Author Topic: mesh networking, last mile problem, and BTSX  (Read 20786 times)

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Offline Method-X

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Quote from: fussyhands
Look.  I currently own a greater percentage of total BTSX supply than total BTC supply, so I'd be happy for BTSX to win.  (Not only for my financial position but because I believe it is a better system.)  I just don't think the arguments put forth for why it WILL win are very convincing.

I see your overall point and I'm glad you're asking these hard questions. You're saying the average user doesn't care about the technical details, they care about the benefits.

BTSX offers two very compelling benefits Bitcoin, by design, cannot:
  • Price stability
  • Yield
The technical details may not be relevant to the end user, but they allow for these two benefits.

Offline Stan

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I'm not sure what this interesting discussion has to do with the OP, but I'll resurrect my 0.02 bitUSD here to enrich the volatile fuel-air mix:


Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline arhag

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Yes I'm in favor of cryptocurrency.  Bitcoin drastically improves over legacy financial systems in transaction time, processing fees, fraud protection, freedom etc.  Those are differences that people will notice.  Bitshares makes modest improvements over Bitcoin in some areas, which people won't really notice.  (Really low fees vs. even lower fees.  Really fast transactions vs even faster transactions.  If you can accept Bitcoin transactions within a few seconds, as other have argued correctly in this thread, what difference does it ultimately make that confirmations are 10 minutes vs 10 seconds.  To the user:  none.)

You ignored the price stability and centralization arguments. Also, there is still a non-trivial risk of double spend with zero confirmation payments in Bitcoin. Given any fixed period of time, the probability of double spend is lower in DPOS than in POW. Looking at the difference in risk of double spend between BitShares X and Bitcoin in just a 20 second time period is absolutely amazing. I think this will appeal to merchants, especially since it along with price stability means they can cut out middlemen like BitPay. But fine, let's say you don't think that is a big deal. Fast transactions make the decentralized exchange possible. It would be too slow to run an exchange if the block intervals were 10 minutes. The decentralized exchange makes BitAssets and price stability possible. And of course it will be incredibly useful for later DAC functionality like trading cryptostock (remember BitShares is bigger than Bitcoin).

Also, your argument that the innovations of Bitcoin over traditional financial systems being more significant than the innovations of BitShares over Bitcoin don't make a lot of sense to me. From the perspective of an outsider in the traditional financial system, both BitShares' and Bitcoin's network effect look absolutely puny. I think it's the marginal benefit in the network effect that is going to seem insignificant to the outsider rather than the marginal benefit in the technology. If even a small fraction of outside wealth pours into BitShares (rather than Bitcoin because the technology advantages of BitShares makes it far more desirable to these outsiders), then BitShares can quickly gain network effect that rivals that of Bitcoin. So, I think it makes a lot more sense to target people who are currently outside the cryptocurrency community. And we have the technology to make it palatable to them: BitAssets with yields, TITAN, an exchange, etc.

No you are wrong.  Your first point says transaction fees will be lower for BTSX than for BTC.  I know that.  But BTC transaction fees can still fall with adoption as the price of security is spread out among more people.

The Bitcoin network currently spends approximately $500 million per year for its current level of security (based on current prices, and assuming profit margins from mining tend toward zero). And only about a $1 million per year of that is from transaction fees. This is for a market cap of approximately $5 billion. As the value of bitcoin grows, would we want more or less security protecting the network? If we want to keep the network security the same as it is today (which I think would be a bad idea if it gets really big) then you have a valid point. Eventually, as the coinbase reduces to zero, that $500 million has to come from somewhere. You need it to come from a 500x increase in total transaction fees. This shouldn't be a problem if we assume the total transaction fees accumulated grows with the transaction volume. Right now Bitcoin transaction volume is on average equal to approximately 1 tx/s. Let's say this gets to Visa/Mastercard levels (4000 tx/s). This means transaction fees could be reduced to 1/8 of their current cost (of course this analysis is not including additional costs to the servers for handling this scale, but let's consider that negligible to the cost of POW). But now do you really think it is realistic to keep the security of a potentially multiple trillion dollar network secured by only $500 million per year. If we wanted the security of Bitcoin to scale with its market cap (with the proportionality constant it has today), then at coinbase saturation and Visa/Mastercard levels of transaction volume, the Bitcoin network could only support a $40 billion market cap without needing to increase transaction fees. If it needed to get to a trillion dollar market cap with this level of security, the transaction fees would have to increase by more than an order of magnitude.

