BitShares Forum
Main => General Discussion => Topic started by: fuzzy on April 22, 2014, 10:04:04 am
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As a wise man once said, "just shoot me now".
https://www.youtube.com/watch?v=iy7NEAraUVI#t=230
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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.
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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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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?
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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.
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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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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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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.
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?
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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.
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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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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.
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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?
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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.
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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!
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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.
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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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.
Is this side chain idea good or evil? I still cannot figure out whether or not it will work or why developers would want anything to do with it.
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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?
A sidechain is a completely different blockchain. For example say enough people want to have faster confirmation times than the 10 minutes from bitcoin, then a 2.5 minute litecoin like sidechain can be created and there can even be a different token amount based on a preprogrammed exchange rate. For example every bitcoin locked into the lite-side-chain-contract would issue 4 lite-btc on the 2,5 minute block confirmation sidechain.
There are many, many ways to fund development even outside of internal revenue of the sidechain. Pumping and dumping or premine are not the only "solutions". Developers will have to work out for themselves how they intend to fund themselves or if they even want monetary compensation for working on interesting ideas (just making bitcoin more useable and valuable could be enough compensation for some). They could code it in directly via a percentage cut of transfer-fees or at the moment of issuance of the new chain btc-pegged-tokens. There are other ways they could raise funds outside of the chain itself, by collecting bounties from interested parties or by working for companies that need something that can be done more easily on a sidechain than on the bitcoin main-chain, say for example companies wanting to do smart contracts and hiring devs to develop and maintain a turing-complete contract sidechain. (That last possibilty seems to have affected Ethereums project lead V. Buterin most of all, judging by the amount of posts on the bitcoin subbreddit about this 2-way-pegging and apparently him feeling the need to defend the worth of his project.)
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Is this side chain idea good or evil? I still cannot figure out whether or not it will work or why developers would want anything to do with it.
Good or evil? According to whom? From the point of view of some bitcoin devs and Dr. Adam Back alt-coins are seen as diluting, distracting and shameless copy-cats with evil intentions by not wanting to contribute to bitcoin and even a threat to the very survival of the idea of cryptocurrencies. One major fear seems to be that if bitcoin were to be replaced by an alt-coin that would be a terminal blow to the credibility of the whole concept and make any crypto-coin replaceable and therefore unreliable in the eyes of the general public. Admittedly I myself was bothered by everyone using the bitcoin2.0 term and think that it was not very clever to try and make bitcoin sound inferior without realizing that this just sets you up to be bitten in the ass when the next alt-coins come along happily naming themselves bitcoin3.0 or bitcoin.ad-nauseam. I did not expect however that this project announcement would make all bitcoin2.0 alt-coins sound petty and inferior to bitcoin overnight. Personally I think that bitshares should try to distance themselves from the 2.0-gimmick as much as possible, especially since I don't think we can confidently say we've even reached anything close to the 1.0 version of bitcoin yet.
At the moment I'm not convinced that Dr. A. Back is an evil person. His motivation seems to be to enable free experimentation and development, but in conjunction with bitcoin instead of in competition with it, and he also sees it as a way to get rid of scam-like pump and dump schemes, because these sidechains are pegged to bitcoin and completely voluntary. But even if the developers are not evil, that does not mean that they have spent enough time working out all possible bad effects this could have, because that tends to be a blind spot for people focusing on new technology and possibilities.
As to why developers would want to contribute, that's almost as impossible to answer as the good vs evil one. You could just as well ask why wouldn't developers want to play with this. The ability to try out new things which are difficult in the current design of bitcoin, but without the need to set up a completely new alt-coin community plus things like exchanges and such, is plenty motivational by itself.
I've suggested this before, but I think you'll get better answers if you listen to the interviews with Dr. Adam Back that are published online and read the discussions on reddit, bitcointalk and maybe even the discussion about two-way-pegging on the bitcoin-mailinglist. I don't think it's wise to base your point of view on the judgement of others and especially not on someone as deficient as I am.
