Just terminology I mean where you find a way to express the security critical parts of the business logic so that it runs in a smart-contract, and then the blockchain enforces it for you.  For example lets say daily spend limits, if bitcion scripts had access to value as well as block height (without getting into address reuse for now) you could write a script to protect yourself from being coerced to spend your savings when you're trying to spend < $1000/day or whatever as a basic precaution from that wallet.  Its more secure if the blockchain enforces that than if a server does via a multisig where the server is the policy decision point because the server could be compromised.


Well block size is an interesting debate.  Lots of people on both sides of that decentralisation vs scalability.  I made my comment on it earlier in the thread here in reply to Peter R comment about it.  https://bitcointalk.org/index.php?topic=68655.msg9997995#msg9997995 on this thread.  Peter Todd for example is pretty against increasing blocksize - but believes in full nodes only, and things like tree chains, Gavin mildly exploring it as a possibility and people who rely on bitcoin scalability due to a focus on user transactions and merchant integration getting nervous about being 3-4x from seeming limit (though we've yet to see spam get squeezed out).  Greg seems cautious due to centralisation risk like Peter.  I think go slowly and carefully as I said.


You do realize that all the blockstream people are cofounders and founded the company and are philosophically inclined to defend bitcoin to the death and would quit if the rest of their co-founders went nuts and tried to coerce them or convince them to do something they considered bad for bitcoin.  We have like 8 Justuses (and I'm one of them:) not even kidding (and 3 people who would bow out for technical depth).


Yes actually that outcome also sucks and is the flip side of the debate where some people (eg Peter Todd with his keep bitcoin safe video on blocksize) small blocksizes are good for decentralisation but bad for access, if bitcoin becomes a settlement network.  As I was mentioning sidechains for those who like the security tradeoffs that can be constructed with them may provide a safety valve that doesnt involve switching to an alt, or going offchain.

If you're going to go offchain obviously its better to do it with split trust (voting trust, federated peg, multi-sig vaults etc) than pure governance IOUs.  But I think by being offchain you often miss out on user ethos focussed features like:

- unfreezability (exchange/vault refuses to give your coins back)
- unseizability (exchange/vault gives your coins to someone else)
- smart-contracts (if your ownership can be undone then so can a contract sort of, so it devolves from smart to dumb conventional electronic contract)

There's not a super nice answer thats in

Adam

well seemingly you, for articulated reasons that we're exploring, would like to restrict people from sending their coins to a sidechain.

I agree people should be able to do what they want with their bitcoin and send them where they want.

Another way to look at sidechains btw is that a federated peg is a multi-sig (with modest parameters eg 5 of 10 and some trustworthy security competent bitcoin interested businesses) and a SPV peg is a bigger federated peg with a 5000 of 10000 multisig with dynamic membership (ie whoever is mining the chain right now).  The spv peg op_code is an opcode to understand those dynamic membership multisigs.  The dynamic membership multi sigs (DMMS for short) are written about in the sidechain white paper http://www.blockstream.com/sidechains.pdf and are a different way to look at bitcoin mining, though its actually the same thing.

You can also combine DMMS sigs with regular multisigs, its just an op code so you can program with it.  eg IF ( 0.5*DMMS + 0.5*multisig(5,10) ) THEN spend coin.  Or IF ( hashrate > 75% AND DMMS ) OR ( hashrate <= 75% AND multisig(5,10) ) THEN spend coin can react to hashrate drops.  Different people could even use different peg rules on the same chain depending on their security tradoff preferences.

I dont see that as some how evil or dangerous relating to offchain transactions (we've seen them cause system shocks mtgox etc) or federated pegs or voting pools (then you are depending on the 5 of 10 of their security etc its better but its still non-zero risk) ... its just the next evolution in that direction - more decentralised, more things enforced by the network.  For example read Nick Szabo's recent blog post about fiduciary code http://unenumerated.blogspot.com/2014/12/the-dawn-of-trustworthy-computing.html what do you think he's talking about?

