JoelKatz
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Democracy is vulnerable to a 51% attack.
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February 28, 2013, 03:34:00 AM |
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Right. We have good pseudo-code for "how" the fee is changed. But no examples for what criteria are used to calculate "what they think the transaction fee should be." For example, how does a gateway implement this function: int desiredFeePerTransaction (NetworkState s);
That's really up to them. I would say pretty much the only criterion is that transaction fees not be so high that they are a barrier to use and, ideally, not so low that they frequently need to be raised to control spam. Do they raise the fee if "too many" transactions go through? Or do they raise if a lot of spam is coming through? For that matter, how do you identify a transaction as spam? The rationale given for the necessity of XRP is that it is "to prevent spam." I agree that spam is an issue. The first thing I would want to do is create a thousand self issued currencies called "BIGDIK" with an incrementing numbed appended to the end. How do we prevent this? How does a gateway recognize this as spam? Is it a manual process performed by the gateway operator poring over server logs? Is there a community website that gateway operators visit to hear the latest and greatest on how to combat spam? You don't need to try to figure out if specific transactions are spammy or not. You just have to look at whether the total volume of transactions is within what the system can handle and also whether the cost of a transaction isn't unreasonably low when compared to the actual costs associated with processing a transaction. A lot of talk has been given on the consensus model and the need for XRPs to prevent spam but nothing has been said on the exact methodology that a gateway will use to determine what an appropriate transaction fee will be, or even if the fee needs to change. If the fee is so high that transactions are discouraged that the system could handle, it should be changed. If the fee is so low that the network is consistently overloaded and has to raise the fee dynamically, it should be changed. Are you saying that bandwidth is the sole criteria for determining the fees? I don't see how that prevents spam at all.
Transaction spam is not like email spam. It doesn't annoy human beings directly. But it does cost bandwidth and reduce the remaining capacity of the network. The criteria is basically to make sure that transactions that cost more money to process (in terms of bandwidth and storage) than they are worth are discouraged without having to resort to dynamic changes in the transaction fee (because that makes fee and transaction clearing times less predictable).
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misterbigg (OP)
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February 28, 2013, 03:44:38 AM |
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Transaction spam is not like email spam. It doesn't annoy human beings directly. What about areas where parts of transactions are displayed to humans? For example, the name of a self issued currency ("BIGDIK" in my example). What about phone numbers, URLs, or other messages (e.g. "Litecoin is crap") appearing in description fields?
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JoelKatz
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Democracy is vulnerable to a 51% attack.
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February 28, 2013, 03:50:02 AM |
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What about areas where parts of transactions are displayed to humans? For example, the name of a self issued currency ("BIGDIK" in my example). What about phone numbers, URLs, or other messages (e.g. "Litecoin is crap") appearing in description fields?
I don't think it much matters because you can't easily get a human's attention. Most likely, nobody is going to look at those fields. We've tried to keep the design so that you can't easily compel another person's attention. If models do arise, I think probably the best solution would simply be for the client not to report it to the user. For example, if someone not on your list of known accounts sends you a microscopic amount of XRP, you probably just don't want to get notified. If we do things like integrated messaging, they'll have anti-spam features built in such as requiring permission first. We are not really expecting the transaction fee to protect against that kind of spam. It may to some extent do so "accidentally", but that's not what we mean when we say it protects against spam -- we mean pointless transactions aimed at clogging out legitimate transactions.
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misterbigg (OP)
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February 28, 2013, 04:05:24 AM |
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Here's an attack vector: someone who holds 50 billion XRP can easily flood the network with transactions, force everyone to raise the fees and then sell some of the XRP off at a higher price.
Well I have to admit that when technical questions are asked, they usually get an acceptable answer. Which is why I did state my assumption in the original post that the system will eventually be rigorously proven to be secure.
The glaring problem is the XRP distribution.
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JoelKatz
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February 28, 2013, 04:26:29 AM Last edit: February 28, 2013, 04:39:10 AM by JoelKatz |
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Here's an attack vector: someone who holds 50 billion XRP can easily flood the network with transactions, force everyone to raise the fees and then sell some of the XRP off at a higher price. Someone who holds a large number of XRP can temporarily raise the cost of transactions. But to keep the cost of a transaction over, say, 10 cents, they'd have to be willing to put ten cents worth of XRP behind every transaction that they make. Presumably, the volume of their transactions will exceed the volume of legitimate transactions at that price, otherwise substantially the same thing would happen without them. So they'd be losing more XRP than the total value of all legitimate transactions that might occur. It's hard to imagine how this could possibly be done at a profit. The glaring problem is the XRP distribution.
