It's about time to turn off PoW mining

[inBitweTrust]

The Second Proof of Stake Whitepaper:

I'll suggest an improvement on DPoS. Essentially the problem solved with delegates is to mitigate the risk of stakeholders themselves controlling the network. Unfortunately, it's still possible for the delegates themselves to actually be the stakeholders themselves secretly using a nom de plume.

Therefore I propose that these delegates then in turn form caucuses that elect representatives that run for election to represent their stakeholders. This can be a bicameral process that offers stakeholders real choice in their representation. These representatives should operate in a bicameral manner consisting of those that serve six year terms (staketors) and those that serve two year terms (staketives). Transactions can be processed by either type of representative, but any single staketor can stop any transaction that is deemed unworthy. To mitigate the risk of this happening too often, stakeholders can hire stakiests to influence the staketors by buying them gifts and taking them on exotic vacations.

Of course, this new and improved DPoS which I will call the Democratic Republic Proof of Stake or DRPoS (pronounced derpus) will revolutionize the entire cryptocurrency universe. You're Welcome!

LOL, thanks for the good laugh.... reminds me of this dialogue from Monty Python .... https://www.youtube.com/watch?v=fxGqcCeV3qk

There are some purposes in life where we need complex politics, but with currency I believe it is obsolete as the politics is represented by the code directly that individuals voluntarily agree to when they use it without creating the unnecessary need for abstractions of a personality contest.

[krach]

No matter POW or POS , BTSX Pegged asset is a joke . BTSX gives you a illusion that it could pegged any assets , usd/gold/oil  , as a result btsx price would go up if pegged successfully.
But in fact , now 3i team are trying to manipulate the bitusd price as they called price feed . This is not what the decentralized free market is . So .. doomed to fail  Wink

Who are the 3i team?

BTSX gives you the ilusion that it could be pegged to any asset? NO WAY, IT is much better than that, "IT IS YOUR OWN FT. KNOX"!

That says it about all, Ft. Knox where countries that depost there gold, and have no permission to inspect if their gold is really there.

[kokojie]

I have been thinking about this and my arguments have been focused on the strengths of PoW vs PoS/DPoS alone and not analyzing the possible benefits of a PoW/PoS bitcoin as a way to possibly reduce waste and increase security(Like Peercoin but with a higher hashing difficulty) . This would not be with the intention of removing PoW but for strengthening it.

I would imagine Miners would need to be incentivized by given a percentage vote based upon their hashing power(instead of stake) as not to simply introduce a hardfork that would reduce their incentives overnight.

Additionally, with adding a different type of security to bitcoin we could accomplish some much needed goals like:

1) Could PoS  be introduced to moderate the use of electricity?
People would have the option of investing in Asics directly for block reward/transaction fees or buy bitcoins directly for a stake in transaction fees thus the arms race would be slowed down a bit.

2) Could PoS  be introduced to increase transaction confirmation time?
Perhaps confirmations could be a mix of quick PoS node votes and 10 min average PoW confirmations... accomplishing this technical feet may be tricky but doable. I imagine we could slowly introduce this as a sidechain/treechain where people could test it first before integrating it completely.

3) Increase the amount of full nodes?
Perhaps, PoS rewards would simply be bitcoin confirmation fees that miners would share with any full node regardless of how many coins they have.... maybe this should be called PoW/PoN(ode) instead? We would need to have a minimum stake size to prevent a botnet being created cheaply of nodes to flood fake confirmations before the first PoW confirmation around 10 min appeared.

4) Could PoS be introduced to encourage/incentivize miners to use p2p pools instead of centralized pools?
Miners could only get the PoS or PoN reward if they solo mined or mined in a p2p pool thus encouraging decentralization.

The more I think of it incorporating PoS could actually fix a lot of weaknesses in Bitcoin. I understand that PoS advocates don't find PoW to be of any value, but you guys need to realized that there are already too many vested interests in PoW despite who is right and getting people to completely give up PoW is going to be challenging if not impossible. The best you could hope for is incentivizing miners with a PoS/PoW hybrid approach as discussed above. If miners are incentivized and this hardfork is packaged in a way that everyone benefits greatly It may have a slight chance of happening.

The whole voting process with DPoS is merely an unnecessary act of supererogation where the real goals aren't about creating a popularity contest, rather to develop methods of securing the network better through decentralization. If there is going to be a hardfork in bitcoin I want 100k "delegates"(nodes) not 100.

