[ANN][XCP] Counterparty - Pioneering Peer-to-Peer Finance - Official Thread

[super3]

This discussion over the past week has made me buy into the argument that proof-of-work is not viable in the long run because it will be cartelized by a few powerful miners.

Proof of stake has its own issues currently but those are technical issues that can be solved, not a political one.

I think the hybrid model, like Peercoin, is the best. Benefits of both, without the drawbacks.

[porqupine]

The problem with a pure implementation of Proof of Stake - all technical difficulties aside, is it's always going to be a monopoly in favor of those that already have stakes - which is untenable for a currency which needs to gain an audience and circulation.

[bitwhizz]

 its good to read unbiased opinions on reddit

[BitcoinTangibleTrust]

Taking policy fights out in the press never gets the wronged party what it wants.

Blockchain.info got Apple to allow wallets in the iPhone when they took out multilple press releases/blog posts. People even shot up their iphones and Apple cried.

[super3]

The problem with a pure implementation of Proof of Stake - all technical difficulties aside, is it's always going to be a monopoly in favor of those that already have stakes - which is untenable for a currency which needs to gain an audience and circulation.

As opposed to the current system where only the people who can afford $10,000 KNC miners have a say, and take 10% of the money supply?

[baddw]

The problem with a pure implementation of Proof of Stake - all technical difficulties aside, is it's always going to be a monopoly in favor of those that already have stakes - which is untenable for a currency which needs to gain an audience and circulation.

The problem with a pure implementation of Proof of Work is it's always going to be a monopoly in favor of those who have lots of hardware, which is untenable for a currency which needs to gain an audience and circulation.

Under both systems, investors (directly or in hardware/mining costs) / early adopters will have all the coins.  Once the currency gains usefulness, the demand will grow and these folks will sell their coins on the free market to anybody who wants one, at the right price.  

The "wider adoption" process works the same way eventually, it's just the initial distribution that's different.  One of them is a gigantic waste of electricity and hardware resources, and the other tends to make the developers rich.  Counterparty is the ONLY crypto-currency that has eschewed BOTH of these methods with a truly fair distribution.

[halfcab123]

Hashpower talks. 

[freedomfighter]

its good to read unbiased opinions on reddit

can someone include a link please? TY

[Patel]

its good to read unbiased opinions on reddit

can someone include a link please? TY

http://www.coindesk.com/developers-battle-bitcoin-block-chain/

http://www.reddit.com/r/Bitcoin/comments/21b4pm/developers_battle_over_bitcoin_block_chain/

[porqupine]

The problem with a pure implementation of Proof of Stake - all technical difficulties aside, is it's always going to be a monopoly in favor of those that already have stakes - which is untenable for a currency which needs to gain an audience and circulation.

I agree but I think that is a problem with a solution. As scammy as Auroracoin is it has the right idea. Could you imagine a government using proof-of-stake crypto to implement a basic income scheme? Every month registered citizens automatically receive a certain amount of crypto income which they can automatically save by generating blocks or spend. That would solve the unequal stake distribution that Peercoin and its clones suffer from.

There would certainly be identity fraud, but the government deals with pension/Social Security fraud every day and is best equipped to handle it. Whether or not a major country would actually try this initiative is another question. But I think there will be at least one country with a weak currency that tries it out.

The other issue, which jgarzik mentioned earlier, that "in PoS there is nothing at stake" is also a technical problem that I think Ethereum will be trying to solve.

Actually even if you had a way to distribute a Pure Proof of Stake implementation fairly and uniformly - it would still be a poor medium of exchange - this is because even if the currency was inflationary it would still only be inflationary for the holders, meaning that spending would be arbitrarily discouraged. (That is to say the person that did not spend but instead increased his Proof of Stake reserves would gain more and more advantage just with passing time, in a way currency already works this way (compare those for whom most of their income is consumed by day to day life, to those that have surplus to invest and earn a return on) - only it would be exacerbated by the Proof of Stake implementation (You wouldn't even need to invest to earn returns!).

It is possible to conceive a centralized inflationary PoS scheme (such as the government acquiring all newly created funds), but this would rather terminate the point of PoS and decentralized currency - although it would make it into a functional medium of exchange. I suspect terms similar to these are the only one's under which a government would actually back a cryptocurrency - since otherwise it would mean forfeiting centralized control of the money supply.

