BTC can only get better: introducing the Smart Network

[topcoin360]

Hi guys,

I need your help to develop a smart network to improve btc’s functionalities. Before explaining the concept, there are a few things I’d like to point out:

1.The solution I propose doesn't require any change to btc's protocol (not even a soft fork). The Smart Network project is an initiative to build a DApp that runs on top of btc’s blockchain (all the data will be recorded on a side chain).
2.The Smart Network is a group of nodes that volunteer to participate in this project. They all agree to share some data that will allow them to better manage very specific situations where the security and the integrity of the network are compromised (such as in the case of a 51% attack).


This solution would solve two problems:

1.The whole network would be much less vulnerable to a 51% attack (better communication means better protection).
2.The whole network would have the potential to be more energy efficient as it could be highly secured even with a low hashrate (as we like to say it’s better to work smarter than harder).


How would it work?

Step 1: all the users who want to participate must register to vote by linking their wallets to a public key and provide a proof of ownership (a digital signature) for their wallets. In the voting process one satoshi equals one vote.
Step 2: Any participant can start a new poll and allow the network to vote against the longest chain. Users who don't send their votes (including those who are not registered) are automatically voting in favor of the longest chain (that chain should be rejected by the network only if a majority vote is opposing it).
Step 3: The participants must update their own record and share their data (it doesn't matter if all the records are not exactly the same as it will probably not really affect the polls’ result). The incentive for a node to participate is to protect the investment of their clients.
 

What is the real idea behind this system?

The network could be secured without consuming a lot of electricity. Also, the transaction fees could go down without any compromise to the network's security.
 

Please award this post and share it if you like the idea so we can move forward. Who knows a bitcoin millionaire might finance the project so we can all get a little richer holding our coins.

Cheers!

P.s. The voting system could also be used to create polls for new proposals. That would create a smart network of nodes capable of planning changes to the protocol in a fully decentralized way.

[garlonicon]

The whole network would be much less vulnerable to a 51% attack

Then it will be more vulnerable to another kind of 51% attack, just when someone will collect 51% coin supply. In this way if it will succeed, you will get mixed PoW+PoS consensus, if PoS will win, then PoW difficulty will reach 1.

The whole network would have the potential to be more energy efficient

Then sooner or later the price will drop. If to mine one block it is needed to spent one dollar, then it is worth something around one dollar. Being more eco-friendly would mean less work per block, so less price per block, you can read more about it here: https://www.truthcoin.info/blog/pow-cheapest/

as it could be highly secured even with a low hashrate

It won't be, because in PoW miners have to sacrifice some computing power to mine a block. In PoS they only need to freeze their coins for a while and sooner or later they are getting all of them back.

all the users who want to participate must register to vote and provide a proof of ownership for their wallets

Then almost all outputs will be as secure as P2PK, assuming that most users would use standard scripts.

that could prevent that the final decision falls into the hands of the big mining pools and the large exchanges who don't necessarily have your best interest at heart

It won't, simply because there always will be big mining pools. In PoS just these pools and exchanges will have huge amounts of coins.

[topcoin360]

Thank you for your interest,

The whole network would be much less vulnerable to a 51% attack

Then it will be more vulnerable to another kind of 51% attack, just when someone will collect 51% coin supply. In this way if it will succeed, you will get mixed PoW+PoS consensus, if PoS will win, then PoW difficulty will reach 1.

Users will always have the final say, not the PoW. Attacking the network while you own 51% of the supply is quite risky. With PoW, miners can wait for the hashrate to go down to reorg the block chain at a low cost.

https://www.coindesk.com/what-a-bitcoin-reorg-is-and-what-binance-has-to-do-with-it

The whole network would have the potential to be more energy efficient

Then sooner or later the price will drop. If to mine one block it is needed to spent one dollar, then it is worth something around one dollar. Being more eco-friendly would mean less work per block, so less price per block, you can read more about it here: https://www.truthcoin.info/blog/pow-cheapest

That's a misconception of the value of things. The value of one thing doesn't necessarily equal its cost of production (otherwise profit wouldn't be possible). The value of btc determines its cost of production not the other way around.

as it could be highly secured even with a low hashrate

It won't be, because in PoW miners have to sacrifice some computing power to mine a block. In PoS they only need to freeze their coins for a while and sooner or later they are getting all of them back.