But again, maybe you think $4 billion per year of security is good enough for even a trillion dollar network. Fine, then you are correct, transaction fees don't need to increase. But so what. Why settle for mediocrity when they can get lower transaction fees with higher effective security by using DPOS. People will eventually stop being blinded by the Bitcoin delusion and realize this. I generally think people are irrational, but I don't think they are that irrational.

Facebook is a good example.  Google, one of the biggest companies in the world, made it their mission to unseat Facebook.  Fail.  Because of mindshare and network effects.  A social network is only as useful as the number of your friends using it.  Same with a currency.  A currency is only as useful as the number of people you need to pay and receive payment from who use it.  Bitcoin has a huge advantage.

Look.  I currently own a greater percentage of total BTSX supply than total BTC supply, so I'd be happy for BTSX to win.  (Not only for my financial position but because I believe it is a better system.)  I just don't think the arguments put forth for why it WILL win are very convincing.

Network effect is huge with currencies, I won't deny that. But look at the network effect of the US dollar. And yet, Bitcoin has the audacity to challenge that network effect. But you are saying it is unrealistic to expect BitShares to take on Bitcoin? I don't see why not, just like Facebook beat MySpace despite the fact that at one point in time MySpace was the place to go for a social network. And it is not impossible for a competitor to beat Facebook. Maybe it will be Google, maybe some other company, or maybe it will be a decentralized social network. Just because Facebook has over a billion users doesn't mean we will be stuck using it for the rest of eternity.

Of course, Bitcoin definitely has a huge advantage with their network effect, there is no denying that. But this space is incredibly competitive, and that coupled with the fact that nearly all Bitcoin supporters seem to be blind to the perils of POW means that a competitor like BitShares has IMHO a decent shot of growing quickly, sneaking up behind it, and eventually dethroning it. But of course I am biased.

My understanding of your position is that you believe in the technology of BitShares but are constantly questioning yourself regarding whether BTSX could succeed over BTC. I think a little bit of that doubt is a good thing. This is after all an incredibly risky investment and could blow up in all of our faces. So, as usual, it is important to not put in more than you can afford to lose. And maybe it makes sense to hedge between BTSX and BTC on the off chance that BTC users will all suddenly see the light and clone the BitShares toolkit but allocate to BTC holders. But I personally don't envision things developing that way.
« Last Edit: October 02, 2014, 02:22:13 am by arhag »

Offline fussyhands

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Didn't expect to have this discussion on the bitsharestalk forum, but okay...

That buys *a lot* more security than is needed.  The reality is block rewards are more a way to distribute coins at this point.  As block reward continues to halve it won't cause a huge problem for security.

The security per unit cost ratio of DPOS will always be better than POW because it is inherent in the consensus technology. Take whatever is the desirable level of security for both DACs, and it will be cheaper to provide that security on the DPOS DAC than the POW DAC (assuming irrational price speculation comes back to reality, or at least that the price speculation is equal on both DACs). In other words, during the saturation stage when adoption has saturated and there is no more inflation, the transaction fees in a POW DAC will necessarily be much higher than the transaction fees in a DPOS DAC (to provide the same level of security).

Yup.  I know that.

No price stability whatsoever(unless of course you pass by centralized  company Circus or Bitpay. Yes user care about centralize or not remember MtGox ?  )

No they don't, and they're right not to.  For most people their money is more secure with Circle or Coinbase then it would be if they tried to keep it in cold storage but messed something up.  People trust regulated, insured, american companies with good brand recognition, and lots of VC backing, and financial executives on their boards.  You and much of the libertarian cryptocurrency crowd doesn't, but most people do.

Wait, are you even in favor of cryptocurrency at all? Yes of course most people on this planet don't care about cryptocurrency at the moment. That will eventually change. And when it does people will want important features like price stability, fast transaction confirmations, and less centralization (all of which BitShares provides over Bitcoin). In fact, I would argue that they won't ever be interested in cryptocurrency if it didn't have those features (well at least the first two).

Yes I'm in favor of cryptocurrency.  Bitcoin drastically improves over legacy financial systems in transaction time, processing fees, fraud protection, freedom etc.  Those are differences that people will notice.  Bitshares makes modest improvements over Bitcoin in some areas, which people won't really notice.  (Really low fees vs. even lower fees.  Really fast transactions vs even faster transactions.  If you can accept Bitcoin transactions within a few seconds, as other have argued correctly in this thread, what difference does it ultimately make that confirmations are 10 minutes vs 10 seconds.  To the user:  none.)

Fees are likely to go bigger and bigger on bitcoin

opposite.

No, you are absolutely wrong about this. See my first point.

No you are wrong.  Your first point says transaction fees will be lower for BTSX than for BTC.  I know that.  But BTC transaction fees can still fall with adoption as the price of security is spread out among more people.

