Critical problems with Trestor - Read before use

[trestorfoundation]

Dear Skang,

Can you send money from Canada to India using Trestor? Yes.
Is sending money to India & holding it allowed, as per Indian or Canadian laws?


Trestor has created a digital "Store of value" and yes it can potentially be used for Remittance, but we are not a money transmitter and do not provide money transmission services. Its obviously clear how people can use Trests to send value across the world for free.

Cryptocurrency is a very new industry with practically zero regulation, as governments begin to regulate cryptocurrencies, Trestor will be proactive and comply by it.

Regulation always lags behind technology.

You can think of the current cryptocurrency situation as that of Internet in the 90's. It took Indian government more than 10 years to make sense of Internet and thereby enact the first Indian IT law on 17th October 2000.


Trestor Team
www.trestor.org
@trestorconnect 

[skang]

Right. Except trestor is not a cryptocurrency.
Just because it is a digital currency using cryptography doesn't make it a cryptocurrency.

[trestorfoundation]

Dear Skang,

There is no legal definition what constitutes a Cryptocurrency under Indian Laws.

Some additional clarifications:

Proof-of-work is not required, a consensus is enough. (Thus trestor validators' consensus is needed to be trusted & they can change anyone's trests.)


If 80% of Trestor validators collude, they can make/block any transaction, wheras in bitcoin if 51% of miners collude, they can make/block any transactions and they can also rewrite the entire history of the blockchain.    

Value of a cryptocurrency is whatever people exchange it for. Trests however have fixed rate (No other cryptocurrency "sells" their currency.)


As more and more trests are out in the market, price of a trest will change as per market dynamics, Trestor Foundation's job is not to fix the market but to create a smooth transition from pegged to unpegged.

Trests are 100% pre-mined


Yes, 100% of the trests have been pre-assigned to Trestor Foundation. There is no mining in Trestor network.

When you buy trests, its not a purchase but a donation, so there is no legal protection for you.


Yes, Trest is neither Goods nor Service, Trest is itself the final settlement, it is a "Store of value"

The right to become a validator is by "buying" it from trestor but there is no return as profit!


Trestor is in talks with some of the leading academic institutions who have shown interest in running Trestor node. After final selection, they will be given 100 million (locked) Trests each, 2% Trests will automatically unlock every year and can be utilized by the institution to fund its research.    

If there is a dispute, there is no history and resolving it is purely a matter of Trestor's discretion.


The primary reason we chose not to have a typical blockchain is because a 51% attack can rewrite the entire history, Trestor Network agrees to the state of the ledger every 10 - 20 seconds, which is equivalent to taking a picture of our ledger every 10 - 20 seconds and sharing that picture with the world. In case of any doubt the network goes back to the latest picture, but in no circumstance, even with the whole network colluding can the picture change. Trestor's history cannot be Overwritten.

Trestor Team
www.trestor.org
@trestorconnect

[trestorfoundation]

Dear Skang,

Trestor team will like to thank you for creating this thread, it definitely helped us improve our communication.

We now understand that explaining the story is almost as important as the story itself.

Thank you once again.

Trestor Team
www.trestor.org
@trestorconnect

[chokho]

I will further add to the answers above:

The right to become a validator is by "buying" it from trestor but there is no return as profit!

Not true. Anyone can run a validator. This is somewhat similar to proof of stake systems. One needs to have a defined minimum amount of Trests in their account to participate in voting. To bootstrap the network initially, the amount of Trests required to run a validator node is high so that attacker has no incentive to add node(s) and gain 80% of consensus to corrupt the network. This is why initially Trestor will give Trests to selected universities (read: trusted entities) so that they support network by running a validator.

As more nodes are added to the network, by consensus of existing validators, this minimum amount reduces and it will get easier for an individual to participate in voting. But at the same time it becomes harder for attacker to achieve 80% consensus. The idea is to have sufficiently big amount (or money) required for someone to break or corrupt the network; which is same as bitcoin where it is calculated in terms of computing power and which translates to money again.

About Incentive or Profit: Projects like TOR, Torrent network, Wikipedia and many others are successfully running despite of having no incentive for people helping/volunteering for it. Actually the incentive doesn't have to be in terms of money. It is just that people really enjoy to help a good cause.

If there is a dispute, there is no history and resolving it is purely a matter of Trestor's discretion.

Again, not True. Simply put, it is NOT Trestor's discretion. Trestor, or anyone else for that sake, can not change history, or the closed ledger (UNLESS they have 80% of network control, in which case they can rewrite all of the network. This number is just 51% in case of Bitcoin). Also, The network stores history and the current state can be verified by history or vice-versa (so if Trestor or anyone changes anything in ledger or history, it will be easily detectable). Important thing to note here is that history does not define current state, which makes it different from bitcoin. Validators vote for the ledger and once there is a consensus, ledger is updated and closed with it's hash (and history is updated). Also as mentioned earlier, a 51% attack on bitcoin can also change history, here one would have to gain 80% which is even more difficult as explained in the answer above.

Trests however have fixed rate.

Right. Except trestor is not a cryptocurrency.
Just because it is a digital currency using cryptography doesn't make it a cryptocurrency.

