Bitcoin Forum

Below u'll find the 2nd part of Transparent Mining essay, the 1st part is available here - https://bitcointalk.org/index.php?topic=364218.0. The essay is based on text written by BCNext, I paraphrase it in my own words to protect BCNext's real identity against text style analysis (as was agreed).

Nxt mining simulates Bitcoin mining by pretending that each coin is a small mining rig. BCNext decided to go this way instead of introducing his own approach coz Bitcoin community is conservative and wouldn't adopt a system with radical differences. Now, when Nxt got its own community, it's time to get rid of the facade and reveal true properties of Transparent Mining. These properties r obvious to everyone who spent some time analyzing Transparent Mining, but still...

Nxt mining uses a deterministic lottery that grants right to mine next blocks. Time of a next block is determined by the time of the previous block and by the base target. The base target is a part of Bitcoin legacy that should be left behind, it doesn't make sense to wait when next block is mined coz we already know who will do it. And we can mine blocks at a fixed rate, for example, every 60000 ms (exactly 1 min). When Internet becomes faster we will switch to a smaller gap between blocks (10 seconds, for example).

Mining reward is another obsolete part. True reward for supporting Nxt network comes from services that use Nxt. Someone owns a currency exchange and mine blocks to keep his business running. Another one owns a shop and mine blocks to keep his business running. The 3rd person owns a software company that develops programs for Nxt-based services and mine blocks to keep his business running. Selfish miners (those who mine only to earn fees) should be "removed" from the system, they r not interested in success of Nxt and only want to cash-out. If a clone appears such the people will likely jump to another ship, they add very little value to Nxt. All this doesn't mean that we should get rid of fees completely, we still need them as a countermeasure against spamming.

NXTs as coins... NXTs r not coins, at least the creator of Nxt didn't want them to be coins. They r tokens that grant privileges to support Nxt. Deflation is not much better than inflation, "real" coins should be created on top of Nxt and be issued in quantities that keep their value constant. BCNext understands that this is very arguable, the community should decide if it wants to follow the path showed by him or stick to Bitcoin legacy with unchangeable supply of coins in hope to become rich by doing nothing.

Trust noone - this is a very important principle. Nxt doesn't rely on trust but solves the problem of trust in another way. It evolves to a system that doesn't care about trust coz everything will be very clear. Transparency extended to absolute leads to inability to cheat thus removing necessity to think if someone should trust another one.

The list of these properties can be extended and BCNext wants the community to do it by itself...

I think that the idea of reducing the fees by a factor of 10 or 100 is likely to pretty much completely get rid of the "mining mentality" (and will increase the # of transactions made) although one does need to be careful perhaps not to do this too soon as currently the "forging reward" is one of the main factors motivating people to run nodes.

Changing the total supply from 1B to something else would be a lot more controversial than reducing the fees - effectively that amount was a "promise" made at the outset so if that promise were to be broken I would expect some investors (especially the 73 initial ones) would be unhappy about that (actually it would probably upset those who have invested at recent "market prices" much more than the 73 as they have already probably each taken large profits from their initial investment).

Then we should keep the fees @ .01 Nxt....as "selfish mining" will be removed from the system.

My VPS Node has been running since the DDos war and my motivation is not forging rewards....my motivation is to keep Nxt running...period.

I agree.  Reduce the tx fee to 0.1 or 0.01, but keep the currency float at 1 billion Nxt.

This part was about issued assets, not nxt.

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Sure - of course there are probably quite a few running nodes whose motivation is not forging - hard to know whether or not that is the majority (perhaps being able to work this out might help with the decision).

I am guessing that a reduction from 1 to 0.1 should at least provide a good way to "get an idea" how much a "further tenfold reduction" would affect the network.

+1

But I think nearly no one is forging for the real benefit of forging. If you do maths you will see you take really low profit. As mentioned before real value is keeping Nxt running, and that's the first for all the people who owns Nxt.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

Nxt is not centralized so I think it's rather good than bad. Also, fiat currencies backed by gold/NXT don't look too bad to me.

This was my thought too.

I have a problem to understand where the difference is now

- CfB always said there should be coins on top of Nxt
- Now BCNext says there should be coins on top of Nxt and this should be the sole purpose of Nxt.

Since you need NXT for this coins, NXT will automatically gets evaluated (high) and BCNext idea of using NXT as coins cannot become real because NXT will get traded like gold coins, e.g. eDollars backed by NXT, dollars (long time ago) backed by gold. Wrong?

edit: Or is this a terminology problem, because 'gold coins' are no coins?

@the last part:

He want's coins backed by gold/silver. Not backed by NXT. How would that even work, a coin backed by NXT is basically NXT in itself^^

I don't see how any AE is going to really ever be properly "backed" by anything - you just end up with "centralised" Gateways a la Ripple or you end up with disasters like GLBSE.

Why do people think AE is so important when the only "decentralised" part is the "trading between IOU's and NXT" (anything else becomes reduced to having to "trust" whoever to actually respect the IOU)?

I;m sorry but any ASSET can be created in AE.....what is Bitcoin backed by? or the United States Dollar?


This would allow us to have a FIXED value e-currency which we can use for micro payments.

@ 10,000 TPS and above speeds.

Nxt is like gold. But you can create gold roman coins, gold watches or teeth :D So you will always need gold (Nxt)

Exactly.

I can say I'm issuing a fiat currency backed by gold and sell the fiat currency on Nxt's AE, but who is going to make sure that I have the gold to back the fiat currency?

 ;D all the above 3 gold examples carry value.

It won't be fixed at all if the issuer suddenly stops redeeming their IOU's and in if fact such IOU's will quickly become worth *nothing* - as you said the Asset can be anything including "Pirate Ponzi Coins".

Understand that just calling something NXTUSD does not at all make it worth 1 USD - it's no different to Mt. Gox USD amounts (they have clearly been valued at less than *real* USD amounts for a long time).

What would be the consequences for Nxt dev?

FORGET IOU....I'm not even talking about IOU's.

Example: NXTMONEY is pegged at 1 USD....so everyone who has or wants to receive NXTMONEY knows that it is worth 1 USD, 1 YEN, 1 CNY for example locally in his country.

Now lets say a merchant sells some cloths for NXTMONEY he now have NXTMONEY in his account....he can then go online and buy from a supplier who accepts NXTMONEY...and so on.

The problem NOW is that NXT or BITCOIN price is always FLUCTUATING....so they don;t lend themselves to simple commerce at the corner store.



 

You are - but let's look at what you say "next" (pun intended).


This is the problem - *how* is it *pegged*?

It can only be so if some individual or group is "guaranteeing" to accept it for 1 USD (or whatever) but if that person/group decides that they are not worth it (for whatever reason - maybe they don't have any USD left) then your *pegging* has just failed and in fact the coins are worth ZERO.

This is why they are not *actual* USDs (or whatever) - they are actually IOUs - this is EXACTLY how Ripple works.

Solution of retailers about the fluctuations;

http://news.cnet.com/8301-17938_105-57618433-1/real-world-price-tag-tracks-shifting-bitcoin-exchange-rate/ (http://news.cnet.com/8301-17938_105-57618433-1/real-world-price-tag-tracks-shifting-bitcoin-exchange-rate/)

Awesome.


I like this. I can't believe I didn't realize the significance of this before, but forging makes 100% more sense now. People will want to forge because a more secure network = more business for them = more profit. It encourages innovation on-top of the platform, rather than stagnating the cryptocurrency movement with 1000's of alts. Power is removed from centralized PoW pools who don't care about network health (ahem, DiscusFish) and instead transfers that power to people who actually need the platform to run smoothly and healthily as possible.

MtGox: Bitcoin Transaction Malleability bug

https://www.mtgox.com/press_release_20140210.html
BTC Crash!

"Note that this will also affect any other crypto-currency using the same transaction scheme as Bitcoin."
NXT not affected!! :)

+1

Hm, looks like this is a problem with my English. BCNext's idea is that NXTs shouldn't be used as mean of exchange.

Nxt could have a special kind of asset backed by fixed amount of NXT.

Ouch - so we should instead exchange things that are just IOU's in place of something that actually at least has scarcity.

Although maybe Ripple screwed up by trying to make too much out of Ripples I think that unless you have atomic cross-chain transaction support so you can trade something of *real* value (such as BTC or LTC) then this would be a disaster.

None. It's just another interpretation of the reality. Just a question of terminology.

But if we aren't supposed to "trade NXT" then that wouldn't have any value then would it?

The point is that we are NOT supposed to do anything, it's up to the community how to develop Nxt further.

I have been working on a solution in my mind for a couple weeks now....I will explain it once Asset Exchange testing starts and we play around for some time....right now it's only concepts in our minds....at least I had the luxury of speaking to a PhD who has been testing the Asset Exchange for some time now but there are still black spots in my thinking.


 

Best of luck with it - but my guess is you end up with something like "Bitshares" who think that just because you call something bitUSD then it will magically be "worth" 1 USD because of it being a "prediction market".

I don't think that holds water at all nor any kind of other "pegging" unless you are talking about the kind of "pegging" that governments do (like Hong Kong's pegging of the HKD to the USD) which is not at all what I think people interested in "decentralised" solutions are looking for.

I think it is best for NXT to have multiple purposes.

1 - As a store of value because of its scarcity.

2 - As an intermediate currency between IOUs issued on the asset exchange.

+1

Any type of "pegging" is centralization.  This is the antithesis of Nxt's ideology.

Let me rephrase his question:

I agree (and had always thought that was the intention).

The mistake that Ripple made was to make all the statements about Ripples just being "postage stamps" and having no real value and then suddenly hyping their value after launching and giving away "coins" (a small percentage). If they had been more honest about it in the first place people would not have been so turned off by it and so far I think Nxt has been far more honest (so no need to go and do the "reverse" of Ripple).

Pegging INSIDE the NXT ASSET EXCHANGE would be Decentralized....as I said I need real time with the Asset Exchange to take my solution forward.

IMO, of all things, NXT - as the base unit - is like gold. It backs up everything in the system because everything can be traded for it, the supply is constant, and its value (within the NXT ecosystem) is guaranteed by the protocol. EDIT: Plus, it makes sense, people don't use gold as currency (anymore) but it still has huge store of value.

And holy shit, why is NXT still tied to BTC... maybe we should contact coinbase to do USD/NXT pair :)

marketing should jump on this and use it immediately

This makes no sense at all - in order to peg NxtUSD to say NxtAUD *inside* the Asset Exchange would mean that the actual USD/AUD exchange rate has to be ignored (as that by definition is *outside* the AE).

