BitShares Forum
Main => General Discussion => Topic started by: gn1 on November 02, 2015, 07:37:59 am
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Isn't it possible for the BitShares blockchain to issue an IOU, called something like BLOCKCHAINBTC, that is 100% collateralized by real BTC?
If the blockchain can issue such IOU and lock up the real BTC, then we don't have to worry about Blocktrades.us or Openledger getting Goxed as a Gateway.
Traders can then freely enter and exit the BitShares system without worrying about counterparty risk because the blockchain will not run away with funds like humans do.
Currently, I am having a hard time imagining the BitBTC:BTS market growing efficiently because the only way the supply of BitBTC can grow is when somebody shorts BitBTC. But look. Who will be the first one to short BitBTC in such an illiquid market? It's too risky compared to its reward. There are people who want to buy BitBTC, but there is not enough people that is willing to short BitBTC and match that demand. Hence, the supply of BitBTC will not grow, and trading can't take place.
If blockchain can issue a collateralized IOU, then we don't have to wait for the BitAsset shorters to enter the game. We can quickly build up on the orderbook using the affiliate program.
Let me hear what you think.
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+5%
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If the blockchain can issue such IOU and lock up the real BTC,
How is 'the blockchain' supposed to lock up real BTC?
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If the blockchain can issue such IOU and lock up the real BTC,
How is 'the blockchain' supposed to lock up real BTC?
What about https://en.bitcoin.it/wiki/Proof_of_burn ? But I am not sure whether this kind of irreversible lock will have economical sense
Second approach: I am also wandering whether multisig could help. Real BTC funds would be secured by two private keys. One private key would be from the issuer, who would send his public key to the network. The second public key... would come somehow from the bitshares network.
Is it possible, that each witness would have only some part of private key? I am thinking about the way... that private key of bitshares network would be used only when witnesses will have consensus...i.e. that there was a transaction, and the issuer want to withdraw his bitcoins.
To be honest, I am not 100% sure, how multisig works... so please be gentle and explain me, what in this idea is wrong, if this is actually impossible.
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It has to be reversible.
I'm not technical so I can only come up with ideas, but can't the blockchain hold onto the private key of the BTC address where nobody else can see, and use it to unlock it whenever the trader tries to redeem his/her real BTC?
I was imagining a cloakroom type of mechanism, where you hand over the receipt when you go home, and you get your coat back on the way out.
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It has to be reversible.
I'm not technical so I can only come up with ideas, but can't the blockchain hold onto the private key of the BTC address where nobody else can see, and use it to unlock it whenever the trader tries to redeem his/her real BTC?
You always need a third party tho - 'the blockchain' is not an entity, so it can't hold onto its own part of the shared secret required to hide the private key from the user who locks it away. You have to prevent the user from double spending it, so she'd need to send it to a multi-sig address where she controls one key and 'another party' controls the other.
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You have to prevent the user from double spending it, so she'd need to send it to a multi-sig address where she controls one key and 'another party' controls the other.
Is it possible that witnesses will control 2nd key?
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You have to prevent the user from double spending it, so she'd need to send it to a multi-sig address where she controls one key and 'another party' controls the other.
Is it possible that witnesses will control 2nd key?
Yes, but then it's not trustless.
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It has to be reversible.
I'm not technical so I can only come up with ideas, but can't the blockchain hold onto the private key of the BTC address where nobody else can see, and use it to unlock it whenever the trader tries to redeem his/her real BTC?
I was imagining a cloakroom type of mechanism, where you hand over the receipt when you go home, and you get your coat back on the way out.
freebie has been playing with this concept for a while for its approach to decentralization of *coin transactions, the technology for this solution does not YET exist, but is theoretically possibly.
this is one of the issues we will be tacking going forward, and would love any suggestions :)
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If the blockchain can issue such IOU and lock up the real BTC,
How is 'the blockchain' supposed to lock up real BTC?
What about https://en.bitcoin.it/wiki/Proof_of_burn ? But I am not sure whether this kind of irreversible lock will have economical sense
Second approach: I am also wandering whether multisig could help. Real BTC funds would be secured by two private keys. One private key would be from the issuer, who would send his public key to the network. The second public key... would come somehow from the bitshares network.
Is it possible, that each witness would have only some part of private key? I am thinking about the way... that private key of bitshares network would be used only when witnesses will have consensus...i.e. that there was a transaction, and the issuer want to withdraw his bitcoins.
To be honest, I am not 100% sure, how multisig works... so please be gentle and explain me, what in this idea is wrong, if this is actually impossible.
