Is my crypto decentralized?

[Daedelus]

[this thread began in the Bitcoin General section]


I have a crypto currency in my mind. Here are the fundamental properties:


***
The number of nodes in the network is limited to 95, so not all users will have the opportunity to secure the network themselves.


Opinions on the biggest decisions (i.e. increasing the limit on nodes) can be expressed by the users but they are none binding, as the devs who run a proportion of the nodes would have to agree first and then write the fork with a new upper limit of nodes.


Users can change the devs/node runners and replace them with new ones, (i.e. Replace Bitcoin Dev Gavin with someone else who is deemed better) by a ballot. Devs/node runners can run more than 1 node by default if users allow it. If users decide 1 entity = 1 node max, it may be hard to enforce (different online IDs belonging to the same person would have to be detected) but we can do RL passport checks etc to confirm identities are independent before allowing eligibility to be included in the node ballot.


The devs will always run a proportion of the nodes, as they get an income from running a node. There is nothing stopping devs becoming users and taking part in the ballots using tokens they buy.


***


Would you call my set-up decentralized?


I can answer questions to clarify anything, if required. You can change your vote later, if any discussion changes your mind.

Thanks in advance for your opinions  

[1715088546]

1715088546

[FandangledGizmo]

OP is largely a NXT supporter from what I can gather. Based on his description I think he is essentially asking, without naming it, whether BitShares with it's 101 delegate system meets the criteria to be called decentralized based on his interpretation of it.

This seems to be a spill over from a thread in the altcoin section -

https://bitcointalk.org/index.php?topic=916696.0

[redsn0w]

Would you call my set-up decentralized?


I can answer questions to clarify anything, if required. You can change your vote later, if any discussion changes your mind.

Thanks in advance for your opinions 

Would you call my set-up decentralized?    No I don't call your "set-up" decentralized , because each person on this planet *must* (or better be able to ) help the network. So you can't "give" the power to only  95 nodes.  Decentralization :


"Decentralization (or decentralisation) is the process of redistributing or dispersing functions, powers, people or things away from a central location or authority."

http://en.wikipedia.org/wiki/Decentralization

[Daedelus]

OP is largely a NXT supporter from what I can gather. Based on his description I think he is essentially asking whether BitShares with it's 101 delegate system meets the criteria to be called decentralized based on his interpretation of it.

This seems to be a spill over from a thread in the altcoin section -

https://bitcointalk.org/index.php?topic=916696.0

All true. Here is what I learned from questioning 2-3 of the delegates; https://bitcointalk.org/index.php?topic=916696.msg10106756#msg10106756


But the point of this thread is the check the communities definition of what decentralized means.

By mentioning Bitshares, you have just skewed people opinions (negatively and positively) without allowing them to consider the facts against the fundamentals of what they consider constitutes decentralised.

Why did you feel the need to do that?

[Tradingriver]

this OP is so low!

let assume i start a new coin, and only 50 people are the first shareholders. Do you call me fair distributed?

But i would never ask this in this way.

[matt608]

Decentralisation isn't an absolute, the system you describe is decentralised enough.  It doesn't mean its necessarily the most decentralised, or the least, but it is sufficiently decentralised to function excellently.

[franky1]

if all 95 nodes are:
not owned by a single person but many individuals
not located or managed or supervised in a single persons property on behalf of individuals
where each node has a practical purpose of strengthening the network by being separate and not in collaboration with other nodes.
where there is no bases that a majority stake of nodes can be utilized collectively to manipulate the basic rules

then it COULD be defined as decentralised

[FandangledGizmo]

OP is largely a NXT supporter from what I can gather. Based on his description I think he is essentially asking whether BitShares with it's 101 delegate system meets the criteria to be called decentralized based on his interpretation of it.

This seems to be a spill over from a thread in the altcoin section -

https://bitcointalk.org/index.php?topic=916696.0

All true.


But the point of this thread is the check the communities definition of what decentralised means.

By mentioning Bitshares, you have just skewed people opinions (negatively and positively) without allowing them to consider the facts against the fundamentals of what they consider constitutes decentralised.

Why did you feel the need to do that?

Because I felt you had an undisclosed conflict of interest. As a result you haven't given a full unbiased description of the system imo. You've also offered to answer questions on BitShares without being particularly well informed on it.

I think it's not unfair to assume that the subsequent information might be biased & misinformed too.

The thread in the alt-coin section, started by & consisting of mostly NXT supporters has thus far been quite propagandistic imo - https://bitcointalk.org/index.php?topic=916696.0

[Daedelus]

Which parts do you object to?


My only interaction with that thread was based around the "Bitshares is decentralized" claim. Dan Larimer (Bytemaster), the core dev, describes Bitshares as "a distributed multi-user database" in his blogpost "What is Bitshares?".
http://bytemaster.bitshares.org/update/2014/12/18/What-is-BitShares/

I agree with him. The node delegates object and insist it is decentralized (with a disclaimer).


This thread is supposed to be a discussion about decentralization, once we had opinions on what that means then we could go from there. You have prevented that from happening.

[FandangledGizmo]

Which parts do you object to?


My only interaction with that thread was based around the "Bitshares is decentralized" claim. Dan Larimer (Bytemaster), the core dev, describes Bitshares as "a distributed multi-user database" in his blogpost "What is Bitshares?".
http://bytemaster.bitshares.org/update/2014/12/18/What-is-BitShares/

I agree with him. The node delegates object and insist it is decentralized (with a disclaimer).


This thread is supposed to be a discussion about decentralization, once we had opinions on what that means then we could go from there. You have prevented that from happening.

Forking is difficult as a new fork would require a new set of 95 nodes at launch, so will require 95 trusted people to secure the network on day 1. Or go through a bootstrapping phase where the network begins centralised in the founder and slowly expands to the 95 node limit.
***

I can answer questions to clarify anything, if required. You can change your vote later, if any discussion changes your mind.

My personal understanding is that forking is not a case of having to choose between 95 trusted nodes or complete trust in the founder. I believe a fork can have how ever many nodes it chooses based on how many trusted people there are too start it.

I'm not very technical though. My main objection is just essentially that a poll and question and answer thread on what is essentially BitShares being conducted by an undisclosed NXT supporter, who had been very critical of the model, would be inherently biased.

[Daedelus]

Forking here refers to a situation where you are unhappy with the current situation and want to break away, in a schism. Thinking about it, this would be true for any crytpo too so is irrelevant and I will remove it.

The rest is accurate, from my lengthy discussion with Stanlarimer, Testz, Sumantsu, yourself and others.


99.9% of my posts are supporting Nxters. It would be undisclosed/underhand if I started a new account with zero post history. But this isn't about Bitshares or Nxt but decentralization and what it means. A point you continue to miss. Once we had confirmed what the community thought this meant, we could have had a better discussion.

But you have made sure that that doesn't happen.

[StanLarimer]

Debates about what constitutes "decentralized" are interesting
if you depend only on decentralization to achieve your design goals.

Centralization tends to corrupt
And absolute centralization corrupts absolutely.
So it is natural to value decentralization.
But,

What we all want is systems that are incorruptible.

Max decentralization does not yield max incorruptibility.

Things that move power away from the center make it harder to corrupt.
Things that increase transparency also help - like broad daylight not darkness.
Things that increase the number of people you have to coerce or seduce to succeed will help,
But so do things that make it harder to coerce or seduce them.
Things that increase detectability of bad behavior make it less likely.
Things that allow correction of the problem - the ability to undo a wrong once detected.
Things that incentivize honorable behavior - and deter dishonorable behavior.

We should be trying to engineer systems with these properties.

Decentralization is a useful tool to this end.
But it is only one tool in our toolkit.
Let us not constrain ourselves to using only one tool.

The leading edge of research has moved on from brute force decentralization.
Now it asks the question, how can we solve such problems most efficiently?
Since decentralization has costs, how much decentralization is enough?
And how much of those savings can be redirected to other important objectives?

Every industry starts out happy to just find some way, any way, to be viable.
Then, over time, better and better ways are added as competitive forces take over.

The aircraft industry used to spend its time optimizing propeller designs.
But aircraft design has not worried much about propellers for a long time.

Never stop looking for ways to solve the problem more efficiently.
That results in systems that are more profitable.
And that helps grow the industry!

[Bisha]

When your own thread backfires. lel

[Daedelus]

Two posts and there could be 50+ Nxters in here who definately wouldn't say it is decentralised.  They would describe it as distributed, in the same camp as Ripple.

But what would be the point of that?


Bitshares definition 'sufficiently distributed' = 'distributed' in mainstream crypto. The core dev refers to it as distributed.

Node owners like StanLarimer seem to be promoting it as decentralized as they see marketing value in it, which feeds into their own bottom line. ~$2500 a month roughly in Stans case.

[CLains]

Bitshares definition 'sufficiently distributed' = 'distributed' in mainstream crypto. The core dev refers to it as distributed.

Core Dev. just wrote a blog post about this topic,

http://bytemaster.bitshares.org/article/2015/01/09/How-to-Measure-the-Decentralization-of-Bitcoin/

[Daedelus]

We are going around in circles.

No one is calling Bitshares centralised. They are saying it isn't decentralised.

It is this kind of soft headed thinking and misdirection that I have come to expect.