So by definition you can't peg those currencies to each other in any meaningful way - you might decide you are going to always exchange 1 NxtUSD for 1 NxtAUD and the opposite but even that won't work unless you have exactly the same amount of either.

The btc tx bug seems to be known since ages. It is more of a exchange bug I think.

I don't want it either. Especially after reading that paper and thinking through TF thoroughly.

What's problem? Scarcity of a precious and in this case I mean really precious good is what make that precious good a perfect thing for a basis. Even better than gold because it cannot be created by mining or nuclear fusion.

So the only problem I have now is, that I don't see any news with his 2nd plan. Anyone, please?

That is what I was talking over and over again.

NXT has no control over offchain activities. It's humans that have. They decide whether they accept it or not. If not, *boff* value=0.

Nothing really new.

My aim is a fix price scenario...I will continue thinking along this line once I have some actual experience with the Asset Exchange.


Lets discuss after a month.  :)

Well, that is interesting. I would like really like it because it seems keeping NXT running because of keeping an actual business running focuses more on the actual value being created other than on NXT itself.

So, yes. I would like it with low fees to incent everybody to stabilize the network and preventing big businesses from soley controlling NXT.


Am I right, that the only technical change we strive to is lowering the fees?

No worries - am sure we'll see some interesting ideas coming out once the AE is live.

I guess I am just a little more skeptical than most about its benefits other than removing the reliance upon 3rd party servers/DBs to store information (which in itself of course is a very clear benefit).

@Come-from-Beyond, I am not sure if I understand this right. I see to possible interpretations:

1st:
BCnext doesn't want the price of nxt to rise (i find this unlogical because even if we issue coins backed by Nxt, the value of Nxt will still rise even if we issue more and more of them. The value of those coins will not rise.

2nd:
BCnext means that we shouldn't just hold Nxts and wait until their price rises, but rather we should make services and develop businesses on top of Nxt in order to support Nxt and consequently it's price will grow.

Or neither of them? Sorry, i wish i didn't care about price, but i do, if it rises i would be able to start a business connected with nxt, work from home and don't see much people, be part of the revolution and see how banks' revenue is crashing. I hope this doesnt sound too bad.

It is not about the price. It is about a complete ecosystem that supports NXT just because it build upon it.

BCNext created a platform to build economy on. We use NXT as coins but BCNext planned that "money" will be built on top of Nxt core. Anyway it doesn't really matter what he wants, Nxt will evolve the way the community wants it to evolve. I wouldn't pay much attention to BCNext's plans.

I would stay away from referring to Nxt as "tokens" as it is similar to Ripple's "Postage Stamp" reference (i.e. implying that it isn't really a currency in itself).

For me, this make sense;

Just wanted to say thank you CIYAM for being levelheaded all the time. It's good to have constructive criticism!

But isn't this the natural way for things to happen? I mean it's not like following somebody's plans. It will happen naturally, big businesses will be built on top of Nxt and they will take care of it and supprot it with forging, while fees will be lowered and there won't be people who forge "for the sake of forging". Coins will be issued backed by Nxt and will play the role of means of exchnage, but Nxt will still be something like a reserve currency. I thought this evolution was inevitable. Is this what BCnext meant or i didn't understand it?

Seems u r right.

That is my understanding, too. And CfB said something similar also, I think (coins for currency, NXT for value)

Actually the Nxt ecosystem is what gives value....that's why the price in fiat terms doesn't matter.

These businesses and services all exist inside the Nxt ecosystem....the stronger the ecosystem the more valuable it becomes.

NXT itself is backed by power to influence on the whole system. If u own 1M NXT then u'll forge each 1000th block. And u can charge fiat money for inclusion transactions into blocks.

Wait, what? When Assets are backed by and bought with NXT, NXT will have a value in fiat terms because of these assets and vice versa.

Or do you think the fiat world ends in the next months?

Hi BCNext and everybody,

IMHO, The problem with Nxt is that the person have more Nxt receives the transaction fees.
But it is not fair!
We should pay the fee to the server and peer hosts and administrators directly.

I'm deep in Nxt but by the way don't doubt to invest on a coin that considers the above fair paradigm.

Thanks,
Sepehr

I'd like to add that this "power" is very valuable. If u forge the next block u decide what orders to include into it. And this decision will change the market.

NXT -> Power -> Ability to change the world

What r u talking about? Nxt offers the most fair way.

I am saying the Nxt ecosystem has value no matter whether it is priced in USD or GOLD or WHEAT or some other currency not yet created...if it survives and continues to grow it will have intrinsic value.

Like the Internet.


 

Actually this is something that concerns me far more than the initial distribution or the PoS reward for forging.

If AE bid/ask tx's can be arbitrarily included or not in a block then I can see a lot of manipulation occurring in this part of the system (another reason that I am not really hooked on the whole AE thing).

This of course could be compounded by huge stake holders "colluding" to say hold back orders.

You can;t just arbitrarily block inclusion into blocks...the only way is if someone one out bids you in tx fee....and if they do you can wait for the next block which can be only the next second.

or am I missing something.

Luckily Nxt can't provide HFT so we shouldn't worry much. Time critical trades will still be done off-chain.

I am pretty sure you can decide which txs you are going to include in your block - the fee is simply to encourage to include as many as you can but if you don't want to include one or more particular txs (and instead include others) then I don't think anything can stop you.

Of course TF does help and it is likely such txs would get included in a following block, but, if we are talking about "matching an order" then a forger could simply include their own tx in preference to another (meaning that you might have just "missed out" on your buy/sell to that forger even if your tx was actually broadcast *first*).

Which then begs the question if all "time critical" trades are going to end up being off-chain (therefore centralised) what exactly is the huge benefit of even having the AE?

(sorry to be so negative about AE but I am still struggling to see why it "so great")

Maybe non-critical ones?

And this is something that makes me wonder about the value of the AE. If we aren't going to trust it for "time-critical" trades (which would be pretty much *all* trades if you are a day trader) then what exactly are these *important* but non-time critical trades that it is needed for?

(some concrete examples would be very helpful here)

https://bitcointalk.org/index.php?topic=455861

Time-critical is subjective....60 seconds can be time-critical....it all depends on the pace of the market.

It's more fair if we pay the transaction fees directly to server operators.

Yes - I guess something along the lines of using AE to trade precious metals might be a better application (although not being a PM trader it doesn't appeal to me personally).

I believe the value of NXT cannot be determined by NXT itself. I would call it external value to stress that issue. If that holds true, a dynamic change in NXT supply might not be possible.

What the best indicators for NXT's external value? MtGox's, BTER's value is not trustworthy. How to determine it then?

FWIW, I could very well live with a constant number of NXT and a slow increase or decrease of its external value.

Another issue, I am concerned with is how to distribute these new NXTs. What mechanism would be choose there?


EDIT: When reading https://bitcointalk.org/index.php?topic=364218.0 one recognizes: "[...] The 2nd scenario can't be applied to Nxt, coz no NXTs exist outside the network. [...]" IMHO this is really important to understand why a constant number of NXTs is the best way.

My same sentiment...

also

please do not try to increase the support to remove mining fees, at least not just yet...Mining makes more people run more nodes, no matter their intent...it secures the network unless you already have Advanced DDoS Protection: Project Kharon implemented and ready to be activated

do not remove mining
do not increase nxt supply....asset exchange token will peg a stable value from people who can verifiably back tokens with real fiat
transaction cancellation is just ridiculous...I hope bcnext is ok






I think every everyone in the community wants nxt to be able to be traded MYSELF INCLUDED  whats going on with bcnext?????? why even suggest this???? or is this another one of his social experiments to make sure he is not seen as Messiah and ensure the functionality of the community is decentralized??? if not i think something serious is going on with him!!!!

Doesn't matter, it's centralized decision (to provide NXT <--->, say, gold), so it can't cover whole field of risks completely (gold's holder can be robbed, can cheat and so on). Why backup so needed for minds? Money better serve its pupose with free flow, w/o any backup. And decentralized money better than centralized.

I'm curious, how does the AE interact with instant transactions? With instant transactions, you could theoretically have semi-HFT (not as fast as off-chain... but pretty fast)?

I also assume that by instant transactions, this actually means instant confirmations (up to a certain point)? Say you can predict 5 blocks in the future with 99.99% accuracy, so if you perform an instant transaction from your special account, you would get an instant 5 confirmations. Even if a single rogue forger decides not to include you, you will still have 4 confirmations.

Or am I getting this completely wrong, c-f-b? I know you explained this somewhere before, but I'll be honest, I did not understand it ;D

I remember a quote from him through you...: "never trust anyone especially with a name like bcnext" or something along those lines...

How "removing" pure forgers going to be provided?

As I understand it, it arises as a result from low fees. A very low incentive to forge.

Do u think there'll be better security if forgers'll get nothing for their job? I don't think so. There'd be forgers competition for fees and best possible decision to secure network (protected public node with wide bandwidth and skilled operator cost some resourses).

Remember, forging - way to secure system. Only then, may be, business itself.

I agree. NXT's external value is not relevant. It's internal value (the value of the goods and services relying on NXT) will be the reason for sustaining it.

Exactly. Leave forging the way it is. Competition is good.

But system needs thousands of independent forgers across the world, while merchant community's rising up. But after that how do u insist forgers to install code that makes their buisness a waste of time?

IMO: better way is position forging as business. Someone'll bake bread, someone'll forge to secure Nxt ecosystem. I don't see so much difference. IT-business for everyone. And good way to redistribute money.

1) There will be zero forge income for people just buying NXT because it is great platform?

2) How should look real example of successfully forging individual?

Oh, sorry. I do not understand what you mean by: "do u insist forgers to install code that makes their buisness a waste of time" Could you paraphrase it?

That's exactly my opinion, too.

I would compare forgers with banks. They keep the system running by verifying the transactions and the like. One thing I dislike about banks is that they create money (cf. https://bitcointalk.org/index.php?topic=193376.0) and therefore rely on an every-increasing industry. So, they push it forward.

Something I would like is a NXT ecosystem that relies on NXT but forgers aren't the ones pushing it forward. The ecosystem on top of NXT should do that.

So, in the end, they may get a piece of the cake to sustain the forging and a bit more of it but they shouldn't be given the power to create NXTs .

As far as i understood it, people will buy it because:

1st:



2nd:
They will buy it to exchange it for coins backed buy Nxt and use those coins as a means of exchange

3rd:
Business in the Nxt ecosystem will buy and forge it to support the network which serves their businesses

So nevermind, I misread  :)

I totally agree with this.

