rpietila Altcoin Observer

[AnonyMint]

give a man a fish and he eats for a day.
give a man a poisson distribution and he eats at a known average rate at times distributed independently of one another.

Intra-block period true, but interblock the distribution isn't even Poisson (??) because the difficulty is a not an independent variable.

[AnonyMint]

10) reviewed positively by cypto-guru AnonyMint and immediately trading on bter (thanks to thorough testnet phase)

I said they implemented the mini-block chain which is a technology I like, but I never said the Cryptonite (not Cryptonote) had compelling a feature set that made it a wise investment.

One feature wonder coins are not necessary sufficient to sustain against the network effects of Bitcoin. It is up to you all to analyze that further.

Pruning of the blockchain is apparently technically plausible for Bitcoin and some apparently effort has been applied investigating that. Will probably be less efficient than the mini blockchain.

[smooth]

Pruning of the blockchain is apparently technically plausible for Bitcoin and some apparently effort has been applied investigating that. Will probably be less efficient than the mini blockchain.

It is more than plausible, it is explained in the original paper. On the surface less efficient if addresses are reused (which is often not recommended), but not dramatically so. Both end up with block headers plus UTXO.

Cryptonite has some other nice features though. The 10 year reward halving schedule is unusual, perhaps valuable, and will never be adopted by Bitcoin. At least it pushes very-low-reward issues out several decades.

[AnonyMint]

On the surface less efficient if addresses are reused (which is often not recommended), but not dramatically so. Both end up with block headers plus UTXO.

Perhaps there are also issues around efficiency of how the history is stored with multiple Merkle trees (one per block) verses one Account Tree. As far as I remember not major (not thinking deeply today on this), probably a constant factor.

[AnonyMint]

And yes, they would want a privileged position, and a pound of flesh.  That's how they roll.

Ethereum basically sold the first 4 years of outright with the genesis sale.  On top of that added .18 of genesis block that was sold for themselves + bounties. The 0.18 may be funding the privileged position.

[smooth]

On the surface less efficient if addresses are reused (which is often not recommended), but not dramatically so. Both end up with block headers plus UTXO.

Perhaps there are also issues around efficiency of how the history is stored with multiple Merkle trees (one per block) verses one Account Tree. Again not major, probably a constant factor.

Yes if there are straggler unspent transactions in old blocks then there will be some merkle branch hashes that need to be kept. Once all the transactions in an old block are spent that goes away and all you have is the header, which is exactly the same as MBC.

This may seem implausible if there are many transactions per block. Except that to keep the ledger from filling with dust and abandoned outputs, MBC suggests (though Cryptonite does not yet implement) some per-account demurrage (idle balances eventually decay to zero and can be pruned). If you do the same thing in bitcoin then you can clean up the old blocks as well. In the end they seem comparable.

[AnonyMint]

This may seem implausible if there are many transactions per block. Except that to keep the ledger from filling with dust and abandoned outputs, MBC suggests (though Cryptonite does not yet implement) some per-account demurrage (idle balances eventually decay to zero and can be pruned). If you do the same thing in bitcoin then you can clean up the old blocks as well. In the end they seem comparable.

I didn't know MBC suggested that but rpietila knows I suggested it in a private message Note he has no inside knowledge of anything I am doing. I just mentioned that to him.

But the problem is how to set the demurrage when you don't know the value of the currency in the future?

[AnonyMint]

And yes, they would want a privileged position, and a pound of flesh.  That's how they roll.

Ethereum basically sold the first 4 years of outright with the genesis sale.  On top of that added .18 of genesis block that was sold for themselves + bounties. The 0.18 may be funding the privileged position.

Which means they can't attain the any where near the widespread distribution and network effects that a mined coin can (especially if that mined coin has a design that defeats botnets). Their distribution is tied up amongst who ever was stupid enough to buy their IPO, which can't expand after the fact as popularity rises, thus popularity can't rise organically exponentially (geometrically) through spiraling network effects.

Yeah I think I agree. Ethereum appears to be mathematically DOA.

Apologies for the multiple posts (my thoughts weren't entirely organized before as I am multitasking and distracted).

[AnonyMint]

Two final points and I am outta here for a while...