In this case, marginal utility = increasing decentralisation. Putting an artificial cap, selected arbitrarily creates a distributed network. It can't scale efficiently as the network grows.

If 1000 users are voting for 101 nodes, a year later there are 2000 users without the cap being raised then as the economy grows there is increasing centralisation. You can only raise the number of nodes with the devs permission, who are recipients of income from running a node. So they have to accept less income for it to happen.

The incentives are working against growth in the system. At least for those who value decentralisation.

[CLains]

Another blog post,

http://bytemaster.bitshares.org/article/2015/01/07/The-Most-Decentralized-Proof-of-Stake-System/

[Daedelus]

Let me put it another way..

Pretend it has been a huge success and 3 billion people are using it. You've successfully got the devs to hard fork the delegate cap up to 2500. How is this better than the system we have today with governments,  lobbyists, finance industry, oligarchs etc... ? Do you believe these groups don't collude today?

In this system, 2500 have all the economic power. Is this decentralisation?

[CLains]

http://wiki.bitshares.org/index.php/DPOS_or_Delegated_Proof_of_Stake#Scalability

There are hard realities we have to face.

When systems scale they become centralized for economic reasons.

It doesn't help to insist on semantics and theories when in practice you end up with worse solutions.

Daniel Larimer in his two blog posts shows why DPOS is the better option when we look on how NXT, PPC and BTC are operating in practice.

[Daedelus]

We are not talking semantics, we are talking realities.

Dan Larimer believes 101 nodes is 'sufficient decentralisation'. So presumably, he would prefer the 101 node limit to never be increased?


3 billion people bound to a system reliant on 101 nodes getting millions of dollars in income each (which is the plan). Decentralised? I don't think so, few here would. It is a system that tends towards centralisation.

[CLains]

When BitShares scales to Visa proportions it will cost something like 5000$ a month to run one Delegate, that's already $500 000 a month cost for decentralization. It goes without saying that you can only increase decentralization so much before these costs will prevent you from being competitive. If we go from 100 to 1000 Delegates at that point in time cost will increase from over 5 million dollars a year to over 50 million dollars. Perhaps it will be worth it, perhaps not - what transaction-fees would you tolerate for this increase in decentralization?

There is no either/or situation here, just economic rationality and navigation between brute realities.

[EvilDave]

Two posts and there could be 50+ Nxters in here who definately wouldn't say it is decentralised.  They would describe it as distributed, in the same camp as Ripple.

But what would be the point of that?


Bitshares definition 'sufficiently distributed' = 'distributed' in mainstream crypto. The core dev refers to it as distributed.

Node owners like StanLarimer seem to be promoting it as decentralized as they see marketing value in it, which feeds into their own bottom line. ~$2500 a month roughly in Stans case.

Cutting to the chase.
The question is: Is Bitshares sufficiently decentralised/distributed to be regarded as a peer-to-peer crypto-currency, or is it in fact a centralised financial system like Ripple or the US treasury ?

101 delegates is not very many on a global scale, these people would become insanely wealthy if BTS achieved global adoption.
I believe that BTS cannot be described as decentralised, simply due to the amount of control of the BTS network being concentrated in so few nodes, and the barriers that have to be overcome to become a node operator.

In NXT, anyone with a fistful of NXT and a spare PC (or VPS) can run a node, forge, contribute to the network and earn fees. Anyone. Obviously, the guys with more NXT will earn more, but there are no barriers whatsoever to setting up and running a NXT node.
Similarly, anyone with a mining rig could (at one time) contribute to the BTC network and mine BTC while securing the blockchain, again no barriers at all, no need to ask permission from anyone.

It's this level of control that makes BTS centralised, they are a (semi-) corporate project, and not a genuine peer-to-peer crypto-currency. Sorry......

[Daedelus]

Here is the kicker, DE  was right when he said this is a solution looking for a problem.

There are already platforms where each node could be run for $30 a year or less, when running at visa levels of transactions.

This capped node system forces a compromise out of ignorance or a desire for profit. It sounds like you are happy to have the economy of 3 billion people in the hands of 101 nodes. Do you run a node?

[CLains]

There are already platforms where each node could be run for $30 a year or less, when running at visa levels of transactions.

How can you avoid this?

At 2000 TPS validation costs equals the cost of running server which include 100 MB/sec network connection, a server with 256 GB of ram or more, high availability (redundant backups), DDOS protection, etc.   These kinds of systems can easily cost $5000 / month or more to operate at scale.

[Daedelus]

By only sending transactions to the next node that forges rather than all nodes. This means netwotk traffic drops to small fraction of what it would be, keeping forging within reach or ordinary people.

[matt608]

No one is calling Bitshares centralised. They are saying it isn't decentralised.

It is this kind of soft headed thinking and misdirection that I have come to expect.

There are 101 nodes in BitShares who can be voted out by stakeholders and thousands of standby nodes at the ready.  That is the fact of the matter.

How many nodes are required to fit for your definition of decentralised?  

The idea that BitShares needs to be able to handle 3 billion users is a straw man.  That level of crypto use could be 20 or 30 years away, no one I know of has claimed BitShares or any crypto can scale scale straight to that level.

Cutting to the chase.
The question is: Is Bitshares sufficiently decentralised/distributed to be regarded as a peer-to-peer crypto-currency, or is it in fact a centralised financial system like Ripple or the US treasury ?

How does anyone in the world create a node and get elected into a network for the US treasury?

[Daedelus]

Decentralisation is a function of the participants in the network. Limiting the number of participants, limits the decentralisation.  I wouldn't call anything that prevents you participating as decentralised.

Don't you want Bitshares to be a global technology? If you do, 3 billion people under 101 nodes is the reality you have to consider.

[matt608]

Decentralisation is a function of the participants in the network. Limiting the number of participants, limits the decentralisation.  I wouldn't call anything that prevents you participating as decentralised.

Don't you want Bitshares to be a global technology? If you do, 3 billion people under 101 nodes is the reality you have to consider.

There is an imposed limit on the level of decentralisation of BitShares, there's no doubts there. 

Anyone can participate though, the standby nodes aren't just waiting, they compete and campaign to get voted in. 

[Daedelus]

Anyone can't participate in security. Only 101.

Campaigning, competing, waiting, on standby don't do anything for security.

[StanLarimer]

Perhaps it will help we agree on a definition of decentralization in this context.

• Some might say something is decentralized if it does not have a central point of control.
• Others might say something is not decentralized until is can not be decentralized any further.
• Many might argue that decentralization is a process that operates on a continuum between the two.

On the prior thread where all this has been debated before, the OPer wrote:

...
With regard to "diminishing returns" and "no real benefit" of increasing above 101 node current cap, most crypto enthusiasts would call this increasing decentralisation.
...
If there is friction in the growth of nodes in relation to the growth of the network, this leads to increasing centralisation.
...

From this, I assume he would agree that there are, in fact, degrees of decentralization.   

So, starting from that point of profound agreement, it may help to propose some new terms to clarify our discourse.  To that end, and without further preamble, I offer the world:

Stan's Super Seven Degrees of Decentralization

1.  Barely Decentralized. A system moves from one point of control to several.  The separation of powers of the US government into three branches could be called "barely decentralized."

2.  Fully Decentralized.  A system is fully decentralized when you can't think of a way to decentralize it any further.

3.  Manageably Decentralized.  A system is engineered to achieve a practical span of control by delegating it downward until people can keep track of everything that is going on.

4.  Plausibly Decentralized.  Decentralized enough to satisfy the general public that control cannot be seized by somebody bad.  Nuclear missile launch authority is deemed plausibly decentralized if two officers are needed to launch having received a verification code from a command authority.

5.  Sufficiently Decentralized.  A system is sufficiently decentralized if it achieves the goals of its designer.  A crypto system is sufficiently decentralized if, in combination with all other design features, it is not possible to gain control of the system to the point of causing it to shut down or malfunction in a sustained and unrecoverable way.

6.  Over Decentralized.  A system is over decentralized if costs more or takes longer to implement than one that is Sufficiently Decentralized.

7.  Under Decentralized.  A system is under decentralized if it is less Over Decentralized than the system you prefer.

A system decentralized to any one of these degrees can be called "decentralized".  If you want to be more precise you can throw in one of the above adjectives.

The BitShares Community,
after a year of iterative design, analysis, redesign, testing and intense public debate
 has concluded that our design is Sufficiently Decentralized
 to trust it with our lives, our fortunes, and our sacred honor.

[Daedelus]

You are the only one left arguing it is still decentralised stan.

As long as there is a cap on participants,  I don't think it will matter how you try to spin it.

[EvilDave]

Fuck, I'm starting to like Stan.  

I'd consider BTS to be somewhere around plausibly decentralised, with good ol' NXT (or, ignoring the mining pool issues, BTC, LTC etc) as being fully decentralised.

While I'm here....could we decentralise NXT any further?

[Daedelus]

He is king of the dodge, sidestep and misdirection 

[toast]

It is crazy to me how people focus on the block producer cap instead of the underlying consensus metric. If you remove the cap and let people produce proportionally to their approval, you would see a higher concentration of blocks produced by a smaller number of nodes.

