NXT :: descendant of Bitcoin - Updated Information

[chanc3r]

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

I proposed almost the same thing yesterday.... only I renamed them to tokens, gave them a monthly value so we can set a bounty for running network nodes each month and the tokens would be redeemable against a buy order in the AE..

I do see the risk of a free floating coin being used a the node operating reward because if it becomes worthless then there is no incentive to run nodes and if the committees need to stimulate people to run nodes through node coin value are there are a lot in circulation then it becomes difficult to change the price / reward per coin... whereas if they have to be regularly redeemed there isn't this problem.

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[Damelon]

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

I think going about this is just where the thinking goes wrong. Again, not attacking, but trying to illustrate a point.

Your post reveals a possible weakness in the NodeCoin idea: great.
But why does this need to be solved community wide?
That wóuld make NodeCoin a problem for Nxt.

If coins get created by a user, it's also up to the user to make it work, in whatever way he or she pleases. If that solution isn't good enough, the coin dies and fades away.
If not, it's viable.

Trying to shoehorn it into Nxt places the responsibility for it where it shouldn't be and opens a big can of ugly worms.

The creation of these coins is an open and free option. If it is truly so, then the execution of it should be the responsibility should be the creator's.

I am fully convinced that people can come up with a way to have the NodeCake and eat it.

[marcus03]

Crypto Review Completed, please read.  Thanks to Jesse James for completing with thorough review and BloodyRookie for reference.

From Jesse James:

"I spent some quality time reviewing the core crypto NXT relies on.  As part of my review I re-implemented the relevant algorithms https://gist.github.com/doctorevil/9521126 using a different approach in a different language to make sure I understood everything deeply.  Although the implementation NXT uses doesn't follow certain algorithm specifications to the letter, the deviations noted (motivated by simplicity and/or performance) seemed reasonable and in general nothing stuck out as a red flag.  There was one bug in the signature generation function (that NXT is aware of and currently working around) for which I've provided a patch (or more precisely tweaked BloodyRookie's proposed patch).  It should be should be safe for devs to incorporate this patch at their convenience.

Review: https://gist.github.com/doctorevil/9521116

Code: https://gist.github.com/doctorevil/9521126 "

130 lines of code for a the curve implementation and still readable. I love python...

[jl777]

I support Nodecoin and jl777 !

+1, you guys need to take a step back for a second, nodecoin will have a positive effect on Nxt.  It encourages people to run a node, why is that bad?  It's a utility coin and it had the potential to bring a couple thousand new users to Nxt, which is great.  It's an accomplishment that James was able to create a mine-able coin in AE, that is awesome.  I think many people are greatly overestimating the effect it will have on Nxt.  To get anything done with Nxt core, you will need to spend Nxt, so people aren't going to circumvent the Nxt core with nodecoin.  

I still think charging nodecoin for services like DAC is a great idea.  Anyone using DAC will still be spending Nxt in the end.  It gives people incentive to run a node, which is incredibly simple, and they will feel like they are accomplishing something and "part of the Nxt club".  It's more of a novelty, but would be cool to make people run a client for a while in order to use DAC, or NxtCash. To say it's bad for Nxt just doesn't make any sense to me.   If it doesn't work out and no one mines it or uses it, so what, at least we know how to create a mine-able coin in AE.

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

?

Nodecoins are redeemable to NXT via AE. That is the only thing they are good for really, other than maybe some private add on services, which hopefully nobody would begrudge me from charging

At 5 nodecoins per day and .01 NXT per nodecoin that is a whopping 1.5 NXT per month per person, but it is something that you get every block and quite addictive.

Instant feedback for running a NXT node, that is nodecoin's purpose. Funding might or might not be there. Speculators might or might not be there.

I am not an economist. I am a simple C programmer

James

[rickyjames]

My big concern is that people will come to see speculation in nodecoin to be more important to them than the value of NXT itself.   If this happens, we are screwed.  At that point NXT is just the fee required to access  AE and make vast fortunes running up the price of nodecoin they buy directly with BTC.  It is now in the speculator's interest to have/drive the exchange fee (NXT itself) as low as possible.  What is the motivator in this scenario to have my big stake in NXT retain a high value instead of being driven down to a low value?

rickyjames, how would speculators drive the price of nxt down in this scenario? Wouldn't supply (finite and fixed) and demand (increasing) cause the price to go up?