@CfB

Removing the randomness from the time to next block will allow us to use the block number as a clock that is synchronized to realworld time. I can see a lot of potential with this!

Transaction fee to manage spam and blockchain bloat makes sense. As it is forging was generating 0.5% per year, at min fee of 0.1 NXT it will be 0.05% per year, so no incentive to just hold the NXT. When NXT network is strengthed, min fee can be set to 0.01 NXT pretty much eliminating any desire to hoard it.

Q1) When BCNext says "issued in quantities to keep their value constant", would issuing NXT Assets in fixed denominations like 1 BTC, 1 USD, etc. satisfy this? I want to fully understand what is being said and this is tricky especially if second hand and different language.

Q2) I think adding support to NXT so that it is able to see or even issue offchain transactions is the only way to extend transparency beyond NXT blockchain. Is there a way simpler than using indistinguishability obfuscator that can be used to trust offchain results from peers? Would carefully designing matched pairs of subroutines to 1) invoke and 2) verify offchain actions be adequate to create trustable transactions despite Evil Bob's best efforts?

Q3) In general, am I on the right track with NXTlayers, NXTplugins, crosschain transactions, automated gateways, NXTcash, blockchain FIFO, etc?

James

I can't imagine why somebody who is selling t-shirts or anything else should be forger and nobody else.

I like the idea forging as business. But still don't undestrand why average person buying a 100000 NXT will not be able to forge.

Mining made bitcoin so famous, because people can do something for the idea at home and earn real money.

What I'm missing?

Maybe you're missing the fact there's many things you can do for the idea at home and earn value. Promotion, development, trading, third party services, etc.

It's important to start changing the mining=forging mentality, and the mining paradigm itself. It will be obsolete soon. The real new paradigm for adoption should rather be something like proof of learning (http://www.cryptocoinsnews.com/2014/02/10/unitas-replace-asic-gpu-cpu-miners-humans/), while proof of stake is a way of securing the network, not an easy buck.

Mining is still possible - for coins built on top of Nxt. As far as i know Come-from-Beyond is actually almost ready with such a coin. (Lakshmi)

Instant transactions work only for usual payments.

I like the idea, but then, I always liked the idea of "something for something".

@marek3ball: as far as I see, there is nothing stopping anyone from forging and nothing else. It will just be unprofitable compared to forging and offering services. I could set up my shop and reduce or eliminate the running costs by being able to run my shop by using my forging gains to pay for servers etc. I and many with me would like that.

As BCNext says, there still will be systems (if this gets implemented you can bet on it!) that will let you forge and just do nothing. It's that BCNext's vision for Nxt is that it won't do that. Someone will come along to clone Nxt and attract the "selfish" forgers who want to get rich by basically running a program. That isn't bad in itself, but it could be much better.

There are many people who would be willing to get in on it, so the system will filter out users by itself. Market: pure and simple.


Nothing in here says Nxt (tokens) will have no value. Their value lies in the "privileges". That makes them a valued possession. Nxt (tokens) are the basis of the system and as such will be in demand. Anything else just refers to them. Their ultimate value is in the fact that they enable the use of (or more of) the Nxt ecology. I see no problems in their value. As such they would resemble red blood cells that are essential to the operation of the living body, whatever that body does.

My 2 Nxt (or whatever equivalent you prefer)

+1

Like it or not, most people are selfish. These words from BCNext mostly apply to some ideal world, not ours. IMHO.

Thank you for very interesting link to the proof of learning (http://www.cryptocoinsnews.com/2014/02/10/unitas-replace-asic-gpu-cpu-miners-humans/). As you can see I'm working a lot to help promote Nxt in the way I know (https://nextcoin.org/index.php/topic,3540.0.html). I would be very happy in case I could be payed by the system for my renderings.

It is Nxt in some way transforming to the POL - proof of learning system? It could be great too. Then we should stop promoting Nxt's forging on the boat in pacific with mobile phone.

I like all yours high level ideas. We shouldn't forget about average people newly interested about Nxt.

But BCNext explicitly states that clones will fix that problem, which they will. There will be room for clones that will reward the forgers who just want to forge, because there are people who want to do just that. This is what I like about the evolving world of the cryptos. The clone won't be bad, it will cater to a different niche. I say good luck to them and will mean it.

But, I am trader and merchant enough to see loads of interesting opportunities for people like me, who want to carve out a niche in Nxt, too :)

The upshot it also that if Nxt doesn't do this, probably someone else will make a clone who does it. :)

I'm interested in the answers.

I think "self-less" (not forging for profit) forging is great in many aspects:

1) Encourages people who run businesses to forge. These people actually contribute to the ecosystem. This aligns being productive with keeping the network secure.
2) PoW mining is "popular" because it is extremely selfish. Bitcoin was designed so that this selfish desire is aligned with securing the network, but I'd wager most miners could care less about bitcoin as long as they are making money. Also, since the introduction of PoS, PoW is completely obsolete (besides running turing-complete scripts, but that still works better in a PoS system where there are a lot of free computer resources).
3) You can forge with 100000 NXT, something like 1 block every 2 days? I agree that it's not profitable to do on it's own. But reading BCNext's and c-f-b posts, it is more than likely there will be coins built on-top of the NXT ecosystem. I'm sure someone will make a very profitable PoW coin.


Ah, okay. Is this a technical limitation, or would it just be a very bad idea?

I wanted to say that, basically, if something is not interesting for selfish people, then this something cannot become widespread, it is doomed to remain restricted to a small community. Well, I'm afraid it will not work if we say "you have to run a Nxt node for the sake of better world!"...

Also, I think that saying "there is a clone that would do what you want" is strategically not good   :)

I have been working on shifting our focus to bring in doers who have the talent and willpower to contribute to the NXT ecosystem. NXT is an innovator's platform, so I feel that we should be showing that side more. I am currently working with Anon136 on writing a letter, on behalf of the NXT community, that will appeal to businessmen and academics, because these are the people who will bring NXT to the top. Average users will come in time when the ecosystem is more established.

I can't tell you how many times I've emailed coinbase to add Nxt.

Just read the "Proof-of-Learning (http://www.cryptocoinsnews.com/2014/02/10/unitas-replace-asic-gpu-cpu-miners-humans/)" article, where "learning" is a bit of a misnomer, but this is already a way of getting a huge adoption. I disagree that even with the "idealistic" setup, it will be restricted. People will play with the "rules".
If you go by the "Proof-of-Learning" model, you could still get huge returns on just running memes.  :D

People will find ways to monetise with the least amount of work anyway.

But I get your point. I am just trying to not let go of mine ;)

I really hate having to go through BTC first via coinbase, because I have to wait 4 days before I get my BTC and then transfer them into NXT. During that time, prices tend to move ;D

Does coinbase have some kind of petition form? I'm surprised they still deal only in BTC.

BCNext was talking about payments only - https://bitcointalk.org/index.php?topic=316104.0

Thanks for the link! But I doubt that such a thing could really work - too many abuse possibilities...

Also, this
would mean that (almost) all scientists (and, certainly, all mathematicians) are doomed in such a system  ;)

+1

http://support.coinbase.com/customer/portal/emails/new

In regards to Part 2 of Transparent Mining.  I personally think it's essential that coins are built on top of Nxt.  Otherwise, we are no different than BTC or new POS clones. We can create a huge market all of which relies on Nxt as the infrastructure.  I would also go so far as to propose that any new Nxtcoin is required to send 10000Nxt to genesis at time of creation.  Thus we are reducing supply of Nxt while adding value since Nxt would be required for creation of Nxtcoin.  All Nxtcoins would start with the same value (10k Nxt) Would also be great because individuals can fund raise Nxt in order to create a new Nxtcoin.  Nxt would become immensely valuable with that model and eventually all Nxt could be replaced with Nxtcoins.  

Can you please explain what job a forger doing other that unlocking his client and leaving the software open?
But the network is not just these nodes! the network needs servers that is now working by donation! IMHO that is not fair!
Just my opinion!

I'm personally may open a client to forge, but why should I arrange several servers/ VPS around the world to Handle the network? Just because I'm a Nxt holder? Just because donations?

That is not enough for long term plan!

Owning NXT is somewhat like owning shares in a virtual public company.  The shares were issued all at once, but they happen to be coins that are traded on crypto markets, which is nice because they are accessible to anyone.  They function as both shares and as the resource used in the network itself.

The forging fees are not attractive right now as an incentive for profit because there is no real activity yet.  To me, forging fees are more of a programmatic "dividend" that is built into the shares.  You are only paid this dividend if you show up to shareholder meetings (run a client with an unlocked account)(run a node).

Same here. I,m running 3 24/7 nodes weeks ago. Motivation is not forging rewards, is Nxt and his concept.

Sorry bit off topic....if anyone has seen the new Robocop movie then you will see clearly why anonymous encrypted internet/calling/messaging/platforms will be a staple of the future.

(leaked today from our dear friend ED)

‘Gilgamesh’ and ‘Shenanigans’

Instead of accessing cellphone metadata through cell phone towers and internet service providers, the NSA uses a program called Gilgamesh. To be able to track the cellphones of potential targets a special device known as a ‘virtual base-tower transceiver’ has to be installed on the drone. The transceiver emits a signal that forces the target’s mobile to lock into the NSA’s system, allowing the target to be tracked to within 30 feet of their location.

As well as Gilgamesh, the NSA has developed a program known as ‘Shenanigans’ that acts like a giant cyber vacuum cleaner. A pod on an aircraft downloads massive amounts of information from any wireless networks, smart phones, computers, or other electronic devices that are within range.

The world needs the Nxt Ecosystem....

I think selfish is a wrong term, I and a lot of people want to make money/business on a new revolutionary way: Cryptocurrency. What is selfish about that? Then every business is selffish, it is always about making money and provide food and shelter for your family. Reward the forgers and youw ill get a lot of forgers!

I tink all these are ideas are interesting and fascinating, but very hard to understand for Average Joe... And me. ;)

Okay, I do it:

The forger:
 - has to have a client
 - risks all his stake if the client is malicious
 - risks his hardware if the client is not secured against malicious attacks
 - has to pay the electricity bill
 - has to pay for the hardware/renewal of such
 - has to pay for a place that hardware can exist in
 - has to pay for the bandwidth he contributes to the network
 - has to implement security measures (attacks, heat etc.)

I think there is pretty much at stake, literally.


So, forgers should be paid for their expenses. But nothing more or just a little bit of it.