1. The pruning in Bitcoin is technically doable (and Satoshi very vaguely mentioned it in the seminal whitepaper), not likely as efficient as the MBC, but I wonder if the pools will even allow it to happen. They may have an incentive to make it more difficult to run a full client. We debated upthread whether users can solely dictate hard forks, or whether mining inertia is also in control of that decision. (so I won't rehash that discussion)

2. There are so many of you out there who don't have enough income and have more free time, I don't understand why many of you wouldn't be spending $200 per day on a 10,000 computer botnet and mining these CPU coins in order to generate more capital to invest in Bitcoin or which ever coin you think is the best investment. The link I shared upthread says the mining GUIs are "point and click" in the botnets, so probably even a dummy could do it. Assuming it is profitable, the only issue is legality and morality. I personally think it is immoral to not expose a natural weakness (both in the crypto-coin and on users' computers), because nature requires we do in order to maximize resilience and prosperity overall. Note I didn't comment on the legality. For example, maybe more users would move away from that spyware Windows 8 and to Linux if more users are seeing their computers slow down:

http://en.wikipedia.org/wiki/Usage_share_of_operating_systems#Desktop_and_laptop_computers

Even though other nefarious uses of a botnet can potentially generate more profit, mining is just so much easier and (at least not factoring the theft of other users' computation, the mining aspect is, versus say stealing credit cards with the botnet) less criminal.

Thus I see these CPU coins with near-term high debasement rates and no botnet resistance as sitting ducks waiting for their price to be in a downward spiral. Some whale could end up with too many coins by sitting on the bid (as the botnet miners dump coins), and end up killing the network effects and thus his investment. Look Ma, I own all the currency. Ma replies, "Aren't you a little bit lonesome?".

Edit: the criminal liability is more than anyone with reasonably good opportunity cost would stomach, but for those who have less alternative opportunities and or who under financial distress (or those with a criminal mindset who don't calculate probabilities well), they would be probably wisest to botnet mine an anonymous coin where they have better chance of concealing their coins.

[smooth]

1. The pruning in Bitcoin is technically doable (and Satoshi very vaguely mentioned it in the seminal whitepaper), not likely as efficient as the MBC, but I wonder if the pools will even allow it to happen. They may have an incentive to make it more difficult to run a full client. We debated upthread whether users can solely dictate hard forks, or whether mining inertia is also in control of that decision. (so I won't rehash that discussion)

There is no fork.

Since pruning does not change the block hash, anyone can just go ahead and unilaterally prune blocks and either store them locally or serve them up to other nodes that request them. The blocks still form a valid chain, and although changes to node logic are obviously needed, permission from pools is not.

A node that receives pruned blocks can still verify transactions and mine on top of a pruned chain. Blocks mined this way are indistinguishable from blocks mined on top of an unpruned chain, so pools can't discriminate against these blocks. Of course concentrated pools can shut out anyone not part of their cartel, but that is independent of pruning.

The efficiency advantages of the mini-blockchain relative to Bitcoin with pruning are quite small, certainly not order of magnitude. Given this I seriously doubt a mini-blockchain can defeat Bitcoin without other advantages.

[AnonyMint]

There is no fork.

Since pruning does not change the block hash, anyone can just go ahead and unilaterally prune blocks

Correct. There might have been an issue with one of the choices for optimized pruning which required a fork (I forget the details).

Edit: I think I remember the issue was that because we can't guarantee that users won't reuse addresses, then pruned Bitcoin block chain can lead to double-spends if different clients have different rules on pruning, thus I think there is some fork needed to deal with this. But again I forget the details.

Edit#2: I haven't studied Cryptonite's implementation of the MBC, but if they didn't deal with the address reuse issue, that is a double-spend hole.

The efficiency advantages of the mini-blockchain relative to Bitcoin with pruning are quite small, certainly not order of magnitude.

That seems to be incorrect on quick thought. Have I missed something?

Unspent address in the pruned Bitcoin blockchain requires an entire branch of the Merkle tree which includes a set of hashes for every node up the tree to the root block hash. In MBC, the cost per address is only roughly one hash as the overhead of the Account Tree is amortized across all unspent addresses.

[thelibertycap]

And yes, they would want a privileged position, and a pound of flesh.  That's how they roll.

Ethereum basically sold the first 4 years of outright with the genesis sale.  On top of that added .18 of genesis block that was sold for themselves + bounties. The 0.18 may be funding the privileged position.

Which means they can't attain the any where near the widespread distribution and network effects that a mined coin can (especially if that mined coin has a design that defeats botnets). Their distribution is tied up amongst who ever was stupid enough to buy their IPO, which can't expand after the fact as popularity rises, thus popularity can't rise organically exponentially (geometrically) through spiraling network effects.

Yeah I think I agree. Ethereum appears to be mathematically DOA.

Apologies for the multiple posts (my thoughts weren't entirely organized before as I am multitasking and distracted).

Good point with the lack of network effect. Although the network effect can work on more institutional level, if ethereum is really backed by the big money and they have a plan to package and sell it to business. They could really use some DAC (distributed autonomous companies) technology and smart contracts - could this be started/used instead by the ordinary folks? Is there really a need for such things?
I have not studied similar platforms yet, but maybe its time to take a closer look because we already have quite a lot of projects and it is reasonable to assume the most successful one is already out there.
Does anybody know of some successful DAC for example? (if this thing is even implemented by some project and not just on the paper)

[iourzzz]

And yes, they would want a privileged position, and a pound of flesh.  That's how they roll.

