**** Official Ethereum QA thread ****

[Kosta#]

Actually, we never were planning to have a miner collect more than 50% of transaction fees. Now, we're debating between 0% (tx fees burned), 50% and something in between.

I apologize for my ignorance in advance. What's wrong with 75% (or 100%) of transaction fees going to the node that actually validates the block?

[FandangledGizmo]

Hi I posted this in the other Ethereum thread a few days ago, but it looks like this is the main one.

Is this the Ethereum gameplan...

Hypothetical scenario

Right now in the US they are busy struggling with how best to regulate crypto-currencies.

These are the potential conclusions I think they will draw...

1. It is too hard to try to regulate the hundreds of crypto-currencies that are out there.
2. Banking compliance is a serious business and issuing bit-licenses and trying to monitor hundreds of new untrusted exchanges is not feasible.
3. Crypto-currencies have deflationary tendencies which run counter to most existing currencies.

The potential solution...

1. It might be possible to regulate 1 base crypto-currency on which other things can be built.
2. Only large existing retail/investment banks with sufficient experience in banking compliance can be trusted as exchanges.
3. A reasonably inflationary crypto-currency would be ideal.

How does Ethereum stack up?

1. Yes Ethereum could be the base crypto, lots of things can be built on top of it, but link back to it when you need to transfer out to fiat.
2. Large existing banks might already have an interest in Ethereum, there is a very large pre-mine, where is it going?
3. Ethereum is very inflationary.

Result...

'They' will decide Ethereum gives consumers the benefits of crypto-currencies while giving the regulators the ability to regulate it and  ensure there are as few bad actors as possible.

They will make it legal for on-line retailers to accept Ethereum as payment and they will make legal Ethereum to fiat exchanges, administered by large existing banks.
However moving to fiat or making online purchases with any other crypto-currency will be illegal.  

Some investment banks are incredibly powerful and influential with large global footprints, they will be able to help ensure this model is also adopted in many other countries. This could make Ethereum insurmountable

______________________________

This is only a hypothetical, but I came up with it because I thought the pre-mine and inflationary model was unattractive.
There's also not a lot of reason why people wouldn't fork Ethereum and create their own competing models with more attractive parameters. (less inflationary and no pre-mine.)

However Ethereum's inflationary model & large pre-mine (Which goes to?) would be appealing to TPTB.
By influencing regulations and laws in favour of Ethereum they could also ensure no competing models could threaten it.

The above hypothesis is obviously a wild stretch, but my question is

Edit: I've re-phrased it

A. Do you recognise that the large pre-mine and inflation won't be attractive to most users?
B. How do you hope to prevent forks to something more favourable if the code is open source? 

[DaFockBro]

Is the inflation distributed to stakeholders and miner's through the POS/POW?

[majik]

Will ethereum accounts be secure from day 1? to reassure early investors.  two-factor authentication?

The Ethereum reference wallet will be far more secure than QT from day 1 (launch of mining). We will have it pen tested thoroughly and even take it to DEFCON next year with a big treasure pot (you hack it; you own it). On a personal note, Bitcoin theft or loss really makes me sad and also I believe is a significant roadblock for mainstream adoption. Mainstream consumers need better security and more tools to protect themselves from themselves. 

Thanks Charles. I will participate in the Ethereum fund raising.  As a non-miner, would my 2000 Eth per btc be deposited/maintained in a secure wallet?  or perhaps you have other plans on how Ethereum ownership is accounted for during the pre-mine pre-wallet period?

[Tulpa]

Sorry for my English.

I saw some launches of CPU coins and it seems that after 2-3 hours after launch botnets are starting to mine this coins. No matter of code etc.

It seems that Eth can be target of such networks too.
512 MB per thread is not too much  when I can usually see that my Firefox is eating 2GB easily. So 4core CPU can be used without much trouble to user.

Will be our GPUs usable or not?

[Come-from-Beyond]

If I recall correctly Vitalik decided to get rid of crypto-opcodes (like SHA256). The point was to make Ethereum language more universal. R u going to do the next step and get rid of 256-bit numbers? Their usage don't make much sense coz 512-bit cryptoalgos will require to use different tricks to work with 512-bit numbers. Could we have only 64-bit numbers, this would help a lot to implement Ethereum interpretator in Java (which doesn't have native support of 256-bit math).

Edit: Maybe 32-bit is the best choice, JavaScript guys would be happy too.

