Author Topic: BitShares X Trustee  (Read 1940 times)

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Offline bitmeat

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BitShares X Trustee
« on: March 28, 2014, 05:12:09 pm »
Can we discuss the latest change suggested by bytemaster?

Is there a whitepaper or more detail on how this would work? Given that this is added in the last minute, I'd like to discuss and make sure there are no attack vectors.

If we are introducing trustees then this is no longer decentralized exchange. I've been mulling over a similar idea where trustees would have to deposit BTC sort of like a license/insurance, that they will not mess with the network, but get commissions off of the transactions, if they get caught not doing the right thing - they get booted and the BTC goes to reimburse affected parties.

In any case - I'd like to see a diagram of how the ecosystem works.

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Re: BitShares X Trustee
« Reply #1 on: March 29, 2014, 04:26:14 am »

If we are introducing trustees then this is no longer decentralized exchange.

Have the same feeling like you...
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Offline donkeypong

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Re: BitShares X Trustee
« Reply #2 on: March 29, 2014, 04:35:37 am »
Once the ball gets rolling, after a day or two, the trustee is largely irrelevant. If that's an easier solution that mining, which is an ugly alternative, then I'll take the person. There is still zero trust because the majority can fire the trustee and select another at any point. I love it. 
« Last Edit: March 29, 2014, 04:53:40 am by donkeypong »

Offline bytemaster

Re: BitShares X Trustee
« Reply #3 on: March 29, 2014, 04:40:28 am »

If we are introducing trustees then this is no longer decentralized exchange.

Have the same feeling like you...

It depends upon the definition of decentralized.   The power is decentralized.  The ability of the exchange to be 'shutdown' can still be near impossible with a properly designed trustee system.   It is kind of like decentralization through separation of powers rather than decentralization through all nodes doing the same thing.   It still retains the following properties:

Your balance cannot be changed and your funds cannot be stolen by the trustee.
It still has all the other properties of bitcoin, except faster.
The transaction record is immutable even by the trustee  (not even Bitcoin has this).

Compare this to a centralized exchange and it is night and day.

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Offline jae208

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Re: BitShares X Trustee
« Reply #4 on: March 29, 2014, 05:35:22 am »
Can we discuss the latest change suggested by bytemaster?

Is there a whitepaper or more detail on how this would work? Given that this is added in the last minute, I'd like to discuss and make sure there are no attack vectors.

If we are introducing trustees then this is no longer decentralized exchange. I've been mulling over a similar idea where trustees would have to deposit BTC sort of like a license/insurance, that they will not mess with the network, but get commissions off of the transactions, if they get caught not doing the right thing - they get booted and the BTC goes to reimburse affected parties.

In any case - I'd like to see a diagram of how the ecosystem works.


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Offline Overthetop

Re: BitShares X Trustee
« Reply #5 on: March 29, 2014, 05:39:37 am »

If we are introducing trustees then this is no longer decentralized exchange.

Have the same feeling like you...

It depends upon the definition of decentralized.   The power is decentralized.  The ability of the exchange to be 'shutdown' can still be near impossible with a properly designed trustee system.   It is kind of like decentralization through separation of powers rather than decentralization through all nodes doing the same thing.   It still retains the following properties:

Your balance cannot be changed and your funds cannot be stolen by the trustee.
It still has all the other properties of bitcoin, except faster.
The transaction record is immutable even by the trustee  (not even Bitcoin has this).

Compare this to a centralized exchange and it is night and day.

 +5%

If trustee can make the best of boths worlds, why not?
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Offline cryptosig

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Re: BitShares X Trustee
« Reply #6 on: March 29, 2014, 07:24:05 am »
I know I'm cross posting but this is an important topic IMO

I don't think centralization is a good idea.

The cryptocurrency grave yard is littered with centralized schemes. Make no mistake that there is enough pressure already IMO on I3 to be indicted for securities violations, whether that is the case will be up to a court to decide. You have taken steps to stop the regulators from stopping your work, but they can arrest you and accuse you at any time. They know they have a better than 80% chance to get a conviction at trial, just because of the psychology of an authority saying you did something wrong. I can deal with that element of centralization, but just barely.