This is a great post, a good framework for change and a step in the right direction if implemented.

[delulo]

No matter POW or POS , BTSX Pegged asset is a joke . BTSX gives you a illusion that it could pegged any assets , usd/gold/oil  , as a result btsx price would go up if pegged successfully.
But in fact , now 3i team are trying to manipulate the bitusd price as they called price feed . This is not what the decentralized free market is . So .. doomed to fail  Wink

Who are the 3i team?

BTSX gives you the ilusion that it could be pegged to any asset? NO WAY, IT is much better than that, "IT IS YOUR OWN FT. KNOX"!

That says it about all, Ft. Knox where countries that depost there gold, and have no permission to inspect if their gold is really there.

It is in now way about Ft. Know. No Gold or anything is deposited. It is only a prediction market that tracks prices of real world assets and makes the result of the prediction market sendable and divisible like you any crypto currency.

[delulo]

Having "Full nodes" automatically become delegates where a minimum stake needed to prevent a botnet of delegate nodes forming would do the trick and insure there was a much larger pool of delegates at less of a cost to secure (less barriers to entry and thus more competition to become a delegate).

There is a difference between a (full) node and a block producer (miner with POW, forger with NXT POS, delegate with DPOS). Full nodes can not prevent a 51% attack.
With your proposal above you would have the problem that the biggest stakeholders would distribute their stake among many accounts so that all accounts are above the defined threshold you mentioned. This in the end would equal NXT proof of stake. Not bad but no problem solved.  

With Nxt your vote is based upon your stake where 10-15 large whales at the moment control a majority of the funds and can mount a 51% attack.

Right. Just as much as the biggest mining farms could.

With this Proof of Node every delegate has an equal vote

That is correct: Every delegate would have an equal vote. But there would be more delegates than individuals who control those delegates. I think my previous post has shown why.

[krach]

It is in now way about Ft. Know. No Gold or anything is deposited. It is only a prediction market that tracks prices of real world assets and makes the result of the prediction market sendable and divisible like you any crypto currency.

Go to the bitsharesX homepage, what slogan do you find? "Your own Ft. Knox" Yes it is totaly about ft. knox, that is a great example because we all know that not all the gold that is in ft. knox is there, and in bitsharesX there is ZERO gold behind bitGOLD and ZERO USD behind bitUSD, you can only cash out in bitsharesX. The USA would rather goverments get their payout in USD than Gold but they are not accepting that.

[delulo]

It is in now way about Ft. Know. No Gold or anything is deposited. It is only a prediction market that tracks prices of real world assets and makes the result of the prediction market sendable and divisible like you any crypto currency.

Go to the bitsharesX homepage, what slogan do you find? "Your own Ft. Knox" Yes it is totaly about ft. knox, that is a great example because we all know that not all the gold that is in ft. knox is there, and in bitsharesX there is ZERO gold behind bitGOLD and ZERO USD behind bitUSD, you can only cash out in bitsharesX. The USA would rather goverments get their payout in USD than Gold but they are not accepting that.

"Your own Ft. Knox" is an a bit far fetched analogy. It is marketing talk. This should not be confused with what makes it work and what the functional output is. Functionally it can be best described as a prediction market which results in a crypto currency like token that is pegged to a certain real world asset  (e.g. the dollar or the gold measure in the price of 1 fine ounce of gold for example).
But let's not take the thread too much off topic. Blockchain security is a wide enough topic already. [Feel free to open a new thread and I will comment on it then! Just send me a pm so I know you opened it]

Who are the 3i team?

That is a team of developers, marketers and partners who work on the infrastructure of all the bitshares DACs. I3 or 3I means Invictus Innovations Incorporated. http://bitshares.org/community/team/

[inBitweTrust]

With this Proof of Node every delegate has an equal vote

I'd disagree again. I think my previous post has shown why.

You are partially correct. A large stake holder could attempt to gain more delegates(nodes) by simply splitting up his coins (stake) amongst many nodes.

This problem is worse within DPoS as delegates can be anonymous(and if they aren't than that presents a whole other set of problems). If you have a large stake in DPoS of 60% you don't have to use all your voting power on only one of the 100 delegates but can create multiple wallets with multiple votes grabbing many different delegates positions. In fact you could potentially gain 80-90% of all delegate positions with a stake of 30-60% because all you need to do is flood the voting pool with potential delegates that you control and tip the odds in your favor for the close races.

