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Alternate cryptocurrencies => Altcoin Discussion => Topic started by: CLains on April 05, 2014, 12:22:13 PM



Title: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: CLains on April 05, 2014, 12:22:13 PM
Delegated Proof-of-Stake (DPOS)
by Daniel Larimer
April 3, 2014

Abstract


This paper introduces a new implementation of proof of stake that can validate transactions in seconds while providing greater security in a shorter period of time than all existing proof of stake systems. In the time it takes Bitcoin to produce a single block a DPOS system can have your transaction verified by 20% of the shareholders and by the time Bitcoin claims the transaction is almost irreversible (6 blocks, 1 hour) your transaction under DPOS has been verified by 100% of the shareholders through their representatives.

http://107.170.30.182/security/delegated-proof-of-stake.php

Daniel "bytemaster" Larimer is answering technical questions in this thread (https://bitsharestalk.org/index.php?topic=4009.msg50412).


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: muddafudda on April 05, 2014, 01:28:58 PM
A paper justifying a 100% premine. Honestly?


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: solaaire on April 05, 2014, 06:45:20 PM
Sounds great on paper - hoping to see it implemented somewhere soon!

Quick question: what prevents Ripple from utilizing DPOS to generate future unique node lists?


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: l4p7 on April 05, 2014, 08:16:00 PM
A paper justifying a 100% premine. Honestly?

You didnt read it. This is not about coin distribution but about payment verification.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: CLains on April 06, 2014, 12:01:50 PM
Sounds great on paper - hoping to see it implemented somewhere soon!

Quick question: what prevents Ripple from utilizing DPOS to generate future unique node lists?

I quoted you on the bitsharestalk forum and Daniel "bytemaster" Larimer and delulo replied,

From bitcointalk, https://bitcointalk.org/index.php?topic=558316.msg6086884#msg6086884

Sounds great on paper - hoping to see it implemented somewhere soon!

Quick question: what prevents Ripple from utilizing DPOS to generate future unique node lists?

Nothing prevents Ripple from doing this..

The difference is: It wouldn't make much of a difference towards the current state of ripple because they control more than 50% of the money supply anyway... The more distributed BTS are the more decentralized it is!!

Inside Ripple the 90% are divided among many players..... so it may still be of some use to them... especially if they ever want to sell.

Good point. But the potential for collusion is still higher than with BTS shareholders...

Join the discussion here https://bitsharestalk.org/index.php?topic=4009.0 :)


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: benjyz on April 23, 2014, 09:52:41 PM
Interesting stuff. I wish the altcoin forum structure would be such that good posts are highlighted.

How does this approach tie in with the following statement?

Quote
The future of currency is not shares in decentralized companies such as Bitcoin, but instead in assets issued by these companies that have the price stability of the dollar, gold, or silver.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on April 25, 2014, 12:24:50 AM
Interesting stuff. I wish the altcoin forum structure would be such that good posts are highlighted.

How does this approach tie in with the following statement?

Quote
The future of currency is not shares in decentralized companies such as Bitcoin, but instead in assets issued by these companies that have the price stability of the dollar, gold, or silver.

right now we are using shares in a decentralized company as currency because they are a good medium of exchange simply by virtue of their digital nature. the point of bitcoin (the network) is to provide a better a currency, so shouldn't these decentralized companies do just that? currencies that are not beholden to inflation or price instability. essentially they are financial instruments of the clients choosing. this is what bitshares x (the decentralized autonomous bank and exchange) allows. individuals can use this bank to acquire assets that maintain the purchasing power of any asset that you can think of. the bank holds at least 200% reserve for all the debt that it issues, so there is no possibility of default. everything within the system is collateralized and accounted for with the bank's shares. as the banks market cap increases it can issue more debt, but it can only do so in accordance with rule that debt can only be issued with 200% collateralization.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: AnonyMint on May 02, 2014, 01:42:25 AM
It is time to squash Proof-of-Stake once and for all. It can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

Apologies I've been busy and hadn't had time to squash bytemaster's latest N.A.O.D. (nonsense algorithm of the day).

First of all, he never was able to address the issues I raised about Transactions as Proof-of-Stake quoted as follows.

This proposal appears to be flawed, unless I am missing something. I have only read the first 4 pages thus far.

1. You propose to decrease the coin rewards as coin-days-destroyed volume increases, so this makes it less costly for an attacker to obtain > 50% of the hash rate assuming the attacker includes all the transactions. You apparently are attempting to imply there is no useful attack to do if the attacker is including the most coin-days-destroyed? Please confirm or deny then I will dig into more analysis of this vector.

2. Also how do you choose between someone who generates a proof-of-work hash with lower coin-days-destroyed several times sooner than the network propagation delay versus another who generates it that much delayed with a higher coin-days-destroyed? If you choose the latter, then you've killed the proof-of-work incentive because it means it will always pay to be later and wait for more transactions to arrive.

3. You claim to defeat my Transactions Withholding Attack, by blacklisting those who send blocks with transactions that were not recently seen by all miners. I retorted against this recently (https://bitcointalk.org/index.php?topic=336350.msg3805458#msg3805458). This centralizes the network (all for one and one for all outcome) by requiring every miner to be responsible for the incoming network connectivity of other miners. And it centralizes the network in other ways, such it can't tolerate a temporary partitioning of the network due to connectivity outages.

P.S. By coin-days-destroyed, I assume you mean coin value x days, otherwise you would motivate proliferation of dust.

The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.

[snip]

Whereas those who actually mine are proactively using their time, ingenuity, initiative and capital to secure the network, thus it seems more capitalistic they should receive the redistribution from the hoarders. Besides it may beis the only viableplausible way to secure the public ledger.

The other attacks you describe all derive from the fundamental reason I declared all non-proof-of-work systems to be insecure back in April.

My logic was mathematically fundamental. The input entropy set is quite deterministic and well known and thus can be preimaged. For example, accumulating a lot of coin-days-destroyed and then targeting them in clever ways to subvert the security.

The randomness (entropy) of each proof-of-work is fundamental and mathematical and it can not be preimaged. It can only be surely defeated with > 50% of the network hash rate. Note I recently offered what I believe to a solution to the selfish-mining attack (the one at hackingdistributed.com that claims 25 - 35% attack).

I am skeptical that you can characterize all possible attack vectors of proof-of-stake in one coherent mathematical proof. Thus you will not know formally what the security is; instead a list of adhoc attacks and counter-measures.

[snip]

Edit: Perhaps coin-days-destroyed in some attack vectors motivates not transacting for long periods of time.



The bottom line is that no proof-of-stake system can ever remain decentralized.

They all will require some sort of delegation of reputation to achieve consensus. I would have to go through a laundry list of examples to cover all the cases. For example, in Transactions as Proof-of-Stake it is required to delegate trust of propagation to the other nodes as I explained above. Thus there needs to be some reputation system to enforce this, e.g. blacklisting, whitelisting, etc.. All the other proof-of-stake systems have a requirement for some form of delegated reputation.

I have many times explained to bytemaster and others the fundamental problem is that any system that attempts to replace proof-of-work will rely on some form of reputation, and reputation is centralization. And centralization is precisely what decentralized crypto-currency is not supposed to be because centralization will always end up control and manipulated (i.e. it is a fiat system).

Trust is orthogonal to reputation and centralization. I can trust Proof-of-Work, which is decentralized trust without reputation. Reputation isn't needed in Proof-of-Work, because the input entropy is fresh (can't be preimaged) on every new TB.

You can 75% attack it if you like, but your nodes wont have any trust, so that block chain will just be ignored.

(In any non-Proof-of-Work design, ) It is mathematically impossible for there to be external consensus trust of the honest chain if the dishonest chain is controlled by more than 51% of the peers. We've covered some of the scenarios upthread, and it always boils down to that the external viewers can not know who to trust except by trusting the majority of peers.

The only mathematical way around this is to centralize the network, by placing more trust in some peers than others over time.

Indeed long-term reputation is a mathematically viable alternative to Proof-of-Work. This is centralization. There are tradeoffs.

So this is not "7 billion individually watching the network", but rather a fewer # of peers with reputation being trusted. This is just the political power vacuum all over again with its contingent problems of vested interests Olsen power scramble (http://esr.ibiblio.org/?p=984):

https://bitcointalk.org/index.php?topic=226033 (No Money Exists Without the Majority)

Notwithstanding the above, any non-Proof-of-Work system can be attacked with much less than 51% of the peers, due to the fact that the input entropy is preimageable, as I explained upthread. Again the only way to work around this is to trust some established peers to guard against this.

Financial transactions must be recorded in a public or private ledger trusted by both the spender and the recipient, otherwise funds could be unspent or double-spent to a plurality of recipients. To provide a ledger that can't be captured, Satoshi described a proof-of-work (PoW) scheme where transaction peers communicating over the network compete to be the first to solve a computational puzzle which is unique for each block of transactions added to a public ledger. The security of this ledger against double-spends has three (3) essential requirements.

1. The computational puzzle can't be preimaged, i.e. nothing can be known about solving the puzzle until the prior block's puzzle is solved.

2. Without at least 50% of the aggregate computational power of all transaction peers, it is not possible to create a modified chain of blocks starting from any present or past block, which would contain more blocks than the block chain controlled by the remaining cooperating peers. Thus the longer chain is trusted.

3. The block chain is cryptographically linked in forward order, such that the historical proof-of-work and transactions can be independently verified at any time in the future. Thus the transaction peers may leave and rejoin the network at will without need for a trusted centralized storage.

Note security point #1 eliminates from consideration PoW schemes in which the puzzle is some real-world computational work because the puzzles are known a priori and are thus pre-imageable. Non-PoW voting and membership schemes disqualify because the ordering of designation of authority (to decide which transactions are in each block) to transaction peers is pre-imageable, or requires peers trusted by reputation which is centralizing on a slippery slope towards Olsen capture.

You must also consider the negative impacts of design features when you state the positive impacts.

Reputation has many downsides:

a. It can be stolen, e.g. threaten first to extort private key, then kill, and keep key.
b. Censorship based on metadata which doesn't always correlate rationally.
c. Discriminate against early adopters out of jealously, i.e. retribution for #b.
d. Regulatory authorities can require the BitName same as they now do Social Security # and Id. They can now establish the BitName is real, because it has (duration) reputation.

The high cost to transfer or revoke a name also has many downsides, e.g. see #d.

I thinking the pool operator (server) does so little relative to work of the pool miners that it doesn't need to charge a very high fee. Thus there isn't much ability (incentive for pool miners) to undercut competitors based on fee.

So there just needs to be a slightest incentive to encourage pool miners to seek out another pool as a pool grows large. This will encourage a poliferation of pools.

How do pool miners know that a pool server isn't cheating them by paying some of the earnings to themselves pretending to be a pool miner?

Go down that line of thought and you will discover what I am thinking.

The only way you can prove a pool isn't cheating is by estimating the hash rate of the pool and comparing it to the number of blocks found.  Unfortunately, you could probably still skim a couple of a percent this way.