As I said, I see forger as an equivalent to bankers with a most important difference (both keep the system running):
- forgers do the least what is necessary to sustain the system - verifying transactions and doing all the hard computational work
- bankers generate the drive to keep the system running by generating money and debts (watch the videos of freigeist) and therefore creating the urge of the society to drive forward, work and repay debts

Bankers have the unfair advantage of creating and manipulating the ways the system works. They therefore make profit at the expense of others.

Forgers can't and therefore don't. BUT they have to be compensated. The (compensation - expenses) should be close to 0 but maybe bit more to create incentive for people to join and explore the possibilities of NXT.

"Wall street complex financial instruments were actually designed by mathematicians and Nobel-tracked physicists, who used algorithms and computer models to reconstitute the unreliable loans in a way that was supposed to eliminate most of the risk.

But you can't model human behavior with math."

interesting.

When Account Controls are implemented, I imagine you can simply lease a "puppet" account your forging power. So you could have a 10mil+ NXT account forging through an account with 1 NXT, so the only risk you take is is the 1 NXT.

It's a tradeoff. If your business relies on NXT being healthy, then you have a very good reason for forge. If you're simply a user with a small balance, but you aren't really affected by hiccups in the service, then obviously you wouldn't forge.

Tbh, I think the rewards justify forging, although it may seem not to be so. For example, if you hold Bitcoin, you are paying a ~10% inflation tax every year. Your stash is literally generating -10% BTC a year.

In NXT, your stash (according to jL7777) appreciates by 0.5% a year. This is a +10.5% difference vs. BTC per year.

This is an important point. Nxt is about transactions being done. It does nothing if no one doesn't dó anything. Any discussion about whether or not forging is profitable is moot until activity gets going.

What do you need to get activity? Services, and lots of them. This is one of the reasons I like incentivising service providers to forge.

That way the "passive" forgers (I like that term better than "selfish", because they too are providing a service to the network) will also get some of the dividend, but it will be less than the "active" forgers, who are actually making the network more attractive to use and also provide extra traffic and transactions.

As I said, in the proposed system, there still is a place for passive forging, but the gains will be much lower than for active forgers.

Tit for tat.

So, what's your point?

Just because, we might be might workaround some security issues does not mean the forger can lean back forever.
Just to make that sure: There will always be a bug! Could somebody create a meme for that?

The real world/hardware etc. issue won't go away anyway.

I completely agree!

Something, I would like to add: whatever ratio of passive/active forging we strive to, we should do the transition as smoothly as possible. Humans cannot bear change and especially not abrupt change.

I return my agreement with this :) Easy does it.

I also would like to add that terminology is important and would like to opt to keep the passiva/active forging terminology.

If "selfish" is used, prepare for a fight. Human nature and all that :) Also, "passives" are still providing something of value.

Yes, "selfish" is probably a bit too strong; but, in fact, we agree in essence. It is quite normal for people to expect a reward for resources invested. And this reward should be immediately convertible to  food and shelter money for one's family, which (I mean, the family :) ) is the most important thing in the world. So it is natural that a forger expects some profit, and that's why the fees should stay, in one way or another.

Hm, what bug are you talking about?

The costs of forging are already taken into consideration when you decide to forge or not. If you depend on the NXT network being very robust, the incentive to forge (supporting the network) vs. not forging (making the network more vulnerable to attack, and making you lose potential profits), then there is a clear economical advantage to forge. There is no true "selfless" forging (maybe rarely), forging aligns the desire of a stable platform with network security, as it should be. This is different from selfish mining, where the only reason to mine is for the block reward, and no one really cares about actually supporting the network.

Both are economically driven, thus forging is not a charity service.

Let me summarize:

We want:
 - passive forging (that what we do right now)
 - active forging (passive forging + additional service on top of NXT)
 - supporting the family
 - slow change

ok you're gonna have to explain what the differences are between active/passive forging.  I do not get how you are making the distinction

why precious metals? why not coffee beans? or oil?

I think it's impossible to remove randomness completely e.g. the miner of the next block may unexpectedly drop out of the network (as Anon136 mentioned in the interview), or botch the block generation. It'll take time for the network to agree on the next miner in line (on the order of seconds? milliseconds? Should decrease as networking tech and infrastructure improves. EDIT: But increase as the # of forgers increases). So the block number could work as a rough timer if you don't need high precision (e.g. for timestamping creative works), but otherwise I think you'd be better off relying on clocks worldwide, which already have a long history of consensus on time.

In fact, I'm guessing (only guessing, since the great puzzle of TF hasn't been solved) that Nxt will still depend on computer clocks for timing. So might as well go straight to the source for time info.

Whatever the case may be, TF should avoid 15+ min time to next block situations. CfB already hinted at this, the high variance from willy-nilly needle in a haystack random hashing, and using base target to compensate, eventually leads to potentially catastrophic situations like multiple quick blocks followed by an insanely long one.



I dunno if this is the 'right' track (for BCNext, or everyone else), but I'm definitely interested in all this. The current model of forking to experiment with new coin properties and features is very inefficient.

After the test of Asset Exchange
here is a workable scenario:
1. bter,dgex,btc-e, issue asset like :BTC, LTC, Dogecoin etc. backed by Nxt
    if issue 1BTC(token) , 20000 nxt have been locked.
2. someone want to sell nxt for btc etc, place bit order, if match the ask order, then btc(token) is transfered to receiver account.
3. more and more can place ask order with btc, etc.

1. because bter,dgex,btc-e are reputable, so you can trust them
  you can deposit your btc,ltc for btc token.
  or can withdrawl them.

I'm pretty sure that when TF is fully activated, blocks will be 1 minute apart, no matter what. C-f-b mentioned every block would have a "group" of forgers (I believe it was 3) eligible to forge the next block. So they would all have to drop out at the same time to simply delay a single block (unlikely). This also has the side effect of being unable to guess who will truly release the next block within the group, thus make it hard to game your own transactions.

I disagree.  Literally.  ;D

Point by point:

 - has to have a client
     - this costs nothing

 - risks all his stake if the client is malicious
     - this can be prevented with some forethought... which costs nothing

 - risks his hardware if the client is not secured against malicious attacks
     - risks his hardware?  This is quite far-fetched and highly unlikely.  It reminds me of the StuxNet virus, which made Iranian uranium-enrichment centrifuges spin until they burned themselves out.  But I know of very few "malicious attacks" that can fry my home PC.

- has to pay the electricity bill
     - this is a sunk cost.  The forger already has an electricity bill, and as has been stated countless times, the cost of electricity for running a Nxt node is very low.

- has to pay for the hardware/renewal of such
     - this is generally also a sunk cost, since people can forge on existing hardware... except for folks who have bought a Raspberry Pi: they're out $50.  Anyone who has spent $5000 on a spiffy Nxt forging rig should be a little embarrassed.

- has to pay for a place that hardware can exist in
     - This is also a sunk cost.  You already have a place to exist in, which you generally share with your hardware.  And your hardware isn't that big.

- has to pay for the bandwidth he contributes to the network
     - This is also a sunk cost, since you already pay for bandwidth. And you can still forge if you don't advertise your node address, which minimizes bandwidth usage.

- has to implement security measures (attacks, heat etc.)
     - "heat security"?  I don't even know what that means.  As for other security: most people already have an edge firewall protecting their local network.  People who don't use any form of security for their home setup are far more exposed already, for their existing hardware (PCs, etc.).  So we're at "sunk cost" again.

Add it all up, and you don't have much to stand on with your attempt to quantify risk/investment.

But consider the alternative.  To run a BUSINESS built on top of Nxt (or to improve/contribute to Nxt itself), you need to make a significant investment of money, time, intelligence, and sweat, depending on what kind of business/advancement you want to build.  Ask nexern how much he's earning.  Or passion_ltc.  Or wesleyh. Or salsacz, or pinarello, or rickyjames, jl777, neer.g, pouncer, klee, Damelon, Zahlen, allwelder, bitcoinpaul, or a whole community of people who have done far more than running a free client on a spare computer and hoping to turn a profit.  Compensate them first.

There is no "profit" in forging because merely forging adds no value.  This is BCnext's point – but I'll grant that even I don't accept the point completely unless we assume a "future state" where there are enough services built on top of Nxt to support the ecosystem without the use of forging-only setups.

Bottom line, though: raw forgers have no real expenses.  If they do, either they're minimal or they're Doing It Wrong.  I know the Internet is a wild place and Bitcoin/Doge/Maxcoin has put dollar signs in lots of peoples' eyes... but you don't earn the right to get compensated for doing nothing.  Some people get lucky (just like lottery players do, or people who manage to sell an old phone with Flappy Bird on it on eBay for $60,000), but that's just not the norm.  Sorry to disappoint you... but hey, Santa Claus isn't real, either.


Verifying transactions is not hard computational work.  Curve25519 was chosen because of its computational simplicity.

The "bankers" you refer to here are people who issue coins on TOP of Nxt.  Those folks can do fractional reserve and money issuing and interest and contracts and whatever else they want, and they should earn something for their work, if it's useful to the community.  You can profit off those people's efforts later.  It's just not what the base layer – Nxt – is for.


For what?  We already know they don't have to invest anything of real value.  

The TRUTH is that people WILL find a way to make profit off Nxt one way or another.  Regardless of whether or not BCNext's plan is respected, Nxt's value WILL vary against other currencies and people will profit from that (and as an aside: let's be honest, here. BCNext has let the animal out of its cage and HAS no control any more, so whether or not we follow the plan is up to us).  In general, though, people who feel entitled to... something... from Nxt have to work a little harder for it.

I said the other day and I'll say it again: Nxt is ultimately a low-level protocol.  Like the pipes that run under the streets, it serves as a necessary foundation for everything built above it.  What can be built is limitless, but in order for that limitlessness to exist, the foundation has to be simple.

"Selfish"? It like a communist's word. Selfish is the nature of human being. It's not a bad thing.

+1

As your reply shows, you have no idea how precious time and other resources are and how computing works nowadays. Nothing of my previous points is far-fetched or completely impossible.

Furthermore, you just provide many relative arguments: of course forging is cheaper than mining. So what? Cheaper means not: no time, no hardware, no place etc. It still costs something. Compensation is therefore legit.


Again? What's your point and what is the difference to what all we said already?

The current banking system enables us to do many things, too. It has flaws and I hope with NXT we create a system that has none of them but enables us to do the same things if not even more.

Btw. I like your analogy with the pipes. The infrastructure is NXT, of course. However, like in the real world how many companies support the pipes/cables/etc. underneath the ground? Very few, I guess. Most of them PAY for their maintenance.