Reference the recent discussion here on driving the transaction fee down from 1 NXT to 0.1 or 0.01 NXT.  That is an increase in "supply" of trading fee tokens by a factor of X10 vs. X100.  Where was the pressure to keep NXT transaction fees UP?  Fees are just another word for tax, people hate taxes, there will always be pressure to drive taxes down.  Would you rather trade 1,000,000 nodecoin for 1 BTC on AE if the NXT fee was 1 NXT = $1 bought at Cryptsy, or the NXT fee was 0.01 NXT  = 1 cent bought at Cryptsy?  What is the motivation / market pressure to keep NXT at $1 each instead of 1 cent?

I am starting to think that not only nodecoin but also AE itself is the enemy of keeping NXT as a store of value....

[chanc3r]

The alternative is to get the price of running a node so cheap that nobody needs a reward to do it.   What we are doing here is creating a pseudo-POW to make up for perceived weaknesses in PoS.  If PoS is strong enough to stand on its own, then let it.  If we try to go pseudo-PoW to be a motivator, then REAL PoW will ALWAYS be a better alternative and who needs NXT?

Ricky, this is wrong.

This is not abut PoS vs PoW... this is about having a reliable network of nodes to secure the network,, they need watching, they need attention, they need restarting, they need network bandwidth - increasingly, they need disk, they need memory... i.e. someone needs to care !

Yep there are raspberry Pis and cubie trucks and whatever else, all these cost and they need to be professionally run....

You thought we were attacked when we started, just wait until we start to be perceived as a real threat...

[grandpa_seth]

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

I think going about this is just where the thinking goes wrong. Again, not attacking, but trying to illustrate a point.

Your post reveals a possible weakness in the NodeCoin idea: great.
But why does this need to be solved community wide?
That wóuld make NodeCoin a problem for Nxt.

If coins get created by a user, it's also up to the user to make it work, in whatever way he or she pleases. If that solution isn't good enough, the coin dies and fades away.
If not, it's viable.

Trying to shoehorn it into Nxt places the responsibility for it where it shouldn't be and opens a big can of ugly worms.

The creation of these coins is an open and free option. If it is truly so, then the execution of it should be the responsibility should be the creator's.

I am fully convinced that people can come up with a way to have the NodeCake and eat it.

It is a temporary solution I see nodecoin as. James made it to solve our forging problem that has been discussed a million times. Nodecoins would definitely solve short term
forging issues until we have thousands of businesses supporting the network for their own sakes. But nodecoin must be traded in for a fixed amount of Nxt like a points system.
James of course should be rewarded well by one of the committees if this is approved

[rickyjames]

The alternative is to get the price of running a node so cheap that nobody needs a reward to do it.   What we are doing here is creating a pseudo-POW to make up for perceived weaknesses in PoS.  If PoS is strong enough to stand on its own, then let it.  If we try to go pseudo-PoW to be a motivator, then REAL PoW will ALWAYS be a better alternative and who needs NXT?

Ricky, this is wrong.

This is not abut PoS vs PoW... this is about having a reliable network of nodes to secure the network...

You thought we were attacked when we started, just wait until we start to be perceived as a real threat...

I totally agree.  And I do not see how nodecoin funds nodes.  How does creating a free coin create real money that gets spent buying a server for a month?  Map for me the flow of money....

[antanst]

Wait... is it possible for a client to sent a transaction request to a VPS and the VPS to determine client balance and use that as the amount and change the destination account to his own account, and , then wrap all that up in transactionBytes for the client to sign and submit to the network?  if so this is a BAD idea, regardless of if you have legit SSL certs or not.

Yes, it's possible, if the client does not verify the transaction.

One could alleviate this issue if the JS client used multiple, independent, CORS-enabled NRS gateways to get transactionbytes from each and compare them. But this is a half-baked solution. The only way to have "trustless" signing, is to do what J-L said: To manually construct the transaction from the browser.

[pandaisftw]

nodecoin is a response to the need for people to get regular and predictable feedback for running a NXT node. It satisfies this requirement. As to what all the other side effects it creates, I am just a simple C programmer and when you start extrapolating things like the behaviors of large groups of people, well, I admit I cannot predict. AUR proves this.

