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Offline luckybit


This is a question to the community about Proof of Stake in general.

I realize DPoS has delegates and that we can shuffle the delegates as a way to keep it somewhat decentralized. It's still Pay-to-Win as a distribution model but it's not as bad as Bitcoin because at least there is some small statistical possibility that you could become a delegate.

The reason Pay-to-Win is a problem is because the gaming community does not generally view Pay-to-Win as fair. Because it is not viewed as fair play it is not considered fun and as a result the games which seem more fair tend to attract the attention of the masses.

Bringing Bitshares technology to the masses and the problem of Ultimate Champions

How do we market Bitshares technology to the global masses? The global masses all want to feel like they have a chance to win and if the only way to play the game is to pay and the people who pay the most win by default every time then the previous winners become ultimate champions who no one can afford to defeat.

Worst of all it can open Bitshares up to the 1% attack where whoever has the most money on earth could simply buy the stakes all up. I recognize this attack is really only theoretical and rhetorical but it means if it's a guaranteed victory for rich players via Pay-to-Win then it's only a matter of time before centralization of wealth does occur.

Pros and Cons of the Pay-to-Win distribution model

There are Pros and Cons to keeping the Pay-to-Win. In the short term it could make some of the large holders on the forum very rich a lot quicker and easier. In general a person seeking to get rich may not care about the future of the technology itself and may just be waiting to cash out when traditional banks figure out they have to buy the shares, Bitcoins, or whatever.

On the other hand the long term consequence of Pay-to-Win is that you will not be able to market it to the masses. People outside of the first world do not want Pay-to-Win and people within the first world who don't have very much to pay still want a chance to win.

So this post is to initiate a discussion on the flaw of PoS (or feature if you're trying to get rich quick) which is PtW.  What should be done about this or should we embrace it?



« Last Edit: July 02, 2014, 03:52:02 AM by luckybit »
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Offline liondani

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #1 on: July 02, 2014, 07:37:51 AM »
I agree.
That's why I think some steps must be taken like...

1) Dynamic number of delegates so more opportunities for the masses to be delegates and not only the few....  https://bitsharestalk.org/index.php?topic=5317.0
2) max delegates per person (I don't know how it is possible) maybe keyhotee would help or max delegates per wallet or something like that.... So it will get't at least very difficult to get centralized from a few rich actors....
3) Choose a percentage of standby delegates (like 20% or 30%) randomly on each block. (so anybody from the masses has the opportunity to participate actively )
4)......
5) make your suggestions.....
6)...
.
« Last Edit: July 02, 2014, 07:50:05 AM by liondani »
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Offline luckybit

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #2 on: July 02, 2014, 07:42:11 AM »
I agree.
That's why I think some steps must be taken like...

1) Dynamic number of delegates so more opportunities for the masses to be delegates and not only the few....  https://bitsharestalk.org/index.php?topic=5317.0
2) max delegates per person (I don't know how it is possible) maybe keyhotee would help or max delegates per wallet or something like that.... So it will get't at least very difficult to get centralized from a few rich actors....
3) Choose a percentage of active delegates (like 20% or 30%) randomly on each block.
4)......
5) make your suggestions.....
6)...
.

How about a provably fair delegate lottery every certain amount of days? Invite anyone to enter from around the world and select the delegates at random.

The political methods in my opinion ultimately lead to centralization of power. It might work for now because we are a small community but it's not going to scale if the market cap is in the trillions. Some corporations are going to start buying people out of these roles and then putting their own people into them.

As long as its not obvious that the same group of people are always having the power over all the DACs like it is with Bitcoin mining then statistically your odds are better that it wont be corrupted because the cost of doing so would become too high.
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Offline liondani

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #3 on: July 02, 2014, 07:48:36 AM »
How about a provably fair delegate lottery every certain amount of days? Invite anyone to enter from around the world and select the delegates at random.

