Fundamental flaw in consensus algorithms?

[TPTB_need_war]

This is just an idea which I would like to get feedback on.

I am thinking the fundamental flaw in any consensus algorithm that relies on some asset, is that the economic game theory is such that the asset will concentrate towards a winner take all over time.

For example in proof-of-stake or proof-of-importance (reputation+stake) the miner with sufficient stake and/or reputation can keep the minority chain sufficiently paced but more often behind the other chain such that most vote on the other chain, but ultimately he uses his power to vote the minority chain to the permanent lead thus orphaning all the rewards of the lesser stakes who were fooled into voting for what they thought was statistically the more likely longer chain. There are other variants of this strategy.

In proof-of-work selfish mining works in general when the adversary has at least 33% of the hashrate, and 25% under some network configurations.

One potential solution I see to this problem is to make mining an unprofitable asset burning operation.

But if this is accomplished by burning coins, eventually end up with 0 money supply.

Or I did I think show it might be possible to eliminate the selfish mining strategy in proof-of-work but at the cost of penalizing the honest party to a double-spend, by paying all chains proportionally. I am not clear how this could work for non-proof-of-work.

[gmaxwell]

Section 4.4 of  https://download.wpsoftware.net/bitcoin/pos.pdf

Seperately, selfish mining is basically orthorgonal. And as you note, it only works when a miner has a very high proportion of the hashrate. A system where any participant has anywhere near one quarter of the authority isn't all that decenteralized.

[monsterer]

Proof of burn has very similar characteristics to POW, it will centralise in the same way - those with the most burn capacity will win the competition for block production.

If you make mining non profitable, though, there will be no incentive to mine.

[TPTB_need_war]

If you make mining non profitable, though, there will be no incentive to mine.

I don't believe that is true:

https://bitcointalk.org/index.php?topic=1159591.msg12219576#msg12219576

But idea still needs to be proven in a real design.

[TPTB_need_war]

Section 4.4 of  https://download.wpsoftware.net/bitcoin/pos.pdf

This is my long standing (since 2013 when I as AnonyMint was debating with the author of Decrits) objection to proof-of-stake (a.k.a. proof-of-share was my misnomer at the time) that the entropy of the system is bounded and thus can be gamed. I think Vitalik refuted Andrew's other arguments to some extent (arguing both PoS and PoW have some subjectivity), yet this entropy argument remains true afaics. Thus I think it should be emphasized.

Note that if PoS does indeed have this inherent flaw, it is likely those who are aggregating stake will try to hide this and thus PoS coins may have no metric of how centralized they are. Of course a similar argument can be made against PoW in that we don't know which pools are really controlled by the same entity behind the curtain, but the distinction is the point below...

Seperately, selfish mining is basically orthorgonal. And as you note, it only works when a miner has a very high proportion of the hashrate. A system where any participant has anywhere near one quarter of the authority isn't all that decenteralized.

Agreed proof-of-work as it is formulated by Satoshi is resistant to the above self-reinforcing collapse into centralization (a.k.a. entropy collapse) if the maximum hashrate that can collude for attacking the network is less than some figure between 25 - 51% depending on network propagation vulnerabilities.

I'd appreciate anyone pointing out any errors in this post.

[monsterer]

I don't believe that is true:

https://bitcointalk.org/index.php?topic=1159591.msg12219576#msg12219576

But idea still needs to be proven in a real design.

Not sure what point you were linking to there?

Isn't this statement just obviously true, though for any rational miner?

[TPTB_need_war]

I don't believe that is true:

https://bitcointalk.org/index.php?topic=1159591.msg12219576#msg12219576

But idea still needs to be proven in a real design.

Not sure what point you were linking to there?

Isn't this statement just obviously true, though for any rational miner?

Maybe try reading johoe's lottery statement again. Is playing Lotto profitable? Do people do it?

I do not believe Lotto is sufficient, because the payoff it so small. But there are more strategies within that generative essence concept that I think do work. Please do not expect me to reveal my secrets before they are published.

[monsterer]

Maybe try reading johoe's lottery statement again. Is playing Lotto profitable? Do people do it?

I do not believe Lotto is sufficient, because the payoff it so small. But there are more strategies within that generative essence concept that I think do work. Please do not expect me to reveal my secrets before they are published.

People gamble actively, not passively. This is why this doesn't work for rational miners - they are always profit motivated. Now, if you were to auction off the block reward, then you would be in a situation very similar to POW. The only trouble is, voting will rely on transaction which themselves require consensus.

[TPTB_need_war]

Maybe try reading johoe's lottery statement again. Is playing Lotto profitable? Do people do it?