Let me ask it right out: What exactly do you want to accomplish: no fees? low fees? different forging mechanism?

Ah thanks, that makes more sense. And that means they can check on each other and make sure all transactions are processed (instead of selectively including them).

I completely agree with my wiki Boss! ;)


But there are some questions!
Who should pay for the pipes to go around the world? Server operators do so!
So they should paid because of their efforts to keep the network globalized.
My point is this!

I'm not sure how Nxt avoids 15+ min blocks either. My info is a little hazy and the OP of this thread and the other linked do not clarify much, but forgers who miss a block are penalized for 1,440 blocks or something I think. That's not a big penalty, especially considering that there may be millions or billions of accounts and your odds of being selected again in those next 1,440 blocks are low. A choice of 3 forgers does not really improve things because all it does is take a big number and divide by 3. The number of potential forgers can't really scale up because then you have many multiple accounts competing for the same block which would be pretty disorganized and would not lend much weight to early transaction confirmations. So if you keep it low, you are hoping that some few specific accounts are all online and ready to forge. Needle in a haystack here too? Maybe.

NXT forging is deterministic, we are not searching for a needle in a haystack. Even with 1 billion forging nodes, you will know with 99.99% (or something close to that) accuracy the next X people that will forge. In the future, base target (difficulty) will simply be a legacy from Bitcoin - which c-f-b mentioned in OP - because why do you need to adjust difficulty when the forging order is already determined? If the order is determined, you simply say "X, broadcast your block at 60s, otherwise you will be penalized." 60 seconds later, "Y, broadcast your block at 60s, otherwise you will be penalized." And so on. In this scenario, X and Y are groups of forgers.

Anyways, I won't claim to understand how any of this works, but the important concept to understand is that forging is deterministic, thus you can have blocks come out in exactly 60 second intervals.

The issue that I raised was that you do not know that they will be available and paying attention. If they are not, no block gets made and there is a delay to transaction confirmation.

I would like to know the answer too.

In passive forging, you lease your forging power to another node.  You will not have to run your own node to collect transaction fees.

In active forging, you generate transaction fess by running your own node.

Not divide. Suppose each forger has a small chance e of failing to forge (whether by d/c or some other reason. Assume this e is the same for all forgers to keep things simple). Then the chance of all 3 not forging is e^3, which is much smaller than e. Consequently the chance that the block gets generated on time is 1-e^3, this is much more reliable than 1-e, which is if there were only one candidate to generate the next block.

I'm guessing actual TF would choose more than 3 candidates, coz if you end up with only 2 candidates, no one can check against the other. With more candidates, idea then is that the chance of too many candidates dropping out from a pool is still much lower than that of any one specific candidate dropping out (math is no longer as simple as the above). And you can scale up the number of candidates as network connectivity and speed increases.




That's not how Nxt works. The account that forges the next block is selected from only online accounts with an effective stake, not from all existing accounts.


Yeah it's tough to understand, even if you manage to read through all of this, and related threads! Helps if you can clear away existing assumptions from previous crypto experience, Nxt is designed from scratch. The wiki (link in my sig) may also help.

Whilst I do *get* the idea behind how the TF "choice" works I don't quite follow this part.

How can every node know which accounts are "online" (in order to consider for TF) when nodes would only be keeping connections to a fraction of all online nodes?

I was presuming a different system and referring to the high probability of failure in either scenario.


I corrected your edit. :P But yes I see there were some misunderstandings and I get the gist of a pretty interesting system.


It'd be nice if the OP was less proselytizing and more detail. Not everyone has time to jump around hundreds of forum pages to garner details.


I may have to check it out at some point.

Completely disagree! Only secure system'll be popular and for that forging'd be popular activity too, here works network effect: more independent forgers with their own goals, more secure system is for everybody else. So it adds value in security aspect of payment system and whole ecosystem.

Agreed. And Nxt solves great problem: forgers selfishness won't bring so powerful arms race as exists in PoW-cryptos. Cos, especially if decentalized Internet'll rise up, end-user don't need infinite bandwith of node. Any imaginable system'll have boundaries of demand (and spam already prevented by minfees) and forgers after achieving it'll compete only in reputational field, which is not only normal, but wished too.

Mgm, in my point of vie it can only strengthen up active forging, cos there'll be a possibility for each forger to increase his own power (which'll not increase EV, but'll decrease dispersion), and with that to ensure landlords the safety of their coins from being stolen.

Transparent Forging called transparent for a reason: in next phases of implementation TF (it's not complete for now) each tx's broadcaster'll scan network and calculate 100%-s of block success by working nodes in next 15 secs, asking them for their effectiveBalance and looking for network's BaseTarget (how many coins're forging now), then send tx info directly to them. Ofc, there still be orphans, some network dynamic dividing (nodes on/off, providers problems, geography and so on) and need to rebroadcast. This's my understanding, hot it'll work.

But bigger Nxt'll be, stronger network effect'll be. Compare it to torrents: when u're starting to download popular file, u're reaching cap speed almost instantly, cos exactly of network effect: more peers are, easier to set up complete map of interconnections and create optimal set of seeders for u.

I wonder if the idea is doomed because of Diffusion of Responsibility (http://en.wikipedia.org/wiki/Diffusion_of_responsibility).

Hmm... if your ping times are anything like they are in China (often 300+ms) then even in 15 secs you certainly won't be able to determine all active nodes so I do question this idea.

Can you give me some "concrete" examples of just how many nodes this can possibly scale to?

For example - you will never work out all connections if you have connections to 1M+ nodes (and will be consuming vast amounts of memory even trying to) - so has BCNext purposely limited the total network size to something quite paltry like a few thousand nodes?

Perhaps I am misunderstanding something, but this seems to idealistically ignore a different sort of selfishness.
If I'm running a Nxt-based business, I could either invest in forging myself, or just not bother, and expect someone else to do it.
A business that forges for itself, with minimal mining rewards, will be less efficient than one that just expects someone else to do it.
The free-riding company will out-compete the 'honest' company.

Some preliminaries:

I don't know how it'll be implemented eventually. Were I to try to design an algo to satisfy the properties of TF I've gathered so far, I might do

1. During the time between blocks, gather info on as many online forging nodes as you can, through the nodes you're connected to. Call these "seen nodes"

2. Strictly order these nodes, say by increasing account number. Insert new nodes/delete d/ced nodes as they are discovered.

3. Compute Hash(public_key_of_previous_forger + N)/(MAX_HASH + 1) for N = 1 to # of candidates. Hash could be say SHA256. Think of these as dice rolls in [0,1) that will determine the candidate accounts.

4. Just before block generation, calculate (your own view of) the candidate accounts for forging. The candidate accounts are precisely those accounts for which [ total_stake_of_previous_accounts / total_stake_of_all_seen_nodes, (total_stake_of_previous_accounts + own_stake) / total_stake_of_all_seen_nodes ) contains a die roll. These intervals are mutually disjoint, and their union is [0,1). Each interval represents each accounts stake in [0,1)

5. Some algo that determines which candidate is chosen, not relevant to our discussion here.

Finally getting to your question:

During the time between blocks, each node builds up their own picture of what the whole network will look like. Different nodes will have slightly different pictures due to different connections and connectivity (assume the overall network condition isn't so bad as to have radically different pictures). But even with slight differences, the die rolls are still likely to land in the same accounts in 4). (picture a [0,1) line segment broken up into very many separate account stakes. Assume no very big stakes. If you remove a few of them and insert a few others, while maintaining stake ratios, the picture doesn't change by much (math can provide bounds hmm, better to simulate it I think.)). So all nodes can achieve consensus.


Again, just my thinking, and coming from general math.

EDIT: No, this particular way doesn't work I think, need another way to determine candidates. But I think the general idea holds: you don't need all nodes to see the same picture of the network, you only need that their pictures mostly agree, and consequently mostly agree on the candidates.

Agree with ChuckOne. Look also at the example of bittorrent: the torrent trackers had to use rating systems and such, just because otherwise there would be too many leechers for too few seeders. That's not because it costs anything (at least in free countries like Brasil, where there is no risk that you could get prosecuted for that) just to leave the client open, it's because people just don't care about it. There are so many things to care about in this life, so it's better to offer at least some reward if we want that people invest some attention to the network maintenance.  

BCNext limited nothing. We don't need to "ping" nodes.

Maybe u r right. BCNext's plan is just his own vision. He doesn't even insist to follow it.

I don't think that consensus can actually be reached without the equation being completely deterministic (so IMO using "known online nodes" just can't work).

I would think that the algo would simply determine the best choice regardless of whether they are online or not - and each client would determine which "online" node that they can see is closest to the best choice and "hope" that the "real choice" was not actually online.

So the TF algo doesn't care about "online" nodes then?

No. TF algo only says what accounts could forge the next block.

Thanks - that's actually what I had assumed (even wrote up my own such pseudo code system when I first heard of the idea in order to get it worked out in my own head).

Yeah that could work. We don't need everyone to be right, we just need most of them to agree on most of the candidates for most of the time.

Why forge? To get fees, but when u're forging, u're securing system. Way to get fees w/o securing not so easy to pick (u need modified code, and have that code updated), so greedy forgers'll exist and'll non-directly serve their key purpose (as miners today).

If you read the original post of the thread, the suggestion was to reduce fees to a minimum level required to prevent spamming the network, and remove the financial incentive to mine purely for fees.

I did that. An I'm counterargumenting such goal. Forgers'es greed'll lead us to perfectly secured network. Almost each one security business I can think about requires competition instead of coopertaion to achieve trustless situation: where every player is not just not expected to trust any other, but don't trust everyone by default. And "green" competition obviously beats down "blackholed" one.

Personally I think it would be best to do this in a gradual manner by slowly reducing the fee reward.

If we start to see a lot of nodes "dropping out" then we can always "pause" until the network strengthens again and presumably we'll reach a point of "equilibrium" that gives us the "least amount of fees" for the "most number of active nodes".

(I don't really see the imperative to make the fees so low as to completely discourage "forging" but of course lower fees does encourage more transactions)
 

Fee'd not be lower than it needed for Nxt to compete with other payment systems. And every sender'd know why he's paying fees: to provide speed and security.

In the world of centralized money (with inflation and not very healthy IDoL), something about 5% per month'll give a financial freedom with not so huge capital, in new world we'll have to calculate X% we'll be ready to provide to forgers for their job, and that number'll depend on thousand of factors, not only on minfee.

I see what you're both getting at.  I think we differ on what constitutes value.

