DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)

[iamnotback]

Furthermore, the uneven distribution of hashing power (and hashing costs) is not the only reason for centralization of Bitcoin.

I firmly believe that the lack of scalability with regard to block creation rate is an equally important factor which makes it virtually impossible for low-scale miners to create blocks. If the granularity of blocks was much higher, even hobbyists could buy ASICs and do some hashing. Economy of scale would be reduced considerably.

It is also safe to assume that there are a lot of people out there who would mine at home if they could get at least some reward from it even if it would be economically irrational due to the costs. Theoretically, you could market block rewards as a lottery and get people to do every sort of irrational things, in the hope of hitting the jackpot.

The uneven distribution of hashrate is built into the economics and game theory of any possible variant of PoW. It is an insoluble issue. My white paper explains why. The excerpts I have already published over the past day already explain most of it.

Scalability is inherently opposed to decentralization in any variant of PoW. There will be no solution for PoW.

Wait I will search for an appropriate quote from my whitepaper...

Edit: This is excerpted from Section 5.6 Aliasing:

The other orphaned partial orders are only effects discarded at propagation time. They are not recorded into the blockchain, their arrival time can’t be proven to any node, and thus have no relevance other than being the discarded information of the anti-aliasing of the longest chain rule. The large block period acts as an imperfect anti-aliasing filter of the effects of only recording one synchronous partial order.

Not including [selfish mining, stubborn mining, and 51% attacks](#41-selfish-mining-example), randomized orphaning of blocks occurs at a rate dictated by an equation which increases with the ratio of the propagation delay in the network to the block period. Decreasing Bitcoin’s block period to 12 seconds would waste an estimated 50% of the hashrate on orphaned blocks.[^orphan]

But a large block period is also inefficient in the sense that the Poisson distributed probabilistic production of new blocks and thus transaction confirmations, has a high variance of up to an hour for the first block confirmation.[^pools]
 
PoW is inefficient in any choice of block period, because it is a synchronous model of what is actually a naturally asynchronous system. And the aliasing error can lead to game theory collapse of the consensus.[^broken] [^nofix] [^goose-egg]

Reading the entire white paper will give a more holistic understanding. I can't share much more without basically giving away my innovation before I am ready to capitalize on it.

[1714680753]

1714680753

[1714680753]

1714680753

[iamnotback]

I much prefer to deal with only non-USA residents/expats and USA residents/expats who are "qualified investors", so that I don't run afoul of the SEC given I am a USA citizen expat. That is unless I can find a proxy to handle any ICO for me who isn't liable to the SEC.

Please aim for the latter.  Please DO NOT do a Bitcoin Capital type deal.  

I will be    hard if excluded from a potential future ICO related to your work.

angel investment behind the scenes

Any chance you can share the terms & conditions (at some point)?  PM is fine.

We'll work out what is best. I want everyone who wants in, to get in, but without raising too much money. Keep the market cap smallish at the start so there is more upside, but not too small so that there are enough resources to fend off all competitors and move R&D forward at a rapid pace. So this means we have to limit participation in a free market way if demand exceeds supply.

I am not ready to think about this.

Let's see if can actually make it to testnet and not just words. You know I have a health issue. It that goes bezerk again like it did in 2015, then I will be stalled again. Will be in Singapore in 2nd week of January to get expert diagnosis and treatment. Hoping to get some good coding done during December. Finishing up white paper now.

I am at some point going to need to be lucky enough to find a co-dev who is also a great hands-on manager, whom I find I work efficiently with. One man can't juggle all the balls. IOHK is one possible resource and also they can also probably handle the ICO. But I can't determine if Charles takes me seriously or not. We haven't spoken yet. Probably too premature at this point. Hong Kong (IOHK has an office there apparently) is actually where I am interested to relocate to for a couple of years, so perhaps they could help me on a visa. Bitfury also appears to have a talented team.