You complain about incentive, but I talked about the details of that and there are multiple secure and workable parameter choices with usable tradeoffs , and off-chain transactions and voting pools have incentive too - the holder just steals them for free with no effort!!  Thats pure human trust.

Incentive discussion was here

Also for the non-voting pool version the statistics are horrible it used to be that 50% of exchanges that ever existed went down with loss of user funds.  Yes its improving but lets ask you a question: do you store investment amounts of bitcoins on an exchange?  Or a web wallet?  Or an offline/paper wallet with backups?  I imagine you do the latter.

Its also (I said this before on this thread) basically embarrassing that bitcoin is repeating the banking governance failures of the last century and of 2008 etc when the entire point of smart-contracts and programable trust is that users can have direct control of their funds and not have to trust third parties.

One of the interesting motivations for wanting the extensibility that sidechains provides is to be able to make that zero trust a reality for more bitcoin transaction types.

Adam

btw (I know you were predicting JustusRanvier) but I dont think one can characterise the op_spv is to the disadvantage of blockstream competitors.  Its an op code, anyone can use it to make sidechains or other things. 

Other things: you can also use the op_spv opcode to enhance security and efficiency for SPV clients like smartphone wallets completely separately from sidechains.  And to fast catchup headers also, the compact SPV proof is work-preserving.

If for example OpenTransactions sees a use for it, or ethereum wants to switch out ethers for bitcoin (i imagine the developers are attached to their premine for now) but perhaps Mastercoin or something thats market cap is falling, seeing less use and the ICO people probably mostly dumped by now (if thats a fair characterisation, dont follow it closely) maybe they might want to migrate to a sidechain, thats all expected and good.  Permisionless innovation is the point of sidechains.  You could even one-way peg the remaining mastercoins into a sidechain to allow their residual tradability.

If you mean it allows bitcoin to more easily incorporate features, well most alts dont really have features, or not meaningful or useful/non-broken ones, but there are some feature coins and bitcoin 2.0ish coins that do.  I dont see how extending bitcoin is unfair - they're all leeching off and copying bitcoin, which was the actual innovation - why cant bitcoin take little bits of innovation back too?

Also alt-coins or feature coins can have sidechains off them also for beta versions, or secondary functionality if they were actively developed.

Adam

Well there is the federated peg that doesnt need miner support.  There is the one way peg that also doesnt (but is more limited than 2wp).  And also most of the miners we've talked to informally seemed pretty keen on the idea.

I mean for example namecoin gets a pretty high Merge Mine rate and thats not really actively used even.  Mining profits are quite thin right now with difficulty reaching equilibrium for the price range so another percent or two makes all the difference.  I got the idea they were also interested in future potential for more transactions and more types of transactions as they considered this a source of bitcoin price upside, and they are mining bitcoins and living off the margin.

Plus a price uptick is a big deal to current miners, its a kind of derivative on bitcoin price.  They get to cash in for 3months at a higher price with too low difficulty until the manufacturers can ramp new manufacturing pipelines and get lots of new equipment to market.

I think the bigger picture though is its premature - we have not yet released code, nor BIP draft for community discussion and picking apart and redesigning etc before there is something to merge mine.  Its also useful (maybe you said it yourself also I think) for a federated peg to operate for a while in parallel with that open design discussion for people to see how it works.  You can view the federated peg as a protocol adaptor - there can still be mining occuring on the sidechain with the federated peg, just the return peg is translated into a multisig for bitcoin by the federation servers.

After that if the community can settle on a op-code for extensibility everyone is happy with people including us can try to stand up a few sidechains.  If no one likes them then they wont get mined.  So as you can see sidechains and the op_spv really depend on community and economic majority approval, and thats a good thing.

Adam

Agreed.  But you're also not completely off the hook.  There are also economic implications from offchain and voting-pools version of offchain.  People also have a right to ask about that similarly.  There are actually economic implications.  If OpenTransactions sucks a bunch of transactions off-chain that deprives bitcoin of transaction fees, and so it lowers bitcoin security.  I am not saying this is a bad tradeoff, just point out that nothing is free of implications.