Modern protocols (GBT & Stratum) both have the full coinbase transaction visible to the miners, meaning you can verify that the block being built will be paid to a certain address or has a certain message encoded in the block that identifies the pool.  This allows you to audit if the pool is trying to skim blocks if certain users start seeing work without a coinbase message that identifies the pool.  In the case of BTC Guild, it's both, they always pay to the same address and always include "Mined by BTC Guild" in the coinbase message.

It's not no-trust, but all it would take is a few % of users monitoring this to determine if a pool was trying to skim blocks by sending a certain % of work that doesn't include identifying marks.

How could anything less than 100% of the pool miners know if some of the coinbase transactions were to addresses not owned by pool miners who contributed shares?

Since you can never know if you are the 100% (because mining pool shares* are not recorded in the block chain), thus seems to me there is no way to verify if there is skimming or not, as bytemaster and I wrote.

*For those who don't know the terminology, a pool share is a proof-of-work hash below some threshold that is easier than the current network difficulty. It might also be a block solution.

Why don't you just use P2Pool? Is there any reason?

I was waiting for bytemaster to answer because I wanted to know his thoughts. Seems to me that you have no way to stop the Share Withholding Attack since it is decentralized. And every peer has to run more of a full client if I am not mistake. And there is a lot more overhead I believe. And perhaps also much less resistance against denial-of-service flooding. Frankly I didn't analyze for long enough to be very sure of my initial intuition which is to stay away from it.

I know it is generally impossible to enforce reputation on a 100% decentralized system. So I am intuitively skeptical of P2Pool.

P.S. I won't have time to go back here and debate. I am technically qualified and I am 100% sure I am correct.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 02, 2014, 02:00:52 AM
the very point of dpos is to centralize for the purpose of specialization, which allows for faster block times and confirmations and also allows for scalability on the level of visa's 10,000 tps payment processor. the system is still decentralized in that there is no one point of failure and there is no one point of control. delegates have a simple job and can be fired on command if they do not perform their duties. consensus on a whole is reach by each individual stake holder, whereas in pow only hashing shares contribute to network consensus.

What makes you so technically qualified?


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Voluntold on May 02, 2014, 03:59:12 AM
I skimmed through and all I had to see was 'reputation is centralization'.... No it's not.  A reputation system is not what led to fiat money.  That's ridiculous.  Please explain to me how a reputation system would lead to manipulation??? Ebay seems to be doing fine. 


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: kongdezhong on May 02, 2014, 07:35:25 AM
I skimmed through and all I had to see was 'reputation is centralization'.... No it's not.  A reputation system is not what led to fiat money.  That's ridiculous.  Please explain to me how a reputation system would lead to manipulation??? Ebay seems to be doing fine. 

Same question with you .Want a explaination.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: benjyz on May 02, 2014, 10:17:34 AM
right now we are using shares in a decentralized company as currency because they are a good medium of exchange simply by virtue of their digital nature. the point of bitcoin (the network) is to provide a better a currency, so shouldn't these decentralized companies do just that? currencies that are not beholden to inflation or price instability. essentially they are financial instruments of the clients choosing. this is what bitshares x (the decentralized autonomous bank and exchange) allows. individuals can use this bank to acquire assets that maintain the purchasing power of any asset that you can think of. the bank holds at least 200% reserve for all the debt that it issues, so there is no possibility of default. everything within the system is collateralized and accounted for with the bank's shares. as the banks market cap increases it can issue more debt, but it can only do so in accordance with rule that debt can only be issued with 200% collateralization.

the big problem here is: shares, assets, instruments are legal terms. but we're not talking about transactions within jurisdictions, but in cyberspace. that is a HUGE difference, and very few people understand this. which is quite amazing really, because it should be obvious that these terms just don't apply in the same way. so bitshares don't have the legal system under them, which makes them ineffective. the same applies to pretty much all non-ecash efforts.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: r0ach on May 02, 2014, 12:02:25 PM
the big problem here is: shares, assets, instruments are legal terms. but we're not talking about transactions within jurisdictions, but in cyberspace. that is a HUGE difference, and very few people understand this. which is quite amazing really, because it should be obvious that these terms just don't apply in the same way. so bitshares don't have the legal system under them, which makes them ineffective. the same applies to pretty much all non-ecash efforts.

This is exactly how I've felt when reading all protoshares/invictus/etc stuff in the past.  I mean, anything can happen, and it's possible they could make some of this stuff work, but why rely on colored coins when you can rely on authoritarianism and men with guns.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: flis1986 on May 02, 2014, 12:41:27 PM
Thank you.
Very interesting article !


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Spoetnik on May 02, 2014, 12:47:41 PM
i like my white papers beige :(


Title: ...uh oooeh'z -> a lesson unlearned
Post by: Spoetnik on May 02, 2014, 12:48:50 PM
A paper justifying a 100% premine. Honestly?

i literally just ROFL'd so hard i thought i was going to choke to death ahhahhahahaa


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: benjyz on May 02, 2014, 01:23:51 PM
This is exactly how I've felt when reading all protoshares/invictus/etc stuff in the past.  I mean, anything can happen, and it's possible they could make some of this stuff work, but why rely on colored coins when you can rely on authoritarianism and men with guns.

yes, that's complicated. the spectrum between cyperpunks and free market capitalists is pretty wide. certainly a bunch of people in N jurisdictions have not the power to incorporate whatever legal entity they want. corporations and states are deeply coupled. corporations have become state-like entities, playing the game of jurisdiction arbitrage and leveraging their power through all kinds of venues, see the recent global trade agreement and the off-shore markets.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: AnonyMint on May 02, 2014, 08:51:35 PM
clout and Voluntold, you need to study the three validity tests for the Byzantine Generals Problem (http://www.drdobbs.com/cpp/the-byzantine-generals-problem/206904396) and understand at a very deep level what proof-of-work solves.

It is not possible to just centralize a subset of the system, because the security and game theory of the system is pre-imageable and manipulable from that subset, thus there is no subset (it is not containable).

The word 'reputation' in this context means any attribute you want to associate with a node in the network. Proof-of-work avoids the need for any persistent attributes, thus centralization does not need to be contained in a subset, because there isn't any centralization subset because there is no attribute that has to be validated.

Think about the Byzantine problem in another abstract way. There can't exist a tally of votes without agreeing who will validate and count the votes (unless perhaps using some group signature algorithm, however these are always two-steps and thus are subject to denial-of-service). Yet who ever is trusted to count the votes, can now game the entire system.

Any reputation attribute metastasizes to centralized game theory.

Sorry. End of story. High IQ abstraction complete.

...delegates have a simple job and can be fired on command if they do not perform their duties...

No they can't be fired in all possible game theory scenarios. Devil is the details. I could spend my entire life doing adhoc analysis of every new N.A.O.D.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 02, 2014, 10:32:50 PM
right now we are using shares in a decentralized company as currency because they are a good medium of exchange simply by virtue of their digital nature. the point of bitcoin (the network) is to provide a better a currency, so shouldn't these decentralized companies do just that? currencies that are not beholden to inflation or price instability. essentially they are financial instruments of the clients choosing. this is what bitshares x (the decentralized autonomous bank and exchange) allows. individuals can use this bank to acquire assets that maintain the purchasing power of any asset that you can think of. the bank holds at least 200% reserve for all the debt that it issues, so there is no possibility of default. everything within the system is collateralized and accounted for with the bank's shares. as the banks market cap increases it can issue more debt, but it can only do so in accordance with rule that debt can only be issued with 200% collateralization.

the big problem here is: shares, assets, instruments are legal terms. but we're not talking about transactions within jurisdictions, but in cyberspace. that is a HUGE difference, and very few people understand this. which is quite amazing really, because it should be obvious that these terms just don't apply in the same way. so bitshares don't have the legal system under them, which makes them ineffective. the same applies to pretty much all non-ecash efforts.

shares, assets etc. are not legal terms they are economic terms that have nothing to do with governments or jurisdictions except that governments attempt to regulate their exchange. these terms do not apply in the same way because the legal ramifications do not apply, but the economic consequences do. this is why bitshares is better than bitcoin and all 2nd generation crypto systems, because it is supported by sound economics.

also what is a non-ecash effort?


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 02, 2014, 10:34:14 PM
the big problem here is: shares, assets, instruments are legal terms. but we're not talking about transactions within jurisdictions, but in cyberspace. that is a HUGE difference, and very few people understand this. which is quite amazing really, because it should be obvious that these terms just don't apply in the same way. so bitshares don't have the legal system under them, which makes them ineffective. the same applies to pretty much all non-ecash efforts.

This is exactly how I've felt when reading all protoshares/invictus/etc stuff in the past.  I mean, anything can happen, and it's possible they could make some of this stuff work, but why rely on colored coins when you can rely on authoritarianism and men with guns.

this doesn't rely on colored coins...


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 02, 2014, 11:07:08 PM
clout and Voluntold, you need to study the three validity tests for the Byzantine Generals Problem (http://www.drdobbs.com/cpp/the-byzantine-generals-problem/206904396) and understand at a very deep level what proof-of-work solves.

It is not possible to just centralize a subset of the system, because the security and game theory of the system is pre-imageable and manipulable from that subset, thus there is no subset (it is not containable).

mining pools are centralized

The word 'reputation' in this context means any attribute you want to associate with a node in the network. Proof-of-work avoids the need for any persistent attributes, thus centralization does not need to be contained in a subset, because there isn't any centralization subset because there is no attribute that has to be validated.

mining pool are beholden to reputation

Think about the Byzantine problem in another abstract way. There can't exist a tally of votes without agreeing who will validate and count the votes (unless perhaps using some group signature algorithm, however these are always two-steps and thus are subject to denial-of-service). Yet who ever is trusted to count the votes, can now game the entire system.

if a delegate does not include all valid votes (transactions) then they are immediately fired, as the client for users that are online will automatically switch to a down vote for that delegate. those that are currently transacting (voting) will remove the delegate from his position. since delegates are paid and can immediately be voted out there is a substantial financial disincentive to not include all valid transactions in a block (not count all the votes)

Any reputation attribute metastasizes to centralized game theory.

sure you can say that, but within dpos unlike pow there is a limit to how centralized the system can be. with bitcoin all you need are two mining pools to collude for them to have control of the network. in dpos you need to control half the delegates or half the stake to control the network. i do not see centralization being more of a problem in dpos as opposed to pow. in fact the converse is true.

now lets get to your point about game theory. please explain to me with pow or with dpos where it is in anyone's best interest to attack the network.


Sorry. End of story. High IQ abstraction complete.

...delegates have a simple job and can be fired on command if they do not perform their duties...

No they can't be fired in all possible game theory scenarios. Devil is the details. I could spend my entire life doing adhoc analysis of every new N.A.O.D.

there is no difference between the centralization of bitcoin mining and the centralization of dpos except that dpos leverages that centralization for faster block times and confirmations. it also allows for scalability that bitcoin cannot achieve with its current design since all the computational resources of the network are being used for mining rather than transaction processing.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 03, 2014, 01:17:50 AM
there is no difference between the centralization of bitcoin mining and the centralization of dpos except that dpos leverages that centralization for faster block times and confirmations. it also allows for scalability that bitcoin cannot achieve with its current design since all the computational resources of the network are being used for mining rather than transaction processing.