Also, notice that if trying to boost the NXT network via nodecoin purchases doesnt work, what have we lost? Without nodecoin, there wouldnt even be that option. nodecoin price fluctuations do not impact NXT. nodecoin is not NXT. nodecoin is a NXT asset. If NXT relies on nodecoin for all of its network infrastructure incentive and nodecoin fails, then where are we? I think we would be where we are now, without nodecoin.

James

There's a saying that when you're up to your ass in alligators, it's hard to remember that you originally intended to drain the swamp.   That's what we've got here.  

The original problem is that everybody eventually comes to the realization that forging NXT isn't getting them rich like they expected Bitcoin mining would do, in fact, if they've got under 2000 NXT, they probably won't even mine a single block in a year (if all NXT owners had their client open and were forging too).   This is a disappointment and demotivator to them, and understandably so.  But hey, that what PoS as implemented by NXT is.  Everybody gets the same ROI / interest rate on their stake, and if you ain't got much stake, your equal share of the pie is gonna be really, really small.  

The original BCNext (and I believe correct) solution to the problem is to realize that NXT doesn't need super expensive computers to keep the node network going, that people will keep their clients open and bear the minimal expense as an altruistic item on their part, that instead of profit motive to run NXT we have community spirit.

Some people feel that a bigger motive / incentive is needed.  This is very noble and I am not cutting them down.  But I come back to my previously stated BCNext's First Law - For every attempt to create a new incentive in the zero-sum NXT system, an equal and opposite disincentive is created somewhere else in that system.  

Money in NXT is not created out of thin air every few minutes like it is in BCT.  There is only so much and if it goes into one person's pocket, it came out of somebody else's pocket.

So here's the bottom line question.  If nodecoin is created as a new source of value to motivate people to support the NXT network, WHOSE POCKET DID THIS VALUE COME FROM IN THE FORM OF NXT?

Hm, the part about BTC generating value out of thin air in not true. Every Bitcoin mined (inflation) takes money out of everyone's pocket - because their stake become relatively smaller - and into the miner's pocket.

My big concern is that people will come to see speculation in nodecoin to be more important to them than the value of NXT itself.   If this happens, we are screwed.  At that point NXT is just the fee required to access  AE and make vast fortunes running up the price of nodecoin they buy directly with BTC.  It is now in the speculator's interest to have/drive the exchange fee (NXT itself) as low as possible.  What is the motivator in this scenario to have my big stake in NXT retain a high value instead of being driven down to a low value?

Nodecoin is only one of many coins that will appear. In the future, your NXT stake will be securing hundreds of coins (just look how many alts of Bitcoin there are!), each one generating fees in NXT when the users and miners transfer and spend the coins.

It's a long game, but I think ultimately was a very smart decision to make NXT an ecosystem instead of purely a "PoS-coin". As an ecosystem, failure of a single service on-top of the NXT will not mean NXT is dead. If Bitcoin fails, it's dead. If nodecoin fails (+ any number of other coins ontop of NXT), NXT will still be intact.

[jl777]

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

I proposed almost the same thing yesterday.... only I renamed them to tokens, gave them a monthly value so we can set a bounty for running network nodes each month and the tokens would be redeemable against a buy order in the AE..

I do see the risk of a free floating coin being used a the node operating reward because if it becomes worthless then there is no incentive to run nodes and if the committees need to stimulate people to run nodes through node coin value are there are a lot in circulation then it becomes difficult to change the price / reward per coin... whereas if they have to be regularly redeemed there isn't this problem.

People can always just buy the evil nodecoins and burn them by sending them to the genesis acct!
That way, large stockpiles will never be created and the universe will be safe

Keep in mind, if nodecoins cant be used to reward people to run nodes, then other means can be used. It is not part of NXT core, it is just a NXT asset that I made

[marcus03]

I should have local (trustless) signing online tomorrow (no password sent to the server). A big thank you to CFB, Antonios, BloodyRookie and Jaguar0625 for all their help with this

I want to make sure people understand that it is not "trustless" signing. Unfortunately, the way we are doing it, you still have to trust the server. You don't send the password to the server, but you sign an array of bytes that the server sent to you. How do you know that this array really represents the transaction you intended to sign? To be sure, the client would need to parse and verify it, so the client needs to know exactly how each transaction type should be represented as a byte array. This is not a secret, it is in the source code, but if you need to implement this logic on the client side, you might as well construct the byte array yourself, and not trust the server to do it for you correctly. So by letting the client be simple and lazy and let the server construct the byte array, you necessarily have to trust the server. Furthermore, you have to trust that the server response you received has not been modified in transit - and the issue of using SSL to talk to the server becomes important again.

