Transparent mining 2, or What part of Legacy should be left behind

[Come-from-Beyond]

Below u'll find the 2nd part of Transparent Mining essay, the 1st part is available here - https://bitcointalk.org/index.php?topic=364218.0. The essay is based on text written by BCNext, I paraphrase it in my own words to protect BCNext's real identity against text style analysis (as was agreed).

Nxt mining simulates Bitcoin mining by pretending that each coin is a small mining rig. BCNext decided to go this way instead of introducing his own approach coz Bitcoin community is conservative and wouldn't adopt a system with radical differences. Now, when Nxt got its own community, it's time to get rid of the facade and reveal true properties of Transparent Mining. These properties r obvious to everyone who spent some time analyzing Transparent Mining, but still...

Nxt mining uses a deterministic lottery that grants right to mine next blocks. Time of a next block is determined by the time of the previous block and by the base target. The base target is a part of Bitcoin legacy that should be left behind, it doesn't make sense to wait when next block is mined coz we already know who will do it. And we can mine blocks at a fixed rate, for example, every 60000 ms (exactly 1 min). When Internet becomes faster we will switch to a smaller gap between blocks (10 seconds, for example).

Mining reward is another obsolete part. True reward for supporting Nxt network comes from services that use Nxt. Someone owns a currency exchange and mine blocks to keep his business running. Another one owns a shop and mine blocks to keep his business running. The 3rd person owns a software company that develops programs for Nxt-based services and mine blocks to keep his business running. Selfish miners (those who mine only to earn fees) should be "removed" from the system, they r not interested in success of Nxt and only want to cash-out. If a clone appears such the people will likely jump to another ship, they add very little value to Nxt. All this doesn't mean that we should get rid of fees completely, we still need them as a countermeasure against spamming.

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.

Trust noone - this is a very important principle. Nxt doesn't rely on trust but solves the problem of trust in another way. It evolves to a system that doesn't care about trust coz everything will be very clear. Transparency extended to absolute leads to inability to cheat thus removing necessity to think if someone should trust another one.

The list of these properties can be extended and BCNext wants the community to do it by itself...

[CIYAM]

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.

I think that the idea of reducing the fees by a factor of 10 or 100 is likely to pretty much completely get rid of the "mining mentality" (and will increase the # of transactions made) although one does need to be careful perhaps not to do this too soon as currently the "forging reward" is one of the main factors motivating people to run nodes.

Changing the total supply from 1B to something else would be a lot more controversial than reducing the fees - effectively that amount was a "promise" made at the outset so if that promise were to be broken I would expect some investors (especially the 73 initial ones) would be unhappy about that (actually it would probably upset those who have invested at recent "market prices" much more than the 73 as they have already probably each taken large profits from their initial investment).

[landomata]

Below u'll find the 2nd part of Transparent Mining essay, the 1st part is available here - https://bitcointalk.org/index.php?topic=364218.0. The essay is based on text written by BCNext, I paraphrase it in my own words to protect BCNext's real identity against text style analysis (as was agreed).


Selfish miners (those who mine only to earn fees) should be "removed" from the system, they r not interested in success of Nxt and only want to cash-out. If a clone appears such the people will likely jump to another ship, they add very little value to Nxt. All this doesn't mean that we should get rid of fees completely, we still need them as a countermeasure against spamming.

Then we should keep the fees @ .01 Nxt....as "selfish mining" will be removed from the system.

[landomata]

I think that the idea of reducing the fees by a factor of 10 or 100 is likely to pretty much completely get rid of the "mining mentality" (and will increase the # of transactions made) although one does need to be careful perhaps not to do this too soon as currently the "forging reward" is one of the main factors motivating people to run nodes.

My VPS Node has been running since the DDos war and my motivation is not forging rewards....my motivation is to keep Nxt running...period.

[2Kool4Skewl]

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.

I think that the idea of reducing the fees by a factor of 10 or 100 is likely to pretty much completely get rid of the "mining mentality" (and will increase the # of transactions made) although one does need to be careful perhaps not to do this too soon as currently the "forging reward" is one of the main factors motivating people to run nodes.

Changing the total supply from 1B to something else would be a lot more controversial than reducing the fees - effectively that amount was a "promise" made at the outset so if that promise were to be broken I would expect some investors (especially the 73 initial ones) would be unhappy about that (actually it would probably upset those who have invested at recent "market prices" much more than the 73 as they have already probably each taken large profits from their initial investment).

I agree.  Reduce the tx fee to 0.1 or 0.01, but keep the currency float at 1 billion Nxt.

[iruu]

Changing the total supply from 1B to something else would be a lot more controversial than reducing the fees - effectively that amount was a "promise" made at the outset so if that promise were to be broken I would expect some investors (especially the 73 initial ones) would be unhappy about that (actually it would probably upset those who have invested at recent "market prices" much more than the 73 as they have already probably each taken large profits from their initial investment).

This part was about issued assets, not nxt.

"real" coins should be created on top of Nxt

[Come-from-Beyond]

Changing the total supply from 1B to something else would be a lot more controversial than reducing the fees - effectively that amount was a "promise" made at the outset so if that promise were to be broken I would expect some investors (especially the 73 initial ones) would be unhappy about that (actually it would probably upset those who have invested at recent "market prices" much more than the 73 as they have already probably each taken large profits from their initial investment).