It doesn't sound decentralised enough, and there is the possibility that the delegates may collude. or a single entity may run multiple delegates.

I don't get the love for PoW either. Bitcoin is controlled by a dozen entities (the Cartel) and makes it opposite to being decentralised.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: mhps on May 03, 2014, 02:58:53 AM
Tribalism is hard-wired in human. We have evolved to be peer-loving social animals. We fondly think we are individuals. Yet we seek out peers with reputation for survival and for solving big problems.  

We can't have absolute mathematically bullet-proof decentralization. Instead we should seek pretty-good-decentralization.

Could there exist a decentralization index, with which we know how good is pretty good? I guess the index  for a given coin could have sub-indices e.g. percentage of new blocks minted by top 5 richest address for POS,  percentage of new blocks mined by top 5 biggest pools for POW, even percentage of new blocks generated by the same  brand of mining rigs,  by a country,  by group of countries having the same background ... If you want to maximize decentralization, choose a low index coin and diversify.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: brekyrself on May 03, 2014, 05:47:24 AM
Tribalism is hard-wired in human. We have evolved to be peer-loving social animals. We fondly think we are individuals. Yet we seek out peers with reputation for survival and for solving big problems. 

We can't have absolute mathmatically bullet-proof decentralization. Instead we should seek pretty-good-decentralization.

Could there exist a decentralization index, with which we know how good is pretty good? I guess the index  for a given coin could have sub-indices e.g. percentage of new blocks minted by top 5 richest address for POS,  percentage of new blocks mined by top 5 biggest pools for POW, even percentage of new blocks generated by the same  brand of mining rigs,  by a country,  by group of countries having the same background ... If you want to maximize decentralization, choose a low index coin and diversify.

Spot on, everything in life is a compromise.  While DPOS is not 110% decentralized, DPOS appears to be MORE decentralized compared to many of the current alternatives.  An index would be a great start for us to compare what technology is decentralized "good enough."


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: SomethingElse on May 03, 2014, 06:38:11 AM
so when is your coin coming out? hehehe


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: ChuckOne on May 03, 2014, 08:33:46 AM
It is time to squash Proof-of-Stake once and for all. It can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

You should read http://www.links.org/files/decentralised-currencies.pdf It explains why PoW is also not the way to go. The reasoning is quite simple:

Why does Bitcoin introduce checkpoints periodically? Because PoW is not secure either.

How is the network gonna find consensus on that checkpoints? Assumption: the developers find it.  <<< is that decentralized? I doubt it.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: ChuckOne on May 03, 2014, 08:38:27 AM
Delegated Proof-of-Stake (DPOS)
by Daniel Larimer
April 3, 2014

Abstract


This paper introduces a new implementation of proof of stake that can validate transactions in seconds while providing greater security in a shorter period of time than all existing proof of stake systems. In the time it takes Bitcoin to produce a single block a DPOS system can have your transaction verified by 20% of the shareholders and by the time Bitcoin claims the transaction is almost irreversible (6 blocks, 1 hour) your transaction under DPOS has been verified by 100% of the shareholders through their representatives.

http://107.170.30.182/security/delegated-proof-of-stake.php

Daniel "bytemaster" Larimer is answering technical questions in this thread (https://bitsharestalk.org/index.php?topic=4009.msg50412).

Btw., your solution is no contribution of the state of the art.

Nxt introduced Transparent Mining in production and Leasing of Mining Power conceptually some time ago. Now, the latter is going to be in production within a few days.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: AnonyMint on May 03, 2014, 10:57:28 AM
Bitcoin hasn't been fundamentally improved since Satoshi exited years ago.

Mining pools can be algorithmically decentralized, but you will never see this in Bitcoin.

Mining can be decentralized with cpu-only PoW, but you will never see this in Bitcoin. Scrypt is not cpu-only.

Checkpoints are a precaution while the network hashing rate is smaller than for example Google's server farms, but isn't needed after that.

Cpu-only will reach that point much faster than Bitcoin did.

Soon.



Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 04, 2014, 12:54:35 AM
Bitcoin hasn't been fundamentally improved since Satoshi exited years ago.

Mining pools can be algorithmically decentralized, but you will never see this in Bitcoin.

Mining can be decentralized with cpu-only PoW, but you will never see this in Bitcoin. Scrypt is not cpu-only.

Checkpoints are a precaution while the network hashing rate is smaller than for example Google's server farms, but isn't needed after that.

Cpu-only will reach that point much faster than Bitcoin did.

Soon.



If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

The idea in the OP sounds promising, even though I have quite a few reservations. Of course, its still a theory now and unless we see it working in practice we won't know if it is any good.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: mhps on May 04, 2014, 01:57:53 AM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: AnonyMint on May 06, 2014, 12:20:06 AM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.

Long ago I realized that botnets are a finite resource, especially with a cpu-only currency there is competition for the same resource, thus if you increase the demand for them, the price will rise eventually to the point where it costs the same as buying the hardware.

Problem mitigated or solved with sufficient scale.

ASICs and proof-of-stake are worse because there is no hope of keeping them decentralized.

I am not only a programmer, I am (perhaps a polymath (https://bitcointalk.org/index.php?topic=365141.msg6533343#msg6533343)) and above demonstrating I am an astute economist (https://bitcointalk.org/index.php?topic=564097.msg6563477#msg6563477).


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: mhps on May 06, 2014, 12:47:44 AM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.

Long ago I realized that botnets are a finite resource, especially with a cpu-only currency there is competition for the same resource,

What about botnets of zombies? The number of computers that can be infested is practically limitless.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: bytemaster on May 06, 2014, 04:49:20 PM
Nice discussion going on here so let me chime in a bit:

Before you can call something decentralized or centralized you must first define what these terms mean in a concrete and objective manner.  I will define them as follows:

1) You are fully decentralized when you are fully in control of your own assets.  The free market and voluntary trade of physical goods is full decentralization. 

2) When fractional ownership of a common good is in play, then you are decentralized when your control/influence is proportional to your own assets.


Mining can never be decentralized because the miners are in control over the shareholders assets and control/ownership are completely decoupled.  Sure you can sign a transaction, but it must be 'approved' by the miners.   


I like Nxt and their transparent forging approach is the closest thing out there to being truly decentralized.   Unfortunately, because only a subset of the users forge and there is no restriction in how concentrated forging power can be.   

I think that this entire debate of mining vs POS is founded upon a lack of understanding on what Bitcoin really is.  It has not solved the Byzantine Generals Problem... it just defined a rule set for consensus that allows anyone with money to control the network and once controlled there are no alternatives.

Likewise, CPU only POW merely means the government will certainly control it given the percentage of the population employed by the government and government-friendly corporations and that each of these employees has a computer.   Mere economic analysis is all that you need to understand that POW is the ultimate means to assure centralization because it erects barriers to entry that are insurmountable by everyone wanting fork as a result of the miners taking the chain in the wrong direction.

Because of a false belief about the nature of consensus many seem to think that 'Zero-Trust' models are the only ones that are valid.   I contend you are always trusting something or someone.  Random selection of anonymous individuals to produce blocks is both slower and allows 'random' bad behavior on a temporary basis.  It is less reliable.   

DPOS is all about creating a system that gives people financial incentive to do the right thing and maintains the ability to 'fire them' quickly if they don't with 100% certainty of getting caught.   The delegates have no power *BUT* to do the right thing.   

Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.   






 


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Luckybit on May 06, 2014, 04:59:17 PM
It is time to squash Proof-of-Stake once and for all. It can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

Apologies I've been busy and hadn't had time to squash bytemaster's latest N.A.O.D. (nonsense algorithm of the day).

First of all, he never was able to address the issues I raised about Transactions as Proof-of-Stake quoted as follows.

This proposal appears to be flawed, unless I am missing something. I have only read the first 4 pages thus far.

1. You propose to decrease the coin rewards as coin-days-destroyed volume increases, so this makes it less costly for an attacker to obtain > 50% of the hash rate assuming the attacker includes all the transactions. You apparently are attempting to imply there is no useful attack to do if the attacker is including the most coin-days-destroyed? Please confirm or deny then I will dig into more analysis of this vector.

2. Also how do you choose between someone who generates a proof-of-work hash with lower coin-days-destroyed several times sooner than the network propagation delay versus another who generates it that much delayed with a higher coin-days-destroyed? If you choose the latter, then you've killed the proof-of-work incentive because it means it will always pay to be later and wait for more transactions to arrive.

3. You claim to defeat my Transactions Withholding Attack, by blacklisting those who send blocks with transactions that were not recently seen by all miners. I retorted against this recently (https://bitcointalk.org/index.php?topic=336350.msg3805458#msg3805458). This centralizes the network (all for one and one for all outcome) by requiring every miner to be responsible for the incoming network connectivity of other miners. And it centralizes the network in other ways, such it can't tolerate a temporary partitioning of the network due to connectivity outages.

P.S. By coin-days-destroyed, I assume you mean coin value x days, otherwise you would motivate proliferation of dust.

The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.

[snip]

Whereas those who actually mine are proactively using their time, ingenuity, initiative and capital to secure the network, thus it seems more capitalistic they should receive the redistribution from the hoarders. Besides it may beis the only viableplausible way to secure the public ledger.

The other attacks you describe all derive from the fundamental reason I declared all non-proof-of-work systems to be insecure back in April.

My logic was mathematically fundamental. The input entropy set is quite deterministic and well known and thus can be preimaged. For example, accumulating a lot of coin-days-destroyed and then targeting them in clever ways to subvert the security.

The randomness (entropy) of each proof-of-work is fundamental and mathematical and it can not be preimaged. It can only be surely defeated with > 50% of the network hash rate. Note I recently offered what I believe to a solution to the selfish-mining attack (the one at hackingdistributed.com that claims 25 - 35% attack).

I am skeptical that you can characterize all possible attack vectors of proof-of-stake in one coherent mathematical proof. Thus you will not know formally what the security is; instead a list of adhoc attacks and counter-measures.

[snip]

Edit: Perhaps coin-days-destroyed in some attack vectors motivates not transacting for long periods of time.



The bottom line is that no proof-of-stake system can ever remain decentralized.

They all will require some sort of delegation of reputation to achieve consensus. I would have to go through a laundry list of examples to cover all the cases. For example, in Transactions as Proof-of-Stake it is required to delegate trust of propagation to the other nodes as I explained above. Thus there needs to be some reputation system to enforce this, e.g. blacklisting, whitelisting, etc.. All the other proof-of-stake systems have a requirement for some form of delegated reputation.

I have many times explained to bytemaster and others the fundamental problem is that any system that attempts to replace proof-of-work will rely on some form of reputation, and reputation is centralization. And centralization is precisely what decentralized crypto-currency is not supposed to be because centralization will always end up control and manipulated (i.e. it is a fiat system).

