I predict a lot of strain on the Bitcoin network soon due to Mastercoin

[ripper234]

I have sent this email to a few devs, Gavin asked that we conduct the discussion publicly and we're happy to oblige.

Hi all,

I think you guys are unaware of the rate at which we are accelerating. Hell, my own board of directors (of the Mastercoin Foundation) has more conservative estimates than me ...

However I think that Mastercoin is going to blow up in scale much sooner than we originally planned.

There will be a lot of transactions on it very soon. I think that perhaps in 2-3 months we'll put a lot more strain on the network that SatoshiDice.

We should prepare.

FYI, we have a small $100 bounty for anyone who documents a migration plan off Bitcoin to another dedicated chain. However this is just a backup plan and we don't see this as likely. We want to stay on top of Bitcoin and support its development and usage.

I think we should have a talk about this ASAP - it's in the best interest of both our projects.

I know you all are busy people, let us know when and how and we'll adjust our schedules.

FYI I think we can sponsor or co-sponsor some research into the scalability of Bitcoin itself. What are the current research problems that can increase Bitcoin Scalability? How can we support this effort?

Please add more core developers to this discussion.

Note that this thread is moderated, and trolling will be deleted.

[1714160031]

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[kjj]

Bitcoin is usage-agnostic.  If there are more transactions, maybe that'll finally be the incentive we've been waiting for to establish the proper fee market.

P.S.  Your usage projections are probably nonsense optimistic.

[Luke-Jr]

If 100% of bitcoin users migrated to Mastercoin and used it the same way, would it produce more load on the blockchain, less, or the same?
If more, why?

[bluemeanie1]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

In other words you're creating some new feature on top of Bitcoin, generating a major performance problem, and then suddenly you act as though we have some natural disaster that we all must come together to solve.

It sounds more like you're breaking Bitcoin.

[Luke-Jr]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

This thread isn't about who predicted it first, it's about scalability.

[bluemeanie1]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

This thread isn't about who predicted it first, it's about scalability.

these problems were well understood and clearly stated by myself many months ago.

Im not sure how exactly we pronounced Mastercoin this wonderful new technology while it poses systemic risks to Bitcoin.

In other words, we must now be concerned about the problems Mastercoin is causing, while a small insider group profits from this business.  As in, we fix the problems that are caused by someone's profit motives.  An analogy: some factory finds a way to make Hummus for 2 cents less than the competitor however it kills entire forests.   The factory does it anyway, then pronounces that there is a huge ecological disaster that we all must come together to fix.

[kjj]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

This thread isn't about who predicted it first, it's about scalability.

these problems were well understood and clearly stated by myself many months ago.

Im not sure how exactly we pronounced Mastercoin this wonderful new technology while it poses systemic risks to Bitcoin.

In other words, we must now be concerned about the problems Mastercoin is causing, while a small insider group profits from this business.  As in, we fix the problems that are caused by someone's profit motives.  An analogy: some factory finds a way to make Hummus for 2 cents less than the competitor however it kills entire forests.   The factory does it anyway, then pronounces that there is a huge ecological disaster that we all must come together to fix.

First, I think you are vastly overestimating how much use mastercoin is going to get.

Second, Luke's first point is the important one here.  Mastercoin isn't much worse than bitcoin, so if every bitcoin user switched to it, load would only increase by a small multiple, which is bad, but not cataclysmic.

Third, mastercoin transactions are easy to spot.  Miners can easily reject them, or insist on larger fees.

[Luke-Jr]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

This thread isn't about who predicted it first, it's about scalability.

these problems were well understood and clearly stated by myself many months ago.

I'm sure there's a thread you can argue this in, but that's not the topic here.
Frankly, that coloured coins have this problem is obvious, so arguing over who "predicted" it first is a complete waste of time.
I expect Ron will probably delete your trolling (and my responses to it) when he gets back, so save your time and make a new thread.

[bluemeanie1]

I predicted this problem with Color Coins long before Mastercoin ever began.  Check the BitcoinX list.

Ron, stop acting like this is some kind of new revelation.

This thread isn't about who predicted it first, it's about scalability.

these problems were well understood and clearly stated by myself many months ago.

Im not sure how exactly we pronounced Mastercoin this wonderful new technology while it poses systemic risks to Bitcoin.

