Proof of stake mining of bicoin

[DecentralizeEconomics]

Centralization remains an issue

That's why PoW provides a 51% mechanism.
It works both ways, any 51% attack can be 51% attacked.

Don't make me laugh.  You think you can 51% the government?  lol

That's why we have an anarchy of competing governments.

Governments aren't going to be 51% attacking each other to protect BTC users' autonomy.  The majority of governments work in concert with each other.  "Competing governments" are an illusion.

[llllllllll]

my question was a combination of a) how exactly does PoS work 

read this:  http://peercoin.net/assets/paper/peercoin-paper.pdf

Or this: https://wiki.nxtcrypto.org/wiki/Whitepaper:Nxt#Proof_of_Stake


Also I would straight up say: Switching bitcoin will be impossible. How would a transition even work without compromising the security of the network? What will happen to all the gear?

I think it's a good example of the problem of divided incentives. Should POS in theory prove to be better for the coin, the miners would still block it - and rather harm the coin to prevent their financial loss. They will have the ultimate decision.

You're giving miners way too much credit for being able to decide on the protocol specifications. If some significant part of the community decides that they would prefer a POS based bitcoin and to change to POS at blockheight x then the miners have no real power to combat this change. They can only decide on whether or not they think it is still profitable to keep mining on the POW fork of "bitcoin".

[DecentralizeEconomics]

What could happen is another consensus layer that gave the right features and supplemented PoW was added to Bitcoin or people just used it with the Bitcoin protocol. This may happen in the future.

What if you had a TaPoS layer that had 1-10 second confirmations which worked with the miners where peoples wallets reflected both the ~10 min confirmation and the 1-10 second ones for added security and to allow for on the sidechain transactions to occur while not giving up on PoW security.
 

Would it help mitigate 51% attacks?

Depends upon what you mean by a 51% attack. It would not protect PoW layer at all directly but would protect the end user because after you receive payment you could depend upon the combined trust(with both the strengths and weaknesses of both consensus algos) of both systems. So If a 51% attack was occurring on the mining pools and the nodes on the TaPoS blockchain were not confirming than one could delay accepting and trusting the transaction until the community figured out what the problem was.

This brings up many other complicated questions though like if it is an act of supererogation and introducing new potential attacks but overall the benefits could be really nice as it would bring a lot more decentralization back into bitcoin, increase security overall, allow for decentralized instant confirmations,  and act as a backstop against the asic manufacturers or mining pools from any mis-behavior.

I don't think that is necessarily true.  If a government were to coerce or more likely impel pools and mining corporations to act a certain way, for instance, freezing some peoples' accounts, would the currency users running the TaPoS chain not abide by the PoW chain and revolt?  I think that would be very unlikely, because the PoW chain will still dominate.  The mass majority of TaPoS nodes will fall in line with whatever "rules" the PoW chain decides to enforce, because if they don't, they will fork and lose their investment.

[cryptogeeknext]

Centralization remains an issue

That's why PoW provides a 51% mechanism.
It works both ways, any 51% attack can be 51% attacked.

Don't make me laugh.  You think you can 51% the government?  lol

That's why we have an anarchy of competing governments.

Governments aren't going to be 51% attacking each other to protect BTC users' autonomy.  The majority of governments work in concert with each other.  "Competing governments" are an illusion.

... unless governments themselves become BTC users, which they should.

It's a good question though. In the scenario of a single totalitarian world government PoW might not be the best option and instead a myriad of anonymous PoS coins will serve better. Though it would not be a perfect global money system for variety of reasons. This solution is temporary and so is the one world government. Once it falls apart PoW provides a neutral playground for competition.

We are far from the scenario described above, because there are clearly big countries who agreed to disagree. We need both systems as each serves its own purpose, so we will see how this plays out.

[bornil267645]

I am not seeing any realistic hopes of Bitcoin switching from PoW.

[ThomasVeil]

Also I would straight up say: Switching bitcoin will be impossible. How would a transition even work without compromising the security of the network? What will happen to all the gear?

I think it's a good example of the problem of divided incentives. Should POS in theory prove to be better for the coin, the miners would still block it - and rather harm the coin to prevent their financial loss. They will have the ultimate decision.