Personally I think this is a very ingenious concept and could make bitcoin better/more useable than it is now. I'm also not that convinced about the good intentions of people behind a lot of alt-coins, so I'm not that disturbed by their possible extinction. This unfortunately also includes projects like Ethereum where imho some very, very disturbing things have been uttered by smooth talking individuals, but that could just mean I'm evil for not separating my pov of the project because of those statements, that very possibly might be in direct opposition to the intentions of a larger less vocal and hopefully far more influential part of the team. So again I urge you to seek out the information yourself until your confident about your ability to make a judgement. That way you'll be better equiped than I can be, my abilities in this regard are limited to put it mildly.
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But ultimately, they will rely on the Bitcoin Blockchain...correct? What if something happens to the Bitcoin network? What if it is compromised?
And JoeyD... <3 man...<3
Much respect...
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But ultimately, they will rely on the Bitcoin Blockchain...correct? What if something happens to the Bitcoin network? What if it is compromised?
And JoeyD... <3 man...<3
Much respect...
That I cannot tell for sure and hasn't been mentioned as far as I know. ByteMaster pointed to the power of miners and them wanting to force merge-mining, but some bitcoin core-devs and A. Back himself didn't seem to be hostile towards alternatives to sha256-mining. The latter just thought it inadvisable to rely on less tested security models than the conservative but well tested and proven ones like with bitcoin (maybe he was referencing alt-coins using new cryptographic methods), or as he calls it less secure ones like scrypt. Afaik Dr. A. Back only mentioned that the bitcoin-main-chain would be firewalled and protected from any failures of sidechains should one of them catastrophically collapse, but he did not exclude the opposite possibility where sidechains could be shielded from the collapse of bitcoin.
The only things I've heard/read about this from him was that he envisioned limitless extending of sidechains sort of like daisy-chaining sidechains from sidechains, which seems to imply the possibility of a high degree of independence from the main-chain. He also thinks that this solution allows bitcoin-devs to focus more on reliability and security instead of features, making catastrophic collapse less likely.
Personally I'm also not a proponent of the single central blockchain solution and that's one of the reasons I'm rooting for the bitshares project.
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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.
Is this side chain idea good or evil? I still cannot figure out whether or not it will work or why developers would want anything to do with it.
They are evil in a very fundamental way. And this gut feeling is not about the technicalities (which I do not completely comprehend).
There is a unhealthy concentration of power in the bitcoin community. To me it seems that the 1% doesn't just hold the majority of bitcoins, but also the majority of hashrate, majority vote on development and the majority of media coverage. Of course these people made crypto into what it is today and we should be thankful for that. But I cannot view the sidechain initiative in any other way than as an attempt to concentrate power in the hands of this group. An attempt to canonize bitcoin as the only crypto equity by decree. Which would be a historical mistake.
Look up the 'Luke-JR' episode on the counterparty thread on bitcointalk to see why it is a bad idea to let the bitcoin elite decide on what counts as innovation and what does not.
I'm rather confident that sidechains would cull any innovation that goes against the vested interests of the aforementioned 'elite'. This is bad, because bitcoin is an implementation of a concept. Not the concept itself. And bitcoin is not by definition the best implementation of the concept.
Now, of course, the altcoin environment is full with scams, pumps and predators. But in my opinion it is an environment that enables innovation at break neck speeds. For developers it offers the opportunity to monetize an idea. For speculators the opportunity to make a quick buck. For miners to hit a gold vein. For investors to browse for ideas that they think will be valuable in the long run.
And heck, it works. New algorithms, new distribution models, new mining models, new 2.0 models, new marketing models, hitting the forums on an almost daily basis. Made possible by independent development and speculation.
Most of these new ideas will go down the gutter of crypto-history. But some have already made an impact, and some may in the future.
Crypto needs wild, uncontrolled evolution, and it needs serendipity. Alt coins do that. To call them a distraction is beyond stupid to such an extend that I don't have a word for it.
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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.
