I couldn't agree more with your re-definition of "private key". The section that said distribute the group's private key was a crypto mistake. In crypto a private key really means one and only one person. Once you give it to someone else, it is no longer serves its crypto function.

That said, I was under the impression that everything else in the PB was both deterministic and validated by every other group. (In the same way that transaction confirmations are.)

FreeNet Block minting allocation rules are based upon the previous PB so other groups should be able to detect invalid transactions. Since they are signed by a particular malicious peer, he should get the death penalty network wide.

Reputation Block seems to be deterministic. Did the peer vote "present" during the PB. This is presumably signed so it can't be forged.

Miscellaneous Block seems deterministic as well. If there were module change majority votes. I'm assuming the votes would be signed to prevent forgery.

That just means you need a way to prevent one person or even a 51 majority from prematurely ending the PB reconciliation before everyone gets to submit their sets of data to the Network wide union.

This is again what I was referring to as the problem of controlling time.

OK, you are going to have to acknowledge that the version I started with stressed at the beginning at some human paid to start a TrustNet. Got the privilege of naming the TrustNet. And could invite his (presumably Trusted) friends et. al. to join his new TrustNet.

In that scenario, it doesn't make a lick of sense to say, Hey Bill let me tell you about EnCoin... Fire up a peer, join someone else's shitty TrustNet until you build up enough Trust to join my TrustNet, then maybe I'll Trust you enough to let you in.

Really, when I read it, I figured it was a caveat to keep the rabble out of the Network you had paid money to start and were busy investing money in building.



OK, I did read "best hash value" as something figuring into the ranking. But ranking hashes didn't make a lick of sense. I presumed you wanted to do some sort of non-linear distribution (value only gets 20%) based upon each peer's Trust (Reputation/Placement/Rank).

You appear to have been serious about what I called non-sense. So let's discuss it. How could you possibly rank random numbers over time? If I have a supercomputer and I generated one block. You have a busted old 386 and you generate one block. Then the hashes of these blocks have are randomly distributed across the difficulty range. You can rank the blocks based on this randomness and say the 386 wins this time. But the overall distribution is still 50-50 as we repeat this exercise.

The goal here seems to be to keep the supercomputer from gaining a minting advantage. So just say all member of the group participating in the PB get an equal share.  Maybe you mean minting members. I'm not sure sure. But that's not important. If the distribution isn't equal, and it isn't based on RP, what is it based on?



I don't know if you meant that as a light tease, but I'm going to take it that way. Then I'm going to work some math to show you are wrong.

Say you are at a difficulty level with 31 leading zeros. That means you have a 50% chance of generating a block in 2^30 hash tries. Sure someone could generate the block on their 1st try or it might take all the way to the 2^31st try. But it averages out to 2^30 Hashes. Note: a block's units are hashes, not hashes/second.

So if m=2^20 then,
1mh/s will take 2^10 seconds (on average) to complete a block. 17 minutes, 0.28 hour.
2mh/s will take half the time, 8.5 minutes, 0.14 hour.
3mh/s will take one third the time, 5.66 minutes, 0.09 hour.

3mh/s for 200W * 0.09 hour = 18.0 Wh/block
2mh/s for 220W * 0.14 hour = 30.8 Wh/block
2mh/s for 180W * 0.14 hour = 25.2 Wh/block

If each of the peers (on average) gets an equal share for doing equal work. Then the most efficient in electrical cost (Wh/block) Wins! Again, electrical efficiency has nothing to do with (h/s).


This seem to acknowledge you recognize what I'm saying as true. But you are ACTIVELY trying to make the more electrically efficient subsidize the less electrically efficient.

It can't be done.

All your logic presumes that someone who is generating a block every 5.66 minutes will, WILLINGLY do more work than those generating a block every 8.5 minutes. This is a bad presumption. Each peer has access to the historical record. Each knows the exact the results of his fellow peer's productivity. If an efficient peer endeavors only to be average in blocks, he wins in DOLLARS!

There is a whole famous book about why your philosophy is a bad idea. Give it a quick read. It's awesome!

So of course not I realize you are trying to PREVENT people from deliberately building particularly reputable FreeNets. I'm guessing this is to prevent 51% transaction confirmation DOS attacks.

I was never able to identify any other power a 51% majority gave a malicious group. You weren't worried about past posting, and falsifying transactions is still impossible. It doesn't seem to be a minting issue.

If I'm missing an issue, I really am clueless I guess.