Trust is orthogonal to reputation and centralization. I can trust Proof-of-Work, which is decentralized trust without reputation. Reputation isn't needed in Proof-of-Work, because the input entropy is fresh (can't be preimaged) on every new TB.

You can 75% attack it if you like, but your nodes wont have any trust, so that block chain will just be ignored.

(In any non-Proof-of-Work design, ) It is mathematically impossible for there to be external consensus trust of the honest chain if the dishonest chain is controlled by more than 51% of the peers. We've covered some of the scenarios upthread, and it always boils down to that the external viewers can not know who to trust except by trusting the majority of peers.

The only mathematical way around this is to centralize the network, by placing more trust in some peers than others over time.

Indeed long-term reputation is a mathematically viable alternative to Proof-of-Work. This is centralization. There are tradeoffs.

So this is not "7 billion individually watching the network", but rather a fewer # of peers with reputation being trusted. This is just the political power vacuum all over again with its contingent problems of vested interests Olsen power scramble (http://esr.ibiblio.org/?p=984):

https://bitcointalk.org/index.php?topic=226033 (No Money Exists Without the Majority)

Notwithstanding the above, any non-Proof-of-Work system can be attacked with much less than 51% of the peers, due to the fact that the input entropy is preimageable, as I explained upthread. Again the only way to work around this is to trust some established peers to guard against this.

Financial transactions must be recorded in a public or private ledger trusted by both the spender and the recipient, otherwise funds could be unspent or double-spent to a plurality of recipients. To provide a ledger that can't be captured, Satoshi described a proof-of-work (PoW) scheme where transaction peers communicating over the network compete to be the first to solve a computational puzzle which is unique for each block of transactions added to a public ledger. The security of this ledger against double-spends has three (3) essential requirements.

1. The computational puzzle can't be preimaged, i.e. nothing can be known about solving the puzzle until the prior block's puzzle is solved.

2. Without at least 50% of the aggregate computational power of all transaction peers, it is not possible to create a modified chain of blocks starting from any present or past block, which would contain more blocks than the block chain controlled by the remaining cooperating peers. Thus the longer chain is trusted.

3. The block chain is cryptographically linked in forward order, such that the historical proof-of-work and transactions can be independently verified at any time in the future. Thus the transaction peers may leave and rejoin the network at will without need for a trusted centralized storage.

Note security point #1 eliminates from consideration PoW schemes in which the puzzle is some real-world computational work because the puzzles are known a priori and are thus pre-imageable. Non-PoW voting and membership schemes disqualify because the ordering of designation of authority (to decide which transactions are in each block) to transaction peers is pre-imageable, or requires peers trusted by reputation which is centralizing on a slippery slope towards Olsen capture.

You must also consider the negative impacts of design features when you state the positive impacts.

Reputation has many downsides:

a. It can be stolen, e.g. threaten first to extort private key, then kill, and keep key.
b. Censorship based on metadata which doesn't always correlate rationally.
c. Discriminate against early adopters out of jealously, i.e. retribution for #b.
d. Regulatory authorities can require the BitName same as they now do Social Security # and Id. They can now establish the BitName is real, because it has (duration) reputation.

The high cost to transfer or revoke a name also has many downsides, e.g. see #d.

I thinking the pool operator (server) does so little relative to work of the pool miners that it doesn't need to charge a very high fee. Thus there isn't much ability (incentive for pool miners) to undercut competitors based on fee.

So there just needs to be a slightest incentive to encourage pool miners to seek out another pool as a pool grows large. This will encourage a poliferation of pools.

How do pool miners know that a pool server isn't cheating them by paying some of the earnings to themselves pretending to be a pool miner?

Go down that line of thought and you will discover what I am thinking.

The only way you can prove a pool isn't cheating is by estimating the hash rate of the pool and comparing it to the number of blocks found.  Unfortunately, you could probably still skim a couple of a percent this way.

Modern protocols (GBT & Stratum) both have the full coinbase transaction visible to the miners, meaning you can verify that the block being built will be paid to a certain address or has a certain message encoded in the block that identifies the pool.  This allows you to audit if the pool is trying to skim blocks if certain users start seeing work without a coinbase message that identifies the pool.  In the case of BTC Guild, it's both, they always pay to the same address and always include "Mined by BTC Guild" in the coinbase message.

It's not no-trust, but all it would take is a few % of users monitoring this to determine if a pool was trying to skim blocks by sending a certain % of work that doesn't include identifying marks.

How could anything less than 100% of the pool miners know if some of the coinbase transactions were to addresses not owned by pool miners who contributed shares?

Since you can never know if you are the 100% (because mining pool shares* are not recorded in the block chain), thus seems to me there is no way to verify if there is skimming or not, as bytemaster and I wrote.

*For those who don't know the terminology, a pool share is a proof-of-work hash below some threshold that is easier than the current network difficulty. It might also be a block solution.

Why don't you just use P2Pool? Is there any reason?

I was waiting for bytemaster to answer because I wanted to know his thoughts. Seems to me that you have no way to stop the Share Withholding Attack since it is decentralized. And every peer has to run more of a full client if I am not mistake. And there is a lot more overhead I believe. And perhaps also much less resistance against denial-of-service flooding. Frankly I didn't analyze for long enough to be very sure of my initial intuition which is to stay away from it.

I know it is generally impossible to enforce reputation on a 100% decentralized system. So I am intuitively skeptical of P2Pool.

P.S. I won't have time to go back here and debate. I am technically qualified and I am 100% sure I am correct.


Programming, AI, and related fields are about iterative improvement. The measure is whether DPOS is more decentralized than Proof of Work.

Proof of Work or Proof of Stake centralizes around whoever has the most money and expertise/knowledge. The barrier to entry with Proof of Stake is money, while the barrier to entry with Proof of Work is also money but expertise as well. You can have the money to buy the latest chip but if you don't make chips then you're never going to be able to mine as efficiently as the chip designers, manufacturers, etc.

I'll dive deeper into this at a later time.  These are only my initial comments but as you can see I'm in favor of DPOS (and Proof of Stake in general) over Proof of Work. I think both can be centralized by design but Proof of Work is centralized currently and while Proof of Stake is an iterative improvement over Proof of Work.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Luckybit on May 06, 2014, 05:19:43 PM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.

Long ago I realized that botnets are a finite resource, especially with a cpu-only currency there is competition for the same resource, thus if you increase the demand for them, the price will rise eventually to the point where it costs the same as buying the hardware.

Problem mitigated or solved with sufficient scale.

ASICs and proof-of-stake are worse because there is no hope of keeping them decentralized.

I am not only a programmer, I am (perhaps a polymath (https://bitcointalk.org/index.php?topic=365141.msg6533343#msg6533343)) and above demonstrating I am an astute economist (https://bitcointalk.org/index.php?topic=564097.msg6563477#msg6563477).

The main problem is concentration of power. That is the whole reason for the decentralization movement.

So the most important thing we can aim for is decentralization of knowledge. Centralization of knowledge is one of the main causes of centralization in a Proof of Stake network.

Knowledge such as which blockchain to invest in. People who don't understand the difference between DPOS, POS and POW will be at a knowledge disadvantage. As a result they will lose out in the race for the limited token supply. Even if Proof of Stake is decentralized it will still favor those who have the most knowledge so there is always going to be a centralizing force. The question is whether or not it's the kind of knowledge that anyone can acquire and if it's the kind of knowledge anyone can acquire then at least you can say there is no barrier to entry.

For example people who think Dogecoin is going to be a great Store of Value for their life savings should have done a bit more research. People who think Proof of Work is going to be as good as a Store of Value as Proof of Stake need to do more research. There will be a lot of centralization around the brightest minds and most knowledgeable persons in a Proof of Stake community while in a Proof of Work community the centralization is around whoever has the most expertise and best equipment.

Money is central to both because usually if you want to invest it's going to cost money and if you want to mine it's going to cost money. Usually the more money you have the more you can make up for lack of knowledge or expertise. People who mine the right coin at the right time do so because they either have the knowledge/expertise or they just have a lot of money to buy whatever equipment they need to keep up with the race for tokens.

Perfect equality is impossible. All brains do not have equal knowledge. All people aren't on the same place on the starting line. Some people have had years to study programming, to study economics, to study cryptography, and have been waiting for something like Bitcoin to come along so they could play with it. Those people are the majority of the early adopters who were paying attention to these subjects prior to Bitcoin even existing.

Then you have people who started paying attention when Bitcoin went over $1, and these people are generally technologists, programmers, geeks, nerds, or whatever you like to call them. But the demographics who understand the technology the best are positioned to benefit from the technology the most and it's always that way even if you try to make it fair.

DPOS in my opinion should be measured compared to what is currently out there and not some hypothetical or mythical Proof of Work which doesn't currently exist. CPU Proof of Work is not going to be decentralized unless everyone can 3d print the CPUs. Proof of Work is not even designed to be decentralized because if you wanted true decentralization you would go direct democracy by saying every registered human being gets to vote on every block rather than every CPU gets to vote.

There will be way more CPUs than human beings. This favors CPU makers because CPU makers will always have the advantage from the start. It also favors the electric company because most people favoring Proof of Work don't have solar panels to generate their own electricity. You have to pay these third parties just to play the "serious game" we call Proof of Work mining.

Proof of Stake is a "serious game" as well but it's simple. Anyone can play this game by simply buying tokens. These tokens act like lottery tickets and by owning them there is a chance that you'll mint new tokens. This could be done in proportion to how many tokens you own (proportional) or it can be randomly distributed such that someone wins a jackpot. In either case this is more decentralized because you remove the need to have expertise in chip making.

You also flatten the hierarchy greatly by removing the need to pay an electric company a huge amount. This way the electric company doesn't decide who can and cannot mine profitably anymore (this limits participation).
Bitcoin hasn't been fundamentally improved since Satoshi exited years ago.

Mining pools can be algorithmically decentralized, but you will never see this in Bitcoin.

Mining can be decentralized with cpu-only PoW, but you will never see this in Bitcoin. Scrypt is not cpu-only.

Checkpoints are a precaution while the network hashing rate is smaller than for example Google's server farms, but isn't needed after that.

Cpu-only will reach that point much faster than Bitcoin did.

Soon.



It's possible to decentralize POW more than it is. I had some discussions on the topic and the best idea I could come up with was to juggle the hashing algorithm and try to make it pseudo-random or even random.

That is really the best you can do. You can make it so people will not know what to invest. Eventually people will start buying all the chips and investing in everything and once again it would centralize around whoever has the most money, but it's definitely better than what Bitcoin is doing.

Bitcoin is not decentralized at all and isn't trying to be. This is why I don't understand why they cannot raise the Max_Block_Size because it's already centralized so what difference does it make?

Bitcoin has major problems and it's not just ASICs. The Bitcoin community suffers from a concentration and centralization of knowledge. The core developers have so much power because there are so few of them and there are so few of them because Bitcoin code is esoteric for the average programmer to understand.