This has nothing do with XRP distribution. Provided they can be freely exchanged, the same problem would occur with any distribution. How you got your XRP in the first place has no effect on what you can most profitably do with them once you have them. If this attack worked, someone who bought up XRP could perform precisely the same attack with precisely the same effects. If it was profitable, people would be motivated to buy up XRP to attempt this.
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misterbigg (OP)
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February 28, 2013, 05:15:12 AM |
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If this attack worked, someone who bought up XRP could perform precisely the same attack with precisely the same effects. If it was profitable, people would be motivated to buy up XRP to attempt this. There is absolutely no way someone could buy up enough XRP to do this in an economically viable fashion. However, someone who started with 50 billion XRP could do it easily.
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alexkravets
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February 28, 2013, 07:37:54 AM Last edit: February 28, 2013, 09:16:02 AM by alexkravets |
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Seems to me that one by one technical questions are being answered, mostly by referring to the as yet under specified and not yet peer reviewed consensus mechanism.
Let's do the following thought experiment to address the 50% of XRPs being controlled by OpenCoin and its founders (effectively the same locus of control) :
Imagine that over the next year, The Fed or some other very rich or "printing" entity patiently accumulates 10.5 million BTCs thereby effectively recreating the concentration that will be present in the ripple network after the distribution even if it costs them, say, $100 billion in freshly printed fiat.
Can this new overlord of Bitcoin suppress the price of Bitcoin from that moment on ? No, because in a non-fractional reserve crypto currency system ( as long as they can't introduce a "paper bitcoin" substitute similar to today's paper gold or silver. Ironically, Ripple if successful, can make highly leveraged fractional reserve BTC IOUs viable, watch out !!! ) with a hard upper bound on total possible number of units that can ever exist, the only way to keep the ceiling on the exchange rate would be to continue selling at whatever rate they chose to be the ceiling, but doing that keeps draining their bounded hoard, therefore that attempt will fail and in this resect ripple would be the same as Bitcoin in this imaginary capture scenario where 50% of all possible coins have been hoarded by The Fed.
Perhaps we should give it a name: "50% of total possible money supply capture attack"
Therefore, in the long run, the non-distributed 50% of XRPs will either stay sequestered off the market or will be drained away through sales ... Either way, that concentration and its perceived Systemic Risk will either remain theoretical or will inevitably dissipate if actually attempted in practice.
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cdog
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February 28, 2013, 04:40:52 PM |
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Being able to mine BTC and LTC is one of the main reasons I am interested in them and invest in their economies.
I have absolutely no interest in Ripple or any other premined ecurrency.
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JoelKatz
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Democracy is vulnerable to a 51% attack.
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February 28, 2013, 04:42:49 PM |
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There is absolutely no way someone could buy up enough XRP to do this in an economically viable fashion. However, someone who started with 50 billion XRP could do it easily.
That makes absolutely no sense. Either the scheme is profitable beyond the raw value of the XRP or it's not. If it is, then it makes sense to buy up XRP to do it. If it isn't, then it makes no sense to do it regardless of how you got the XRP.
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bitcool
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Live and enjoy experiments
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February 28, 2013, 04:53:53 PM |
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pre-mined and post-mined, just like what Federal Reserve can do to USD.
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jtimon
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February 28, 2013, 06:16:24 PM |
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pre-mined and post-mined, just like what Federal Reserve can do to USD.
There's no pre or post mining: there's no mining.
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misterbigg (OP)
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February 28, 2013, 06:22:03 PM |
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There's no pre or post mining: there's no mining. As I said before, it is technically true that there is no mining but the term "pre-mine" in this community has become generally accepted to mean a cryptocurrency where issuance or distribution is partly or wholly under the control of the authors.
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Zangelbert Bingledack
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March 01, 2013, 10:40:02 AM |
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There is a reason Bitcoin is mined: proof-of-work technology is what made Bitcoin possible, because it made it possible for the units to be acquired through the same method by anyone. Without proof-of-work, Bitcoin couldn't have come into existence; the same holds for any allocation of virtual currency. The only way to make Ripple work is to do away with XRP or find a way to make them "mine-able."
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jtimon
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March 01, 2013, 01:00:09 PM |
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There is a reason Bitcoin is mined: proof-of-work technology is what made Bitcoin possible, because it made it possible for the units to be acquired through the same method by anyone. Without proof-of-work, Bitcoin couldn't have come into existence; the same holds for any allocation of virtual currency. The only way to make Ripple work is to do away with XRP or find a way to make them "mine-able."
