It's about time to turn off PoW mining

[kokojie]

I don't see how hacking one delegate can lead to all other delegate being hacked, since I am actually one of Bitshares 101 delegates, and I have no information regarding other delegates, they are all anonymous to me.

I can almost guarantee that likely delegates are found here:
http://bitshares.org/community/team/

and than other delegates can be found by prominent users here:
https://bitsharestalk.org/ and Here https://www.reddit.com/r/BitShares

Humans being social creatures are easily compromised with social engineering and than that can be leveraged by impersonating other prominent members.

uh hate to break it to you, even if you convince me you are Satoshi Nakamoto, I ain't giving you my wallet password or access to my PC dude. lol

[1715399652]

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[1715399652]

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[inBitweTrust]

uh hate to break it to you, even if you convince me you are Satoshi Nakamoto, I ain't giving you my wallet password or access to my PC dude. lol

Ughhh, it has nothing to do with that. A hacker will have access to all their emails and contact lists and can email or IM a fellow delegate or developer and even use their PGP signature to impersonate the identity of either the developer or delegate. A hacker doesn't need to know who the developers are or what their IP's are and can simply fish to compromise likely candidates

Most users guard is down when they get an IM  or email from a close friend /partner/ coworker and it is easy to get one of these to visit a site or download or open an attachment from a trusted source. Some of these developers may maintain credentials of other developers as well.

You are proving my point that most users are credulous and overly confident that they are secure, which in turn makes them more vulnerable. We all are insecure. Treat everything that touches the WAN or comes in indirect contact with the WAN as vulnerable! This is even worse because you are a delegate for bitshares and are acting as you are invulnerable to becoming a target. This hubris is a great example of how we should be concerned about DPoS as it is introducing security unaware individuals into the delegate process where they can control the direction of a 62 million dollar market cap.

I noticed kokojie was getting ganged up on ITT, and since I share similar thoughts about PoW I thought I would help him out. So it is known, we are both Bitshares fanboys.. because it solves some of the glaring problems with the mainstream cryptos and the issues with PoW.

That's fine. Can you show me where I can look up a average initial and current distribution graph for BTSX?  Example of what I am interested in :http://charts.nxtcrypto.org/cDistribution.aspx but for BTSX.... I have searched all over and can't find that info.  

[CoinHoarder]

Hacking all delegates is more unlikely than hacking discus fish and ghash mining pools. All delegate identities and IPs are not known, making this even harder.. Not to mention having to hack 51 servers compared to 2.
Yes, hacking 51 delegates and hacking discus fish and ghash mining pools is possible but both are unlikely to happen

I don't hear this brought up very often, but Bitcoin could be attacked much cheaper and easier than building a farm or hacking the large mining pools. All it would take is two computer savvy gunmen. Send them to the discus fish and ghash servers, force them at gunpoint to log into the servers, and bam.. 51% attack successful at the cost of only 2 guns and life in prison (IF they are caught.) With DPoS you would need 51 gunmen. I'm sure there are plenty of computer savvy (savvy enough to run a script) poor people in the world that would do this on the promise of someone taking good care of their family and kids.

[inBitweTrust]

Hacking all delegates is more unlikely than hacking discus fish and ghash mining pools. All delegate identities and IPs are not known, making this even harder.. Not to mention having to hack 51 servers compared to 2.
Yes, hacking 51 delegates and hacking discus fish and ghash mining pools is possible but both are unlikely to happen

I dunno, those 2 mining pool operators are likely more security aware than half the bitshare delegates. This convo is moot, as both are insecure.

You do bring up an interesting point in the sense that PoW ties a physical asset - asic miner to its protocol and that asset can be attacked directly unlike with PoS. So this is another vulnerability bitcoin has to manage.

Perhaps a PoW / PoR would be a good hybrid for bitcoin in the future. I suppose PoR can exist on a sidechain/treechain to pay for asic electricity by renting out cpu cycles and hard drive space without a hard fork.

