61
General Discussion / Re: LTC Volume as High as BTC Today
« on: July 10, 2015, 10:51:23 am »
And finally and inevitably - the crash. Down over 30% the last 2 hours...
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62
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 08, 2015, 10:54:21 pm »Thom re your first comment - I deliberately said my comments had nothing to do with micro payments, so I'm not sure what you're disagreeing with - do you care to clarify for me?Warning: this tangential discussion has nothing to do with micro-payments:
As an aside, I wondered if it might be beneficial to demand transparency of real identities from witnesses. This would allow the community to better assess the actual decentralisation in the witness pool, the trustworthiness of the witnesses, and put their real-life reputations at stake rather than just an alias that can be replaced. Could this improve network security (albeit at the expense of witness privacy)?
First, I respectfully disagree about the impact of cost on the viability of micropayments. As I stated earlier, the cost of the network must be factored into the equation for determining minimal fees and thus directly relates to whether micropayments will be economically viable and not a welfare feature.
Second, as to the last paragraph, have you considered that mandating a real world identity might make the network weaker? It provides a direct path for gov regulators to attack individual witnesses, which is yet another reason I keep saying coexistence of privacy and forceful (i.e. gov) regulation cannot coexist.
A better way to protect against bad witnesses is their track record of production and other systems of reputation. Real world identification is not necessary.
Regarding witness identities, to be clear I'm a long way from pushing this idea - I was just floating it because I think there may be security challenges as a direct result of the lack of transparency (see below). Its a critical point you raise on regulatory attack though and I expect most of the community feels the same. But here's what triggered me to raise it in the first place, as I was questioning arhag's statement that it's more difficult to achieve collusion amongst 51% of witnesses than 51% of PoW miners. Feel free to comment on whether such concerns are real and addressed or not, and alternatives to meet them.
1. We have limited transparency on the independence of the witnesses. Is it possible for users with a superior witness process (with the best witness stats) to clone that into more than one witness, perhaps in the extreme even controlling more than 51% of witnesses? Even if we were convinced that witnesses were controlled by different forum identities, might the individuals be related parties, for example working for the same entity (e.g. CMX or others)?
2. We have limited means to make reputation loss an effective deterrent. If the reputation is limited to BitShares, rather than real world, the sacrifice is a lot less for somebody willing to forsake ongoing involvement with BitShares for a highly profitable attack, than for somebody who carries that stigma with them into any future endeavours. Further, what's to stop an attacker from running one or more witnesses under a new alias after the attack is carried out?
Red very badHa! Yeah, I hear you!
Green good
63
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 08, 2015, 08:10:10 am »
Warning: this tangential discussion has nothing to do with micro-payments:
arhag, I wish I could personally give your commentary the full comprehension it deserves, but alas I am not an expert on block-chain attacks. I'm sure others will see gems in your remarks, and I trust such a detailed post is not lost.
Bearing this in mind, you appear to make a strong case that the economics of an attack in DPoS compared to PoW are more discouraging for the would-be attacker. I think network stakeholders use a different economic scorecard though in determining what cost they are willing to absorb to defend against such an attack. That is, the cost of insuring against the attack needs to be weighed against the loss of stakeholder value and system credibility if an attack is successful, which will be just as negative in either system. On this basis, the community will expend as much cost as is considered reasonable to protect the integrity of the system. If the probability of an attack is much lower, because the attack economics are poorer as you demonstrate, then perhaps the acceptable insurance cost will be less. But it's hard for stakeholders to estimate such probabilities, so the link may not be very clear.
For PoW this network insurance cost is clear (dilution), while for DPoS, the explicit cost (dilution) is lower, but there is additional time and resource cost the community willingly contributes in order to provide the vigilance required around qualitative issues such as witness selection, decentralisation, and trust, in order to prevent such attacks. The greater the need to prevent attack, the more the community will be willing to expend in the effort to prevent it. BTC owners by contrast, expend no effort to analyse these things or vote accordingly. My earlier point was merely to say that because this effort is not quantifiable, its difficult to compare the all-up costs to stakeholders in each system.
As an aside, I wondered if it might be beneficial to demand transparency of real identities from witnesses. This would allow the community to better assess the actual decentralisation in the witness pool, the trustworthiness of the witnesses, and put their real-life reputations at stake rather than just an alias that can be replaced. Could this improve network security (albeit at the expense of witness privacy)?
arhag, I wish I could personally give your commentary the full comprehension it deserves, but alas I am not an expert on block-chain attacks. I'm sure others will see gems in your remarks, and I trust such a detailed post is not lost.
