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

[CIYAM]

https://bitcointalk.org/index.php?topic=455861

Yes - I guess something along the lines of using AE to trade precious metals might be a better application (although not being a PM trader it doesn't appeal to me personally).

[ChuckOne]

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 believe the value of NXT cannot be determined by NXT itself. I would call it external value to stress that issue. If that holds true, a dynamic change in NXT supply might not be possible.

What the best indicators for NXT's external value? MtGox's, BTER's value is not trustworthy. How to determine it then?

FWIW, I could very well live with a constant number of NXT and a slow increase or decrease of its external value.

Another issue, I am concerned with is how to distribute these new NXTs. What mechanism would be choose there?


EDIT: When reading https://bitcointalk.org/index.php?topic=364218.0 one recognizes: "[...] The 2nd scenario can't be applied to Nxt, coz no NXTs exist outside the network. [...]" IMHO this is really important to understand why a constant number of NXTs is the best way.

[Ola]

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.

My same sentiment...

also

please do not try to increase the support to remove mining fees, at least not just yet...Mining makes more people run more nodes, no matter their intent...it secures the network unless you already have Advanced DDoS Protection: Project Kharon implemented and ready to be activated

do not remove mining
do not increase nxt supply....asset exchange token will peg a stable value from people who can verifiably back tokens with real fiat
transaction cancellation is just ridiculous...I hope bcnext is ok

Nxt could have a special kind of asset backed by fixed amount of NXT.

But if we aren't supposed to "trade NXT" then that wouldn't have any value then would it?

The point is that we are NOT supposed to do anything, it's up to the community how to develop Nxt further.

I think every everyone in the community wants nxt to be able to be traded MYSELF INCLUDED  whats going on with bcnext??? why even suggest this? or is this another one of his social experiments to make sure he is not seen as Messiah and ensure the functionality of the community is decentralized??? if not i think something serious is going on with him!!!!

[ZeroTheGreat]

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?

Nxt could have a special kind of asset backed by fixed amount of NXT.

Doesn't matter, it's centralized decision (to provide NXT <--->, say, gold), so it can't cover whole field of risks completely (gold's holder can be robbed, can cheat and so on). Why backup so needed for minds? Money better serve its pupose with free flow, w/o any backup. And decentralized money better than centralized.

[pandaisftw]

Maybe non-critical ones?

And this is something that makes me wonder about the value of the AE. If we aren't going to trust it for "time-critical" trades (which would be pretty much *all* trades if you are a day trader) then what exactly are these *important* but non-time critical trades that it is needed for?

(some concrete examples would be very helpful here)

I'm curious, how does the AE interact with instant transactions? With instant transactions, you could theoretically have semi-HFT (not as fast as off-chain... but pretty fast)?

I also assume that by instant transactions, this actually means instant confirmations (up to a certain point)? Say you can predict 5 blocks in the future with 99.99% accuracy, so if you perform an instant transaction from your special account, you would get an instant 5 confirmations. Even if a single rogue forger decides not to include you, you will still have 4 confirmations.

Or am I getting this completely wrong, c-f-b? I know you explained this somewhere before, but I'll be honest, I did not understand it

[Ola]

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.

@Come-from-Beyond, I am not sure if I understand this right. I see to possible interpretations:

1st:
BCnext doesn't want the price of nxt to rise (i find this unlogical because even if we issue coins backed by Nxt, the value of Nxt will still rise even if we issue more and more of them. The value of those coins will not rise.

2nd:
BCnext means that we shouldn't just hold Nxts and wait until their price rises, but rather we should make services and develop businesses on top of Nxt in order to support Nxt and consequently it's price will grow.

Or neither of them? Sorry, i wish i didn't care about price, but i do, if it rises i would be able to start a business connected with nxt, work from home and don't see much people, be part of the revolution and see how banks' revenue is crashing. I hope this doesnt sound too bad.

BCNext created a platform to build economy on. We use NXT as coins but BCNext planned that "money" will be built on top of Nxt core. Anyway it doesn't really matter what he wants, Nxt will evolve the way the community wants it to evolve. I wouldn't pay much attention to BCNext's plans.

I remember a quote from him through you...: "never trust anyone especially with a name like bcnext" or something along those lines...

[ZeroTheGreat]

So the only problem I have now is, that I don't see any news with his 2nd plan. Anyone, please?

Nothing really new.

How "removing" pure forgers going to be provided?

[ChuckOne]

So the only problem I have now is, that I don't see any news with his 2nd plan. Anyone, please?

Nothing really new.

How "removing" pure forgers going to be provided?

As I understand it, it arises as a result from low fees. A very low incentive to forge.

[ZeroTheGreat]

But it is not fair!

What r u talking about? Nxt offers the most fair way.

It's more fair if we pay the transaction fees directly to server operators.

Do u think there'll be better security if forgers'll get nothing for their job? I don't think so. There'd be forgers competition for fees and best possible decision to secure network (protected public node with wide bandwidth and skilled operator cost some resourses).

Remember, forging - way to secure system. Only then, may be, business itself.

[ChuckOne]

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?

Nxt could have a special kind of asset backed by fixed amount of NXT.

Doesn't matter, it's centralized decision (to provide NXT <--->, say, gold), so it can't cover whole field of risks completely (gold's holder can be robbed, can cheat and so on). Why backup so needed for minds? Money better serve its pupose with free flow, w/o any backup. And decentralized money better than centralized.