Thanks very much for the expression of interest (it helps keep me positive and motivated), but this is too premature at this point. let's see where I am with it by Xmas.

[alkan]

The uneven distribution of hashrate is built into the economics of any possible variant of PoW. It is an insoluble issue. My white paper explains why. The excerpts I have already published over the past day already explain most of it.

Thank you for the excerpts. It's obvious that the uneven distribution of hashrate is a big issue with Bitcoin and other blockchains that are based on block rewards. But it's a bold claim to say that it cannot work with any possible variant of PoW, regardless of the incentive mechanism and the block topology (like DAGs).

Scalability is inherently opposed to decentralization in any variant of PoW. There will be no solution for PoW.

This is probably true for blockchains, but is it also the case if combined with hashgraphs which are 100 % efficient in the sense that every valid block is set to become part of the graph? See http://www.swirlds.com/downloads/Overview-of-Swirlds-Hashgraph.pdf and http://www.swirlds.com/downloads/Swirlds-and-Sybil-Attacks.pdf.

Wait I will search for an appropriate quote from my whitepaper...

Thanks!

Are you claiming that PoW is prone to centralization even if (cumulatively)
1. no profitable block reward is paid out
2. block time issue (scalability) is solved
3. an ASIC-proof PoW algorithm is used (or invented)
4. bot nets don't exist?

[iamnotback]

I think that is the big failure of any non-anonymous currency (most of them in fact).  With non-anonymity comes non-fungible coins.  You can decide not to accept coins that come from transactions in certain countries, you can decide not to have coins that have been held by the competition (if that competition is smaller), law makers can impose different taxes as a function of where coins come from (for instance, they could make tax transferrable: if you accept coins from someone who hasn't paid their taxes, YOU should now pay them in their place).

Non-anonymous coins are not fungible.

@iamnotback: I'm curious to know your stance on this. Does your new coin tackle this issue (if it's really one)?

Notwithstanding my opinion on whether governments are going to tax and attempt to fragment crypto-currency, higher valued transactions are more at risk than microtransactions. I just can't fathom the government attempting to ask people to report and pay taxes on every $0.0001 transaction they do on social networking. So since I am mostly focused on scaling out crypto-currency for social networking and apps gamification (think small payments for in game upgrades, etc), then i don't view anonymity as a crucial issue for fungibility in my targeted priority area.

My opinion is that governments are going to be forced to reduce regulation of crypto-currencies not increase. Because it is a global phenomenon that they don't have jurisdiction over. One-by-one they will fall like dominoes into this reality, especially as crypto-currency becomes more and more popular.

Additionally I believe there is a global monetary reset coming 2019-2024ish, in which we will have a global financial governance established with the World Bank, IMF, and SDRs. Thus the nations will turn to this new institutional regulatory power to regulate the global crypto-currencies without impacting fungibility. (See my posts in the Martin Armstrong thread of the Economics forum on why I believe this will come)

Privacy is I think a stronger argument for why we need some form of anonymity sets in our crypto-currency. I plan to do something low overhead with offchain mixing (with a new invention I have for that) to achieve a commensurate level of privacy for the market I am targeting. For every high valued finance, I am thinking Zcash's technology may be the best. The trusted key setup does not impact anonymity, only could allow hidden debasement (inflation). I think they will figure out a way to make these private keys in a way that corporations trust the veracity. I am not sure if I still see a need for Monero's form of anonymity. Maybe, I and I need to spend more time analyzing that. Haven't had time lately to focus on anonymity. There was an issue with Monero's viewkey being superior, etc...

