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Author Topic: Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat  (Read 66620 times)
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July 24, 2014, 12:37:42 AM
 #441

Ethereum has already sold 11.5 million ETH (was 7 million yesterday) sold at roughly $0.30 per ETH. So they've already raised $3.3 million, plus the whitepaper says they will additionally premine 9.9% of whatever that final amount is to be given to the founders and early angel investors. And there are 40 more days to go that this IPO premine will be open to investors.

(I wonder if they've done their legal requirements to comply with SEC regulations for non-qualified USA investors, could end up in legal trouble as what happened to some in the Bitcoin community who sold shares to non-qualified USA investors)

Plus the annual debasement will be 26% of what ever the premine from the IPO ends up being.

As I wrote upthread, it is appears Ethereum is getting the interest of Peter Thiel. And the only way to have Turing-complete apps on the blockchain without viruses is to have certification of each app by a centralized authority. Thus looks like this is the direction it will morph to over time. It won't be truly decentralized, because the apps will need to be vetted by an authority, although the apps will run decentralized after vetting. We can clearly see the powers-that-be are taking control over Bitcoin (one pool has 50% of the mining hashrate) and now on Bitcoin 2.0 concepts.

Note Charles Hoskinson originally tried to recruit me to work on Bitcoin 2.0 altcoin, and when I declined he hooked up with Vitalik Buterin. Someone told me Charles 'left' Ethereum. Look what happened to the last company he was forced out of bytemaster's Protoshares/Bitshares.

https://coinmarketcap.com/

So BitSharesX is in 7th place with a $20 million market cap after nearly a year of release.

Even the #3 coin (other than Bitcoin or Litecoin) is only at $50 million market cap. Thus even if Ethereum makes it to #3 within a year and if the IPO ends up being say $5 - $10 million (already at $3.3 million 1 day into the 42 day IPO), then the upside is only less than a 10 bagger in a year, unless somehow Ethereum surpasses Litecoin in that short time frame (not likely!). Also the actual release won't come until late 2014 or early 2015, so it will be 1.5 years before seeing that level.

Realistically it is looking that gains on Ethereum will be in the realm of less than 100% per annum. And there is a lot of technical risk of snafus and failure.

This doesn't appear to be a good risk versus reward investment.

Some other faster moving altcoin will come along in the interim time and take away the momentum of Ethereum.


I agree, Ethereum doesn't seen that smart an investment. The returns(even if it does go smoothly without much incicdents, which is very unlikely) will probably get less than 50% IMO, which just isn't worth it since after the IPO is finished, you'll still have to wait months and months before Ethereum is released(and you could of spent that btc to make more in the meantime). Plus, Ethereum is doing the IPO before any beta or public testing of their product, which makes me think that the developers just want to make as much money as possible, because they know the project won't succeed....

"The nature of Bitcoin is such that once version 0.1 was released, the core design was set in stone for the rest of its lifetime" - Satoshi Nakamoto, June 17, 2010
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July 24, 2014, 12:47:15 AM
 #442

I agree, Ethereum doesn't seen that smart an investment. The returns(even if it does go smoothly without much incicdents, which is very unlikely) will probably get less than 50% IMO, which just isn't worth it since after the IPO is finished, you'll still have to wait months and months before Ethereum is released(and you could of spent that btc to make more in the meantime). Plus, Ethereum is doing the IPO before any beta or public testing of their product, which makes me think that the developers just want to make as much money as possible, because they know the project won't succeed....

Your IPO Ethereum shares will be illiquid until the coin is released. You can't sell or determine a market price in the interim.

However, I am starting to form another view on whether it fail or not, see below...

As I wrote upthread, it is appears Ethereum is getting the interest of Peter Thiel. And the only way to have Turing-complete apps on the blockchain without viruses is to have certification of each app by a centralized authority. Thus looks like this is the direction it will morph to over time. It won't be truly decentralized, because the apps will need to be vetted by an authority, although the apps will run decentralized after vetting. We can clearly see the powers-that-be are taking control over Bitcoin (one pool has 50% of the mining hashrate) and now on Bitcoin 2.0 concepts.

The only potential choices we currently know of for getting tunable apps on to the blockchain are:

a) The coin developer approves new scripts.

b) You release a Turing-complete scripting API, wait for viruses to appear, then the community will demand that a central authority vets each script.

So really no one has proposed a better solution than what Ethereum is launching.