As a result we have a lot of altcoins which exist to allow programmers to learn the code base but also to experiment. That is a good thing because it decentralizes the knowledge and expertise, but for some core devs it could be seen as a bad thing.







Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 06, 2014, 09:10:08 PM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.

Long ago I realized that botnets are a finite resource, especially with a cpu-only currency there is competition for the same resource, thus if you increase the demand for them, the price will rise eventually to the point where it costs the same as buying the hardware.

Problem mitigated or solved with sufficient scale.

ASICs and proof-of-stake are worse because there is no hope of keeping them decentralized.

I am not only a programmer, I am (perhaps a polymath (https://bitcointalk.org/index.php?topic=365141.msg6533343#msg6533343)) and above demonstrating I am an astute economist (https://bitcointalk.org/index.php?topic=564097.msg6563477#msg6563477).

AnonyMint, you are welcome to trim your arguments and debate Bytemaster on mumble on Saturday 11 AM EST https://bitsharestalk.org/index.php?topic=4203.30

Anyway anyone is invited to ask questions and critique concepts.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 07, 2014, 03:50:24 AM
If you make a CPU only coin and assuming it remains so over time, you will have huge botnets controlling the coin. It doesn't make it any better.

Another form of centralization.

Long ago I realized that botnets are a finite resource, especially with a cpu-only currency there is competition for the same resource, thus if you increase the demand for them, the price will rise eventually to the point where it costs the same as buying the hardware.

Problem mitigated or solved with sufficient scale.

ASICs and proof-of-stake are worse because there is no hope of keeping them decentralized.

I am not only a programmer, I am (perhaps a polymath (https://bitcointalk.org/index.php?topic=365141.msg6533343#msg6533343)) and above demonstrating I am an astute economist (https://bitcointalk.org/index.php?topic=564097.msg6563477#msg6563477).

What are you even talking about? CPU coin means botnets mining at a rate which is unprofitable for normal users. Which means it will be controlled by thieves.

If you are going down that route I would rather stick to the cartel.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 07, 2014, 03:52:12 AM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.   

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: bytemaster on May 07, 2014, 04:35:29 AM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.   

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.

First of all someone with 51% of the delegates only has one power:  to exclude transactions or to stop producing blocks. 

If they gain 51% of the delegates and fail to include transactions that would vote them out then it will be very obvious to everyone on the network, the blockchain will be hard-forked by some developer and the network will continue to function.  You see what binds a network is not the software rules, but the social contract among the community.   It is almost inconceivable that in the event 51% of the delegates stop including transactions that the community would sit back and take it for long.   

Competition among chains and no barriers to entry or forking keeps people honest because there is NOTHING to gain by a 51% attack. 

Note that these 51 delegates would have to pretend not to see blocks from the other 49 delegates and thus the attack would be so obvious and disruptive that it wouldn't last more than 24 hours before community members took action. 


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 07, 2014, 05:12:29 AM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.   

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.

First of all someone with 51% of the delegates only has one power:  to exclude transactions or to stop producing blocks. 

If they gain 51% of the delegates and fail to include transactions that would vote them out then it will be very obvious to everyone on the network, the blockchain will be hard-forked by some developer and the network will continue to function.  You see what binds a network is not the software rules, but the social contract among the community.   It is almost inconceivable that in the event 51% of the delegates stop including transactions that the community would sit back and take it for long.   

Competition among chains and no barriers to entry or forking keeps people honest because there is NOTHING to gain by a 51% attack. 

Note that these 51 delegates would have to pretend not to see blocks from the other 49 delegates and thus the attack would be so obvious and disruptive that it wouldn't last more than 24 hours before community members took action. 

Is it just stop including transactions or putting in some dubious ones too? I can see how a 51% attack can benefit someone trying to manipulate big money. You will be running banks, lotto etc so the incentive is there.

wouldn't last for 24 hours doesn't look too good if bitshares is aspiring to replace the big financial institutions we all hate now.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: bytemaster on May 07, 2014, 05:41:27 AM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.   

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.

First of all someone with 51% of the delegates only has one power:  to exclude transactions or to stop producing blocks. 

If they gain 51% of the delegates and fail to include transactions that would vote them out then it will be very obvious to everyone on the network, the blockchain will be hard-forked by some developer and the network will continue to function.  You see what binds a network is not the software rules, but the social contract among the community.   It is almost inconceivable that in the event 51% of the delegates stop including transactions that the community would sit back and take it for long.   

Competition among chains and no barriers to entry or forking keeps people honest because there is NOTHING to gain by a 51% attack. 

Note that these 51 delegates would have to pretend not to see blocks from the other 49 delegates and thus the attack would be so obvious and disruptive that it wouldn't last more than 24 hours before community members took action. 

Is it just stop including transactions or putting in some dubious ones too? I can see how a 51% attack can benefit someone trying to manipulate big money. You will be running banks, lotto etc so the incentive is there.

wouldn't last for 24 hours doesn't look too good if bitshares is aspiring to replace the big financial institutions we all hate now.

They cannot produce dubious transactions... if they double sign then that is incontrovertible proof the delegate should be fired and is easily detected by all nodes on the network.  In less than 50 minutes every delegate should have confirmed your transaction and a 51% attack / double spend becomes impossible.  So large financial institutions have nothing to fear if they wait just 1 hour... not even bitcoin has this level of security... it takes 6 blocks and even then a fork could result in a doubles spend. 

All clients automatically recognize when a block has been missed and the 'confirmation window' is automatically lengthened and wallets are warned.   No one would lose money... everyone would immediately see that 49% of the blocks are being dropped despite being produced on time.    The client would view this as a network-split at least and automatically inform everyone to stop trading until the fork is resolved.  Under normal conditions the network would reconnect and all delegates would start producing blocks again and the fork will be considered resolved.   Under an attack the 'fork condition' will remain until the attacker can get enough votes to fire the other 49%.... this could take a while and may be impossible once people realize what was happening.    The minority (good) delegates and majority (good) clients would manually flag the attackers blocks to be ignored.  In a relatively short period of time the attacker's delegates would be voted out of the minority fork and it will quickly regain its title of being the longest chain.   

So as you can see there is a simple algorithm in place that allows the good majority of shareholders to quickly recover control from an attack.  No funds can be stolen in this process unless people choose to ignore the automatic chain fork detection warnings. 




Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 07, 2014, 06:32:31 AM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.  

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.

First of all someone with 51% of the delegates only has one power:  to exclude transactions or to stop producing blocks.  

If they gain 51% of the delegates and fail to include transactions that would vote them out then it will be very obvious to everyone on the network, the blockchain will be hard-forked by some developer and the network will continue to function.  You see what binds a network is not the software rules, but the social contract among the community.   It is almost inconceivable that in the event 51% of the delegates stop including transactions that the community would sit back and take it for long.  

Competition among chains and no barriers to entry or forking keeps people honest because there is NOTHING to gain by a 51% attack.  

Note that these 51 delegates would have to pretend not to see blocks from the other 49 delegates and thus the attack would be so obvious and disruptive that it wouldn't last more than 24 hours before community members took action.  

Is it just stop including transactions or putting in some dubious ones too? I can see how a 51% attack can benefit someone trying to manipulate big money. You will be running banks, lotto etc so the incentive is there.

wouldn't last for 24 hours doesn't look too good if bitshares is aspiring to replace the big financial institutions we all hate now.

They cannot produce dubious transactions... if they double sign then that is incontrovertible proof the delegate should be fired and is easily detected by all nodes on the network.  In less than 50 minutes every delegate should have confirmed your transaction and a 51% attack / double spend becomes impossible.  So large financial institutions have nothing to fear if they wait just 1 hour... not even bitcoin has this level of security... it takes 6 blocks and even then a fork could result in a doubles spend.  

All clients automatically recognize when a block has been missed and the 'confirmation window' is automatically lengthened and wallets are warned.   No one would lose money... everyone would immediately see that 49% of the blocks are being dropped despite being produced on time.    The client would view this as a network-split at least and automatically inform everyone to stop trading until the fork is resolved.  Under normal conditions the network would reconnect and all delegates would start producing blocks again and the fork will be considered resolved.   Under an attack the 'fork condition' will remain until the attacker can get enough votes to fire the other 49%.... this could take a while and may be impossible once people realize what was happening.    The minority (good) delegates and majority (good) clients would manually flag the attackers blocks to be ignored.  In a relatively short period of time the attacker's delegates would be voted out of the minority fork and it will quickly regain its title of being the longest chain.  

So as you can see there is a simple algorithm in place that allows the good majority of shareholders to quickly recover control from an attack.  No funds can be stolen in this process unless people choose to ignore the automatic chain fork detection warnings.  

Sounds quite good. Do you have anything running or is this all just hypothetical at the moment? You speak as if you have the algorithm working and have survived through attacks.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 07, 2014, 03:12:56 PM
Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.  

What happens if somebody sets up 51 delegates, provides incentives to get the votes, and then takes over? Its much easier than trying to get 51% of the mining power.

First of all someone with 51% of the delegates only has one power:  to exclude transactions or to stop producing blocks.  

If they gain 51% of the delegates and fail to include transactions that would vote them out then it will be very obvious to everyone on the network, the blockchain will be hard-forked by some developer and the network will continue to function.  You see what binds a network is not the software rules, but the social contract among the community.   It is almost inconceivable that in the event 51% of the delegates stop including transactions that the community would sit back and take it for long.  

Competition among chains and no barriers to entry or forking keeps people honest because there is NOTHING to gain by a 51% attack.  

Note that these 51 delegates would have to pretend not to see blocks from the other 49 delegates and thus the attack would be so obvious and disruptive that it wouldn't last more than 24 hours before community members took action.  

Is it just stop including transactions or putting in some dubious ones too? I can see how a 51% attack can benefit someone trying to manipulate big money. You will be running banks, lotto etc so the incentive is there.

wouldn't last for 24 hours doesn't look too good if bitshares is aspiring to replace the big financial institutions we all hate now.

They cannot produce dubious transactions... if they double sign then that is incontrovertible proof the delegate should be fired and is easily detected by all nodes on the network.  In less than 50 minutes every delegate should have confirmed your transaction and a 51% attack / double spend becomes impossible.  So large financial institutions have nothing to fear if they wait just 1 hour... not even bitcoin has this level of security... it takes 6 blocks and even then a fork could result in a doubles spend.  

All clients automatically recognize when a block has been missed and the 'confirmation window' is automatically lengthened and wallets are warned.   No one would lose money... everyone would immediately see that 49% of the blocks are being dropped despite being produced on time.    The client would view this as a network-split at least and automatically inform everyone to stop trading until the fork is resolved.  Under normal conditions the network would reconnect and all delegates would start producing blocks again and the fork will be considered resolved.   Under an attack the 'fork condition' will remain until the attacker can get enough votes to fire the other 49%.... this could take a while and may be impossible once people realize what was happening.    The minority (good) delegates and majority (good) clients would manually flag the attackers blocks to be ignored.  In a relatively short period of time the attacker's delegates would be voted out of the minority fork and it will quickly regain its title of being the longest chain.  