The foundation of my post is that forging is valueless only when there are enough services built on top of Nxt to render it valueless.  Given the current Nxt topology, I agree that forging is necessary just to maintain the network.  However, once nodes are running code and providing services for other coins, applications, contracts, games, parallel blockchains, etc., those nodes will profit from those endeavours AND also look after base Nxt network consensus, as a pure consequence.  I define "value" as what is offered by those services.

I don't think "block rewards" are going away.  Someone's account has to forge a block, and that account will still win the fees in that block.  Those fees will just be LOW.  So perhaps this whole debate is too much in the weeds.

I feel like I'm flip-flopping.  In the early days of Nxt I said that the value of forging was in building network consensus, not profiting in terms of Nxt.  Or... maybe I'm not flip-flopping at all.

We already have something like this: https://bitcointalk.org/index.php?topic=453935.msg5079581#msg5079581

Completely disagree! Only secure system'll be popular and for that forging'd be popular activity too, here works network effect: more independent forgers with their own goals, more secure system is for everybody else. So it adds value in security aspect of payment system and whole ecosystem.
[/quote]

Securing a system adds value to the system.

Namely: security.

This relates to my post here: https://bitcointalk.org/index.php?topic=364218.msg5034359#msg5034359

I still don't see how the network determines that a node has not forged?

Maybe, you can look through my other notes as well and provide some feedback. Thanks in advance.

It sees that someone else forged the next block.

How? Nodes separately determine whether an account forged or not. But this information could come delayed. When does a node say: stop I do not accept this block from this account anymore?

Okay - so "forget about *who is online*" and just look at "who *should* forge the next node based upon the hash value".

If we know that account 1111 was *supposed* to *forge* but didn't then we penalise node 1111 for not doing so (regardless of whether they were *online* or not).

This is why *timing* is an *essential* part of Nxt (your clock needs to be set very accurately).

Bitcoin doesn't have a reliance upon NNTP (which is why the timestamps can vary quite a bit) but Nxt *does* (this is also a very fair *criticism* of Nxt IMO).

Okay, I see.

But then, what's the legitimate branch of the chain?

That is determined by what in Bitcoin terms would be "the most work".

In Nxt terms if the hash was best for 1111 but 2222 also was close then whoever ended up choosing 2222 would be on a fork until they changed to 1111 (assuming they didn't see 1111 straight away).

This is a typical "fork" problem - and is solved once the nodes in the network "see" the best chain (they have approx. 1 day to do so from what I gather).

Yes, timing is essential in Nxt. Luckily it's not a big problem to have the time synced.

Agreed - but it would be better if we didn't need to rely upon NNTP servers to do this (perhaps some future tech will make them obsolete?).

U should stick to a branch where ur balance is the highest, it's a part of the advanced consensus (coz "the longest chain wins" is not enough when accounts r penalized for skipping their turn to forge a block).

The life is full of trade-offs, I'm not sure that Nxt could work properly without time syncing.

I *know* it wouldn't (told you - I have created my own equivalent in pseudo-code and it also needs timing to work).

I *research* things when I am interested in them.  ;)

Ah, I remember you told me that.

Not sure, if I understand why this should be my favorite choice.

Coz if someone is double-spending against u then they likely r trying to lower ur balance.

If someone decide to compromise clock servers, it'll affect whole economy and beat attacker back definetely. I don't heard about attacks like that. Nxt also relays on Internet connection ;)

cool plan. waiting for April :)

USB Atomic clock will save ur ass. ;)

Sorry for the newbie question:
How can we create a decentralised coin backed by Nxt that has a constantly increasing supply? Can we make a feature allowing us to convert Nxt to some coin(made for this) in a decentralised way? Let's say you send 10 Nxt to some "special" account and you somehow automatically receive lets say 100 NXTCASH coins. The conversion rate should follow an algorithm and constantly increase but just slightly. Is this possible? Could that coin offer instant transactions just like Nxt?

Currencies backed by NXT r not implemented yet.

NXT is a little different than bittorrent in that the value of your NXT will drop if the network becomes insecure. If you're a torrent seeder, you're providing a service out of the generosity of your own heart. Additionally, the files your are providing don't actually have any invested value - it is more than likely most seeders are not the ones who created that file, so they could care less if the network failed. In NXT, you're providing a service (forging) because you want to preserve the value of your NXT. Due to game theory, the only node you can truly trust to act responsibly, is your own.

So think of it this way: if you had a multi-million dollar business built on-top of NXT, would you want the network to be weak and insecure? Even if it looks very healthy now, do you trust others to keep their nodes up 100% of the time? Heck no, you'd be forging to make sure the network stays up 100% of the time so it doesn't affect your business. Luckily, the cost of running the NXT client is cents per day.

I agree with you, too. It is different and as a big business relying on NXT you should better secure it yourself. You won't hear an argument by me.

What I really appreciate about this discussion is the broad and unique perspectives of each of us. And you know what? I think everybody is right in a certain sense. Just wanted to say that. Maybe, it's the music.

But what do we do now? Especially, how do we express our wide variety of opinions in terms of hard NXT variables and algos?

I think most of us:
 - agree to lower the fees in order to let people build on top of NXT
 - that ventures on top of NXT will secure the network because of their immediate dependence on NXT
 - think forging is not evil but should not the foremost reason to join NXT
 - advertise NXT in order to raise awareness
 - create ideas and inspire people to build on top of NXT

Just a personal side-note to CfB: when will all of the advanced consensus mechanism be revealed?

For me, this ''mean of exchange" means daily commercial payment method. NXT still can be exchanged with the "real coins" (mean of exchange), as the relationship between gold and USD. But how are you able to make the exchange rate between NXT and the "real coins" constant? If the demand for the real coins becomes high, you can issue more real coins to keep the rate constant. But if the demand becomes low, you can't buy back them because there is no central bank. Do you really need to keep it constant?

When one of u re-invent them.

Why do we need exchange rate between NXT and "real coins" to be constant?

We can easily build a coin on top of Nxt and keep it's price constant with "real coins".

I'd like to see an implementation of http://en.wikipedia.org/wiki/Demurrage_(currency) (http://en.wikipedia.org/wiki/Demurrage_(currency)) on top of Nxt.

Once the network already knows the order of who will forge, then there is no need for a block delay at all.  The network can forge and issue blocks on an as-needed basis in response to pending transactions.

Interesting something similar to Freicoin.

Did you mean that these "real coins" should not be backed by NXT or other commodities (like gold and silver), but they need to be in certain quantity and created in a PoW fashion?

We can use any approach.

Why? And who is going to use it?

Coz I like the idea of such money. Dunno if anyone will implement it.

People will be afraid of having their values in this coin.

You could argue that then they will use it for transactions. But why, if I have my values in say XCoin? Why first transferring it to DemurrageCoin in the first place only to transfer it to somebody?

Maybe, you could provide an idea how to incent people to join and develop DemurrageCoin?

I think a DemurrageCoin as a currency only works in a society with only DemurrageCoinsy. But who knows what the implications of the existence of such a coin in the digital world are and what kind of services will be built on top of this coin. Could be a nice experiment.

I can't.

I ask somebody how probably has no idea of cryptocurrencies.

I ask him: imagine there is a currency where you have pay for having money.
He reponded: ah, demurrage.
I ask further: what could somebody encourage to buy such money?
He basically said:
1) if my purchasing power in that system increases more than the demurrage reduces my money
2) if there is some [service] I really want or if I really want to offer a [service] there because when I do not somebody else will and I will lose profit

Here is my vision of Nxt:

Every forgers runs a client and tries to make money off of running it.  We run it like a company and try to make ourselves as big and stable as possible.

The programming team makes applications such as the messaging application, the alias registration, etc.  The more Nxt you own, the more it'd be like having stock in our company and you'd be rewarded for forging with enough Nxt to make money doing it. This would encourage a large base of users who would each be making an average of $1 per day just for leaving their computers running.  Users would be encouraged to hoard coins because they know that the more coins they own, the more they'd make off of forging not to mention it being an investment in our company and the future of our coin.

This does not sound at all like that and this is not the Nxt I invested in.. sorry guys you just lost me, think I'm going to compete with you guys instead.. unless enough of the community is in favor of trying to make a profit instead of going this direction?

I'm one of those people BTCNext saw jumping ship, I just sold all my Nxt and BTC too since it seems to be a bubble popping.. and I'm new to this, I haven't been around long and I don't have money I can afford to lose, I'll buy back in when it appears to have bottomed out.  Anyone else who wants to make some money.. please send me a PM. I'm going to need some help.  I've spent every free minute of the last month analyzing how the Nxt backbone and idea allows us to make a very profitable coin.  NEM also seems to be heading that direction. I've got 13 pages of a business plan written up and I haven't finished just yet. I was hoping to convince Nxt to go that direction but this topic and many of the replies to it have me worried that it is not heading in that direction.  Got big plans for my vision of this coin.

I loved Nxt.. if you guys would prefer to try to make Nxt profitable, count me in but with this vision.. later guys, I see this crashing as people start turning off their forging machines left and right and others realize that they won't make much money off of this but I truly wish you all the best!  Maybe I'll hold onto 1000 Nxt because I truly did love this coin.

bye

Good luck with buying Nxt back with the price 0,5$.

how is it possible that someone has the ability to do all the work you've just described, yet get stuck in short-term tunnel vision where you cannot see the long-term possibilities of using NXT as the infrastructure for a decentralized economy?  sounds like you just wanted to see NXT as just another cryptocurrency that just happened to have different code.

Maybe I overreacted a little bit but are we seriously not going to pay the forger's anything? or did I misread that?

I'm perfectly ok having a very small transaction fee, even 0.01Nxt.. IF we try to implement other services, such as the arbitrary messaging, alias registration, distibuted computing, distibuted storage, etc. that would pay the person for their computing time and compensate.  Another idea I really like would be if we could implement project Kharon to the extent where we allow other people to protect their websites using our software, we could easily charge $300 per month per customer and then pay back the forgers using that money.. you could probably pay them a couple bucks per day to maintain the network. 

Also regarding profitably, Nxt transaction fees could even be profitable at approximately 0.05% when we reach bit coins size, so to me it doesn't seem like that big of a deal to charge a small transaction fee..  I mean that is tiny compared to Visa's 2.5%, we are talking $0.5 to send $1000 and we could still be profitable at that level.

No, I love Nxt's code.. but I don't like this direction it's heading if as I understand it, we're going in more of a communist direction of everyone works for free and pays for forging machines to support this but doesn't get compensated for doing it.  I mean it's not like we're talking a lot of money for the people propping up the network but I feel pretty strongly that they should be compensated for it.