3) Choose a percentage of active delegates (like 20% or 30%) randomly on each block.
(sorry I meant standby not active....)

Quote
The political methods in my opinion ultimately lead to centralization of power. It might work for now because we are a small community but it's not going to scale if the market cap is in the trillions. Some corporations are going to start buying people out of these roles and then putting their own people into them.

this!
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Offline luckybit

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #4 on: July 02, 2014, 07:49:22 AM »
The cost of a hostile take over is whatever the community would accept to be bought out. So if there are 1000 people who are delegates of all the DPoS DACs 5 years from now and the market cap is in the trillions then if each delegate is offered 100 million dollars they'd sell their private key.

100 billion dollars could be all it takes to buy the entire community out. That sounds like a fortune because for us it would be and considering Bitcoin has less than a 10 million dollar market cap it seems like it is. The potential market cap for Bitshares is in the trillions not billions of dollars.

Do we think it can scale? I don't think Bitcoin with it's mining will scale because miners will start getting rich and why would they want to let go? How would it be different than a digital Wall Street firm?
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Offline Troglodactyl

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Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #5 on: July 02, 2014, 01:13:02 PM »
Are you getting to "pay to win" by assuming people only vote/approve themselves as delegates?

Not everyone needs to be a delegate, but anyone can be elected as a delegate if they can convince other stakeholders to approve them.  It should be more about reputation than money.

Maximum number of delegates per person I don't think can be limited without forcing everyone to prove their identity and taking DNA samples or something, and without that, random selection of registered delegates becomes "spam to win".

Offline liondani

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #6 on: July 02, 2014, 01:56:38 PM »
random selection of registered delegates becomes "spam to win".

1. random only for a percentage of total delegates
2. spam will be costly because of delegate fees... spammers(maybe buzz creators) are welcome if they pay.
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Offline bytemaster

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #7 on: July 02, 2014, 02:12:58 PM »
We don't want to dilute the delegate pool or introduce too much entropy when you consider that the role of delegates should be much greater than simply running a node. 

Increasing the number of delegates you can vote for introduces huge network costs (transaction fees)

Randomly selecting a subset of delegates introduces new attack vectors whereby you can randomly select a slate of delegates that gives an attacker 51%

It isn't possible to use outside metrics (such as unique nodes, physical IDs, etc) for block-chain security without introducing a ton of centralization / control.

This whole "fairness" argument is completely bunk and is effectively:  "everyone should have the right to job X because job X pays well and thus it should be time-shared".

This isn't "pay-to-win" this is more like a "popularity contest" where the winner is whoever shareholders like the most and not who has the most money.   I could see a charity delegate winning... delegates can win by offering to "work for free".   

The real issues that needs to be remembered is that the value of capital accumulation / centralization is non-linear.  Take $7 billion dollars and give everyone in the world $1 and how much will get done?    Take $7 billion dollars and give it to a company like Apple and how much can get done?      Take a startup company with a fixed budget and try to hire 1000 people at $100 / year or one person at $100,000 per year and which company will get more done?

So those who are arguing Pay-to-Win as a fault are doing so based upon envy and not based upon economics or reason.   The most I can grant them is that the general population is as ignorant as they are and that it could result in complaints.   Ultimately the complainers are not justification for creating an economically inviable system and instead should be viewed as a marketing challenge and perception management.

Focus instead on:
1) Anyone can become a delegate if they can convince enough people to support them.
2) Equal opportunity
3) Everyone gets a voice





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Offline emski

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Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #8 on: July 02, 2014, 02:19:33 PM »
Copy/paste from my post originating here https://bitsharestalk.org/index.php?topic=5205.75

Any group controlling 51% stake can elect all delegates.
Controlling all the delegates enables you to :
1 No fees for your own transactions - even if the fees exist they come back to the controlling party
2 Increase transaction taxes for the rest of the world. - This could be made looking non-suspicious by generating large amounts of dummy transactions (free due to 1).
3 Banning lists of addresses from using the network at all. (while not processing their transactions effectively robbing them of their stake)

Offline CLains

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Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #9 on: July 02, 2014, 05:47:13 PM »
Agree with bytemaster here. I don't really understand the problems you guys raise.