The Ethereum whitepaper on page 28 discusses how lack of Turing-completeness is not a good solution either.

#b is the facebook model for apps, and we see Peter Thiel (angel investor of facebook, paypal, bitpay, etc) has already awarded $100,000 to Ethereum's founder.

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July 24, 2014, 12:56:54 AM
 #443

Ethereum has already sold 11.5 million ETH (was 7 million yesterday) sold at roughly $0.30 per ETH. So they've already raised $3.3 million, plus the whitepaper says they will additionally premine 9.9% of whatever that final amount is to be given to the founders and early angel investors. And there are 40 more days to go that this IPO premine will be open to investors.

(I wonder if they've done their legal requirements to comply with SEC regulations for non-qualified USA investors, could end up in legal trouble as what happened to some in the Bitcoin community who sold shares to non-qualified USA investors)

Plus the annual debasement will be 26% of what ever the premine from the IPO ends up being.

As I wrote upthread, it is appears Ethereum is getting the interest of Peter Thiel. And the only way to have Turing-complete apps on the blockchain without viruses is to have certification of each app by a centralized authority. Thus looks like this is the direction it will morph to over time. It won't be truly decentralized, because the apps will need to be vetted by an authority, although the apps will run decentralized after vetting. We can clearly see the powers-that-be are taking control over Bitcoin (one pool has 50% of the mining hashrate) and now on Bitcoin 2.0 concepts.

Note Charles Hoskinson originally tried to recruit me to work on Bitcoin 2.0 altcoin, and when I declined he hooked up with Vitalik Buterin. Someone told me Charles 'left' Ethereum. Look what happened to the last company he was forced out of bytemaster's Protoshares/Bitshares.

https://coinmarketcap.com/

So BitSharesX is in 7th place with a $20 million market cap after nearly a year of release.

Even the #3 coin (other than Bitcoin or Litecoin) is only at $50 million market cap. Thus even if Ethereum makes it to #3 within a year and if the IPO ends up being say $5 - $10 million (already at $3.3 million 1 day into the 42 day IPO), then the upside is only less than a 10 bagger in a year, unless somehow Ethereum surpasses Litecoin in that short time frame (not likely!). Also the actual release won't come until late 2014 or early 2015, so it will be 1.5 years before seeing that level.

Realistically it is looking that gains on Ethereum will be in the realm of less than 100% per annum. And there is a lot of technical risk of snafus and failure.

This doesn't appear to be a good risk versus reward investment.

Some other faster moving altcoin will come along in the interim time and take away the momentum of Ethereum.

But I could be wrong and it surpasses Litecoin quickly (but I still think that is not likely).

I agree and I guess the price will drop initially.

Look, what it all comes down to is this: What is the best Coin Emission Scheme

I put the following CES in a list, ranked from "fair" to "scam"

FAIR:

PoW: announce the new coin at least a few weeks in advance and generate the genesis block. delete the keys of that genesis block and PoW can start. Don't make it a "fastmine". <10% of the coins should be mined in the first month

æthereum approach: fix a certain bitcoin block (a few weeks in advance) and distribute the coins according to the bazlances at that block. This is an ideal scenario if you want your coin to be distributed in a way a lot of people will be able to use it from the start. This can have a very good effect on "adoption" of the coin

PoW + PoS: even with a small balance, it should be possible to mine for PoS. With peercoin, it's almost impossible. NXT solved that problem with "leased forging". If you want PoS, make it accesable to anyone!

PoB: Proof of Burn: nobody benefits from the bitcoins. They are gone. So if the new coin doesn't gain value, money is lost. Even with limited supply, it's not a ponzi, because there is noone benefitting (you need to announce it at least a month before launch off course)

***

"shady":

Fast PoW (+ PoS): if you announce your coin and let people mine it, even for a short period, it's a good thing. I can understand that if you want to have a 100% PoS coin. But the faster the PoW phase is, the more shady the coin is

premine (+ Pow or PoS): I can understand that the devs want some money to develop. That money is denominated in the new currency, so no garantee that their premine fund will someday be worth something. If the premine fund is managed transparently, it is justifiable

IPO with limited coin supply: you need to know in advance how much coins will be created. You can pay the devs BTC, but know that they will not have a risk, you risk loosing the BTC


***

SCAM:

IPO without knowing how much coins will be created: Ethereum

Centralized emission points, debt based: ripple

hyperfastmine / ninjamine: pump the altcoin when most of the coins are already generated (BCN, QUARK)



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I think a lot of issues just come down to FAIR EMISSION.