I do not believe Lotto is sufficient, because the payoff it so small. But there are more strategies within that generative essence concept that I think do work. Please do not expect me to reveal my secrets before they are published.

People gamble actively, not passively. This is why this doesn't work for rational miners - they are always profit motivated. Now, if you were to auction off the block reward, then you would be in a situation very similar to POW. The only trouble is, voting will rely on transaction which themselves require consensus.

Please do not expect me to reveal my secrets before they are published.

[monsterer]

Please do not expect me to reveal my secrets before they are published.

I take it you are already familiar with Proof of Ticket?

https://bitcointalk.org/index.php?topic=1016517.0

He auctions off the block reward to the highest bidder - but you still have the problem I mentioned.

[TPTB_need_war]

Please note that Gregory Maxwell moved this thread from the Bitcoin Technical & Discussion thread. I explained more about this fraud at the following linked post:

https://bitcointalk.org/index.php?topic=1049048.msg12231625#msg12231625

Note I have added a poll to this thread.

The poll would have been offtopic before, but now it is unfortunately ontopic.

The technical thread was unfortunately politicized by the aforementioned person.

[YarkoL]

So now discussion of consensus
algos other than PoW are consigned to altcoin discussion?

I'm well aware that this section serves as
the equivalent of the sewers where disagreeable
posters get dropped (by pushing a red button that
opens a trapdoor below them - whoosh), but this
is getting ridiculous.

BTW welcome back AnonyMint.

[r0ach]

If you make mining non profitable, though, there will be no incentive to mine.

I don't believe that is true:

https://bitcointalk.org/index.php?topic=1159591.msg12219576#msg12219576

But idea still needs to be proven in a real design.

The only easy answer to that is a state sponsored coin where all mining is linked to a social security number and each number is capped at x reward per day.  The government would just manufacture a few million numbers for themselves and siphon off all the transaction fees until they accumulated all the wealth though.  There's no easy answer in getting out of the finite resource linked to the blockchain.  Combining proof of capacity and proof of stake to cancel out each other's weakness sounds promising to me.

[TPTB_need_war]

So now discussion of consensus
algos other than PoW are consigned to altcoin discussion?

Actually the discussion was applicable to Bitcoin's PoW also, because the selfish mining attack means any party that controls 33% of the network hash power can in theory accumulate wealth disproportionately faster than the rest of the network thus the fundamental flaw I described in the opening post. With certain control over the network propagation the required percentage drops as low as 25%. This can be happening now, indicators might be the orphan rate and statistics of how often two block solutions broadcast within the network propagation delay.

Perhaps Maxwell doesn't like the fact that I have a solution to that problem and am going to destroy Bitcoin and his bloated $24 million dollar vulture capital morass.

Maxwell is a smart guy, but selfish, closed source assholes (censoring technical discussion is closing source) can't win against the entire community of humanity. Does he really think the community can't pool enough resources to hire mathematicians and cryptographers as smart or smarter than him   He has a personality disorder (or vested interest but he didn't decide to acquire his position of overlord without the personality disorder in the first place) that I think Eric S. Raymond described well:

http://esr.ibiblio.org/?p=4901

National styles in hacking
Posted on 2013-04-11 by Eric Raymond

The German: Methodical, good at details, prone to over-engineering things, careful about tests. Territorial: as a project lead, can get mightily offended if you propose to mess with his orderly orderliness. Good at planned architecture too, but doesn’t deal with novelty well and is easily disoriented by rapidly changing requirements. Rude when cornered. Often wants to run things; just as often it’s unwise to let him.

[Come-from-Beyond]

I am thinking the fundamental flaw in any consensus algorithm that relies on some asset, is that the economic game theory is such that the asset will concentrate towards a winner take all over time.

What if a system makes a winner to give away his "power" if he comes close to the point of no return?

[TPTB_need_war]

I am thinking the fundamental flaw in any consensus algorithm that relies on some asset, is that the economic game theory is such that the asset will concentrate towards a winner take all over time.

What if a system makes a winner to give away his "power" if he comes close to the point of no return?

That is a common argument that the society will bolt into a minority hash power (or minority stake) chain with the majority of users. However the problem with that in the context of all published designs I've seen, is that we all know well that the users tend to continue using (preoccupied, irrelevant to their priorities, etc) what they use and those tend to be controlled by the same vulture capitalists who will centralized the mining, e.g. Coinbase. Blockchain.com (see below), etc.. However you have identified conceptually what my design in effect technically accomplishes.

