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

[Come-from-Beyond]

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.

Perhaps I am misunderstanding something, but this seems to idealistically ignore a different sort of selfishness.
If I'm running a Nxt-based business, I could either invest in forging myself, or just not bother, and expect someone else to do it.
A business that forges for itself, with minimal mining rewards, will be less efficient than one that just expects someone else to do it.
The free-riding company will out-compete the 'honest' company.

Maybe u r right. BCNext's plan is just his own vision. He doesn't even insist to follow it.

[CIYAM]

During the time between blocks, each node builds up their own picture of what the whole network will look like. Different nodes will have slightly different pictures due to different connections and connectivity (assume the overall network condition isn't so bad as to have radically different pictures). But even with slight differences, the die rolls are still likely to land in the same accounts in 4). (picture a [0,1) line segment broken up into many separate account stakes. Assume no super-big stakes. If you remove some of them and insert some others, while maintaining stake ratios, the picture doesn't change by much (math can provide bounds)). So all nodes can achieve consensus.

I don't think that consensus can actually be reached without the equation being completely deterministic (so IMO using "known online nodes" just can't work).

I would think that the algo would simply determine the best choice regardless of whether they are online or not - and each client would determine which "online" node that they can see is closest to the best choice and "hope" that the "real choice" was not actually online.

[CIYAM]

BCNext limited nothing. We don't need to "ping" nodes.

So the TF algo doesn't care about "online" nodes then?

[bitcoinpaul]

Perhaps I am misunderstanding something, but this seems to idealistically ignore a different sort of selfishness.
If I'm running a Nxt-based business, I could either invest in forging myself, or just not bother, and expect someone else to do it.
A business that forges for itself, with minimal mining rewards, will be less efficient than one that just expects someone else to do it.
The free-riding company will out-compete the 'honest' company.

Agree with ChuckOne. Look also at the example of bittorrent: the torrent trackers had to use rating systems and such, just because otherwise there would be too many leechers for too few seeders. That's not because it costs anything (at least in free countries like Brasil, where there is no risk that you could get prosecuted for that) just to leave the client open, it's because people just don't care about it. There are so many things to care about in this life, so it's better to offer at least some reward if we want that people invest some attention to the network maintenance.  

I wonder if the idea is doomed because of Diffusion of Responsibility.

[Come-from-Beyond]

So the TF algo doesn't care about "online" nodes then?

No. TF algo only says what accounts could forge the next block.

[CIYAM]

No. TF algo only says what accounts could forge the next block.

Thanks - that's actually what I had assumed (even wrote up my own such pseudo code system when I first heard of the idea in order to get it worked out in my own head).

[Zahlen]

I would think that the algo would simply determine the best choice regardless of whether they are online or not - and each client would determine which "online" node that they can see is closest to the best choice and "hope" that the "real choice" was not actually online.

Yeah that could work. We don't need everyone to be right, we just need most of them to agree on most of the candidates for most of the time.

[ZeroTheGreat]

There is no "profit" in forging because merely forging adds no value.

Completely disagree! Only secure system'll be popular and for that forging'd be popular activity too, here works network effect: more independent forgers with their own goals, more secure system is for everybody else. So it adds value in security aspect of payment system and whole ecosystem.

I wonder if the idea is doomed because of Diffusion of Responsibility.

Why forge? To get fees, but when u're forging, u're securing system. Way to get fees w/o securing not so easy to pick (u need modified code, and have that code updated), so greedy forgers'll exist and'll non-directly serve their key purpose (as miners today).

[murraypaul]

Why forge? To get fees, but when u're forging, u're securing system. Way to get fees w/o securing not so easy to pick (u need modified code, and have that code updated), so greedy forgers'll exist and'll non-directly serve their key purpose (as miners today).

If you read the original post of the thread, the suggestion was to reduce fees to a minimum level required to prevent spamming the network, and remove the financial incentive to mine purely for fees.