[Kosta#]

If I recall correctly Vitalik decided to get rid of crypto-opcodes (like SHA256). The point was to make Ethereum language more universal. R u going to do the next step and get rid of 256-bit numbers? Their usage don't make much sense coz 512-bit cryptoalgos will require to use different tricks to work with 512-bit numbers. Could we have only 64-bit numbers, this would help a lot to implement Ethereum interpretator in Java (which doesn't have native support of 256-bit math).

Edit: Maybe 32-bit is the best choice, JavaScript guys would be happy too.

The hardest ECC scheme (publicly) broken to date had a 112-bit key for the prime field case and a 109-bit key for the binary field case. So 64-bit obviously won't do and at the same time it's a long way until 512-bit keys will be needed, if ever.

[Come-from-Beyond]

The hardest ECC scheme (publicly) broken to date had a 112-bit key for the prime field case and a 109-bit key for the binary field case. So 64-bit obviously won't do and at the same time it's a long way until 512-bit keys will be needed, if ever.

I meant we could use four 64-bit numbers to represent 256 bits. Regarding the long way until 512-bit keys will be needed - I want to implement RSA with 4096 bits.

Edit: Not everyone has hardware with AVX support, why not 128 bits at least/most?

[Kosta#]

The hardest ECC scheme (publicly) broken to date had a 112-bit key for the prime field case and a 109-bit key for the binary field case. So 64-bit obviously won't do and at the same time it's a long way until 512-bit keys will be needed, if ever.

I meant we could use four 64-bit numbers to represent 256 bits. Regarding the long way until 512-bit keys will be needed - I want to implement RSA with 4096 bits.

Edit: Not everyone has hardware with AVX support, why not 128 bits at least/most?

It is well-known that RSA needs much longer keys to achieve the same crypto strength. Ethereum uses ECC, and I was talking about ECC, so it is not clear why RSA is relevant here (or ROT13, for that matter).

[Come-from-Beyond]

It is well-known that RSA needs much longer keys to achieve the same crypto strength. Ethereum uses ECC, and I was talking about ECC, so it is not clear why RSA is relevant here (or ROT13, for that matter).

It's relevant coz Vitalik wants Ethereum to be universal. Also ur position that 256 bits is enough reminds me the myth about Bill Gates and 640K.

[JTB800]

Edit: I've re-phrased it

A. Do you recognise that the large pre-mine and inflation won't be attractive to most users?
B. How do you hope to prevent forks to something more favourable if the code is open source? 

When you say that a pre-mine won't be attractive to most users, you actually mean miners. There is nothing that miners bring to the table but pump and dump. OK, practically nothing. Most miners are swirling around the newest coins waiting for the starting gun. Massive computing farms turned on and ready to go, or at the very least a few AMD 7950s.

Once the mining begins they all pretend to be part of the "community". Once that "community" raises the bid on the coin enough, it's dump, dump, dump and these dedicated miners are off to the next coin.

Then, to top it all off, they act as if they are doing everyone a big service with all of that "hard work" of mining the coin for them in the first place.

Mining started out as a fun and interesting new internet project. Now, on every forum, it's dominated by vultures who's only concern is their coin acquisition rate and at what price they can dump their coins. They can hardly even conceal their greed by pretending to be a part of the crowd that actually likes the coin.

The faster mining dies, in its present form at least, the healthier crypto-currencies will be.

[FandangledGizmo]

Edit: I've re-phrased it

A. Do you recognise that the large pre-mine and inflation won't be attractive to most users?
B. How do you hope to prevent forks to something more favourable if the code is open source?  

When you say that a pre-mine won't be attractive to most users, you actually mean miners. There is nothing that miners bring to the table but pump and dump. OK, practically nothing. Most miners are swirling around the newest coins waiting for the starting gun. Massive computing farms turned on and ready to go, or at the very least a few AMD 7950s.

Once the mining begins they all pretend to be part of the "community". Once that "community" raises the bid on the coin enough, it's dump, dump, dump and these dedicated miners are off to the next coin.

Then, to top it all off, they act as if they are doing everyone a big service with all of that "hard work" of mining the coin for them in the first place.

Mining started out as a fun and interesting new internet project. Now, on every forum, it's dominated by vultures who's only concern is their coin acquisition rate and at what price they can dump their coins. They can hardly even conceal their greed by pretending to be a part of the crowd that actually likes the coin.

