The state of crypto - The only serious thread on the subforum

[r0ach]

State of Crypto v0.04 changelog
-------------------------------
Added to DPoS section:

I)  A common complaint of DPoS is that it can't be decentralized because it has the word "delegated" in the title, yet anyone mining with a pool in PoW is doing the exact same thing.  Satoshi made the claim of one CPU, one vote, yet you are delegating your vote to the pool owner in PoW.  Some argue you are not delegating in PoW because you can solo mine.  While this statement would be technically correct, the miniscule portion of the Bitcoin userbase able to do so makes it functionally infeasible.  It's only a question of what percent of the hash rate is being delegated.


Additional
---------
I will continue to refine the original post trying to remove ambiguous statements, fluff parts, etc.

[1714003320]

1714003320

[1714003320]

1714003320

[1714003320]

1714003320

[smooth]

State of Crypto v0.04 changelog
-------------------------------
Added to DPoS section:

I)  A common complaint of DPoS is that it can't be decentralized because it has the word "delegated" in the title, yet anyone mining with a pool in PoW is doing the exact same thing.  Satoshi made the claim of one CPU, one vote, yet you are delegating your vote to the pool owner in PoW.  Some argue you are not delegating in PoW because you can solo mine.  While this statement would be technically correct, the miniscule portion of the Bitcoin userbase able to do so makes it functionally infeasible.  It's only a question of what percent of the hash rate is being delegated.

I disagree with this analysis. In analyzing incentives it is often important to have an option to do something even if that option in rarely exercised in practice. For one thing, it puts a cap on the degree of abuse that can be performed by those who can be opted out. Now you can vote out particular delegates in DPoS but you can't opt out of the delegate system, you can only do a "meet the new boss same as the old boss" switch. If the abuses are inherent in the power structure, then replacing Boss Alice with Boss Bob will not fix them.

However, in Bitcoin if the pool system were to be became sufficiently abusive (but it likely won't by the argument in the third sentence of the previous paragraph), miners really could just opt out entirely and solo mine. It would have a cost, but the cost is bounded and even measurable.

[TPTB_need_war]

I disagree with this analysis. In analyzing incentives it is often important to have an option to do something even if that option in rarely exercised in practice. For one thing, it puts a cap on the degree of abuse that can be performed by those who can be opted out...

However, in Bitcoin if the pool system were to be became sufficiently abusive (but it likely won't by the argument in the third sentence of the previous paragraph), miners really could just opt out entirely and solo mine. It would have a cost, but the cost is bounded and even measurable.

This is another epic logic fail.

You love to argue ad nauseum points that are not viable.

Fact is that mining will become ever more centralized in Satoshi's design because of the economies-of-scale of ASICs and electrical power. I believe there was maybe even a research paper that proved something along these lines?

The fundamental problem is the mining is done for profit. For as long as that is the case, ASIC farms (or Larry Summers' 21 Inc. economies-of-scale) and subsidized, industrial/government/utility scale electricity will rule.

Also due to bandwidth issues and that every full mining node has to validate every transaction, scaling transaction volume will force centralization.

These are precisely some of the core issues my Delegated Transaction Consensus design is attempting to fix.

Also your argument about sacrificing cost is nonsense, because the low cost leader will take hash rate from the others over time by reinvesting higher rates of return.


Edit: Smooth has a valid point if no entity (or collusion of entities) has 51% of the hash rate because then someone could sacrifice mining losses in return for censorship resistant way to post transactions to the block chain. So in that sense, my word "nonsense" is incorrect and I apologize. But the huge glaring flaw is that once the State can regulate 51% of the mining power (which is destined to be centralized), then Smooth's caveat no longer applies. And this is my overriding concern, so that is why I often downplay this caveat that smooth points out.

Edit#2: however if hashrate is very large then smooth's caveat is really pointless because who has enough hash rate to push their transaction onto to the block chain without a pool. And again Satoshi's design doesn't enforce that pools must allow getblocktemplate. If your hashrate is not too small, you can just mine on any pool that offers getblocktemplate and wait a long time until you win a block solution to insert your transaction, or just mine a long time solo. Many could potentially join together to pool their resources to mine at a loss to have ready access to censorship resistance, but unless you are using P2Pool (which can be attacked with share withholding attacks) then the State might target your pool server (but again I think it is easier for them to just target 51% of the hash rate for regulation requiring all transactions to carry KYC, since you might place your server behind an anonymity network although this will be very difficult to do in Satoshi's design because of the bandwidth requirements). And now you start to get some inkling of why my consensus network design overhaul is so important.