In the past I dreamed of a perfect e-gold wherein our anonymity was absolute. I now realize that is not feasible and would violate the fundamental laws of physics. Analogous to we can't do anything in real life without some risk of it being known to someone else, the same will be true online. It will be impossible to have perfect assurance of anonymity. So we shouldn't be modeling fungibility on the assumption of perfect anonymity. Fungibility can be I think modeled on the assumption that the people-at-large will demand that their Internet money be globally fungible. It will be considered a basic human right that Internet money and access be without borders/barriers. The globalists want this. I believe the elite created Bitcoin as a Trojan horse against nation-state and banking interests selfishness. They are using us to force a wedge between nation-states and banks, and the global village reality of the Internet. We are the partners of the global elite, not their enemy. This is why we see Richard Branson offering his private island to Bitfury group's conference:

https://www.youtube.com/watch?v=Rep37R3l3_4

This is why we see Nicholas Negroponte at the Montreal Scaling Bitcoin conference talking about Internet access and money as a basic human right:

https://scalingbitcoin.org/presentations
https://youtu.be/0SnjrdQtf8Y?t=537

[iamnotback]

The uneven distribution of hashrate is built into the economics of any possible variant of PoW. It is an insoluble issue. My white paper explains why. The excerpts I have already published over the past day already explain most of it.

Thank you for the excerpts. It's obvious that the uneven distribution of hashrate is a big issue with Bitcoin and other blockchains that are based on block rewards. But it's a bold claim to say that it cannot work with any possible variant of PoW, regardless of the incentive mechanism and the block topology (like DAGs).

It always comes back to the reason nature concentrates resources into an exponential or power-law distribution (which I also discuss in my white paper). Iota's DAG doesn't change the fact that (without the centralized servers) he who can rent $1000s of hashrate (to have the majority of the hashrate for a sufficient duration) can double-spend more than $1000s and destroy Iota overnight while profiting. Why do you think Iota has centralized servers. (Btw, awesome name for a coin that Iota!)

It is a detailed discussion that I'd rather not embark on now. We can have that sort of discussion perhaps mid to late next year, after I've completed my urgent work. Perhaps by that time, I will have been able to have formulated/completed even better proofs and explanations in technical white papers. Right now, I am flying-by-the-seat-of-my-pants quite overloaded with tasks to do.

Scalability is inherently opposed to decentralization in any variant of PoW. There will be no solution for PoW.

This is probably true for blockchains, but is it also the case if combined with hashgraphs which are 100 % efficient in the sense that every valid block is set to become part of the graph? See http://www.swirlds.com/downloads/Overview-of-Swirlds-Hashgraph.pdf and http://www.swirlds.com/downloads/Swirlds-and-Sybil-Attacks.pdf.

Wait I will search for an appropriate quote from my whitepaper...

Thanks!

Are you claiming that PoW is prone to centralization even if (cumulatively)
1. no profitable block reward is paid out
2. block time issue (scalability) is solved
3. an ASIC-proof PoW algorithm is used (or invented)
4. bot nets don't exist?

#1 can never be secure as I explained already in a prior reply to you.

#2 can't be solved without centralization for as long as PoW is a metric used to measure the longest chain for the total ordering against double-spends.

#3 makes the coin susceptible to rented hashrate attacks. ASICs are more secure against this because the mining farms won't rent out 51% of the hashrate because their ASICs are useless doorstops if they destroy the value of Bitcoin.

#4 is irrelevant because of #3.

[iamnotback]

How did you solve this issue in your version of unprofitable PoW?

I discarded proof-of-work and formulated a consensus ordering design concept different than just proof-of-stake, DPoS, or a DAG.

Yes, I see. You discarded your original plan of using unprofitable PoW, but this is not exactly what I asked. I imply that you don't want to tell us more about your discarded unprofitable PoW scheme, even though it might offer further insights why current systems (that you are critizising so vehemently) are flawed.

I am doing my best to share why I abandoned unprofitable PoW within the limited time I have to share.

I am not going to share the scheme because a facet of the scheme is employed in my ongoing (current) solution, even though my current design no longer employs unprofitable PoW. I am instead burning transaction fees and using TaPoS to prevent long-con nothing-at-stake attacks. But the "longest chain rule" is not the default consensus mechanism in my design. I can't give more details than that right now. My design has multiple facets which are (afaik) novel.