I agree. NXT's external value is not relevant. It's internal value (the value of the goods and services relying on NXT) will be the reason for sustaining it.

[ChuckOne]

But it is not fair!

What r u talking about? Nxt offers the most fair way.

It's more fair if we pay the transaction fees directly to server operators.

Do u think there'll be better security if forgers'll get nothing for their job? I don't think so. There'd be forgers competition for fees and best possible decision to secure network (protected public node with wide bandwidth and skilled operator cost some resourses).

Remember, forging - way to secure system. Only then, may be, business itself.

Exactly. Leave forging the way it is. Competition is good.

[ZeroTheGreat]

As I understand it, it arises as a result from low fees. A very low incentive to forge.

But system needs thousands of independent forgers across the world, while merchant community's rising up. But after that how do u insist forgers to install code that makes their buisness a waste of time?

IMO: better way is position forging as business. Someone'll bake bread, someone'll forge to secure Nxt ecosystem. I don't see so much difference. IT-business for everyone. And good way to redistribute money.

[marek3ball]

1) There will be zero forge income for people just buying NXT because it is great platform?

2) How should look real example of successfully forging individual?

[ChuckOne]

As I understand it, it arises as a result from low fees. A very low incentive to forge.

But system needs thousands of independent forgers across the world, while merchant community's rising up. But after that how do u insist forgers to install code that makes their buisness a waste of time?

Oh, sorry. I do not understand what you mean by: "do u insist forgers to install code that makes their buisness a waste of time" Could you paraphrase it?

IMO: better way is position forging as business. Someone'll bake bread, someone'll forge to secure Nxt ecosystem. I don't see so much difference. IT-business for everyone. And good way to redistribute money.

That's exactly my opinion, too.

I would compare forgers with banks. They keep the system running by verifying the transactions and the like. One thing I dislike about banks is that they create money (cf. https://bitcointalk.org/index.php?topic=193376.0) and therefore rely on an every-increasing industry. So, they push it forward.

Something I would like is a NXT ecosystem that relies on NXT but forgers aren't the ones pushing it forward. The ecosystem on top of NXT should do that.

So, in the end, they may get a piece of the cake to sustain the forging and a bit more of it but they shouldn't be given the power to create NXTs .

[Isildur23]

1) There will be zero forge income for people just buying NXT because it is great platform?

2) How should look real example of successfully forging individual?

As far as i understood it, people will buy it because:

1st:

That is my understanding, too. And CfB said something similar also, I think (coins for currency, NXT for value)

NXT itself is backed by power to influence on the whole system. If u own 1M NXT then u'll forge each 1000th block. And u can charge fiat money for inclusion transactions into blocks.

I'd like to add that this "power" is very valuable. If u forge the next block u decide what orders to include into it. And this decision will change the market.

NXT -> Power -> Ability to change the world

2nd:
They will buy it to exchange it for coins backed buy Nxt and use those coins as a means of exchange

3rd:
Business in the Nxt ecosystem will buy and forge it to support the network which serves their businesses

[ZeroTheGreat]

That's exactly my opinion, too.

So nevermind, I misread 

[mthcl]

I think it is best for NXT to have multiple purposes.

1 - As a store of value because of its scarcity.

2 - As an intermediate currency between IOUs issued on the asset exchange.

I totally agree with this.

[jl777]

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...

@CfB

Removing the randomness from the time to next block will allow us to use the block number as a clock that is synchronized to realworld time. I can see a lot of potential with this!

Transaction fee to manage spam and blockchain bloat makes sense. As it is forging was generating 0.5% per year, at min fee of 0.1 NXT it will be 0.05% per year, so no incentive to just hold the NXT. When NXT network is strengthed, min fee can be set to 0.01 NXT pretty much eliminating any desire to hoard it.

Q1) When BCNext says "issued in quantities to keep their value constant", would issuing NXT Assets in fixed denominations like 1 BTC, 1 USD, etc. satisfy this? I want to fully understand what is being said and this is tricky especially if second hand and different language.

Q2) I think adding support to NXT so that it is able to see or even issue offchain transactions is the only way to extend transparency beyond NXT blockchain. Is there a way simpler than using indistinguishability obfuscator that can be used to trust offchain results from peers? Would carefully designing matched pairs of subroutines to 1) invoke and 2) verify offchain actions be adequate to create trustable transactions despite Evil Bob's best efforts?

Q3) In general, am I on the right track with NXTlayers, NXTplugins, crosschain transactions, automated gateways, NXTcash, blockchain FIFO, etc?

James

[marek3ball]

I can't imagine why somebody who is selling t-shirts or anything else should be forger and nobody else.

I like the idea forging as business. But still don't undestrand why average person buying a 100000 NXT will not be able to forge.

Mining made bitcoin so famous, because people can do something for the idea at home and earn real money.

What I'm missing?

[VanBreuk]

I like the idea forging as business. But still don't undestrand why average person buying a 100000 NXT will not be able to forge.

Mining made bitcoin so famous, because people can do something for the idea at home and earn real money.

What I'm missing?

Maybe you're missing the fact there's many things you can do for the idea at home and earn value. Promotion, development, trading, third party services, etc.

It's important to start changing the mining=forging mentality, and the mining paradigm itself. It will be obsolete soon. The real new paradigm for adoption should rather be something like proof of learning, while proof of stake is a way of securing the network, not an easy buck.