But if you are worried about the transaction DOS issue I realized that such an attack is trivial to detect. If you see a valid transaction that doesn't make the next primary block. If that transaction is still valid after PB reconciliation, then it MUST be appear in the next PB or a DOS is happening.

Any way. I hope at least one thing was insightful.

Continuing on a slightly different point.

-----

FreeNet reputation seems intended to be a measure of a network's combined Reliability over time. In my mind, I define that Reliability as made up of two parts Availability and Accuracy.

Availability means at least one of the FreeNet's peers must be online to receive transactions, validate them, and to batch and send those transactions around. The goal for the FreeNet is 100% availability.

Accuracy means every transaction must be validated and confirmed exactly according to the crypto and accounting rules. Each FreeNet is required to be 100% accurate. If even one invalid transaction is confirmed, action must be taken.

So if a FreeNet is 100% available and 100% accurate for some period of time, they reach a max Reputation. I know you had said validation/confirmation errors would really hammer a FreeNet's reputation. I began wondering if it should be a death penalty. That seemed overkill at the FN level.

---

When I thought about these two concepts at the peer level I noticed a difference. Each peer must still be 100% accurate. But each peer is not required to be 100% available. Also, minting effort seems to be more important intraFN than between networks.

So if a peer solves minting blocks he might increase in rank. If a FN member peer is not 100% available he might lose rank. But if a FN member peer is not 100% accurate, the FreeNet either has to kick him out, or shut down. No other FN should trust a net that is even partially non-compliant.

If a guy is shopping for a new FreeNet, I'd want to know if he got kicked out of his previous one!

---

You seem to be seeing network membership as more flowing and flexible then me. I'm interested in hearing more about that. But this is the original picture I got in my mind when I read the proposal.

Clearly, I don't feel qualified to really come to terms with most of those details. But I can offer what (I think) are insights.

I always visualized your reputation idea as two layered. You have FreeNets which gain reputation as a whole. And you have individuals, who are ranked (for lack of a better term) by their FreeNet Peers. To make a lame example, I may be a "made man" in the Italian Mob. But if I quit and go to the Russian Mob, my rank doesn't necessarily travel with me.

I assumed in between when someone asked to become part of a FreeNet and when they were accepted into the FreeNet there was some sort of vote based on the existing FN Peers. I guess I'm suggesting that when you apply to be a member of a FreeNet. That the application contains an "rank" that you are applying for. If members don't think you are proven enough for that rank, they reject you.

To make an example, I might say "Yo! I'm currently ranked 100% in Fred's (90 RP 3 block/day) FreeNet. I'll quit Fred, if you let me join Ryan's (180 RP 4 block/day) FreeNet at 75% rank. That way, I don't have to start from the bottom again.

I was presuming, the FreeNet reputation dictated the total number of coins the FN could generate in a block. And the intraNet rank somehow affected how those coins were split among members.

Wasn't a baited question. I'd never given it two seconds thought.

It was a witty retort to your smug reply.

As for ideas. I defend your good ones. I defend no one's stupid ones. I don't mind starting another thread to actually discuss principles leading to a stable currency. Perhaps, someone who didn't reply to every question with, "It's obliquely referenced in my 28 pages of incoherent blathering about minting reform." would foster some discussion.

LOL!  New meme for me. Woot!

Now personally, I think PayPal are a bunch of weenies. I'm personally offended by what they did to wikileaks. I make some regular credit card payments though PayPal at the merchant's request. But I refuse to "validate" my PayPal account by giving them my personal bank account information. That just seems stupid to me. Expecially given their history. They don't need to "validate" me. The credit card company confirms my identity by processing my payments. They are disingenuous weenies for even asking.

But anyone who has ever bought a house knows, the lender always find something stupid and annoying in your financial history. You write letters explaining issues, you pay off anything insignificant that might hold off your process. Or you don't.

But if you don't, you aren't awarded free liberty to associate your misfortune with black helicopters. Just saying.

Alright, support the #feedtheprotest cause, but don't bang this particular PayPal drum too loudly.

The guy admitted he had a paypal billing issue 8 years ago where he claimed not to be responsible for some charges. PayPal investigated, found no fraud, but he never followed up with them. He simply cancelled his PayPal account.


Now he's claiming this is a wikileaks situation. PayPal annoys me as much as the next guy, but make sure you investigate the horse's health before you hitch your wagon to it.

Yes, I completely agree. I've been away from the *coin world for about a year. Just trying to get the lay of the land.