Other than rented hashrate double-spend attacks for the PoW coins that don't use ASICs, as I point out in detail in my white paper, the main concern is the 51% attack is not for issuing double-spends (which I agree they won't do) but the majority hashrate can have a monopoly on all the mining rewards in the system by orphaning the other blocks in the system (and in a decentralized minority case, this attack isn't even detectable!). That is an attack and it is insidious (harmless) enough that users of transactions probably won't care, especially given the "benefit" that 1 confirmation becomes a guarantee and can't be orphaned (because the network becomes controlled by a deterministic mining cartel).

This is an interesting attack vector but I don't see how it is applicable to unprofitable PoW schemes like the second one I suggested. If the mining reward is limited to preventing a loss of stake or decreasing the tx fees (which cannot go below 0 %), there's no incentive for 51% miners to orphane other blocks. Such a behaviour would inevitably deter honest stakeholders/miners from using the currency, so that the coin would eventually depreciate and hurt the attacker.

Also, in case of negative interest rates applied to the stake, the power law distribution is counteracted by the fact that small stakeholders could use the idle power of their devices while large stakeholder would need to buy or rent extra hashpower to preserve their stake.

I explained to you that your negative interest idea could be attacked by a 51% attack which enables only the majority to retain stake by orphaning the minority's blocks. So it is just an obfuscated minted block reward. That is not unprofitable PoW.

Additionally I explained to you that if you did indeed have unprofitable PoW then it would have insufficient hashrate and it could be attacked very cheaply by renting hashrate.

[r0ach]

Additionally I believe there is a global monetary reset coming 2019-2024ish

Or today with the death of unallocated, fractional reserve gold and naked shorts being able to control the markets:



China seems to be drawing a line in the sand at $18 silver while the Khazar banking mafia in NYC dump their bazillions in paper naked shorts.  Whether that line in the sand consists of aggregate Chinese traders/holders or the Chinese govt themselves playing some currency wars, who knows.  It feels like metals have reached some type of tipping point where this Shanghai metals exchange finally became of some use to prevent western manipulation.

[iamnotback]

r0ach, thanks. The most salient threat isn't double-spending and direct theft. Rather it is the insidious debasement tax taken in the form of a winner-takes-all monopoly on transaction fees for PoW and for DPoS that is the level of funding whales vote for themselves for running witnesses.

Both PoW and (D)PoS systems are just central bank printing machines in an obfuscated form.

I will offer a new design. Let's see what y'all think when the juicy part of the white paper with the new design is published.

I get the point, but I don't think I would call that debasement, more like rent seeking behavior.  And yea, if anyone actually can form a cartel or monopoly in crypto, you do have a mirror of the rent seeking behavior central bankers use to extract wealth, or essentially skim off the top until they own it all.  This is why they hate serfs using gold and silver, because it's difficult to skim off someone physically holding the currency in their hand and defending it with an AR15.

"Debasing" was more concise and clear than "Leeching". "Renting seeking" is definitely more general. I do state that in the text. I'll try to improve the wording.

Here is what I have for the Debasing section of DPoS thus far:

6.1 Dictatorship

As explained in the sub-section 6.7 Debasing, DPoS can only in exist in one of two possible disequilibrium failure modes at opposite ends of the extremes.

If the whales aren’t able to coordinate and cartelize their majority voting power, then they can’t tightly control the delegate witnesses who produce the blocks, which can result in greater transaction confirmation latency (more than the advertised “an average of just 1 second”), reduction in the transaction volume throughput, and perhaps double-spends.

Whereas, if whales do form a monolithic majority voting bloc, they can control the election of every delegate witness and thus are able censor transactions, monopolize rent extracted from the system, and double-spend.

