AI Coin Development Diary

[benjyz]

If the coin creation method is changed, the ASIC owners have nothing to say.

Bitcoin uses proof-of-work, and therefore the majority of the hashing power decides. Why would the current stake-holders be so stupid to switch to a system which is unproven and where there economic advantages, i.e. their capital investment becomes worthless? That makes no sense whatsoever. Coin creation in Bitcoin doesn't arbitrarily change. That's why its a solid system. If such changes were possible Bitcoins would be worthless. All of this should be obvious to anyone who wants to understand why Bitcoin works. The reason is works is that hashing-power can not possibly become worthless. And those that own the hashing power will not agree to give it up. That's the fundamental limitation as well.

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[rpietila]

If the coin creation method is changed, the ASIC owners have nothing to say.

Bitcoin uses proof-of-work, and therefore the majority of the hashing power decides. Why would the current stake-holders be so stupid to switch to a system which is unproven and where there economic advantages, i.e. their capital investment becomes worthless? That makes no sense whatsoever. Coin creation in Bitcoin doesn't arbitrarily change. That's why its a solid system. If such changes were possible Bitcoins would be worthless. All of this should be obvious to anyone who wants to understand why Bitcoin works.

It is precisely BECAUSE of what you described that if any PoS would ever be implemented by anyone based on Bitcoin blockchain, it will be a fork, or an altcoin, and not Bitcoin. And therefore you and all of the ASIC miners will have no say in the process, because it has new rules.

If people see that the intruder is gaining in value and Bitcoin is losing it, they may try to get extra share of the new coins by selling their Bitcoins, hastening their demise. The original Bitcoin proponents will only lose, though, if they have sold the spinoff, thinking that it is worth nothing.

[SlipperySlope]

If the coin creation method is changed, the ASIC owners have nothing to say.

Bitcoin uses proof-of-work, and therefore the majority of the hashing power decides. Why would the current stake-holders be so stupid to switch to a system which is unproven and where there economic advantages, i.e. their capital investment becomes worthless? That makes no sense whatsoever. Coin creation in Bitcoin doesn't arbitrarily change. That's why its a solid system. If such changes were possible Bitcoins would be worthless. All of this should be obvious to anyone who wants to understand why Bitcoin works.

It is precisely BECAUSE of what you described that if any PoS would ever be implemented by anyone based on Bitcoin blockchain, it will be a fork, or an altcoin, and not Bitcoin. And therefore you and all of the ASIC miners will have no say in the process, because it has new rules.

If people see that the intruder is gaining in value and Bitcoin is losing it, they may try to get extra share of the new coins by selling their Bitcoins, hastening their demise. The original Bitcoin proponents will only lose, though, if they have sold the spinoff, thinking that it is worth nothing.

With the exception of certain full nodes in the P2Pool, existing ASIC miners do not participate in the Bitcoin network. They provide shares of hashing power to their respective pools in return for daily payouts. My pitch for Bitcoin 1.0 would be to the pools who could retain a lot more of the $500 million passing through their hands each year. There are only 12 or so to persuade. There are about 7300 other full nodes that verify the blockchain and have the power to ban other full nodes who misbehave. Either a majority of existing full nodes must migrate to this project's version, or they must somehow be greatly outnumbered by new paid full nodes on the new version. Other powerful entities in the Bitcoin network include the exchanges and payment processors. Nearly all of these must be on board with the new version. I believe that they would be swayed primarily by popular opinion, and to a lesser extent by the possible zero-confirmation, and lower fee transactions, made possible by the single temporary mint.

I plan a friendly takeover of the blockchain in some possible future world, where I am effectively invited to do so by Bitcoin experts, media, and the public. There will be no doubt those who get spun out on the old blockchain with the old client. But I simply do not see how they could compete with this project.

I want the bitcoin experts to recognize this project as an unimplemented Bitcoin system. That requires passing a very strict test regarding the Satoshi Social Contract. A draft project whitepaper will formally specify how everything is to work. It will no doubt be revised many times, perhaps even after coding and testing reveal glaring errors on my part.

[Brangdon]

Why would the current stake-holders be so stupid to switch to a system which is unproven

I gather the plan is to spend several years developing the technology, proving it and building consensus. I presume one of the goals is to keep the protocol as compatible with Bitcoin as possible, so authors of wallet software etc will find it relatively easy to support.

I don't know how practical this is. The root post mentions "a sandboxed testnet that periodically forks the Bitcoin blockchain". To me that sounds like I won't be able to buy anything with the testnet coins, and any trading I do will be wiped out when the next fork happens, because the testnet block-chain will be over-written with the latest Bitcoin block-chain. So, nothing will be at stake in the testnet. Those conditions are so unrealistic that I'm not sure any system can be said to have proven itself under them.