Why is being a delegate being a winner? It is a job that you are voted into by the shareholders. Normal shareholders just want their shares to go up. People who use the DAC just wants the service it provides as cheaply as possible.

The checks we have on delegates being responsible, incorruptible, open, honest, is through shareholder votes. Is it not enough?

If someone buys up a lot of shares to vote for their delegates the price of the whole system goes up, and their money is as tied to the success of the network as anyone else. If someone buys up all of the delegates - or blackmails/threatens them - without any of this being detected, then the shareholders likely did a horrible job voting for delegates?

That being said, if there is no incentive to vote on delegates then shareholders might do a horrible job at voting. If there are too few delegates they can all be coerced/bought, and if there are too many the network will be slow. Dynamic number is better than magic numbers, but evolution through testing seems to be the only way to fine-tune all things considered.


Offline luckybit

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #10 on: July 02, 2014, 08:13:15 PM »
The real issues that needs to be remembered is that the value of capital accumulation / centralization is non-linear.  Take $7 billion dollars and give everyone in the world $1 and how much will get done?    Take $7 billion dollars and give it to a company like Apple and how much can get done?      Take a startup company with a fixed budget and try to hire 1000 people at $100 / year or one person at $100,000 per year and which company will get more done?

So those who are arguing Pay-to-Win as a fault are doing so based upon envy and not based upon economics or reason.   The most I can grant them is that the general population is as ignorant as they are and that it could result in complaints.   Ultimately the complainers are not justification for creating an economically inviable system and instead should be viewed as a marketing challenge and perception management.

Focus instead on:
1) Anyone can become a delegate if they can convince enough people to support them.
2) Equal opportunity
3) Everyone gets a voice

What I know from the gaming community is that the players and culture around it has determined that Pay-to-Win isn't fun. They vote with their dollars and time and typically choose the games which they perceive as being fair.

Whether or not it's economical isn't entering the minds of the players. The players for instance don't play Diablo because it's good for the economy or to make Blizzard rich but to have fun playing it. It's all on the forums to see for yourself.

https://us.battle.net/d3/en/forum/topic/9882019032
https://us.battle.net/d3/en/forum/topic/9165847048
http://us.battle.net/wow/en/forum/topic/11298399749?page=1
http://www.reddit.com/r/wow/comments/1ym140/blizzard_world_of_warcraft_is_not_going_to_become/

So you can see that the sentiment isn't coming from me and that I'm not making it up. It's an observation of gaming culture and I think it is important for the Bitshares community and for technology in general to appeal to this demographic. If we can't get gamers how are we supposed to win  and who are we going to attract instead?

I find it bizarre that we would want to try to appeal to Apple consumers when Apple specifically banned Bitcoin for the longest time. It's a strategy which could work but I think getting gamers is a lot easier and I think a lot of miners are also gamers which could explain the popularity of mining.

Agree with bytemaster here. I don't really understand the problems you guys raise.

Why is being a delegate being a winner? It is a job that you are voted into by the shareholders. Normal shareholders just want their shares to go up. People who use the DAC just wants the service it provides as cheaply as possible.

The checks we have on delegates being responsible, incorruptible, open, honest, is through shareholder votes. Is it not enough?

If someone buys up a lot of shares to vote for their delegates the price of the whole system goes up, and their money is as tied to the success of the network as anyone else. If someone buys up all of the delegates - or blackmails/threatens them - without any of this being detected, then the shareholders likely did a horrible job voting for delegates?

That being said, if there is no incentive to vote on delegates then shareholders might do a horrible job at voting. If there are too few delegates they can all be coerced/bought, and if there are too many the network will be slow. Dynamic number is better than magic numbers, but evolution through testing seems to be the only way to fine-tune all things considered.