You did see this reply?  https://bitcointalk.org/index.php?topic=68655.msg9997546#msg9997546


Was that really called for?  I am trying to be responsive here...

I said its a very valid question.  I tried several times to answer.  Feel free to pick apart the answer but dont just say I didnt answer, or I cant really reply short of reiterating as I wont know what it is you found unclear or unconvincing about the argument.

Adam

Hmm so it took me a while to see this, but actually most economic differences can be mathematically modelled and opted into on a sidechain.  For example demurrage could be implemented.  Or different block intervals.  Or different tapering of block reward, or ongoing block reward.  Those define a deterministic calculable difference.

Sidechain pegs do not have to be 1:1 nor silly things like 1:1000 just mean sidecoins are milli bitcoins, but also the rate can be deterministically time-changing.

Now the even more interesting realisation once you see this, is it provides a formula to value altcoins.  If you wouldnt opt into the sidechain with that behaviour, if you had to pay above par, you probably are just seeing more clearly that you similarly shouldnt buy that altcoin.  An alt-coin is a watermarked bitcoin sold above par with a marketing story.


Using the really high level definition that bitcoin is an abstract model for converting electricity into proofs of work, where in all of these proofs globally define the total electrical expenditure, which then adjusts the J/proof to hold block interval on target at 10mins.  When you look at it like that, and if bitcoin cant quite do that its an implementation limitation, that maybe we can fix with quantum sci-fi in the future, then you can see that mining an alt-coin is sort of like watermarking a bitcoin and calling it a foo and expecting people to be suckered into paying above-par for it.

Or like gold bars but making them into triangular shapes or stamping them with a doge and expecting people to pay more.  A gold atom is a gold atom.  A proof of electrical consumption is a proof of electrical consumption.  That not many people are stamping doges on their gold bars doesnt mean doge stamped bars are more valuable, once the fad wears off, someone will realise they are being ripped off for gold or buy their own doge stamping machine and buy basic gold.

Adam

I think thats wrong, lets say bytecoin with its ringsigs.  That provides some interesting privacy properties, not quite zerocoin, but safer crypto and more compact.  I could imagine a number of people would be interested to use that as a sidechain.

Adam

ps checkout cryptonote https://cryptonote.org/whitepaper.pdf and http://cryptonote.org for explanations (seems they've been busy making a nice web site with explanations).

Nah Justus is the good guy.  He just flames a little, so what.

Adam

Oh boy, thats another can of worms.  You dont happen to work for conformal do you btw?

So (it a long story) but a) no one knows who's funding them; b) most of them seem to have ex-defence contractor profiles; c) no one knows why they are coding it; d) if there is one off by even a single bit interpretation bug in it it breaks consensus and forks bitcoin, which can likely be systematically abused, to create a massive accounting/double-spend mess that will be too expensive to repair as last time - that could create a mega fork worse than the leveldb bug, and kill bitcoin or force some really harsh choices to best effort cleanup where there are innocent losers; e) it apparently took a lot of effort by the core devs to persuade them that this was a problem; f) it still has that problem.

I think that about covers it.

Adam

I could persist, and I think you are glossing over questions that could and should be asked of monetas (it is also some kind of offchain thing and brings its own risks - if people wanted to get concerned about economic models, sucking fees out of bitcoin, encouraging lower security transactions - they could call OpenTransactions a kind of sidechain and with full justification make all the same observations that you just saw on this thread), but I think I made my point - there are hard questions that could and should be asked to companies and individuals proposing changes or architectures/trust-models for handling bitcoin.

And its better to be open, clear and non-confrontational in your responses - people have a right to ask.  I think I handled it more openly and gracefully than you did.  So there

Adam

ps the correct response is touche not deflection.

I am not sure its a blockstream position as there are multiple independent minded bitcoin-protocol aware people that compose blockstream who dont always agree on everything.

But my view is increasing blocksize increases centralisation so you'd want to be careful about that.

I guess the current tx throughput is about 3-4x away from the 1MB limit with current average tx sizes?

