back" (that they may have lost, had stolen, or sold).  Checkpoints limit how far back the chain can be reorged but they don't solve the nothing at stake problem, only limit the extent of the damage.

This is enough of a reason for me to say no to PoS. Very much against. If someone asks me what Quark is, I'd say it is like Bitcoin, but it's faster and more secure. Obviously there are concerns about incentives for miners ensuring network security but I mean it's intrinsically more secure due to the algorithm, it's part of the design. I still don't think people outside of the crypto community understand what Proof of Stake is, and yet it is people outside of the crypto community that we want to discover this coin.

Please tell us which PoS coin has been attacked by so called "nothing at risk" problem.

None definitively although more than one POS coin has been 51% attacked.  Many of them have stake requirements which are negligible so often cheap attack is easier than a more sophisticated nothing at stake attack.  No POS coin has extensive history in the field other than PPC and it avoids an attack by using 100% centralized checkpoints.   Still you don't really believe that "hasn't happened" = "can't happen"?  Bitcoin has never been 51% attacked therefore you believe an attack is impossible?

Could you provide any other theoretical evidence to support your claim if it had never happened in practice?

In PoS, you use your stake to determine the longest chain thus total cumulative stake on a chain is the one to make nodes follow that chain. Say currently 5% of the stake is used to secure the network. An early adopter/exchange/group of people/stake pool with more stake (more than 5%) at some point in the coins history (the people might have sold long time back) can create a parallel secret chain and reverse the current chain by showing more cumulative stake. How do you get the current chain with this decision mechanism? Cannot be decentralized... No matter what is the approach the attackers can repeat the steps of the PoS approach...  Does it make sense?

It doesn't make sense at all. To do this kind of attack, you need generate a parallel secret chain using your 5% coin first. To sell your 5% coin on exchange you need to synchronize to the publick blockchain. Then your blockchain is not secret at all and you can't go back after you sell your coin.

The clients accept the longest chain. Once you sell you withdraw say bitcoins you dont need to go back to the current chain at all to make a profit....

To make a profit you need to reverse the current chain by showing more cumulative stake after you sell your PoS coin to bitcoin. Then you can get bitcoin and PoS coin at same time. However, to move 5% PoS coin to exchange, you have to publish your secret longer blockchain to public. Then your secret longer blockchain becomes to public chain and you lose the ability to reverse the public blockchain.

Why would the network without human intervention not accept my second chain? It perfectly follows the rules...

Why would the network without human intervention not accept my second chain? It perfectly follows the rules... The other attack you are describing is the nothing at stake problem where you can keep trying double send without any cost. I am talking about a more severe attack that will force the network to become centralized or investors/exchanges/reputation take massive losses....

I am talking about a more severe attack that will force the network to become centralized or investors/exchanges/reputation take massive losses....

Why would the network without human intervention not accept my second chain? It perfectly follows the rules...

Because you cannot reverse public blockchain using your one secret longer blockchain twice.

Why would the network without human intervention not accept my second chain? It perfectly follows the rules... The other attack you are describing is the nothing at stake problem where you can keep trying double send without any cost. I am talking about a more severe attack that will force the network to become centralized or investors/exchanges/reputation take massive losses....

It do cost to attack Pos coin. You have to buy 5% coin from market.

I am talking about a more severe attack that will force the network to become centralized or investors/exchanges/reputation take massive losses....

Please describe the more severe attack in detail.

The point is that you dont need to reverse it twice but only once.

Apart from that you misunderstand what a decentralized autonomous corporation like bitcoin means. There are certain rules and all clients follow those rules. The rule is to work on the longest chain aka most cumulative stake for PoS and most work for PoW.

 If you have the stake in your history you can reverse it 2,3,5 and as many times as you like if you want. Noone stops you from that only human intervention aka centralized checkpoints.


You only need to own the keys at some point in the past. For example, a person who deposits/withdraws multiple times from exchanges (think of exchanges using multiple addresses) can get the keys for a lot of stake ownership in the blockchain history and use it to create an alternate chain. Exchanges own a lot of stake in their history... Pools do the same.... and many other services...


https://en.bitcoin.it/wiki/Altcoin#Proof_Of_Stake

Ironically, Feathercoin, AudroraCoin and Quarkcoin, all of those PoW coin, have centralized checkpoints.

Thats true... It is like a chicken and egg problem... The value needs to rise so that more hashing power flows in and secure the network.... So I guess these coins are waiting if more adoption happens so that the price rises and become secure... On the other hand PoS cannot be decentralized at any value...

I am sure if these coins become more valuable they can remove the checkpoints....

When the mining reward of PoW coin is decreased dramatically, it will require centralized checkpoints like PoS coin.
That is what happened on quark.

I worry that changing Quark to PoS would make it complicated to newcomers. To the average consumer, PoW is hard enough to understand, but I think it makes sense at least. I think that Quark has the bare bones of something great--fast transactions, secure network, best distribution model around. We don't need to reinvent the wheel; we just need to put some air back in the tires.

I think working on getting mining pools set up (great work by Cashmen) is where we should focus our efforts. Vic had some great ideas on reddit. Orm also had some excellent ideas, which I will quote here.