Since, I've been there: Compared to implementing signing, getting the bytes for a transaction is childplay. I'd encourage client developers to make it complete and not use prepareTransaction, but implement it fully in the client.

EDIT:
As easy as this:

 public byte[] getBytes() {

        ByteBuffer buffer = ByteBuffer.allocate(getSize());
        buffer.order(ByteOrder.LITTLE_ENDIAN);
        buffer.put(type.getType());
        buffer.put(type.getSubtype());
        buffer.putInt(timestamp);
        buffer.putShort(deadline);
        buffer.put(senderPublicKey);
        buffer.putLong(Convert.nullToZero(recipientId));
        buffer.putInt(amount);
        buffer.putInt(fee);
        buffer.putLong(Convert.nullToZero(referencedTransactionId));
        buffer.put(signature != null ? signature : new byte[64]);
        if (attachment != null) {
            buffer.put(attachment.getBytes());
        }
        return buffer.array();

    }

From https://bitbucket.org/JeanLucPicard/nxt/src/1ff7dc8f579fed8804d6bb3fdda6a822fcd52162/src/java/nxt/TransactionImpl.java?at=master

[jl777]

The alternative is to get the price of running a node so cheap that nobody needs a reward to do it.   What we are doing here is creating a pseudo-POW to make up for perceived weaknesses in PoS.  If PoS is strong enough to stand on its own, then let it.  If we try to go pseudo-PoW to be a motivator, then REAL PoW will ALWAYS be a better alternative and who needs NXT?

Ricky, this is wrong.

This is not abut PoS vs PoW... this is about having a reliable network of nodes to secure the network...

You thought we were attacked when we started, just wait until we start to be perceived as a real threat...

I totally agree.  And I do not see how nodecoin funds nodes.  How does creating a free coin create real money that gets spent buying a server for a month?  Map for me the flow of money....

DOGE, AUR

[Damelon]

So then why has my original suggestion been ignored about having nodecoins be redeemable for Nxt like a points/airline miles program? That way nobody disputes that the value
nodecoins have is in that it can increase my Nxt stake. The only problem I see is how to donate this fund and whether one of the committees will fund this. Any funding for this
will only be temporary because I can't imagine it would take more than a year for Nxt to be successful enough to not need nodecoins for incentive to forge.

I think going about this is just where the thinking goes wrong. Again, not attacking, but trying to illustrate a point.

Your post reveals a possible weakness in the NodeCoin idea: great.
But why does this need to be solved community wide?
That wóuld make NodeCoin a problem for Nxt.

If coins get created by a user, it's also up to the user to make it work, in whatever way he or she pleases. If that solution isn't good enough, the coin dies and fades away.
If not, it's viable.

Trying to shoehorn it into Nxt places the responsibility for it where it shouldn't be and opens a big can of ugly worms.

The creation of these coins is an open and free option. If it is truly so, then the execution of it should be the responsibility should be the creator's.

I am fully convinced that people can come up with a way to have the NodeCake and eat it.

It is a temporary solution I see nodecoin as. James made it to solve our forging problem that has been discussed a million times. Nodecoins would definitely solve short term
forging issues until we have thousands of businesses supporting the network for their own sakes. But nodecoin must traded in for a fixed amount of Nxt like a points system.
James of course should be rewarded well by one of the committees if this is approved

I believe nodecoin was exactly conceived as that. James can correct me if I am wrong.
It was conceived as a solution to a problem that we were and still are grappling with, which is why it ticks me off that James is getting so much flack for it.
He made something to try and solve a problem. I think we could at least appreciate that.

Be that as it may, and at the risk of sounding like a record: it's not just nodecoin that is the issue. What about AE and the fact that we have this option at all?