It may also not be as close to the limit as it looks because once there was actual block space scarcity, maybe the economics will push out some stuff that is currently basically spam.  But you dont want that to go too far or actual transactions will back up.

Maybe the interim solution is to increase it a little bit or be prepared to, as it takes time to be ready.

If sidechains were ready, for people who like the security tradeoff, it offers another degree of freedom, because you can have different blockchains with different blocksizes.  eg you could have a lower value transaction blockchain where people can better tolerate the small extra centralisation risk (centralisation being if the bandwidth is 10x or 100x fewer nodes have the bandwidth to validate all tx.)   You might even make the argument bitcoin main blocksize could be reduced to improve its decentralisation.  It decouples from the one-size fits all aspect of bitcoin, which I think is a good thing - we can have more decentralisation where it matters, and more and faster transactions where it doesnt as much.

ps As its not always obvious to people a sidechain could also have a shorter block interval for faster clearing of lower valued transactions.  I'm sure you know that, but not everyone does.

Adam

Hmm I'm not sure if actual VCs invested in any alt-coins - other than ripple & stellar, right?


Actually I did watch an hour video of you presenting technical details about the trust model & I thought you did a good job of articulating it and being fair about the security assumptions.  I also read some other stuff and Chris showed me a code walk through and demo a while back.

But I do find it pretty funny that you jump on me as trolling when I replay your own questions to you   Chortle.  Thats actually what I said about what I was doing and you still bit?

Your (and others) questions about our investors were far more pointy and detailed than I asked you also.  You didnt name them.  You didnt say what their motive was.  You didnt say why we should trust you.  You didnt give your backup plan for what'd happen if Monetas went evil.

Anyway really - you dont have to answer, I'm not actually asking, you're not proposing changes to bitcoin core.  But once you have users, they may have a legitimate reason to demand answers to those questions so you maybe want to think about company structure and board voting control and such things also and ask yourselves a bunch of red-team what-if questions.

Not giving you a hard time really.  I kind of like OT's model its slightly similar to a model I had for a 2001 censor resistant name space http://www.cypherspace.org/p2p/auditable-namespace.html in its trust but verify model, and I spent a while talking with Chris and he seems to have good intentions and be technically smart.


I like his articles, and if you contributed ideas to them great, nice job.


Yeah I saw some of the bct exchanges between you and him about project status.  Not my business to pry into really I dont know.

Adam

Yes.  I argue altcoins and appcoins are fooling themselves as they imagine that the feature they are selling creates value.  It is the network effect and liquidity that creates value.  And their feature if it were really really killer awesome, would actually get copied and patched into bitcoin core (ignoring sidechains for the moment).  Fact is as far as I know, no one created a feature useful enough to qualify (for the rather high bar of patching bitcoin) because bitcoin is awesome already and its really hard to improve strongly enough to overcome the risk cost.

What sidechains do is make it easier, trivial even to fork the altcoins with perhaps useful features and put them in a sidechain.

Also many of the altcoins are making mistakes that cause the technical failure of the network in ways cataloged by Andrew Poelstra, https://download.wpsoftware.net/bitcoin/alts.pdf so they also arent typically safe to use.  

Adam

I quit a job paying plenty more than I am paid now.  I think everyone took a pay cut relative to US listed company rates of pay.  I wouldnt say we are poorly paid for a seed startup, but software development is expensive, and there are limits to how far below market rates you can expect people with living costs to go.

What you are saying is sort of analogous to me suggesting you donate your bitcoins to charity so no one can accuse you of bias?

I dont think a kickstarter or donations would've raised enough money to do it.  Mark Friendenbach has first hand experience of trying to work for a year on bitcoin donations, that didnt work out very well.  We could probably have implemented the core part in our spare time, but we figured that isnt enough for people to actually use it.  You need mining software, wallets that understand sidechains, you need a sample sidechain or two, a sidechain explorer, tools to issue assets (if thats in the sidechain feature set), etc etc.  Thats a ton of work and in our estimation if you drop a library or patch over the wall it lands with a thunk and sits there unused.  You have to minimally demonstrate a useable system.