[ZeroTheGreat]

Why forge? To get fees, but when u're forging, u're securing system. Way to get fees w/o securing not so easy to pick (u need modified code, and have that code updated), so greedy forgers'll exist and'll non-directly serve their key purpose (as miners today).

If you read the original post of the thread, the suggestion was to reduce fees to a minimum level required to prevent spamming the network, and remove the financial incentive to mine purely for fees.

I did that. An I'm counterargumenting such goal. Forgers'es greed'll lead us to perfectly secured network. Almost each one security business I can think about requires competition instead of coopertaion to achieve trustless situation: where every player is not just not expected to trust any other, but don't trust everyone by default. And "green" competition obviously beats down "blackholed" one.

[CIYAM]

If you read the original post of the thread, the suggestion was to reduce fees to a minimum level required to prevent spamming the network, and remove the financial incentive to mine purely for fees.

Personally I think it would be best to do this in a gradual manner by slowly reducing the fee reward.

If we start to see a lot of nodes "dropping out" then we can always "pause" until the network strengthens again and presumably we'll reach a point of "equilibrium" that gives us the "least amount of fees" for the "most number of active nodes".

(I don't really see the imperative to make the fees so low as to completely discourage "forging" but of course lower fees does encourage more transactions)
 

[ZeroTheGreat]

Fee'd not be lower than it needed for Nxt to compete with other payment systems. And every sender'd know why he's paying fees: to provide speed and security.

In the world of centralized money (with inflation and not very healthy IDoL), something about 5% per month'll give a financial freedom with not so huge capital, in new world we'll have to calculate X% we'll be ready to provide to forgers for their job, and that number'll depend on thousand of factors, not only on minfee.

[joefox]

- has to have a client
     - this costs nothing

 - risks all his stake if the client is malicious
     - this can be prevented with some forethought... which costs nothing

 - risks his hardware if the client is not secured against malicious attacks
     - risks his hardware?  This is quite far-fetched and highly unlikely.  It reminds me of the StuxNet virus, which made Iranian uranium-enrichment centrifuges spin until they burned themselves out.  But I know of very few "malicious attacks" that can fry my home PC.

- has to pay the electricity bill
     - this is a sunk cost.  The forger already has an electricity bill, and as has been stated countless times, the cost of electricity for running a Nxt node is very low.

- has to pay for the hardware/renewal of such
     - this is generally also a sunk cost, since people can forge on existing hardware... except for folks who have bought a Raspberry Pi: they're out $50.  Anyone who has spent $5000 on a spiffy Nxt forging rig should be a little embarrassed.

- has to pay for a place that hardware can exist in
     - This is also a sunk cost.  You already have a place to exist in, which you generally share with your hardware.  And your hardware isn't that big.

- has to pay for the bandwidth he contributes to the network
     - This is also a sunk cost, since you already pay for bandwidth. And you can still forge if you don't advertise your node address, which minimizes bandwidth usage.

- has to implement security measures (attacks, heat etc.)
     - "heat security"?  I don't even know what that means.  As for other security: most people already have an edge firewall protecting their local network.  People who don't use any form of security for their home setup are far more exposed already, for their existing hardware (PCs, etc.).  So we're at "sunk cost" again.

As your reply shows, you have no idea how precious time and other resources are and how computing works nowadays. Nothing of my previous points is far-fetched or completely impossible.

Furthermore, you just provide many relative arguments: of course forging is cheaper than mining. So what? Cheaper means not: no time, no hardware, no place etc. It still costs something. Compensation is therefore legit.

Agree with ChuckOne. Look also at the example of bittorrent: the torrent trackers had to use rating systems and such, just because otherwise there would be too many leechers for too few seeders. That's not because it costs anything (at least in free countries like Brasil, where there is no risk that you could get prosecuted for that) just to leave the client open, it's because people just don't care about it. There are so many things to care about in this life, so it's better to offer at least some reward if we want that people invest some attention to the network maintenance.  

I see what you're both getting at.  I think we differ on what constitutes value.