[smooth]

I disagree with this analysis. In analyzing incentives it is often important to have an option to do something even if that option in rarely exercised in practice. For one thing, it puts a cap on the degree of abuse that can be performed by those who can be opted out...

However, in Bitcoin if the pool system were to be became sufficiently abusive (but it likely won't by the argument in the third sentence of the previous paragraph), miners really could just opt out entirely and solo mine. It would have a cost, but the cost is bounded and even measurable.

This is another epic logic fail.

You love to argue ad nauseum points that are not viable.

Fact is that mining will become ever more centralized in Satoshi's design because of the economies-of-scale of ASICs and electrical power. I believe there was maybe even a research paper that proved something along these lines?

I'm not aware of such a paper.

The fundamental problem is the mining is done for profit. For as long as that is the case, ASIC farms (or Larry Summers' 21 Inc. economies-of-scale) and subsidized, industrial/government/utility scale electricity will rule.

Also due to bandwidth issues and that every full mining node has to validate every transaction, scaling transaction volume will force centralization.

Maybe correct, but depends on assumptions about future costs and technology which are hard to make soundly with certainty. Bandwidth, etc. may become too cheap to matter. The new iPhone has 300 megabit (peak; ideal) wireless capability. Comcast is promising to upgrade their entire network to 1-10 gigabit within three years without needing fibre to the home.

In any case, that's not the same delegation argument r0ach was making. Pool mining and centralized mining is not the same thing.

These are precisely some of the core issues my Delegated Transaction Consensus design is attempting to fix.

Great. Go finish it.

[TPTB_need_war]

smooth please see the edit on my prior post. I was rushing when I wrote that because my gf was giving me "3rd call" on "come eat breakfast".

I realized you have a valid point in the non-51% attack case. Again please bear in mind that I am most concerned about the case where the G7 can regulate 51% of the large centralized mining corporations, such as 21 Inc. which is coming up fast.

[rikkejohn]

Any block chain has the problem that a few big players can collude, whether they are large stakeholders or large hashpoolers.

That's true that in all blockchains stakeholders/hashpower can collude

My white paper will be the first to show the above are false assumptions.

I am telling you I am going to shock the world.

I don't do small things. I rock the Titanic.

Call this hype without details. Fine. But I can't let you write fallacious statements without pointing them out.

By pointing them out using a fallacious statement yourself.  The irony. Maybe if you spent less time beating your dog we'd get more sense from you.

[TPTB_need_war]

The fundamental problem is the mining is done for profit. For as long as that is the case, ASIC farms (or Larry Summers' 21 Inc. economies-of-scale) and subsidized, industrial/government/utility scale electricity will rule.

Also due to bandwidth issues and that every full mining node has to validate every transaction, scaling transaction volume will force centralization.

Maybe correct, but depends on assumptions about future costs and technology which are hard to make soundly with certainty. Bandwidth, etc. may become too cheap to matter. The new iPhone has 300 megabit (peak; ideal) wireless capability. Comcast is promising to upgrade their entire network to 1-10 gigabit within three years without needing fibre to the home.

In any case, that's not the same delegation argument r0ach was making. Pool mining and centralized mining is not the same thing.

You know I am all for not conflating separate concerns, so I concede.

But again the 51% attack (if you believe it is realistic the G7 or G20 and other government unions can regulate that much mining) renders the distinction almost entirely effectively invalid.

But I will repeat the point I've made to you this year (recently) that as you raise the bandwidth requirements, you reduce the diversity of ways that mining can be connected to the network which thus increases the State's ability to regulate you (i.e. effectively centralize mining w.r.t. to censorship resistance and KYC) and also decrease network fault tolerance issues such as network slowdowns w.r.t. to orphan rate which then impacts double spends, etc.. You can't win the argument that big O (or theta O) scaled higher bandwidth requirements beats a design with lower big O bandwidth requirements scaling, all other factors being equal. I know you did not argue higher bandwidth is superior rather you seem to be arguing it might be a mitigated issue. And I am arguing that the failure potentials are significant and that we need to improve on all aspects to maximize probability of retaining some attributes of resilience such as censorship resistance.