In other words, we must now be concerned about the problems Mastercoin is causing, while a small insider group profits from this business.  As in, we fix the problems that are caused by someone's profit motives.  An analogy: some factory finds a way to make Hummus for 2 cents less than the competitor however it kills entire forests.   The factory does it anyway, then pronounces that there is a huge ecological disaster that we all must come together to fix.

First, I think you are vastly overestimating how much use mastercoin is going to get.

Second, Luke's first point is the important one here.  Mastercoin isn't much worse than bitcoin, so if every bitcoin user switched to it, load would only increase by a small multiple, which is bad, but not cataclysmic.

Third, mastercoin transactions are easy to spot.  Miners can easily reject them, or insist on larger fees.

or decide which ones they like and which ones they don't, creating an entirely new vista of mining incentives.  All these things were discussed by myself on the BitcoinX list, but they were not addressed because the people driving the conversation weren't interested in how this technology damages the network, they were only interested in how to get it done for their own glorification.

the problem is when you create new 'colors'.  Generally its Num Transactions ^ Num Colors = unusable network.

In general I think the notion of making accommodations for a for-proft project is a serious violation of Bitcoin principles.  Honestly at this point it wouldn't suprise me.

Frankly, that coloured coins have this problem is obvious, so arguing over who "predicted" it first is a complete waste of time.

if it was so 'obvious' why was I the only one on record to point this out?

[mezzomix]

Maybe it's time to be able to have an interface to add custom filters without changing the source code. Thank you for the heads-up - my network support clients (500-1000 connections) will no longer relay TX with inputs or outputs to the 1ExoDus address.

[Luke-Jr]

Frankly, that coloured coins have this problem is obvious, so arguing over who "predicted" it first is a complete waste of time.

if it was so 'obvious' why was I the only one on record to point this out?

Because everyone else knew it was obvious, and didn't need to be pointed out?

[bluemeanie1]

Frankly, that coloured coins have this problem is obvious, so arguing over who "predicted" it first is a complete waste of time.

if it was so 'obvious' why was I the only one on record to point this out?

Because everyone else knew it was obvious, and didn't need to be pointed out?

then why is Ron acting like this is a startling revelation?

[bluemeanie1]

Maybe it's time to be able to have an interface to add custom filters without changing the source code. Thank you for the heads-up - my network support clients (500-1000 connections) will no longer relay TX with inputs or outputs to the 1ExoDus address.

being that Mastercoin is a profit scheme, you could actually charge Ron tolls to relay his transactions.

still think the block chain is 'free', chaverim?

[adam3us]

a migration plan off Bitcoin to another dedicated chain.

You could consider a merge mined side-chain (for security), or an existing altcoin.  If interested in alt-coin route perhaps protoshares/bitshare have some synergy in being a bearer asset related alt.

But if you're going to do it an an alt you dont need to coloring, just directly represent the color.  No need to encode your messages on top of a network that doesnt understand your semantics, if you can extend the protocol.  You can technologically win an arms race with hypothetical anti-color rules, via steganographic arguments, but it doesnt change the network cost, so its zero sum for the anti-coloring and the pro-coloring.

About native color representation freimarkets have done an excellent job of thinking through the minimum new script features necessary for smart-contracts.  I proposed a couple of extensions, and I saw they had the exact same, plus more as they have explored the full set of required features with the minimal, simple and elegant protocol bitcoin script extensions.  (Freimarkets is completely unrelated to freicoin other than name).  Bitshare itself has its own (unpublished?) direct encoded from scratch implementation in the works.

FYI I think we can sponsor or co-sponsor some research into the scalability of Bitcoin itself. What are the current research problems that can increase Bitcoin Scalability? How can we support this effort?

Well this is another solution.  Make bitcoin so scalable that it doesnt matter.  However that is really hard.  Zero-trust offchain is one avenue, but its not clear how or if it can work; there maybe some 'crypto/computation physics' limits.  Unknown so far, but lots of people are interested to see if it could be done.  The existence of satoshi-dice didnt help as a catalyst - the scalability problem is known recognized and very hard, it didnt progress because we're at a technology limit unless and until someone can overcome it.

