Author [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] Topic: Nxt Forging Discussion  (Read 1279 times)

0 Members and 1 Guest are viewing this topic.

Offline bytemaster

Nxt Forging Discussion
« on: February 14, 2014, 12:10:01 AM »

In my ongoing pursuit to understand the best technologies available I am attempting to internalize the design behind Nxt.   Here is what I think I understand and what I think the benefits are:

Every minute a block is supposed to be produced, the address who gets to produce that block can be calculated deterministically.  If they don't produce a block, within the minute allotted then that address is removed from the candidate pool for 24 hours.  And everyone moves on to the next person in line to produce a block.

Every block has a deterministic timestamp. 

Your wallet must be online and unlocked to participate in forging.

There is a slight bias toward accounts with larger balances finding results more often than many accounts which sum to the same balance. 

There exists financial incentive for people to pool their funds in one account which will then forge blocks and pay rewards because people's computers are not always online. Such a pool already exists.

In theory there should be 1 block per minute, but sometimes an address is chosen that doesn't produce a block. 

Potential Attacks:
  - some nodes could refuse to relay a block that was forged as it was supposed to.
  - someone could dramatically slow the block production rate by having a large number of accounts and not mining with them... If the penalty period is only 24 hours then having a large number of accounts makes the penalty affect only a small portion of your power instead of ALL of your power.  I suspect it could quickly get to the point at scale where most blocks are not produced and the block production rate falls to perhaps 20% or less the intended rate.   After all, to produce a block your funds must be unlocked and your computer on.
  - their suggestion that nodes know who to send transactions to is a problem, especially if that person is malicious. 
  - Denial of Service Attack... assuming only a small percentage of the users are forging then a large owner could start forging and simply stop including transactions. 
  - Assuming someone has a large enough balance, how do you determine which chain is legitimate and which is a fraud?   Suppose there are two chains, one being produced by the attacker and one being produced by everyone else.  If the attacker has 51% of the forging power, then he can produce a chain with more blocks in it than the master chain as he will simply pretend he didn't see anyone else producing blocks.   Everyone else on the network then has to choose....
  - How can someone pick up a new chain with no outside reference and identify it as the best chain?   Most blocks?  Percent of chain forging? 

Benefits of this system:
   - no mining required at all.  Simply sign when it is your turn.
 
So the big question is how is it better or worse than TaPOS. 
   Better:
      - no mining at all, you know who is randomly selected to produce a block.
   Worse:
      - no incentive to include transactions except for fees.. attacker may make more by performing DOS for certain transactions. 
      - 100% certainty on who gets to produce a block... this is bad for markets when they also have freedom to exclude transactions without penalty.   If I was a market manipulator I would acquire a large enough stake so that I could frequently win the right to produce a block.
      - miner can produce block that pays no fees and burden the rest of the network.


My conclusion is that their approach limits the security of the network by limiting the participants that contribute to forging/securing the network.  With TaPOS everyone automatically contributes to securing the network and 100% of the shares are used.  With Nxt only a fraction of the shareholders secure the network.   

Things we have:  deterministic mandatory transaction fees targeting a maximum average bandwidth/storage requirement.   Those that include transactions of others are more likely to produce blocks than those that do not.   Minimize mining rewards and maximize dividends.   

I think that is all.... if someone can convince me to adopt a feature of Nxt in one of our future chains I will pay them a 100 PTS bounty.   



 

 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bytemaster

Re: Nxt Forging Discussion
« Reply #1 on: February 14, 2014, 03:27:08 AM »
Posted bitcointalk?? by Come-from-Beyond on February 10, 2014
Quote
This is the second part of BCNext's essay on Nxt's transparent mining (or "transparent forging") system. The description is based on text written by BCNext, paraphrased in Come-from-Beyond's words [and grammar-corrected by Joefox] to protect BCNext's real identity against text style analysis (as was agreed).

Nxt mining simulates Bitcoin mining by pretending that each coin is a small mining rig. BCNext decided to go this way instead of introducing his own approach because the Bitcoin community is conservative and wouldn't adopt a system with radical differences. Now that Nxt has grown its own community, it's time to get rid of the facade and reveal true properties of Transparent Mining. These properties are obvious to everyone who spent some time analyzing Transparent Mining, but still...