I always thought the original bitcoin philosophy, of defending everyone's shared history based on the implausibility of >51% CPU power attacks, died when coders put in the first hard coded block lock. Since then the question has been, "How much history can we leave at risk?" What you call a "confirmation horizon" is exactly what I am suggesting. Otherwise, the definition of "confirmed" becomes non-sensical.

I figured exchanged must have long ago solved this problem. It simply doesn't make any sense for multiple exchanges to trade on different branches. The notion of, "Everyone stop trading, while we (exchanges) discuss this among ourselves." makes perfect sense.

Just curious, what mechanisms to the mechanisms to the exchanges currently use?

Why don't you add in a rolling block lock. Say locking blocks 1 hour old. That would limit any CPU attack to the ability to only erase transactions less than an hour old.

I know about the chicken and egg problem. How do anonymous peers know which block to lock? But in this case there is one known "non-anonymous" peer that is implicitly trusted. It is owned and operated by "michaelmclees".

When you reach critical mass and add an exchange to the fairbrix network. That adds a second non-anonymous peer. Though no one will "implicitly" trust the exchange, if miners go with a fork unsupported by the exchange there will be no place to reap their rewards.

If an exchange changes forks, it would result in brix they sold to customers for dollars disappearing. Since the exchange is non-anonymous actual police are likely to show up and arrest them for fraud. I presume exchanges will be monitoring any chain swap attacks closely.

That is the part I, and everyone else, have been trying to explain to him. That exercise is futile.



These effects are true, but they turn out to be temporary in the sense that the price will re-stabilize. It will not tend toward zero or infinity. It will simply pick a new level and continue from there.

The thing that made that side effect less abhorrent to me was the relationship of the price of electricity to the outside economy as a whole. Electricity is a government regulated commodity.

If there is a "glut" of electricity then the "fuel charge" part of your electric bill tends to go down. However, random fees and transmission line maintenance costs tend to rise. As with water, it doesn't matter how much conservation everyone decides to do. The gross monthly billing to consumers is never allowed to fall so far that it bankrupts the utility.

Conversely, electricity tend to rise in proportion to general inflation. If your electric bill goes up, the price of bread is up, and *hopefully* your salary will rise to match. (I know salaries tend to lag. Such is life.)



While I agree with you about this specific proposal. I agree with Etlase2 that stable money would be good. I also think using electricity as a benchmark worth further investigation and discussion.


But naming your currency as if it was an Enron product, seems a silly, silly thing!

Anyway, good luck with it. I'm pulling for you to make it work. By the way, what does the "En" in EnCoin stand for?

I do appreciate you pulling me back here to talk about something that is not austrian economics, the wonders of the gold standard, or how hoarding bitcoins is just like buying stock in a new company! That used to be really tedious.

It was nice to hear someone else is a fan of stable digital money. Really, a year ago you could get shouted off the site just for mentioning it. It is a bit sad to see that you are not getting more interest.

Oh, I really thought you were trying to say something insightful. None of my example said anything about running at 50% of the hash rate. That is some random fantasy you made up.

I'm saying that a 190W (2mh/s) machine is going to be significant. And I'm saying that a 200W (3mh/s) machine saves a full third. A 400W (16mh/s) GPU machine saves 3/4s, even if the 400W number looks bigger.

Each block at a single difficulty level takes on average 2^(D-1) hashes to find. Where D is the number of leading zeros. This has nothing to do with (/second). The block doesn't care if you do it in one second or one hour. If all of my peers are averaging 1 block/day. Then if I can average the same block faster, I have hours to save electricity by loafing. There is nothing anyone can do about that.

You seem to think you can average everything out and each peer's individual variance doesn't matter. Woot! Ignore it! Tell everyone it won't matter! Yell it to the world!

I promise to keep my mouth shut. I'll do the same hashes as my peers. Get paid same ENC as my peers. And win, because my costs are lower. I will command the marketplace. I'll cash out faster because I can take the existing "highest bid", but still end up with a higher ROI then those waiting for a "lowest ask" that will never come.

Woot! Trust me! You'll never know the difference. This is the last thing I'll ever say on the subject. I may even go back and delete any mention of it from this thread. Knight will be so proud!

The secret was he rented an Amazon farm of servers for a few months. Wrote custom code. Took every coin when it was easy and cheep. Tried not to run up his own difficulty. And did it without mentioning anything to others. By the time he posted the image he was done. The basic lesson is, keep your mouth shut!


Ah, now I see the issue You think ROI is a cause, not an effect!

You are thinking people will mint around 10kwh but you plan to try and stabilize the market around 14kwh? Did you mean it would vary between 13kwh and 15kwh? Unless something catastrophic happens?