Is this side chain idea good or evil? I still cannot figure out whether or not it will work or why developers would want anything to do with it.
They are evil in a very fundamental way. And this gut feeling is not about the technicalities (which I do not completely comprehend).
There is a unhealthy concentration of power in the bitcoin community. To me it seems that the 1% doesn't just hold the majority of bitcoins, but also the majority of hashrate, majority vote on development and the majority of media coverage. Of course these people made crypto into what it is today and we should be thankful for that. But I cannot view the sidechain initiative in any other way than as an attempt to concentrate power in the hands of this group. An attempt to canonize bitcoin as the only crypto equity by decree. Which would be a historical mistake.
Look up the 'Luke-JR' episode on the counterparty thread on bitcointalk to see why it is a bad idea to let the bitcoin elite decide on what counts as innovation and what does not.
I'm rather confident that sidechains would cull any innovation that goes against the vested interests of the aforementioned 'elite'. This is bad, because bitcoin is an implementation of a concept. Not the concept itself. And bitcoin is not by definition the best implementation of the concept.
Now, of course, the altcoin environment is full with scams, pumps and predators. But in my opinion it is an environment that enables innovation at break neck speeds. For developers it offers the opportunity to monetize an idea. For speculators the opportunity to make a quick buck. For miners to hit a gold vein. For investors to browse for ideas that they think will be valuable in the long run.
And heck, it works. New algorithms, new distribution models, new mining models, new 2.0 models, new marketing models, hitting the forums on an almost daily basis. Made possible by independent development and speculation.
Most of these new ideas will go down the gutter of crypto-history. But some have already made an impact, and some may in the future.
Crypto needs wild, uncontrolled evolution, and it needs serendipity. Alt coins do that. To call them a distraction is beyond stupid to such an extend that I don't have a word for it.
The one reason I find their plan very suspicious is the fact that they don't offer any shared owership, crowdfunding, or offer anything which reduces barriers to entry. In fact they seem to be trying to increase barriers to entry with ASICs, big mining pools, etc.
What about the little guy? Why is it that I get the feeling the core devs are out to screw the little guy? To a lesser degree I get that feeling about Ethereum as well. Team Ethereum gives speeches for Silicon Valley which is cool but what about the little guy?
It seems to me that the current attitude is that it's okay to market a product to the little guy but the idea of letting the little guy actually have ownership is another matter entirely. Ethereum I will reserve from forming conclusions about, but their initial IPO was insulting to say the least.
Now we have Maidsafe which seems to have done it again on the Mastercoin side of things. None of this is good for the industry. Barriers to entry lead to centralization of resources which bring is right back to where we started.
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bump...
This conversation is getting good, hoping to hear more people chime in. Also, one has to wonder if this is why the Bitcoin pundits seem so intent on smearing alternatives like bitShares, which seems by its own nature to force a more decentralized and competition-based delegation of power.
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It's here like everywhere in the world. People's material interests shape their theories about the world which they then believe in themselves. Everything can be viewed from different perspectives so it natural for the subconscious mind to choose the perspectives that suits it's prospects the most.
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Sorry for dropping off half-way in the discussion, I caught the flu complete with fever and all, so I thought it wise to not post in a delirium.
Forgive me if I sound addled or if I'm rambling, but my mind is still plenty foggy.
Again about the evil bit, that still is just a matter of point of view. People might complain about asics and centralization, but fact of the matter is most alt-coins don't do a better job of it. Just look at Litecoin and it's asic-proof mentality, people are already complaining about the litecoin-devs not wanting to take action to prevent asics from messing up the market.