It's got a much much bigger problem.  Nobody has ever hear of it (apart from hardcore cryptonerds).  And nobody cares that it is better in a whole bunch of ways that don't matter at all to the user.

And there was a time when nobody ever heard of Bitcoin, or Facebook, or Google, or ... on and on and on.

Facebook is a good example.  Google, one of the biggest companies in the world, made it their mission to unseat Facebook.  Fail.  Because of mindshare and network effects.  A social network is only as useful as the number of your friends using it.  Same with a currency.  A currency is only as useful as the number of people you need to pay and receive payment from who use it.  Bitcoin has a huge advantage.

Look.  I currently own a greater percentage of total BTSX supply than total BTC supply, so I'd be happy for BTSX to win.  (Not only for my financial position but because I believe it is a better system.)  I just don't think the arguments put forth for why it WILL win are very convincing.
« Last Edit: October 02, 2014, 12:46:27 am by fussyhands »

Offline arhag

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Didn't expect to have this discussion on the bitsharestalk forum, but okay...

That buys *a lot* more security than is needed.  The reality is block rewards are more a way to distribute coins at this point.  As block reward continues to halve it won't cause a huge problem for security.

The security per unit cost ratio of DPOS will always be better than POW because it is inherent in the consensus technology. Take whatever is the desirable level of security for both DACs, and it will be cheaper to provide that security on the DPOS DAC than the POW DAC (assuming irrational price speculation comes back to reality, or at least that the price speculation is equal on both DACs). In other words, during the saturation stage when adoption has saturated and there is no more inflation, the transaction fees in a POW DAC will necessarily be much higher than the transaction fees in a DPOS DAC (to provide the same level of security).

No price stability whatsoever(unless of course you pass by centralized  company Circus or Bitpay. Yes user care about centralize or not remember MtGox ?  )

No they don't, and they're right not to.  For most people their money is more secure with Circle or Coinbase then it would be if they tried to keep it in cold storage but messed something up.  People trust regulated, insured, american companies with good brand recognition, and lots of VC backing, and financial executives on their boards.  You and much of the libertarian cryptocurrency crowd doesn't, but most people do.

Wait, are you even in favor of cryptocurrency at all? Yes of course most people on this planet don't care about cryptocurrency at the moment. That will eventually change. And when it does people will want important features like price stability, fast transaction confirmations, and less centralization (all of which BitShares provides over Bitcoin). In fact, I would argue that they won't ever be interested in cryptocurrency if it didn't have those features (well at least the first two).

Fees are likely to go bigger and bigger on bitcoin

opposite.

No, you are absolutely wrong about this. See my first point.

It's got a much much bigger problem.  Nobody has ever hear of it (apart from hardcore cryptonerds).  And nobody cares that it is better in a whole bunch of ways that don't matter at all to the user.

And there was a time when nobody ever heard of Bitcoin, or Facebook, or Google, or ... on and on and on.

Offline fussyhands

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Bitcoin security cost  about 600 millions dollar a year, that's one of the reason bitcoin price is going down.

That buys *a lot* more security than is needed.  The reality is block rewards are more a way to distribute coins at this point.  As block reward continues to halve it won't cause a huge problem for security.

51 attack it is a very real possibility

Maybe.  Maybe not.  But to most people the length of time a system has been running without a major failure will be more important than which one is actually more secure, since most people, including financial executives, are unable to make a reasonable judgement about which is actually more secure.

No price stability whatsoever(unless of course you pass by centralized  company Circus or Bitpay. Yes user care about centralize or not remember MtGox ?  )

No they don't, and they're right not to.  For most people their money is more secure with Circle or Coinbase then it would be if they tried to keep it in cold storage but messed something up.  People trust regulated, insured, american companies with good brand recognition, and lots of VC backing, and financial executives on their boards.  You and much of the libertarian cryptocurrency crowd doesn't, but most people do.

Fees are likely to go bigger and bigger on bitcoin

opposite.

Discus fish and ghash.io controls at least 40%-60% and it getting worst  (p2pool will never  be competitive with ghash.io)

This is a big issue, I agree.  It seems possible it could be solved by the likes of p2pool though, despite your assertion to the contrary.

BitshareX  has none of those problem.

It's got a much much bigger problem.  Nobody has ever hear of it (apart from hardcore cryptonerds).  And nobody cares that it is better in a whole bunch of ways that don't matter at all to the user.