6.7 Debasing

Analogous to the winner-has-taken-all outcome for PoW wherein the miners’ cartel majority has a pricing monopoly on transaction fees and can capture all mining revenue by orphaning all (or as much as they deem optimum) of the minority’s blocks, in the winner-has-taken-all outcome for DPoS, the whales’ cartel majority has a pricing monopoly on the level of remuneration paid to delegate witness which is funded by minting new money supply and can capture all witness revenue by electing themselves (even if obscured as Sybil proxies) as the witnesses.

Thus both PoW and DPoS are ultimately cartel controlled systems analogous to central banks which have control over the spoils of monetary policy.

Before the winner-has-taken-all juncture wherein the whales aren’t sufficiently monolithic/coordinated on voting[87] to maintain tight control over delegate witness performance, DPoS wastes work on political strife in elections regarding witness compliance[21] and may cause monetary and/or opportunity cost losses due to recurrent malevolent witnesses. And analogously even before it is fully captured by the winner-take-all, PoW awards disproportionately more revenue to those miners with more hashrate.

Thus both PoW and DPoS are always debasing most of the participants.

[21]: Paul Sztorc. Nothing is Cheaper than Proof of Work. Truthcoin.info blog, §Example 2: Delegated Proof-of-Stake (DPoS), Aug 4, 2015.

[87]: Paul Sztorc. Nothing is Cheaper than Proof of Work. Truthcoin.info blog, §Wealth Isn’t Unequal Enough, Aug 4, 2015.

Aren't you guys tired of being fooled!

[r0ach]

Aren't you guys tired of being fooled!

There are no solutions to social or economic problems with cryptocurrency. 

In economics there are only two real outcomes, rent seeking behavior where the goal is to force others to work for you as beasts of burden, or Hitler style national socialism, which is group evolutionary strategy.

Groups like the Japanese tend to trend towards the second option, while the Jews utilize a hyper-nepotism form of the second option and hypocritically try to demonize regular white people as "nazis" if they utilize the same behavior of operating to promote their own collective self interest.

http://en.metapedia.org/wiki/Jewish_group_evolutionary_strategy

It's also built into their so called religion that the "goyim" are explicitly stated to be used as beasts of burden in the Talmud.  These type of collective strategies are easily predictable to occur with the family/tribal nature of humans, but the real shocker is that the Jews have been able to con others into not operating for their own collective self interest while letting themselves do it to such an absurd degree.  The Trump election was probably the symbolic end of that con game.  There's still plenty of brainwashed suckers left in California, but their mindless shrilling has no effect on people that know the game.

[iamnotback]

Aren't you guys tired of being fooled!

There are no solutions to social or economic problems with cryptocurrency.  

In economics there are only two real outcomes, rent seeking behavior where the goal is to force others to work for you as beasts of burden, or Hitler style national socialism, which is group evolutionary strategy.

Groups like the Japanese tend to trend towards the second option, while the Jews utilize a hyper-nepotism form of the second option and hypocritically try to demonize regular white people as "nazis" if they utilize the same behavior of operating to promote their own collective self interest.

http://en.metapedia.org/wiki/Jewish_group_evolutionary_strategy

It's also built into their so called religion that the "goyim" are explicitly stated to be used as beasts of burden in the Talmud.  These type of collective strategies are easily predictable to occur with the family/tribal nature of humans, but the real shocker is that the Jews have been able to con others into not operating for their own collective self interest while letting themselves do it to such an absurd degree.  The Trump election was probably the symbolic end of that con game.  There's still plenty of brainwashed suckers left in California, but their mindless shrilling has no effect on people that know the game.

That is a very interesting link. I wonder what CoinCube has to say about that? Yeah it does seem Europeans are more R than K strategists. And then the socialism of Europe is really about destroying ethno biases of nation-states?

W.r.t to consensus ordering algorithm, I have I think a design which removes the power of control from those who have the most wealth resources and puts the control in the hands of those who transact the most. The capitalists transact very little and thus are not consumers and are wealthy. The rest of us transact a lot and our power is that we are the consumers!

That is one of key insights of my design, but the algorithm is also very clever.