Also there is the issue of network fragmentation, which none of the consensus network designs deal with at all. They just collapse into chaos of double-spending.

Also on that chart you posted upthread about electric consumption and hashrate declining over time due to block reward halving, that excludes the expectation that transaction rates and fees will be increasing and assuming the market is competitive then hashrate should be higher than it would be due to value of block rewards alone.

r0ach's overall point is we are headed for centralized mining any way.

On that thesis he is correct, unless someone presents a superior consensus network design.

[venlo]

The future will be bitcoin with merged mined coins. Merge mined chains are secure and cheap to run. They also enable much more txs. It's really a riddle to me how people haven't begun to support merged mining more as it solves a lot of the issues mentioned in OP

[TPTB_need_war]

By pointing them out using a fallacious statement yourself.  The irony. Maybe if you spent less time beating your dog we'd get more sense from you.

I did not make a 'fallacious' statement. There is a difference between a 'claim' and a 'fallacious' statement. Perhaps you could use the adjective 'vacuous' instead to qualify my statement.

I would argue that inferior logic and vocabulary skills is an indicator of which of us is likely to be correct on the final resolution of my 'claim'.

[sidhujag]

With an N delegate dpos you have option to vote out for anyone else based on the demand for N delegates if power structure is corrupt then because the barrier of entry is so little then anyome outside of that structure can get voted im (democratic and viable once a smooth distribution of tokens over many years of accumilation amd distribution cycles). As its smoothed out more it becomes harder and harder to have a corrupt power structure retaining control.

[TPTB_need_war]

The future will be bitcoin with merged mined coins. Merge mined chains are secure and cheap to run. They also enable much more txs. It's really a riddle to me how people haven't begun to support merged mining more as it solves a lot of the issues mentioned in OP

Afaik, merged mining doesn't change anything about the centralization of mining. It enables mining multiple chains, but that doesn't mean the miners are any more decentralized. Am I missing something about merged mining?

[TPTB_need_war]

I)  A common complaint of DPoS is that it can't be decentralized because it has the word "delegated" in the title...

Just like when I delegate the transfer of my internet packets to my ISP and all the router hops along the way, thus my participation in the internet is no longer decentralized.  

That is the fabulous logic of Smoothie which he tried to ram down our throat 5 or more times.

As I tried to explain to that young punk several times, if the routers are fungible, replaceable, and can't be monopolized, then the packets find their way to the destination, without need to trust or centralize. Delegation should not be conflated with centralization, nor trust. We told him this 5 or more times, yet he still insisted.

And he claims to be a software developer. I wouldn't let him any where near my code.

By my own profession (software developer)

[r0ach]

I disagree with this analysis.

I have explained my point in much greater detail here as a separate topic in the main Bitcoin general forum:

The Bitcoin consensus mechanism is incorrectly labeled Proof of Work

https://bitcointalk.org/index.php?topic=1176835.0

[TPTB_need_war]

With an N delegate dpos you have option to vote out for anyone else based on the demand for N delegates if power structure is corrupt then because the barrier of entry is so little then anyome outside of that structure can get voted im (democratic and viable once a smooth distribution of tokens over many years of accumilation amd distribution cycles). As its smoothed out more it becomes harder and harder to have a corrupt power structure retaining control.

Voting systems are a winner take all paradigm, because they create of power vacuum of who can do the most corruption can offer the greatest spoils to the victors. So the power structures will align towards who can game the system to extract the most value for those who join the corruption. Votes are bought by sharing the spoils.

Vitalik Buterin explained this as an undersupplied public good:

https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/

Unfortunately, altruism-prime cannot be relied on exclusively, because the value of coins arising from protocol integrity is a public good and will thus be undersupplied (eg. if there are 1000 stakeholders, and each of their activity has a 1% chance of being “pivotal” in contributing to a successful attack that will knock coin value down to zero, then each stakeholder will accept a bribe equal to only 1% of their holdings).

The problem was explained by Mancur Olsen in his Logic of Collective Action.

Eric Raymond, the 150 - 160 IQ genius progenitor of the term "open source", wrote an essay about this Some Iron Laws of Political Economics.

[sidhujag]

With an N delegate dpos you have option to vote out for anyone else based on the demand for N delegates if power structure is corrupt then because the barrier of entry is so little then anyome outside of that structure can get voted im (democratic and viable once a smooth distribution of tokens over many years of accumilation amd distribution cycles). As its smoothed out more it becomes harder and harder to have a corrupt power structure retaining control.