I know I don't have a lot of posts on this forum, but I'm pretty sure most people know who I am so whatever. It's hard enough keeping up with reddit, IRC, Trello, Email without having to follow forums as well.

quark is just fine. Stop making all coins the same. Quark has been copied many times - because it is good. Please no pos. Pos is more inflation and reduces the value in the long run. don't kill quark with pos. Thanks.
Have some patients with it and improove otherwise. do not dilute scarce coin.

PoW coins with low/no block reward have been shown to not work. A recent failure is Coin2, which was under massive attack and had to implement PoS after that. The attacker even posted in the ANN thread and claimed that he earned 20+BTC by 51% attacks. Considering Coin2 only has a very small market cap, 20BTC is a huge number. Quark could be the next Coin2 if we blindly believe Quark is unique and shouldn't be changed in anyways, and don't take any measure to increase network security.

Not the best example.  Coin2 PoS was 51% attacked.

The problem is fundamental and will stay long-term, so the solution must be fundamental. I think the only viable option is Proof-of-Stake (PoS), the form of mining when a probability of block generation increases dramatically with increase of coins in the wallet of miner. TO day this technology has already proven itself with a several years of operating in probably a hundred of coins. I know no serious issues reported or acknowledged security concerns.

Moreover, PoS is viable economically, as it reward long-term coin supportes and provide income on capital. Also PoS stimulate people to maintain full nodes which favorably affects network integrity and security.

Still, PoS is not ideal because it give a significant share of block and coin generation to coin bags with large wallets. But it could be adjusted to reduce such factor. For example the network could provide even tiny amount of coins generated this way and the process will be still continuing since the costs is almost zero. Or amount of PoS generated coins and/or probability of block finding may be depend nonlinear from wallet. Anyway we could find some intelligent and economically justified solution.

I understand people have concerns - but we have to do full due diligence and look at all the data -

Kolin, you keep boasting about how great Quark's distribution is. In fact it's really bad. 30-40% of all Quark coins are owned by 3-4 people...

http://bitinfocharts.com/top-100-richest-quarkcoin-addresses.html

ha ha..

What is needed is an algo which will assess a penalty (a drain) against any wallets holding excessively large stakes in the coin. This algo would constantly evaluate and be aware of wealth distribution on the whole network based upon activity recorded in the block chain (pseudo-anonymously).  When the size or advantage of a wallet, or a quorum of wallets, or a "neighborhood" of wallets, reaches a certain threshold or relational structure, then the algo will trigger the "fission" of the coin balance (a small fraction of it) to occur in the designated penalty wallet(s), while the network makes corresponding microdeposits in another designated set of wallets, the beneficiary wallets.

A Fission event may (A) create new coin and/or (B) deduct existing coin.  A Fission event occurs, for example, when one or more stakes becomes "too big," or an oligarchy of stakes becomes too entrenched.  Fission causes the dispersal of coin from the big stake(s) into and among wallets deemed worthy of being beneficiaries.  That opens a wide door, doesn't it?

Fission may accomplish wealth redistribution, or not.  Its up to the devs and the market to decide which fission regimes are the best.  

My preference is to have fission deduct from top stakes and drizzle the harvest into every other wallet on the network in statistically-defined patterns and portions.  

This "fallout" or dust caused by fission can be distributed randomly in all wallets or apportioned methodically into the appropriate beneficiary wallets.  Different coin developers can compete with different coins defining different ways to determine which "standards" and wallets are "appropriate."  It would open up a whole new generation of PoS coins.  

To sum up: In the proposed "fission" mechanism, whenever the algo determines that a critical mass exists in one or more wallets, or that the time has come to forceably reshape the wealth distribution profile of the network, the stakes in the one or more wallets undergo "coin fission," and each stake blasts a calculated sum of coin out into the community to be received however the devs have arranged it. The dynamics of any coin's fission rules can be customized and finely tuned.

And importantly, stakeholders can reasonably predict the consequences of holding a fissile coin, because the terms and criteria are published; however, stakeholders can never predict the precise timing and exact cost of any one fission event (so they cant avoid it). Thus they must acquiesce to the "stake tax" when investing in the coin or they must go find another coin to parasitize.  Still, in a fissile coin, the largest stakeholders do gain enough steady growth overall to compensate and reward them for remaining dominantly invested in the coin.  

My vision of Fission is that it tickles the big wallets more than it mauls them.

Thus, the above concept is a suggestion for implementing a "coin fiission" algo that might save us from the current doldrums of the "gotto go PoS" days of altcoins, where the imperfect infrastructure of the digital economy is selecting strongly for PoS algos even though we may be better off without much PoS.  

The proposed Fission algo will operate upon wallet balances that reach a "critical mass," or throughout a network when it starts dying for lack of liquidity due to excessively large stakeholdings (e.g., high coin age).  Fission imposes a size-dependent cost upon the largest and laziest stakeholders and it makes offsetting deposits in other wallets according to variable rules and goals.  This will promote liquidity in PoS and will smooth out the rough edges of wealth-concentration patterns that would otherwise characterize a mature PoS network.  


Got it?  Great.  Have a beta version in my inbox by tomorrow...

Your comments and criticisms are most welcome...

Interesting dilemma!