Do you know where I can get a distribution graph per user of the 2 billion btsx?

[CoinHoarder]

Do you know where I can get a distribution graph per user of the 2 billion btsx?

I don't know of a distribution graph. I have never cared to do the research, as just with Bitcoin or any other currency I know there are many more rich people than me and I have come to terms with that... Life is not fair.

For the record, I was not a PTS or AGS investor, and thus did not receive BTSX in the genesis block. I bought the very small amount of BTSX I own on the free market after it's release. I am just someone that believes in the ideology, technology, and features of Bitshares.. specifically BitsharesX.

The distribution is contained within the genesis block though, so if someone wanted to make some sort of chart that would be cool. The only thing you can really calculate is initial distribution via the genesis block:
https://raw.githubusercontent.com/dacsunlimited/bitsharesx/master/libraries/blockchain/genesis.json

There will never be any "BTSX Rich Lists" because BTSX forces everyone to use "Bitcoin's best practices" by using a variation of stealth addresses in conjunction with aliases. After the genesis block it is very challenging (nearly impossible?) to track what happens. http://wiki.bitshares.org/index.php/TITAN

I also don't want to make it seem as if I'm pushing Bitshares here. I would love nothing more if Bitcoin were to adopt some of what I perceive as advantages that Bitshares provides, as I think it would be a step forward for Bitcoin specifically. Ignoring Bitshares for a second.. I think it would benefit Bitcoin and the crypto ecosystem at large. I think that is kokojie's purpose of this thread as well, to improve Bitcoin.. not push an Alt coin.

[CoinHoarder]

I dunno, those 2 mining pool operators are likely more security aware than half the bitshare delegates. This convo is moot, as both are insecure.

I can agree that statement in its entirety is likely true.

[inBitweTrust]

I don't know of a distribution graph. I have never cared to do the research, as just with Bitcoin or any other currency I know there are many more rich people than me and I have come to terms with that... Life is not fair.

Distribution is very important and why I am concerned about Satoshi controlling 700k-1 million bitcoin. Whether or not we should trust Satoshi is moot as he could become compromised as his email account being taken proves.

Ahhh, I dug up some more info... http://www1.agsexplorer.com/
Seems like BTSX distribution is better than NXt and bitcoin but their is one glaring concern:

Looks like a lot of funding is going toward supporting the developers directly.
https://docs.google.com/spreadsheet/ccc?key=0AqTwk-e7yzJydDFnQmlkTVlkbWpubnJBbzR2UG5ucnc&usp=sharing#gid=0

Looks like operation costs are burning through ~100BTC a week or 50k usd a week average and they have used half their fundraising BTC. At this rate they can fund operations for 30 more weeks if BTC doesn't increase in value , longer if BTC appreciates....interesting.

[CoinHoarder]

I don't know of a distribution graph. I have never cared to do the research, as just with Bitcoin or any other currency I know there are many more rich people than me and I have come to terms with that... Life is not fair.

Distribution is very important and why I am concerned about Satoshi controlling 700k-1 million bitcoin. Whether or not we should trust Satoshi is moot as he could become compromised as his email account being taken proves.

Ahhh, I dug up some more info... http://www1.agsexplorer.com/
Seems like BTSX distribution is better than NXt and bitcoin but their is one glaring concern:

Looks like a lot of funding is going toward supporting the developers directly.
https://docs.google.com/spreadsheet/ccc?key=0AqTwk-e7yzJydDFnQmlkTVlkbWpubnJBbzR2UG5ucnc&usp=sharing#gid=0

Looks like operation costs are burning through ~100BTC a week or 50k usd a week average and they have used half their fundraising BTC. At this rate they can fund operations for 30 more weeks if BTC doesn't increase in value , longer if BTC appreciates....interesting.