They are different systems, none of them is fundamentally superior. In any case it always depends on how much you have to win and how much you have to lose. Btw, what I propose is to use PoS on a side chain, I think the PoS system you're referring to is a flawed system that was suggested years ago.

all the users who want to participate must register to vote and provide a proof of ownership for their wallets

Then almost all outputs will be as secure as P2PK, assuming that most users would use standard scripts.

You could use a VPN to send the proof, the only thing you would reveal is your public key.

that could prevent that the final decision falls into the hands of the big mining pools and the large exchanges who don't necessarily have your best interest at heart

It won't, simply because there always will be big mining pools. In PoS just these pools and exchanges will have huge amounts of coins.

Not necessarily as people can withdraw their coins from exchanges but even if it was the case then they would probably do what's necessary to preserve the value of their coins.

[odolvlobo]

1.The solution I propose doesn't require any change to btc's protocol (not even a soft fork). The Smart Network project is an initiative to build a DApp that runs on top of btc's blockchain (all the data will be recorded on a side chain).

Actually, what you are proposing is a hard fork. Nodes that don't upgrade in order to follow the new rule (side-chain vote vs. longest chain) remain on the legacy branch and the result is a fork.

[topcoin360]

Creating a poll on the side chain would be optional, in any case if the majority vote was in favor of an alternative block chain then I think a hard fork would be inevitable.

[Wind_FURY]

OP, why not an “off-chain” layer, or L2 that makes the base-chain/L1 as the settlement layer? Then it wouldn’t matter if your “smart network” should be centralized, decentralized, or any-lized.

Creating a poll on the side chain would be optional, in any case if the majority vote was in favor of an alternative block chain then I think a hard fork would be inevitable.

OR better plan, experiment in a shitcoin network, if their community welcomes it? Do you believe the shitcoin community will welcome it?

[garlonicon]

Users will always have the final say, not the PoW.

So, you are saying that "PoS will always have the final say, not the PoW", simply because users are voting by having coins and it is called "Proof of Stake". Am I missing something here?

Attacking the network while you own 51% of the supply is quite risky.

But you don't know if someone has 51% coins or not, Bitcoin is pseudonymous. The same is true for PoW: you don't know if some major pools are not owned by the same entity. Just in PoW reaching majority means that the monopolist starts fighting with itself more than with other miners. In PoW miners have to sacrifice more computing power and it is waste for them to fight with themselves, but in PoS they are getting their coins back, so they can reuse the same coins to mine even more coins.

With PoW, miners can wait for the hashrate to go down to reorg the block chain at a low cost.

But with PoS, miners can collect big amount of coins on many addresses and reorg the block chain at even lower cost (because they will sooner or later get all of their coins back).

The value of one thing doesn't necessarily equal its cost of production (otherwise profit wouldn't be possible).

It is always equal if you take everything into account. If you have 50 BTC from some old block, the cost was not only using your computing power to mine it on your CPU in 2009 or so, but also the cost is waiting a long time to spend it now. At the time of mining, coins are usually worth less than the cost of electricity to mine them. You can say that you are turning the time into your profit. As explained in the linked post, it is always somehow balanced. It is the property of the whole universe that you cannot get things from nowhere, physically speaking you cannot create Perpetuum Mobile. Also, you can look at mempool and see that people paying one satoshi per byte are not only paying transaction fees. They are paying time fees, just because their transactions will be included later (or never if they won't be rebroadcasted and mempools will hit their limits).

Btw, what I propose is to use PoS on a side chain, I think the PoS system you're referring to is a flawed system that was suggested years ago.

It have to be somehow connected to the main chain. You can always build some system outside of the main chain, but where is the incentive in such system? If it is purely informational, then voting cannot be enforced in any way. And then saying that "users will always have the final say, not the PoW" is simply not true if results of this voting are not enforced on the main chain.

You could use a VPN to send the proof, the only thing you would reveal is your public key.