I think that any trustee that reveals their identity and lives in a country with strong financial regulations, such as the US, will go to jail for operating with out a license, selling securities with out a license, conspiracy to commit security fraud, money transmission without a licence, running a money services business without a license, the litany of charges will go on forever in some cases.

This will basically only leave trustees in countries where regulations are lax to operate the trustee scheme. This type of system will ensure that wall street and most of main street will not participate. This is bad for my and others' investment in PTS,AGS, and BTS. I will not participate in such a scheme, I believe the only reason that Bitcoin is any different than any prior is because of the blockchain decentralization invention. You are literally taking the greatest invention of the century and throwing it out the window for centralized control. Make no mistake you are taking a step backward.

If you are serious about this thing you have created, you would spend the time to do it right. Satoshi took years crafting his system, you can't take a few extra months?
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Offline jae208

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Re: BitShares X Trustee
« Reply #7 on: March 29, 2014, 07:54:29 am »
I know I'm cross posting but this is an important topic IMO

I don't think centralization is a good idea.

The cryptocurrency grave yard is littered with centralized schemes. Make no mistake that there is enough pressure already IMO on I3 to be indicted for securities violations, whether that is the case will be up to a court to decide. You have taken steps to stop the regulators from stopping your work, but they can arrest you and accuse you at any time. They know they have a better than 80% chance to get a conviction at trial, just because of the psychology of an authority saying you did something wrong. I can deal with that element of centralization, but just barely.

I think that any trustee that reveals their identity and lives in a country with strong financial regulations, such as the US, will go to jail for operating with out a license, selling securities with out a license, conspiracy to commit security fraud, money transmission without a licence, running a money services business without a license, the litany of charges will go on forever in some cases.

This will basically only leave trustees in countries where regulations are lax to operate the trustee scheme. This type of system will ensure that wall street and most of main street will not participate. This is bad for my and others' investment in PTS,AGS, and BTS. I will not participate in such a scheme, I believe the only reason that Bitcoin is any different than any prior is because of the blockchain decentralization invention. You are literally taking the greatest invention of the century and throwing it out the window for centralized control. Make no mistake you are taking a step backward.

If you are serious about this thing you have created, you would spend the time to do it right. Satoshi took years crafting his system, you can't take a few extra months?

How much for your PTS, AGS and BTS? I think BM mentioned that the trustee can operate through tor. If no one wants to be a trustee I volunteer, even though I live in the United States. We don't really know if Satoshi took years crafting his system. Bitcoin was released in 2009 after the 2008 nonsense that happened. Maybe he only took a year to develop Bitcoin which was only possible because the enabling factors were in place, research by other people looking create such a system who perhaps didn't because they were too timid. Fortune favors the bold.

The greats of history sometimes committed treason of the highest order such as the founders of America for the betterment of mankind. The founders of the United States turned against the most power empire at the time, they didn't ask for permission from the British. Same dynamic is at play right now. We don't need to ask for permission to do what we are doing.

Anyways, the IRS has said that it views Bitcoin as property and will be taxed as such. How many people do you think will actually file their Bitcoin earnings? I sure didn't and I'm sure the majority of people won't either. The lack of regulation or licenses sure didn't stop people form accepting and purchasing Bitcoin. I think the same think will happen here with Bitshares.
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Offline cryptosig

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Re: BitShares X Trustee
« Reply #8 on: March 29, 2014, 08:41:26 am »
I know I'm cross posting but this is an important topic IMO

I don't think centralization is a good idea.

The cryptocurrency grave yard is littered with centralized schemes. Make no mistake that there is enough pressure already IMO on I3 to be indicted for securities violations, whether that is the case will be up to a court to decide. You have taken steps to stop the regulators from stopping your work, but they can arrest you and accuse you at any time. They know they have a better than 80% chance to get a conviction at trial, just because of the psychology of an authority saying you did something wrong. I can deal with that element of centralization, but just barely.

I think that any trustee that reveals their identity and lives in a country with strong financial regulations, such as the US, will go to jail for operating with out a license, selling securities with out a license, conspiracy to commit security fraud, money transmission without a licence, running a money services business without a license, the litany of charges will go on forever in some cases.