The problem as I see it is bitcoin has a scaling limit, like transactions per second, which it can support in full p2p bearer form.  It can be scaled but only at the cost of reducing its decentralization.  eg if block sizes go to 1GB, that counts me out of running a full node.  Its an issue because if you can only be a full node, with an OC3 line, most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central.  These will grow into large companies, be acquired etc.  And then become defacto policy points and they'd just as well sign contracts and stop mining.  OK so committed transactions can till prevent policy by making transactions opaque to miners, but it is not quite ideal itelf.

The other direction is that the minimum transaction value (implied by minimum fee) goes up, and the minimum bandwidth to be a full node stays p2p compatible.  But that implies bitcoin turns into a clearing network.  If its for large transactions its less interesting to users and will either disappear from lack of interest (remain as a whale speculator network?) or be co-opted and shaped by companies with a use for end-of-day clearing transactions - large exchanges, big payment processors.  All user traffic anyway would end up off-chain.  As the off-chain technology does not exist (and we dont know how to do it not for lack of trying), that means the off-chain technology will offer weak semantics: it will have need for central trust in offchain transaction servers, it will have risks of value seizure/account freezes, risks of the transaction server going out of business.  Probably 1 of 3 properties could be fixed, or maybe 2 of 3 (pick any two features conundrum style) if the business even care to try.  Many are "pragmatic" which is an ugly word.

And then where is bitcoin?  In this environment a smart contract is not smart.  Smartness requires final settlement which means strong fungibility (cryptographic blinding/hiding, or defacto).  Without those guarantees, disputes will arise, transactions will be undone by court order, and the usual costs will creep back in and we're back to the status quo of credit card transactions, and not transacting without reputation research, reputation rating of the business world, which is where their high costs of existing revocable payment systems come from.  I dont think most people understand this unfortunately.

As close as I got was committed tx (aka hidden tx), where you can transact with peer level policy decisions even if 99% of the miners were hostile to your transaction completing.  https://bitcointalk.org/index.php?topic=206303.0  

A new idea even triggered by your question is that I think you can reveal without miner censorship of the reveal, which was previously a UTXO compaction limitation.  The reason is peers can broadcast old keys for revealing without fees because they are validatable against previously published data which was already paid for.

(The reason to reveal at all, and not re-spend in hidden form, which is supported is that it increases the UTXO set size because only people receiving the payment know what the transactions mean, it is in fact fully private and anonymous against anyone except people in the transaction path.  The limitation is the velocity of money means that there will over time be many people in the path and they all need to see the full history.  The actual payment is very compact as it is just a key allowing the recipient to identify and decrypt/validate the input transactions.)

Adam

[bluemeanie1]

a migration plan off Bitcoin to another dedicated chain.

FYI I think we can sponsor or co-sponsor some research into the scalability of Bitcoin itself. What are the current research problems that can increase Bitcoin Scalability? How can we support this effort?

Well this is another solution.  Make bitcoin so scalable that it doesnt matter.  However that is really hard.  Zero-trust offchain is one avenue, but its not clear how or if it can work; there maybe some 'crypto/computation physics' limits.  Unknown so far, but lots of people are interested to see if it could be done.  The existence of satoshi-dice didnt help as a catalyst - the scalability problem is known recognized and very hard, it didnt progress because we're at a technology limit unless and until someone can overcome it.

The problem as I see it is bitcoin has a scaling limit, like transactions per second, which it can support in full p2p bearer form.  It can be scaled but only at the cost of reducing its decentralization.  eg if block sizes go to 1GB, that counts me out of running a full node.  Its an issue because if you can only be a full node, with an OC3 line, most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central.  These will grow into large companies, be acquired etc.  And then become defacto policy points and they'd just as well sign contracts and stop mining.  OK so committed transactions can till prevent policy by making transactions opaque to miners, but it is not quite ideal itelf.

 and keep in mind that the so called 'big names' in Bitcoin actually favor this route because it's a scenario that can be capitalized on.  Thus we repeatedly hear solutions of this sort from those looking to commercialize various aspects of Bitcoin.  Even IBM has been hanging around lately.  Bitcoin is quickly morphing into a traditional payment network.