After that, although it might be theoretically possible to gradually evolve Bitcoin into Bitcoin-PoS, with both PoW and PoS blocks being accepted as valid by nodes for a while until all nodes upgrade, that isn't what the root post in this thread proposes. Instead it proposes a "big bang", go live with one last snapshot of the Bitcoin block-chain. After which, it will be a fully-fledged altcoin which will coexist alongside the original Bitcoin.

Coin creation in Bitcoin doesn't arbitrarily change. That's why its a solid system. If such changes were possible Bitcoins would be worthless.

The goal is to preserve Satoshi's social contract. Presumably this includes the rate at which new coins are created.

And those that own the hashing power will not agree to give it up. That's the fundamental limitation as well.

The miners are not the only stakeholders. What really matters is whether the users want to own the new coins or the old. I think the goal is to make it very easy for them to switch. So the authors of wallet software are important stakeholders, because they can ease the transition for users. It's also important that the new coin is a fork of the old, because basing it on a snapshot of Bitcoin's block-chain means the value of users' holdings in Bitcoin is preserved in the new coin. If the users then prefer to buy the new coins, the value of old Bitcoin will crash and the miners will be in trouble anyway, because the block reward will have less real-world buying power.

A core belief here is that PoS is simply better, and will carry the day on merit. It does seem to me that transaction fees ought to be lower with PoS. That hardly matters today because the block reward is so high. It will matter more in a few years with the block reward halves. Anyone with any foresight can see that after a few halvings, and after a few more years of the PoW hashpower arms race continuing, that Bitcoin transaction fees will have to grow a lot to cover the cost of the miners' hardware. If PoS can offer a similar system with greater efficiency, and that translates into lower transaction fees for users, then it has a real chance of winning users and other stakeholders. Basically, all stakeholders except the miners. And the great thing about PoS is that it doesn't need the miners because it's not computationally expensive. And we don't have to wait for the block reward to happen to make these judgements. The stakeholders - the venture capitalists, the people who make hardware wallets, point-of-sale terminals, Bitcoin ATMs - will place their bets based on which network they consider to have the most long-term future value. And that won't be PoW because PoW is painting itself into a corner.

(All assuming PoS can be made to work. Of which I have yet to be convinced. And as I mentioned above, I also have reservations about whether a currency can really be considered to have proven itself on a testnet.)

[Peter R]

What really matters is whether the users want to own the new coins or the old...It's also important that the new coin is a fork of the old, because basing it on a snapshot of Bitcoin's block-chain means the value of users' holdings in Bitcoin is preserved in the new coin.

Whether you create a fork or a spin-off, the end result is the same in this respect: in both cases you have bitcoin (PoW) and bitshares (PoS) running side by side.  If you want bitshares to supersede bitcoin, then you need to legitimize it somehow and the market needs to agree.  

We should also agree on the definition of a "fork" and a "spin-off".  Here are my thoughts:

FORK:
====
A fork preserves the complete chain of digital signatures in the bitcoin blockchain back to the Satoshi genesis block with no missing details.  Bitshares implemented as a fork would mean that new PoS blocks are built forking out from some pre-defined block #X and that client nodes would likely download all new bitshares blocks plus the entire bitcoin blockchain up to the forking point.  

SPIN-OFF:
======
A spin-off preserves the wealth distribution (provable via ECDSA private keys) as specified by the unspent outputs in block #X but does not necessarily preserve the complete chain of digital signatures back to the Satoshi genesis block.  Bitshares implemented as a spin-off would mean that new PoS blocks are built on top of some "nucleus" that represents a snapshot of the blockchain's unspent outputs at block #X.  Client nodes would likely download only the bitshares blocks if the nucleus was hard-coded (the unspent outputs require vastly less disk space than the blockchain transaction history).  

[jonald_fyookball]

A core belief here is that PoS is simply better, and will carry the day on merit.  

I'm not convinced of that necessarily.  And I am not on board
with this delegation scheme for reasons I've stated.  

Provided that distributed consensus can be achieved with PoS, and provided
that it has better defenses against a 51% attack than PoW does,
I would say it MIGHT be superior to PoW if introduced at the
right time, which I think would be premature right now for Bitcoin.

[ahmed_bodi]

If this is done and working on a testnet i would be happy to fork bytecoin with your changes.

[SlipperySlope]

If this is done and working on a testnet i would be happy to fork bytecoin with your changes.