I'm really trying to understand your math, but not trying to criticize. The math tends to go backwards and forwards at the same time.

OK, by definition: 50 peers burning the standard 200w each should generate 1 ENC per hour.


I understand the 2 to 1 ratio. But I have no idea why you awarded 20 coins.
1000 peers / 20 coins = 50 peers/coin
Because 1000 peers were around for 1 hour you split up 20 coins?

My bigger question is how do you know 50% were running at 1mh/s and 50% at 2mh/s. I assume this has to be deduced from how many blocks were generated and each block's difficulty level

I'm assuming at primary block time, you could see
24 blocks at an average of (X) mh    and
24 blocks at an average (X/2) mh
over one 24h period

That gives you 1 block/hour
2mh/s * 60s/hour = 120mh/hour

so 12 blocks took an average of 120mh to find
and 12 took an average of 60mh to find

difficulty-1 = log2(120m)
difficulty-2 = log2(60m)

So your difficulty level was about 28 leading zeros.

Which brings up another puzzling thing for me. You define a proof-of-work similar to bitcoin. It's difficult can only change in powers of 2. That makes your 1/10 difficulty and 1/5 difficult to grasp.

I'm absolutely sure plug computers could handle all the non-minting tasks without breaking a sweat. That is a lot of network support if the Freedom Box project makes. (A huge if!)


I looked for this in the proposal, but I didn't immediately find an implementation. I don't see how it can be done cryptographically. In bitcoin the proof-of-work must be derived from the bitcoin block. In Encoin it must be derived from the Encoin transaction block (?). Two different hash values can't be calculated simultaneously.

What am I missing?

Oh and I saw this in the proposal.

9-3) Blind Signatures; “Mixing” coins

I have a thread on this forum about anonymizing bitcoin that way. It was part of my series on how to fix some of the anonymity flaws.

https://bitcointalk.org/index.php?topic=624.msg6793#msg6793

No. That was why I said Computationally Undecidable. That is the point I and (John?) and others have posted from the beginning.



This is the closest of your examples to what I wrote. However you use the work efficiency to mean how many khashes/sec I use efficiency to mean how many kwh/khash.

The way I understand your minting process, each FN works in collaboration to solve a single minting proof-of-work. Exactly analogous to a bitcoin mining pool. I also understand (but could be wrong) that each FN submits only one minting transaction per Primary Block. I'm under the understanding that this has to be done under a time constraint that, at maximum, starts at one PB and ends at the completion of the subsequent PB.

You scale the difficulty of this proof-of-work (I think) based upon time in a similar manner to how bitcoin does. Meaning, in bitcoin's sense, one POW solution per (all miners) per 10 minutes. If on average (all miners) produce a solution faster than one every 10 minutes the difficult is made harder. Slower the difficulty is made easier.

Your system seems to replace (all miners) with (FreeNet). You allow each FreeNet to produce one solution per fixed-length period. You completely remove the competition between FreeNets. In bitcoin, the competition is the incentive used to keep miners honest about their solution timing. That timing is what makes it possible to adjust the difficulty.

In your system, you can't tell the differences between a FN that took 99% of the period to complete their solution. And one that took 5% of the period to complete the solution and idled their electrical consumption for 94% of the time. Then lied to you about running full blast for 99% of the period.

If you tell me, I'm wrong and each team can submit as many blocks as they want during a period. It really doesn't change the problem. You can scale to any average of completed blocks per period you choose. The faster system can always lie.

If you can't tell the difference between the truth and a lie, you can't make compensation. That is where the halting problem comes in. Specifically, since there is no algorithm that can tell if an arbitrary SHA2() implementation will complete ("halt") for any given input. There is no algorithm that can tell if it will complete in a certain number of instructions or clock time.

In this particular problem, "lying cooperatively" has a greater long term monetary benefit than, "honestly competing" for higher initial gains. That is why it is called the prisoner's dilemma. If the same scenario is repeated over and over, it is called the iterated prisoner's dilemma. In its iterated version, it is used to evaluate competing algorithms for maximizing long term gain. Exactly as EnCoin is doing.



Closing your eyes and pretending that people are not trying to optimize things for reasons other than your network, doesn't make it so.

Technology will improve. Improvements will be obvious to some. Not to others. That is how knightmb got 710,000 bitcoins for a trivial investment. I'm not saying he destabilized the network. I'm saying he profited handsomely without even trying to destabilize the network. And he did it secretly, right in front of everyone while posting daily in the forums.