Yes, it is true, but if public keys are revealed, then there is no reason to use any kind of hash of your public key if keys of all voters are publicly known. So then, in long term perspective all output scripts in such system will be known all the time, because revealing them is needed to vote. And if voting is profitable, then there is no reason to avoid it.

people can withdraw their coins from exchanges

It is more convenient for many users to hold coins on exchanges. Many people are doing that, because then they can speculate easier and they don't have to worry about on-chain fees. It is sad that people prefer convenience over security, but it is true. Do you really believe that people will keep their coins on their own wallets if they could stake them on exchanges and get even more coins for doing that? If your system will work, exchanges will simply vote instead of users, because they will hold their coins. And the more coins they will have, the more voting power they would have, so even they could start paying users for their deposits.

Actually, what you are proposing is a hard fork.

It can be done in a soft-fork way. But because miners are taking profits from PoW mining, they won't go for it that easily, especially if you take mining hardware companies into account.

Nodes that don't upgrade in order to follow the new rule (side-chain vote vs. longest chain) remain on the legacy branch and the result is a fork.

That's why reaching majority of PoW miners is needed to do it in a soft-fork way. Without having miners on your side, you can as well release an altcoin, fork from the latest block and apply your voting rules here. And then all Bitcoin holders will quickly exchange your fork into Bitcoin and it will fall as many other altcoins. That's why if you think seriously about your project and you want to do it on Bitcoin, doing it in a soft-fork way is needed. But I think it will simply fail on Bitcoin, because here miners don't want to switch into PoS. Maybe with other coins like Ethereum you will have more luck in bringing your project into reality.

[HeRetiK]

What is the real idea behind this system?
If there is a fork on the network then the nodes would be able to quickly determine which version of the blockchain is most likely legitimate (that could prevent that the final decision falls into the hands of the big mining pools and the large exchanges who don't necessarily have your best interest at heart). A majority vote could be the ultimate consens rule but in any case the most important thing is to develop the "smart network" as it could add a lot of value to our coins.

Apart from the problems that the others pointed out -- what exactly would be the "smart" part of this "smart network" idea? So far I only see something akin to hashpower signaling but based on PoS rather than PoW. Which doesn't really make much sense on a blockchain whose security relies on PoW; moreso it would likely even actively undermine its security.

[NotATether]

Apart from the problems that the others pointed out -- what exactly would be the "smart" part of this "smart network" idea? So far I only see something akin to hashpower signaling but based on PoS rather than PoW. Which doesn't really make much sense on a blockchain whose security relies on PoW; moreso it would likely even actively undermine its security.

He did say that it would be a DApp that handles emergency situations like a 51% attack:

1.The solution I propose doesn't require any change to btc's protocol (not even a soft fork). The Smart Network project is an initiative to build a DApp that runs on top of btc's blockchain (all the data will be recorded on a side chain).

But OP, I think you are misunderstanding to what extent a DApp can do. They cannot influence BTC's chain or its nodes without using features already defined in Bitcoin's protocol. It can only change its own state and it's up to users to make use of the DApp.

2.The Smart Network is a group of nodes that volunteer to participate in this project. They all agree to share some data that will allow them to better manage very specific situations where the security and the integrity of the network are compromised (such as in the case of a 51% attack).

Since it's a opt-in service this is going to put the chain's fate in the hands of a few nodes, much less than the total active nodes on the network. An emergency recovery like what you're talking about is an all-hands-on-deck situation and should require all nodes' participation.

How would that work?

Step 1: all the users who want to participate must register to vote and provide a proof of ownership for their wallets (it's a PoS based system where one btc equals one vote).
~

I'm assuming the 1btc requirement can be changed to something less expensive? To prevent centralization of voting to only those who can afford it (most of them will be miners of course!)

This next quote is from your next post, and every post in this thread is getting too damn long to quote 

You could use a VPN to send the proof, the only thing you would reveal is your public key.

This is actually a bad idea because VPN providers are also centralized and in most cases are secretly working with law enforcement. It is better to use Tor instead.

[topcoin360]

How would that work?

Step 1: all the users who want to participate must register to vote and provide a proof of ownership for their wallets (it's a PoS based system where one btc equals one vote).
~

I'm assuming the 1btc requirement can be changed to something less expensive? To prevent centralization of voting to only those who can afford it (most of them will be miners of course!)