About the counterparty dispute, I've read the forum thread on bitcointalk and this discussion, (which btw was blown out of all proportions by the crypto tabloid as usual) was not about all bitcoin-devs being "anti-2.0" or even uncooperative, at least not at the start of the discussion. The way I saw it, counterparty was being a diva and pissed off that not everyone in bitcoin-land was devoted to their every whim. Counterparty was exploiting a feature that was not meant for that purpose and were causing blockchain-bloat that cannot be filtered, which means they were burdening everyone using bitcoin with their stuff and their argument that the miner got his fee does not make that right. Also they were expecting people to guess what they were doing and what they needed, without participating in any discussion on the proper and open channels for this, nothing on the bitcoin mailinglists, no BIP nothing. The bitcoin-devs posted some ideas about more elegant (and filterable for people not interested in counterparty) solutions and temporary workarounds in the meantime, but counterparty seemed to want nothing of it and the discussion quickly deteriorated, with Luke-Jr and Counterparty both throwing oil on the fire.
Back on topic of centralization of POW and ASIC-miners and evil centralization. I don't exactly see how sidechains would stop innovation. As I mentioned before, I'm not actually seeing the benefits of the vast majority of alt-coins even the big ones like Litecoin, especially with the advent of scrypt-asics. I'm also not seeing devs being religiously pro POW per se, but they just don't believe there is a better way to issue coins and even peercoin (and PTS for that matter) seems to share that believe. There is a thread on bitcointalk where someone with a long name with "slippery" in it, is trying to come up with a way to upgrade bitcoin to POS, while at the same time keep a fair and reliable coin-issuance mechanic. Bitcoin-devs were telling him to go right ahead, but warned him that he would fail like all others who tried before him.
The AGS-auction, while ingenious is not actually an integrated decentralized solution, so up till now nobody seems to have worked out a better method for coin-generation than POW (resulting in centralization, miningpools and asics) before getting to the stage of POS. The other method is premine like NXT and they are not actually doing that great of a job redistributing the wealth and "forging" power (I keep seeing the same few block forgers appearing on their blockexplorers).
Also keep in mind, should a few bitshares DACs take off, how would people late to the party view our stake in the market? I'm pretty sure we'll get plenty of complaints about premine, unfair advantage, centralization and people clamoring the righteous need for these projects to get forked. I also noticed some hefty opposition when discussing ways to come up with more "fair" distributions like airdrops and such. I like the lottery idea in bitcoin rewarding people for lending services to improve or run the network and use that as an incentive to bootstrap the system. Biggest problem seems to be to get initial stakeholders to agree on it, Bytemaster seems to not be in favor of any share-diluting features like new token/share-generation.
Hmm, that gave me an idea about something which probably should be front and center on the bitshares webpages and faqs. A list of facts and myths plus rebuttals for people unfamiliar with (D)POS and what it implies. Like how lottery style token-generation won't work in (D)POS, not even if done in separate stages. For example a 20% founder premine and timed issuance of the remaining 80% through lottery amongst blocksolvers/ full node runners, would still unfairly advantage the initial stakeholders in the lottery.
I'll have to break off again here, I passed out a few times while writing this post so I'm starting to suspect that I probably should hit the sack and try to sleep off this flu.
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This was just posted on Counterparty thread, and rather relevant.
Let's Talk Bitcoin just published my interview with them explaining why side-chains are insecure and bad for decentralization: https://soundcloud.com/mindtomatter/ltb-e104-tree-chains-with#t=19:04
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This was just posted on Counterparty thread, and rather relevant.
Let's Talk Bitcoin just published my interview with them explaining why side-chains are insecure and bad for decentralization: https://soundcloud.com/mindtomatter/ltb-e104-tree-chains-with#t=19:04
That interview or conversation doesn't actually address anything that hasn't already been discussed and even commented upon by A. Back on the reddit discussion and for me doesn't have any relation to the concept of the two-way-peg smart-contract linked to another blockchain. All points of critique had no direct relation to two-way-pegging, but were about centralization of mining power in POW in general, but without any suggestions on how to solve it.
If they wanted to discuss side-chains I think they chose the wrong person to do it with. My guess is they simply made a recording of a conversation that touched on the subject and it would have been nice if they first got a reaction from some people intimately familiar with the technical details of the proposal before uploading it, because now you have a single sided rant of someone not affiliated with the technical aspects. Sort of like forcing someone to talk about his own arse, provided he is not of unconventional anatomy he might try and make some educated guesses, but in the end he's talking about something he's never seen.