Really the exchange price is what all clients are going to care about. When I said stable I meant outside of extreme circumstances like Amazon adopting ENC, of Silk Road getting busted. On a day to day basis, ENC prices should vary between say 9.9 kwh and 10.1 kwh. (2%) At worst maybe 5-10%. But you are saying 15kwh which means that maybe it falls to 5kwh? That is a 100% variation. Doesn't seem that stable if I'm a client. I'm definitely going to try market timing with those swings.



I'm saying even an accidental +-5% variance among clients is going to mean the more electrically efficient, chase out the less electrically efficient. Most people won't even recognize why. It won't crash the client economy. It will make the minter community's breath smaller than you anticipate. I've said from the beginning I don't care about this. I don't care if there is only a single minter. So long as client facing ENC prices stay stable.

You, however, suggest this will effect EnCoin's long term viability. If so, that's a design flaw. First fix the flaw, then make if fair to minters again. That's all I'm saying.

I plan on becoming a client, not a minter. I might even run a peer to keep everything flowing. But I'm not tolerating CPU fan noise just to feel good about myself. That was why I shut down bitcoin.

--- Marketing ---

One of the reasons I'm so obsessed with not burning needless CPU power when not absolutely necessary is for marketing reasons.

Bitcoin had a great bootstrapping plan,
1) Appeal to anarchist libertarians who don't trust the fed to keep monetary policy stable.
2) Appeal to those who hate banks because they return low interest, when inflation is low. And return almost no interest while everything is deflating.
3) Appeal to those who hate stock investing because the market was currently crashing.
4) Convince them bitcoin was like investing because it was a deflationary currency and therefore anything bitcoins you stuffed in your mattress today were going to make you rich tomorrow.
5) Start giving out free bitcoins and hope (1,2,3) buy into the (4) logic.

Turns out in retrospect, it was a brilliant plan.

--------

A stable currency has to make a different appeal. I'm not even exactly sure who it appeals to. Certainly it serves exactly the same niche as paypal, visa, mastercard, etc. There is not much to differentiate it if you compete for clients only on price.  

However, the one thing that attracted me to bitcoin was its promise of anonymity. I don't mean its "strong" anonymity. Like, "The police can't catch me while I'm buying drugs!" To me even bitcoin's "weak" anonymity has value.

Especially marketing value!

You are never going to generate mass appeal for a system that claims to let criminals get away with being criminals. I accept that as a given.

However, it may be possible to generate mass appeal for a system that "prevents monitoring" of behaviors that most people are repelled at the thought of having monitored. Say buying controvercial books, porn, visiting strippers, cheating on your spouse, etc. It is for these types of activities that people currently use cash. Cash doesn't have "know your customer" laws like electronic banking/credit does.

There is a growing number of activities being suggested for additional monitoring. For example, buying fast food cheeseburgers. Or french fries, or beer, or cigarettes, or ice cream. A lot of progressive thinkers advocate tracking  these sorts of activities and reporting behavior patters to either the government or private health care plans.

It is very easy for people to imagine the government telling MasterCard to turn over everyone's purchase records to the Obamacare administrators. Or to tell Google to turn over everyone's search records. That way people can be targeted for specific "education" about the dangers of these behaviors.

I think it is these people to which EnCoin could appeal.

A subgroup of potential early adopters/advocates might be the Freedom Box Foundation. They advocate everyone having their own low power home server, specifically to protect their personal privacy. The project is still in its beginnings but they are proposing to use 5W plug computers like I linked previously.

These boxes will tunnel browsing over TOR. Host personal mail servers. Share personal files. Enable other folks to jump firewalls. etc. In general, the set of all plug boxes reinvents the cloud computing concept, except people own their own parts of the cloud. Their philosophy is very complementary your intentions for EnCoin.

However, I'm guessing they would be much more interested in running non-minting Peers. They already don't mind buying and running their own cheap server to participate in shared cause (like TOR). But they would be opposed to *literally* overheating their plug servers to prove their dedication. Or to burn so much CPU power that the other "Freedom Box" features wouldn't function as intended.

I put myself in this class of possible EnCoin users. I don't mind telling my server to help EnCoin with bandwidth and transaction monitoring. But, if it slowed down my browsing, email, or required me to add a fan to the plug. Poof, the EnCoin process would be gone. Minting profits are not part of my personal value calculation. I wouldn't waste the CPU cycles stressing the server, even if the electricity was guaranteed to be offset by minting awards.

But that is just me.

Do you have any thoughts on bootstrap marketing?