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July 24, 2014, 01:25:00 AM
 #444

FAIR:

... Don't make it a "fastmine". <10% of the coins should be mined in the first month

A rapidly declining debasement curve implies a fastmine in that early adopters get too large a % of all future coins. I made this argument about Monero in the Monero thread recently, although Monero is far from the worst case and in that grey area between your "fair" and "shady".

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July 24, 2014, 01:31:30 AM
 #445

Near the end of that video currently on the Ethereum home page, Tual claims Ralph Merkle is on their team. In what capacity?

This blog post by the Ethereum founder got me thinking about something. The fundamental threat from viruses on the blockchain is data ("state") corruption or disruption.

Therefore you can perhaps surmise what I've just thought of as a solution, which would allow Turing-completeness on the blockchain without requiring a centralized authority Wink

I don't know if they've thought of my idea. So I will not reveal it now. But now I am really thinking about the importance of what they are doing and will need to beat them before they release.

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July 24, 2014, 03:57:28 AM
 #446

Some discussion about Ethereum over in the Monero thread, and this post is lucid in my opinion:

Maybe that's about the right time to look into another direction: Etherium (ETH)

The Ether guys just started the pre-sale, and I'm wondering how you all think about this new coin and its presale. Some quick questions/points from me side:

- Will ETH be a threat to Monero?
- Is the presale (2000ETH per BTC right now) a reasonable investment chance? (I couldn't find an upper bound on the coin supply for the presale.)
- Is there a chance that ETH will make it against Mastercoin and Counterparty?
- Would Bitshares-X (similarly Bitshares-PTS) be a better investment? (ETH and Bitshares seem to share some goals, e.g., decentralized organisations/companies, etc.)

Regards.

Whats a better investment, a bowling ball or a ham sandwich?

They are all fundamentally different things. I don't think etherium is attempting to build a tax haven in the cloud and I don't think monero is trying to build a consensus based turing complete distributed virtual machine.

Be careful with etheirum though. Huge amounts of hype and many wild promises, little evidence that they will be able to deliver on those promises, and with the sorts of valuation they are obtaining i think its questionable whether it would be a good value even if they do deliver on those promises. The thing about open source code is that it can be copied. Of course there are network effects to make the largest network more valuable. But with something like a virtual machine thats being run in parallel on a huge number of computers, its very questionable to what extent that can be scaled. If it cant be scaled well than their first mover advantage may offer little benefit beyond a certain threshold.

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July 24, 2014, 04:54:34 AM
 #447

Cross-posting on Ethereum...

For that reason alone, they are likely to get a lot of attention, and attention equals dollars, and dollars equals hiring more devs. Pretty virtous cycle that XMR should have but doesn't seem able to make happen. They have already sold over 1 million USD worth.

Meaning more Mythical Man-Months to muck up the progress on identifying the sweet spot.

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July 24, 2014, 07:00:51 AM
 #448

Clarifications to what I posted earlier.

Apparently Charles didn't leave but was moved "to other activities in the space":

https://blog.ethereum.org/2014/06/05/ethereum-project-update/

Quote from: Joseph Lubin
The most recent phase of business activity involved strong attention to the legalities of the sale and Charles Hoskinson was ideal to lead that effort.  But that effort is now substantially complete and Charles will be moving on to other activities in the space.

And apparently they did deal with the legalities on their IPO:

Quote from: Joseph Lubin
Other core activities include attention to legalities in different jurisdictions regarding the pre-sale...

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July 24, 2014, 07:11:25 AM
 #449

Regarding Ethereum, Vitalik Buterin's intelligence is quite high as displayed on his blog posts. And they have other smart people in their group, with Tual even claiming Ralph Merkel is on their team. Expect great things from them. But it doesn't mean they will necessarily hit the sweet spot. They might though.

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July 24, 2014, 08:06:53 AM
 #450

Regarding Ethereum, Vitalik Buterin's intelligence is quite high as displayed on his blog posts. And they have other smart people in their group, with Tual even claiming Ralph Merkel is on their team. Expect great things from them. But it doesn't mean they will necessarily hit the sweet spot. They might though.