Only half of the BTSX tokens were distributed to AGS fund donators, although it is true that is how they are paying for development. Once the funds run out it will need to be more of a grassroots effort like Bitcoin, but I think the intention of the AGS fund was just to bring the idea to fruition and for it to function more like Bitcoin's development does in the future.

The other half of the tokens were distributed to Bitshares PTS holders via a "snapshot" (spin off) on February 28th. This is intended to further distribute the tokens evenly and provide a way for miners and/or people that didn't want to donate to AGS to get a stake in Bitshares DACs.

I guess distribution does matter some people.. I am not to worried about it though. I don't think Satoshi will ever spend or cash out a single Bitcoin out of his stash. Bitcoin was his soapbox to bring awareness to the corruptness of FIAT, and show that there is a solution. If he was interested in getting rich, he would of cashed out at $1000+ IMO. I'd like to think that he secured his private keys better than his email, or ideally he destroyed them.

[inBitweTrust]

Only half of the BTSX tokens were distributed to AGS fund donators, although it is true that is how they are paying for development. Once the funds run out it will need to be more of a grassroots effort like Bitcoin, but I think the intention of the AGS fund was just to bring the idea to fruition and for it to function more like Bitcoin's development does in the future.

The other half of the tokens were distributed to Bitshares PTS holders via a "snapshot" (spin off) on February 28th. This is intended to further distribute the tokens evenly and provide a way for miners and/or people that didn't want to donate to AGS to get a stake in Bitshares DACs.

I guess distribution does matter some people.. I am not to worried about it though. I don't think Satoshi will ever spend or cash out a single Bitcoin out of his stash. Bitcoin was his soapbox to bring awareness to the corruptness of FIAT, and show that there is a solution. If he was interested in getting rich, he would of cashed out at $1000+ IMO. I'd like to think that he secured his private keys better than his email, or ideally he destroyed them.

Yeah, I was familiar with the whole distribution/investment history of invictus. I just re-listened to this talk with Daniel Larimer about DPOS:
http://letstalkbitcoin.com/blog/post/lets-talk-bitcoin-129-dogeparty-and-delegated-proof-of-stake

The concern with Bitshares is how quickly they are blowing through their initial investment(50k a week) and what will happen to development and the community when that investment runs out.

I too hope that Satoshi destroyed them as one person holding that much is very dangerous to the marketplace.

[johnyj]

It does not matter pow or pos, as long as the coin generation has no cost, the exchange rate will be close to zero. If you want to give a cryptocurrency some value, it must have a cost

It seems that fiat money does not have a cost but still have some value, but fiat money is forced by law into circulation thus backed by all the merchants' productivity in that country, thus the cost is the cost to make that law: A war or lots of political campaign could bring such a privilege, they cost a lot

But for a cryptocurrency, you can not force them into circulation, thus its value is closely decided by the manufacturing cost, just like gold. Of course the market demand will affect the exchange rate, but cost is always a baseline for deciding its value: If it cost nothing to make a $500 coin, everyone will immediately dump their coin into market, thus the coin becomes a pump and dump speculation

Suppose that 100 coins mined per day, there might be a shareholder using $50000 to buy up all the coins everyday to artificially maintain a market price of $500. Then its market capital will never grow big enough to take serious volume

However, if those 100 coins cost $5000 to mine, then the producer will refuse to sell under his cost thus automatically reduce the sell pressure on the market when exchange rate dip below $500

[CoinHoarder]

It does not matter pow or pos, as long as the coin generation has no cost, the exchange rate will be close to zero. If you want to give a cryptocurrency some value, it must have a cost

It seems that fiat money does not have a cost but still have some value, but fiat money is forced by law into circulation thus backed by all the merchants' productivity in that country, thus the cost is the cost to make that law: A war or lots of political campaign could bring such a privilege, they cost a lot