The discussion seems to centre around merge-mining and merge mine-able coins. Sidechains supposedly don't need to be merge mined and not even be POW. They are pegged via bitcoin smart-crontracts, but with a more secure implementation than standard humans or human run exchanges. If anything side-chains offer a better solution to centralization than the other way around. One could even argue that in theory bitcoin itself is the weakest link for sidechains, because it has mining centralization via POW, but so far nobody seems to have come up with a better token generation scheme that is not a so-called premine.
I've tried being as neutral as possible about the concept of a smart-contract mathematically linking two blockchains together, but I do notice that most critiques (like the linked podcast one) are not neutral or objective at all. If you think of side-chains as an on the fly smart-contract-based exchange between any blockchain-type you want, built into bitcoin, I personally think that is a rather clever and quite elegant solution, which might be a useful addition to the bitshares toolkit as well.
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This was just posted on Counterparty thread, and rather relevant.
Let's Talk Bitcoin just published my interview with them explaining why side-chains are insecure and bad for decentralization: https://soundcloud.com/mindtomatter/ltb-e104-tree-chains-with#t=19:04
That interview or conversation doesn't actually address anything that hasn't already been discussed and even commented upon by A. Back on the reddit discussion and for me doesn't have any relation to the concept of the two-way-peg smart-contract linked to another blockchain. All points of critique had no direct relation to two-way-pegging, but were about centralization of mining power in POW in general, but without any suggestions on how to solve it.
If they wanted to discuss side-chains I think they chose the wrong person to do it with. My guess is they simply made a recording of a conversation that touched on the subject and it would have been nice if they first got a reaction from some people intimately familiar with the technical details of the proposal before uploading it, because now you have a single sided rant of someone not affiliated with the technical aspects. Sort of like forcing someone to talk about his own arse, provided he is not of unconventional anatomy he might try and make some educated guesses, but in the end he's talking about something he's never seen.
The discussion seems to centre around merge-mining and merge mine-able coins. Sidechains supposedly don't need to be merge mined and not even be POW. They are pegged via bitcoin smart-crontracts, but with a more secure implementation than standard humans or human run exchanges. If anything side-chains offer a better solution to centralization than the other way around. One could even argue that in theory bitcoin itself is the weakest link for sidechains, because it has mining centralization via POW, but so far nobody seems to have come up with a better token generation scheme that is not a so-called premine.
I've tried being as neutral as possible about the concept of a smart-contract mathematically linking two blockchains together, but I do notice that most critiques (like the linked podcast one) are not neutral or objective at all. If you think of side-chains as an on the fly smart-contract-based exchange between any blockchain-type you want, built into bitcoin, I personally think that is a rather clever and quite elegant solution, which might be a useful addition to the bitshares toolkit as well.
Noted. The reason I bumped this was because it belies an ASIC-centric viewpoint that comes from being sucked too far into the POW sphere of influence. The only people who really would like merged mining are those whose businesses center around the use and production of ASIC devices. Very apt dovetail into the original link provided in this thread.
You know guys...this would be a WONDERFUL topic for the next sitdown with BM. And it is obvious you each would bring some interesting conversation topics to the table. Remember it is this coming Tuesday, 29 APR 14 @ 7PM EST: https://bitsharestalk.org/index.php?topic=4387.0
P.S. Someone may be there who is planning to write an article on bitShares, so your opinions might prove valuable for him to better explain the complexities of the problems and the intricacies of potential solutions the entire industry needs to be looking at. Soo dont miss it? :)
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Noted. The reason I bumped this was because it belies an ASIC-centric viewpoint that comes from being sucked too far into the POW sphere of influence. The only people who really would like merged mining are those whose businesses center around the use and production of ASIC devices. Very apt dovetail into the original link provided in this thread.