The faster mining dies, in its present form at least, the healthier crypto-currencies will be.

Hi JTB800, thanks for the reply.

1 100% agree with your assessment of miners and that mining is obsolete. POS is the way forward. Unfortunately that doesn't answer either of my questions though.

POS does not equal Pre-mine. POS currencies distribute the currency to investors during an IPO period and the trend is for more & more fair distribution not less. There is no precedent for such a large pre-mine (Going to developers + ?) being successful.

What about the inflation?
The advantage in full POS is obviously 0% inflation and right now they're even working on formulas to  make the transaction fee as mathematically cheap as possible, only increasing it if the network gets too full or the number of decentralised nodes becomes too low.

I just can't fathom a scenario where someone would devise Ethereum's model knowing crypto-currencies especially Vitalik, who is obviously a genius. Pre-mine and high inflation ONLY appeals to TPTB. So as far fetched as it might be, IMO the only situation I can think of where your model makes sense is if TPTB are involved AND can provide assistance in ensuring no fork or competitor would be legal.

Again if someone could please answer why they think Ethereum's large pre-mine and/or high inflation would be viewed favourably by users please enlighten me.

[JTB800]

Hi JTB800, thanks for the reply.

1 100% agree with your assessment of miners and that mining is obsolete. POS is the way forward. Unfortunately that doesn't answer either of my questions though.

POS does not equal Pre-mine. POS currencies distribute the currency to investors during an IPO period and the trend is for more & more fair distribution not less. There is no precedent for such a large pre-mine (Going to developers + ?) being successful.

What about the inflation?
The advantage in full POS is obviously 0% inflation and right now they're even working on formulas to  make the transaction fee as mathematically cheap as possible, only increasing it if the network gets too full or the number of decentralised nodes becomes too low.

I just can't fathom a scenario where someone would devise Ethereum's model knowing crypto-currencies especially Vitalik, who is obviously a genius. Pre-mine and high inflation ONLY appeals to TPTB. So as far fetched as it might be, IMO the only situation I can think of where your model makes sense is if TPTB are involved AND can provide assistance in ensuring no fork or competitor would be legal.

Again if someone could please answer why they think Ethereum's large pre-mine and/or high inflation would be viewed favourably by users please enlighten me.

Well, to be honest, I am looking at them warily as well. But, I really have little problem with pre-mines as a (very) general rule. If we want real developers that can bring real innovation, then they have to get paid. Better that, then having little skin in the game and quickly turning their attention to another coin or just sticking to their day job. Now, are the people behind Ethereum worth the money? I have no idea.

I think inflation is a problem for many currencies, but I also think it can be exaggerated. There is going to be a percentage of coins "lost" or unrecoverable due to forgetting one's password, computer crashing with no backup or just forgetting they had a tiny bit left in a wallet somewhere. I don't recall what ETH's inflation was off the top of my head, but that is definitely a consideration for any coin.

Now, I am one of those people playing around with some of these coins for fun, mostly. So, my due diligence will be less than a lot of people's will be, of course. That is a roundabout way of saying that I don't have a full analysis of Ethereum for you and that you will have to wait for the more serious investors to get a complete picture.

But, investing is investing and if the founders are good, honest and working hard toward their goals, then any percentage one can grab will be a good deal. Now, if you could tell me who those people were, I'd buy those coins!

Sorry, I couldn't be much more help -- hope you get the answers you are looking for.

[FandangledGizmo]

Well, to be honest, I am looking at them warily as well. But, I really have little problem with pre-mines as a (very) general rule. If we want real developers that can bring real innovation, then they have to get paid. Better that, then having little skin in the game and quickly turning their attention to another coin or just sticking to their day job. Now, are the people behind Ethereum worth the money? I have no idea.

I think inflation is a problem for many currencies, but I also think it can be exaggerated. There is going to be a percentage of coins "lost" or unrecoverable due to forgetting one's password, computer crashing with no backup or just forgetting they had a tiny bit left in a wallet somewhere. I don't recall what ETH's inflation was off the top of my head, but that is definitely a consideration for any coin.

Now, I am one of those people playing around with some of these coins for fun, mostly. So, my due diligence will be less than a lot of people's will be, of course. That is a roundabout way of saying that I don't have a full analysis of Ethereum for you and that you will have to wait for the more serious investors to get a complete picture.