You're giving miners way too much credit for being able to decide on the protocol specifications. If some significant part of the community decides that they would prefer a POS based bitcoin and to change to POS at blockheight x then the miners have no real power to combat this change. They can only decide on whether or not they think it is still profitable to keep mining on the POW fork of "bitcoin".

Who is that "significant part of the community"? If it excludes most core devs (who seem to hate POS) and most miners... which also means most big exchanges, since they have massive mining ventures too - e.g. Huobi and BTC-China. Adding then that most users are unmotivated to look into any of those issues, then we talk about a tiny minority that has to take over the system.
Technically possible - but improbable close to the point of "never gonna happen". And if it would (maybe because of a government attack), it will be major chaos.

It seems much more logical that people who don't like the system switch to an alt with the desired properties.

[llllllllll]

Also I would straight up say: Switching bitcoin will be impossible. How would a transition even work without compromising the security of the network? What will happen to all the gear?

I think it's a good example of the problem of divided incentives. Should POS in theory prove to be better for the coin, the miners would still block it - and rather harm the coin to prevent their financial loss. They will have the ultimate decision.

You're giving miners way too much credit for being able to decide on the protocol specifications. If some significant part of the community decides that they would prefer a POS based bitcoin and to change to POS at blockheight x then the miners have no real power to combat this change. They can only decide on whether or not they think it is still profitable to keep mining on the POW fork of "bitcoin".

Who is that "significant part of the community"? If it excludes most core devs (who seem to hate POS) and most miners... which also means most big exchanges, since they have massive mining ventures too - e.g. Huobi and BTC-China. Adding then that most users are unmotivated to look into any of those issues, then we talk about a tiny minority that has to take over the system.
Technically possible - but improbable close to the point of "never gonna happen". And if it would (maybe because of a government attack), it will be major chaos.

It seems much more logical that people who don't like the system switch to an alt with the desired properties.

First of all, I definitely agree that it's unlikely to happen due to the reasons you've just given (and because I don't think POS is a viable alternative [currently] but that's beside the point). I was only trying to point out that it's not a decision the miners have some ultimate say in. If a part of the community forks the bitcoin blockchain at some blockheight and changes to POS, there is little the miners can do about it. That being said, if such a fork would occur in the near future there probably wouldn't be a lot of support for it from the current userbase (partly because currently miners are also related to other parts of the ecosystem as you stated).

[sumantso]

As far as attacking, yes you do need some stake at least initially to attack a poS coin, so it's not truly free.  probably you would need something on the order of a 1% stake.  But on the other hand, it doesn't necessarily mean poS will work at larger scales; many have serious concerns about the security model.  You are right that the concerns are theoretical as of now.

It would need significantly more than 1% stake. Again, I am thinking in terms of DPoS, as I don't have a thorough knowledge of the alternatives.

Whether the security remains as robust with scaling remains to be seen, but that is only possible when it gets big. I haven't seen any good theoretical attack vectors which may compromise it on a bigger scale. In case it does, the developers have to look at improving the solution, like DPoS itself was an evolution through a series of steps.

[DecentralizeEconomics]

As far as attacking, yes you do need some stake at least initially to attack a poS coin, so it's not truly free.  probably you would need something on the order of a 1% stake.  But on the other hand, it doesn't necessarily mean poS will work at larger scales; many have serious concerns about the security model.  You are right that the concerns are theoretical as of now.

It would need significantly more than 1% stake. Again, I am thinking in terms of DPoS, as I don't have a thorough knowledge of the alternatives.

Whether the security remains as robust with scaling remains to be seen, but that is only possible when it gets big. I haven't seen any good theoretical attack vectors which may compromise it on a bigger scale. In case it does, the developers have to look at improving the solution, like DPoS itself was an evolution through a series of steps.

DPoS (aka Delegated PoS) is a joke because it adds a social construct to chain security which is easily manipulated.  This makes it susceptible to Sybil attack and breaks it.  There is no way to prove the delegates are unique individuals.  THIS IS A FATAL FLAW!

An individual can create multiple delegates and get stakeholders to approve them via deception.  This gives the illusion that there are 101 unique delegates when in reality many delegates are in fact one individual.  When you consider that multiple individuals could collude to create these faux delegates, it becomes obvious that gaining control over 51% of the delegates would not be that difficult.  It's even more vulnerable because Bitshares is trying to attract "businesses and developers" as delegates.  All someone would have to do to get voted in as a delegate is to post a convincing but fake business plan or resume and the stakeholders would eagerly pull in the Trojan horse.