Absolutely, I wasn't excluding the possibility to "divide" a vote, so the amount of votes you'd have would equal the amount of coins that you have in your wallets.

This next quote is from your next post, and every post in this thread is getting too damn long to quote  

You could use a VPN to send the proof, the only thing you would reveal is your public key.

This is actually a bad idea because VPN providers are also centralized and in most cases are secretly working with law enforcement. It is better to use Tor instead.

Thanks for the advice, yes it would probably be a better option.

The value of one thing doesn't necessarily equal its cost of production (otherwise profit wouldn't be possible).

It is always equal if you take everything into account. If you have 50 BTC from some old block, the cost was not only using your computing power to mine it on your CPU in 2009 or so, but also the cost is waiting a long time to spend it now. At the time of mining, coins are usually worth less than the cost of electricity to mine them. You can say that you are turning the time into your profit. As explained in the linked post, it is always somehow balanced. It is the property of the whole universe that you cannot get things from nowhere, physically speaking you cannot create Perpetuum Mobile. Also, you can look at mempool and see that people paying one satoshi per byte are not only paying transaction fees. They are paying time fees, just because their transactions will be included later (or never if they won't be rebroadcasted and mempools will hit their limits).

Guys,

I think some of you are understanding btc's economics. Miners are for profit corporations so they will try to sell their coins at a higher price than what they've paid for them. They can't predict, nor anyone can predict the future price of btc. Since most of their suppliers won't accept btc as a payment method and the miners have to pay their bills, the vast majority of them will sell their coins on the short term (this is why the network's hashrate is highly correlated to the cost of electricity AND btc's price).

PoS vs PoW

If a group of people owns more than 50% of the coins in circulation then you simply can't ignore their vote. If they'd want to they could sell all their coins on one fork, the price of the coin would drop, the hashrate on that fork would drop and fools like you would realize "Well, that must not be the real btc??", isn't it what happened with btc and bch back in 2017? The solution I'm proposing is just a more convient and a more decentralized way of reaching a consensus in case of emergency.

[20kevin20]

If mining pools are an issue due to power centralization, then this Smart Network only makes things worse. If 1 BTC = 1 vote and the rich own a large quantity of coins, then we are only moving the power from pools to large wallets instead.

The vast majority of users don't even use non-custodial wallets; the larger amount of votes will likely be dominated by the richer wallets that, as you said yourself, you cannot ignore. With that being said, the average user will not even know that this is a thing so only the more advanced or experienced users will acknowledge the existence of this "Smart Network". And since there is usually a very small number of people owning a ton of BTC, it would make things even worse and more unfair than they are right now.

In case of a 51% attack, we'd be witnessing the rich choosing what chain they'd want to be chosen as the legitimate one. Correct me if I'm wrong, but it seems like it's only handing the power from rich to rich men which would not make sense..

[HeRetiK]

Apart from the problems that the others pointed out -- what exactly would be the "smart" part of this "smart network" idea? So far I only see something akin to hashpower signaling but based on PoS rather than PoW. Which doesn't really make much sense on a blockchain whose security relies on PoW; moreso it would likely even actively undermine its security.

He did say that it would be a DApp that handles emergency situations like a 51% attack:

All I see is a change to the consensus layer by allowing PoS to override PoW? Usually I'd associate DApps with scripts that run on top of a decentralized protocol rather than changes that are done to the protocol itself (even if those changes are selected by means of a voting system).

If they'd want to they could sell all their coins on one fork, the price of the coin would drop, the hashrate on that fork would drop and fools like you would realize "Well, that must not be the real btc??", isn't it what happened with btc and bch back in 2017? The solution I'm proposing is just a more convient and a more decentralized way of reaching a consensus in case of emergency.

Yes, and it worked amazingly well, didn't it?

If people would have believed BCH to be superior than BTC, they would have sold their BTC for BCH and BCH would have ended up with the larger market cap. If people would have believed BSV to be superior than BCH, they would have sold their BCH for BSV and BSV would have ended up with the larger market cap. If you were uncertain or indifferent about the situation, you simply held each fork coin you received until the dust had settled.

People were literally voting with their wallet, in way that's as decentralized as it gets -- on the free market.