So perhaps I beg to differ with your assertion that there are no solutions. Even CoinCube had written that we are moving to higher and higher entropy levels because of technology:

https://gist.github.com/shelby3/67111f328822a36beb4cad1a5220eb33
https://bitcointalk.org/index.php?topic=355212.msg16982844#msg16982844

Copy of private msg sent to CoinCube:

I read this:

https://bitcointalk.org/index.php?topic=355212.msg16982844#msg16982844

Excellent. Seems congruent with what I wrote and shared with you yesterday.

Not able to defect should ultimately equal not needing to defect. Degrees-of-freedom should be unbounded and Coasian costs drop to zero. But as you say we will never get there, just ratchet up to higher and higher levels of entropy.

Please feel free to write this connection publicly for me if you are so inclined. I can't do it now. Feel free to cite the portion of the white paper I shared with you as that is a public url.

[CoinCube]

There are no solutions to social or economic problems with cryptocurrency. 

In economics there are only two real outcomes, rent seeking behavior where the goal is to force others to work for you as beasts of burden, or Hitler style national socialism, which is group evolutionary strategy.

Groups like the Japanese tend to trend towards the second option, while the Jews utilize a hyper-nepotism form of the second option and hypocritically try to demonize regular white people as "nazis" if they utilize the same behavior of operating to promote their own collective self interest.

http://en.metapedia.org/wiki/Jewish_group_evolutionary_strategy

It's also built into their so called religion that the "goyim" are explicitly stated to be used as beasts of burden in the Talmud.  These type of collective strategies are easily predictable to occur with the family/tribal nature of humans, but the real shocker is that the Jews have been able to con others into not operating for their own collective self interest while letting themselves do it to such an absurd degree.  The Trump election was probably the symbolic end of that con game.  There's still plenty of brainwashed suckers left in California, but their mindless shrilling has no effect on people that know the game.

An interesting read r0ach. To be fair, however, were I Jewish given that 40% of them got wiped out in the last major wave of European national socialism I would be a little skittish about far right nationalism too.

It is a mistake to view the Jews as a monolithic group. At a minimum they must be divided in the orthodox (observant) and the non orthodox for these groups are very different. The orthodox Jews for example voted for Trump in the election.

I talked a little about why Judaism specifically orthodox Judaism is an effective evolutionary strategy in the Health and Religion thread.

Religious attendance strongly correlated with supporting Donald Trump.
http://forward.com/news/353914/by-the-numbers-3-key-takeaways-from-the-2016-jewish-vote/

http://www.jta.org/2016/09/13/news-opinion/politics/poll-shows-hillary-clinton-trouncing-donald-trump-among-jewish-voters

Reform Jews are likeliest to favor Clinton over Trump, 74 percent to 10 percent; Reconstructionists prefer Clinton 71 percent to 0 percent for Trump and 15 percent for Stein; “just Jewish” chooses Clinton over Trump, 60 to 17 percent; and Conservative Jews favor Clinton over Trump, 57-29 percent.

Among Orthodox respondents, as in recent elections, preferences are flipped, with respondents likelier to favor Trump — to a degree. Trump does not do as well with this subset as Clinton does overall. Orthodox respondents favor Trump at 50 percent, Clinton at 21 percent, Johnson at 6 percent and Stein at 1 percent, with 15 percent saying they will not vote.

[iamnotback]

Zerotime Vtrash...

I would choose None of the above, although I am not tracking Lisk developments so I am more or less ignorant about it. I also stopped tracking Dash's developments.

Monero might have a shot just being a robust highly respected alternative to Bitcoin's scalepocalypse.

Zerotime does not scale. It scales O(n^2). How many times I pointed that already and I am tired of getting into long fights with all the Vtrash fanboys who apparently don't understand technology yet are so sure that the anonymous "JConner" is phenomenal. Stop fighting with me boys because I am not going to trash your trash again. Waste of my time. Who takes seriously a project with a single anonymous developer who doesn't even write proper white papers. Most all of the altcoins are bad jokes on those gullible enough to purchase them. If you are just speculating on others buying the trash from you at higher prices, okay fine, but pleeeaassse stop with the lies about technology which you don't know enough about.