Some Bitshares' users ask about how to tell if delegates are unique, but they get no response from the devs.

Bitshares has already had a Sybil attack occur earlier this year when it was uncovered that an individual named "sfinder" actually controlled the TOP 5 DELEGATES!

It becomes laughable when the main Bitshares' dev, Daniel Larimer (aka Bytemaster), appears in the thread and starts asking if anyone else knows what other delegates "sfinder" controls.  The Bitshares' devs obviously know about this problem, but they still have the audacity to say that "Bitshares is your gateway to the decentralized world!"

The truth of this matter is, that as everyone knows who was around in 2013, Bitshares was originally going to be PoW.  The Bitshares' devs only decided to switch to PoS after they saw the success of NXT.  In a flawed attempt to look original, they added "delegates" to PoS which effectively destroyed it by adding centralization and opening it up to the aforementioned Sybil attacks.

[sumantso]

Bitcoin is very hard to upgrade but you can hold bitcoin on a DPOS (delegated proof of stake) chain on BitShares as bitBTC and earn interest.  So individuals can choose to upgrade but the network itself can't.

There is no need to 'upgrade' Bitcoin now as such. A non-PoW complement to Bitcoin already exists in BitBTC, though granted at this particular moment the peg is not holding too well (it needs more volume). It can be used as BTC with bells and whistles and will also allow users to see how a non-PoW option works.

I eventually see Bitcoin moving on to a different scheme, whether its completely non-PoW or partly PoW. I expect Bitcoin holders to be not too happy in the future when they realize that they may not need to pay this much to secure the network thus reducing inflation.

[jonald_fyookball]

 
Bitshares has already had a Sybil attack occur earlier this year when it was uncovered that an individual named "sfinder" actually controlled the TOP 5 DELEGATES!

Epic fail.  I knew it.  Not to mention that even if the delegates are known,
then they become subject to manipulation.

How did they uncover this "sfinder" character?

[toast]

Why is having multiple delegates belong to one person bad?
Or are you saying that 101 is indeed the magic number, and anything less is too centralized? What if we coalesced redundant delegates into single nodes?

[matt608]

Bitshares has already had a Sybil attack occur earlier this year when it was uncovered that an individual named "sfinder" actually controlled the TOP 5 DELEGATES!


The truth of this matter is, that as everyone knows who was around in 2013, Bitshares was originally going to be PoW.  The Bitshares' devs only decided to switch to PoS after they saw the success of NXT.  In a flawed attempt to look original, they added "delegates" to PoS which effectively destroyed it by adding centralization and opening it up to the aforementioned Sybil attacks.

Sfinder was found and voted out successfully. 

It is almost impossible for full pay delegates to be the same person.  Unless they are superhuman and able to complete multiple jobs at the same time.  You can view the work delegates are doing.  They have to be transparent and productive or they are voted out.  It's simply not possible to all be the same person because 1 person cannot do 101 jobs.  And there are huge incentives to not do this.

Delegates are one of the great features of BitShares.  It's creating a thriving community and a whole new type of decentralised organisation.  Not to mention the unique identity verifying features being developed.   DPOS is an amazing, fascinating and powerful invention which is going to re-structure society itself.  Constructive criticism is always welcomed, but please keep it real.

[sumantso]

An individual can create multiple delegates and get stakeholders to approve them via deception.  This gives the illusion that there are 101 unique delegates when in reality many delegates are in fact one individual.  When you consider that multiple individuals could collude to create these faux delegates, it becomes obvious that gaining control over 51% of the delegates would not be that difficult.[/b]

Certainly more difficult than one individual or group running several pools and getting control over 51% hashrate. Imagine having around 10 delegates, imagine that the delegates have power proportional to the votes, imagine that 2-3 of the top voted delegates have control due to the proportionality factor - well, you get Bitcoin.

DPoS concedes that some degree of gravitating towards a few concentrated points is always going to happen, as was clear in the Ghash success, and later seen in NXT forging pools too. It attempts to regulate this behaviour by making it inbuilt in the protocol itself and trying to make sure that there is no more centralization than is necessary.

[sumantso]

It's even more vulnerable because Bitshares is trying to attract "businesses and developers" as delegates.  All someone would have to do to get voted in as a delegate is to post a convincing but fake business plan or resume and the stakeholders would eagerly pull in the Trojan horse.