It's not a problem for now. You're not looking for enough ahead.

Today our community is small so we cannot see problems with the way things are because it's only maybe 5000 people on the forum and less than 20,000 (I'm being generous) who will use Bitshares and who know what it is.

My opinion is that with a small community like this of course what we are doing is going to look good in an echo chamber. If we want mass appeal I believe we have to do something different because the earth has around 7 billion people and the vast majority don't have enough money to win.

If it's Pay-to-Win then the vast majority of potential users are going to think it's unfair. They already think this in the gaming community which is where the phrase came from and if you Google Pay-to-Win you can see this is how the majority of gamers already think. They think if you do something Pay-to-Win it's a sign that somehow you're selling out and that it is unfair.

The problem is that in order to grow long term and be used by all people in the world the DPoS technology and Bitshares brand must appeal to all kinds of players. This includes the players who don't like Pay-to-Win. Today Bitshares appeals to people like us, and do you really think there are enough people like us in the world to make Bitshares a global phenomena?

We aren't like Apple because Apple has been around for a long time, has connections everywhere, has boatloads of cash to buy everyone out. We are like the startup community trying to create an industry and we have to target the demographics of early adopters which includes Apple consumers but is not exclusively Apple consumers.

These are my opinions, I offer them to encourage debate even if I'm in disagreement with Bytemaster.

« Last Edit: July 02, 2014, 08:26:19 PM by luckybit »
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Offline bytemaster

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #11 on: July 02, 2014, 08:17:41 PM »
I guess it depends on whether people view this as a game or an investment.
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Offline luckybit

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #12 on: July 02, 2014, 08:22:50 PM »
I guess it depends on whether people view this as a game or an investment.

This is a very good point. You do have a large demographic of investors who can be targeted.

I think to hobbyists mining at the time it is/was viewed as a game. I think the majority of miners have a different mindset. I think if you're dealing with day traders then it's an investment mindset.

We have to find a way to appeal to both if we want the trillion dollar market cap. It has to be fun enough that everyone will want to use some Bitshares software including the gaming community but the gaming community might not want to use Bitshares X initially unless they have a version which appeals to them.
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Offline bytemaster

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #13 on: July 02, 2014, 08:32:05 PM »
I guess it depends on whether people view this as a game or an investment.

This is a very good point. You do have a large demographic of investors who can be targeted.

I think to hobbyists mining at the time it is/was viewed as a game. I think the majority of miners have a different mindset. I think if you're dealing with day traders then it's an investment mindset.

We have to find a way to appeal to both if we want the trillion dollar market cap. It has to be fun enough that everyone will want to use some Bitshares software including the gaming community but the gaming community might not want to use Bitshares X initially unless they have a version which appeals to them.

It also depends upon the use case.   Is the market fair?  Is the gambling fair?   I think the users of the DAC can have a fair experience even if the DAC itself is run just like Blizzard (for profit). 
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 liondani

Re: Proof of Stake is currently Pay-to-Win, what should we do about it?
« Reply #14 on: July 02, 2014, 09:23:01 PM »
I guess it depends on whether people view this as a game or an investment.

many "investor's" actually are gamblers (of course they don't admit it....)
so integrating betting would be awesome...

Imagine the voters of delegates could bet XTS on them and win if they get to the top 101 (if they prediction is right they win) something like with bitshares-music,
you "bet" on an artist's and if they get popular you win...

Our "artist's" are our delegates and their "songs" are their equipment, their marketing etc. 
if our trusted delegates get "popular" (top 101) we win  ;)


PS when we click on thumb-up to to give our trust, give the option to bet XTS on them
     we win if they go up, we loose if they don't  (our loses are the win for others they made better predictions)
« Last Edit: July 02, 2014, 09:31:39 PM by liondani »
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