Be aware that hard forks caused by protocol changes are something very different from 51% attacks though, to me it reads like you are placing them in the same bucket.

[topcoin360]

If mining pools are an issue due to power centralization, then this Smart Network only makes things worse. If 1 BTC = 1 vote and the rich own a large quantity of coins, then we are only moving the power from pools to large wallets instead.

The vast majority of users don't even use non-custodial wallets; the larger amount of votes will likely be dominated by the richer wallets that, as you said yourself, you cannot ignore. With that being said, the average user will not even know that this is a thing so only the more advanced or experienced users will acknowledge the existence of this "Smart Network". And since there is usually a very small number of people owning a ton of BTC, it would make things even worse and more unfair than they are right now.

In case of a 51% attack, we'd be witnessing the rich choosing what chain they'd want to be chosen as the legitimate one. Correct me if I'm wrong, but it seems like it's only handing the power from rich to rich men which would not make sense..

It takes money to buy btcs but it also takes money to buy mining equipment. The only difference is, when the cost of the equipment is paid off miners can as well turn into a central bank as far as they don't really have to care about the value of the coin. With PoS though you can't mess with the system without risking of losing your own wealth, the interest of the validator is well aligned with the interest of the user.

Apart from the problems that the others pointed out -- what exactly would be the "smart" part of this "smart network" idea? So far I only see something akin to hashpower signaling but based on PoS rather than PoW. Which doesn't really make much sense on a blockchain whose security relies on PoW; moreso it would likely even actively undermine its security.

He did say that it would be a DApp that handles emergency situations like a 51% attack:

All I see is a change to the consensus layer by allowing PoS to override PoW? Usually I'd associate DApps with scripts that run on top of a decentralized protocol rather than changes that are done to the protocol itself (even if those changes are selected by means of a voting system).

No way, the app would find the legitimate block chain if the network is under a 51% attack. That chain would eventually be the longest chain with a valid PoW anyway.

If they'd want to they could sell all their coins on one fork, the price of the coin would drop, the hashrate on that fork would drop and fools like you would realize "Well, that must not be the real btc??", isn't it what happened with btc and bch back in 2017? The solution I'm proposing is just a more convient and a more decentralized way of reaching a consensus in case of emergency.

Yes, and it worked amazingly well, didn't it?

If people would have believed BCH to be superior than BTC, they would have sold their BTC for BCH and BCH would have ended up with the larger market cap. If people would have believed BSV to be superior than BCH, they would have sold their BCH for BSV and BSV would have ended up with the larger market cap. If you were uncertain or indifferent about the situation, you simply held each fork coin you received until the dust had settled.

People were literally voting with their wallet, in way that's as decentralized as it gets -- on the free market.

Be aware that hard forks caused by protocol changes are something very different from 51% attacks though, to me it reads like you are placing them in the same bucket.

I don't think that voting through exchanges is the best option as they can manipulate prices if they want to.

[vjudeu]

Even if PoS is better, why are you still trying to do it on Bitcoin? There are communities willing to change from PoW to PoS, for example Ethereum. And if you really want to connect BTC with your system, why don't you create some second layer, as mentioned by @Wind_FURY and let free market decide if it is good idea or not? If you are not sure, you can run it on testnet, regtest or even your own signet, just to check if it technically works. I also think it would fail, but to have a proof, you have to see it. And if you are right and it would work, then everyone would benefit from it.

[topcoin360]

Even if PoS is better, why are you still trying to do it on Bitcoin? There are communities willing to change from PoW to PoS, for example Ethereum. And if you really want to connect BTC with your system, why don't you create some second layer, as mentioned by @Wind_FURY and let free market decide if it is good idea or not? If you are not sure, you can run it on testnet, regtest or even your own signet, just to check if it technically works. I also think it would fail, but to have a proof, you have to see it. And if you are right and it would work, then everyone would benefit from it.

Challenge accepted, I also think that throughout time more and more people will sign up so the system will become more efficient.

What is the real idea behind this system?
If there is a fork on the network then the nodes would be able to quickly determine which version of the blockchain is most likely legitimate (that could prevent that the final decision falls into the hands of the big mining pools and the large exchanges who don't necessarily have your best interest at heart). A majority vote could be the ultimate consens rule but in any case the most important thing is to develop the "smart network" as it could add a lot of value to our coins.