MaidSafeCoin I trashed recently. Ditto Iota. No need to repeat myself.

Posts like this makes everybody hate me. I think I will STFU about other coins, until or if I can offer something which they can also attack.

Sure put zerotime alone and it won't scale the blockchain just by it self. What makes Vcash scalable is the whole package including dynamic block size scaling, nodes that carry the blockchain, udp layer, the fact people no longer need to download the whole blockchain with zeroledger, the way the data is handled and more... If you really think monero has a shot because its respected, your funny... That thing is deprecated.

Sorry you lacking technical comprehension. Zerotime's "O(n^2)" scaling complexity has nothing to do with blocksize, but rather the communication propagation latency required between nodes for the "instant" confirmation algorithm. Precisely it is probably better than O(n^2) because not every node has to propagate to every node, but still super-linear which means it won't scale. In other words, the more nodes and/or the more volume of zerotime transactions, the slower confirmation will be.

Also we know from the theory of Byzantine agreement, that 51% agreement is not sufficient. You must have 67% of the nodes agree to prevent the agreement from being jammed unless you have a centralized tally. And Byzantine agreement is impossible when Sybil attacks are possible.

If ever the anonymous "John Conner" writes a proper white paper specification for Zerotime, then the academics can rip it to shreds pointing out the flaws.

[r0ach]

it won't scale.

I calculated a long time ago by looking at typical high value transaction volumes like real estate and automobiles that you only need 50 TPS to have a viable digital currency with market penetration in the upper middle class globally.  The idea that you have to scale to huge TPS is false.  50 TPS is all you need to get the job done for the lower limit.  If you ignore other things like rough consensus attacks, Bitcoin could exist forever fully functional at 8 MB blocks w/ Schnorr sigs under current population levels.  Or, if population does a Fibonacci retracement back to pre-industrial revolution sustainable levels of 500,000,000 then I guess you'd only need 3.5 TPS.

[hyc]

3.5 TPS? Not likely.

I wrote some thoughts on scalability a short while back https://forum.getmonero.org/4/academic-and-technical/86964/random-thoughts-on-scalability before I stumbled over this thread. Have to agree with most of what TPTB_ wrote earlier on. And my apologies, I only read the 1st 3 pages and final page of this thread before posting. If my points have already been covered, please let me know.

[sidhujag]

it won't scale.

I calculated a long time ago by looking at typical high value transaction volumes like real estate and automobiles that you only need 50 TPS to have a viable digital currency with market penetration in the upper middle class globally.  The idea that you have to scale to huge TPS is false.  50 TPS is all you need to get the job done for the lower limit.  If you ignore other things like rough consensus attacks, Bitcoin could exist forever fully functional at 8 MB blocks w/ Schnorr sigs under current population levels.  Or, if population does a Fibonacci retracement back to pre-industrial revolution sustainable levels of 500,000, then I guess you'd only need 3.5 TPS.

50 to 100 tps makes sense and its what i designed syscoin inflation targetting around.. if and when we get there it will work as designed. People forget the blockchain is a settlement mechanism and not a transaction processor

[iamnotback]

I'll take a look into ur paper, just read ur comment, when u talk about puttin "the control in the hands of those who transact the most" it reminds me NEM with the proof of importance

Proof-of-importance is an obfuscation of proof-of-stake, because it doesn't burn transaction fees, so a cartel majority of stake holders (who thus can control which chain wins) could do as many transactions as they want, paying any transaction fees to themselves:

the POI algorithm, albeit unique, is not a huge amount different than a regular POS algorithm, the only difference being that it takes into consideration how many transactions you make.

If you think it can easily be cheated, well i guess all you need to do is move your funds across different accounts constantly.