Nxt mining uses a deterministic lottery that grants the right to mine the next block. The generation time of each next block is determined by the time of the previous block, and by the base target value. The base target is a part of the Bitcoin legacy that should be left behind. It doesn't make sense to wait until next block is mined because we already know who will do it. And we can mine blocks at a fixed rate – for example, every 60000 ms (exactly 1 min). When the Internet is faster we can switch to a smaller gap between blocks (10 seconds, for example).

Mining rewards are also obsolete. The true reward for supporting the Nxt network comes from services that use Nxt. For example, someone who owns a currency exchange and mines blocks to keep his business running; someone who owns a shop and mines blocks to keep his business running; someone who owns a software company that develops programs for Nxt-based services and mines blocks to keep his business running. Selfish miners (those who only mine to earn fees) should be "removed" from the system. They are not interested in the success of Nxt and only want to cash out. If a clone of Nxt appears, these kinds of people will likely "jump ship", and this is fine since they add very little value to Nxt anyway. None of this means we should get rid of fees completely: we still need them as a countermeasure against spamming.

Regarding NXT as coins: NXTs are not coins... or at least the creator of Nxt didn't want them to be seen as coins. They are tokens that grant privileges for supporting Nxt.

Deflation is not much better than inflation. "Real" coins should be created on top of Nxt, and be issued in quantities that keep their value constant. BCNext understands that this is very arguable. The community should decide if it wants to follow the path showed by him, or stick to the Bitcoin legacy of an unchangeable supply of coins with which people hope to become rich by doing nothing.

Trust no one. This is a very important principle. Nxt doesn't rely on trust, but solves the problem of trust in another way. It evolves to a system that doesn't care about trust because everything will be very clear. Transparency extended to its absolute end leads to an inability to cheat. This removes necessity of wondering if anyone should trust anyone else.
The list of these properties can be extended, and BCNext wants the community to do it.

Ok, this post from Nxt developer shows many things that are insightful of their mindset and what makes us different and more competitive.

1) Their economics are flawed based upon their opinion of deflation and belief in the meaningless concept of price stability (constant value).   

2) Based upon this they are unlikely to switch to a dividend system and thus continue to pay fees to miners...err forgers.

3) They are attempting to call their currency tokens rather than coins:
Quote
  Token: a voucher that can be exchanged for goods or services                                 
Quote
  Coin: pieces of hard material used primarily as a medium of exchange or legal tender. 

Thus they have retained the same metaphor of currency vs shares in a business.


For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2487
    • View Profile
Re: Nxt Forging Discussion
« Reply #2 on: February 14, 2014, 04:00:27 AM »
I know that they claim that they are resistant against a 90% (or more) attack. The reason for this would be intersting. I could only find the claim: OP here https://bitcointalk.org/index.php?topic=345619.0

Descrits claims to be resistant to a 99% attack https://bitcointalk.org/index.php?topic=189239.0

Quote
There exists financial incentive for people to pool their funds in one account which will then forge blocks and pay rewards because people's computers are not always online. Such a pool already exists.
Will such pooling also be possible in TaPOS? That is again a form of centralizing "mining" / transaction processing.

To increase the confidence in TaPOS that the formation of cartels is not possible/likely it would be good if there was a way to proof what the distribution is like (x people own y% of the stake). Anyway to do that?

Why not post your thoughts to the NXT thread? For the bounty and for more insights... Provoking people a bit gives great insights  :)
« Last Edit: February 14, 2014, 04:27:45 AM by delulo »

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2487
    • View Profile
Re: Nxt Forging Discussion
« Reply #3 on: February 14, 2014, 04:29:28 AM »

Offline bytemaster

Re: Nxt Forging Discussion
« Reply #4 on: February 14, 2014, 06:10:49 AM »
In the case of TaPOS there is no bias toward individuals with larger balances getting more of the fees and therefore it is just as profitable to solo-mine as it is to put it in a pool.  You don't get penalized for being offline (for less than a year) and thus when you do get online you can collect more fees when you do solve a block. 

Without any profit motive, trusting your coins to a 3rd party seems like a big risk to take.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2487
    • View Profile
Re: Nxt Forging Discussion
« Reply #5 on: February 14, 2014, 06:33:03 AM »
In the case of TaPOS there is no bias toward individuals with larger balances getting more of the fees and therefore it is just as profitable to solo-mine as it is to put it in a pool.  You don't get penalized for being offline (for less than a year) and thus when you do get online you can collect more fees when you do solve a block. 

Without any profit motive, trusting your coins to a 3rd party seems like a big risk to take.

that makes sense.

Did you check out the links and posts that were posted in the nxt thread as an answer to my question?

 

Google+