Having 101 validators is FORCING the network to be MORE decentralized than the other consensus protocols, where 99% of blocks are produced by far fewer than 100 validators. As a stakeholder, your control over block producers is exactly proportional to your stake whereas in other systems it becomes unprofitable to validate unless you control huge amounts of the stake (or hash power in POW, or unique nodes on ripple UNL)

What is the goal of decentralization? It is to make it difficult for anyone but majority stake-vote to decide what the rules of ownership are. To protect the stakeholders from everyone else. The goal is not to make everyone feel like a part of the validation process and pay them for make-work.

[StanLarimer]

When the BitShares devs get a little uppity, I love to remind them that what they are doing is not exactly rocket science.  

But, while trying to find a way to communicate the architecture of BitShares to folks on other forums, I've stumbled on the following description, drawing on my past experience with continuously reconfiguring fault-tolerant flight control systems.  (Yes I wrote a technical report with that title back before there was an Internet or even a word processor.)  See if you buy this way of describing the BitShares architecture:

We tend to get three different attributes mixed up causing endless confusion even among men of good will.

Throughput Scalability and Fault Tolerance and Decentralized Control
are three different concepts.  

Fault Tolerance. We are saying 101 highly-reliable, tested and proven, hand-picked parts dispersed across the globe and selected by the entire owner population is sufficient redundancy to achieve reliable fault tolerance.  The only thing those parts can do is -- do their job to spec.  We can observe their performance and swap them out in ten seconds if they don't perform to spec. So, really, they are just interchangeable slave machines.  Producing the blocks is a mindless task.

Selecting which parts make up the machine is where the power lies.

Decentralized Control.  The total decentralized population of the all owners participate in selecting the most reliable machines to run the network. Those 101 parts have no power over the owners. 101 dispersed redundant parts is a decentralization red herring! That's not where control lies. Those 101 chosen nodes can be completely reconfigured or replaced by the fully decentralized participating owners in 10 seconds.  

We have decentralized p2p control
of a distributed, fault-tolerant computer
implementing an autonomous unmanned company
running a decentralized crypto currency exchange
which produces stable crypto-currency products.

Throughput Scalability is also entirely different.  Any of the 101 nodes can scale up by adding parallel machines, side chains, and a thousand inventions we haven't dreamed of.   When we get to a billion owners and need a thousand machines per node, we can do that.  It will still be decentralized enough to ensure that the 101 (now bigger) parts that make up the distributed, fault-tolerant machine will perform their mindless slave jobs reliability - from positions scattered across 24 time zones.

Those million decentralized owners do not want to have to think about managing more than 101 redundant parts to their unmanned company's processing infrastructure. 101 is plenty, maybe too many, for the average owner to keep track of how they are performing.  Adding more parts reduces the degree to which each part can be vetted and therefore reduces the system's reliability.   Total reliability is a combination of node redundancy and node reliability via reputation-based vetting.

In BitShares, absolute control is fully decentralized down to the votes of every single atomic BTS satoshi.  You can't get more decentralized than that.
 
EDIT:  I have updated the above post because I get smarter (and better looking) each day.  
My thanks to my fencing partners here who have helped me to hone my explanation with each post.

[Daedelus]

It is crazy to me how people focus on the block producer cap instead of the underlying consensus metric. If you remove the cap and let people produce proportionally to their approval, you would see a higher concentration of blocks produced by a smaller number of nodes.

Having 101 validators is FORCING the network to be MORE decentralized than the other consensus protocols, where 99% of blocks are produced by far fewer than 100 validators. As a stakeholder, your control over block producers is exactly proportional to your stake whereas in other systems it becomes unprofitable to validate unless you control huge amounts of the stake (or hash power in POW, or unique nodes on ripple UNL)

What is the goal of decentralization? It is to make it difficult for anyone but majority stake-vote to decide what the rules of ownership are. To protect the stakeholders from everyone else. The goal is not to make everyone feel like a part of the validation process and pay them for make-work.

You are talking about the situation as it is today. 101 nodes might be acceptable to some for the amount of users in the network today.


But what happens if node growth lags (way) behind network growth (which is likely do to the economic incentives of the node operators). Is 101 nodes for the economy of 3 billion people decentralised?

Rather than enforcing decentralisation, the fundamental concept of capping participation enforces centralisation over time as the network expands.

The ratio between node operator and user can only have an upward trajectory in a capped system;

1:10 > 1:50 > 1:200 > 1:1000 .....     > 1:1Million


This pattern is growing centralisation. A system destined for growing centralisation can't be called decentralised. Where is the logic?


You need to show why Bitshares won't follow this path.

[fluxer555]

A system destined for growing centralisation can't be called decentralised. Where is the logic?

Your statement is at odds with itself:

1. By describing "A system destined for growing centralisation" you acknowledge that there many shades/degrees of centralization/decentralization.
2. By stating "...can't be called decentralised", you force a description of said shades/degrees into a binary TRUE/FALSE state.

That being said, I think the point you bring up about increasing centralization with network growth is a valid concern, and is a useful contribution to continuously-improving BitShares hivethink.

[Daedelus]

There are shades, the main three distinctions are centralised > distributed > decentralised with shades in each.

I keep seeing arguments framing everything in terms of decentralisation. I read stan's 7 ideas as an example of it and it is absurd.  

Imagine starting with the colour red. Add a bit of yellow an it is a different colour. Keep adding yellow and there will be a point were you can't call it red any more and soon it will clearly be orange in 95% of people's eyes. Stan is starting with orange and trying to make us think of orange only in terms of red. It doesn't work.

We already have a word to describe this setup, it is distributed. Attempts are being made to twist this into 'sufficiently decentralised', attempting to pass a clear orange in 95% of people's eyes off as the reddest of reds (most decentralised).  


Decentralisation is a very special word is crytpo, it is a foundation concept and core principle so its definition shouldn't be diluted.

[toast]

Decentralization is about who is in control.

The original design was pure TAPOS with a *single* block signer! This would still be decentralized by our interpretation because SHAREHOLDERS decide who that block signer is and because the block signer does not have the ability to do any damage if clients refuse to roll back. The problem with this design is that it is a million times easier to coordinate the transition between block signers on-chain than off-chain, so we want enough block signers to stop them from coordinating to block all transactions and tada you've invented DPOS.

Who cares about the ratio of users to block producers? Block producers have no power and serve the BTS holders. Again, what is your goal?

Our goal is to protect BTS (and by extension, bitAsset) holders from non-BTS holders. That's it.

[toast]

You are talking about the situation as it is today. 101 nodes might be acceptable to some for the amount of users in the network today.

To the contrary, RIGHT NOW all other systems are more decentralized because they are small enough to afford more than 100 validators. DPOS will only become more decentralized AT SCALE, when you cannot afford that many validators unless you force them to be distinct. The argument is presented in depth in a few places:

http://bytemaster.bitshares.org/article/2015/01/07/The-Most-Decentralized-Proof-of-Stake-System/
http://wiki.bitshares.org/index.php/DPOS#Scalability

But as I said in my previous post, focusing on the ratio of block validators to users is a red herring. Focus on the ratio of stake in the network to influence over network behavior. Other POS systems force out the little guy.

[Daedelus]

My repeated point is that your interpretation of decentralization (almost as bad a "decentralisation is just a tool" btw) is a minority view. Most people wouldn't accept it and was the point of me starting this thread was to gauge the definition (away from BTS or Nxt holders in the main Bitcoin discussion with the relevant vocab and numbers changed)  so it would be useful to our current situation. I could show you that I am right. But FandangledGizmo chose to sabotage any hope of that.

I won't go into asking why someone decided to start a crypto with a single block signer.. Ok, just one question. Which dev proposed this idea?


Who cares about the ratio of users to block producers? = Who cares about government and corporate control of the economy?

I remind you that we can vote people in and out now (in many countries). Not as quickly as DPOS, granted, but in real life we have the advantage of knowing politicians can't come back under a different name. And Politicians can't easily buy themselves votes to keep themselves in power or buy votes for their cronies to stay elected. I haven't discussed this but DE did have a point in the other thread.


Decentralization is about who is in control. 101 people (in the best possible scenario) isn't enough for anything of significant size to stay decentralied.

[Daedelus]

To the contrary, RIGHT NOW all other systems are more decentralized because they are small enough to afford more than 100 validators. DPOS will only become more decentralized AT SCALE, when you cannot afford that many validators unless you force them to be distinct. The argument is presented in depth in a few places:

http://bytemaster.bitshares.org/article/2015/01/07/The-Most-Decentralized-Proof-of-Stake-System/
http://wiki.bitshares.org/index.php/DPOS#Scalability

You assume it costs (and will cost) a lot of money to run a node. Maybe it does in Bitshares. Why do you think this is true in other systems?


Constantly posting the same links is getting tedious. DE answered this at length in the other thread. I reposted it. And I answered a question on it up thread.

I will get DE's post, in reply to Bytemaster's blog...



The first line is key, the rest is just humoring him. I added in the other thread not only businesses but encrypted messaging apps, MMO games etc. Basically anything that is already running and connected to the internet, adding a POS stake node has a negligible cost (tech is in development for these things).

@OP  you claim NXT is more decentralized, can you respond to specific points here?  http://bytemaster.bitshares.org/article/2015/01/07/The-Most-Decentralized-Proof-of-Stake-System/

Bytemaster's entire argument falls apart when you take into account that businesses using any payment platform will be running their hardware anyway and therefore, the cost of running a PoS node is negligible.

But, let's assume for argument's sake that a node will ONLY forge if it can recoup its operating cost off of transaction fees alone.