So as you can see there is a simple algorithm in place that allows the good majority of shareholders to quickly recover control from an attack.  No funds can be stolen in this process unless people choose to ignore the automatic chain fork detection warnings.  

Sounds quite good. Do you have anything running or is this all just hypothetical at the moment? You speak as if you have the algorithm working and have survived through attacks.
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: ChuckOne on May 07, 2014, 03:28:41 PM
DPOS is all about creating a system that gives people financial incentive to do the right thing and maintains the ability to 'fire them' quickly if they don't with 100% certainty of getting caught.   The delegates have no power *BUT* to do the right thing.   

Can they collude?  Assuming they did collude the only thing they could do is block transactions and it would be instantly detected by all peers.   A fork would be launched immediately with these delegates stripped and the two chains would compete against each other in the market.  Assuming the delegates were just random people that attempted to screw with the system then consensus would be maintained.

Exactly, how Nxt will work.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: benjyz on May 07, 2014, 03:36:29 PM
Hi bytemaster,

I think this is some good progress. The great weakness in PoS is that money gets distributed on the genesis block. This is potentially much more corrupt than the initial bitcoin distribution. Although coins can always be purchased on an open market, this process leads to mis-trust from the beginning. BCNext chose a rather fair distribution via the forums, but this was before the release of the code. It will be interesting to see how PoS clones will do on the market, because there is no hurdle of creating clones at all. Also what will be interesting is the relationship between corporations (Invictus LLC, ethereum GmbH, ...) and currencies. I think creating legal entities creates unnecessary attack surfaces.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 07, 2014, 10:11:52 PM
Hi bytemaster,

I think this is some good progress. The great weakness in PoS is that money gets distributed on the genesis block. This is potentially much more corrupt than the initial bitcoin distribution. Although coins can always be purchased on an open market, this process leads to mis-trust from the beginning. BCNext chose a rather fair distribution via the forums, but this was before the release of the code. It will be interesting to see how PoS clones will do on the market, because there is no hurdle of creating clones at all. Also what will be interesting is the relationship between corporations (Invictus LLC, ethereum GmbH, ...) and currencies. I think creating legal entities creates unnecessary attack surfaces.
The facts are: The Bitshares donations period goes a long 200 days and everyone can participate!! That is more than half a year. Whenever a DAC is ready there is a snapshot. And the distribution will be a whole lot more equal than with Bitcoin and most POW altcoins. Also the code is completely open at ALL stages. Check it out on https://github.com/BitShares/bitshares_toolkit
The last question you raised is indeed interesting :)


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 08, 2014, 06:29:29 AM
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen

I knew Protoshares was the IPO coin, but didn't know about the other coin. The prices are much lower than what they used to be so its quite a good bargain being informed late :D

You are awarding 10% at the start as IPO. How are you distributing the remaining 90%? If you have another IPO for that I would be interested. Whatever you do, make it a fair one, even a proof of burn style process as Counterparty is the only new project which has any credibility. Look at what happens when you invest in a unfair distribution with greedy developers like that of Mastercoin, you get screwed as they try and make their money through deals with third party like Maidsafe.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 08, 2014, 02:28:06 PM
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen

I knew Protoshares was the IPO coin, but didn't know about the other coin. The prices are much lower than what they used to be so its quite a good bargain being informed late :D

You are awarding 10% at the start as IPO. How are you distributing the remaining 90%? If you have another IPO for that I would be interested. Whatever you do, make it a fair one, even a proof of burn style process as Counterparty is the only new project which has any credibility. Look at what happens when you invest in a unfair distribution with greedy developers like that of Mastercoin, you get screwed as they try and make their money through deals with third party like Maidsafe.

Agree! (Perceived) Fairness correlates with how many people know about the possibilities, that is why the principle is to be as transparent as possible and make threads also here on BTT like this one. Everyone is welcome to join on our forums. Also Daniel and the whole team goes to conferences regularly to make Bitshares known as much as possible. We also head a lot of mainstream media coverage.
The rule is to give at least 10% to PTS/AGS. It is up to the developer of a DAC that uses Bitshares codebase to decide which allocation gets him the most support for his project. Mostly it is more than 10% for PTS/AGS... With Bitshares X it was even 50/50. The snapshot for Bitshares X took place on the 28. February. There where delays due to problems with Bitshares X out of which DPOS came out as a solution.
We discussed the Maidsafe fiasco here https://bitsharestalk.org/index.php?topic=4090.0


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 09, 2014, 06:30:42 AM
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen

I knew Protoshares was the IPO coin, but didn't know about the other coin. The prices are much lower than what they used to be so its quite a good bargain being informed late :D

You are awarding 10% at the start as IPO. How are you distributing the remaining 90%? If you have another IPO for that I would be interested. Whatever you do, make it a fair one, even a proof of burn style process as Counterparty is the only new project which has any credibility. Look at what happens when you invest in a unfair distribution with greedy developers like that of Mastercoin, you get screwed as they try and make their money through deals with third party like Maidsafe.

Agree! (Perceived) Fairness correlates with how many people know about the possibilities, that is why the principle is to be as transparent as possible and make threads also here on BTT like this one. Everyone is welcome to join on our forums. Also Daniel and the whole team goes to conferences regularly to make Bitshares known as much as possible. We also head a lot of mainstream media coverage.
The rule is to give at least 10% to PTS/AGS. It is up to the developer of a DAC that uses Bitshares codebase to decide which allocation gets him the most support for his project. Mostly it is more than 10% for PTS/AGS... With Bitshares X it was even 50/50. The snapshot for Bitshares X took place on the 28. February. There where delays due to problems with Bitshares X out of which DPOS came out as a solution.
We discussed the Maidsafe fiasco here https://bitsharestalk.org/index.php?topic=4090.0

Finally the real reason for all the sudden interest comes out. You and your group awarded all to yourselves and are now promoting it. I don't know whether you really believe what you wrote in that post is it part of the act.

I don't think you developers should work for free, but you should be honest. If you want to award even 50%, state that clearly and others will still support. Trying to keep it hidden, awarding yourselves all and claiming it was fair later on won't fool us here. We have seen enough to spot when it happens. I suppose I shouldn't be surprised as Bitshares are closely linked to the Ethereum group who even with all their advertising efforts couldn't fool the community with their IPO.

Good luck with your project. Its very interesting and anything which can emerge as an alternative to the cartel has my support. I will just wait for a Counterparty equivalent of your project.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 09, 2014, 12:49:16 PM
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen

I knew Protoshares was the IPO coin, but didn't know about the other coin. The prices are much lower than what they used to be so its quite a good bargain being informed late :D

You are awarding 10% at the start as IPO. How are you distributing the remaining 90%? If you have another IPO for that I would be interested. Whatever you do, make it a fair one, even a proof of burn style process as Counterparty is the only new project which has any credibility. Look at what happens when you invest in a unfair distribution with greedy developers like that of Mastercoin, you get screwed as they try and make their money through deals with third party like Maidsafe.

Agree! (Perceived) Fairness correlates with how many people know about the possibilities, that is why the principle is to be as transparent as possible and make threads also here on BTT like this one. Everyone is welcome to join on our forums. Also Daniel and the whole team goes to conferences regularly to make Bitshares known as much as possible. We also head a lot of mainstream media coverage.
The rule is to give at least 10% to PTS/AGS. It is up to the developer of a DAC that uses Bitshares codebase to decide which allocation gets him the most support for his project. Mostly it is more than 10% for PTS/AGS... With Bitshares X it was even 50/50. The snapshot for Bitshares X took place on the 28. February. There where delays due to problems with Bitshares X out of which DPOS came out as a solution.
We discussed the Maidsafe fiasco here https://bitsharestalk.org/index.php?topic=4090.0

Finally the real reason for all the sudden interest comes out. You and your group awarded all to yourselves and are now promoting it. I don't know whether you really believe what you wrote in that post is it part of the act.

I don't think you developers should work for free, but you should be honest. If you want to award even 50%, state that clearly and others will still support. Trying to keep it hidden, awarding yourselves all and claiming it was fair later on won't fool us here. We have seen enough to spot when it happens. I suppose I shouldn't be surprised as Bitshares are closely linked to the Ethereum group who even with all their advertising efforts couldn't fool the community with their IPO.

Good luck with your project. Its very interesting and anything which can emerge as an alternative to the cartel has my support. I will just wait for a Counterparty equivalent of your project.

I think you have misunderstood. The Bitshares X  (the first family of DAC's) allocation is 50% to pts holders and 50% to ags holders. The developers are not directly being allocated equity. The only equity that the developers receive is that which they have paid for through pts or ags like everyone else. This "crowdfunding" method is without a doubt more transparent and fair than any of the alternatives. You can still buy or mine pts very cheaply, and you can still donate to ags addresses. Ags is particularly fair since the daily allocation of 10,000 ags split among donators proportional to their donations encourages those with greater funding capital to spread their donations over several days, which serves to increase the stake accumulated by smaller investors per day. 

There won't be a Counterparty equivalent to the project. Bitshares DAC's use their own blockchains which allows for greater flexibility in what these DAC's can do.  DPOS as explained before is a faster method of coming to consensus than pow mining. Any counterparty "equivalent" would be subject to the same slow transaction speeds as bitcoin. Additionally, its not feasible for counterparty to implement a bank an exchange like bitshares x on top of the bitcoin blockchain. Lastly, counterparty doesn't have enough funding because they decided to go with a proof of burn allocation model which is counterproductive.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Agent86 on May 09, 2014, 01:15:31 PM

Finally the real reason for all the sudden interest comes out. You and your group awarded all to yourselves and are now promoting it. I don't know whether you really believe what you wrote in that post is it part of the act.

I don't think you developers should work for free, but you should be honest. If you want to award even 50%, state that clearly and others will still support. Trying to keep it hidden, awarding yourselves all and claiming it was fair later on won't fool us here. We have seen enough to spot when it happens. I suppose I shouldn't be surprised as Bitshares are closely linked to the Ethereum group who even with all their advertising efforts couldn't fool the community with their IPO.

Good luck with your project. Its very interesting and anything which can emerge as an alternative to the cartel has my support. I will just wait for a Counterparty equivalent of your project.

Fernandez, I think you are wrong in your understanding of the fairness of distribution.  I honestly think bytemaster/invictus have been ridiculously fair and beyond reproach.

The developers themselves took 0% of the IPO as profit.  They first released an asic resistant POW coin as a means of doing an IPO with NO premine, it was announced well in advance and the developers competed along with everyone else to mine or buy coins.  You can't really say the distribution is worse than a POW coin if the distribution was done using a POW coin.

Then, they realized that people were spending/burning tons of money on mining to get PTS which is kind of silly considering the project and everyone invested in it can benefit from funding.

So they started a 200 day IPO for AGS shares announced in advance.  They have always said they support a "social consensus" that the initial distribution for "DACs" should favor a bare minimum of 10% for PTS holders and 10% for AGS holders but higher percentages are encouraged and would likely have more market acceptance.