You should view blockstream as a sort of hybrid.  We are developing FOSS open IP much as a not-for-profit would.  But we are also aiming to make a profit by selling services, doing partnerships, advising integrators etc this is all complicated stuff and people need help to make it work.  Like was said its kind of like Mozilla.

We also had opinions about the correct uses, and maintaining bitcoin ethos.  If you drop a patch you dont have any strategic input into maintaining bitcoin ethos in the deployment.

We're also individuals with a community voice independent from the company.  I dont think you see most companies nor individuals working for companies in the bitcoin space giving the kind of detailed rationale or insight into plans.

Not to OpenTransactions, not conformal/btcd, not bitfury, not 21e6 etc.  I understand we're the only company to propose actually extending the core so there's a higher standard - but really btcd is kind of opaque which to my mind is a bit of a concern given that its proposed as a full node and creates risk of network fork as it has a reimplementation of consensus critical code.

Adam

The primary safe guard is what I said Everything is FOSS, open IP.   Thats just like bitcoin right.  If the company changes management later down the road after investment rounds or whatever, and it tries to do something bad (which would sabotage its investment as the ecosytem would reject it), we could all leave (which would cripple its ability to maintain code nor execute its plan).  Or if it was us under blackmail or some legal threat, the same logic as applies to bitcoin applies: if the core does bad things, a new core can fork it and undo the bad things.

Clear enough?

We also did a bunch of stuff in terms of GMaxwell and Pieter Wuille's contract that was mentioned (can walk and continue to get paid if company does bad stuff) as was mentioned, and chose investors with similar and compatible ethos (understanding of FOSS, need for decentralisation, need for open IP, etc. they get it and get bitcoins value hinging on its decentralisation. )  Reid Hoffman is you might notice Chairman of the Mozilla foundation and you can find videos online where you can see he's enthused about bitcoin potential himself pre-blockstream.


Well kind of what we said is "dont trust us"  ie if we succeeded in the cant be evil you dont have to trust us, and we cant be coerced because we have no control or power.  And if you think about it, its in our interests individually to not have a position of power or control as potentially even governments or organised criminals (there's a difference) might get interested in abusing control.


You know not to troll you, but Justus you also work for a for profit company - Monetas/Open Transactions - right? Nothing is known about the funding of that company.  We dont know what your motives are.  The OT network voting trusts escrow everyones bitcoins so are a form of trust.  Should we trust you.  You dont have to answer.. just illustrating the sorts of questions you're asking so you can think about them and see the perspective on the receiving end.

I am quite happy for people to ask tough questions.  Indeed it would be kind of surprising and disappointing if they did not given how important it is for bitcoin to remain decentralised, neutral and free from proprietary control.

I am also quite happy to voice my opinion if I see bad stuff (take a look at the coinvalidation redlist thread for example).  You might notice Greg doing the same.

I suppose the cipherdoc version of such questions is that he's biased to the value of his bitcoin hoard.  Personally I think thats a pretty healthy bias.  And as maybe Greg said or maybe implied (or not) everyone at blockstream has some bitcoins.  Anyway Daniel Krawisz view is that the investors are driving bitcoin so the extent he's right and certain things about bitcoin must not change or it isnt bitcoin.

Adam

Yeah that figure comes from memory if you google around there was someone offering Jackson Palmer $500 or $600k to develop and market dogecoin.  He told them to go away as it was a joke.  Unfortunately the dogecoiners havent realised the joke yet  I believe I heard others were offered similar amounts to develop an alt-coin.  (I dont think that would be no-strings - they'd own a defined share of the premine, and there would be multiple developers to run the project for a period of time in the budget).

However its very likely the case that people working at blockstream, including myself, could've made more pay going to the dark side and starting their own alts, or taking money from unscrupulous people to start pyramid pump & dump scams.  However they have ethical problems with that.  It also probably helps them avoid sharing a jail cell with the pump & dumpers

We also want to be constructive and think bitcoin is where the future is.  Good things dont magically happen someone has to design and code them.  Thats why we co-founded blockstream to go do those things.