But Ethereum has the same problems regarding anonymity and scalability as all the other coins you criticize.
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July 24, 2014, 03:34:27 PM
 #451

Regarding Ethereum, Vitalik Buterin's intelligence is quite high as displayed on his blog posts. And they have other smart people in their group, with Tual even claiming Ralph Merkel is on their team. Expect great things from them. But it doesn't mean they will necessarily hit the sweet spot. They might though.

But Ethereum has the same problems regarding anonymity and scalability as all the other coins you criticize.

Indeed.  Grin

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July 26, 2014, 04:46:45 AM
 #452

I think it's a better option to reaveal the things you know but don't want to share but that is your decision.I do appreciate the thought and effort you put into explaining your views.

A post which summarizes some of my views.

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July 26, 2014, 04:51:29 AM
 #453

I agree with alot [ ... ]
This user seems to be copy-pasting old posts of other people in several threads

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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July 30, 2014, 03:30:46 PM
 #454

Tonight I learned from my 20-something neighbor in the Philippines that he estimates 25% of his former classmates are doing call center or virtual work online. He is doing administrative work for a foreclosure company based in Florida. His job is to compile photos, submit online listing, and monitor to make sure all listings are in sync. His wife is a customer service rep for a USA company that sells bikinis. They both work at night on the computer. He earns about $750 a month, which slightly more than the $650 a tenured teacher earns, in a country where the official minimum wage is about $240 monthly and many non-professionals earn less than that.

They find jobs and get paid through oDesk.com, which takes a 10% fee.

His brother created a social media app Lifebit, and is in the process of seeking venture funding.

The Philippines is moving towards taxing their incomes.

He has heard of Bitcoin and was thinking about doing mining in his home but didn't seem so practical to him. He agrees Bitcoin hasn't spread as much in 5 years as the smartphone did.

Implications:

1. The market for a decentralized payment system that could scale to such social media and virtual economy is growing.

2. The world is changing radically and the western high salaries are being hollowed out, at least for work that doesn't require extremely high skills that filipinos can't do. The west MUST collapse down to the level of these salaries paid abroad.

3. When the west collapses 2016 - 2020+, some of these virtual workers in the developing countries are going to lose their jobs (e.g. customer service rep for bikini company). One might envision the foreclosure work increasing, but the company demanding to pay less or increase the work load for the same pay.

4. This confluence of economic challenges is going to create a huge demand for investment in the high tech virtual economy where the growth will occur.

5. Bitcoin's adoption is past 20% already. It will not scale sufficiently.


Clearly we are moving to electronic money. The remaining question is who will control it. Will it be a fiat or a decentralized crypto-currency. Bitcoin couldn't scale any way without being centralized (another Visa).

We live in interesting and exciting times.

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July 30, 2014, 04:42:34 PM
 #455

Tonight I learned from my 20-something neighbor in the Philippines that he estimates 25% of his former classmates are doing call center or virtual work online. He is doing administrative work for a foreclosure company based in Florida. His job is to compile photos, submit online listing, and monitor to make sure all listings are in sync. His wife is a customer service rep for a USA company that sells bikinis. They both work at night on the computer. He earns about $750 a month, which slightly more than the $650 a tenured teacher earns, in a country where the official minimum wage is about $240 monthly and many non-professionals earn less than that.

They find jobs and get paid through oDesk.com, which takes a 10% fee.

His brother created a social media app Lifebit, and is in the process of seeking venture funding.

The Philippines is moving towards taxing their incomes.

He has heard of Bitcoin and was thinking about doing mining in his home. He agrees Bitcoin hasn't spread as much in 5 years as the smartphone did.

Implications:

1. The market for a decentralized payment system that could scale to such social media and virtual economy is growing.

2. The world is changing radically and the western high salaries are being hollowed out, at least for work that doesn't require extremely high skills that filipinos can't do. The west MUST collapse down to the level of these salaries paid abroad.

3. When the west collapses 2016 - 2020+, some of these virtual workers in the developing countries are going to lose their jobs (e.g. customer service rep for bikini company). One might envision the foreclosure work increasing, but the company demanding to pay less or increase the work load for the same pay.

4. This confluence of economic challenges is going to create a huge demand for investment in the high tech virtual economy where the growth will occur.

5. Bitcoin's adoption is past 20% already. It will not scale sufficiently.


Clearly we are moving to electronic money. The remaining question is who will control it. Will it be a fiat or a decentralized crypto-currency. Bitcoin couldn't scale any way without being centralized (another Visa).

We live in interesting and exciting times.

