While there is an incredible and growing amount of censorship in social media, in this site, advocating views that are critical of bitcoin are clearly tolerated.

I don't know if it that is a good or a bad thing.

On the one side, I consider it to be a good thing, because I fundamentally object to censorship and to silencing opposing views. On the other side, it is annoying that when I express views that support bitcoin in mainstream sites, my views will get censored, but when other people do the opposite here, they will not get censored. Therefore, it also feels a bit unfair ...

There are powerful financial interests who want and desperately need to "prove" that bitcoin and gold should not be considered safe havens.

These financial interests are willing to spend an inordinate amount of fiat money on discrediting alternatives to the fiat banking system.

For example, these financial interests accumulate lots of borrowed and paper gold and then dump massive amounts of fake gold during a stock-market downturn to depress the gold price exactly at that point in time.

They also do that with bitcoin. Centralized exchanges are more than happy to lend out their users' bitcoins for a fee to financial manipulators. Therefore, as long a the market capitalization of fiat values is relatively large compared to bitcoin and gold, it will be possible for financial fiat interests to "prove" that bitcoin and gold are not safe havens. In fact, given the fact that the total market cap of bitcoin is still much smaller than the one for gold, it is even easier to manipulate the bitcoin price than the gold price.

Bitcoin still survives in spite of all these financial assaults.

Therefore, the flight into alternatives will be exponentially slow at the beginning. It will take a prolonged depression in fiat values along with long, robust performance of bitcoin before the flight into bitcoin will be able to commence in all earnest.

I think you are right about the difficulty. It should certainly not be forced to be equal. Each shard must have its own.
Looks like an interesting application of the original atomic-swap idea!
I personally think that @aliashraf's alternative is actually better than my original proposal.

Sharding along tx hash bytes removes the need for an atomic-swap server network, which then becomes completely optional.

It also makes the question of price pegs between sub-chains moot.

The user may still want this network service for the occasional defragmentation of his bitcoin holdings. If the user's bitcoin holdings are too much spread out over different shards, then a typical payment may require sending a potentially large set of sub-txs, each to its own shard. Therefore, the user may, at times, still want to use the atomic-swap server network to regroup his bitcoin holdings to fewer shards.

Thinking of it. Yes.

It would indeed be possible to shard based on transaction hash instead of address, and guarantee shard affinity by using a small nonce. In that case, it would indeed be sub-network 12 because the tx hash starts with a 12 and not because the address starts with a 12. Sounds good to me. Adding the nonce is also a good idea (without which tx sharding would obviously not work).

True. Your approach would be even simpler. I certainly like your simplification.

Yes, but also without the "merge mining". I propose to make sure that the protocol gives convenient access to an atomic-swap market. In my impression, that should be enough to make the different sidechains look like one. As long as the wallet software does the hard work for you, of looking for atomic swaps, carrying them out, and then making the payments within the various sidechains, almost nothing changes for the user. The "send payment" button triggers more actions under the hood, but that's also about it.

For the miners, not much will change either.

Instead of mining one block in one chain, they will mine 256 blocks in 256 subchains. Of course, they have the option of not mining for one subchain and only to mine for other ones, but why would they do that? Why would a miner mine in subchain 56 and not in subchain 89? It is equally difficult. The payoff is exactly the same. So, for all practical purposes, subchain 56 and subchain 89 are the same thing.

The atomic-swap servers do not accept a 1:1 rate. As an atomic-swap server, you can buy at 0.90 from subchain 67 and sell at 1.15 in subchain 112. Nothing prevents you from doing that.

However, it is a free market, and there are other atomic-swap servers. Hence, in an open market, you are quite unlikely to find counter-parties for your 0.90/1.15 offer. It looks expensive. If you can make that much money by swapping, I will compete with you with my 0.95/1.10 offer, which is obviously still a lot of profit. So, don't be surprised that the market price will eventually turn out to be something like 0.9999999999/1.0000001.

Furthermore, if you are an atomic-swap server, you had better watch out for offering irrational prices or discriminate against arbitrary sub-chains, because automated arbitrage bots will not hesitate to take you to the cleaners. For example, if you accidentally happen to offer something like 0.98/0.99 or like 1.01/1.02, that will go wrong within seconds. You will find your coin buffers depleted almost immediately. Arbitrage bots are merciless. If they smell blood, you will be gone very fast. That is the same phenomenon as on any exchange market.