So that was partly why I mentioned it because people were saying, but they'll be beholden to the company for pay so they can eat etc.  Screw that they walked away from more money doing alt-coin crap - ie they already demonstrated willingness to walk away from things they think are unethical.

Adam

The quote didnt say not to make a profit it said to have a dual objective and compared the approach to Mozilla.  Mozilla made plenty of profit (and is a hybrid incorporating both a for profit and a not-for-profit) and also did a good job of making the firefox browser a leading source of user ethos focussed innovation and features.

Greg Maxwell (nullc on reddit) wrote some about how blockstream plans to make profit.  

https://www.reddit.com/r/IAmA/comments/2k3u97/we_are_bitcoin_sidechain_paper_authors_adam_back/clhoo7d

I dont think making a profit is a bad thing - to hire developers & QA and UX designers and maintain software and design protocols and figure out how to use smart-contracts and find business partnerships to make those available to users all takes money.  As those are good outcomes, and require more money, you have to have a profit to fuel it, you cant rely on investors to keep putting in more rounds!

Its quite feasible to make money without being controlling, proprietary, centralising or evil.  We certainly aim to try.

Adam

Patent trolls dont feel the need to be concrete - there are patents on how to run a CPU on top of homomorphic encryption before there is usable performance FHE.

The world badly needs patent reform.  Ban patents, copyright cant be too soon IMO.

Adam

(Summary being from the reddit attack described at the above link that a miner with > 50% DoS's transactions on bitcoin chain (ie does not accept any transactions just mines empty blocks on the main chain people are trying to use) until people either abandon bitcoin or capitulate and adopt the rules the DoS miner is threatening.) 

Yeah that is kind of logical, there are some caveats.  The miner has a lot of capital invested maybe > $300m to do that now.  (You can be sure most pool miners would abandon a pool that did that.)  This is going to be disruptive to bitcoin confidence and price and that affects the value of bitcoins they are mining, or the equipment itself which is worthless if bitcoin fails or crashes badly as a result.  Dangerous game to play with a $300m good behaviour bond.  Secondly while they are DoSing bitcoin, they are not mining coins nor on their proposed alternative chain at any kind of usable speed as they have almost no hashpower left (if they have 55% and they're using 53% to DoS bitcoin that gives them 500min blocks if the new chain has the same difficulty.  If the new chain has reset difficulty the honest miners might DoS it in retaliation (block transactions there).  Now if the attacker had maybe 70% they could dominate both chains reliably.

This is beyond mining a new hard-fork protocol version (which honest users and full nodes would ignore) and more DoS warfare to kill the main chain to give users a choice of no transactions or to fold and use the new chain.  I would imagine users would be annoyed enough about that so as to be a scenario where the bit red button might get pushed - destroying the $300m capital of the attacker (and the $245m of the rest of the miners who probably are going to sue the attacker, and its not easy to hide the delivery and location of $300m worth of mining equipment drawing perhaps a GW of power.)


Yep its a unfortunate.  This is why decentralisation of mining is important.


I dont think you cant really technically enforce freedom from security issues or freedom from bad economic parameter choices kind of stuff, thats probably AI / halting-problem type difficulty which we dont know how to do.  You could certainly make some best practices statement about how security should be achieved, and acceptable parameters and configurations for user safety, and have someone competent audit that and certify their audit.


Well bitstamp isnt trying to algorithmically peg - they're saying trust our host security, cold wallet physical security, audit, governance / separation of duty etc.  Ie you are trusting humans to manage an IOU.  (Not saying bitstamp is a bad exchange).

Adam

You know my experience of flame fests and trolling is the effective way to deal with it is to create signal, let the ad-hominems slide and circle back to the interesting tech/policy discussion.

Anyway its your thread so if you two enjoying saying fuck-you too to each other all-day long, knock yourself out.


Nopes dont know him personally and i was presuming he was in the thread for a long time.

You know a lot of people think sidechains are the coolest thing since bitcoin itself.  He might be one of those people?

Adam