An intelligent node operator will use an energy-efficient device (~20W) to forge.  You can get some fairly powerful computers running at ~20W.  Let's say a forger uses a 35W computer.

35W * 24 hours / 1000w/kW * $0.10 kWh = $0.084

It costs the node operator 8.4 cents per day.

Currently, NXT is worth over 1.7 cents.  He needs to generate 8.4/1.7 = 4.94 NXT per day to breakeven.

NXT's current average daily transaction fees amount to 5,095 NXT.

4.94 / 5095 = 0.000969808

The node operator needs to forge 0.0969% of all blocks.  We can now calculate the amount of NXT he needs to have by multiplying by the total amount of NXT.

0.000969808 * 1,000,000,000 = 969,808 NXT

The node operator must own 969,808 NXT to breakeven forging on a 35W computer.

Now, let's calculate how many forgers the NXT network can support running 35W computers.

1,000,000,000 / 969,808 = 1031

The NXT network can currently support ONE THOUSAND AND THIRTY-ONE 35W nodes.

Bytemaster's argument that as the network scales profitability decreases is fallacious, because the number of transactions increase proportionally to the transaction fees per block.  Therefore, if a forger would be required to run a more computationally powerful node, he would be able to afford to do so.  Bytemaster takes his argument to ridiculous extremes claiming that to process 1000 tps, you would need a server with 256GB of RAM, 2TB of expendable hard drive space per week and a synchronous 64Mbps connection.  Most people in the developed world have asynchronous residential internet connections that are close to or above this speed.  I fail to see why such a connection would need to be synchronous as the nodes would be downloading 1000 tps per second, but would only need to publish ONE block if they managed to forge it.  2TB of blockchain space per week seems extreme.  Bitcoin's blockchain is only 31 GB after six years.  If blockchain sizes increased to such a size, I imagine some type of blockchain shrinking would be implemented.  As time goes on and Moore's law continues, computational power and ram get cheaper, more efficient and more powerful.  By the time any cryptocurrency reaches 1000 tps, which I imagine will take years, the hardware landscape will have completely changed and the cost/power ratios of hardware will be even more efficient.  If you take into account the ability for nodes to figure out who the next forger is (aka NXT Transparent Forging) and route transactions only to that node, it makes Bytemasters' node requirements even more asinine.

It seems limiting forgers to 101 necessitates that the forgers run more powerful hardware to handle the load.  Each forger has to produce 0.99% of all network blocks and therefore consumes more bandwidth and electricity.  It also seems to decrease the resiliency of the network by placing the ENTIRE load on 101 individuals/computers.  This make the network an easier target for DDOS attacks too.

I don't see the necessity in centralizing a PoS system.  As others have stated, DPoS is a solution in search of a problem.  When one considers that there is no such problem to solve, they must ask themselves why was such a "solution" introduced.  As I have stated before and will continue to ascertain, it is my belief that the ONLY reason DPoS was chosen for Bitshares was to force centralization on its stakeholders, disenfranchise them of their forging profits and subject them to tax via inflation.  In addition, since DPoS is vulnerable to Sybil attacks and Stan Larimer has stated that it is acceptable for multiple delegates to be controlled by one individual, one can assume that it is the intention of the Bitshares' developers and business interests, which they have a vested interest in, to establish a type of delegate monopoly over the system.  Whereby, they continue to increase their profits at the expense of existing shareholders.  One may ask, why do they need to strip tx fees from stakeholders and impose inflation on them when they already hold, I am sure, a great amount of stake themselves.  The only rational explanation I can give you is that it is unfettered greed and a desire to maintain total control over the system via a delegate monopoly under the guise of free elections.  Ask yourself, since the network can clearly support more than 101 forging nodes, why are elections necessary?

I could sit here all day and debate back and forth with Stan and others who support Bitshares, but in the end, everyone has to form their own opinion on what the Bitshares' devs and business interests are really trying to accomplish with this venture.  Some people might call me a "troll", but the fact is that I intentionally made this post inflammatory to draw attention to what I believe is a threat to the original movement of Bitcoin, NXT and decentralization.  There is no greater threat to decentralization than corporatization masquerading as such.  The corporatization of the Bitcoin movement is what destroyed it.  I don't want to see that same fate happen to the cryptocurrency scene in general.  I don't want to see people fall victim to what I believe are faux movements.  The day when corporations take over the blockchain is the day our freedom dies.  I will admit to being a holder of both BTC and NXT.  If you believe that has skewed my viewpoint, so be it; but believe me when I say, I supported these movements not only in the hopes of making profit, but also because I believed in the ideology behind them.  It is my contention that Bitshares' imposed inflation on stakeholders is nothing less than taxation without representation.  You may say, "I can vote for delegates.  How is it without representation?"  I argue it is without representation because you yourself do not forge on your own behalf and instead are forced to hand over the security of your investment to business interests and developers who believe it is their right to be forever delegates and can easily manipulate the vote to form a permanent monopoly over the system.  Monopoly is the nemesis of free enterprise.  Why should a select group of 101 businesses get stakeholder subsidies?  What about the smaller businesses users might want to start?  Such users are forced to pay a tax to their competitors and fund their operations without such an advantage.  Your "freedom to choose" really isn't freedom at all, because all your choices result in you becoming a tributary slave to the delegates.

[toast]

Ok, that's a decent response. Here's some more thoughts.

Maybe "decentralized" means something different to most people. I hadn't thought that others might think it means something other than "lack of centralized control points". These concern us because they can be used by non-stakeholders to take money away from stakeholders. Again, I would like you to state the *goal* of building your system so that it is not centralized.

I'm still not totally clear what the cause of your concern for the small number of block producers is. Having more delegates does not give me more power or money unless the stakeholder choose it.

Maybe one day BTS stakeholders will do a cost/benefit analysis and realize that spending 10x on validation is worth the perceived extra decentralization. Heck maybe even spending a few thousand a year for anyone to opt-in to a mailing list that says "you, too, are helping secure the network" - equivalent to what small-time miners or forgers are experiencing right now.

I won't go into asking my someone decided to start a crypto with a single block signer.

Even stranger it was suggested by a hardcore anarcho-capitalist who hates centralized control! Either he is an idiot or onto something more fundamental about the nature of consensus...


This is a good thread, thanks for being civil. Does it really end with disagreement about the definition?

If we banned the words "centralized" and "decentralized" and started this topic over, would we still be disagreeing?
http://lesswrong.com/lw/nu/taboo_your_words/    What are we actually talking about here, if not "avoiding robbery via takeover of control points" ?

[MisO69]

this OP is so low!

let assume i start a new coin, and only 50 people are the first shareholders. Do you call me fair distributed?

But i would never ask this in this way.

Of those 50, 45 are sock puppets of the dev. Proven by dev creating a secondary fork and trying the same shit, this time being caught red handed.

[Daedelus]

I think we would find it hard to discuss without those two words! But I think we would still be disagreeing, as I have failed to explain clearly why a limit of 101 nodes isn't much different from the world we live in today. And probably the % who say BTS is decentralised will be the same as % that say the world today is decentralised. DE has a special way of expressing himself but I think he is right in a lot of what he says and the logical thread in his thoughts is sound.


As long as most Bitshares users are in the bitsharestalk silo, I think Bytemaster should allow comments on his blogs   Or better still, come here. I get the impression bitsharestalk is an echo chamber for his ideas. And with comments, Nxters can correct some of the BS he writes about the platform, when he is aiming "to be objective as possible"

I did note that out of the 7-8 BTS guys I have spoken to, that I think I have only 1 (maybe 2) of them weren't node delegates. I never said it but it did feel a bit like a series of ASIC manufacturers telling me POW is the best thing in crypto   Stan gets paid $2500 a month as a node operator just to tell people BTS is great (evangelising, he calls it), I bet there are a lot of people out there who would say anything is great for $2500/month!   More ordinary guys views would reduce this feeling.

[StanLarimer]

The Secret Truth About Signing Insiders

I'll bet if you look at the Top 101 most frequent block signers for any major block chain you will find that this same group signs over 90%, maybe even 99%, of the chain's blocks inside a typical transaction confirmation window.   For all such windows.

For convenience, I'll call the members of this elite group the block chain's signing insiders.  

Everyone who is not a signing insider has a tiny fraction of that final 1% chance to sign a block.  This gratuitous honor is shared among all the outsiders and has no material effect on the reliability, integrity, or security of the network.

So it doesn't matter how many outsiders are eligible to sign a block, they have no relevance whatsoever.  Their chance to win the signing lottery is a mere placebo, designed to make them feel like they are involved.  

Only the insiders matter in determining whether any transaction gets confirmed.  

No outsider, much less the same outsider, will get honored with another turn in the same confirmation window to weigh in on whether any particular transaction should be confirmed.  Thus, all transactions are confirmed by insiders.

Outsiders don't matter.  
Arguing about how many powerless outsiders your chain has is meaningless.

All block chains are completely controlled by their signing insiders.

With Ripple, insiders must appoint new insiders and have economic incentives not to go any where near 101 of them.
With POW systems, you appoint yourself to be an insider by acquiring control of one of the top 101 pools of hardware.
With POS systems, you appoint yourself to be an insider by acquiring control of one of the top 101 pools of coins.
With DPOS systems, you get elected to be an insider by acquiring one of the top 101 most preferred reputations.