An interesting but I'm not so sure it is fair to compare Bitcoins growth over the last five years to the growth of the smartphone.  The smartphone is being backed/produced by major companies with extremely deep pockets for one.  Bitcoin is grass roots and mainly depends on word to mouth forms of advertisements.  Expecting the same results as far as growth doesn't seem fair. 

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July 30, 2014, 04:52:14 PM
 #456

An interesting but I'm not so sure it is fair to compare Bitcoins growth over the last five years to the growth of the smartphone.  The smartphone is being backed/produced by major companies with extremely deep pockets for one.  Bitcoin is grass roots and mainly depends on word to mouth forms of advertisements.  Expecting the same results as far as growth doesn't seem fair.  

You can compare it to the growth of the internet or the radio, which were decentralized early on and attained the smartphone's fast rate of growth.

My CoolPage.com was released Oct. 1998. By 2000-1, I (as a 1 man company) had well in excess of 1 million downloads (just on download.com it shows 2/3 of a million and that didn't include Tucows and other download sites, as well as downloads from our site since I was spending up to $10,000 a month on Goto.com/Overture and then Google Ads) and I confirmed using a special AltaVista search feature 335,000 active websites created with the CoolPage editor (because I embedded coolpage.com in a meta tag). At that time, if I remember correctly, CoolPage.com peaked as a top 10-50,000 site as reported by Alexa (note we didn't have a sticky site, users just dropped in to download and then not come back unless they needed to download again or upgrade or get customer support, so the site ranking doesn't reflect user share).

So in less than 3 years, it had grown to 0.1 - 0.25% share of the internet users. Bitcoin was estimated to have in the realm of 1 million users when it hit 5 years, which was only 0.03% of the internet. In 2012 when Bitcoin was 3 years old, it had probably less than 100,000 users[1] and thus 0.003% of the internet. Bitcoin.org is a top 10,000 site and peaked in the top 1000. This is understandable due to the extent that Bitcoin was hyped in the media.

Bitcointalk.org is a top 3000 site and hasn't peaked but was top 2000. Why it is more popular? Probably because creating new discussions on bitcointalk.org is DECENTRALIZED thus more N x N network effects and sustaining value, i.e. there is always new information unlike at bitcoin.org.

I wasn't backed by any big companies. My company was never plastered all over the (top down controlled!) internet news sites. I was a 1 man company, and I slaughtered Bitcoin's (top down investment pump!) rate of growth.

Bitcoin is failing to grow fast because it is becoming increasingly centralized. I believe you've got the concept backwards. Decentralized viral growth, grows geometrically faster than top-down managed growth due to Reed's or Metcalf's laws.

Bitcoin is weighed down by dead weight of myopic investment whales who work hard to top down herd the flock (see the centralization of mining for example, and it also applies to Winkervoss twins, Peter Thiel, and even our resident forum whale). This must change if we are to grow crypto-currency for the world. It won't change with words. It will change with programming.


[1] In the OP, I cited where Peter R showed that price (or was it marketcap?) is correlated very closely to N x N, where N is a proxy for the number of users. Bitcoin was < $10 in 2012, thus 1/100 of recent prices, so we can expect users were 1/10 since 10 x 10 = 100. If it was marketcap, it was even less users.

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July 30, 2014, 05:32:22 PM
 #457

Clearly you can see someone wants most fiat <--> BTC exchange to go through the likes of centralized Coinbase and not through decentralized small businesses.

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August 01, 2014, 01:42:56 AM
 #458

Tonight I learned from my 20-something neighbor in the Philippines that he estimates 25% of his former classmates are doing call center or virtual work online. He is doing administrative work for a foreclosure company based in Florida. His job is to compile photos, submit online listing, and monitor to make sure all listings are in sync. His wife is a customer service rep for a USA company that sells bikinis. They both work at night on the computer. He earns about $750 a month, which slightly more than the $650 a tenured teacher earns, in a country where the official minimum wage is about $240 monthly and many non-professionals earn less than that.

They find jobs and get paid through oDesk.com, which takes a 10% fee.

His brother created a social media app Lifebit, and is in the process of seeking venture funding.

The Philippines is moving towards taxing their incomes.

He has heard of Bitcoin and was thinking about doing mining in his home. He agrees Bitcoin hasn't spread as much in 5 years as the smartphone did.