Thanks for confirming it is just proof-of-stake with some weighting by the transaction graph. That is my read also:

http://nem.io/NEM_techRef.pdf#section.7

As for whether it's security could be gamed (leading to The DAO like failure), well I would argue that the risk is nonzero (given that anyone can make a lot of transactions) until it has been properly peer reviewed. You can't trust one guy to do this sort of analysis.

Additionally NEM's consensus ordering system has numerous other deficiencies that I don't have time to detail now. After my white paper is published, we can go into it. As to discuss it now, would basically require revealing much of my white paper before I am ready to.

[iamnotback]

if you think that Ned and Dan have complete control over STEEM, then perhaps you should check out: https://steemit.com/steem/@steemitguide/steemitguide-what-is-a-exactly-is-a-steem-witness-and-why-every-user-should-vote

Dan has some errors in that video (ironically/coincidentally yesterday I was viewing that video). Sorry he is wrong too often (where it matters significantly). Here is another example of where he is wrong:

https://bitcointalk.org/index.php?topic=1319681.msg16960504#msg16960504

Errors:

0:40 - "witness are under control of the shareholders". Incorrect. They can do whatever they want until they are replaced by an election.
0:45 - "actually more secure than Bitcoin". Incorrect. I explain why in my white paper.
0:48 - "proof-of-work is ... burn most money is most secure ... proof-of-stake ... is also a scarce resource". Incorrect.
1:40 - "all systems are vulnerable to 51% attack ... no such thing as avoiding 51% attack". Incorrect. PoS is economically vulnerable to double-spends, Bitcoin is not. I explain this in my white paper. Correct that all systems have some form of 51% attack, but PoS has additional 51% attack vectors.
2:10 - "where we get the advantage over proof-of-work is that the cost of acquiring the 51% is much higher in proof-of-stake". Incorrect. Much easier to borrow or rent 51% stake than to rent 51% of mining farms. The mining farms have too much at stake. The shareholders have nearly nothing-at-stake because of their shares being an undersupplied public good. Worse yet, it may be more profitable for the whales to double-spend and short, than to sell their stake straight up.
2:20 - "because DPoS uses deterministic manner of producing blocks, we don't have to rely on random chance". Incorrect. He fundamentally does not understand resiliency and liveness. I explain this in detail in my white paper. Thus he doesn't understand why Graphene will never scale up to the world. Dunning-Kruger-esque.
3:30 - "get non-linear growth in the ability to achieve things when you concentrate capital". Incorrect. He is touting the concentration of nodes to 110 witnesses as being some advantage, because he never figured out how to otherwise solve the propagation scaling issue that plagues an unbounded number of nodes. But it doesn't follow that a concentration, bounded, and permissioned, provides resiliency and liveness. He is conflating.

[generalizethis]

If you look at them on an individual basis, of course none of them passes the decentralized test--this is the equivalent of looking at the stars and thinking it's a sheet with holes in it and there's one 100w bulb to power them all. 

[iamnotback]

If you look at them on an individual basis, of course none of them passes the decentralized test

The "of course" will be disproven.

I understand your point is you think competing altcoins is a form of decentralization. But if all of them are not decentralized, then no matter which one you switch to, then you've still got the same "light bulb" (from your analogy) in control.

The wealthy can spread their wealth around to all the important altcoins as well.

The problem isn't solved in your conceptualization. Sorry.

[generalizethis]

If you look at them on an individual basis, of course none of them passes the decentralized test

The "of course" will be disproven.

I understand your point is you think competing altcoins is a form of decentralization. But if all of them are not decentralized, then no matter which one you switch to, then you've still got the same "light bulb" (from your analogy) in control.

The wealthy can spread their wealth around to all the important altcoins as well.

The problem isn't solved in your conceptualization. Sorry.

You're missing that setting the goal creates a net effect, it's no longer karate or boxing, it's mma. We aim for a perfection and achieve various degrees of success based on preferred taste--sooner or later, you will get there, or not, but all your negative energy helps