You make it sound so easy. Its interesting how preference sways our judgement. For instance, I can easily say the same for PoW coins:

All someone has to do is operate a pool which rewards block finders generously and has 0 fees, and the miners would eagerly pull in the Trojan horse

If anything, the Ghash incident showed that miners are not pro-active in protecting the network and it leaves PoW coins vulnerable. Will shareholders be more careful when it becomes larger and the voting is more distributed? Well, only time will tell.

[randpaulcoin]

Why is having multiple delegates belong to one person bad?
Or are you saying that 101 is indeed the magic number, and anything less is too centralized? What if we coalesced redundant delegates into single nodes?

This is the same problem being mulled over with my coin.  (Search RPCD ANN)

According to my analysis Bitcoin has incentives to centralize as market cap goes up, especially as long as block rewards are relatively high. You can't risk orphaned blocks mining on your own little home based node and p2p pool doesn't seem to be as efficient either.

Where with DPOS it seems all the centralization should occur early on and then as market cap grows, the largest reason for multiple delegates per person decreases because each can pay a fair amount of compensation. At that point shareholders (which POW miners are not) will be incentivized to keep the network decentralized because NETWORK SECURITY WILL DEMAND IT !

[DecentralizeEconomics]

 
Bitshares has already had a Sybil attack occur earlier this year when it was uncovered that an individual named "sfinder" actually controlled the TOP 5 DELEGATES!

Epic fail.  I knew it.  Not to mention that even if the delegates are known,
then they become subject to manipulation.

How did they uncover this "sfinder" character?

Epic fail is exactly right.  It's disingenuous, in every sense of the word, that the Bitshares' devs continue to lead people to believe that Bitshares is "decentralized" and I quote "Safer than a Swiss bank account!"  Obviously, they care more about getting investors' money than protecting it and creating an actual decentralized system.

The Bitshares' devs didn't find "sfinder" on their own accord.  Daniel Larimer (aka Bytemaster), the main Bitshares' dev, even voted him into multiple delegate positions.  It was some individuals in the Chinese community that found out about his multiple delegate positions.

Why is having multiple delegates belong to one person bad?
Or are you saying that 101 is indeed the magic number, and anything less is too centralized? What if we coalesced redundant delegates into single nodes?

I'm going to assume the first question is a joke.  I'm saying regardless of how many delegates you have 11, 101 or 1001, DPoS is fundamentally flawed because you geniuses forced a social construct onto chain security which opens you up to Sybil attacks.

Sfinder was found and voted out successfully.  

Are you sure about that?  Prove it.  Oh wait... you can't because it is IMPOSSIBLE to in Bitshares' DPoS mechanism.

It is almost impossible for full pay delegates to be the same person.  Unless they are superhuman and able to complete multiple jobs at the same time.  You can view the work delegates are doing.  They have to be transparent and productive or they are voted out.  It's simply not possible to all be the same person because 1 person cannot do 101 jobs.  And there are huge incentives to not do this.

Yes, because we all know that all investors are diligent and have the experience necessary to ensure that they don't fall into a trap.  Also, we all know that scammers never, ever work together, right?  lol

How are you going to verify a delegate is doing his due diligence as a business if his progress can't be determined solely based on code commits?

Delegates are one of the great features of BitShares.  It's creating a thriving community and a whole new type of decentralised organisation.  Not to mention the unique identity verifying features being developed.   DPOS is an amazing, fascinating and powerful invention which is going to re-structure society itself.  Constructive criticism is always welcomed, but please keep it real.

I am "keeping it real".  Everyone involved in Bitshares that supports these claims of it being "decentralized" and "Safer than a Swiss bank account" is misleading those who don't know any better.  Bitshares destroyed PoS by adding delegates.  What is worse is that imo the real reason the Bitshares' devs added delegates was to steal NXT's PoS mechanism and try to make it look like they were "innovative" when really they just wanted to ride on NXT's success.  It is clear that Daniel knows that it is IMPOSSIBLE to ascertain the identities behind delegates, but they continue on this "decentralization" charade, imo purely to capitalize on the uninformed.