Bearing this in mind, you appear to make a strong case that the economics of an attack in DPoS compared to PoW are more discouraging for the would-be attacker. I think network stakeholders use a different economic scorecard though in determining what cost they are willing to absorb to defend against such an attack. That is, the cost of insuring against the attack needs to be weighed against the loss of stakeholder value and system credibility if an attack is successful, which will be just as negative in either system. On this basis, the community will expend as much cost as is considered reasonable to protect the integrity of the system. If the probability of an attack is much lower, because the attack economics are poorer as you demonstrate, then perhaps the acceptable insurance cost will be less. But it's hard for stakeholders to estimate such probabilities, so the link may not be very clear.
For PoW this network insurance cost is clear (dilution), while for DPoS, the explicit cost (dilution) is lower, but there is additional time and resource cost the community willingly contributes in order to provide the vigilance required around qualitative issues such as witness selection, decentralisation, and trust, in order to prevent such attacks. The greater the need to prevent attack, the more the community will be willing to expend in the effort to prevent it. BTC owners by contrast, expend no effort to analyse these things or vote accordingly. My earlier point was merely to say that because this effort is not quantifiable, its difficult to compare the all-up costs to stakeholders in each system.
As an aside, I wondered if it might be beneficial to demand transparency of real identities from witnesses. This would allow the community to better assess the actual decentralisation in the witness pool, the trustworthiness of the witnesses, and put their real-life reputations at stake rather than just an alias that can be replaced. Could this improve network security (albeit at the expense of witness privacy)?
64
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 08, 2015, 01:53:55 am »Finally I would like to strongly encourage bytemaster to test significant changes like this with the community first - at a minimum, by forming groups of trusted community members that can provide feedback on different policy areas. Why not take advantage of the depth of expertise at hand?Well said! Yet every time this is suggested, and it has been suggested many times, it is ignored, for example when the PR muzzle silenced open communication. A PR review board was suggested but it was never taken seriously. That doesn't exactly give me a nice warm feeling, and doesn't indicate a very strong level of respect for the community IMHO.
It's really a compromise situation I think. Full transparency creates PR problems. Trusted groups creates privileged access for some over others. Pushing pre-baked decisions may lead to sub-optimality, unforeseen risks and corrections. But maybe there is a middle ground available, with enough thought.
65
OpenLedger / Re: USD, EUR and CNY Gateway created on CCEDK.com
« on: July 08, 2015, 01:30:07 am »
I would like to better understand how the actual functionality will look for users, because it appears a bit vague to me at the moment. (Apologies if the answers are obvious to others). So as a starting point:
Say I have fiat USD, and I want to start trading cryptos. I send the fiat USD to CCEDK - do I then receive bitUSD in return or a gateway USD (say CCEDK.USD)?
Likewise if I were to send BTC or alt-coin to CCEDK, do I receive the Smartcoin version (e.g. bitBTC) or a gateway equivalent (say CCEDK.BTC)? If there were more than one privatised Smartcoin equivalent of any fiat or crypto, which version would I receive?
Assuming I receive the appropriate Smartcoin equivalents, then is my crypto-trading limited to whatever cryptos are currently represented in BitShares in Smartcoin form? ie. I speculate in bitDASH rather than real DASH or a gateway IOU called CCEDK.DASH?
What is the profit model for CCEDK dependent on? For example, would CCEDK be creating their own privatised Smartcoins to represent DOGE, DASH, BLK etc in order to earn trading fees as a privatised issuer? Or would they be rewarded in some way for setting up markets for various trading pairs? If there are multiple exchanges like CCEDK in the network competing in these activities, would we end up with multiple representations of each coin (which would not seem very efficient from a user perspective)?
Or is the profit model transformed primarily into a referral model, where CCEDK receives a cut of all trading activity in the BitShares exchange resulting from members brought into the system?
How are different exchanges in the BitShares Exchange Network likely to differentiate themselves?
Say I have fiat USD, and I want to start trading cryptos. I send the fiat USD to CCEDK - do I then receive bitUSD in return or a gateway USD (say CCEDK.USD)?
Likewise if I were to send BTC or alt-coin to CCEDK, do I receive the Smartcoin version (e.g. bitBTC) or a gateway equivalent (say CCEDK.BTC)? If there were more than one privatised Smartcoin equivalent of any fiat or crypto, which version would I receive?