The foundation of my post is that forging is valueless only when there are enough services built on top of Nxt to render it valueless.  Given the current Nxt topology, I agree that forging is necessary just to maintain the network.  However, once nodes are running code and providing services for other coins, applications, contracts, games, parallel blockchains, etc., those nodes will profit from those endeavours AND also look after base Nxt network consensus, as a pure consequence.  I define "value" as what is offered by those services.

I don't think "block rewards" are going away.  Someone's account has to forge a block, and that account will still win the fees in that block.  Those fees will just be LOW.  So perhaps this whole debate is too much in the weeds.

I feel like I'm flip-flopping.  In the early days of Nxt I said that the value of forging was in building network consensus, not profiting in terms of Nxt.  Or... maybe I'm not flip-flopping at all.

[Isildur23]

But isn't this the natural way for things to happen? I mean it's not like following somebody's plans. It will happen naturally, big businesses will be built on top of Nxt and they will take care of it and supprot it with forging, while fees will be lowered and there won't be people who forge "for the sake of forging". Coins will be issued backed by Nxt and will play the role of means of exchnage, but Nxt will still be something like a reserve currency. I thought this evolution was inevitable. Is this what BCnext meant or i didn't understand it?

Seems u r right.

After the test of Asset Exchange
here is a workable scenario:
1. bter,dgex,btc-e, issue asset like :BTC, LTC, Dogecoin etc. backed by Nxt
    if issue 1BTC(token) , 20000 nxt have been locked.
2. someone want to sell nxt for btc etc, place bit order, if match the ask order, then btc(token) is transfered to receiver account.
3. more and more can place ask order with btc, etc.

1. because bter,dgex,btc-e are reputable, so you can trust them
  you can deposit your btc,ltc for btc token.
  or can withdrawl them.

We already have something like this: https://bitcointalk.org/index.php?topic=453935.msg5079581#msg5079581

[ChuckOne]

There is no "profit" in forging because merely forging adds no value.

Completely disagree! Only secure system'll be popular and for that forging'd be popular activity too, here works network effect: more independent forgers with their own goals, more secure system is for everybody else. So it adds value in security aspect of payment system and whole ecosystem.
[/quote]

Securing a system adds value to the system.

Namely: security.

[ChuckOne]

...each tx's broadcaster'll scan network and calculate 100%-s of block success by working nodes in next 15 secs...

Hmm... if your ping times are anything like they are in China (often 300+ms) then even in 15 secs you certainly won't be able to determine all active nodes so I do question this idea.

Can you give me some "concrete" examples of just how many nodes this can possibly scale to?

For example - you will never work out all connections if you have connections to 1M+ nodes (and will be consuming vast amounts of memory even trying to) - so has BCNext purposely limited the total network size to something quite paltry like a few thousand nodes?

BCNext limited nothing. We don't need to "ping" nodes.

This relates to my post here: https://bitcointalk.org/index.php?topic=364218.msg5034359#msg5034359

I still don't see how the network determines that a node has not forged?

Maybe, you can look through my other notes as well and provide some feedback. Thanks in advance.

[Come-from-Beyond]

I still don't see how the network determines that a node has not forged?

It sees that someone else forged the next block.

[ChuckOne]

I still don't see how the network determines that a node has not forged?

It sees that someone else forged the next block.

How? Nodes separately determine whether an account forged or not. But this information could come delayed. When does a node say: stop I do not accept this block from this account anymore?

[CIYAM]

I still don't see how the network determines that a node has not forged?

It sees that someone else forged the next block.

Okay - so "forget about *who is online*" and just look at "who *should* forge the next node based upon the hash value".

If we know that account 1111 was *supposed* to *forge* but didn't then we penalise node 1111 for not doing so (regardless of whether they were *online* or not).

[CIYAM]

But this information could come delayed. When does a node say: stop I do not accept this block from this account anymore?

This is why *timing* is an *essential* part of Nxt (your clock needs to be set very accurately).

Bitcoin doesn't have a reliance upon NNTP (which is why the timestamps can vary quite a bit) but Nxt *does* (this is also a very fair *criticism* of Nxt IMO).