Now the Bitshares' cheerleaders will tell you, "What does it matter if the delegates are the same person?"  Surely, they jest.  The ENTIRE REASON behind ALL consensus mechanisms is to prevent SYBIL ATTACKS!  PoW does this with hashpower.  PoS does this with stake.  DPoS claims to be able to do this with "delegates", but this is impossible because multiple delegates can be controlled by one individual.  Some of you might say, well, with NXT's PoS, you can lease your forging power isn't that the same thing?  The difference is this.  NXT doesn't force the social construct onto the chain.  You DON'T have to lease your forging power to anyone!  There is NO reason to lease your forging power to anyone unless you want to receive the tx fees you earn on a more consistent basis at the cost of paying the forging pool operator a fee.  Leasing in NXT was created so you could lease your stake to YOURSELF and keep your main account offline.  Therefore allowing you to protect the network and not keep your main account open on your computer.

Anyone who supports Bitshares' DPoS consensus mechanism is either disingenuous, delusional or severely misinformed.

DPoS concedes that some degree of gravitating towards a few concentrated points is always going to happen, as was clear in the Ghash success, and later seen in NXT forging pools too. It attempts to regulate this behaviour by making it inbuilt in the protocol itself and trying to make sure that there is no more centralization than is necessary.

Nice try, but NXT's forging pools never got remotely close to GHash's hashpower concentration.  NXT also has way more than 101 forgers securing its chain.

You make it sound so easy.

I make it sound "easy", because it is "easy" to mislead and manipulate people who are uninformed.  Have you seen the scams that are being pulled over on people in the altcoin section?

[jonald_fyookball]

Where with DPOS it seems all the centralization should occur early on and then as market cap grows, the largest reason for multiple delegates per person decreases because each can pay a fair amount of compensation.  

This is a ridiculously naive argument with no appreciation for the reality of people's greed,
and 100% wrong.
 
The people that would abuse the system to gain multiple delegate spots
are NOT going to say "you know what, I'm being paid a fair amount already,
I don't want more than my fair share."

The more money there is to make, the MORE motivated everyone will be to cheat.
 

[cbeast]

Sfinder was found and voted out successfully. 

It is almost impossible for full pay delegates to be the same person.  Unless they are superhuman and able to complete multiple jobs at the same time.  You can view the work delegates are doing.  They have to be transparent and productive or they are voted out.  It's simply not possible to all be the same person because 1 person cannot do 101 jobs.  And there are huge incentives to not do this.

Delegates are one of the great features of BitShares.  It's creating a thriving community and a whole new type of decentralised organisation.  Not to mention the unique identity verifying features being developed.   DPOS is an amazing, fascinating and powerful invention which is going to re-structure society itself.  Constructive criticism is always welcomed, but please keep it real.

That's the most ridiculous thing to say in the internet age. Of course one person can do millions of procedural tasks at once. If you can't write software to do it you hire cheap tech support in Mexico or India and script them. Break them up into teams for each delegate pseudonym and offer compensation based on productivity.

[matt608]

Sfinder was found and voted out successfully. 

It is almost impossible for full pay delegates to be the same person.  Unless they are superhuman and able to complete multiple jobs at the same time.  You can view the work delegates are doing.  They have to be transparent and productive or they are voted out.  It's simply not possible to all be the same person because 1 person cannot do 101 jobs.  And there are huge incentives to not do this.

Delegates are one of the great features of BitShares.  It's creating a thriving community and a whole new type of decentralised organisation.  Not to mention the unique identity v

erifying features being developed.   DPOS is an amazing, fascinating and powerful invention which is going to re-structure society itself.  Constructive criticism is always welcomed, but please keep it real.

That's the most ridiculous thing to say in the internet age. Of course one person can do millions of procedural tasks at once. If you can't write software to do it you hire cheap tech support in Mexico or India and script them. Break them up into teams for each delegate pseudonym and offer compensation based on productivity.

Point taken there can be subcontracting. 

Mathematically proving delegates are different people isn't necessary.  Incentives work strongly against any attacker.  They would have to spend months developing (via subcontracting or doing it themselves) a bunch of features for BitShares to win voter approval to take multiple positions or they would have to buy a massive amount of BTS to be able to vote themselves in, only to then attack themselves by attacking the network.  The cost of attack is already very high.

There is nothing necessarily wrong with having a social construct be part of the mix.  Lets compare it to massive warehouses filled with asics run by a handful of mining pools.  Both methods are worthy experiments and no one knows what POW or DPOS will lead to in the future.