Atomic-swap servers provide liquidity. Hence, the size of the swapping fees will make sure to attract the liquidity for which the users will want to pay, by matching supply and demand. I suspect, however, that these fees will be very reasonable. Still, if you put 10 BTC on one subchain and 10 BTC on another, you obviously expect to get paid for keeping your money available for atomic-swap market takers. Otherwise, why would you do it?

I think drivechain is an interesting idea. Still, it requires "blind merged mining". In this proposal, we do not need that. Tried and true atomic-swap smart contracts are enough to achieve the same. It is simply "time-locked payment against preimage" all over again.

Even though Tier Nolan introduced his multi-billion dollar idea of atomic swaps in this very forum in 2013 already, it still took until 2017 for someone to actually write the first prototype. In my impression, Tier Nolan's atomic-swap idea is much, much bigger than just trustless trading of altcoins. His idea will undoubtedly turn out to be gigantic. In my impression, atomic swaps can almost trivially solve the pernicious problem of sharding and allow for infinite scalability.

Yes. However, there is no requirement to have more sub-networks than desired. E.g. it could start out with just 5 sub-networks. All addresses in the tx would then all have to have the same (mod 5) modulo. There is not even a need to roll out all 256 sub-networks afforded by sharding the first byte.

Yes, of course, indeed. It was just an indication as to how many sub-networks would be possible by sharding 3 bytes. I also do not believe that we would ever need to scale that far. It is rather that the principle allows for unlimited scaling.

There is obviously a need to figure out how to start sharding and with how many shards initially, and how to (automatically?) increase the number of shards when needed, but I assume that this problem does not need to be solved already. The deployment could cause a fork in the network. Therefore, allowing for the existing and the new situation to correctly co-exist will be a very real problem to solve, with a lot of nitty-gritty details to take into account. If I tried to dream up such details right now, on the spot, they would undoubtedly be grossly wrong.

You can add a header to the tx (for efficiency). However, you can already see it from looking at the first (few) byte(s) of any address involved in the unspent outputs and/or source tx. Mixing shard prefix would not be allowed. A single miner can mine for any of the sub-networks. To that effect, he needs to keep multiple blockchain databases (one for each sub-network).

The wallet will have to split the tx (automatically and transparently) in one tx per sub-network you are paying to. So, if you are paying to three addresses on three sub-networks, the wallet will broadcast three tx. You will need enough unspent output on each sub-network, but the initial swap will have to make sure of that.
Technically, yes, but in all practical terms, most probably not.
The atomic swap network would have to treat sub-networks differently, and e.g. charge different swapping fees per sub-network. Why would they do that?
Concerning the user, the user would need to have a preference for a particular sub-network, while they are indistinguishable.


> A UTXO can be spent to any other zone or region within the network by signing a new transaction  that  relocates  it  to  a  new  zone.

I propose to let the atomic-swap network handle this for a fee.

> the zones which users aggregate into will be based on a combination of geography, network topology, and  existing economic relationships.

It looks complicated. Why would that even be needed?

> The network incentives need to be modified to incentivize the regions and zones needed for BlockReduce.

In my proposal, the servers on the atomic-swap network can set their own fees and let market competition determine how much those should be.

> ... any excess transaction fees could be sequestered into an escrow account ...

... and who will be sitting on the corresponding private keys?

It is otherwise, indeed, a very similar proposal. I do not see the need, however, for a PRIME network or regional networks, or any other hierarchy. I think that it can be done with just one atomic-swap network.

I wonder if the following sharding strategy would make sense?

Imagine that we split the bitcoin network in 256 subnetworks (shards), depending on the second byte of the address in the unspent output (the first byte is already in use for other purposes).

Addresses in network 0 can only be spent to other addresses in network 0. Same for network 1,2, 3, ... 255.

Miners keep mining in each of the sub-networks for the current coinbase divided by 256. They will receive the transaction fees for just the block in sub-network.

This sub-network affinity of funds sounds annoying, but it is probably less annoying than it looks like.

If you hold funds on network 47, and you need to pay to network 12, it means that there needs to be an atomic swap network, with atomic swap servers, where you can automatically swap network-47 funds for network-12 funds. You will have to pay an atomic-swap fee to the swapping server, but since it is a free trade, this fee should be rather minimal. The swapping can be completely automated between your wallet and the swapping server. After swapping for funds in network 12, the wallet can proceed automatically with making the actual payment.