But, investing is investing and if the founders are good, honest and working hard toward their goals, then any percentage one can grab will be a good deal. Now, if you could tell me who those people were, I'd buy those coins!

Sorry, I couldn't be much more help -- hope you get the answers you are looking for.

Thanks for the discussion. Again I 100% agree with 'skin in the game.' But I prefer when some of it's their own skin (own contribution).
I also have no problem with some funds helping with initial and also medium to long term development. But I think anymore than a 10% distribution of funds received given to 'devs + ?' will be received very badly.  

For me, unlike regular companies, crypto-currencies are the answer to the problem of a small group of people having the power to control a money system that eats away at people's purchasing power via inflation. Using this model (40% pre-mine/distribution of funds received to 'devs & ?' & high inflation) Ethereum seems to solve neither of those problems and makes fiat seem quite attractive by comparison. Like you I haven't been able to look in depth at everything yet, so hope to be proved wrong!

[ddink7]

Team:

Since the funding for this projected will be collected and held in bitcoins, do y'all have a contingency plan in case of a significant drop in bitcoin prices over the short- to intermediate-term?

[Kosta#]

It is well-known that RSA needs much longer keys to achieve the same crypto strength. Ethereum uses ECC, and I was talking about ECC, so it is not clear why RSA is relevant here (or ROT13, for that matter).

It's relevant coz Vitalik wants Ethereum to be universal. Also ur position that 256 bits is enough reminds me the myth about Bill Gates and 640K.

you asked for 32-bit key because it would be "convenient for java and javascript guys". this is the opposite of "wanting to be universal". obviously, you are not familiar with cryptography at all, otherwise you would know which key sizes are considered secure. also, you would not compare RSA key length with ECC. it would be interesting to observe whether your arrogance will overwhelm common sense and you continue to argue.

256 bits will be enough for quite a long time, unless quantum computers appear (actual ones, not dwave-type), in which case 512 will be as useless as 256.

[Ursium]

IMPORTANT - PLEASE READ

Regarding Peercover and its announcement - we have not launched and have no relation with ANY exchanges and specifically mention that peercover is not legitimate.

There are complicated issues that we (Ethereum.org) need to resolve before we can make any clear statements about the initial ether sale. Any action taken by any individuals or groups before we release official documents is premature and may lead to a significant loss.

While we are aware of and have respect for the work peercover.com is doing, they are in no way officially associated with Ethereum Project, do no speak for it, and are, in our opinion, doing a disservice to the Ethereum Project and possibly leading their own clients into a situation that they don't understand. Offering to sell ether that doesn't yet exist, to naive purchasers, can only be considered irresponsible at this point. Buyer beware.

We request that peercover.com cease to offer ether forwards, until there is more information released on The Ethereum Project, the potential value of the ether cyptofuel, and until lawyers in various countries clarify what the securities and regulatory issues might be in selling ether to the public in various countries.

And of course, peercover.com, please feel free to reach out and discuss with us how we may work together in the future. Thank you.

[Come-from-Beyond]

you asked for 32-bit key because it would be "convenient for java and javascript guys". this is the opposite of "wanting to be universal". obviously, you are not familiar with cryptography at all, otherwise you would know which key sizes are considered secure. also, you would not compare RSA key length with ECC. it would be interesting to observe whether your arrogance will overwhelm common sense and you continue to argue.

256 bits will be enough for quite a long time, unless quantum computers appear (actual ones, not dwave-type), in which case 512 will be as useless as 256.

Looks like my previous reply insulted u, coz now u r discussing my personality.

Of coz I know that EC key length is not "equal" RSA key length, that's why I wrote

I want to implement RSA with 4096 bits.

Regarding "256 bits will be enough for quite a long time"... Well, looks like u've never heard of Ed25519 which would be easier implemented if we had 512-bit numbers, or Curve25519 implementations that require even more bits.

PS: I'm going to stop discussing this issue with u, obviously u r unable to contribute anything valuable.

[td services]

... and until lawyers in various countries clarify what the securities and regulatory issues might be in selling ether to the public in various countries.

uh-oh. a project is DOA once lawyers get involved. I liked Ethereum a lot, but this is not a good sign.

[Ursium]

... and until lawyers in various countries clarify what the securities and regulatory issues might be in selling ether to the public in various countries.

uh-oh. a project is DOA once lawyers get involved. I liked Ethereum a lot, but this is not a good sign.

I don't think that's true. Going ahead without doing our homework on the other hand is irresponsible.