Do not trust any vulture capital endeavors. They are all beholden to the capitalist network that enslaves the world. That is for programmers whose priorities are to get rich on some fat compensation with stock options and not on changing the world. You'll find nearly no programmers of my talent and capabilities who are willing to work with no guarantees and only $2000 monthly (self-funded for the past 2 decades up until this month) in survival goods expenses. Believe me, I've tried to find them and failed.

Maxwell's Blockstream (whether he realizes it or not) is probably just another Hegelian dialectic gambit by the powers-that-be, where there is a good and bad car salesman (at the same dealer), so the good one looks less worse than the bad one and fools you into a horrible deal.

Traitor! We must replace this shit company. Not with politics. With superior code.

The plutocrats are pushing for their NWO electronic (digital) currency. Yet another clue of where GavinCoin is headed.

http://blog.blockchain.com/2015/08/08/bitcoin-news-for-the-week-of-8315/

Blockchain CEO Peter Smith traveled to SE Asia with British Prime Minister David Cameron and other fintech executives to speak with senior regulators, bank CEOs, and telecommunications executives about the future we are working towards as an industry. - See more at: http://blog.blockchain.com/#sthash.ggmqlh9f.dpuf

[Come-from-Beyond]

You'll find nearly no programmers of my talent and capabilities who are willing to work with no guarantees and only $2000 monthly...

Modesty is not the strongest of your qualities as I see, hehe.

[TPTB_need_war]

You'll find nearly no programmers of my talent and capabilities who are willing to work with no guarantees and only $2000 monthly...

Modesty is not the strongest of your qualities as I see, hehe.

Working for $2000 a month is not modest, when in fact I earned up to a $million per year in inflation adjusted dollars in the past   And I earned all my big money (which is by now expended) from self-funded startups on my own long winded sacrifices, not from fat salaries and stock options pumped up by vulture capital. I actually walked away from an $80K annual salary and $1.2 million in stock options vested in 3 years back in 1995. Inflation adjust that.

http://www.shadowstats.com/inflation_calculator?amount1=80000&y1=1995&m1=7&y2=2015&m2=7&calc=Find+Out

$80,000 July 1995
$125,000 July 2015 (liar BLS stats)
$455,000 July 2015 (Shadowstats corrected stats)

If there are any programmers who are capable and willing to take coins, they are free to message me. I haven't been able to find any. And believe me, I have tried. Rather take the prior post as an expression of frustration, consternation, and stern realization.

People who focus on ego are time wasters. I hope that isn't you (I see the "hehe").

P.S. Something I just deleted from an earlier draft of my white paper on the consensus network because it is redundant now in the final version:

The distinguishing characteristic of the longest chain of proof-of-stake system is the closed entropy which is conceptually no more random than a preset seed in a random number generator; and not that the basis of the proof-of-stake is subjective[Poelstra2015] because proof-of-work is also based on subjective altruistic sacrifice[Buterin2015-2] as an undersupplied public good[Buterin2015-1].

[Buterin2015-1] Vitalik Buterin, Proof of Stake: How I Learned to Love Weak Subjectivity, 2014-11-25. https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/

[Buterin2015-2] Vitalik Buterin, The P + epsilon Attack, 2015-01-29. https://blog.ethereum.org/2015/01/28/p-epsilon-attack/

[Poelstra2015] Andrew Poelstra, On Stake and Consensus, 2015-03-22. https://download.wpsoftware.net/bitcoin/pos.pdf

[Come-from-Beyond]

[Poelstra2015] Andrew Poelstra, On Stake and Consensus, 2015-03-22. https://download.wpsoftware.net/bitcoin/pos.pdf

By referencing papers of such bad quality you lower credibility of your own paper very much.

[TPTB_need_war]

[Poelstra2015] Andrew Poelstra, On Stake and Consensus, 2015-03-22. https://download.wpsoftware.net/bitcoin/pos.pdf

By referencing papers of such bad quality you lower credibility of your own paper very much.

Didn't I just write I deleted it from a rough draft   Wasn't I criticizing that paper even in the text I deleted   How about I delete this post and you delete yours? Deal? Or do you prefer your trolling to remain on public display. Everyone can see what you are trying to do here. Is politics all you can do?

Readers judge for yourself:

Imagine this highly technical discussion comparing PoW and PoS can't happen in the Bitcoin Technical & Discussion forum, because the overlord Gregory Maxwell moves it to the Altcoin Discussion thread.

This forum is private property. Its owner and moderators have the right to do anything they wish. Is Gregory Maxwell bad because he moved your topic? I wouldn't judge without hearing his reasons.

Does the Nxt community condone your trolling? I see you were a prominent person at one time in that community. I have no fight with that community. They are working on many interesting technologies and appear to be agnostic to any particular technology as long as they get the best coded into their ecosystem.