Hence, you will potentially need to make three blockchain operations: an atomic swap (=two operations) and a normal payment. This will take twice as long as usual.

Still, your wallet can also indicate in what sub-network you have the largest amount of funds. From there, you can notify your payee your preferred sub-network for making payments and let the payee generate a payment address in exactly that sub-network. That will spare you the wait for the atomic swap and the swapping fee.

The advantage of using shards, is that it scales pretty much infinitely.

You just need to shard by one more byte, to multiply capacity again by 2⁸=256. So, sharding by two bytes, results in 65536 sub-networks. Sharding by three bytes, in 16777216 sub-networks. There should always be enough online, atomic swapping-server capacity available, because swap servers will find themselves attracted to growing swapping fees, in case of shortage. Your wallet will automatically pick the cheapest swapping fee.

Concerning instantaneous payments (lightning network), lightning nodes should be able to rout payments from your fund commitment in one sub-network to recipients in another sub-network. The existing contracting system should therefore remain the same. In fact, all existing smart contracts will continue to work. The only requirement is that the addresses involved in a smart contract must be valid for the sub-network in which the smart contract is being entered. It will just create a principle of "smart contract sub-network affinity".

Do you think that a sharding strategy for bitcoin could be viable? If not, let me know your objections!

Feel free to send me a PM for your project. I look forward to discussing with you.

Handling incoming payments on the lightning network requires special effort, because someone else needs to fund the payment channel in which you receive your payments. Why would he even do it? Still, we should be able to solve that problem with self-atomic marketplaces.

How to provide liquidity on the bitcoin lightning network for incoming payments

http://bitcoinviews.com/live-is-bitcoin-proving-to-be-plain-and-simply-unsafe

Of course, 45 percent of bitcoin exchanges fail. If you know the admin's root password, you can obviously visit the exchange server and steal all its money, if they did not use a receive-only deterministic wallet. How do the admin get their password? From the hosting company, of course. A large hosting company does not send just one email with the root password, as you can imagine that they may receive visitors who will tell them that their servers will be used for "terrorism" and that all such passwords must be handed over, along with a gag order, of course. For foreign exchanges, it is just a question of doing pattern matching on the meta data and on the automatically generated email that contains the root password.

If something is possible in theory, all we need is a PoC (Proof of Concept) to figure out what they are doing already and what they will be doing next. There is no need to look into Edward Snowden's stash of documents at all. Just look at the what the existing information infrastructure looks like and what is already possible just in theory.

In approximately every large country in the West, there is a large central government database containing all bank account holders with their names and account numbers. This database is obviously under surveillance by the country's secret services in order to detect who is a "terrorist".

As you can imagine, anybody holding a substantial amount of money in his own name, instead of the name of some anonymous company,  must look carefully at the last transactions in his bank account. The freelancers in the secret services and in the bank may accidentally have swapped the order of things to do. Suddenly lots of transactions show up on your account, anti-dated to a date that third parties may not even be able to get a copy of! Your balance is mostly gone! What is there about to happen? This is indeed a mistake, and the mistake is that you are still alive. That was obviously not the idea. Some people just do not understand that in this kind of landscape the sum of their bank account holdings simply forms a bounty on their heads.

Of course, the best targets are people that they have been instructed to watch already. They are famous, have a lot of money, or they are in a situation that lends itself to doing that. Look at what my friend Luis is complaining about:

I got fucked big time. The portuguese government froze/boycotted/stole/impeached the meagre savings that i had in the portuguese bank!!! Alledgedly due to unpaid back taxes (that i remember nothing about since i haven't worked in the wretched country for the last 10 years...) they just grabbed the 5000 euros that were my last.resource.

For them, it was fantastically safe to fake this kind of things, because he won't be coming back to complain, anyway. No need to kill him. This man is still alive.

Riba means Interest. Riba is forbidden in Islamic economic jurisprudence (fiqh) and considered as a major sin. Simply, unjust gains in trade or business, generally through exploitation. (http://en.wikipedia.org/wiki/Riba).

Why is it sinful for a muslim name to store a lot of money in these riba banks? Because they were instructed to watch you already, and because the database that you will find with queries they made against this kind of names is exactly what their bosses instructed them to do. Someone committing the sin of receiving or paying riba, that is, usury, may simply no longer fall under the protection of the laws of his Almightiness. Since I am no better than you, this is not really a reproach. If the accounting of sins, the karma, turns out in a wrong way, we may just be going to the same place after this world ;-)