Of course bitcoin would have not existed without PoW because bitcoin relies on it for its security. A PoW chain doesn't need to distribute the initial supply through PoW though. Making xrp mine-able is not difficult, as I said in the thread where this issuing mechanism is proposed for xrp, it's just not economical: it's a waste of resources.
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Beepbop
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March 01, 2013, 05:32:17 PM Last edit: March 01, 2013, 07:47:31 PM by Beepbop |
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I made a post in another thread that is relevant to this one. I'll just make a partial quote here: That is a very insightful thread, IMO, but Ripple itself is the counterparty for XRP, and they don't have any obligation to give you USD or other currency for it - they only have a vague promise that you can use it to process transactions in the future. It's as if I issued IOUs for backrubs for the rest of my lifetime, or if the postal service issued 1st class air mail stamps that are good for all eternity (actually the Norwegian postal service does this - which might get interesting in 100 years).
XRPs are like the non-denominated 1st class stamps in Ripple. I like that analogy.
As an illustration, here's an example of these stamps. ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FAYvZ1kp.jpg&t=665&c=0mAQBjRIao4WzQ) The Norwegian Postal Service sells one book of "A Verden" (first class air mail international) stamps for 150 NOK. But they will continue to honor them as long as they are in "business". Unlike traditional stamps which have are denominated in a currency like NOK, this is a bit like a Ripple XRP. Of course, unlike stamps, there are no "rare" or "special" XRPs - it's fungible and divisible. Also it's more likely that Ripple will collapse than that the Postal Service will collapse. They have some partial monopoly protections in some countries after all. Edit: Users will prefer XRPs as part of a trade over any IOUs This remains to be seen. Bitcoiners prefer XRP over IOUs just like gold bugs would prefer platinum over dollars, but if Ripple is to become successful, it has to attract users who will use IOUs for transactions. To use the analogy above, the postal service can't be successful if the only ones it attracts is stamp collectors. And even if the user Opencoin claims that XRP is a currency, I don't accept it as a real currency even if it has an acronym. It's more like stamps or frequent flier miles.
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misterbigg (OP)
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March 01, 2013, 07:52:02 PM |
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This whole Ripple thing has a horrible stink to it.
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Beepbop
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March 01, 2013, 08:00:32 PM |
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If you're the type of person who faults the Post Office for "pre-mining" stamps or the Fed for "pre-mining" USD, I guess you could see it that way.
Now, there's plenty of problems with Ripple, but a lack of "proof of work", and a lack of wasted electricity, is not one of those problems. Distributing free XRP to people is a great marketing idea, but really it would still work if everyone had to buy XRPs.
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Deprived
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March 01, 2013, 08:16:03 PM |
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If you're the type of person who faults the Post Office for "pre-mining" stamps or the Fed for "pre-mining" USD, I guess you could see it that way.
Don't think anyone faults the Post Office for "pre-mining" stamps. But if the Post Office were to claim stamps were decentralised then I think you'd find a few people disagreeing.
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markm
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March 01, 2013, 08:38:23 PM Last edit: March 01, 2013, 09:59:46 PM by markm |
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The lack of source code is also preventing "post offices" from springing up everywhere.
If I'd been able to download the source I would probably have had gateways running by now for at least a few different altcoins. As it is maybe by the time the source does come out there won't be much point worrying about gateways until first a new network with some distribution that isn't so controversial is set up.
-MarkM-
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Beepbop
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March 01, 2013, 09:51:17 PM Last edit: March 01, 2013, 10:53:09 PM by Beepbop |
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Don't think anyone faults the Post Office for "pre-mining" stamps. But if the Post Office were to claim stamps were decentralised then I think you'd find a few people disagreeing.
Think of it as multiple post offices - and local corner stores acting as postal agents - selling stamps then - based on a common consensus about how many stamps should be distributed. Now imagine competing chains of post offices providing the same postal money order services, but not having cross-redemption agreements. The first post office chain was started by some guys who pre-printed their stamps and threw them around, letting the post offices buy more stamps from them as needed. In time, I think these competing chains would merge, or would start cross-redeeming their postal money orders. When you talk about centralization, it's really a question of degree, and how you do it. The Fed also has several branches, but it's controlled by a board and subject to Congress. If every man starts his own cryptocurrency, there's no centralization, but total chaos about what these things are worth really. Ripple has a similar issue of not all IOUs being equally worth due to defaults, (see also subprime mortgage crisis), but at least Ripple IOUs are issued in a set currency, not BeepbopBux or MisterbiggCoins.
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