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Offline fuzzy


As a wise man once said, "just shoot me now".

https://www.youtube.com/watch?v=iy7NEAraUVI#t=230
« Last Edit: April 22, 2014, 10:47:33 AM by fuznuts »
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Offline JoeyD

Dr. A. Back is quite active on the bitcoin reddit discussing the sidechain project. From that discussion I gathered that there is actually no limitation to the type of blockchain you can "peg" onto the bitcoin-mainchain, so for the sidechains ASICS are not obligatory. Also since the whole idea is to stop minting of new bitcoin-tokens and only transaction fees to keep these sidechains running, convincing mining-pools to merge mine, might be more difficult than going with a different model like NXT-forging or bitshares-DPOS.

I don't like mining centralization and also have issues with the high energy cost for just security, but I do think this is a pretty clever and clean way to use the available hashing-power for bitcoin. Now that scrypt has ASICS and ostensibly asic-resistance on pow-chains is futile, this is a way to increase efficiency a bit for that model (even if it increases centralization).

I think I mentioned this before, but I do think bitshares should be very alert to the possibility of being copied and Borg-ed into sidechains and in my opinion should supervise the Borg-assimilation itself. Not in the last place because these sidechains also seem to allow easy forking or transformation of bitcoin to a different blockchain-design. If a sidechain becomes more popular than the main-chain I would expect that sidechain would become the new mainchain and this seems to open up possibilities for bitshares and DPOS as well. In short if bitshares-projects are going to be assimilated anyway, why not let bitshares try assimilating bitcoin?  Also the sidechain 2-way-peg-solution might also offer another way to move between the different DAC-chains of bitshares and open up another range of possibilities.

Offline toast

The dream is every blockchain supports cross-chain trading and so the competition is over who gets to be a central hub. If asset values can move between chains it comes down to technical advantages or disadvantages.

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Offline santaclause102

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What I didn't get about the blockchain 2.0 thing is...
- What incentive does a developer have to issue his coin/DAC as a bitcoin sidechain? There is the benefit of the network effect but how can he personally monetize his efforts? Just by owning a lot of BTC himself - increasing the value BTC because the Bitcoin network is used more?
-  How efficient can a sidechain DAC be? Efficient here as a function of: Confirmation times, tx fees (without diluting the own coins) and network security? Can it be faster/less costly/more secure than Bitcoin transactions?

Offline JoeyD

What I didn't get about the blockchain 2.0 thing is...
- What incentive does a developer have to issue his coin/DAC as a bitcoin sidechain? There is the benefit of the network effect but how can he personally monetize his efforts? Just by owning a lot of BTC himself - increasing the value BTC because the Bitcoin network is used more?
-  How efficient can a sidechain DAC be? Efficient here as a function of: Confirmation times, tx fees (without diluting the own coins) and network security? Can it be faster/less costly/more secure than Bitcoin transactions?

- Sidechains can build in any incentives they want, including a percentage to devs instead of miners. The sidechains are not beholden to bitcoins limitations.
- Apparently as efficient as anyone is able to code it. Yes.

bitbro

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What I didn't get about the blockchain 2.0 thing is...
- What incentive does a developer have to issue his coin/DAC as a bitcoin sidechain? There is the benefit of the network effect but how can he personally monetize his efforts? Just by owning a lot of BTC himself - increasing the value BTC because the Bitcoin network is used more?
-  How efficient can a sidechain DAC be? Efficient here as a function of: Confirmation times, tx fees (without diluting the own coins) and network security? Can it be faster/less costly/more secure than Bitcoin transactions?

- Sidechains can build in any incentives they want, including a percentage to devs instead of miners. The sidechains are not beholden to bitcoins limitations.
- Apparently as efficient as anyone is able to code it. Yes.

Then what are the drawbacks?


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Offline toast

We can have a standalone exchange chain with both CTT with bitshares and two-way bitBTC/BTC peg.

Best case scenario... bitcoin massively diluted by bitbtc for bts holder gain.

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Offline santaclause102

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What I didn't get about the blockchain 2.0 thing is...
- What incentive does a developer have to issue his coin/DAC as a bitcoin sidechain? There is the benefit of the network effect but how can he personally monetize his efforts? Just by owning a lot of BTC himself - increasing the value BTC because the Bitcoin network is used more?
-  How efficient can a sidechain DAC be? Efficient here as a function of: Confirmation times, tx fees (without diluting the own coins) and network security? Can it be faster/less costly/more secure than Bitcoin transactions?