The other direction is that the minimum transaction value (implied by minimum fee) goes up, and the minimum bandwidth to be a full node stays p2p compatible.  But that implies bitcoin turns into a clearing network.  If its for large transactions its less interesting to users and will either disappear from lack of interest (remain as a whale speculator network?) or be co-opted and shaped by companies with a use for end-of-day clearing transactions - large exchanges, big payment processors.  All user traffic anyway would end up off-chain.  As the off-chain technology does not exist (and we dont know how to do it not for lack of trying), that means the off-chain technology will offer weak semantics: it will have need for central trust in offchain transaction servers, it will have risks of value seizure/account freezes, risks of the transaction server going out of business.  Probably 1 of 3 properties could be fixed, or maybe 2 of 3 (pick any two features conundrum style) if the business even care to try.  Many are "pragmatic" which is an ugly word.

 my system solves all these problems by eliminating PoW and instead granting the ownership of the chain to new kind of layout.  Any kind of assets can be traded and other financial features can be employed with no problems of scalability or cost of computing equipment.  You lose the so-called 'zero trust', gain performance, and keep the distributed nature of the block chain.  You don't have to do transactions 'off chain', everything gets fully committed very quickly.

 all these problems were entirely visible to me months ago, which led to the development of Confidence Chains.

 -bm

[Sukrim]

If 100% of bitcoin users migrated to Mastercoin and used it the same way, would it produce more load on the blockchain, less, or the same?
If more, why?

If distributed markets are implemented, I would predict more, as there would not be only transactions for transfers of currency, but also transactions for posting trading offers and executing these trades.

I'm unsure if these order books are supposed to end up in the blockchain (e.g. in Ripple they do, but the ledger there is constantly pruned because of that) or not, in any case it might cause strain if they use the network to message each other about offers and the memory pool explodes.

[jgarzik]

I have long been a proponent of a merge-mined "data chain" which is specifically designed for smart property, colored coins, and mastercoin metadata.

Even did a tiny bit of work creating an (unseen to the public) "DataNet" codebase, whose work is both obvious and long since outdated.

The keys are

• Emphasize tech neutrality, and engage other projects outside MasterCoin to use the data chain.  Even up to and including patch contributions to third party projects.
• Approach pool operators, request merged mining of this chain.  Point out how it's a community chain.
• Do not premine, or other scamcoin traits.
• Be very explicit about intended chain uses, and aggressively work with pool ops to de-spam.

[NewLiberty]

Third, mastercoin transactions are easy to spot.  Miners can easily reject them, or insist on larger fees.

So long as this is maintained, the mining market can fix itself and compete for mastercoin txs.

[adam3us]

bitcoin [...] can be scaled but only at the cost of reducing its decentralization [...then...] most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central.  [...]  then become defacto policy points and they'd just as well sign contracts and stop mining.

 and keep in mind that the so called 'big names' in Bitcoin actually favor this route because it's a scenario that can be capitalized on.  Thus we repeatedly hear solutions of this sort from those looking to commercialize various aspects of Bitcoin.  Even IBM has been hanging around lately.  Bitcoin is quickly morphing into a traditional payment network.

Other than the committed tx defense, if they try to centralize it, and introduce dispute resolution, taint tracing as an analog of credit scoring, they will damage fungibility, increase transaction costs via the credit scoring management tax they extract, and the payment repudiation they may seek to introduce.  Eg take a look at this

http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/

Its based on significant misunderstands about bitcoins value proposition - destroy its fungibility and the costs float up to meet credit cards and paypal.

If they want to certify users, they should do that as optional KYC, AML certificates that regulated merchants in respective jurisdictions can request, which are attached to wallets/identities, not to fully fungible coins.  The certificates should be non-transistive they attest to the identity of the funds.  They should be optionally sent - if the recipient does not request it, it is privacy destructive and a security risk to send identifying information to unregulated businesses and individuals.

[...Confidence Chains...] my system solves all these problems by eliminating PoW and instead granting the ownership of the chain to new kind of layout.  Any kind of assets can be traded and other financial features can be employed with no problems of scalability or cost of computing equipment.  You lose the so-called 'zero trust', gain performance, and keep the distributed nature of the block chain.  You don't have to do transactions 'off chain', everything gets fully committed very quickly.