Only with DPOS do outsiders have any say at all in who gets to be an insider.

So, its your call.  Do you want your blocks signed by people who appointed themselves as insiders through their ability to acquire large pools of coins or hardware?  Or would you rather have that job done by the people, even very poor people, who have done the work necessary to earn one of the best reputations?

How do you get rid of a bad actor that owns a large pool of hash power or tokens?  
Um, You can't.

How do you get rid of a bad actor who just violated the trust she had painstakingly earned?  
"Click."

 

[Daedelus]

Put some research and factual numbers in and we could have a discussion. There are already two false assumptions I noticed (and one serious negative, presented as a positive). At the moment, these are just assertions in the same camp as your "trust me, I'm a rocket scientist" posts. They are style over substance.

Again, this is only considering today. At least one major blockchain is designed to become more decentralised over time. Bitshares path is fixed: it is distributed today and will tend towards centralisation as the network grows.

[toast]

I think we would find it hard to discuss without those two words! But I think we would still be disagreeing, as I have failed to explain clearly why a limit of 101 nodes isn't much different from the world we live in today. And probably the % who say BTS is decentralised will be the same as % that say the world today is decentralised. DE has a special way of expressing himself but I think he is right in a lot of what he says and the logical thread in his thoughts is sound.

It might be hard but it will shed some light. I think we still have the main disagreement where you think block producers have some sort of advantage over non-block producers. You would claim that increasing the cap from 100 to 1,000,000 would make it more decentralized, I would claim that's nonsense (remember I said 1 block producer only doesn't work because of technical challenges of swapping him out quickly which matters for network availability - not because it is a control point). Let's figure out why we disagree - what is the goal of decentralization, what metrics are useful for measuring goal, etc.

As long as most Bitshares users are in the bitsharestalk silo, I think Bytemaster should allow comments on his blogs   Or better still, come here. I get the impression bitsharestalk is an echo chamber for his ideas. And with comments, Nxters can correct some of the BS he writes about the platform, when he is aiming "to be objective as possible"

BM is quite open to debate and has changed his mind in light of better arguments many times - I will ask him to enable comments. I won't drag him here to BTT unless there is a specific question you'd like him to answer (IMO there is nothing new in this thread so I won't pull him here yet because he needs to be coding).

I did note that out of the 7-8 BTS guys I have spoken to, that I think I have only 1 (maybe 2) of them weren't node delegates. I never said it but it did feel a bit like a series of ASIC manufacturers telling me POW is the best thing in crypto   Stan gets paid $2500 a month as a node operator just to tell people BTS is great (evangelising, he calls it), I bet there are a lot of people out there who would say anything is great for $2500/month!   More ordinary guys views would reduce this feeling.

Yes, "leprechauns" - like trolls but they have a pot of BTS. Again an interesting thing to note is that I would think a BTS bagholder is just as likely to be a leprechaun as a delegate. Heck, eventually I hope to see delegates not be major BTS stakeholders at all, and have them work to improve BTS with razor thin margins. Until then you will obviously see major overlap because there are only a few thousand community members and a few dozen who can commit full-time.

[DecentralizeEconomics]

Ok, these are legitimate questions which I will try to help with, although I'm just an old retired rocket scientist.  We'll probably have to get one of the devs in here to cover the fine points when one of them comes up for air.

I've tried my best to explain it for you, but as I said, I'm just an old retired rocket scientist.  I'm sure Bytemaster will do a better job.

A vote for xeldel is a vote for his proposal to hire Stan for the blockchain.

Toast is a developer who runs his own delegate.  Guys like xeldel make it possible to hire marketers, celebrities, or old rocket scientists who don't have a clue how to run a delegate.

When the BitShares devs get a little uppity, I love to remind them that what they are doing is not exactly rocket science.  

But, while trying to find a way to communicate the architecture of BitShares to folks on other forums, I've stumbled on the following description, drawing on my past experience with continuously reconfiguring fault-tolerant flight control systems.  (Yes I wrote a technical report with that title back before there was an Internet or even a word processor.)

Stan, nobody cares.  Stop trying to validate your position via the fact that you were a "rocket scientist".

The Secret Truth About Signing Insiders

I'll bet if you look at the Top 101 most frequent block signers for any major block chain you will find that this same group signs over 90%, maybe even 99%, of the chain's blocks inside a typical transaction confirmation window.   For all such windows.

For convenience, I'll call the members of this elite group the block chain's signing insiders.  

Everyone who is not a signing insider has a tiny fraction of that final 1% chance to sign a block.  This gratuitous honor is shared among all the outsiders and has no material effect on the reliability, integrity, or security of the network.

The issue with Bitshares is that you have turned who is a "signing insider", as you call them, into a POLITICAL POSITION with the power to tax the rest of the stakeholders.  This political hierarchy that you have created is NOT, as you frequently refer to it, a representative government similar to the republican government of the US.  If every stakeholder regardless of their wealth, got ONE VOTE then it would be, but it's not.  The Bitshares' "government" is a ruling body with delegates who are the most powerful and influential members of the group.  These "insiders" will use all sorts of tactics to stay in power.  Bitshares' now has two classes of stakeholders.  The "insiders" who receive subsidies and the "outsiders" who are subjected to taxation to pay them.  What you have created is a PLUTOCRACY (government of the wealthy).  By centralizing the forgers, which is exactly what you are doing whether you want to call it that or not, you are practicing a form of wealth redistribution (aka COMMUNISM!).

In NXT, there isn't a government.  Nobody VOTES!  No one has the power to levy taxation upon anyone else.  NXT is a coalition of stakeholders who secure the chain in proportion to their investment.  You can't say that NXT is a plutocracy because the wealthiest NXTers forge the most blocks, because there is NOT A GOVERNMENT!  NXT is most similar to separate nation states participating in international trade and forming a joint coalition to protect the trade routes.  Yes, different nation states have bigger economies and are wealthier than others, but they protect the international trade routes according to their defense budget (stake).

So it doesn't matter how many outsiders are eligible to sign a block, they have no relevance whatsoever.  Their chance to win the signing lottery is a mere placebo, designed to make them feel like they are involved.  

I think "voting" with DPoS is "designed to make them feel like they are involved."  In a PoS system, THEY ARE ACTUALLY INVOLVED REGARDLESS OF THEIR SIZE!

Only the insiders matter in determining whether any transaction gets confirmed.  

No outsider, much less the same outsider, will get honored with another turn in the same confirmation window to weigh in on whether any particular transaction should be confirmed.  Thus, all transactions are confirmed by insiders.

True for Bitshares.  FALSE FOR NXT!

Outsiders don't matter.  
Arguing about how many powerless outsiders your chain has is meaningless.

Wow.  This certainly is revealing as to your outlook on "decentralization".  Lol

All block chains are completely controlled by their signing insiders.

With Ripple, insiders must appoint new insiders and have economic incentives not to go any where near 101 of them.
With POW systems, you appoint yourself to be an insider by acquiring control of one of the top 101 pools of hardware.
With POS systems, you appoint yourself to be an insider by acquiring control of one of the top 101 pools of coins.

What are you talking about?  With Ripple, you participate in consensus if you run a node and others mark you as a trusted validator.  With PoW, you participate in consensus if you contribute hashpower.  With PoS, you participate in consensus if you own coins and forge.  There are not just "101 pools of coins" in PoS.

Only with DPOS do outsiders have any say at all in who gets to be an insider.

Am I to interpret this statement as a declaration of revolution by the proletariat?

So, its your call.  Do you want your blocks signed by people who appointed themselves as insiders through their ability to acquire large pools of coins or hardware?  Or would you rather have that job done by the people, even very poor people, who have done the work necessary to earn one of the best reputations?

How do you get rid of a bad actor that owns a large pool of hash power or tokens?  
Um, You can't.

How do you get rid of a bad actor who just violated the trust she had painstakingly earned?  
"Click."

 

Oh please, don't use that "meritocracy" argument again.  You, I and anyone with half a brain, knows that the type of political system you have implemented is not going to turn into a "meritocracy".  Interesting fact, the Communists used to use that same argument!

You act like it is impossible to invalidate the stake of a bad actor in PoS.  It's not.

[toast]

The issue with Bitshares is that you have turned who is a "signing insider", as you call them, into a POLITICAL POSITION with the power to tax the rest of the stakeholders. 

This is where we disagree, I think. It is not a political position because the delegate has absolutely no influence over the inflation rate or DAC policy outside of what is approved *before he is elected* by the stakeholders.

We keep saying "the shareholders rule the delegates, not the other way around" but you just don't believe it.

There *is* a group of powerful insider who form a plutocracy - it's the majority shareholders! In this sense yes, BTS centralizes power in the hands of BTS holders (+bitAsset holders) at the expense of non-BTS holders.


Again, the fixation on the delegate cap is bizzare. We considered making it unlimited with block production proportional to approval, and concluded this would make it *too centralized*.

[StanLarimer]

For the record, here is Bytemaster's latest blog article, offered up as a modest indication that he is indeed following the discussion here and refining the important take-aways for presentation to a wider audience.

Decentralization-Scalability-and-Fault-Tolerance-of-Bitcoin

I appreciate everybody who helped us refine the arguments.

[Daedelus]

When do I get my consultancy fee?   