- Sidechains can build in any incentives they want, including a percentage to devs instead of miners. The sidechains are not beholden to bitcoins limitations.
- Apparently as efficient as anyone is able to code it. Yes.

Quote
The sidechains are not beholden to bitcoins limitations.
If that relates to the tx times, tx fees and security: How can that be? I thought that with the bitcoin 2.0 approach security and tx conformation is still provided by the bitcoin network / by bitcoin miners and that is costly and slow and only as secure as mining pools are not corrupted.

Different question: What are the DAC/Coin value determining factors for the "altcoin" on the side cain? Assuming the following: BTC appreciate in value/price because they are used much and the amount of btc in supply is limited, respectively because a high volume in tx are assumed for the future. Now, in order to access the service that the DAC/Coin on the sidechain is offering, do I have to use the sidechain coin as well as bitcoin?   

Offline bytemaster

Lets break this down to the basics at the risk of creating a straw man design:

Step 1) In Bitcoin chain, suspend coins on main bitcoin block chain
Step 2) In Sidechain,  verify that the coins were suspended in bitcoin chain using light weight validation.
Step 3) Time Passes
Step 4) In Sidechain,  issue transaction that provably destroys coins.
Step 5) In Bitcoin chain, given transaction that provably destroys coins, restore bitcoins.

Assumptions:
1) Bitcoin blockchain is secure and has insurmountable hashpower
2) Side chains only need the bitcoin block headers to validate incoming transfers
3) Bitcoin miners need headers of side chains to validate Step 5
    - with proof of stake coins, headers alone may not be sufficient for light weight clients because full block contents is necessary to know who should be signing for each block.
    - this means miners will have to rely on some kind of block explorer....
    - all bitcoin miners must be able to validate all transactions.... which means that side chains require 51% support of the miners. 

Conclusion:
  Bitcoin miners determine which side chains get supported.
  Bitcoin miners are centralized which means experimentation will be limited.
  Miners would have to voice support for a side chain and only allow transactions in/out of the side chain while 51% of blocks are produced by miners that claim to recognize the side chain.

So while steps 1 through 5 sound spiffy in theory, I believe that the only way to solve step 4 to 5 in a reasonable way is to assume that all side chains are also secured by proof-of-work which can be used as the simple, generic, validation measure.   This means that side chains must be merge-mining based.   I think this is a case of them making bold claims without actually walking through the details.

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 toast

Do you think they will enable a sidechain that has either CTT or two-way peg to a chain with BitBTC?
What happens then?
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Offline JoeyD

If that relates to the tx times, tx fees and security: How can that be? I thought that with the bitcoin 2.0 approach security and tx conformation is still provided by the bitcoin network / by bitcoin miners and that is costly and slow and only as secure as mining pools are not corrupted.

The sidechain is a completely separate blockchain but the tokens on that chain are mathematically anchored in smart-contracts on the bitcoin-main-chain. But tx-fees, tx-times, security etc are all independent from the bitcoin-mainchain. Dr. A. Back calls it firewalled. So any experimentation on the sidechain will have no detrimental effect on bitcoin. The sidechain is able to interact with those smart-contracts on the bitcoin mainchain. Only the crossover from main-chain into sidechain or vice-versa will have a preset confirmation delay on the bitcoin-mainchain for security, but exchanging bitcoins for side-chain-bitcoins would also be possible.

Different question: What are the DAC/Coin value determining factors for the "altcoin" on the side cain? Assuming the following: BTC appreciate in value/price because they are used much and the amount of btc in supply is limited, respectively because a high volume in tx are assumed for the future. Now, in order to access the service that the DAC/Coin on the sidechain is offering, do I have to use the sidechain coin as well as bitcoin?   

The use of sidechains is for things bitcoins main-chain is not ideal and offers a clean solution instead of cluttering the bitcoin-mainchain with piggy-backing coins. So the value comes from use and technical superiority of those sidechains, not from pumping and dumping or minting of new (alt)coins.