But for a cryptocurrency, you can not force them into circulation, thus its value is closely decided by the manufacturing cost, just like gold. Of course the market demand will affect the exchange rate, but cost is always a baseline for deciding its value: If it cost nothing to make a $500 coin, everyone will immediately dump their coin into market, thus the coin becomes a pump and dump speculation

Suppose that 100 coins mined per day, there might be a shareholder using $50000 to buy up all the coins everyday to artificially maintain a market price of $500. Then its market capital will never grow big enough to take serious volume

However, if those 100 coins cost $5000 to mine, then the producer will refuse to sell under his cost thus automatically reduce the sell pressure on the market when exchange rate dip below $500

I would argue that purely PoS coins do cost something. The different ways of distribution for PoS/consensus I have seen all cost the person who originally received the coins something, except for one distribution model.. giveaways.

The 3 distribution methods where the coins cost money:
IPO - Definitely costs $$$
Proof of Burn - Definitely costs $$$
PoW period then switched to purely PoS - Costs money in the electricity used and time mining in which someone could of mined other cryptocurrencies

The only sketchy non-PoW distribution model that this argument could possibly be applied for:
Giveaways - I admit this is the only category thus far that could fall under your reasoning above, however giveaways have costs in that it takes the developers time, energy, and money, to program and market the cryptocurrency. However, is this perceived cost enough seeing as though the end users didn't pay for these costs themselves? Maybe, maybe not.

In the case of generic country coins that bring no innovation to the table, they have failed on a massive level. In the case of Ripple which bring an innovative approach, it has sustained and even grew in value. I think some cases are different than others, and cost is not an end all be all to a cryptocurrency having value. As long as the crypto provides some benefit, utility, or innovation, AND a larger cryptocurrency isn't already known for this innovation, then it is possible for it to survive and possibly even thrive due to the network effect.

I get what you're saying, but I'm not sure it's actually true or not. I agree my reasoning for giveaway coins having value is somewhat sketchy, so feel to prove me wrong. I have actually been using this as a reason as to why I think "spin offs" will not work, because I think Bitcoin holders will dump immediately for profit just like the country coin failures. So I guess I am contradicting myself here... I admit it is complicated.

Although to be fair to my reasoning as to spin offs, specifically the spin off I think is likely to fail is Aethereum. It is mostly due to your reasoning that there is no costs, combined with the network effect of Ethereum in which everyone pretty much sees as the decentralized programming project to beat. So in combination of no cost and the network effect, I think Aethereum will not do so well. If you replaced Aethereum with some innovation or improvement upon Bitcoin that has not already garnered a network effect, it may be possible for the spin off to be a success. I think Stellar will fail for the same reason, there is no cost and Ripple has already achieved a sufficient network effect.

So in summary I suppose I believe that my theory for other giveaways holds true with Spin Offs: As long as the crypto provides some benefit, utility, or innovation, AND a larger cryptocurrency isn't already known for this innovation, then it is possible for it to survive, and possibly even thrive due to the network effect.

[devphp]

There's no checkpoints in Bitshares, users will be able to opt out checkpoints in Peercoin 0.5, and I don't know enough about NxT checkpointing to comment.

Interesting discussion you have here. I just want to inject some missing info which is too long to search.

Almost quoting Come-from-Beyond here. NXT in its bootstrapping phase (which is now) has rolling checkpoints 720 blocks deep (so called automatic re-organization of the blockchain). After the bootstrapping phase is over (could be by the end of 2014, at least that's the plan), Transparent Forging is supposed to be implemented which sets rolling checkpoints to 10 blocks deep. And CfB acknowledges that Transparent Forging is somewhat similar to what DPoS does, but at the same time it's different. In DPoS delegates are voted by users. In Transparent Forging mechanism of NXT the software will transparently define the next forgers of blocks with the algorithm, which enables transactions being sent directly to those forgers, which makes possible a very fast block generation (15 seconds - 1 minute).

The number of successful forgers in NXT since Genesis block varies over time, but on average is 250-300 as analysis of public keys in the blockchain reveals.

