Quote from: fussyhands on October 02, 2014, 01:25:22 pm

Quote from: MeTHoDx on October 02, 2014, 01:08:33 pm

Quote from: fussyhands

No I didn't.  I already answered them in a previous post in this thread.  To recap:  mainstream adopters do not care about centralization regardless of how upset libertarian cryptonerds feels about it.  Circle, Coinbase, etc are planning to offer pegged balances.  For most people a balance denominated in USD on Circle is the equivalent or even better than BitUSD.

I'm assuming these solutions you speak of will be like the current Locks system offered by Coinapult. Basically e-Gold. I'm not convinced.

What aren't you convinced?

Its a centralized solution subject to local regulations. For example, Coinapult won't offer Locks to the U.S. currently because of legal concerns. You also can't directly transact with the pegged asset like you can with bitUSD. The user would have to manually use a pegging service. I also can't see there ever being a yield offered. An e-Gold type pegging service will be expensive to run, considering they're actually buying the physical asset with the BTC.

Of course, I'll know more when / if these services are ever offered. I suspect if it were as easy as you're suggesting, it would have been implemented long ago. Hence, I remain unconvinced.

Interesting.  Do you know what the specific legal obstacles are?  Will these legal obstacles apply to BitAssets like BitUSD?  It might seem like decentralization makes BitUSD immune to regulation, but to actually be useful directly in transactions,  BitUSD needs to be integrated into the payments systems of the companies that you actually make payments to, almost all of whom will follow the rules pretty closely (mortgage company, utilities, cellular providers, restaurants/bars, groceries/retail, taxis/buses/airplanes/uber, shooting range, Amazon, whatever...all easy to regulate).  I don't see how decentralization is a big advantage legally.

I also don't see much problem with account balances in USD and transfers in BTC.  What does the user care how the money is transferred if it shows up as USD in their account?  Directly transacting in the pegged assets doesn't seem very important.

Also, my Bitshares X client shows zero yield.  Am I doing something wrong?  What is the yield expected to be?  You remain unconvinced because you haven't seen pegging services in the US yet.  By the same token, I'm unconvinced about the yield because I haven't seen it yet, and I don't see any reason that it would be substantial.

You ignored the price stability and centralization arguments.

No I didn't.  I already answered them in a previous post in this thread.  To recap:  mainstream adopters do not care about centralization regardless of how upset libertarian cryptonerds feels about it.  Circle, Coinbase, etc are planning to offer pegged balances.  For most people a balance denominated in USD on Circle is the equivalent or even better than BitUSD.

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.

Merchants are already using Bitcoin.  How many of them are experiencing double spend problems by accepting zero confirmation transactions?  Almost none?  If they end up losing 0.05% of income to double spend attacks do you think it's that big a deal?  No.  What they are excited about is not having to pay 3% transaction fees, and losing 5% in charge backs.  7% improvements are a big deal.  0.05% improvements hardly even register. 

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).

User doesn't care about any of that.  They just go to Circle and click the "peg to USD" button.

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.

You overlook what is keeping Bitcoin so far in the lead despite its technical inferiority:  all that outside wealth you are hoping will close that gap is thinking the same thing I'm arguing here, i.e. Bitcoin is way ahead on network effects and none of the altcoins offer anything truly compelling to users.  They are overwhelmingly betting on the leader.  Also as far as developing infrastructure Bitcoin is 1-2 years ahread of Bitshares.  That is a long lead time.

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.

$500m is plenty of security for a trillion dollar network, given that the benefits of attacking are so limited.  All it really gets you is the ability to perform a denial of service against the network.  Nobody would spend that kind of money to double spend small transactions, and double spending large transactions will just land you in jail.  Furthermore it will shatter confidence in the network and destroy your astronomical investment in specialized mining hardware.  The numbers just don't add up for a criminal organization.  For a hostile state... well what keeps them from printing a 100 trillion dollars worth of USD and dumping it on the world?  There are other incentives not to attack the world financial system...

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.

*I* wouldn't settle for mediocrity.  But mainstream users don't give a shit about the technical details of the security, and even if they cared, they wouldn't have the capacity to make an informed decision.

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?

Bitcoin offers HUGE advantages over dollar denominated systems in terms of transaction fees, speed, security, etc.  If it has a chance, which is debatable, it is because of these paradigm shifting advantages.  Bitshares doesn't really offer much of any user tangible advantage over Bitcoin.

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.

That's right.  I want Bitshares to succeed because it's really similar to a system I designed on paper 3 years ago but didn't bother to make.  That is what got me excited about Bitshares.  Its technical superiority.  But the more I think about it, the less it seems to matter.

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.

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...

mining? DITW = dead in the water [/cite]

Agreed.

we can start building that kind of mesh network with mobile phones first:
https://opengarden.com/apps

"earn bitUSD by providing network to people nearby"!

Exactly!  If you could earn money by running opengarden it might really take off.  People would start running it everywhere (it's available for Mac and Windows) and feel gratified every time they saw their earnings tick up.

But realistically most people won't want to share their cellular data connections because cellular data is so expensive/scarce.  But broadband data is not.  So I think the place to start is giving people a way to share their broadband connections via mesh and earn money for it.  The phone apps will probably mostly be used to get data from the broadband connections rather than to share the cellular connections.

Maybe someone with more experience in this field can comment, but if you want to replace the last-mile connectivity, I don't think it is going to just be 10 additional hops. I doubt the latency would every be low enough for gaming, voip, and video chat. And the latency might be high enough that browsing the web recreationally would suck so much that you rather not bother.

Possible that gaming wouldn't be practical (at first), but my guess is that everything else would be.  Remember, especially early on, there are likely to be hundreds or thousands of internet connections throughout the city because at first people will be sharing their comcast connectivity over the mesh and making money on it (it could be very difficult for comcast to detect).  As time goes on those thousands of comcast connection points could be replaced by inter-city comcast competitors.  Putting 100 connection points throughout a big city is only a *tiny* fraction of the cost of wiring up every house, so it would be feasible for competitors to enter the market, even if it required placing many connection points.  Furthermore you can aggregate all the connection points of all competitors when thinking about how many connection points would be spread through a city.  So if there are 10 competitors who each have placed 100 connection points, then you have 1000 connection points spread throughout the city.  So yes, I think 5-10 hops to a connection point could be very realistic.

Quote from: fussyhands on October 01, 2014, 01:17:22 am

It's not settled that legal liability would attach.  There have been some cases about people not securing their wifi connection in their homes, and outsiders using their wifi for evil purposes, and I don't think anyone has gotten in serious trouble for not securing their wifi.  It won't be target by government unless it is fairly popular, and once it is, there may be little they can do.  Your example of tor for instance is apt.  Tor is still going.

I am just saying this legal uncertainty can kill adoption.

My intuition is that the legal uncertainty would not prevent this from catching on, and once it did catch on, courts and legislatures would be less likely to adopt laws that would kill it.  I'm a lawyer so I take legal uncertainty very seriously, but in this case my guess is that it wouldn't be a crucial factor.  But I admit that that is only my intuition based on experience and study.  Impossible to know for sure.