Deal. And thank you so much.

[SlipperySlope]

What really matters is whether the users want to own the new coins or the old...It's also important that the new coin is a fork of the old, because basing it on a snapshot of Bitcoin's block-chain means the value of users' holdings in Bitcoin is preserved in the new coin.

Whether you create a fork or a spin-off, the end result is the same in this respect: in both cases you have bitcoin (PoW) and bitshares (PoS) running side by side.  If you want bitshares to supersede bitcoin, then you need to legitimize it somehow and the market needs to agree.  

We should also agree on the definition of a "fork" and a "spin-off".  Here are my thoughts:

FORK:
====
A fork preserves the complete chain of digital signatures in the bitcoin blockchain back to the Satoshi genesis block with no missing details.  Bitshares implemented as a fork would mean that new PoS blocks are built forking out from some pre-defined block #X and that client nodes would likely download all new bitshares blocks plus the entire bitcoin blockchain up to the forking point.  

SPIN-OFF:
======
A spin-off preserves the wealth distribution (provable via ECDSA private keys) as specified by the unspent outputs in block #X but does not necessarily preserve the complete chain of digital signatures back to the Satoshi genesis block.  Bitshares implemented as a spin-off would mean that new PoS blocks are built on top of some "nucleus" that represents a snapshot of the blockchain's unspent outputs at block #X.  Client nodes would likely download only the bitshares blocks if the nucleus was hard-coded (the unspent outputs require vastly less disk space than the blockchain transaction history).  

By this definition, this project is intended to be a fork, indeed what bitcoin core developers call a hard fork.

[benjyz]

The miners are not the only stakeholders. What really matters is whether the users want to own the new coins or the old.

Nope. The consensus is very clearly defined. Users of coins have absolutely nothing to decide in this decision making process. If you want to understand how Bitcoin works I would suggest to study the whitepaper. If a switch to another algorithm would be possible, bitcoins would be worthless bits. The most important feature of the network is that some elements can't change, first and foremost the money supply and proof-of-work. You can ask some of the miners and core developers how likely such a switch is.

[rpietila]

The miners are not the only stakeholders. What really matters is whether the users want to own the new coins or the old.

Nope. The consensus is very clearly defined. Users of coins have absolutely nothing to decide in this decision making process. If you want to understand how Bitcoin works I would suggest to study the whitepaper. If a switch to another algorithm would be possible, bitcoins would be worthless bits. The most important feature of the network is that some elements can't change, first and foremost the money supply and proof-of-work. You can ask some of the miners and core developers how likely such a switch is.

Nope. A cool part of the crypto universe is that anyone can fork the coin (considering he has the majority of the shares/consensus AFTER the fork against hostile groups) to do whatever, and the markets decide if the fork has any value.

I don't believe miners and core developers would like to support such a change, but unless they have the majority of stake in the fork, they don't count. You can decide the parameters of the fork such that they actively suppress the position of devs and miners. Just like you would be designing an altcoin.

[benjyz]

Nope. A cool part of the crypto universe is that anyone can fork the coin (considering he has the majority of the shares/consensus AFTER the fork against hostile groups) to do whatever, and the markets decide if the fork has any value.

I don't believe miners and core developers would like to support such a change, but unless they have the majority of stake in the fork, they don't count. You can decide the parameters of the fork such that they actively suppress the position of devs and miners. Just like you would be designing an altcoin.

Yes, you can create a new coin, but this has nothing to do with the consensus in Bitcoin. The difference between a fork and a new chain is that all wealth gets wiped out. Bitcoins don't have value in a new chain. So what OP is talking about is just nonsense - he is explicitly referring to migrating Bitcoin. The people who hold the 5 billion dollars in wealth have no interest in destroying their wealth. The ASIC miners have no interest in moving to another system. The Bitcoin chain is secured by the hashing power. Which means the wealth can't be destroyed by random judgements of people. This economic calculation is the very reason why Bitcoin works in the first place. Essentially those nodes who would want to change the system would be malicious actors in the network. All of this is really required if you want to understand the system, because otherwise bitcoins would be worthless. The value of bitcoins crucially depends on the self-interest of miners and the tie to the hashing-power. Which is not to say there can be better systems. One might imagine a currency where users actually have a say in development, but Bitcoin is not such a system. Any new algorithm will be an Altcoin, not Bitcoin 2.0.

[rpietila]

Seems that we have the same understanding of the situation.

In the end, the individual users of the currency have the final say, because if many of them decide to migrate, the previous currency network loses value and punishes those who still trust in it. Both PoW and PoS consensuses are helpless if people just abandon the currency en masse.