Ethereum basically sold the first 4 years of outright with the genesis sale.  On top of that added .18 of genesis block that was sold for themselves + bounties. The 0.18 may be funding the privileged position.

Which means they can't attain the any where near the widespread distribution and network effects that a mined coin can (especially if that mined coin has a design that defeats botnets). Their distribution is tied up amongst who ever was stupid enough to buy their IPO, which can't expand after the fact as popularity rises, thus popularity can't rise organically exponentially (geometrically) through spiraling network effects.

Yeah I think I agree. Ethereum appears to be mathematically DOA.

Apologies for the multiple posts (my thoughts weren't entirely organized before as I am multitasking and distracted).

Good point with the lack of network effect. Although the network effect can work on more institutional level, if ethereum is really backed by the big money and they have a plan to package and sell it to business. They could really use some DAC (distributed autonomous companies) technology and smart contracts - could this be started/used instead by the ordinary folks? Is there really a need for such things?
I have not studied similar platforms yet, but maybe its time to take a closer look because we already have quite a lot of projects and it is reasonable to assume the most successful one is already out there.
Does anybody know of some successful DAC for example? (if this thing is even implemented by some project and not just on the paper)

I think it's too early to talk about successful DACs as they have not proved any of its concepts yet except for an ability to splurge and rise capital for the future projects.

It seems that Bitshares and its child projects like Bitsharex-X are directly competing with some promises of Etherium. Smart contracts are also available with Counterparty.

[smooth]

The efficiency advantages of the mini-blockchain relative to Bitcoin with pruning are quite small, certainly not order of magnitude.

That seems to be incorrect on quick thought. Have I missed something?

Yes, merkle tree hashes are small and not that many are needed.

One hash is required for each complete branch that has been pruned (the extreme being the entire tree being pruned, in which case only the root hash in the header remains). The worst case would be one remaining transaction in a block with a long chain of hashes all the way from the transaction to the root. If there is more than one transaction, then fewer hashes are needed per transaction (the extreme case here being all the transactions present, in which case again only the root hash remains).

Hashes are 32 bytes each. Transactions average very roughly 500 bytes. The block header is 80 bytes. With 8 million transactions per block (obviously impossible with the current 1 MB block size, but let's assume that gets increased, and Visa scale is, somehow, reached), the tree is only 23-deep, so this is 736 bytes of hashes and 80 bytes of header for each unspent output, roughly a factor of 2.5x in total chain overhead. This is the worst case, which won't be reached for every block (some older blocks may be fully spent or expired by demurrage fees, and newer blocks will have more unspent outputs).

There are other optimizations possible within Bitcoin. For example, it isn't necessary to store input scripts once the transaction is "fully" confirmed. These likely require a fork but they don't certainly don't require a whole new coin, nor does switching to a new coin really offer any advantage if this sort of optimization (which is effectively what the mini-blockchain is doing) is seen as a valid tradeoff against security.

[villabacho]

Risto I think you missed the point. Botnets have an order-of-magnitude or more lower costs, thus this lower cost basis means they can sell at lower prices, thus they drive the price of the coin down if they are too much of the float (which I theorize could impact the exponential share of the distribution and growth curve).

While the debasement rates are high, the price of the coin is modulated significantly by the cost of mining.

Thus for two reasons botnets are not a problem in the long-term, but they can destroyhurt a coin early on (when the long-term growth curve is being established and perhaps set in stone).

1. The difficulty eventually rises such that either the demand for botnets drives their prices up to parity with rented hardware or botnets fade as a significant % of the hashrate.

2. Debasement rates slow so the price of the coin is less modulated by the cost of mining.

I think you can also add

3. Because of the rising difficulty, an increasing fraction of the people who want to acquire XMR and were mining so far to that purpose now will buy instead.

So, the selling pressure created by botnets is one thing. On the other side of the coin (pun intended), also buying pressure should build up. Economically, the only reason that these two effects do not perfectly neutralize each other is that they do not happen at the same time.

That's how I see it, from an economical perspective at least. Hard to figure out the psychological effects, though.

[smooth]

Edit: I think I remember the issue was that because we can't guarantee that users won't reuse addresses, then pruned Bitcoin block chain can lead to double-spends if different clients have different rules on pruning, thus I think there is some fork needed to deal with this. But again I forget the details.

Edit#2: I haven't studied Cryptonite's implementation of the MBC, but if they didn't deal with the address reuse issue, that is a double-spend hole.

Cryptonite keeps a full block chain for, I believe, two weeks, after which it assumed that chain forks are never going to happen. Bitcoin pruning would need to do something similar

I might be wrong about the details though. I didn't really study Cryptonite very much after concluding that it adds little to Bitcoin with SPV and pruning, and also after seeing it grossly overvalued relative to its maturity. When the price comes down to something I might consider potentially attractive as an investment I might take a closer look.