Implications:

1. The market for a decentralized payment system that could scale to such social media and virtual economy is growing.

2. The world is changing radically and the western high salaries are being hollowed out, at least for work that doesn't require extremely high skills that filipinos can't do. The west MUST collapse down to the level of these salaries paid abroad.

3. When the west collapses 2016 - 2020+, some of these virtual workers in the developing countries are going to lose their jobs (e.g. customer service rep for bikini company). One might envision the foreclosure work increasing, but the company demanding to pay less or increase the work load for the same pay.

4. This confluence of economic challenges is going to create a huge demand for investment in the high tech virtual economy where the growth will occur.

5. Bitcoin's adoption is past 20% already. It will not scale sufficiently.


Clearly we are moving to electronic money. The remaining question is who will control it. Will it be a fiat or a decentralized crypto-currency. Bitcoin couldn't scale any way without being centralized (another Visa).

We live in interesting and exciting times.

An interesting but I'm not so sure it is fair to compare Bitcoins growth over the last five years to the growth of the smartphone.  The smartphone is being backed/produced by major companies with extremely deep pockets for one.  Bitcoin is grass roots and mainly depends on word to mouth forms of advertisements.  Expecting the same results as far as growth doesn't seem fair. 


This is a good point, however the growth of smart phones could potentially make it easier for the masses to start using bitcoin as apps are developed for bitcoin wallets, making it easier to use bitcoin

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AnonyMint
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August 03, 2014, 03:08:43 PM
 #459

Proof-of-stake is “fundamentally flawed”.

https://download.wpsoftware.net/bitcoin/pos.pdf

Quote
Proof-of-stake is frequently proposed as a mechanism for distributed consensus in non-Bitcoin cryp-
tocurrencies (“altcoins”). However, this idea appears to be fundamentally flawed. We explore the
history and motivation leading to Bitcoin’s distributed consensus mechanism, which evades a im-
possibility result, and demonstrate that proof of stake does not work as a replacement.

...

Now, we have a consensus history and an attacker who is able to fork it at some early time.
To actually replace the entire consensus history, he needs to produce an alternate history,
starting from his fork, which is longer than the existing history. But every block needs a
new random selection of signers, so is this possible? The answer is absolutely yes: we have
been using this word “random”, but in fact we have required consensus on the set of signers
(otherwise forks would trivially happen), so even a random selection must be seeded from
past consensus history

...

Further, this ability to control the future selection of stakeholders (and even the
set of stake-holders, by controlling which transactions appear in blocks) has serious consequences. This
is because even without a deliberate attacker, the signers who extend the history at every point
have an incentive to direct the history toward one in which they have more stake (and there-
fore more reward), which causes the system to trend toward centralization. They may do this
by skewing the stake selection of future blocks, or more insidiously by censoring transactions
which (may eventually) increase the set of stakeholders.



Isn't that what I wrote in 2013...

Cross-posting from the following linked post:

https://bitcointalk.org/index.php?topic=558316.msg6501774#msg6501774


It is time to squash Proof-of-Stake once and for all. It can NEVER remain decentralized...

The other attacks you describe all derive from the fundamental reason I declared all non-proof-of-work systems to be insecure back in April.

My logic was mathematically fundamental. The input entropy set is quite deterministic and well known and thus can be preimaged. For example, accumulating a lot of coin-days-destroyed and then targeting them in clever ways to subvert the security.

...

(In any non-Proof-of-Work design, ) It is mathematically impossible for there to be external consensus trust of the honest chain if the dishonest chain is controlled by more than 51% of the peers. We've covered some of the scenarios upthread, and it always boils down to that the external viewers can not know who to trust except by trusting the majority of peers.

The only mathematical way around this is to centralize the network, by placing more trust in some peers than others over time.

Indeed long-term reputation is a mathematically viable alternative to Proof-of-Work. This is centralization...

Notwithstanding the above, any non-Proof-of-Work system can be attacked with much less than 51% of the peers, due to the fact that the input entropy is preimageable, as I explained upthread. Again the only way to work around this is to trust some established peers to guard against this.

...

The fundamental math problem with using any metric from the block chain (or any consensus voting such as proof-of-stake) is that it can be gamed deterministically unlike proof-of-work which is a randomized process, i.e. the input entropy is not orthogonally unbounded as it is in the randomization of proof-of-work.

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klee
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August 03, 2014, 09:23:56 PM
 #460

I had some tweets with Come-from-Beyond regarding this paper:

https://twitter.com/comefrombeyond/status/495940346728435712
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