With PoN there are much larger inherent costs to this task as an attacker needs to pay for or secure a large set of servers with different Ips and have a sizable amount of stake to spread amongst those servers to meet the minimum thresh-hold. With DPoS there is a limited amount of delegate slots and an attacker could flood the market with potential delegates, and with this there wouldn't be any limits to the amount of nodes(and the starting amount of nodes would be much higher) so an attack would be much more difficult. The incentives wouldn't be there to profit as transaction fees won't be motivation enough and the only objective would be to attack the network (and oneself) which would be held in check by the PoW consensus method. So this form of attack would cost a high amount in order to get a free coffee before the first PoW confirmation came in?

Nxt is much different than PoN because there is no need to invest in all the server and IP resources and your vote is only equal to the amount of stake you have directly. If Bitcoin had a minimum stake amount of 0.1 BTC per node to become a delegate than getting getting enough nodes , managing them, and securing them would be cumbersome and expensive.

[sandykho47]

I hope you not say bitcoin should use PoS, because it will make inflation & the price will down

[delulo]

If you have a large stake in DPoS of 60% you don't have to use all your voting power on only one of the 100 delegates but can create multiple wallets with multiple votes grabbing many different delegates positions.

This is not how it works. But kind of similar, see http://wiki.bitshares.org/index.php/DPOS#Voting_Algorithm

You are making the assumption that someone has a huge stake. If someone has more than 51% of stake in a POS system it is under the control of the person. But there would be a final solution to this: Fork and not honor this 51% stakeholder.

It seems to me like you tread DPOS and your proposed PoN in one sentence. Also it would make sense to differenciate between delegates and nodes. I have to admit that I didnt get your argument really.  

[delulo]

I hope you not say bitcoin should use PoS, because it will make inflation & the price will down

Why the heck should POS be correlated with inflation??

[inBitweTrust]

Why the heck should POS be correlated with inflation??

Agreed, Inflation is a non-sequitor to this discussion.

If you have a large stake in DPoS of 60% you don't have to use all your voting power on only one of the 100 delegates but can create multiple wallets with multiple votes grabbing many different delegates positions.

This is not how it works. But kind of similar, see http://wiki.bitshares.org/index.php/DPOS#Voting_Algorithm

You are making the assumption that someone has a huge stake. If someone has more than 51% of stake in a POS system it is under the control of the person. But there would be a final solution to this: Fork and not honor this 51% stakeholder.

It seems to me like you tread DPOS and your proposed PoN in one sentence. Also it would make sense to differenciate between delegates and nodes. I have to admit that I didnt get your argument really.  

What I am proposing is allowing full nodes to automatically become "delegates"  if they are on a unique IP and have a minimum stake of lets say 0.1BTC(But this could be adjusted as needed). The reasons for this have been explained in detail in the last 2 pages.

You are correct that with BTSX DPoS there is the cost of transferring part of ones stake to the intended candidate, but is this really a cost when all an attacker is doing is transferring his part of his stake from a shill voter to one of many shill delegates(to himself)? An attack with DPoS would simply involve flooding the market with many potential delegates, promoting those delegates to get enough other votes , and than using your shill accounts to tip the race in your favor for all candidates you control.  

The solution of forking after the attack has happened isn't satisfactory either because any hard fork because of an attack does huge damage to everyone. Forking is possible with any open source coin and what we are talking about is methods of securing a protocol so a hard fork after an attack isn't needed in the first place.

Please explain to me how this attack could be mitigated without decloaking the identity of all the potential delegates and thus bringing into the conversation a whole new can of worms.

[delulo]

Thanks for the reply! The quality of the discussion is getting better!

Agreed, Inflation is a non-sequitor to this discussion.

Right, it doesn't matter as long as we compare all systems as if they were not using inflation to pay for security. Bitcoin POW does have huge inflation atm to pay miners / pay for security.

What I am proposing is allowing full nodes to automatically become "delegates"  if they are on a unique IP and have a minimum stake of lets say 0.1BTC

Interesting! But then you would have the problem of actually nothing at stake (an attacker would just have to create millions of full nodes) plus own stake. In the end you have NXT like POS with the additional requirement to create a ton of full nodes to attack the network. It could be said that an attacker might be better at creating full nodes at scale than the average stakeholder which would make the system more easy to attack.