You know guys...this would be a WONDERFUL topic for the next sitdown with BM. And it is obvious you each would bring some interesting conversation topics to the table. Remember it is this coming Tuesday, 29 APR 14 @ 7PM EST: https://bitsharestalk.org/index.php?topic=4387.0
P.S. Someone may be there who is planning to write an article on bitShares, so your opinions might prove valuable for him to better explain the complexities of the problems and the intricacies of potential solutions the entire industry needs to be looking at. Soo dont miss it? :)
Ah, sorry I wasn't actually talking about bitsharestalk, but the discussion on the channels that should be more neutral. I meant it as an observation instead of a reprimand. I was also making a guess from the title of that podcast "Lets talk bitcoin" that it aimed to be somewhat neutral, but I'm not that familiar with the show (only listened to a few excerpts of a couple of shows this year), this was the first one with Antonopoulos (sorry if I've misspelled it) and I was expecting some more input from him, based on a couple of his presentations I've seen on youtube, but it sounded like he was unfamiliar with the whole side-chain proposal. Bitsharestalk is an area where I think you can expect a certain focus in point of view and I suspect quite a large percentage are not in favour of mining, asics and centralization if they can be circumvented. That does bring the risk of introducing an us versus them way of thinking and limiting our avenues of thought and discovery of new options more than necessary.
I'll try to connect on tuesday, but can't make any promises as of yet, but it does sound very interesting. Is it okay to just listen on the channel and maybe sending an occasional channel-message? I'm not sure my voice will have returned by then, so I'd rather type than disturb everyone with my growling.
EDIT
Correction to my earlier post about the interview, I think I'm having some problems with soundcloud on my system, which made the stream cut out right at the intermission, making me believe I'd reached the end of the interview. Only when I tried posting a comment there just now I discovered there was a second part that does tie into the sidechain and merge-mining concepts discussed in the first part.
The second part of the interview is a lot more interesting even though it is very pie in the sky and in my opinion not actually solving the risk of mining centralization he pointed to in the first part. In short he wants to make blocks more modular and essentially merge-mine more tree-like structured blocks, where miners can merge mine on sub-block-branches as well as the main block, but he needs the solutions proposed by side-chains before he can work out his plan in more detail. While I understand how this could make the bitcoin-blocks more versatile I don't see how this addresses mining centralization in the way he described it in the first part. From what I could gather his proposal does nothing to decrease the hashing advantage of the big boys, or is there something I've missed in that discussion.
Also tree-chains do not sound all that space and bandwidth efficient, so I'm having some trouble working out how his proposal is better or more preferable than purpose-built sidechains.
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One major fear seems to be that if bitcoin were to be replaced by an alt-coin that would be a terminal blow to the credibility of the whole concept and make any crypto-coin replaceable and therefore unreliable in the eyes of the general public.
The fear about loosing credibility if an alt replaces bitcoin only makes sense if bitcoin/any crypto ledger is seen as a currency and not as a company. For a currency the implicit assumption is that there can only be one. With companies there naturally is competition among many. I think that Daniel's company metaphor suggestion makes a lot of sense because it was always clear that Bitcoin can have competition, more easily even than in traditional fields because it's all open source. This is a essential element of the structure of the cryto field and it is better to make the analogies / analysis frames right than to moralize and accuse.
But even if the developers are not evil, that does not mean that they have spent enough time working out all possible bad effects this could have, because that tends to be a blind spot for people focusing on new technology and possibilities.
+5%
I don't really think there is something such as an evil person at least for the very vast majority of people. The reason why we perceive some people as bad intentioned and some not is that there are a wide variety of perspectives that can all be justified with a certain set of assumptions.
The above is my personal take on it and I think it is viable because we should not create a different and seperate society order with one crypto currency that it all depends on. Every time in history some one propagated the ultimate solution it ended in a horrible catastrophe. We should keep an open mind to avoid this.
The AGS-auction, while ingenious is not actually an integrated decentralized solution, so up till now nobody seems to have worked out a better method for coin-generation than POW (resulting in centralization, miningpools and asics) before getting to the stage of POS. The other method is premine like NXT and they are not actually doing that great of a job redistributing the wealth and "forging" power (I keep seeing the same few block forgers appearing on their blockexplorers).