As to Jgarzik's comment, I'm not sure what the context is, but supposedly you are able to double or multi-sign the same numbered Block, this could be penalized for by doing something like a reverse Ghost weighting - i.e. reducing signature weight for outputs present in more than 1 uncle of the last block (but that might be too much added overhead). There are probably a lot of other issues though - I'm not that well technically informed.

edit: just to be clear, in the above I'm not talking about the distribution but about the actual equilibrium state that Pure PoS would gravitate to.

[Anotheranonlol]

Some of the comments on reddit..

[–]bassjoe 1 point 48 minutes ago
The blockchain belongs to the whole network, not just those that want to use it to store their proprietary information which is useless to the majority of the network's users.

[–]physalisx -1 points 1 hour ago*
As far as I'm concerned, counterparty can suck it. There is no reason why they should be allowed to abuse the blockchain by filling it with their data. The blockchain is not a general purpose storage space, period. They'll have to find another way. Wanting to build decentralized services is great. But there's no justification for putting it all on Bitcoin's shoulders.


[–]scotty321 1 point 1 hour ago
This is why we can't have nice things.

[–]super3
The blockchain is a data structure. Why do people get to state what it may or many not be used for?
[–]nullc 3 points 19 minutes ago
Your home is a steel and timber structure, why do people get to state what it may or may not be used for? I for one am looking forward to putting my radioactive waste in your living room. Don't like it? Too bad: I paid fees to your neighbor, fair and square.
[–]slimmtl 8 points 2 hours ago
My miners arent your free cloud storage.

[idoB]

 He used computing resources which did not belong to him, but were entrusted to his care, to sabotage another project.

If that's true, I'll be moving my miners off Eligius and recommend same to every other miner I know. Care to back quoted claim with some data?

[nakaone]

Some of the comments on reddit..

[–]bassjoe 1 point 48 minutes ago
The blockchain belongs to the whole network, not just those that want to use it to store their proprietary information which is useless to the majority of the network's users.

[–]physalisx -1 points 1 hour ago*
As far as I'm concerned, counterparty can suck it. There is no reason why they should be allowed to abuse the blockchain by filling it with their data. The blockchain is not a general purpose storage space, period. They'll have to find another way. Wanting to build decentralized services is great. But there's no justification for putting it all on Bitcoin's shoulders.


[–]scotty321 1 point 1 hour ago
This is why we can't have nice things.

[–]super3
The blockchain is a data structure. Why do people get to state what it may or many not be used for?
[–]nullc 3 points 19 minutes ago
Your home is a steel and timber structure, why do people get to state what it may or may not be used for? I for one am looking forward to putting my radioactive waste in your living room. Don't like it? Too bad: I paid fees to your neighbor, fair and square.
[–]slimmtl 8 points 2 hours ago
My miners arent your free cloud storage.

the question of network neutrality is quite elemental. But I can also understand the critique of abuse (not in the case of counterparty) but in general.

to see it on a broader scale, the problem of oligopolized mining and their political power seems already to be relevant. Just imagine the same situation we have with the pools, between a regulator and a mining pool. This situation has the potential to be a major drawback for mass adoption, because no regulator will support a situation where he can basically be extorted. I personally was quite shocked although I knew of the power of the miners that they would have the potential to abuse this power in an almost unlimited way. to put this system in a wider perspective a constitution is missing, I highly doubt that in that spot a kind of self-enforcing equilibrium will occur. 

[sparta_cuss]

One of the primary arguments against POS - that one doesn't need to spend/invest in order to earn money through fees - is also an argument against saving to earn interest.

Certainly there will be people who hoard in order to earn fees, but no entrepreneur will be satisfied with such low returns. They will spend/invest their money to develop useful products and services for the prospect of significantly greater returns than through collecting tolls. And other users will want to buy those products or services, since the product or service is worth more to them than the little income they earn from the POS transaction fees.

There will always be hoarders, as I say, but the hoarders provide ballast and stability to the currency. Most savers will use the currency because it only has value when it is spent to create or consume real-world products and services.

[baddw]

One of the primary arguments against POS - that one doesn't need to spend/invest in order to earn money through fees - is also an argument against saving to earn interest.