An attack with DPoS would simply involve flooding the market with many potential delegates

An attacker would have to trick stakeholder into thinking that his delegates are good delegates. The DPOS implementation of BTSX is in its early days. Today almost all delegates are some reputable forum members. Later the idea is that big companies or trustworthy public individuals from the crypto (currency) world would provide delegates: Exchanges, payment processors, DAC developement companies, trustworthy stakeholders; basically everyone that has an interest in a working BTSX system provides a delegate. Those entities then would have a lot more to loose (credibility of an exchange for example) than they could gain from a 51% attack which might be reversed anyway by a fork.
Regarding your attack: Stakeholders would have to be convinced that the random flood of delegates the attack set up are more trustworthy then the current delegates. That might work with 1 or even a few but not with 52.

Now if that happens there could be a fork that reverses the double spent / reversed transactions. Like you said correctly this might harm others who made transactions between the point in time when the double spend happened and when transactions are halted to fork. Those ppl could be compensated through a fund. The advantage would be that the incentive for a double spend attack would decrease to zero when the attacker knows that there is such a fund and a fork would reverse his double spend anyway. How could such a fund be funded (work only work if BTSX grows and tx volume picks up; but gives you an idea what delegates could be good for apart from tx processing): Buy a delegate or several delegates who commit to paying parts of their delegate pay into such a fund. Those delegates then campaign among Stakeholders with this fund.

Forking is possible with any open source coin

As for forking to protect a network in general: Let's assume someone has acquired 51% of all hashing power for Bitcoin's sha256 mining then Bitcoin would have to find and implement a new proof of work algorithm in order to fork and get rid of the 51% control of a single party.
When someone has acquired 51% of stake in a POS coin you can simply fork and not honor this 51% and let the market decide which network is considered more trustworthy (probably the one without the 51% control....).

Please explain to me how this attack could be mitigated without decloaking the identity of all the potential delegates and thus bringing into the conversation a whole new can of worms.

See above. And I would also say that a mix of anonymous and publicly known delegates would be most resilient.

Overall I do not propose that DPOS / POS has no disadvantages. I am pretty certain though that the security per cost you achieve with POS/DPOS is a lot higher than with POW. In the end security and decentralization costs and someone (coin holders or users) has to pay those costs.

[arxwn]

Thanks for the reply! The quality of the discussion is getting better!

Agreed, Inflation is a non-sequitor to this discussion.

Right, it doesn't matter as long as we compare all systems as if they were not using inflation to pay for security. Bitcoin POW does have huge inflation atm to pay miners / pay for security.

What I am proposing is allowing full nodes to automatically become "delegates"  if they are on a unique IP and have a minimum stake of lets say 0.1BTC

Interesting! But then you would have the problem of actually nothing at stake (an attacker would just have to create millions of full nodes) plus own stake. In the end you have NXT like POS with the additional requirement to create a ton of full nodes to attack the network. It could be said that an attacker might be better at creating full nodes at scale than the average stakeholder which would make the system more easy to attack.

An attack with DPoS would simply involve flooding the market with many potential delegates

That is right. An attacker would have to trick stakeholder into thinking they are good delegates. The DPOS implementation of BTSX is in its early days. Today almost all delegates are some reputable forum members. Later the idea is that big companies or trustworthy public individuals from the crypto (currency) world would provide delegates: Exchanges, payment processors, DAC developement companies, trustworthy stakeholders; basically everyone that has an interest in a working BTSX system provides a delegate. Those entities then would have a lot more to loose (credibility of an exchange for example) than they could gain from a 51% attack which might be reversed anyway by a fork.
Regarding your attack: Stakeholders would have to be convinced that the random flood of delegates the attack set up are more trustworthy then the current delegates. That might work with 1 or even a few but not with 52.

Now if that happens there could be a fork that reverses the double spent / reversed transactions. Like you said correctly this might harm others who made transactions between the point in time when the double spend happened and when transactions are halted to fork. Those ppl could be compensated through a fund. The advantage would be that the incentive for a double spend attack would decrease to zero when the attacker knows that there is such a fund and a fork would reverse his double spend anyway. How could such a fund be funded (work only work if BTSX grows and tx volume picks up; but gives you an idea what delegates could be good for apart from tx processing): Buy a delegate or several delegates who commit to paying parts of their delegate pay into such a fund. Those delegates then campaign among Stakeholders with this fund.