I would guess that Bitcoin distribution is among the most horrible of all crypto ledger projects. So that can not be an argument for Bitcoin. Would be interesting to compare the Bitshares distribution to Bitcoin distribution.
Then can POW guarantee a better distribution? The only thing is does differently (in a far less efficient way) is it avoids legal challenges of an IPO that could also go over a very long period of time and could mimic the bitcoin creation model. It is an illusion that mining gives coins to the average guy. In the end mining gives the coins just to those that can afford mining equipment that is efficient enough to be run economically. In the end miners are professionals that invest in equipment that bring coins into existence and then sell those coins for a price above electricity costs. If you can not afford this mining equipment you have to buy the coins from the professional miners for the market value if there was no mining + the electricity costs of the miner + a small margin. In the end you can not avoid to distribute the coins based on peoples buying power (money) but making an IPO in addition gives you capital so you can speed up the development process and promote the idea to get a wider supporter base....
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I would guess that Bitcoin distribution is among the most horrible of all crypto ledger projects. So that can not be an argument for Bitcoin. Would be interesting to compare the Bitshares distribution to Bitcoin distribution.
Then can POW guarantee a better distribution? The only thing is does differently (in a far less efficient way) is it avoids legal challenges of an IPO that could also go over a very long period of time and could mimic the bitcoin creation model. It is an illusion that mining gives coins to the average guy. In the end mining gives the coins just to those that can afford mining equipment that is efficient enough to be run economically. In the end miners are professionals that invest in equipment that bring coins into existence and then sell those coins for a price above electricity costs. If you can not afford this mining equipment you have to buy the coins from the professional miners for the market value if there was no mining + the electricity costs of the miner + a small margin. In the end you can not avoid to distribute the coins based on peoples buying power (money) but making an IPO in addition gives you capital so you can speed up the development process and promote the idea to get a wider supporter base....
POW is still just a fair as POS. It just wastes of lot of resources long term. With POS, once the market price is established thats about the only way you get coins. With POW at least there is an ability to get them below market price until mining period is over, but the cost of entry might be prohibitive.
POS doesn't really define a distribution, so it can be literally the worst possibile distribution to the best. Where as with POW this is not the case.
Even then you need to define what specifically is a better distribution. I'm sure BTC has more users/wallets than any altcoin. Tiny chance DOGE beats BTC.
-edit I miss your original point and that is POS leaves more capital for the creators. Thats true, but thats not necessarily good or bad. With all the altcoins premines are seen as evil and unfair. It is all perspective and value judgement need context. If you were trying to make litecoin #2 POW is ok, if you want to distribute shares in a company POW distribution isn't even workable.
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I would guess that Bitcoin distribution is among the most horrible of all crypto ledger projects. So that can not be an argument for Bitcoin. Would be interesting to compare the Bitshares distribution to Bitcoin distribution.
Then can POW guarantee a better distribution? The only thing is does differently (in a far less efficient way) is it avoids legal challenges of an IPO that could also go over a very long period of time and could mimic the bitcoin creation model. It is an illusion that mining gives coins to the average guy. In the end mining gives the coins just to those that can afford mining equipment that is efficient enough to be run economically. In the end miners are professionals that invest in equipment that bring coins into existence and then sell those coins for a price above electricity costs. If you can not afford this mining equipment you have to buy the coins from the professional miners for the market value if there was no mining + the electricity costs of the miner + a small margin. In the end you can not avoid to distribute the coins based on peoples buying power (money) but making an IPO in addition gives you capital so you can speed up the development process and promote the idea to get a wider supporter base....
POW is still just a fair as POS. It just wastes of lot of resources long term. With POS, once the market price is established thats about the only way you get coins. With POW at least there is an ability to get them below market price until mining period is over, but the cost of entry might be prohibitive.
POS doesn't really define a distribution, so it can be literally the worst possibile distribution to the best. Where as with POW this is not the case.