EDIT
BM and toast posted while I was writing this, so there is probably more educated information in their posts. Also I'd suggest reading the reddit-threads on the subject from reactions from the Adam Back and bitcoin core-devs.
« Last Edit: April 22, 2014, 06:40:11 PM by JoeyD »

Offline santaclause102

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The sidechain is a completely separate blockchain but the tokens on that chain are mathematically anchored in smart-contracts on the bitcoin-main-chain. But tx-fees, tx-times, security etc are all independent from the bitcoin-mainchain. Dr. A. Back calls it firewalled. So any experimentation on the sidechain will have no detrimental effect on bitcoin. The sidechain is able to interact with those smart-contracts on the bitcoin mainchain. Only the crossover from main-chain into sidechain or vice-versa will have a preset confirmation delay on the bitcoin-mainchain for security, but exchanging bitcoins for side-chain-bitcoins would also be possible.
How would those smart contracts be structured that you mentioned?

Offline JoeyD

The sidechain is a completely separate blockchain but the tokens on that chain are mathematically anchored in smart-contracts on the bitcoin-main-chain. But tx-fees, tx-times, security etc are all independent from the bitcoin-mainchain. Dr. A. Back calls it firewalled. So any experimentation on the sidechain will have no detrimental effect on bitcoin. The sidechain is able to interact with those smart-contracts on the bitcoin mainchain. Only the crossover from main-chain into sidechain or vice-versa will have a preset confirmation delay on the bitcoin-mainchain for security, but exchanging bitcoins for side-chain-bitcoins would also be possible.
How would those smart contracts be structured that you mentioned?
Unfortunately I'm not qualified to be part of the development team, all I can do is repeat what I've read and heard about the project and given that the project hasn't even officially started yet that isn't much. From what I've read it seems to work the way ByteMaster described it, but no exact details have been published as far as I know. There seems to have been some discussion on the subject via mailing lists. The only things that have come out is that Dr. Adam Back as inventor of bitcoins POW-mechanic and household name in the CypherPunk community is not some nobody without a track record and that they were able to work out the math and convince even the skeptics among the bitcoin core-devs.

However as ByteMaster pointed out, working out the technical solution (which they most likely are able to do) does not mean there will be no practical issues going forward. Then again, things are not looking all that bright for many of the POW-alt-coins out there, especially the simpler ones like litecoin and such.

Offline santaclause102

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The sidechain is a completely separate blockchain but the tokens on that chain are mathematically anchored in smart-contracts on the bitcoin-main-chain. But tx-fees, tx-times, security etc are all independent from the bitcoin-mainchain. Dr. A. Back calls it firewalled. So any experimentation on the sidechain will have no detrimental effect on bitcoin. The sidechain is able to interact with those smart-contracts on the bitcoin mainchain. Only the crossover from main-chain into sidechain or vice-versa will have a preset confirmation delay on the bitcoin-mainchain for security, but exchanging bitcoins for side-chain-bitcoins would also be possible.
How would those smart contracts be structured that you mentioned?
Unfortunately I'm not qualified to be part of the development team, all I can do is repeat what I've read and heard about the project and given that the project hasn't even officially started yet that isn't much. From what I've read it seems to work the way ByteMaster described it, but no exact details have been published as far as I know. There seems to have been some discussion on the subject via mailing lists. The only things that have come out is that Dr. Adam Back as inventor of bitcoins POW-mechanic and household name in the CypherPunk community is not some nobody without a track record and that they were able to work out the math and convince even the skeptics among the bitcoin core-devs.

However as ByteMaster pointed out, working out the technical solution (which they most likely are able to do) does not mean there will be no practical issues going forward. Then again, things are not looking all that bright for many of the POW-alt-coins out there, especially the simpler ones like litecoin and such.
Thanks!

Offline luckybit

What I didn't get about the blockchain 2.0 thing is...
- What incentive does a developer have to issue his coin/DAC as a bitcoin sidechain? There is the benefit of the network effect but how can he personally monetize his efforts? Just by owning a lot of BTC himself - increasing the value BTC because the Bitcoin network is used more?
-  How efficient can a sidechain DAC be? Efficient here as a function of: Confirmation times, tx fees (without diluting the own coins) and network security? Can it be faster/less costly/more secure than Bitcoin transactions?

- Sidechains can build in any incentives they want, including a percentage to devs instead of miners. The sidechains are not beholden to bitcoins limitations.
- Apparently as efficient as anyone is able to code it. Yes.

How can you free yourself from the technical limitations of Bitcoin if you're a sidechain? Please explain this.

Also how do developers make money from the process? How does crowd funding take place?
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