NXT :: descendant of Bitcoin - Updated Information

[bitcoinpaul]

So there IS a decentralized solution?

*Yes* but is not simple, nor quick and I don't believe anyone has actually even done it.

Also it can't apply to Nxt itself until we have AT (as we don't have the equivalent of Bitcoin "script" until then).

So the solution is obvious:

- build a great gateway á la james
- work hard on AT and atomic cross chain transactions

Right?

[Jerical13]

No matter if there are 3 or more servers running the gateway stuff, it is centralized (since 1 guy could be in charge of these servers). I think no one can change that. So we have one centralized gateway. With full transparency, but it is still centralized.

If there would exist many of these gateways (N) from different people/companies/entities, we could foster some decentralization and, therefore, trust in the Nxt ecosystem. The result is that we would have N different Assets for a coin. Now the free market can value each asset for a coin differently because its different trust in these gateways. We saw an example of this in the last weeks/days as people wanted to trade their goxBTC with other BTC.

Conclusion: We need a nice paper on how these gateway servers work and make it public with a big bang.

Not sure how one guy would be in charge of three INDEPENDENT gateways. This is what I have been saying. We need to find three different, independent, separate, not the same guy, gateway operators.

All of these gateways issue the SAME asset. This is possible due to the shared multisig acct. All three independent gateways share a single multisig acct, but it takes two to make a withdrawal. No single gateway owns or controls the customer deposits.

I have written and described how this works many times. Maybe it would help if one of our graphics guys made a nice easy to understand chart?

James

I have an idea about this. It seems that the people who have prioritized getting NXT on various exchanges are having problems doing so. It also clearly seems that using the gateways in the way that has been discussed will add a layer of centralization to the AE and to NXT overall.

What if the gateway were used as a marketing tool to the exchanges? This would put them in charge of managing the gateways, and put any risk involved on them, allow them a way of participating in the AE instead of competing with it, and give them incentive to trade NXT.

It would also decentralize the use of the gateway by making it a private enterprise.

[CIYAM]

- build a great gateway á la james
- work hard on AT and atomic cross chain transactions

Without a doubt if we can achieve atomic cross-chain txs then we will have basically got rid of the business model for all exchanges that don't do fiat.

IMO "this is our job".

The future will not be centralised!

[bitcoinpaul]

I think you can ensure that per gateway there is only one AE asset type for a RL Asset e.g. USD, I think this will avoid confusion, if you have a legit USD and a scammer can create US or USd or some variant people will get scammed.

We cannot force other people not to build a gateway on their own. We can build a nice community-drive gateway which could become very big and everyone uses it. But that's about it.

and be clear on the AE which gateway and asset is being traded through.

Absolutely.

[bitcoinpaul]

- build a great gateway á la james
- work hard on AT and atomic cross chain transactions

Without a doubt if we can achieve atomic cross-chain txs then we will have basically got rid of the business model for all exchanges that don't do fiat.

IMO "this is our job".

The future will not be centralised!

So could some stakeholders put the biggest chunk of bounty in history of mankind out there for atomic cross chain transaction on nxt please? During this time (this will take a while?!) we should have the best community driven gateway possible, which james is currently building.

[chanc3r]

I think you can ensure that per gateway there is only one AE asset type for a RL Asset e.g. USD, I think this will avoid confusion, if you have a legit USD and a scammer can create US or USd or some variant people will get scammed.

We cannot force other people not to build a gateway on their own. We can build a nice community-drive gateway which could become very big and everyone uses it. But that's about it.

and be clear on the AE which gateway and asset is being traded through.

Absolutely.

Agreed, there will be other gateways...
People need to know who they are trading through..
The NXT Community Multi-Sig Gateway will be the gold standard...

[bitcoinpaul]

The NXT Community Multi-Sig Gateway will be the gold standard...

+1

[bitcoinpaul]

- your solution (a service provider) is not decentralized as decentralized as Nxt.

I have to correct me, since decentralization is a relative term.

[ebereon]

James,

I like what you do with the gateway stuff!

But I would like to have something for the paranoia guys:
- implement the posibility to link any "coind" in the NXT core (client?)
- NXT client will check the blockchain against the gateways
- trade the coins directly from your own wallet like:
   - create asset for the coin
   - when trading set the traded NXT onhold, not accessible for 24 hours
   - check coind blockchain + gateways for confirmations
   - after x confirmations on coind and gateways then send the "onhold"-NXT
   - IF confirmations arrive:
      - trade done
   - IF NO confirmations seen on the coind blockchain, free the "onhold"-NXT after 24 hours
      - no trade occoured
      
The needed confirmations should be configurable.

Is there any security problems with my thinking? The gateways will make sure there is no fake blockchain and such!?

Greets,
eb

PS: sry for my bad english ;oD

[punkrock]

NXTpool.net CLOSING SOON!

DOMAIN FOR SALE!

It was a test and an experience. All deposits will be paid back. Let's see, what the future brings. I will focus my work on nextcoin.org and NXTclient.net.

Thanks.

[redsn0w]

NXTpool.net CLOSING SOON!

DOMAIN FOR SALE!