Also, I misunderstood this pointed forging apparently.. I thought that people were going to be able to lease their forging power and essentially the people doing the actual forging would pay them say 80% of the money made using their forging power.  But that doesn't sound like what this leased forging power is all about, right?

What do you guys think about the idea of charging for our extra services and essentially using them to subsidize the forgers for handling transactions?  Or do you guys agree that forging machines should be run at a loss by the companies who rely most on Nxt?

How are we going to support distributed computing, distributed storage, etc. in that way?  I mean look at Bitcoin, some people are calling it as big as the 500 biggest supercomputers combined.. we have that same potential to have a huge number of computers on the network and supporting it, and during the majority of the time when they are not processing for Nxt transactions, we pay them to be online and running the distributed computer. If we can pay the forgers enough to make it worth their time, we could easily be the world's largest supercomputer.

Also, I see those services as adding that inheritant value to Nxt that Bitcoin doesn't have, not only do we have the coin, Nxt, but it's essentially a piece of stock in a company that has methods of making money and paying you back for owning those Nxt in the form of essentially dividends.  This is why I do believe that Nxt should indeed be the currency itself, it's backed by something, specifically computing power, unlike all the rest of these cryptos.

Anyway that's my vision, if Nxt doesn't want to go that direction as this is sounding, I seriously might start my own coin.

One more point, deflation is largely a myth:
http://www.forbes.com/sites/eamonnfingleton/2013/08/11/now-for-the-truth-the-story-of-japans-lost-decades-is-the-worlds-most-absurd-media-myth/
http://archive.mises.org/8778/austrians-on-deflation/

Slight misunderstanding. We need fees anyway. So, forgers get them.

no, and i was surprised as well.  but I dont think it will happen as there doesnt appear to be a mass of orgs out there right now rushing in trying to build services on top of NXT like BCNext envisioned.  not to say that it couldnt happen in the future, but to then remove fees altogether would require a consensus that I do not believe it achievable - by the point that there are enough orgs out there that could sustain forging for free per BCNext's plan, the distribution of NXT will surely be at the point to make it impossible.

We need fees in order to prevent spamming.

Besides a demurrage coin, one issue I was thinking of recently was the life-cycle of a NXT account.

Think of it like this:
in the real world there will be a father and a mother supporting their child; by feeding, by teaching etc. When somebody dies, the wealth he acquired over time will be distributed either to the community or to his children. This is how most humans get their initial wealth (as small as it can be) to start with. Family members hodl the wealth of the family.

0) What do you think of heredity? Is it legacy as well? Or can this concept being transferred to NXT/crypotcurrencies?

1) Do we want to have the concept of heredity in NXT?
2) If yes, how?
3) If no, then maybe in a subcoin of NXT?
4) If still no, how to prevent it?
5) If yes, how?

It's tricky to build anything on top of Nxt right now such as the distributed computing, unless there was some way of getting into the source code. And that being said, we now have a bunch of clients, we'll get our own version of Bitpay soon enough.. maybe we can get ourselves onto the coinkite terminal (Check it out, I think this is awesome: https://coinkite.com/faq/terminal ) and if not.. well who's willing to bet me that you'll be able to pay with Nxt at more places within the next year than Bitcoin?  I'll willing to wager up to 10,000 Nxt. ;)

Also I seriously I think that operating Nxt as a business is the way to say that we are actually backed by something, which I think is important.  We would have more inherent value because we would run the world's largest super computer, that would actually be usable, and then I also really feel like we should use Nxt as a currency because it is indeed backed by something solid people can believe in, specifically our products and services, rather encouraging people to use coins built on top of Nxt.

Ok.. well I hung onto 150k Nxt, mostly by accident due to them being stuck in transit from dgex.  Which did well overnight, I only sold about 50k.. I'll probably buy back in again. Looks like I got caught up in the panic sell.. I believe in cryptos but I could've seen that bug scaring some people away who didn't consider it as a possibly.

If you just stopped trying to make money with the protocol level of NXT, you will make a ton of money. NXT is designed exactly for people like you to come up with businesses on top of NXT.

Imagine how far the internet would have gone if everytime you used the IP protocol, you were charged a percentage fee. Would the Internet be anything like it is today? Every email, every webpage, every bittorrent, all would have incurred fees. It would have made 99% of the Internet nonviable.

forging is only meant as a transitory carrot. It was similar enough to mining that NXT got enough critical mass. It has served its purpose, it is time for it to go away. it will be 0.1 for a while and then 0.01 and maybe it stays there. The only purpose for minimum fees are to prevent spam. Notice issuing an asset costs 1000NXT. What are the implications of that?

I think you want to make money. Imagine having a NXT based business. Would you rather have that business be on top of the Internet, or Compuserve?

James

P.S. If you dont know about compusurve http://en.wikipedia.org/wiki/CompuServe, they had 90%+ of online business, but charged a per hour fee for online time. People said, Internet is much better.

I do remember CompuServe (and even used it) and just like the initial MSN (when they were trying to kill the internet with their binary protocols) it died.

For sure the forging fees are not going to make people rich but at the same time we do need to ensure that the network is looked after so I think that the fees should always at least make it viable to make a small amount of money forging as that is a useful benefit for the Nxt system.

Compuserve, had my first mail address with them!

It's not too late to delete that post (or maybe it is now that I've quoted it).

;D

Excellent way of putting it.. ok I'm convinced there is something to the idea... however, we do need to come up with something, and I'm thinking distributed computing will be our killer app, that will allow us to feed the network on a more consistent basis.  We might need a programming language specifically tailored to our purposes.

Ok.. interesting..  going to have to think about the implications of this a little bit.. definitely a very different direction than I would've taken it.

What do you think about using Nxt as money however?  I kind of think that we can still use the units of Nxt as money, why build other types of money on top of Nxt?  For that matter if Nxt won't be used as the currency part of the equation.. how does that affect it's value?

Personally, I prefer a deflationary currency and I don't think that it would cause problems, it only causing problems if it's a debt based currency instead of one backed by something and the government tries to artificially introduce inflation.

The "problem" with using NXT as money is that there are only 1 billion of them. Any fiat is in the trillions. So, the best way is to create a NXT Asset, each up to 1 billion. You can make each of these represent whatever you want. Server CPU hours for grid computing, actual fiat with 1:1 conversion, turtles, etc.

NXT will become the reserve currency of both crypto and post-fiat economies. What that means is that everything will have its price denominated in NXT. Since there is a fixed and finite amount of NXT, it will act like gold (that cant be mined anymore). As the reference currency, there are a nearly infinite number of price points that solve the equation of relative pricing of all the assets against each other. What the exact price will end up is really more of a function of the total GDP of the NXT economy. The more value that is represented by all the NXT Assets, the more each NXT will be worth.

Inflation cannot happen with NXT, that is why it is appropriate for it to be the reserve currency. As the NXT GDP rises, even .01 or .0001 NXT fee per transaction will more than offset any costs for running a server if you have any amount of NXT. I would imagine that any business that is basing its model on NXT would make sure it stocked up on NXT before announcing its services that will in turn boost the value of NXT, especially if it is a killer app.

All of the Asset issuance fees, AM and payment fees recirculate with 100% efficiency. It is really quite an amazing system design.

My advice is stock up on NXT. Figure out what your killer app is. Figure out how to parcel it into an NXT asset. Complete killer app, issue assets, make money. All while your initial investment in NXT is growing in value.
Imagine thousands of businesses doing this.

James

What do you think of the idea of the last will of an account?

Sure, not a bad idea, but not need to put this into protocol. Just use existing methods for inheritance.

And now, i quoted it. Shit...


;D

Sure 1 billion Nxt can be used as currency, look at the Satoshi.. we can just subdivide Nxt into say 0.0001 Nxt = 1 credit and then 1 Nxt would be equivalent to $0.12, if it grew to be the same size as the US dollar.  Why not, I feel like Nxt itself has to have some inherit value to it and using it as currency where people would keep their money as Nxt would be a good way to do it.

Because here's my thing, if we're not using Nxt, then why would someone making such a new coin stock up on a bunch of Nxt?  Once we allow it to be further subdivided, why not buy 10,000 Nxt, and subdivide it into 100 million small parts and call each one of those tiny parts 1 coin of this other currency.. I mean somehow you'd need to factor in that Nxt would be required to pay some very tiny fee to the forgers to prevent spamming but I don't see any limit.

If we do distributed computing, I think that would need to be built it right into Nxt, not on top of it but I could see distributed computing, and distributed storage, and other apps being profitable and paying the forgers to forge, seeing as those have already been propsed.. I guess I won't give up hope on that ending up integrated into this coin yet.

Thanks for the replies James!

Wish BCNext would come on here himself and find some way that we could discuss these ideas directly with him.. I guess him throwing out the ideas and letting the community decide which direction to actually go isn't a bad idea either though.

What exactly do you mean by existing methods? Notaries?

I still think NXT is made for the people and should address their very personal needs like supporting the family, financial security, legal certainty and the like. This is even more important in case somebody dies.

In NXT nobody should trust anybody. But people need trust. So, what I have in mind would be decentralized notary (DN). A third party bound by cryptography and algos.

An account holder could tell the DN to sign something and to do something for him in a pre-defined future:
 - to pay amount x_i to some accounts
 - to send encrypted messages to certain accounts in order to reveal knowledge
 - to execute a script
Everything the DN does is invisible to everybody except those how own the keys.

Use-cases could be:
 - when a father wants to hand down his fortune to equal parts to his two sons
 - signing documents like contracts, birth certificates etc.
 - when a real-world corporation changes leadership

BCNext said: Trust nobody.

That's certainly the best advice somebody could give. However, another smart guy told me this:

In the end, you have to trust somebody.

Isn't this smart contract stuff?

I'm not sure if the best way to have more coins on top of Nxt is to use the asset exchange, or build a new coin on top and use AM for storing the new coin's blocks.  Both methods will need to be explored, I think.

Common knowledge is that there are ~1 billion NXT.  Take a look at the source and you'll see a bunch of multiplications by 100L -- adjusting for displaying/thinking in cents.   There are actually ~100 billion NXT.  Every time you send 1 NXT, you're actually sending a bundle of 100 NXT.


Sure it can.  Everyone just has to agree that the multiplier is now larger than 100L.  If everyone agrees the multiplier is now 1000L, there will be an order of magnitude more NXT than right now.

It's a pain in the butt at the moment since it requires everyone to update their software with a hard-coded change.  There's no reason in the future the multiplier can't be a variable, however, and the size is agreed to by software voting.