[Pheonike]

Question:

Is it economically feasible to a mine in POW without joining a pool?
Is it economically feasible to join a pool that has less than 10% of the hashing power?

If it is not feasible then altruism is the primarily factor for the majority of miners to participate in POW.

[DecentralizeEconomics]

The issue with Bitshares is that you have turned who is a "signing insider", as you call them, into a POLITICAL POSITION with the power to tax the rest of the stakeholders. 

This is where we disagree, I think. It is not a political position because the delegate has absolutely no influence over the inflation rate or DAC policy outside of what is approved *before he is elected* by the stakeholders.

We keep saying "the shareholders rule the delegates, not the other way around" but you just don't believe it.

There *is* a group of powerful insider who form a plutocracy - it's the majority shareholders! In this sense yes, BTS centralizes power in the hands of BTS holders (+bitAsset holders) at the expense of non-BTS holders.


Again, the fixation on the delegate cap is bizzare. We considered making it unlimited with block production proportional to approval, and concluded this would make it *too centralized*.

You are omitting the key word.  "The wealthiest shareholders rule the delegates."

It is absolutely a political position.  The wealthiest stakeholders are ELECTING individuals to forge on everyones' behalf.  It is in the wealthiest stakeholders best interest to levy taxation (inflation) to increase their wealth through the subsidies from the poor.  Seeing that it is acceptable for an individual to control multiple delegate positions, the wealthiest individuals can ensure that they aren't subject to this tax.  Each delegate position they control allows them to hold 0.99% of the stake tax free.  If they own 4.95% of the stake, they need to control five delegate positions.  Since voting is one vote per stake and not one vote per man, the wealthiest stakeholders have the means to form coalitions and elect themselves into permanent positions.  This creates a forging monopoly and initiates a policy of wealth redistribution from the poor to the rich.

"There *is* a group of powerful insiders who form a plutocracy - it's the wealthiest shareholders!  In this sense yes, BTS centralizes power in the hands of biggest BTS holders (+bitAsset holders) at the expense of the smaller BTS holders."

[toast]

You realize BTS uses approval voting and not direct voting right?  (multi-winner approval voting:  http://en.wikipedia.org/wiki/Approval_voting#Multiple_winners)

If they own 4.95% of the stake, they need to control five delegate positions.

Except that the *minimum* approval for any delegates is over 10% right now, while the *maximum* owned by any individual is on the order of 1%.

You can only get a delegate spot by appealing to the largest agreeing subset of BTS holders. This group will tend to vote in the interests of 51% shareholders.

[DecentralizeEconomics]

Except that the *minimum* approval for any delegates is over 10% right now

Since voting is one vote per stake and not one vote per man, the wealthiest stakeholders have the means to form coalitions and elect themselves into permanent positions.

while the *maximum* owned by any individual is on the order of 1%.

I REALLY don't believe that one.  You can't prove this statement either.

[toast]

You're right I can't prove anything about distribution, but I'll claim that it doesn't matter. The point I was making is this:

Each share gets one vote *per potential delegate*. Suppose 3 guys own 10% each, so their coalition owns 30%, and everyone else owns a tiny fraction.

Now suppose everyone is a perfectly rational voter and there is maximum participation. Obviously that's a stretch but bear with me.

How many delegates will the 3 richest guys get? 30? No! They will get 0, and 100% of the delegates will be those selected by the majority composed of tiny stakeholders. If that doesn't make sense to you, go read how approval voting works.

Now suppose there is a coalition that owns 51% of the stake. How many delegates will they get, 51? No! They will get all of them!

In this sense you are right - majority ownership is complete ownership. That's how companies work. If you are in the minority and don't like policy elected by the majority, split off with your own DAC.

At the end of the day, 51% stakeholders rule and cannot be diluted by any large stakeholder without 51% approval.

My claim is that there is no 51% coalition that can coordinate to do anything but enforce property (BTS and bitasset) ownership. That's how all these consensus systems work, they hide the ability to do anything "bad" behind a coordination problem of getting 51% of the consensus metric.

[StanLarimer]

Guys like xeldel make it possible to hire marketers, celebrities, or old rocket scientists who don't have a clue how to run a delegate.

It's a running joke, but you are right, it's clear I'm using it too much.

By centralizing the forgers, which is exactly what you are doing whether you want to call it that or not, you are practicing a form of wealth redistribution (aka COMMUNISM!).

You keep using that word, I don't think it means what you think it means.

In NXT, there isn't a government.  

That's fine.  We are reengineering government.  You don't have to participate.

In a PoS system, THEY ARE ACTUALLY INVOLVED REGARDLESS OF THEIR SIZE!

The whole point of my article is that kind of involvement is meaningless and imparts exactly zero additional security.  The point was:

No outsider, much less the same outsider, will get honored with another turn in the same confirmation window to weigh in on whether any particular transaction should be confirmed.  Thus, all transactions are confirmed by insiders.

True for Bitshares.  FALSE FOR NXT!

Please show me an example where that has ever happened.

What are you talking about? ... With PoW, you participate in consensus if you contribute hashpower.  With PoS, you participate in consensus if you own coins and forge.  

When you contribute hash power or lease your stake you are giving someone else, probably in the top 101 signers that authority.  No different than voting for them in its net effect.

There are not just "101 pools of coins" in PoS. 

I was being generous, allowing you to take credit for the Top 101 pools of your coins as having some some impact on the actual outcome in the validation of transactions.  I suspect it's less. Prove me wrong and I'll eat a whole coconut cream pie.

So, its your call.  Do you want your blocks signed by people who appointed themselves as insiders through their ability to acquire large pools of coins or hardware?  Or would you rather have that job done by the people, even very poor people, who have done the work necessary to earn one of the best reputations?

Oh please, don't use that "meritocracy" argument again.  

I can see why you wouldn't want us to use it since its one of our most potent discriminators. 

[Daedelus]

How many delegates will the 3 richest guys get? 30? No! They will get 0, and 100% of the delegates will be those selected by the majority composed of tiny stakeholders. If that doesn't make sense to you, go read how approval voting works.

Expand on this part pls. Why would they get 0 delegates? Won't each get 20% approval of the Bitshares stakes, voting for each other? 30% if they also vote for themselves? Which is more than the threashold for getting elected

[Daedelus]

Pre-empt Stans next post: he is still assuming today's distributions are fixed and will never improve   For a fair comparison of his model, he should be using Ripple as his 'vs'. I said previously that distributed models are quicker at achieving consensus as they have a fixed number of nodes to consult, rather then a constantly changing x number that occur in decentralised systems. Last I heard, Ripple have 15 second confirmations. Bytemaster should know this is he truly was "objective as possible", his blog has turned into a hate campaign against Nxt with no right of reply. Comments would allow readers to judge the true value of what he is saying. He also writes as though he has found a big secret..

[toast]

How many delegates will the 3 richest guys get? 30? No! They will get 0, and 100% of the delegates will be those selected by the majority composed of tiny stakeholders. If that doesn't make sense to you, go read how approval voting works.

Expand on this part pls. Why would they get 0 delegates? Won't each get 20% approval of the Bitshares stakes, voting for each other? 30% if they also vote for themselves? Which is more than the threashold for getting elected

There's no "threshold" for getting elected. Maybe you mean the current 10% lowest approval in our particular system, but that is also in the same system where the largest stakeholder has nowhere near 10%.

In my example I said to assume full voter participation, and to assume you have 3 guys with 10% stake each and the other 70% stake is split among tons of small stakeholders who vote in their own interest.

In this (extremely contrived) scenario, all 101 delegates would have 70% approval, while the 3 guys even if they all voted for each other would only have 30% approval.

If this is confusing to you please read the wiki on how approval voting works.

[StanLarimer]

When do I get my consultancy fee?   

Send me your BitShare's ID and I'll send you 1000 BitShares.

Shall I just send it to Daedelus right now, or do I need to give you time to register?

 

[StanLarimer]

Put some research and factual numbers in and we could have a discussion.

Wow, I may have to up the size of Daedelus' fee for challenging me to extend my qualitative speculation here:

https://bitcointalk.org/index.php?topic=920621.msg10128438#msg10128438

Into something more quantitatively rigorous.

His challenge above just inspired Bytemaster (with some research help from chryspano of bitsharestalk.org) into publishing another article addressing this very topic.  

I really don't want to get into a war with any specific block chain tribe here, that's why I tried to use generic categories like POW, POS, and DPOS in my previous post without unnecessarily naming names. We view the NXT community as a valuable ally in the real fight against the current corrupt system.

But, since you asked so nicely for a concrete example, here's the article Bytemaster authored just for you ...

Decentralization of Next vs. BitShares

[Daedelus]

Pre-empt Stans next post: he is still assuming today's distributions are fixed and will never improve   For a fair comparison of his model, he should be using Ripple as his 'vs'. I said previously that distributed models are quicker at achieving consensus as they have a fixed number of nodes to consult, rather then a constantly changing x number that occur in decentralised systems. Last I heard, Ripple have 15 second confirmations. Bytemaster should know this is he truly was "objective as possible", his blog has turned into a hate campaign against Nxt with no right of reply. Comments would allow readers to judge the true value of what he is saying. He also writes as though he has found a big secret..

Bump. You should test your definitions in the wider community.  I'll refrain from going into init, xeldel etc delegates and the 101. It is not a good look. I will leave you to your campaign.