[benjyz]

I agree - the market of Alt-Coins will be a kind of meta-consensus system. You vote with your wallet, which network you support. So side-chains, coin issuance within another network and migration are not needed. The market can price the different coins. What is missing is a more fluid exchange, so that payment in BTC and other coins are almost the same.

[jonald_fyookball]

didnt mastercoin promise that?

[SlipperySlope]

If you are so interested in these kinds of things, you should study the problem first. You seem to overlook some basics of Bitcoin. The current stakeholders, i.e. ASIC owners, have no interest in giving up their money printing press. To make changes to Bitcoin you need the consensus of those who have mining power and developers ("community consensus"). That community consensus is very clear.

I am studying Satoshi's paper in order to extract the terms of the social contract. Then I will author a project whitepaper to describe Bitcoin Proof-of-Stake in an academic format suitable for review. What I have thought about so far assumes well-behaving and bug-free agents operating in an ideal network - abstracted from the real network used by Bitcoin today. The whitepaper must allow for misbehaving and buggy agents operating in a possibly broken network. The new system must be shown to work without any trusted agents. The more convincing math that is in the paper - the better. The developer consensus can be moved by logic and math.

Bitcoin will never move to PoS.

The year 2016 is the last year for awarding 1,314,000 block reward bitcoins, then the block reward halves for the subsequent four years. I would tentatively set January 1, 2016 as the project launch date, because the reallocation of the block rewards is the enticement for switching transactors and holders over to the new version. I will revise a small portion of the Bitcoin Core C++ source code, and create a reference pool Java software program before the end of 2014, and then use all of 2015 for public testing in a sandboxed Bitcoin testnet. At least one altcoin, e.g. bytecoin, could be forked by others to test proof-of-stake in the wild in 2015.

A controversy over the future of Bitcoin can only hurt its price and utility.

All further actions of this project must be non-confrontational to the maximum degree.

[fireinwall]

POS is popular for now. Some days later , new feature will come out for most people.

[benjyz]

A controversy over the future of Bitcoin can only hurt its price and utility.

All further actions of this project must be non-confrontational to the maximum degree.

What you're trying to do is similar to asking 100 mulit-millionaires to donate all their wealth to charity. it's physically possible, but economically impossible. this is the whole genius of the system. if 51% of the hashing power stays honest, the system works. the reason why people don't destroy the network out of self-interest, is that they can't profitable do so. to move to another algorithm would destroy the system. if you believe it's possible you shouldn't support Bitcoin in the first place  - collusion would be possible to the detriment of all coin holders.

[rpietila]

I believe that these development should be explored. Bitcoin was born as a disruptive innovation, and now/soon it maybe time to consolidate the gains by making incremental improvements.

It is like the earliest automobile was an invention over buggy, but religious sticking to its parameters would seem funny from the perspective of us who use quite different vehicles these days. Similarly I can only lament the fact that any real progress in human transportation ended with jet engine, because of the selfsame religious sticking to certain concepts and stifling of competition of innovation.

I am of the opinion that PoS is inherently fiat, and inherently non-coin, unimplementable, unworkable and undesirable. But I am open to change my opinion if new facts surface. Unwillingness to change opinions with facts is a trait not fitting for a Bitcoin user.

[SlipperySlope]

Transitional SHA-256 Mining Multipool

What you're trying to do is similar to asking 100 mulit-millionaires to donate all their wealth to charity. it's physically possible, but economically impossible. this is the whole genius of the system. if 51% of the hashing power stays honest, the system works. the reason why people don't destroy the network out of self-interest, is that they can't profitable do so. to move to another algorithm would destroy the system. if you believe it's possible you shouldn't support Bitcoin in the first place  - collusion would be possible to the detriment of all coin holders.

Thanks for the idea about hashing power.

This project will create, or otherwise facilitate, a transitional SHA-256 multipool which pays its participating SHA-256 ASIC hashers in bitcoins free from the taint of inputs dependent upon rewards created by ASIC miners after the fork.

At launch of this project, the Bitcoin Network will regrettably split to some degree as bitcoins mined by the new proof-of-stake version cannot be spent by proof-of-work clients and vice versa. A condition of the launch is that the number of full nodes in the proof-of-stake version greatly outnumber their counterparts in the proof-of-work version, in particular that the major bitcoin exchanges and online wallets support the proof-of-stake version. The ASIC miners who continue to operate their rigs can obtain new-version bitcoins by joining this new multipool, which in addition to mining proof-of-work version Bitcoin, will also mine altcoins sharing the SHA-256 algorithm.