Nope. Bundle of some units, say, 0.01-NXTs or NXTcents. 100s of it = NXTs.

Right now Jean-Luc working on that - to implement easy divisibility for cents and for any needed zeros after point in fututre instead of current model.

In what way, other than perceptual, is a fixed point representation of 100.00 different than the integer 10000?

Tomato/Tomato

I am thinking that using AE and AM is the best way to go, still working out details

Anything that has the same effect as a stock split is not really inflationary in the sense I am talking about. By inflation I mean whatever amount of NXT you have is suddenly (or gradually) worth not as much due to dilution. What you describe increases the nominal number of NXT, but whatever percentage of NXT you had is unchanged. So it is neither inflationary or deflationary

Ah. Ok.  Makes sense.

I'm sure Jean-Luc knows what to do, so, if it takes time, there's no "Tomato/Tomato", there's refractoring.

Storing all numbers as integers, and then placing the decimal point afterwards allows for all kinds of error.  This kind of "floating point" math has cost lots of people lots of money over the years.  As of even a couple of weeks ago, some parts of the Nxt code expressed amounts in full coins (1 Nxt = "1") and other parts expressed in in terms of Nxt-cents (1 Nxt = "100").  Hopefully I don't have to explain how that can cause trouble.

In case I do: imagine a situation where a third party has created a payment processing system that has been deployed by hundreds of people running servers.  Each person has this software running, and is happily processing transactions.  One day, the Nxt core devs decide to move Nxt from two to four decimal places, so that 100 coins which used to be represented as 10000 are now represented as 1000000.  They implement the change, and roll it out.  Everyone running that payment software on their own servers have to SIMULTANEOUSLY be ready to CORRECTLY interpret the change in their input data, so that they don't receive "1000000", think it means "10000.00 Nxt", and suddenly cost someone and additional 9900 Nxt for their transaction.  The FEE would be 100 times too big, by accident, as well.

Deciding where the decimal goes from the outset, and then sticking with it (FIXED point operations) removes all of the risk of this kind of error.

yes, JLP has already come out and said the conversion to NXT-cents, and to allow for .1 as a fee will be more complex, exactly for the reasons you state.  you can see in the code that in some places its just a long/integer and some other places there is a 100L division.  He is going to have to standardize before we get the new functionality

This would be a great idea, do you have the know how to develop?

How does Nxt have nearly the same amount of value potential that it otherwise would if it's not a coin but more of a stock in a company that releases other coins?

Also, I'll say it again, deflation is not such a bad thing: http://www.forbes.com/sites/eamonnfingleton/2013/08/11/now-for-the-truth-the-story-of-japans-lost-decades-is-the-worlds-most-absurd-media-myth/

My vote is keep Nxt as a coin as well as building upon it and sure allow competing coins to be built on top of it and indeed allow Nxt to be a share in the company that controls other coins but no reason not to use it as a coin as well.

Wanted to clarify my understanding of Nxt's TF approach to proof of stake. Going to try to write it out here, hope folks can comment/correct/ask about stuff and help me improve my understanding. I'm unable to keep up with the main thread, sorry if all this has been brought up before. Thanks!


Regard time where events (transactions) are occuring as discrete (say in 60 sec blocks). The consensus problem: how do we get a group of actors (Nxters, nodes) to come to an agreement on a common, consistent version of history (blockchain branch), given that no one can see the entire network at any point in time, each actor only knows about his own actions, and maybe the actions of actors near him. And this becomes more difficult as not everyone can be assumed to be always honest or accurate.

The simplest way to come to consensus is to accept what one actor decides as the version of history. This is the starting point of Nxt. So the general consensus problem now reduces to the problem of agreeing on which actor should be the one to decide (forge the block). Let D be the function that determines who is the one to decide.

Again, the decider does not see the entire network. In order to get information, other actors must send information about their events to the decider. It's inefficient to send information about all of your past events, so to simplify, each actor sends only events that they originate during the current block of time and state which version of history these events are based on. The decider then updates the version of history with the information received. The other actors may not see the decider as well, so after updating the decider broadcasts the updated version of history to other actors, who continue to help broadcast it.

We cannot have the same actor always decide, since they may not always be honest or accurate. So we need to regularly change the decider, have different actors decide for different blocks of time. We don't necessarily want all actors to decide the same fraction of the time, i.e. to not all have the same say. Call the proportion of the time where an actor gets to decide their effective stake. So effective stake is a measure, and basis of an actor's influence in the version of history. This is why we say Nxt is proof of stake.

Even if everyone agrees at a point in time to one actor's version of history, that version may not be honest or accurate. So we need to be able to switch versions of history, to prefer one history over another. Call this preference function H.

Let's investigate the properties that D and H should have, and then hopefully be able to define them.

(There is a third function I that determines which events the decider wishes to include into the updated version of history. This is not so important, I think it can be left up to each actor, so I won't go into it here.)

The decider function D:

We want each actor to be selected as decider with frequency proportional to their effective stake. But each actor may not be reachable (online) all the time. They may also not be honest or accurate. So we want D to select not just one decider, but a sequence of candidate deciders of the next versions of history, so that actors can have a choice between alternative versions of history via the preference function. We also want D to be based on the version of history h you wish to extend with your current events, we write D(h) to reflect this.

One way for D(h) to satisfy this is via:

1) For each account with a positive effective stake, roll a deterministic die based on the history h you wish to extend. Call the result HIT
2) Order all such accounts in increasing HIT/EFFECTIVE_STAKE.
3) The first account that is reachable (online) is the first candidate, the next reachable account is the second, etc.

This D does indeed choose each actor with frequency proportional to their effective stake, as the number of accounts with an effective stake grows to infinity. (subject to simple niceness conditions; ask me if you're interested in the proof).

When you want to extend a version of history with your current events, you send a request to the first few candidates. Send to more to increase the chances of your events being included in some version of history.

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I think the above is what's known so far about TF, from BCNext via CfB. This assumes all actors are honest and accurate, which not all will be. Below is one possible (untested) modification:

Each actor maintains a personal weighted blacklist of other actors that they believe to be dishonest, inaccurate, or otherwise do not wish to send their information to. The weights are probabilities of not choosing them as a candidate decider and so not sending your events to them when you would normally do so. So a weight of 1 would mean never send them any events. Weights are updated as new information is gained about other actors and your confidence in their honesty and accuracy changes.

The history preference function H:

(This part I don't understand well. Please help me improve my understanding.)

H is supposed to select a preferred history (or rather like D, a sequence of histories of decreasing preference) to build on from a set S of known possible histories, so write H(S) to represent this.

I think you want H to be consistent with D: Suppose you're at a version of history h right now, and D chooses as decider account a_1 as the first candidate, a_2 as the second candidate, and so on. If the updated versions of history proposed by each a_n is h_n respectively, H should prefer h_1 over h_2, h_2 over h_3 and so on. One way to achieve this is for H to prefer the version of history with the smallest sum of all previous HIT/EFFECTIVE_STAKEs of previous deciders in that version of history, since if you have two versions of history differing only in the last block, the HIT/EFFECTIVE_STAKEs are all the same except for the last decider, so the version with the smallest sum is also the one whose last decider has the smallest HIT/EFFECTIVE_STAKE.

But folks in the main thread were talking about largest sum of 1/EFFECTIVE_STAKEs (of just the deciders?), which isn't consistent in the way I described here, so I don't get this part. Am I missing something?

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H should likewise be consistent with any blacklisting used, I'm not sure what a good modification would be.

Dealing with many versions of history:

In the approach described in the above posts, you can never be sure which version of history is the right one, in fact, it's not meaningful to talk about a "right" version of history, only different versions of history that you have different confidence about. It may turn out that one version of history preferred by H right now may not extend to the version preferred by H in the next block. For the most part, that's ok, because most versions will be identical except for small differences due to transactions not reaching the deciders/dropped. So you just request to add your events to your most preferred versions of history as determined by H, and stick to just the most preferred resulting versions of history.

To avoid dealing with an exponentially growing tree of histories and save computing resources, you can discard the least preferred versions of history. e.g. if H is the lowest sum of HIT/EFFECTIVE_STAKEs, you can know the probability distribution of the lowest HIT/EFFECTIVE_STAKE during each block by sampling previous blocks. If you know that the difference between the lowest HIT/EFFECTIVE_STAKE and say the 10th lowest HIT/EFFECTIVE_STAKE has never been greater than e and will likely almost never be greater than e, then you can just keep the history with the lowest sum SUM of HIT/EFFECTIVE_STAKEs in memory, along with just those histories whose sum are less than SUM + e and discard the rest. In the unlikely event that the versions of history that the rest of the network prefers are built on an old version that you discarded, then you end up on a fork, and you'll have to deal with it manually by redownloading the histories from somewhere you trust.

This is when all the actors are honest. When there are dishonest actors, then large differences from deliberate actions by them can occur. So the problem is how to discover who they are, and consequently blacklist them and reject their versions of history. This could be done outside the network of actors and events, through e.g. RL investigation. It could also be done within the network. e.g. if the versions of history broadcast by a certain actor frequently don't include the events involving you that are sent to them while other versions of history do, that suggests that actor is not being honest with you. You may want to prefer other versions of history that did include your events (or if you think it's not a big deal just try to include that event again later based on the same history, when it is a different decider's turn), and you may want to increase their blacklist weight, and announce the discrepancy to other actors so they can likewise increase their blacklist weights.

Will read shortly, thanks for posting.

Thanks. :)

Some consequences:

None of this requires thinking of Nxt as a currency (or in fact, Nxt at all. I've tried to avoid terms like "blockchain" which I suspect have a lot of pre-established "freight", I prefer to talk about the more general concepts like "version of history"). Nxt, or rather effective stake, is just how often you get to update a version of history, i.e. how much say you have in the history. Right now, I think of Nxt as a way to come to consensus on a version of history. Not just a history of $ transaction, but potentially for any events that can be recorded digitally.

If Nxt is not a currency, then it doesn't make sense to talk about profiting from requesting events to be added to versions of histories (transactions). It does make sense to make such requests free. But in practice, in Nxt, current technology is still limited, we need to limit (ab)use with a cost to transactions. If we are to have costs, it makes sense for such costs to depend on the type of tx being sent (as in fixed fees), since different txs have different costs in terms of space and processing requirements of the entire network. Rather than depend on the amount of Nxt you're sending (as in proportional fees), since the more effective stake and influence you have, the more you should be able to do.

(I think jl has already talked a lot about these last two paragraphs, just in different terms.)