[StanLarimer]

Pre-empt Stans next post: he is still assuming today's distributions are fixed and will never improve   For a fair comparison of his model, he should be using Ripple as his 'vs'. I said previously that distributed models are quicker at achieving consensus as they have a fixed number of nodes to consult, rather then a constantly changing x number that occur in decentralised systems. Last I heard, Ripple have 15 second confirmations. Bytemaster should know this is he truly was "objective as possible", his blog has turned into a hate campaign against Nxt with no right of reply. Comments would allow readers to judge the true value of what he is saying. He also writes as though he has found a big secret..

I can assure you there is not a shred of hate directed against NXT or any other crypto tribe.  We want NXT to succeed.
Truth is, we hardly ever think about other tribes except to try to be somewhat informed when interviewers ask us about some point of comparison (or to see what we can learn from them - imitation is the sincerest form of flattery).  It is entirely possible that improvements have been made since we last checked in.  Discussions like this help us find that out.

The only reason I am even engaged in this conversation at all is for the purpose of explaining that BitShares is exploring a different design space, with different design criteria, and a different set of optimization parameters.  And that our design is valid and competitive.  Our long term goals go far beyond the current functionality and many of our design decisions are made with that in mind.  Without an understanding of that vision and roadmap, we can understand why some of our decisions are not yet well understood.  But those who have taken the time to gaze down that road with Bytemaster are truly inspired.  Look at the scope of topics at Bytemaster.BitShares.org and you'll begin to get the idea.  He's not making any big secret about it.

Your definition of decentralization doesn't need to agree with ours.  You are exploring what you can accomplish along that design axis and that's great.  We hope it succeeds and have no need to argue about it except in self-defense.

My campaign is simply this - use the opportunity created by people stirring up controversy to tell our side of the story.

To prove that I am sincere, take a look at this recent article stimulated when Bytemaster and Vitalik were exchanging views on

Cooperation Among Crypto Projects.

Our position is clear:  we are still in the Cambrian Explosion phase of the crypto-revolution.  We need a lot of evolution happening all at once and need lots of species out there mutating.  We need continuing recombination of our open source crypto-DNA as the fastest possible path to replacement of the current system's evil dinosaurs.  We mammals need to stick together a little while longer!

Some of our ideas about "smart decentralization" we hope will inspire other alternatives to brute force decentralization. We hope that our self-funding model will inspire others to accelerate their development the same way.  We hope that our emphasis on building in profitability as a design requirement will point the way to everybody becoming more adapted for survival in whatever ecological niche they have chosen.

So any time we stop to engage with a tribe of fellow-warriors, it is only to share our insights (and defend them if necessary.)  We do not need to stay inside the bounds of the current community consensus of opinion.  In fact, we aim to break out of it and make new progress on the bleeding edge.

You'll note we never engage in hateful, ad hominum attacks.  Every post is aimed only at sharing our ideas.  If you find something useful in there you can use, why, you're welcome!

[Daedelus]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

[bytemaster]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

This is absolutely the most amusing thing I have read in a while.    I am the most directly accessible lead developer out there.  If you want to have a real live debate, join our weekly mumble sessions.  It will be quite entertaining and educational for all involved. 

[Daedelus]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

This is absolutely the most amusing thing I have read in a while.    I am the most directly accessible lead developer out there.  If you want to have a real live debate, join our weekly mumble sessions.  It will be quite entertaining and educational for all involved.  

Why don't you allow comments on your blog if you choose to make claims about other cryptos? A little one sided, no? I guess you have been reading all along but chose not to take part?

[StanLarimer]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

Actually, this isn't even what I do in my 60 hours a week working for BitShares.  (But I admit, this is more fun!)

Bytemaster takes live questions from a world wide audience every Friday at 10:00 AM Eastern Standard Time.  
BitShares Global Teleconference

[bytemaster]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

This is absolutely the most amusing thing I have read in a while.    I am the most directly accessible lead developer out there.  If you want to have a real live debate, join our weekly mumble sessions.  It will be quite entertaining and educational for all involved.  

Why don't you allow comments on your blog if you choose to make claims about other cryptos? A little one sided, no? I guess you have been reading all along but chose not to take part?

Here is why I don't use blog comments:

http://www.stevepavlina.com/blog/2005/10/blog-comments/

And no, I haven't been reading all along.  I get updates from Stan periodically and people post on BitSharestalk which I follow.

[Daedelus]

It is strange how Vitalik is able to have comments on his blog, arguably the most widely read in crypto, without issue.

If this thread is to remain useful,  I think it is in your interests to repeat the initial purpose of this thread. You can do it on your own terms with as much obfuscation as Stan can muster. It is a challenge, if you think 'smart decentralisation' is a flyer, then it should be no issue for you.

[StanLarimer]

You certainly do earn you $2500 a month, anyone would think you get paid by the letter  

There is no controversy over the definition of decentralised.  Restart this thread in the the Bitcoin General section, as I attempted to do, and find out for yourself. And let me know when Dan has gained the confidence to engage in genuine debate   everything is a little too staged managed for my tastes atm..

This is absolutely the most amusing thing I have read in a while.    I am the most directly accessible lead developer out there.  If you want to have a real live debate, join our weekly mumble sessions.  It will be quite entertaining and educational for all involved.  

Why don't you allow comments on your blog if you choose to make claims about other cryptos? A little one sided, no? I guess you have been reading all along but chose not to take part?

Here is why I don't use blog comments:

http://www.stevepavlina.com/blog/2005/10/blog-comments/

And no, I haven't been reading all along.  I get updates from Stan periodically and people post on BitSharestalk which I follow.

That said, there are still plenty of ways to comment if you like.  Every new article is posted as a link on BitSharesTalk.org and the community gives it a good debate.  Come participate there - it's just a link away.

What's more, most of the articles wind up getting posted on reddit or bitcointalk by somebody, and then they really get a workover!

[Daedelus]

Can you post any examples of these working overs?

[StanLarimer]

It is strange how Vitalik is able to have comments on his blog, arguably the most widely read in crypto, without issue.

If this thread is to remain useful,  I think it is in your interests to repeat the initial purpose of this thread. You can do it on your own terms with as much obfuscation as Stan can muster. It is a challenge, if you think 'smart decentralisation' is a flyer, then it should be no issue for you.

Polls are overrated.  They can be easily be manipulated by issuing a tribal battle cry and at best they only represent the very groupthink we always try to escape.

As General Patton once said in his famous speech to the 3rd Army:

I don't want any messages saying 'I'm holding my position.' We're not holding a goddamned thing. We're advancing constantly and we're not interested in holding anything except the enemy's balls. We're going to hold him by his balls and we're going to kick him in the ass; twist his balls and kick the living shit out of him all the time. Our plan of operation is to advance and keep on advancing. We're going to go through the enemy like shit through a tinhorn.

Of course, we intend to make our advances in a much more polite and erudite way...  

[Daedelus]

Just a discussion thread then, to allow everyone to make their points and be heard. It is bitcoiners you are trying to get the opinion of, champions of the first decentralised blockchain. At least I was, before the sabotage.

[Daedelus]

Can you post any examples of these working overs?

Bump.

[StanLarimer]

Can you post any examples of these working overs?

My pleasure:  bitsharestalk.org/index.php?board=83

[Daedelus]

Can you post any examples of these working overs?

My pleasure:  bitsharestalk.org/index.php?board=83

This is a free ticket on bitsharestalk. You led me to believe a wider audience on reddit and bitcointalk had scrutinised Dans claims. Particularly of his blog posts.

[StanLarimer]

Just a discussion thread then, to allow everyone to make their points and be heard. It is bitcoiners you are trying to get the opinion of, champions of the first decentralised blockchain. At least I was, before the sabotage.

I thought that's exactly what this thread (and the two before it) have been.  No?

https://bitcointalk.org/index.php?topic=916696.40
https://bitcointalk.org/index.php?topic=913075.0;all

Over 5000 views between all three.  Not bad, given the nature of their OPs. 

[StanLarimer]

Can you post any examples of these working overs?

My pleasure:  bitsharestalk.org/index.php?board=83

This is a free ticket on bitsharestalk. You led me to believe a wider audience on reddit and bitcointalk had scrutinised Dans claims. Particularly of his blog posts.

Yes, I'm digging up the links to those too.
The bitsharestalk.org threads were just already all on one page and easy to grab.
(And are open to the public too - just a click away.)

[Daedelus]

Just a discussion thread then, to allow everyone to make their points and be heard. It is bitcoiners you are trying to get the opinion of, champions of the first decentralised blockchain. At least I was, before the sabotage.

I thought that's exactly what this thread (and the two before it) have been.  No?

No.

Members of the BTS community saw fit that exactly that was prevented. There are no bitcoiners here. That is why I made the suggestion.

[Daedelus]

I will leave it with you. Hopefully, you'll find the bitcointalk working overs of dans previous blogposts. Or I'll come back to walls of text containing a series of ill fitting analogies   I'd prefer the former but I know you won't let me down stan  

[StanLarimer]

Can you post any examples of these working overs?

My pleasure:  bitsharestalk.org/index.php?board=83

This is a free ticket on bitsharestalk. You led me to believe a wider audience on reddit and bitcointalk had scrutinised Dans claims. Particularly of his blog posts.