Apart from the problems that the others pointed out -- what exactly would be the "smart" part of this "smart network" idea? So far I only see something akin to hashpower signaling but based on PoS rather than PoW. Which doesn't really make much sense on a blockchain whose security relies on PoW; moreso it would likely even actively undermine its security.

The "smart" part is the ability for a node to communicate valuable information (beyond block chain data). This will create a Smart Network of nodes capable of planning changes to the protocol in a fully dencentralized way. 

[aliashraf]

OP,
I'm following your posts here and observing your good faith and out-of-the-box thinking which I appreciate deeply and sincerely, it is why I send merits to you BTW,  keep your good spirit and try more.  

As you've already understood, bitcoin is both simple and complicated technology, it is simple when it comes to the basic idea and the tools/implementation stuff, etc., but it is complicated when one decides to change/improve things because of the unprecedented nature of Bitcoin as the first open/decentralized/distributed computing system ever, and I'm not talking about governance issues, far more importantly it is about technical consequences and impacts.

So, I'd recommend a style shift in your presentations: using a 'what-if' literature and asking for brain-storming contributions.

As of your idea presented in this thread, I think user wallets are already  playing the role you are trying to assign to them somehow officially and the PoS part at the same time suffers from an anomaly in design and a game-theoretic flaw: as long as the coins are not deposited and subject to penalties, a voting system doesn't work securely.

[topcoin360]

OP,
I'm following your posts here and observing your good faith and out-of-the-box thinking which I appreciate deeply and sincerely, it is why I send merits to you BTW,  keep your good spirit and try more.  

Thank you very much for these compliments,

To start, there's a big problem with PoW as a consensus mechanism which is that the security of the network depends on the inefficiency of the network (which is unsustainable). Maybe bitcoin was victim of it's own success but sooner or later the network's hashrate will drop and it will then be possible for someone with a bit of hashrate to reorganize the block chain (this is why I think we need a second layer of security and I don't see any other option than to use PoS as a consensus mechanism). We must take into consideration that with the system I propose someone would need 51% of the current supply to take over control (which is a lot more expensive than 51% of the hashrate) and they would be the hardest hit if the coin loses its value so they would have an incentive to well behave. The game theory suggests that competition doesn't work well when a collective action is needed (so miners will only consider mining if they can earn a profit).

To make btc an investment rather than a gamble we must think on the long run...

[pooya87]

the security of the network depends on the inefficiency of the network (which is unsustainable).

Having a high cost to perform a certain type of attack doesn't mean the system is inefficient.

but sooner or later the network's hashrate will drop and it will then be possible for someone with a bit of hashrate to reorganize the block chain

That is your assumption and can only happen if the bitcoin price drops significantly and stays low. Something like dropping down to $500 and staying there in which case your other statement is also wrong because it would cost a lot less to acquire 51% of the total supply too:

I propose someone would need 51% of the current supply to take over control

[topcoin360]

the security of the network depends on the inefficiency of the network (which is unsustainable).

Having a high cost to perform a certain type of attack doesn't mean the system is inefficient.

Bitcoin isn't more secure than other payment systems that are way less expensive.

but sooner or later the network's hashrate will drop and it will then be possible for someone with a bit of hashrate to reorganize the block chain

That is your assumption and can only happen if the bitcoin price drops significantly and stays low. Something like dropping down to $500 and staying there in which case your other statement is also wrong because it would cost a lot less to acquire 51% of the total supply too:

I propose someone would need 51% of the current supply to take over control

If btc can't compete with other payment services then it's almost a 100% sure that the price will fall at some point (not my assumption, no utility means no demand). Be aware that the network's hashrate can drop regardless of the value of the coin.

[pooya87]

Bitcoin isn't more secure than other payment systems that are way less expensive.

Bitcoin is more secure than both centralized and decentralized options.

If btc can't compete with other payment services then it's almost a 100% sure that the price will fall at some point (not my assumption, no utility means no demand). Be aware that the network's hashrate can drop regardless of the value of the coin.

The utility that bitcoin offers is a censorship resistance currency that can be used globally with a very fast speed. Other payment systems don't have any of that.