Umm, again incorrect. Say if there is a exchange (or bitcoin foundation itself) who is always willing to buy/sell any number of bitcoins at USD 300. The value of bitcoin rises to USD 300 and stays there (but yeah, no one would ever do that).
In this case, Trestor Foundation is willing to exchange any number of trests for 0.01 USD, so it may seem like Trests have a fixed value, which is not the case. No one is bound to exchange Trests at this rate, they can exchange it at a lower or higher rate (subjective value). This also answers the legality of Trestor network in India or anywhere and how Trest is a cryptocurrency.

Trests are 100% pre-mined and owned by Trestor Foundation.

Yes that is true. Trestor Foundation is committed to nourish and grow Trestor Network. Assigning 100% of trests at genesis to Trestor foundation helps the network in multiple ways.

In bitcoin network, one can get bitcoins by mining (thus helping the network). In trestor network, one can get Trests by volunteering, contributing to code, helping spread the word, running a validator (and thus helping the network).

So instead of competing (mining) with each other and wasting resources, people can help the cryptocurrency network in many other ways. It is not limited to buying expensive hardwares to mine.

When you buy trests, its not a purchase but a donation, so there is no legal protection for you.

I am unable to understand what sort of legal protection is required?
Getting Trests from Trestor foundation is comparable to mining. Is there any sort of legal protection required when one mines bitcoins? No, because the bitcoins themselves can be verified and same is with Trests because that is how cryptocurrencies are designed.


We will be happy to answer any subsequent questions. Also, if anything requires more clarification, feel free to ask.

[stv]

This is Stephan, one of Trestor's protocol architects.

Problems that Trestor's developers said they did not understand:
1. Trests only get sent from one app to another if they are validated by validators. The right to become a validator is by "buying" it from trestor but there is no return as profit! So why would someone become a validator? Either to earn from fees or to earn by selling trests. Thus it becomes a pyramid scheme where investors who will continue to recruit other investors for an incentive that is presented as an investment opportunity - the right to sell a particular product or to earn fees from them.

Not true. The idea is that Trestor Foundation provides deposits to institutions (e.g. universities), which are willing to voluntarily run a node. Pretty much like Tor nodes. As running a node does not require vast resources like mining, it can be easily run by any willing institution.
The more independent institutions from different jurisdictions are getting on board, the more decentralized control over the network will become.

2. If there is a dispute, there is no history and resolving it is purely a matter of Trestor's discretion.
3. Even if trestor starts saving the history, there is no proof of it's correctness since they do not use proof-of-work or anything. thus every new participant in the network needs to trust the pre-existing validators. Thus also vulnerable to mitm.

That claim does not make sense. It is up to the majority of validators, which after some time will not be controlled by Trestor.

4. If a majority decides that a transaction is valid, that transaction is validated, irrespective of any algorithm preventing trests to be created out of thin air; not even Trestor, because again, they have no proof-of-work.

What? That statement makes me think that you do not understand Bitcoin.

5. In case of a double spend the transaction gets stuck, since validators can't vote against themselves. To resolve this they have implemented time-bound validity of nodes. This doesn't solve it. Consider a scenario where first 50% validated A->B and second half validated A->C at the same time. The transaction gets stuck. Votes expire after time t and now the first half votes for A->C & the transaction gets stuck again & so on..

A (honest) node cannot vote for a transaction conflicting with a transaction it previously voted on, that is correct. But your analysis is based on assumptions about our protocol which are incorrect. A node can still get knowledge about the conflicting transaction. At that point, the node will blacklist the corresponding account until all those transactions are invalid (plus some buffer).

[skang]

Cool. Now it is up to the reader to find the flaws in my questions & your answers.

You guys satisfied with the thread title etc? Okay if I lock it & move on?

[chokho]

So far, I guess, by reading the above answers one can conclude that Trestor is a cryptocurrency and shares the same legal status as Bitcoin across the world.

We would encourage everyone to bring out anything specific that has been left unanswered or unclear.

We do not want anyone in the community to have any sort of uncleared doubts.

[stv]

Sorry, but I cannot let this statement unchallenged:

4. If a majority decides that a transaction is valid, that transaction is validated, irrespective of any algorithm preventing trests to be created out of thin air; not even Trestor, because again, they have no proof-of-work.

You are assuming that there is an “algorithm” in Bitcoin preventing the creation of new coins “out of thin air”. That assertion is full of misconceptions. The creation of coins is defined by the protocol. The protocol is, whatever the majority of miners defines it to be. The Bitcoin protocol is not unchangeable, quite the opposite: It changes a lot over time in order to improve Bitcoin. This also comes with bad side effects like the fork a few day ago:

Coindesk: Double Spending Risk Remains After July 4th Bitcoin Fork

The only thing that prevents miners from changing the number of newly created coins is their incentive to not devalue their reward. This can easily change in the future as default reward is going down and income from fees may not rise to the same level.

The situation is the same with Trestor validators. They will reject any transaction that is not covered by existing accounts, rendering creation of coins impossible. It is in the hand of the majority how all these aspects of the protocol are defined, and maybe changed in the future.

And all of this by the way has nothing to do with proof-of-work.

[Rotten Egg]

Trestor - A confirmed cryptocurrency scam ! [Part II]

https://bitcointalk.org/index.php?topic=1112771.0

[chokho]

http://dumpcast.com/wp-content/uploads/Funny-Facepalm-Collection-Pic-7.jpg

[trestorfoundation]

Dear Rotten Egg,

Skang is a reasonable individual and he would probably be the last person to feel scared or intimidated in any way.

Thank you for calling all of our parents rich!!

Nice pseudo-name, Suits you.

Trestor Team
www.trestor.org
@trestorconnect