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

[CIYAM]

My VPS Node has been running since the DDos war and my motivation is not forging rewards....my motivation is to keep Nxt running...period.

Sure - of course there are probably quite a few running nodes whose motivation is not forging - hard to know whether or not that is the majority (perhaps being able to work this out might help with the decision).

I am guessing that a reduction from 1 to 0.1 should at least provide a good way to "get an idea" how much a "further tenfold reduction" would affect the network.

[BitAddict]

My VPS Node has been running since the DDos war and my motivation is not forging rewards....my motivation is to keep Nxt running...period.

Sure - of course there are probably quite a few running nodes whose motivation is not forging - hard to know whether or not that is the majority (perhaps being able to work this out might help with the decision).

I am guessing that a reduction from 1 to 0.1 should at least provide a good way to "get an idea" how much a "further tenfold reduction" would affect the network.

+1

But I think nearly no one is forging for the real benefit of forging. If you do maths you will see you take really low profit. As mentioned before real value is keeping Nxt running, and that's the first for all the people who owns Nxt.

[CIYAM]

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

[Come-from-Beyond]

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

Nxt is not centralized so I think it's rather good than bad. Also, fiat currencies backed by gold/NXT don't look too bad to me.

[2Kool4Skewl]

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

This was my thought too.

[bitcoinpaul]

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

NXTs r not coins, at least the creator of Nxt didn't want them to be coins.

I have a problem to understand where the difference is now

- CfB always said there should be coins on top of Nxt
- Now BCNext says there should be coins on top of Nxt and this should be the sole purpose of Nxt.

Since you need NXT for this coins, NXT will automatically gets evaluated (high) and BCNext idea of using NXT as coins cannot become real because NXT will get traded like gold coins, e.g. eDollars backed by NXT, dollars (long time ago) backed by gold. Wrong?

edit: Or is this a terminology problem, because 'gold coins' are no coins?

[TwinWinNerD]

BCNext doesn't propose to change 1B limit, he is even against it coz this would break forging. His idea is similar to issuance of eDollars on Asset Exchange.

Oh - I thought the purpose of the Asset Exchange was always going to be for such things. At the end of the day I think that the AE just brings the Nxt functionality closer to Ripple (which may or may not be a good thing).

NXTs r not coins, at least the creator of Nxt didn't want them to be coins.

I have a problem to understand where the difference is now

- CfB always said there should be coins on top of Nxt
- Now BCNext says there should be coins on top of Nxt and this should be the sole purpose of Nxt. Wrong?
- Since you need NXT for this coins, NXT will automatically gets evaluated (high) and BCNext idea of using NXT as coins cannot become real because NXT will get traded like gold coins, e.g. eDollars backed by NXT, dollars (long time ago) backed by gold. Wrong?

@the last part:

He want's coins backed by gold/silver. Not backed by NXT. How would that even work, a coin backed by NXT is basically NXT in itself^^

[CIYAM]

I don't see how any AE is going to really ever be properly "backed" by anything - you just end up with "centralised" Gateways a la Ripple or you end up with disasters like GLBSE.

Why do people think AE is so important when the only "decentralised" part is the "trading between IOU's and NXT" (anything else becomes reduced to having to "trust" whoever to actually respect the IOU)?

[landomata]

I don't see how any AE is going to really ever be properly "backed" by anything - you just end up with "centralised" Gateways a la Ripple or you end up with disasters like GLBSE.

Why do people think AE is so important when the only "decentralised" part is the "trading between IOU's and NXT" (anything else becomes reduced to having to "trust" whoever to actually respect the IOU)?

I;m sorry but any ASSET can be created in AE.....what is Bitcoin backed by? or the United States Dollar?


This would allow us to have a FIXED value e-currency which we can use for micro payments.

@ 10,000 TPS and above speeds.

[salsacz]

Nxt is like gold. But you can create gold roman coins, gold watches or teeth So you will always need gold (Nxt)

[2Kool4Skewl]

I don't see how any AE is going to really ever be properly "backed" by anything - you just end up with "centralised" Gateways a la Ripple or you end up with disasters like GLBSE.

Why do people think AE is so important when the only "decentralised" part is the "trading between IOU's and NXT" (anything else becomes reduced to having to "trust" whoever to actually respect the IOU)?

Exactly.

I can say I'm issuing a fiat currency backed by gold and sell the fiat currency on Nxt's AE, but who is going to make sure that I have the gold to back the fiat currency?

[landomata]

Nxt is like gold. But you can create gold roman coins, gold watches or teeth So you will always need gold (Nxt)

  all the above 3 gold examples carry value.

[CIYAM]

This would allow us to have a FIXED value e-currency which we can use for micro payments.

It won't be fixed at all if the issuer suddenly stops redeeming their IOU's and in if fact such IOU's will quickly become worth *nothing* - as you said the Asset can be anything including "Pirate Ponzi Coins".

Understand that just calling something NXTUSD does not at all make it worth 1 USD - it's no different to Mt. Gox USD amounts (they have clearly been valued at less than *real* USD amounts for a long time).