This will basically only leave trustees in countries where regulations are lax to operate the trustee scheme. This type of system will ensure that wall street and most of main street will not participate. This is bad for my and others' investment in PTS,AGS, and BTS. I will not participate in such a scheme, I believe the only reason that Bitcoin is any different than any prior is because of the blockchain decentralization invention. You are literally taking the greatest invention of the century and throwing it out the window for centralized control. Make no mistake you are taking a step backward.

If you are serious about this thing you have created, you would spend the time to do it right. Satoshi took years crafting his system, you can't take a few extra months?

How much for your PTS, AGS and BTS? I think BM mentioned that the trustee can operate through tor. If no one wants to be a trustee I volunteer, even though I live in the United States. We don't really know if Satoshi took years crafting his system. Bitcoin was released in 2009 after the 2008 nonsense that happened. Maybe he only took a year to develop Bitcoin which was only possible because the enabling factors were in place, research by other people looking create such a system who perhaps didn't because they were too timid. Fortune favors the bold.

The greats of history sometimes committed treason of the highest order such as the founders of America for the betterment of mankind. The founders of the United States turned against the most power empire at the time, they didn't ask for permission from the British. Same dynamic is at play right now. We don't need to ask for permission to do what we are doing.

Anyways, the IRS has said that it views Bitcoin as property and will be taxed as such. How many people do you think will actually file their Bitcoin earnings? I sure didn't and I'm sure the majority of people won't either. The lack of regulation or licenses sure didn't stop people form accepting and purchasing Bitcoin. I think the same think will happen here with Bitshares.

I can't sell them to you. You would not pass the KYC/AML due diligence requirement, since you just admitted that you are breaking or are trying to break several laws including tax evasion. If I did find out your name, through the KYC/AML process, I would be forced to report you to the IRS or risk being a conspirator as per FINCEN regulations on money laundering. I don't need to end up like poor old Charlie.
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Offline jae208

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Re: BitShares X Trustee
« Reply #9 on: March 29, 2014, 09:01:09 am »
I know I'm cross posting but this is an important topic IMO

I don't think centralization is a good idea.

The cryptocurrency grave yard is littered with centralized schemes. Make no mistake that there is enough pressure already IMO on I3 to be indicted for securities violations, whether that is the case will be up to a court to decide. You have taken steps to stop the regulators from stopping your work, but they can arrest you and accuse you at any time. They know they have a better than 80% chance to get a conviction at trial, just because of the psychology of an authority saying you did something wrong. I can deal with that element of centralization, but just barely.

I think that any trustee that reveals their identity and lives in a country with strong financial regulations, such as the US, will go to jail for operating with out a license, selling securities with out a license, conspiracy to commit security fraud, money transmission without a licence, running a money services business without a license, the litany of charges will go on forever in some cases.

This will basically only leave trustees in countries where regulations are lax to operate the trustee scheme. This type of system will ensure that wall street and most of main street will not participate. This is bad for my and others' investment in PTS,AGS, and BTS. I will not participate in such a scheme, I believe the only reason that Bitcoin is any different than any prior is because of the blockchain decentralization invention. You are literally taking the greatest invention of the century and throwing it out the window for centralized control. Make no mistake you are taking a step backward.

If you are serious about this thing you have created, you would spend the time to do it right. Satoshi took years crafting his system, you can't take a few extra months?

How much for your PTS, AGS and BTS? I think BM mentioned that the trustee can operate through tor. If no one wants to be a trustee I volunteer, even though I live in the United States. We don't really know if Satoshi took years crafting his system. Bitcoin was released in 2009 after the 2008 nonsense that happened. Maybe he only took a year to develop Bitcoin which was only possible because the enabling factors were in place, research by other people looking create such a system who perhaps didn't because they were too timid. Fortune favors the bold.

The greats of history sometimes committed treason of the highest order such as the founders of America for the betterment of mankind. The founders of the United States turned against the most power empire at the time, they didn't ask for permission from the British. Same dynamic is at play right now. We don't need to ask for permission to do what we are doing.