I put some comments about confidence chains idea on the thread about it:

https://bitcointalk.org/index.php?topic=317114.msg3581752#msg3581752

I think it has the same problems as other consensus systems like ripple, and the existing banking infrastructure in terms of sybil attack (identity theft), reputation management (equivfax etc) and fraud (when people prove unworthy of their default reputation, succeed in committing identity theft, or commit fraud).

These are issues bitcoin mining is intended to defend against.  Most attempts to save the cost of mining reinvent ripple and come to the realization that mining is performing a critical security function.  Mixed PoW/PoS of PPCoin maybe an exception.

Adam

[bluemeanie1]

bitcoin [...] can be scaled but only at the cost of reducing its decentralization [...then...] most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central.  [...]  then become defacto policy points and they'd just as well sign contracts and stop mining.

 and keep in mind that the so called 'big names' in Bitcoin actually favor this route because it's a scenario that can be capitalized on.  Thus we repeatedly hear solutions of this sort from those looking to commercialize various aspects of Bitcoin.  Even IBM has been hanging around lately.  Bitcoin is quickly morphing into a traditional payment network.

Other than the committed tx defense, if they try to centralize it, and introduce dispute resolution, taint tracing as an analog of credit scoring, they will damage fungibility, increase transaction costs via the credit scoring management tax they extract, and the payment repudiation they may seek to introduce.  Eg take a look at this

http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/

Hi Adam,

  There was a thread about this on this forum: https://bitcointalk.org/index.php?topic=332918.0

  Clearly the 'Bitcoin Business' wants to move this thing in this direction.  At best, we'll be left with something like SWIFT or ABA.  If transaction costs rise to or above the general costs of using eg. Paypal, you will see a drastic reassessment of Bitcoin's business case, and BTC exchange rate.

  It's really about the way this business sector is constructed.  It's not really about vending software per se, because the systems vendors are in bed with the banks and they dont simply deliver technology, they deliver privilege and part of that tactic is making sure that most people do not have access to the basic tools of finance.  Most people never realize how much money banks make off transaction fees.  If you want to build a financial exchange there are really only one or two companies you can go to.  I used to be a infrastructure consultant for AIG on Wall St. btw. 

  Confidence Chains aims to change all this.  You can run full fledged exchanges on them, and intend to deliver this functionality as open source.

Its based on significant misunderstands about bitcoins value proposition - destroy its fungibility and the costs float up to meet credit cards and paypal.

Im not sure its based on misunderstands.  Probably a better term is 'based on a undermining of Bitcoin's value proposition'.  This subversion of Bitcoin's values has been going on for some time now.

If they want to certify users, they should do that as optional KYC, AML certificates that regulated merchants in respective jurisdictions can request, which are attached to wallets/identities, not to fully fungible coins.  The certificates should be non-transistive they attest to the identity of the funds.  They should be optionally sent - if the recipient does not request it, it is privacy destructive and a security risk to send identifying information to unregulated businesses and individuals.

[...Confidence Chains...] my system solves all these problems by eliminating PoW and instead granting the ownership of the chain to new kind of layout.  Any kind of assets can be traded and other financial features can be employed with no problems of scalability or cost of computing equipment.  You lose the so-called 'zero trust', gain performance, and keep the distributed nature of the block chain.  You don't have to do transactions 'off chain', everything gets fully committed very quickly.

I put some comments about confidence chains idea on the thread about it:

https://bitcointalk.org/index.php?topic=317114.msg3581752#msg3581752

I think it has the same problems as other consensus systems like ripple, and the existing banking infrastructure in terms of sybil attack (identity theft), reputation management (equivfax etc) and fraud (when people prove unworthy of their default reputation, succeed in committing identity theft, or commit fraud).

These are issues bitcoin mining is intended to defend against.  Most attempts to save the cost of mining reinvent ripple and come to the realization that mining is performing a critical security function.  Mixed PoW/PoS of PPCoin maybe an exception.

Adam

Thanks for the comments.  I'll respond to the Confidence Chains points in the other thread just to keep things readable.  This isn't a Confidence Chains thread and I try to be respectful on this forum.  You make some salient points.

go here to follow this discussion:  https://bitcointalk.org/index.php?topic=317114.new;topicseen#new

thanks Adam,

-bm