Offline xeroc

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It almost seems as the bitcoin people just don't believe us :-) Their very own fault :D

In a year or so we can print shirts with: "we told you so .. LAST year" :)


Offline oco101

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Bitcoin security cost  about 600 millions dollar a year, that's one of the reason bitcoin price is going down.
51 attack it is a very real possibility
No price stability whatsoever(unless of course you pass by centralized  company Circus  Bitpay. Yes user care about centralize or not remember MtGox ?  )
Fees are likely to go bigger and bigger on bitcoin
10 min transactions ( yeah I know not a big issue for you or the users but still ..)
Discus fish and ghash.io controls at least 40%-60% and it getting worst  (p2pool will never  be competitive with ghash.io)


BitshareX  has none of those problem.

-With BitshareX you don't need Circle or Bitpay, so for starters you have very low transactions fees  in BTSX  and  you pay  ZERO fees to Circus or bitPay. Now  what bitUSD you'll use ? 
-bitAssets give users yield.
« Last Edit: October 01, 2014, 10:04:20 pm by oco101 »

Offline oldman

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I agree with that, but then again, if there is no compelling advantage of an altcoin to the USERs it really doesn't matter if Bitcoin can integrate the altcoin's technology, does it?  And as far as I can tell BTSX's supposed advantages don't amount to much when you really drill down...

Now you've lost me, which users are you talking about now? Because first you say the average user doesn't give a hoot about what bitcoin actually is or how it works, nor do they care about any other coin and what they might become, and then suddenly you say they do care.

Huh?  My point is that the users only care about what they can do with the currency.  They don't care how it works, whether it is more decentralized, whether it is theoretically more secure, etc.  Can they buy beer with it?  Can they buy peg it to USD?  Can they use it to buy mesh internet connectivity?  Those are things the user cares about.  The user does not care if the block chain uses proof of work or delegates, if confirmation times are 10 seconds or 10 minutes (if you are right that confirmation times can pretty much be ignored), if purchase of assets such as USD are decentralized like BitUSD or centralized like Circle's upcoming pegged USD balances.

When you look at BTSX advantages, it's all stuff that the user doesn't care about.

Yep. Average Joe is not going to care about the tech as long as the front end is fast, easy and pretty.

Offline fussyhands

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I agree with that, but then again, if there is no compelling advantage of an altcoin to the USERs it really doesn't matter if Bitcoin can integrate the altcoin's technology, does it?  And as far as I can tell BTSX's supposed advantages don't amount to much when you really drill down...

Now you've lost me, which users are you talking about now? Because first you say the average user doesn't give a hoot about what bitcoin actually is or how it works, nor do they care about any other coin and what they might become, and then suddenly you say they do care.

Huh?  My point is that the users only care about what they can do with the currency.  They don't care how it works, whether it is more decentralized, whether it is theoretically more secure, etc.  Can they buy beer with it?  Can they buy peg it to USD?  Can they use it to buy mesh internet connectivity?  Those are things the user cares about.  The user does not care if the block chain uses proof of work or delegates, if confirmation times are 10 seconds or 10 minutes (if you are right that confirmation times can pretty much be ignored), if purchase of assets such as USD are decentralized like BitUSD or centralized like Circle's upcoming pegged USD balances.

When you look at BTSX advantages, it's all stuff that the user doesn't care about.
« Last Edit: October 01, 2014, 07:07:03 pm by fussyhands »

Offline JoeyD

I agree with that, but then again, if there is no compelling advantage of an altcoin to the USERs it really doesn't matter if Bitcoin can integrate the altcoin's technology, does it?  And as far as I can tell BTSX's supposed advantages don't amount to much when you really drill down...

Now you've lost me, which users are you talking about now? Because first you say the average user doesn't give a hoot about what bitcoin actually is or how it works, nor do they care about any other coin and what they might become, and then suddenly you say they do care.  If the average Joe doesn't give a four letter word, than that would probably mean that the first system to come with actual solutions will get the cake (or at least the first serving of it), not the one who promises he might or might not offer something in the achievable future. The features and technology bitsharesX has, it has them right now, bitcoin as of now, does not have those features. Getting an exchange working on the bitcoin blockchain will not be an easy copy paste from bitsharesx, I'm fairly confident in that assessment.

I agree with you that getting critical mass in user adoption is key, but I am not as confident that bitcoin has that, so if you have any solutions or ideas on that front, then I think those would be very much appreciated on this forum. Btw, I'm not against bitcoin, although I do like bitshares solutions a lot better. I just want the decentralized revolution to happen and I don't have any preference how or with which project, but I do hope from the bottom of my heart that it will not be a single blockchain one.

Offline fussyhands

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How you see the chances of survival is of course up to you, but neither bitcoin nor bitshares will be running their entire blockchain over a mesh network any time soon, because that is just doing it wrong.