NXTs as coins... NXTs r not coins, at least the creator of Nxt didn't want them to be coins. They r tokens that grant privileges to support Nxt. Deflation is not much better than inflation, "real" coins should be created on top of Nxt and be issued in quantities that keep their value constant. BCNext understands that this is very arguable, the community should decide if it wants to follow the path showed by him or stick to Bitcoin legacy with unchangeable supply of coins in hope to become rich by doing nothing.

[NxtMinnow]

I can't believe the debate I am seeing here ala nodecoins! Good job James for creating the first mine-able coin on the Asset Exchange!

Good job Jean-Luc for implementing client side transaction signing and confirming the need for SSL between client and server for security!

[chanc3r]

The alternative is to get the price of running a node so cheap that nobody needs a reward to do it.   What we are doing here is creating a pseudo-POW to make up for perceived weaknesses in PoS.  If PoS is strong enough to stand on its own, then let it.  If we try to go pseudo-PoW to be a motivator, then REAL PoW will ALWAYS be a better alternative and who needs NXT?

Ricky, this is wrong.

This is not abut PoS vs PoW... this is about having a reliable network of nodes to secure the network...

You thought we were attacked when we started, just wait until we start to be perceived as a real threat...

I totally agree.  And I do not see how nodecoin funds nodes.  How does creating a free coin create real money that gets spent buying a server for a month?  Map for me the flow of money....

Quite simply...
If no reward other than forging is needed then people need no incentive...
If people are not running nodes, no investor steps up and for example we have to use inf-com funds to pay for nodes then we will be in trouble after a time...

If the number of nodes in the network needs to be stimulated / maintained.
Create an order for node coins on the AE at a price people think it worth it...
People will run nodes to generate node coins to fill the order and redeem the coins for NXT

We could even trial this...

Do I want to see node coin as a new free floating coin - No
Do I want to see it hardened as a way to stimulate and reward people to run nodes - Yes unless there is a better idea out there.

[marcus03]

Good job Jean-Luc for implementing client side transaction signing and confirming the need for SSL between client and server for security!

I've missed that. Could you point me to where he said that? Found it. :-)

[rdanneskjoldr]

Pls someone answer.  If in some time,we had lots of nodes supporting the network,could we just get rid of nodecoins??Or would they be part of Nxt in their most basic structure???

[rickyjames]

It is a temporary solution I see nodecoin as. James made it to solve our forging problem that has been discussed a million times. Nodecoins would definitely solve short term
forging issues until we have thousands of businesses supporting the network for their own sakes. But nodecoin must be traded in for a fixed amount of Nxt like a points system.
James of course should be rewarded well by one of the committees if this is approved

OK, there's 525,600 minutes in a year.  Say everybody gets 5 nodecoins per block.  That's 2.6 million node coins per year.  If their value under a "points" system is 0.01 NXT (completely arbitrary, who knows what the market price would be - but a "free" coin had better be worth very little NXT), that's the same as creating a new stash of 26,000 NXT per year - that's an inflation rate of 0.0000026%.  At the current nickel per NXT, that's $1300 per year raised for servers.  If NXT goes up by a factor of 10, that's $13K per year.

Let me just say, if NXT goes up by a factor of 10, there are PLENTY of stakeholders here (me included) that would pay a voluntary "donation" / tax of 0.0000026% to support the computer network that made it happen.

[Come-from-Beyond]

I should have local (trustless) signing online tomorrow (no password sent to the server). A big thank you to CFB, Antonios, BloodyRookie and Jaguar0625 for all their help with this

I want to make sure people understand that it is not "trustless" signing. Unfortunately, the way we are doing it, you still have to trust the server. You don't send the password to the server, but you sign an array of bytes that the server sent to you. How do you know that this array really represents the transaction you intended to sign? To be sure, the client would need to parse and verify it, so the client needs to know exactly how each transaction type should be represented as a byte array. This is not a secret, it is in the source code, but if you need to implement this logic on the client side, you might as well construct the byte array yourself, and not trust the server to do it for you correctly. So by letting the client be simple and lazy and let the server construct the byte array, you necessarily have to trust the server. Furthermore, you have to trust that the server response you received has not been modified in transit - and the issue of using SSL to talk to the server becomes important again.

Very good point. I completely overlooked that server can return malicious transaction bytes.