Certainly there will be people who hoard in order to earn fees, but no entrepreneur will be satisfied with such low returns. They will spend/invest their money to develop useful products and services for the prospect of significantly greater returns than through collecting tolls. And other users will want to buy those products or services, since the product or service is worth more to them than the little income they earn from the POS transaction fees.

There will always be hoarders, as I say, but the hoarders provide ballast and stability to the currency. Most savers will use the currency because it only has value when it is spent to create or consume real-world products and services.

I agree.  The return on most PoS coins is quite low - 1% yearly for Peercoin, IIRC?  You'd have to be an idiot to not do better than that by cashing out your Peercoins for fiat and investing them in real-world financial instruments (barring the chance for value appreciation of Peercoins relative for fiat).  The real case for PoS is that it allows stochastic mining that will never spiral out of control in terms of real-world costs.

In the end, all coins find their way to exchanges where they can be purchased outright with fiat or other cryptos.  The people who originally obtained them (whether by mining or by IPO/pre-buy/burn/whatever) are entitled to some profit IMO.  The free market is really the only way to "fairly" distribute coins, and they all end up there eventually.  Mining and IPO are simply ways to distribute the coins initially, and both methods have their flaws.  But if the coin has value, that value will be determined in the free market.

[porqupine]

It's essential for the coins value that it can function as a medium of exchange - all the advantages related to cryptocurrency are precisely in terms of the benefits it offers in that regard.

[Anotheranonlol]

[–]mike_hearn 2 points 13 minutes ago
Well, be fair - lots of projects have promised the moon in this regard (e.g. Mastercoin) and then not delivered. Counterparty has actual code and specs, which is great, but when I poked around yesterday the only GUI I found is perhaps better described as a command line in a window. I question whether this can be described as a "functioning distributed exchange".

shocking really, I expected better.

A command line in a window, behave yourself.

[Elokane]

There is something I don't understand about the mechanics of the current problem with OP_RETURN. I am planning to issue an asset on top of XCP and want to make sure I get this straight, so I'll appreciate a clarification.

Currently, XCP already works with the current Bitcoin implementation. It's able to process feeds, allows decentralized trading, asset issuance and dividend payment, and so on.
With the next version, this OP_RETURN feature is being added, but with less storage space than anticipated, throwing a wrench in XCP development plans.

So my question is:
Will XCP still function as it does now (asset trading, dividend distribution, etc)?
What are the features that are incompatible with this new change?

Thanks in advance.

[cityglut]

There is something I don't understand about the mechanics of the current problem with OP_RETURN. I am planning to issue an asset on top of XCP and want to make sure I get this straight, so I'll appreciate a clarification.

Currently, XCP already works with the current Bitcoin implementation. It's able to process feeds, allows decentralized trading, asset issuance and dividend payment, and so on.
With the next version, this OP_RETURN feature is being added, but with less storage space than anticipated, throwing a wrench in XCP development plans.

So my question is:
Will XCP still function as it does now (asset trading, dividend distribution, etc)?
What are the features that are incompatible with this new change?

Thanks in advance.

XCP will function just as it does now, and no features are incompatible with the reduction of OP_RETURN outputs to 40 bytes. Remember, Counterparty has not been using OP_RETURN, but rather bare multi-sig, and so it will just continue using the latter. If bare multi-sig ever stops being an option, there are other methods of putting data in the blockchain.

[freedomfighter]

[–]mike_hearn 2 points 13 minutes ago
Well, be fair - lots of projects have promised the moon in this regard (e.g. Mastercoin) and then not delivered. Counterparty has actual code and specs, which is great, but when I poked around yesterday the only GUI I found is perhaps better described as a command line in a window. I question whether this can be described as a "functioning distributed exchange".

shocking really, I expected better.

A command line in a window, behave yourself.

To be fair he continued by saying:

".................So though I haven't weighed in on the Counterparty thread, people who take a relatively unknown project and claim Bitcoin will die without their amazing hack that works in a totally different way to how I am expecting it to work, start out with slightly negative credibility in my view. Certainly I'm willing (happy!) to be proven wrong though!

I highly suggest that one of the devs respond to him directly via PM or at the thread and show him otherwise. we need these key guys to see the entire pic.