Time lock encryption does make it possible to lock up Bitcoins in the blockchain for a period of time. It could probably be modified to be a list of conditions which unlock it but still because Bitcoin is a separate blockchain it's not so easy to do this.
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This is exactly what nxt's multi-gateway do.
But nxt's is not that smooth. Sometimes you have to wait more than a day after deposit. If we can do better, then it will be really useful.
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You have to prevent the user from double spending it, so she'd need to send it to a multi-sig address where she controls one key and 'another party' controls the other.
Is it possible that witnesses will control 2nd key?
Yes, but then it's not trustless.
Correct me if I am wrong, but issuer will not have to trust anyone, if he have own key, because no one can successfully made a transfer without having 2/2 keys.
So... If I want to withdraw my real bitcoins from bitshares blockchain I will initiate a transfer... which will be confirmed with 2nd key by witnesses only in case when bitBTC will be properly deposited by me.
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Correct me if I am wrong, but issuer will not have to trust anyone, if he have own key, because no one can successfully made a transfer without having 2/2 keys.
So... If I want to withdraw my real bitcoins from bitshares blockchain I will initiate a transfer... which will be confirmed with 2nd key by witnesses only in case when bitBTC will be properly deposited by me.
The user must trust the holder(s) of the other keys not to destroy, lose or otherwise refuse to unlock the funds.
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I already proposed this, but there's currently no way to finance development (check the link in my sig for more info).
The SuperNET ICO had great support from the NXT community and ended with $2.2M. We could get something more advanced done on BTS for a fraction of that, but neither an ICO nor a worker proposal seems to stand a chance here.
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I already proposed this, but there's currently no way to finance development (check the link in my sig for more info).
I saw this post... but it seems, that in that case I didn't catch the idea. Are you sure, that people actually understand what you proposed? You can attach a poll: [Yes/No/I don't understand the full concept yet].
I will give it a second look.
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The poll's a nice idea. Although posting ones remaining questions would be a lot more helpful for everyone ;)
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It has to be reversible.
I'm not technical so I can only come up with ideas, but can't the blockchain hold onto the private key of the BTC address where nobody else can see, and use it to unlock it whenever the trader tries to redeem his/her real BTC?
I was imagining a cloakroom type of mechanism, where you hand over the receipt when you go home, and you get your coat back on the way out.
freebie has been playing with this concept for a while for its approach to decentralization of *coin transactions, the technology for this solution does not YET exist, but is theoretically possibly.
this is one of the issues we will be tacking going forward, and would love any suggestions :)
Okay, now I understand that locking away BTC using the blockchain is theoretically possible, but not practically possible at this moment.
Either way, the current "flooding" of BTC IOU is not an ideal situation.
So, I've given it a thought and came up with another idea.
Let me know what you think.
How about we use proof-of-burn to burn real BTC to allow the blockchain to issue a counterparty-risk-free BLOCKCHAIN.BTC, which is a pseudo-BTC that uses the BitShares Blockchain?
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How about we use proof-of-burn to burn real BTC to allow the blockchain to issue a counterparty-risk-free BLOCKCHAIN.BTC, which is a pseudo-BTC that uses the BitShares Blockchain?
Just because something costs X to produce, does not mean it is worth Y - you need redeemability to give it value parity.
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I already proposed this, but there's currently no way to finance development (check the link in my sig for more info).
The SuperNET ICO had great support from the NXT community and ended with $2.2M. We could get something more advanced done on BTS for a fraction of that, but neither an ICO nor a worker proposal seems to stand a chance here.
At some point in the future it might but right now your idea is before it's time. It's not a bad idea and it seems Omni, and Counterparty, have the same sort of idea on the Bitcoin blockchain.
Of course doing it over Bitshares would be more efficient and you wouldn't need to rely on as much centralization, but it's not necessarily better, safer or easier. It costs more to do it right now than the current way.
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I see. Thank you for your input, guys. I now see the weak point in the regular proof-of-burn approach.
I'll just keep coming up with more ideas. All we have to do is to increase the absolute supply of BitAssets in a fair way.
I have two more ideas at this time. How does this sound?
A. We can do a one-time crowdsale to allow people to "buy" BitAssets directly from the blockchain using their BTS. The collected BTS can then be used to support the network or get locked up for good.
B. Copy bitcoin's approach and simply use proof-of-work to allow users to "mine" BitAssets until we feel that supply of BitAsset has increased to a sufficient level.