Voting systems are a winner take all paradigm, because they create of power vacuum of who can do the most corruption can offer the greatest spoils to the victors. So the power structures will align towards who can game the system to extract the most value for those who join the corruption. Votes are bought by sharing the spoils.

Vitalik Buterin explained this as an undersupplied public good:

https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/

Unfortunately, altruism-prime cannot be relied on exclusively, because the value of coins arising from protocol integrity is a public good and will thus be undersupplied (eg. if there are 1000 stakeholders, and each of their activity has a 1% chance of being “pivotal” in contributing to a successful attack that will knock coin value down to zero, then each stakeholder will accept a bribe equal to only 1% of their holdings).

The problem was explained by Mancur Olsen in his Logic of Collective Action.

Eric Raymond, the 150 - 160 IQ genius progenitor of the term "open source", wrote an essay about this Some Iron Laws of Political Economics.

This logic is flawed because it assumes you would have 51% of the voting power shared by multiple random but coordinated sources by the entity. The key is to understand that it just takes one leak to ruin the whole corruption while it takes massive coordination to try to game.. I guess if there is enough incentive people can keep quite but if tokens are distributed smoothly then chances of this are low.

Logically because it just takes one leak and therefor replacement within a few hours vs coordination whoch mY take weeks or years then System tends towards rewarding honest delegates

[TPTB_need_war]

sidhujag, could you please make your elucidation more well defined and clear. I can't understand what the heck you are describing.

Specifically refute the undersupplied public good, as I quoted it.

[TPTB_need_war]

Bandwidth, etc. may become too cheap to matter. The new iPhone has 300 megabit (peak; ideal) wireless capability. Comcast is promising to upgrade their entire network to 1-10 gigabit within three years without needing fibre to the home.

Come on smooth. You've been a serious programmer long enough to observe that demand for bandwidth and CPU fills up any new supply. If the new standard for bandwidth is 1000X greater, then users will be doing 1000X more microtransactions.

And you've been a serious programmer long enough to become very acquainted with the very important factor that big O algorithmic complexity drives your big wins in terms of performance and other attributes that hinge on it.

These are the sort of intuitive priorities that are just no brainer to any senior level programmer.

[Fuserleer]

So what has exactly happened to the Bitshares

B)  Hope that Vitalik, Fuserleer, or Anonymint will some day release something better, but the consensus mechanism of all three projects is currently vaporware

I disagree that eMunie's is "vapourware".

1. It is function in the client now
2. Anyone can test the client out
3. The database of the client can be queried for the consensus components.
4. More documentation going up this coming week
5. Finally, I can provide source code relating to the consensus should anyone be willing to be legally bound not to leak it.

That to me isn't "vapourware".

[kelsey]

sorry i'm missing how DPoS is a viable option (apart from being a passing buzz word)  

You didn't read anything in the thread and decided to troll us with Litecoin...which is functionally identical to Bitcoin...

In other news, coindesk just made a good article saying what I said a month ago:

http://www.coindesk.com/why-bitcoin-creates-a-voluntary-tax-system/

If the anonymous function was relatively bulletproof, and reached large circulation and market cap, there would be a high probability of it abolishing the state, or the state as we know it at least.

i've certainly read this thread, how about less arrogance more input, i mean you spin the same shit ad nauseam, but you're not really saying anything.

stop baffling on about me being troll here with litecoin, hell i attack and troll litecoin more then most coins, there's no sentimental attachment to litecoin or any coin here.

i've said many a times the only thing good to come out of crypto so far is the idea.

yes its self evident that litecoin todate is the best we've got, and if you asked my why, and to my reply you wouldn't listen just troll me saying i'm a litecoin troll.

[TPTB_need_war]

I disagree with this analysis.

I have explained my point in much greater detail here as a separate topic in the main Bitcoin general forum:

The Bitcoin consensus mechanism is incorrectly labeled Proof of Work

https://bitcointalk.org/index.php?topic=1176835.0

Well I guess I must agree. Thanks for making that point.

Edit: let me add that for as long as the individual miners can't decide what they put in the block for their mining shares, then my statement that the entropy of proof-of-work is unbounded needs to be corrected to bounded, which is the same as for proof-of-stake.