Yes, I'm digging up the links to those too.
The bitsharestalk.org threads were just already all on one page and easy to grab.
(And are open to the public too - just a click away.)

http://www.reddit.com/r/Bitcoin/comments/2rru9h/how_to_measure_the_decentralization_of_bitcoin/
http://www.reddit.com/r/CryptoCurrency/comments/2rz0ol/bitasset_yield_now_shown_at_bitsharesblocks/
http://www.reddit.com/r/CryptoCurrency/comments/2rpear/nothing_at_stake_nothing_to_fear/

[DecentralizeEconomics]

Guys like xeldel make it possible to hire marketers, celebrities, or old rocket scientists who don't have a clue how to run a delegate.

It's a running joke, but you are right, it's clear I'm using it too much.

By centralizing the forgers, which is exactly what you are doing whether you want to call it that or not, you are practicing a form of wealth redistribution (aka COMMUNISM!).

You keep using that word, I don't think it means what you think it means.

COMMUNISM is the perfect word to describe Bitshares.  Communism is a centralized, hierarchical form of governance where wealth is transfered by force from the unprivileged to the privileged.  It is the substitution of competing private enterprises with one state controlled private enterprise.  It is creation of a system which combines political and capital bureaucracy into one all-powerful bureaucracy.  These two forces (political and capital) which should be opposed to each other are consolidated into one creating a "new master class" (101 delegates).  This "new master class" is in fact a state capitalist monopoly which centralizes its rule over the people under the auspices of "economy" and "efficiency" for the "betterment of the society."

In NXT, there isn't a government.  

That's fine.  We are reengineering government.  You don't have to participate.

A Communist government.  A government controlled and dominated by the privileged elite.  I don't want to participate in such a scheme.

In a PoS system, THEY ARE ACTUALLY INVOLVED REGARDLESS OF THEIR SIZE!

The whole point of my article is that kind of involvement is meaningless and imparts exactly zero additional security.  The point was:

No outsider, much less the same outsider, will get honored with another turn in the same confirmation window to weigh in on whether any particular transaction should be confirmed.  Thus, all transactions are confirmed by insiders.

True for Bitshares.  FALSE FOR NXT!

Please show me an example where that has ever happened.

You said "No outsider".  That is a false statement.  There are 1 Billion NXT.  1 Billion divided by 101 equals 9.9 million.  People with less than 9.9 million NXT have forged a block.  If you have 1 million NXT, you forge 2.08 blocks a day.  There is a high chance an individual with less than 9.9 million NXT would add a block that would help confirm transactions.

What are you talking about? ... With PoW, you participate in consensus if you contribute hashpower.  With PoS, you participate in consensus if you own coins and forge.  

There are not just "101 pools of coins" in PoS.  

I was being generous, allowing you to take credit for the Top 101 pools of your coins as having some some impact on the actual outcome in the validation of transactions.  I suspect it's less. Prove me wrong and I'll eat a whole coconut cream pie.

What you are advocating is the redistribution of forging power.  Where you and I differ is that you believe it is necessary for the State (101 delegates) to intervene and redistribute forging power to themselves and I believe forging power should be left in the hands of its rightful owners and the free market should determine its allocation.  If an individual forges one block a day, does that qualify as worthy?  If he forges one block a week, does that also qualify as adding decentralization to the chain?  You have gone down an extremely slippery slope in disenfranchising forgers based on your opinion of their "contribution" to the decentralization of the system under the auspices of "economy" and "efficiency".  IMO, a forger who contributes one block a day to the chain adds in its decentralization.  Personally, I believe a forger who forges one block a week adds a sizable quantity of decentralization.  In NXT to forge one block a day, you need 500,000 NXT.  500,000 * 101 = 50,500,000 NXT.  There is over eight times as much NXT forging.  I believe that constitutes as more than "101 pools of coins" securing the network.


I would like to say this.  Some people probably think that I'm opposed to Bitshares because I'm a NXT supporter.  This is not true.  I am though strongly opposed to the taking advantage of people who are uninformed and who are not economically privileged.  This is IMO what Bitshares' DPoS algorithm does.  People purchase Bitshares believing that it's decentralized, their vote actually matters, and their money will be protected.  The truth of the matter is none of this is actually true.  It is controlled by 101 individuals (maybe? who really knows).  The wealthiest stakeholders dominate voting to such a degree it creates a blockchain plutocracy.  Their money is taxed via inflation to support the largest stakeholders.  Some people will claim the delegates won't be the wealthiest stakeholders.  I say, "Don't be naive."  They have the means to escape the blockchain taxation by occupying delegate positions which control more stake than they own.  The Bitshares' devs actually encourage individuals to occupy multiple delegate positions.  I have no doubt that this will occur and what is being proposed as a blockchain "meritocracy" is really a blockchain plutocracy which will result in the disenfranchisement of the smaller stakeholders to the benefit of the ruling elite.

[FandangledGizmo]

http://bytemaster.bitshares.org/article/2015/01/13/Decentralization-of-Nxt-vs-BitShares/

60% of all blocks are produced by just 15 people

I wish NXT luck with their model and I hope it scales well in the future but NXT doesn't seem currently very decentralized imo.

[Daedelus]

Can you post any examples of these working overs?

My pleasure:  bitsharestalk.org/index.php?board=83

This is a free ticket on bitsharestalk. You led me to believe a wider audience on reddit and bitcointalk had scrutinised Dans claims. Particularly of his blog posts.

Yes, I'm digging up the links to those too.
The bitsharestalk.org threads were just already all on one page and easy to grab.
(And are open to the public too - just a click away.)

http://www.reddit.com/r/Bitcoin/comments/2rru9h/how_to_measure_the_decentralization_of_bitcoin/
http://www.reddit.com/r/CryptoCurrency/comments/2rz0ol/bitasset_yield_now_shown_at_bitsharesblocks/
http://www.reddit.com/r/CryptoCurrency/comments/2rpear/nothing_at_stake_nothing_to_fear/

None of these are more than 7 days old, one of them a day old. I am getting the feeling there has been no external discussion of BTS. Which makes sense, it explains how your claim to decentralisation has gone unchallenged for so long. 

[Daedelus]

http://bytemaster.bitshares.org/article/2015/01/13/Decentralization-of-Nxt-vs-BitShares/

60% of all blocks are produced by just 15 people

I wish NXT luck with their model and I hope it scales well in the future but NXT doesn't seem currently very decentralized imo.

Thank you, I think you have been listening. With all crypto still in bootstrapping, it is the future picture that counts.

[DecentralizeEconomics]

http://bytemaster.bitshares.org/article/2015/01/13/Decentralization-of-Nxt-vs-BitShares/

60% of all blocks are produced by just 15 people

I wish NXT luck with their model and I hope it scales well in the future but NXT doesn't seem currently very decentralized imo.

OMG! FREE MARKET CAPITALISM!!!

SOMEBODY REDISTRIBUTE SOMETHING!!!!!!!!

What matters is not how MUCH stake any individual possesses, but how those with the most are or aren't able to disenfranchise everyone else.  All systems will evolve into 20% of the group owning 80%.  If you attempt to redistribute forging rights, regardless of the reason, you are effectively redistributing wealth and will create a system where those in power will maintain their power through manipulation and not because they earned it.

[achimsmile]

I think this topic is funny.

Here's an example why:

Let's say community 1 and 2 both have 1000 active stakeholders.

Community 1 has no delegates
Community 2 has 101 delegates

In community 1, everyone can process a block. 60% of all blocks are processed by the same 15 stakeholders. But The total amount of block processors is 200 (example).
In community 2, only the 101 delegates can process blocks. Each block is verified by 101 delegates. But the total amount of block processors is only 101.

Now comes the fun part:

Imagine that community 1 and 2 both reach 1M active stakeholders.

In community 1, number of block processors grows naturally with community size / distribution.
In community 2, number of block processors stays 101.


What people don't get:
In community 2, Multiple stakeholders are delegating their power to one Delegate.
The bigger the community get's, the more centralized it will become.
This is the very opposite of decentralization. I don't get how people don't see this.

[Daedelus]

I think this topic is funny.

Here's an example why:

Let's say community 1 and 2 both have 1000 active stakeholders.

Community 1 has no delegates
Community 2 has 101 delegates

In community 1, everyone can process a block. 60% of all blocks are processed by the same 15 stakeholders. But The total amount of block processors is 200 (example).
In community 2, only the 101 delegates can process blocks. Each block is verified by 101 delegates. But the total amount of block processors is only 101.

Now comes the fun part:

Imagine that community 1 and 2 both reach 1M active stakeholders.

In community 1, number of block processors grows naturally with community size / distribution.
In community 2, number of block processors stays 101.


What people don't get:
In community 2, Multiple stakeholders are delegating their power to one Delegate.
The bigger the community get's, the more centralized it will become.
This is the very opposite of decentralization. I don't get how people don't see this.

I have repeated this 4-5 times. I think, as I said above, it is because Bitshares have developed in isolation from crypt  so the idea of "sufficient decentralisation" has gone unchallenged. But they won't contemplate any form of discussion with the wider community to check if the majority agree.


The purpose of this thread is now redundant, if you wish to continue discussion please use one of the existing threads posted above by Stan or start your own.

Thread is locked, I can unlock it to discuss the results of any community consultation on the subject of decentralisation. Feel free to PM.