Forking is possible with any open source coin

As for forking to protect a network in general: Let's assume someone has acquired 51% of all hashing power for Bitcoin's sha256 mining then Bitcoin would have to find and implement a new proof of work algorithm in order to fork and get rid of the 51% control of a single party.
When someone has acquired 51% of stake in a POS coin you can simply fork and not honor this 51% and let the market decide which network is considered more trustworthy (probably the one without the 51% control....).

Please explain to me how this attack could be mitigated without decloaking the identity of all the potential delegates and thus bringing into the conversation a whole new can of worms.

See above. And I would also say that a mix of anonymous and publicly known delegates would be most resilient.

Overall I do not propose that DPOS / POS has no disadvantages. I am pretty certain though that the security per cost you achieve with POS/DPOS is a lot higher than with POW. In the end security and decentralization costs and someone (coin holders or users) has to pay those costs.

It's time we use the term Watts/Verification ?

[krach]

"Your own Ft. Knox" is an a bit far fetched analogy. It is marketing talk. This should not be confused with what makes it work and what the functional output is. Functionally it can be best described as a prediction market which results in a crypto currency like token that is pegged to a certain real world asset

yes I know, it is marketing talk that is the point. It is sold as one thing but it is another.  I know that it has "pegs" and it will fail as soon as the base price of bitsharesX crashes atm it is only about 85% I guess that is a stable peg.

[CoinHoarder]

"Your own Ft. Knox" is an a bit far fetched analogy. It is marketing talk. This should not be confused with what makes it work and what the functional output is. Functionally it can be best described as a prediction market which results in a crypto currency like token that is pegged to a certain real world asset

yes I know, it is marketing talk that is the point. It is sold as one thing but it is another.  I know that it has "pegs" and it will fail as soon as the base price of bitsharesX crashes atm it is only about 85% I guess that is a stable peg.

85% ?? Where did you get that number from?

http://www.cryptocoincharts.info/pair/bitusd/usd/bter/alltime

If you use the feature on the above website to hide the price spikes sufficiently, which are caused by low market depth and liquidity on BTER, you will see bitUSD has averaged 99.5% of USD's value. Furthermore, the centralized exchanges won't track the price as accurately as the decentralized market in BTSX, as most of the market depth and liquidity is on the decentralized exchange in BTSX.

However, this has nothing to do with PoW, PoS, or DPOS.

[johnyj]

In future, bitcoin will become a by-product of heating devices, eliminate the electricity waste concern

So mining will alternate between north and south hemisphere.

Near the pole. But warm water are always needed 24/7 regardless of location

[krach]

85% ?? Where did you get that number from?

as shown in the chart not too many days ago the "peg" was well below 99% That is where I "got it from" and no it is not a totaly accurate "alltime" (what a few weeks) ave but just a number from somone that casualy checked the price, not a BitsharesX devotee, uh I mean delegate. I guess someone actually cashed out,  im sure the data feed blah will fix all the flux in the future. Nubits does the same thing NXT has coino and mt.gox had mt.gox $ but yea this has almost nothing to do with PoS vs. PoW

[CoinHoarder]

85% ?? Where did you get that number from?

as shown in the chart not too many days ago the "peg" was well below 99% That is where I "got it from" and no it is not a totaly accurate "alltime" (what a few weeks) ave but just a number from somone that casualy checked the price, not a BitsharesX devotee, uh I mean delegate. I guess someone actually cashed out,  im sure the data feed blah will fix all the flux in the future. Nubits does the same thing NXT has coino and mt.gox had mt.gox $ but yea this has almost nothing to do with PoS vs. PoW

You conveniently deleted my explanation of BTER being a bad place to track the value of bitUSD regarding most of the market depth and liquidity being on the BTSX decentralized market. Even with it being the most inaccurate source of data in regards to the peg, it has averaged 99.55% which is pretty damn close to parity. You picked the most inaccurate point on the graph to make your claim which is convenient for your side of the argument.

Nxt's CoinoUSD is centralized.

Comparing Mt. Gox to BTSX or Nubits is idiotic.

I am confident anyone who is interested in looking into the facts can come to the conclusion on who is closer to reality in regards to our statements about the market peg. I don't expect anyone to take my word for it.

[krach]

Comparing Mt. Gox to BTSX or Nubits is idiotic.

Im not, Im comparing them to Mt.GoxUSD, all three have nothing to do with cash USD other than being pegged to the price of USD, none of them have deposited USD to back them up.



Im not claming to be an expert on bitUSD prices, of course as a delegate you are, thanks!


As a delegate can you tell us how BitFund.PE profits from this whole project?