Anyways, the IRS has said that it views Bitcoin as property and will be taxed as such. How many people do you think will actually file their Bitcoin earnings? I sure didn't and I'm sure the majority of people won't either. The lack of regulation or licenses sure didn't stop people form accepting and purchasing Bitcoin. I think the same think will happen here with Bitshares.

I can't sell them to you. You would not pass the KYC/AML due diligence requirement, since you just admitted that you are breaking or are trying to break several laws including tax evasion. If I did find out your name, through the KYC/AML process, I would be forced to report you to the IRS or risk being a conspirator as per FINCEN regulations on money laundering. I don't need to end up like poor old Charlie.

You don't need to know me. KYC doesn't apply to private parties I am not buying from an exchange if I buy from you am I? You aren't in the business of exchanging fiat for crypto are you? Send me a BTC address and this exchange will be prompt.
Any tax laws are basically unenforceable when it comes to cryptocurrency/crypto-equity. Just like any charges of 'theft' are unenforceable when it comes to downloading movies or songs from something like the piratebay.
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Offline cryptosig

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Re: BitShares X Trustee
« Reply #10 on: March 29, 2014, 09:33:54 am »
Any transaction of this size requires a AML/KYC and unless you are in a state that does not require a MTL, that would be needed as well.

"An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. "

"An administrator or exchanger that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency for any reason is a money transmitter under FinCEN's regulations, unless a limitation to or exemption from the definition applies to the person."

"FinCEN's regulations provide that whether a person is a money transmitter is a matter of facts and circumstances. The regulations identify six circumstances under which a person is not a money transmitter, despite accepting and transmitting currency, funds, or value that substitutes for currency. 31 CFR § 1010.100(ff)(5)(ii)(A)-(F). "

FINCEN on one time transactions:
"At one time. For purposes of § 1010.340 of this part, a person who transports, mails, ships or receives; is about to or attempts to transport, mail or ship; or causes the transportation, mailing, shipment or receipt of monetary instruments, is deemed to do so “at one time” if:
(1) That person either alone, in conjunction with or on behalf of others;
(2) Transports, mails, ships or receives in any manner; is about to transport, mail or ship in any manner; or causes the transportation, mailing, shipment or receipt in any manner of;
(3) Monetary instruments;
(4) Into the United States or out of the United States;
(5) Totaling more than $10,000;
(6)
(i) On one calendar day; or"
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Offline liondani

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Re: BitShares X Trustee
« Reply #11 on: March 29, 2014, 07:05:04 pm »
keep writing, we have time for reading posts like this  +5%
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Offline vlight

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Re: BitShares X Trustee
« Reply #12 on: March 29, 2014, 09:13:48 pm »
At first i was against the 'trustee' idea. However, if you think about it, it is really not more centralizing it is actually less.

The real life analogy to this is government. It is a necessary evil(or good  ;)). If you will not elect the gov, someone else will take its place anyway. In crypto world mining pools took the role of gov and became the rulers.

By delegating the Trustee, the network will have its gov already in place with a clearly defined role and restrictions that WILL be enforced by the network itself. I think it is better than mining pools having their own way.

However, whether network with Trustee will work or fail, that remains to be seen. I'm sure there will be some unexpected exploits.

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Re: BitShares X Trustee
« Reply #13 on: March 29, 2014, 11:10:10 pm »
Because you need one node to produce the block. With bitcoin the block producer is almost always going to be one of the mining pools with the greatest hash rate. I dont think it has to be one person necessarily, but I don't think you gain any security or utility with greater decentralization. It is just harder to coordinate which causes slower processing speeds. This structure appears centralized since there is one node that is delegated this task, but it really is decentralized by the fact that if you do not do your job as central processor someone else will immediately be given the job. This is decentralization through competition.

Offline bytemaster

Re: BitShares X Trustee
« Reply #14 on: March 30, 2014, 02:25:08 am »
You are wrong. It can be fast with more trustee nodes as well. One trustee = trouble. Sorry for being brief driving right now. You need a contingency plan if that one trustee can no longer operate


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