Invictus takes none of the IPO funds from AGS donations as profit or personal gain.  It is all used to growing the crypto-equity industry and is independently audited/accounted for (they have a spreadsheet showing every transaction on the blockchain and what it was for.)  AGS is used to pay salaries that are way below market rate for developers such as bytemaster.

Bytemaster and the other core developers have personally had to compete with everyone else to buy AGS shares to invest in their own project!

They could have said 10% or more of Bitshares X goes to developers/insiders but they didn't; they gave it all to investors.  Every investor was on equal footing.   The only reason the Feb 28th snapshot happened so soon was because they had promised to give at least 2 weeks notice before doing a snapshot and they felt they were nearing completion of bitshares X so they didn't want to delay it.

Bitshares X is just the first profitable Decentralized Autonomous Company (DAC) that they are releasing.  There is much more to come.  One blockchain to rule them all does not work.  AGS is a steal at the moment, PTS is cheap.  You have plenty of time to get in.  The pre snapshot price of Bitshares X was actually pretty high (look at PTS market cap @ end of Feb) so when it is released you quite likely will be able to buy in at a similar price.

I think you will find that clones/copies that try to cut out the people that made this happen will not be a good investment.
Let me know if you have questions.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 09, 2014, 09:24:33 PM
Invictus recommends to all developers using the Bitshares codebase to honor BTS PTS (aka Protoshares) holders with at least 10% as well as BTS AGS holders with at least 10%.
Bitshares XT is tested at the moment. You can look at it here and test it yourself https://bitsharestalk.org/index.php?topic=4480.0;topicseen

I knew Protoshares was the IPO coin, but didn't know about the other coin. The prices are much lower than what they used to be so its quite a good bargain being informed late :D

You are awarding 10% at the start as IPO. How are you distributing the remaining 90%? If you have another IPO for that I would be interested. Whatever you do, make it a fair one, even a proof of burn style process as Counterparty is the only new project which has any credibility. Look at what happens when you invest in a unfair distribution with greedy developers like that of Mastercoin, you get screwed as they try and make their money through deals with third party like Maidsafe.

Agree! (Perceived) Fairness correlates with how many people know about the possibilities, that is why the principle is to be as transparent as possible and make threads also here on BTT like this one. Everyone is welcome to join on our forums. Also Daniel and the whole team goes to conferences regularly to make Bitshares known as much as possible. We also head a lot of mainstream media coverage.
The rule is to give at least 10% to PTS/AGS. It is up to the developer of a DAC that uses Bitshares codebase to decide which allocation gets him the most support for his project. Mostly it is more than 10% for PTS/AGS... With Bitshares X it was even 50/50. The snapshot for Bitshares X took place on the 28. February. There where delays due to problems with Bitshares X out of which DPOS came out as a solution.
We discussed the Maidsafe fiasco here https://bitsharestalk.org/index.php?topic=4090.0
   

Finally the real reason for all the sudden interest comes out. You and your group awarded all to yourselves and are now promoting it. I don't know whether you really believe what you wrote in that post is it part of the act.

I don't think you developers should work for free, but you should be honest. If you want to award even 50%, state that clearly and others will still support. Trying to keep it hidden, awarding yourselves all and claiming it was fair later on won't fool us here. We have seen enough to spot when it happens. I suppose I shouldn't be surprised as Bitshares are closely linked to the Ethereum group who even with all their advertising efforts couldn't fool the community with their IPO.

Good luck with your project. Its very interesting and anything which can emerge as an alternative to the cartel has my support. I will just wait for a Counterparty equivalent of your project.

Sorry for the confusion. I invested in "after BTS X Snaphot AGS" when AGS prices where twice as high as atm. So you can get twice a better deal than I got. I think that is pretty fair.
The reason for the "social consensus" and its "at least 20% to AGS and PTS together" rule is that the Bitshares code can be use as a code base for many profitable DACs by 3rd party developers and it's open source so you can not force anyone to honour PTS/AGS. The rule for any developer using the Bitshares code base therefore is that giving 20% to AGS/PTS (combined) gives you the support (marketing, legal advice, coding consulting with Bytemaster etc) of Invictus and the support of the Bitshares community which has proven to see value in DAC business models. The allocation is up to the developer that launches the DAC. Invictus just recommends doing at least 10%/10% to get the support but that reasoning is finally up the developer. Here https://bitsharestalk.org/index.php?topic=2876.0 is a more theoretical and more detailed outline of the approach and its background.
Bitshares X has been promoted many times on Bitcointalk before the Snapshot. I am not a developer. Just an investor in the Bitshares ecosystem like many others.
Bitshares is trying to accomplish something similar as Ethereum but with major design differences. Bitshares is nor closely related to Ethereum! See https://bitsharestalk.org/index.php?topic=4460.0;all
There is a lot more documentation on the Bitshares forum.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Fernandez on May 10, 2014, 06:20:58 AM
When I said counterparty equivalent I meant something with a fair distribution. If you see all the next generation projects you find the underlying theme, greed of the developers. I think developers should be greedy but they shouldn't be dishonest and try to claim they are not. NXT, MSC, Ripple, Ethereum has all shown this tendency and Bitshares is following the same path.

You all awarded awarded yourselves all the Bitshares X 2-3 months back even though there is nothing there even now. Why would you do that, except to maximise your share? You have a silent fundraiser with your buddies, award yourselves all the shares and now say keep donating to us in the hope that some others will honour it and you will get something.

I don't know if you all seriously believe in what you seeing. It would be difficult for you to realise the con your developers are pulling out because you all will profit a lot from it. You all are doing your part now by trying to promote now. In the past few weeks I have heard quite a bit about this DPOS, and it seems thats because you now need others to know to increased demand.

I think you will find that clones/copies that try to cut out the people that made this happen will not be a good investment.
Let me know if you have questions.

clones/copies which aim for a fair distribution and don't aim to award themselves everything with an underhanded distribution will be a good investment. I am not saying there will definitely be a counterparty equivalent, but I will be fully behind one if it happens.

As I said, good luck with your project. It is very innovative and has the potential to show a viable alternative to the cartel which is ruining Bitcoin. Its just sad that you all fell into the same greed trap.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: benjyz on May 10, 2014, 08:15:32 AM
this thread is about the DPOS paper, please stay on-topic.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: clout on May 10, 2014, 08:38:16 AM
 
When I said counterparty equivalent I meant something with a fair distribution. If you see all the next generation projects you find the underlying theme, greed of the developers. I think developers should be greedy but they shouldn't be dishonest and try to claim they are not. NXT, MSC, Ripple, Ethereum has all shown this tendency and Bitshares is following the same path.

How is counterparty more fair? Because it used proof of burn? That doesn't make anything about their crowd funding model more fair that just means that the developers can't use any of that money to help with development. How is the bitshares fundraiser not the most fair? It was announce well in advance and the duration of the fundraiser is longer than any other to date. You can mine pts, you can buy pts, you can donate btc, you can donate pts. There are so many ways to get an allocation in the snapshot. And as previously mentioned the daily allocation of 10,000 allows smaller players to accumulate more stake than they might otherwise.

You all awarded awarded yourselves all the Bitshares X 2-3 months back even though there is nothing there even now. Why would you do that, except to maximise your share? You have a silent fundraiser with your buddies, award yourselves all the shares and now say keep donating to us in the hope that some others will honour it and you will get something.

Bitshares X is a year in the making. There have been several posts here at bitcointalk regarding the Feb 28th snapshot for Bitshares X. Its not a silent fundraiser simply because you did not take the time to look into bitshares. Bitsharestalk.org is the second most active forum only after bitcointalk.org. Theres a huge community of supporters and it continues to grow.  

I don't know if you all seriously believe in what you seeing. It would be difficult for you to realise the con your developers are pulling out because you all will profit a lot from it. You all are doing your part now by trying to promote now. In the past few weeks I have heard quite a bit about this DPOS, and it seems thats because you now need others to know to increased demand.

In the past few weeks you should have heard quite a bit about DPOS its revolutionary and the concept only came out about a month ago. The reason for the delay in the bitshares x software is largely due to the newly found realization of how to secure the block chain at the lowest cost.



Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: delulo on May 10, 2014, 08:39:35 AM
When I said counterparty equivalent I meant something with a fair distribution. If you see all the next generation projects you find the underlying theme, greed of the developers. I think developers should be greedy but they shouldn't be dishonest and try to claim they are not. NXT, MSC, Ripple, Ethereum has all shown this tendency and Bitshares is following the same path.

You all awarded awarded yourselves all the Bitshares X 2-3 months back even though there is nothing there even now. Why would you do that, except to maximise your share? You have a silent fundraiser with your buddies, award yourselves all the shares and now say keep donating to us in the hope that some others will honour it and you will get something.

I don't know if you all seriously believe in what you seeing. It would be difficult for you to realise the con your developers are pulling out because you all will profit a lot from it. You all are doing your part now by trying to promote now. In the past few weeks I have heard quite a bit about this DPOS, and it seems thats because you now need others to know to increased demand.

I think you will find that clones/copies that try to cut out the people that made this happen will not be a good investment.
Let me know if you have questions.

clones/copies which aim for a fair distribution and don't aim to award themselves everything with an underhanded distribution will be a good investment. I am not saying there will definitely be a counterparty equivalent, but I will be fully behind one if it happens.

As I said, good luck with your project. It is very innovative and has the potential to show a viable alternative to the cartel which is ruining Bitcoin. Its just sad that you all fell into the same greed trap.
... it should stay on topic true.
But seeing Bitshares described having an unfair distribution and greedy developers is ridiculous. It probably has the most flat distribution of all the Bitcoin 2.0 projects. Because many people (also outside of the crypto space) know about it. Bitshares had a great amount of media coverage and was introduced at the Miami, the Texas and the NY conference. I am pretty sure there are more PTS and AGS holders than there where Counterparty burners (I burned some BTC as well and I think Counterparty is among the most innovative and trustworthy projects out there). And like it was said above the developers do not take ANY AMOUNT of the stake for themselves other than the stake they got through mining / buying PTS and donating to AGS, just like with Counterparty. The donations from AGS are not theirs and are used to develop the bitshares ecosystem only! There is a spread sheet somewhere where all the expenses are listed.

If you want to compare the fairness with Counterparty:
Presence on Bitcointalk? About equal, there was only one thread about Counterparty during burn period but a few about Protoshares, Angelshares, Bitshares etc. Most Bitshares threads were less instructional though.  
Length of donation period? 30 days with Counterparty vs. 60 days for BTS X and up to 200 days for most other DACs.  
How many people know/knew about it during the coin distribution phase? Way more people know about bitshares, 10,000 people fourm, mainstream media coverage, presence on conferences to introduce ideas.
How do devs profit compared to the community/other investors? Counterparty and Bitshares are equally fair here. Same principle: Devs have the same conditions for getting stake like everyone else and only profit if the project is successful.
Counterparty has branded itself as being fair, and rightfully so, because it was the most fair Bitcion 2.0 project and especially way more fair than it's competitor Mastercoin. But Bitshares is at least as fair as Counterparty.
Also important: Fairness is not about how many Bitcoinalk people know about possibilities but about how many people in general do. Because, later on people could say. All those projects were only announced on these forums and the average guy that more consumes main stream media had no chance know it. Bitshares had media coverage (during stake distribution phase not after like Counterparty) with The economist, Bloomberg, Business Week, Tech Crunch and a local general news paper. 