Huh?  No one suggested that.

The thing with bitcoin is, that it is not quick to change and will not adapt as fast as the smaller more agile altcoins. And the slogan that bitcoin can just take anything from any alt and implement it, I'm afraid is a load of bovarian excrement.

I agree with that, but then again, if there is no compelling advantage of an altcoin to the USERs it really doesn't matter if Bitcoin can integrate the altcoin's technology, does it?  And as far as I can tell BTSX's supposed advantages don't amount to much when you really drill down...

Offline JoeyD

I wasn't trying to discredit bitsharesx, but it also doesn't help to leave misconceptions about bitcoin out in the wild either.

How you see the chances of survival is of course up to you, but neither bitcoin nor bitshares will be running their entire blockchain over a mesh network any time soon, because that is just doing it wrong. Bitshares dpos has the added bonus of a solution to get the efficiency of a little centralization, but with the ability to still have voting power of the network as a user, while bitcoin does not. Bytemaster did propose a plan on how bitcoin could move to dpos, but the response has not been overly enthusiastic up till now.

The thing with bitcoin is, that it is not quick to change and will not adapt as fast as the smaller more agile altcoins. And the slogan that bitcoin can just take anything from any alt and implement it, I'm afraid is a load of bovarian excrement. I'll believe it when I see it, until then it's just talk and what I'm hearing is that developers are having a hard time even getting paid. They have been posting outcries that people should stop seeng the group of volunteer core-devs as some company they can demand a product from. It also leaves the problem that mining centralization is a big problem and that the 51% network attack has been achieved months ago, just because you split up ghash.io in name, does not mean you don't control the majority.

Here's my humble tip, see this all as a very very early experiment and don't believe anyone when he tells you what the future will bring. So betting blindly on a single experiment even the only slightly less tiny one like bitcoin is not the smartest move you could make.
« Last Edit: October 01, 2014, 06:28:53 pm by JoeyD »

Offline fussyhands

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Oh, even though I'm late to respond, no you actually don't need to wait for the first confirmation in bitcoin. As I said you only need to know if the payment is possible. Verifying the balance doesn't take 10 minutes, and you can see all transactions waiting in line even without them being in a block and you can actually see how far the transaction has spread through the network and even deduce the likelihood of it being processed in the next block.

That might be enough.  It leaves open the possibility of collusion with a large miner to steal back some percentage of transactions, but for some reason no miner has started offering that service (as far I know).  I suspect one day some miner will start offering a steal back service since a dishonest miner can make the honest income plus theft income, and be reasonably protected on tor.  Maybe it's just too complicated.  Or maybe it's not worth doing right now because Bitcoin is too small.

Anyway, Bitcoin fees are too high.  BTSX wins on lower fees for this idea.  Though I guess if you use a payment channel you really only have to pay two fees (establishing the channel and closing the channel) per new mesh connection.  So maybe this can be done on Bitcoin just fine.

Hmmmm... this makes me think that maybe BTSX doesn't have such a practical advantage over Bitcoin.  Especially if p2pool really takes off and mining becomes more decentralized... I guess BTSX has lower transaction fees and less waste, but not sure how important those are to adoption since BTC fees are very low compared to traditional payment processors, and will probably drop even further over time.  Users don't care about the waste.

A lot of people here think BitAssets are the killer app but I just don't see that.  The big web wallets (e.g. Circle) are contemplating services to carry USD balances.  To the mainstream end user that is just as good as BitUSD.  If there is mainstream demand (which I doubt) they could easily offer gold pegged balances or any other balance.  Hell they could even integrate a brokerage and sell you bona fide stock shares.  Hard to argue that BitAAPL is better than AAPL.

So as far as mainstream users are concerned, BTC seems to offer everything BTSX offers.  The technology may be more wasteful and less secure, but nobody is really going to understand that or care about it.  People will value Bitcoin higher than altcoins for the same reason people value gold higher than silver:  cus' that's how it was last year.  (http://about.ag/debate.htm)  Maybe I should sell my BTSX...
« Last Edit: October 01, 2014, 06:11:13 pm by fussyhands »

Offline oldman

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Coming back to the trusted node system for the mesh payment network, would it not be feasible to convince shops in crowded areas to be seed nodes if they can get paid for sharing their bandwidth to the mesh network and at the same time be sure they have a very reliable link to the payment network. Use greed and fear at the same time, that's a tried and true tactic which has worked wonders since time in memoriam.

This is genius!

Starbucks + McDonalds.

Retailers could reduce overhead or perhaps even add a new revenue stream.

Wow.