Even then you need to define what specifically is a better distribution. I'm sure BTC has more users/wallets than any altcoin. Tiny chance DOGE beats BTC.
-edit I miss your original point and that is POS leaves more capital for the creators. Thats true, but thats not necessarily good or bad. With all the altcoins premines are seen as evil and unfair. It is all perspective and value judgement need context. If you were trying to make litecoin #2 POW is ok, if you want to distribute shares in a company POW distribution isn't even workable.
With all the altcoins premines are seen as evil and unfair.
An IPO is not the same as premine. With premine the actual coins go to the devs and they can do with it whatever they want. An IPO distributes the coins to everyone that is donating and the devs have the same rules as others. Not so with premine.
Even then you need to define what specifically is a better distribution. I'm sure BTC has more users/wallets than any altcoin.
Right, like you said elsewhere in your post, a POS-IPO (also POS is not equal to IPO see Peercoin) is not more fair but also not less fair.
The fact that there are more Bitcoin wallets than with any other alt is due to Bitcoin being the first not due to the fact that it is POW.
POS doesn't really define a distribution, so it can be literally the worst possibile distribution to the best. Where as with POW this is not the case.
POS has by itself nothing to do with distribution. It can be done by POW (Peercoin) or by an IPO. The Bitshares IPO is shorter than Bitcoin POW but the amount of coins you get doesnt decrease over time like with Bitcoin POW which is an advantage for later commers.
POW is still just a fair as POS. It just wastes of lot of resources long term. With POS, once the market price is established thats about the only way you get coins. With POW at least there is an ability to get them below market price until mining period is over, but the cost of entry might be prohibitive.
The market price of BTC is not defined by whether the mining period is over or not. The market if it is half way accurate prices the to be expected dilution in.
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A premine can utilize IPO. An IPO can be a joke, depending on how "public" the offering is. Look at the sourgrapes NXT complaints. My point here is that POW is not any worse of a distribution mechanism than most of the offered alternatives.
I didn't mean to imply that the distribution of bitcoin is wide because of POW, I was just disagreeing that bitcoin distribution is among the "most horrible of all crypto ledger projects". You really need to be specific about what is "horrible". If you were to use # of wallet as the metric, I think one would come to a different conclusion.
Even in the early days with bitcoin, I'm sure the # of miners vs the community size was closer in quantity than it is now. One could argue that any bitcoin distribution problems are a result of how much the community has grown.
Obviously whether or not the mining period is over with a coin will affect the market price. You are right it doesn't define it, but I am not sure about your last sentence. You seem to be saying 2 different things. You say mining period doesn't affect market price because market price takes it into account ?!? Interesting perspective.
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A premine can utilize IPO. An IPO can be a joke, depending on how "public" the offering is. Look at the sourgrapes NXT complaints. My point here is that POW is not any worse of a distribution mechanism than most of the offered alternatives.
I didn't mean to imply that the distribution of bitcoin is wide because of POW, I was just disagreeing that bitcoin distribution is among the "most horrible of all crypto ledger projects". You really need to be specific about what is "horrible". If you were to use # of wallet as the metric, I think one would come to a different conclusion.
Even in the early days with bitcoin, I'm sure the # of miners vs the community size was closer in quantity than it is now. One could argue that any bitcoin distribution problems are a result of how much the community has grown.
Obviously whether or not the mining period is over with a coin will affect the market price. You are right it doesn't define it, but I am not sure about your last sentence. You seem to be saying 2 different things. You say mining period doesn't affect market price because market price takes it into account ?!? Interesting perspective.
I agree with you that POW and POS are not better or worse in terms of coin distribution. It vastly depends on how many people know about it and how many people think it's gonna be successful.
By "distribution" I mean a continuum of: A "good" distribution = many individuals have the majority of the coins and a "bad" distribution = one individual has all coins.
Bitcoin distribution is not "good" because few people knew about it when many coins per time were issued: http://www.businessinsider.com/927-people-own-half-of-the-bitcoins-2013-12