[johnyj]

The 3 distribution methods where the coins cost money:
IPO - Definitely costs $$$
Proof of Burn - Definitely costs $$$
PoW period then switched to purely PoS - Costs money in the electricity used and time mining in which someone could of mined other cryptocurrencies

As long as the entry is free and everyone with enough resource will get enough coin, the coin's cost will rise, and also comes the risk of one entity controlling more than 50% of hash power, this is how free market works. If you artificially create some barrier to prevent new joiners to dominate the market, then very quickly new people will abandon the game, since they have no chance to win majority

Actually this is also a worry for bitcoin, which have less and less coin generation every 4 years. What is the purpose of investing in one asset while most of this asset is controlled by a few? The good thing with bitcoin is that no matter how much coin you hold, you don't gain more than the coin itself. This will force people to spend the coin sooner or later, thus flattening the coin distribution. If the coins holding will grant you some kind of privilege over new comers, then it becomes a kind of private elite club, and kill the coin over time

The real demand for oversea transaction and merchant acceptance are relatively small compared to investment and speculative demand. Financial investors are usually very smart, any weakness in the distribution design will shun those people away

[oda.krell]

Several issues.

The claim that PoW is "inefficient" is economically naive, at least in the form presented here.  The exact cost per transaction is difficult to determine at the moment because of price fluctuations, but ultimately the efficiency of the network will settle to a value determined by the total value transferred over total cost of running the network. The cheeky claim that it "costs hundreds of time more than a credit card transaction" can hardly be taken serious if it is presented without any kind of calculation, as was done here.

Re: network security. PoW at the scale of the current Bitcoin network is de facto secure (no attack ever succeeded, no realistic attack vector that does not involve massive clandestine hardware production is known), and it is getting more secure each day as additional hashpower comes online. "Increased" security through PoS is an advantage that holds little weight then.

On the other hand, there are numerous disadvantages of PoS. The most significant ones I can think of:

Coin distribution by stake, instead of coin distribution by work. There is something intuitively unappealing about handing the highest rewards to the already largest holders of an asset, and there is something intuitively satisfying about rewarding those who "work the hardest". Don't take my word for it, ask around. This is probably the most basal reason why a majority of the Bitcoin community dislikes PoS.

Consensus forming in the case of competing chains. From a technical perspective, probably the strongest argument. Summarized in the well know form as "The trouble with Proof-of-stake is that there is nothing at stake" if there is a need to form a consensus which of two or more competing chains is the canonical one. I'm not informed enough on the current state of the discussione to know if there have been, generally accepted, solutions to the problem, but the entire problem is alien to PoW because hashpower/energy is a limited resource.

Which brings me to the final point: what some perceive as an "inefficient waste of energy" is, in they eyes of a number of Bitcoin users/investors the fundamental economical backing of the currency. Time will tell if there will be an upper limit to the hardware and energy cost supplied to the network (and that cost will certainly have to increase as total value transferred on the network increases), but setting up the currency-slash-network such that it requires some amount of energy to keep it running is an economic advantage, not disadvantage, because it provides a base valuation in the form of the work it takes to run the network.

tl;dr Bitcoiners prefer PoW. Deal with it.

[cbeast]

Coin distribution by stake, instead of coin distribution by work. There is something intuitively unappealing about handing the highest rewards to the already largest holders of an asset, and there is something intuitively satisfying about rewarding those who "work the hardest". Don't take my word for it, ask around. This is probably the most basal reason why a majority of the Bitcoin community dislikes PoS.

tl;dr Bitcoiners prefer PoW. Deal with it.

You are right, but here's the thing: many people have physiologically impaired brains that don't have these intuitive insights. They can't use logic because they are ruled by fear. They can be objectively detected with an MRI brain scan. Many of us can detect them by asking them a few questions unless they have developed strong evasion skills. These are the sociopaths. Don't worry about them. Just ignore them and keep using logic and reason.