Most importantly, there was only one snapshot yet (the one for Bitshares X). There are at least half a dozen of DACs to have a Snapshot and you can be part of it and even profit from it twice as much as I will. PTS/AGS prices are ridiculously low atm. I bought earlier and will profit less than late investors... So please be fair.  


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: coininaction on May 10, 2014, 08:56:47 AM
http://www1.agsexplorer.com/

here you can check, hwo funds are used to cover development costs etc.
Stay tuned...but guess we should come back to OP and DPOS ..

Google sheets -- AGS funds used for development
__________
BTC: Fund Usage  (https://docs.google.com/spreadsheet/ccc?key=0AqTwk-e7yzJydDFnQmlkTVlkbWpubnJBbzR2UG5ucnc&usp=sharing#gid=0)
__________
PTS: Fund Usage  (https://docs.google.com/a/invictus-innovations.com/spreadsheet/ccc?key=0AqTwk-e7yzJydFZ3bVVWT0o1OUwzXzdESHFBY0FkUWc&usp=sharing#gid=0)
__________


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: DonnyMontana on May 10, 2014, 09:53:23 AM
Very smart indeed !!
This is going to revolutionize next generation cryptoequities.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: digitalindustry on May 11, 2014, 04:40:53 AM
I wouldn't be as forthright about it as AnonyMint but I have to agree with him .

It is the random expodential nature of PoW that is the key here .

But I'm never against trying new things.

This is why also the EQ reward simply solves another more basic economic problem and utilizes PoW to do so.


When the NSA hashed out their white paper you will notice it had not just mathematical input but broard sociological also.

Economics has nothing to do with Math what does the EQ reward do?


This is a new economic system.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: digitalindustry on May 11, 2014, 04:47:11 AM
You know credit has to be given because in a perfect world even BTC harsh inflation would work even combined with ASIC because in an equilibrium the BTC price would continually crash and let new decentralized energy in.

But the world is not perfect or an equilibrium it's a monopoly capitalist system just one step away from communism.

So because of both the sociological aspect that the world is in a slow motion "crisis" at the fundamental level and monopoly capitalists working to control it.

BTC is part propped and part propped by the free market.

Cryptocurrency will find the equilibrium but BTC will have to fork.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: Agent86 on May 11, 2014, 12:38:29 PM
You have a silent fundraiser with your buddies, award yourselves all the shares

The new definition of unfair secret fundraiser on bitcointalk seems to be anything I didn't personally know about, or take the time to research, or take the risk to participate in.

Even if you hire marketing professionals, speak at bitcoin conferences, get mentioned in major publications, and post announcements everywhere.

Counterparty proof of burn just robbed the project and investors of development funds.  Imagine investing in a company by everyone getting together and awarding shares based on how much cash you throw in a bonfire, it makes just about that much economic sense.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: CLains on May 18, 2014, 10:02:59 PM
Update from https://bitsharestalk.org/index.php?topic=4480.msg58250#msg58250

Follow essential updates here, https://bitsharestalk.org/index.php?topic=3812.15

I have working DPOS chain with instructions here: http://bitshares.org/documentation/group__dpos__manual__testing.html

This is working with full P2P mode, DPOS delegates producing blocks, and the new level_db based wallet....

I will be refining this a tad further and keep you all posted on when we can resume the test.

 +5%
Plan to test it this weekend

I have updated the testing instructions here: http://bitshares.org/documentation/group__dpos__manual__testing.html

Primary changes are in the API usage and wallet management.    The primary goal is to get people away from sending to an 'address' and instead sending to an 'account' where the account is a hierarchal key.  Every time you send to an account it will use a different public key (address) and eventually this will allow automation of privacy enhancing transactions.   

We have also extended the API / implemented more of it.   See info here:
Code:
blockchain_get_block <block_hash>                                       Retrieves the block header for the given block hash
blockchain_get_block_by_number <block_number>                           Retrieves the block header for the given block number
blockchain_get_blockcount                                               Returns the number of blocks in the longest block chain.
blockchain_get_blockhash <block_num>                                    Returns hash of block in best-block-chain at index provided..
blockchain_get_delegates [first] [count]                                Returns the list of delegates sorted by vote
blockchain_get_name_record <name>                                       Retrieves the name record
blockchain_get_names [first] [count]                                    Returns the list of reserved names sorted alphabetically
blockchain_get_transaction <transaction_id>                             Get detailed information about an in-wallet transaction
get_info                                                                Provides common data, such as balance, block count, connections, and lock time
help [command]                                                          Lists commands or detailed help for specified command.
network_add_node <node> <command>                                       Attempts add or remove <node> from the peer list or try a connection to <node> once
network_get_connection_count                                            Returns the number of connections to other nodes.
network_get_peer_info                                                   Returns data about each connected node.
stop                                                                    Stop BitShares server
validate_address <address>                                              Return information about given BitShares address.
wallet_close                                                            Closes the curent wallet if one is open.
wallet_create <wallet_name> <password>                                  Opens the wallet of the given name
wallet_create_receive_account <account_name>                            Add new account for receiving payments
wallet_create_sending_account <account_name> <account_key>              Add new account for sending payments
wallet_get_account <account_name>                                       Lists all foreign addresses and their labels associated with this wallet
wallet_get_balance [account_name] [minconf] [asset]                     Returns the wallet's current balance
wallet_get_name                                                         Returns the wallet name passed to wallet_open
wallet_get_transaction_history [count]                                  Retrieves all transactions into or out of this wallet.
wallet_import_bitcoin <filename> <password>                             Import a BTC/PTS wallet
wallet_import_private_key <key> [account_name] [wallet_rescan_blockchain]   Import a BTC/PTS private key in wallet import format (WIF)
wallet_list_receive_accounts [start] [count]                            Lists all foreign addresses and their labels associated with this wallet
wallet_list_reserved_names [account_name]                               Lists all reserved names controlled by this wallet, filtered by account.
wallet_list_sending_accounts [start] [count]                            Lists all foreign addresses and their labels associated with this wallet
wallet_lock                                                             Lock the private keys in wallet, disables spending commands until unlocked
wallet_open <wallet_name> <password>                                    Opens the wallet of the given name
wallet_open_file <wallet_file> <password>                               Opens the wallet at the given path.
wallet_register_delegate <name> <data>                                  Registeres a delegate to be voted upon by shareholders.
wallet_rename_account <current_account_name> <new_account_name>         Lists all reserved names controlled by this wallet, filtered by account.
wallet_rescan_blockchain [starting_block]                               Rescan the block chain from the given block
wallet_rescan_blockchain_state                                          Rescans the genesis block and state (not the transactions)
wallet_reserve_name <name> <data>                                       Retrieves the name record
wallet_transfer <amount> <sending_account_name> [invoice_memo] [from_account] [asset_id]   Sends given amount to the given address, assumes shares in DAC
wallet_unlock <spending_pass> <timeout>                                 Unlock the private keys in the wallet to enable spending operations

If you are curious about the new transaction structure you can view an example json dump here:
Code:
{
           "expiration": null,
           "delegate_id": null,
           "operations": [{
               "type": "withdraw_op_type",
               "data": {
                 "balance_id": "XTSKh6JP6QzMmeUmmK1T16gxgadrJ547ocGT",
                 "amount": 154321,
                 "claim_input_data": ""
               }
             },{
               "type": "deposit_op_type",
               "data": {
                 "amount": 54321,
                 "condition": {
                   "asset_id": 0,
                   "delegate_id": 8,
                   "condition": "withdraw_signature_type",
                   "data": {
                     "owner": "XTSAg5YxD9reTXr5iQWBZEJrLzzMxMxvnFhy"
                   }
                 }
               }
             }
           ],
           "signatures": [
             "2028da68efe2696ab7895e86c1b35affbb7cd1b71d8f33124fe81ad785ace3ed55226e0e622098b9c45f8660801b4b929556102c3da549d887c5da99262b5c6275"
           ]
}

As you can see this transaction is entirely human readable outside the context of the blockchain,  it is transferring 154321 from XTSKh6JP6QzMmeUmmK1T16gxgadrJ547ocGT and sending 54321  to XTSAg5YxD9reTXr5iQWBZEJrLzzMxMxvnFhy while paying a fee of 100000.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: IPCoinz on May 31, 2014, 01:00:06 PM
The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.




How about this idea: a "Fission" algo that erodes the largest stakes in a PoS network and inflates all (or maybe only some) of the other active wallets on the network

This is an idea I just discussed on the Quark Forum where they are contemplating a fork to PoS. The following is a paste from my original comment at https://bitcointalk.org/index.php?topic=627038.msg7052800#msg7052800.  Whichever post gets the first reply, let that be the genesis block...


[Quote:]

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

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

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

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

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

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

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

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

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

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


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

Your comments and criticisms are most welcome...




Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: r0ach on May 31, 2014, 02:53:09 PM

The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.


How about this idea: a "Fission" algo that erodes the largest stakes in a PoS network and inflates all (or maybe only some) of the other active wallets on the network

This is an idea I just discussed on the Quark Forum where they are contemplating a fork to PoS. The following is a paste from my original comment at https://bitcointalk.org/index.php?topic=627038.msg7052800#msg7052800.  Whichever post gets the first reply, let that be the genesis block...



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

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

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

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

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

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

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

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

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

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


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

Your comments and criticisms are most welcome...

Rename it from "Fission coin" to Obamacoin.  Or since there's already a coingen Obamacoin, go with Obamacoin Reloaded.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: donschoe on June 30, 2015, 11:14:30 AM
I'm looking for the original DPOS whitepaper. The link in the first post is dead. Does anyone have a copy?


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: yenNSTH on December 07, 2017, 11:09:37 AM
sr where program bounty campainge on twitter & facebook


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: timisis on December 12, 2017, 05:03:23 AM
I'm looking for the original DPOS whitepaper. The link in the first post is dead. Does anyone have a copy?

ditto! Is this really being implented now and gone closed source? IIRC WTF!


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: hanzosum on January 04, 2018, 03:39:35 PM
I see that Dpos is the feature of blockchain technology. Which coins are based of Dpos that gone to moon or redy to gone like EOS, Lisk, Ark... And another one BTW(Bitcoin White) is coming soon to marketplace wtih great feature via Dpos

It's transaction speed is really unbelievable why is based on Dpos. I strongly advice you to invest on Dpos based coins. BTC's fees, so long trx times apparent there!..

Dpos is our benefaction over the traditional blockchain tech.


Title: Re: Delegated Proof of Stake (DPOS) White Paper by Daniel Larimer
Post by: TACIXAT on November 30, 2018, 11:04:12 PM
What prevents the witnesses from ignoring votes? Why would someone allow themselves to be voted out?