It was a test and an experience. All deposits will be paid back. Let's see, what the future brings. I will focus my work on nextcoin.org and NXTclient.net.

Thanks.

Ok 

[jl777]

James,

I like what you do with the gateway stuff!

But I would like to have something for the paranoia guys:
- implement the posibility to link any "coind" in the NXT core (client?)
- NXT client will check the blockchain against the gateways
- trade the coins directly from your own wallet like:
   - create asset for the coin
   - when trading set the traded NXT onhold, not accresable for 24 hours
   - check coind blockchain + gateways for confirmations
   - after x confirmations on coind and gateways send "onhold" NXT
   - IF confirmations arrive:
      - trade done
   - IF NO confirmations seen on the coind blockchain, free the "onhold"-NXT after 24 hours
      - no trade occoured
      
The needed confirmations should be configurable.

Is there any security problems with my thinking? The gateways will make sure there is no fake blockchain and such!?

Greets,
eb

PS: sry for my bad english ;oD

ultimately AT will allow us to think about cross chain transactions by the NXT core.

In the meantime we are stuck with gateways to validate the offchain data and to essentially certify it for inclusion in the NXT blockchain.

I will be putting in gateway transaction monitoring into nodecoin. Everybody running nodeminer will not only earn nodecoins, they will also ensure the accuracy of the gateway transactions. This makes the gateways even more decentralized, but still the money transactions are done by the 3 gateways. However, we are much much much better than any other gateway, anywhere.

For larger deposits I think I will have to issue BTC.hold assets, which are tradeable, but not redeemable into actual BTC, but only for BTC asset after all chances for blockchain reorg are gone. Since blockchain reorgs are pretty rare, I would expect the market price for BTC.hold to be very close to BTC asset. this means that people can deposit and start trading after the usual confirmation time, but the gateways (and community) is protected from large scale losses.

This would also avoid incidents similar to recent exchange heists where 100+ BTC was stolen and withdrawn from the exchange. The deposit would come in and be able to be traded, but withdraw will be on hold. A bit messy, but necessary in this environment

James

[CIYAM]

i havnt read anything about atomic cross-chain tx's? could you give a quick description please?

Assuming you have done an internet search but still not *understood* it then let me try and illustrate:

Step 1) I create a tx with a "secret" number (that you don't know) and give that tx to you (instead of the secret number there is a *hash* of it).

Step 2) You create a tx that will need the same secret number (due to needing the same hash) and give it back to me.

Step 3) In order for me to *get* your coins I have to *use* that secret number (and it is basically *impossible* to find another secret that has the same hash).

Step 4) As you can now *see* the secret you can complete your tx without fail.

This is a simplified description (use the internet to find the full description) but is perhaps an "easier read".

[CIYAM]

In short...  you will be able to trade cryptos without the need of gateways/exchanges.

*Yes* it is the "secret sauce" to making a completely decentralised crypto to crypto exchange possible.

[jl777]

i havnt read anything about atomic cross-chain tx's? could you give a quick description please?

Assuming you have done an internet search but still not *understood* it then let me try and illustrate:

Step 1) I create a tx with a "secret" number (that you don't know) and give that tx to you (instead of the secret number there is a *hash* of it).

Step 2) You create a tx that will need the same secret number (due to needing the same hash) and give it back to me.

Step 3) In order for me to *get* your coins I have to *use* that secret number (and it is basically *impossible* to find another secret that has the same hash).

Step 4) As you can now *see* the secret you can complete your tx without fail.

This is a simplified description (use the internet to find the full description) but is perhaps an "easier read".

I never did fully understand this, but maybe I finally can. Just to be clear, in Step 2, if I dont know the secret number, how can I make a tx that needs it hash? Or if I just make it use the hash, then wouldnt the first party be able to complete the tx with the hash without revealing the secret?

[bitcoinpaul]

Assuming you have done an internet search but still not *understood* it then let me try and illustrate:

Step 1)

Sounds so easy. Please reduce bounty 

Ok, serious: if nxt will be able to do this... 

[bitcoinpaul]

any forecast for when asset exchange will be live?

"When we are happy with it"

[xyzzyx]

What about new nodes in CfB's solution? Which branch of the DAG should they choose?

New nodes will get their information from their peers (so whichever peer they got a branch from first is the one they will stick to in case of another equal weight branch appearing).

Is there a post somewhere detailing this solution?  When I run it in my head all I see are many unresolved forks -- the opposite of what a blockchain is supposed to solve: consensus.  I think I don't understand the solution.

[CIYAM]

I never did fully understand this, but maybe I finally can. Just to be clear, in Step 2, if I dont know the secret number, how can I make a tx that needs it hash? Or if I just make it use the hash, then wouldnt the first party be able to complete the tx with the hash without revealing the secret?

The tx uses Bitcoin "script" to check the hash of a value (so you *leave out the value*).

In reality it's a little more complicated because you need refund txs (with timeouts) but basically the whole point is that the 1st tx can't happen *without disclosing the number that was hashed* (which is all that the 2nd tx needs to become valid).

[bitcoinpaul]

Should/could we prepare/change/add some bits and bytes in/to the nxt core/AE now for atomic cross chain transactions in the future? Just to make it right from the beginning and pave the way...