[bobabouey2]

Not sure how new this is, but coingecko.com has a variety of interesting metrics by which you can sort altcoin rankings.

This one use various source code activity to rank coins by "developer."  Monero is #4  https://www.coingecko.com/en?sort_by=developer_score

Monero is also top 10 on "total" and "liquidity."

Does not do so well on "Community", but it looks like that score is based primarily on reddit, facebook and twitter.  It does not seem to track bitcointalk.org (let alone the fine rpietila specific threads).  No doubt this is due to increased complexity of monitoring discussions on bitcointalk generally, and the even further complexity of tracking the reputation of posters on bitcointalk.org.

Still, some interesting measures.

PS - doesn't seem to sort well on chrome, had to use explorer to get that working.

[Majormax]

Risto I think you missed the point. Botnets have an order-of-magnitude or more lower costs, thus this lower cost basis means they can sell at lower prices, thus they drive the price of the coin down if they are too much of the float (which I theorize could impact the exponential share of the distribution and growth curve).

While the debasement rates are high, the price of the coin is modulated significantly by the cost of mining.

Thus for two reasons botnets are not a problem in the long-term, but they can destroyhurt a coin early on (when the long-term growth curve is being established and perhaps set in stone).

1. The difficulty eventually rises such that either the demand for botnets drives their prices up to parity with rented hardware or botnets fade as a significant % of the hashrate.

2. Debasement rates slow so the price of the coin is less modulated by the cost of mining.

I think you can also add

3. Because of the rising difficulty, an increasing fraction of the people who want to acquire XMR and were mining so far to that purpose now will buy instead.

So, the selling pressure created by botnets is one thing. On the other side of the coin (pun intended), also buying pressure should build up. Economically, the only reason that these two effects do not perfectly neutralize each other is that they do not happen at the same time.

That's how I see it, from an economical perspective at least. Hard to figure out the psychological effects, though.

It is not easy to separate interactive factors, and consider pairs of variables in isolation. The 3 body/4 body problem (per Newtonian physics) comes into play. In altcoin economics there are additional overlays relating to distribution stages (critical mass stepchanges) and reflexivity (effect of participants views and bias).

All these make prediction an art rather than a science !

[thelibertycap]

And yes, they would want a privileged position, and a pound of flesh.  That's how they roll.

Ethereum basically sold the first 4 years of outright with the genesis sale.  On top of that added .18 of genesis block that was sold for themselves + bounties. The 0.18 may be funding the privileged position.

Which means they can't attain the any where near the widespread distribution and network effects that a mined coin can (especially if that mined coin has a design that defeats botnets). Their distribution is tied up amongst who ever was stupid enough to buy their IPO, which can't expand after the fact as popularity rises, thus popularity can't rise organically exponentially (geometrically) through spiraling network effects.

Yeah I think I agree. Ethereum appears to be mathematically DOA.

Apologies for the multiple posts (my thoughts weren't entirely organized before as I am multitasking and distracted).

Good point with the lack of network effect. Although the network effect can work on more institutional level, if ethereum is really backed by the big money and they have a plan to package and sell it to business. They could really use some DAC (distributed autonomous companies) technology and smart contracts - could this be started/used instead by the ordinary folks? Is there really a need for such things?
I have not studied similar platforms yet, but maybe its time to take a closer look because we already have quite a lot of projects and it is reasonable to assume the most successful one is already out there.
Does anybody know of some successful DAC for example? (if this thing is even implemented by some project and not just on the paper)

I think it's too early to talk about successful DACs as they have not proved any of its concepts yet except for an ability to splurge and rise capital for the future projects.

It seems that Bitshares and its child projects like Bitsharex-X are directly competing with some promises of Etherium. Smart contracts are also available with Counterparty.

Being very early at least discussing it is good and we already have so many projects. This is the altcoin observer thread and I haven't seen any idea except the rising anonymous currencies being discussed here. Anything else?

[AnonyMint]

Hashes are 32 bytes each. Transactions average very roughly 500 bytes...

There are other optimizations possible within Bitcoin. For example, it isn't necessary to store input scripts once the transaction is "fully" confirmed...

You are apparently incorrectly assuming the MBC coin doesn't perform some optimization to store only the outputs address (over the long-term that exceeds the window of retention of full transaction history), and thus the relative overhead of the hashes in the tree (compared to the retained transaction size for only the outputs) is much more significant than your computation of "2.5".

Bitcoin would have to fork to achieve similar levels of efficiency. Actually I am not even sure they could. The historical block hash would have to change in order to discard part of a transaction's data. I suppose there might be some clever way to finagle it. Why not just implement the MBC instead.