[johnyj]

In future, bitcoin ASICs can be built into a heating device to provide warm water or air in cold places, that will easily solve the "wasted energy" complain, and make those heating devices very welcome

[cxz]

Several issues.

The claim that PoW is "inefficient" is economically naive, at least in the form presented here.  The exact cost per transaction is difficult to determine at the moment because of price fluctuations, but ultimately the efficiency of the network will settle to a value determined by the total value transferred over total cost of running the network. The cheeky claim that it "costs hundreds of time more than a credit card transaction" can hardly be taken serious if it is presented without any kind of calculation, as was done here.

Re: network security. PoW at the scale of the current Bitcoin network is de facto secure (no attack ever succeeded, no realistic attack vector that does not involve massive clandestine hardware production is known), and it is getting more secure each day as additional hashpower comes online. "Increased" security through PoS is an advantage that holds little weight then.

On the other hand, there are numerous disadvantages of PoS. The most significant ones I can think of:

Coin distribution by stake, instead of coin distribution by work. There is something intuitively unappealing about handing the highest rewards to the already largest holders of an asset, and there is something intuitively satisfying about rewarding those who "work the hardest". Don't take my word for it, ask around. This is probably the most basal reason why a majority of the Bitcoin community dislikes PoS.

Consensus forming in the case of competing chains. From a technical perspective, probably the strongest argument. Summarized in the well know form as "The trouble with Proof-of-stake is that there is nothing at stake" if there is a need to form a consensus which of two or more competing chains is the canonical one. I'm not informed enough on the current state of the discussione to know if there have been, generally accepted, solutions to the problem, but the entire problem is alien to PoW because hashpower/energy is a limited resource.

I agree. Gold costs a huge amount of investment capital to mine, hence the strength in the long term store of value. bitcoin is the strongest network only because of asic  POW. The 51% attack would cost way too much time and investment with zero financial incentive. Security of the network is the most important foundation of any cyrpto. There's more scalability than security concerns with blockchain bloat and underfunded core devs as the network grows. I assume this will be resolved in time, but am I foolish to do so? POS incentives are for hoarders and savers, which leads to a lack of trading volume. As we see in economics,a country's GDP is what gives intrinsic value to any paper fiat. So incentives for savers prevents growth in value. I say this even though i'm very bullish with btsx atm due to my interest with DACS. Bitcoin will be no1 king of crypto for ever imho. First mover advantage means alot in this game. I will be surprised if bitcoin loses highest market cap position 20 years from now.

[jabo38]

Not time yet to turn off PoW but I do think it will need to happen someday.  Lets make Bitcoin into something good before we go and actually try to replace it.   Also, when it is replaced, I gather it won't be DPoS because DPoS leaves a bad taste in my mouth. 

[blue eyes]

My reasoning:
* Each transaction in Bitcoin costs hundreds of time more than a credit card transaction to process. (currently this is subsidized by inflow of capital into the eco-system, so users haven't felt the full effect).

* Hundreds of millions of dollars are paid to mining hardware vendor and electricity company. This will continue year after year, and only will grow more and more as Bitcoin grows bigger. The Bitcoin community is being bled dry. The price action this year shows that even with massive amount of big name adoption and good news, the inflow of capital is having trouble to keep up with the insane surge of mining cost.

* There are better ways to secure the network, for example Bitshares's DPoS system. Money is re-invested into the eco-system and community, instead of paid to hardware vendor and electric company.

* If Bitcoin doesn't drop PoW and embrace the much more efficient DPoS system. I can see Bitshares eventually overtake Bitcoin. Simply because Bitcoin eco-system is bleeding hundreds of millions of dollars each year, and the DPoS re-invests the money and grows the eco-system/community each year.

Btw, you can hold BTC in Bitshares 

why are you so sure about the security of DPos system?

[bornil267645]

the truth is, I never liked PoW mining in the first place.