Assuming I receive the appropriate Smartcoin equivalents, then is my crypto-trading limited to whatever cryptos are currently represented in BitShares in Smartcoin form? ie. I speculate in bitDASH rather than real DASH or a gateway IOU called CCEDK.DASH?
What is the profit model for CCEDK dependent on? For example, would CCEDK be creating their own privatised Smartcoins to represent DOGE, DASH, BLK etc in order to earn trading fees as a privatised issuer? Or would they be rewarded in some way for setting up markets for various trading pairs? If there are multiple exchanges like CCEDK in the network competing in these activities, would we end up with multiple representations of each coin (which would not seem very efficient from a user perspective)?
Or is the profit model transformed primarily into a referral model, where CCEDK receives a cut of all trading activity in the BitShares exchange resulting from members brought into the system?
How are different exchanges in the BitShares Exchange Network likely to differentiate themselves?
66
Technical Support / Re: Collateral
« on: July 08, 2015, 12:33:16 am »
The level of counter-party exposure will depend on the counter-party risk inherent in the underlying collateral and the minimum collateral requirements to protect against sudden devaluations. In v 2.0 these will be more flexible and specific to each Smartcoin. So its probably best not to make general statements, other than to say the collateral mechanism aims to substantially reduce counter-party risks.
67
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 07, 2015, 10:37:03 pm »
Network security comes at a cost. Under PoW, that cost is explicit. Under DPoS, that cost is opaque, but real nonetheless - the cost of voting. I've made this point previously, that it is not a verifiable claim to say DPoS is lower expense than PoW for this reason. Either DPoS also has a high cost, or compromises security. This change brings that point home for me. Still, I believe there are strong benefits to DPoS because stakeholders have control rather than miners.
The key is to exercise that control in the most effective and efficient way possible. Until convinced otherwise, I strongly prefer stakeholders retain the ability to vote instantly rather than waiting 24 hours, as I worry that unforeseen attack types are possible in that time (unknown unknowns), that perhaps cannot all be captured by automated block-chain bans. I see the ability to instantly fire witnesses as a catch-all solution, if implemented effectively.
The best solution to instant firing I can think of is to allow voting power to be delegated by the community to members who prove themselves at being trustworthy, adept and responsive to such events in real-time. Users can in turn instantly change those delegations, leaving ultimate power in the hands of the wider community. This would help reduce voter apathy, as the job is much simpler and far less frequent for stakeholders with little input, while allocating the strongest voting power where the most information is held and highest responsiveness needed. To validate such an approach though, I'd want to be sure that we are not just shifting the problem of malevolent witnesses to malevolent delegates.
I'll need to rely on experts in this area to find the optimal solution, but just wanted to add my view. Bytemaster is yet to comment, and may allay some concern.
Finally I would like to strongly encourage bytemaster to test significant changes like this with the community first - at a minimum, by forming groups of trusted community members that can provide feedback on different policy areas. Why not take advantage of the depth of expertise at hand?
The key is to exercise that control in the most effective and efficient way possible. Until convinced otherwise, I strongly prefer stakeholders retain the ability to vote instantly rather than waiting 24 hours, as I worry that unforeseen attack types are possible in that time (unknown unknowns), that perhaps cannot all be captured by automated block-chain bans. I see the ability to instantly fire witnesses as a catch-all solution, if implemented effectively.
You always have great depth of analysis arhag, but how confident can the community be that we can ever foresee every attack vector?My thinking was that if the attacker used their own stake to vote in all their delegates, then transferred to an exchange and sold (losing the votes), they would have more time to sell and execute the attack if votes are only tallied once a day, instead of immediate.
I see. I'm not too worried about that attack considering the difficulty of controlling enough stake to unilaterally vote in enough active witnesses for an attack. And the 1 day tally is only a downside from the current 0.x system if you believe that voters would react fast enough to vote out that witness in less than 24 hours (which I do not believe at all).
The best solution to instant firing I can think of is to allow voting power to be delegated by the community to members who prove themselves at being trustworthy, adept and responsive to such events in real-time. Users can in turn instantly change those delegations, leaving ultimate power in the hands of the wider community. This would help reduce voter apathy, as the job is much simpler and far less frequent for stakeholders with little input, while allocating the strongest voting power where the most information is held and highest responsiveness needed. To validate such an approach though, I'd want to be sure that we are not just shifting the problem of malevolent witnesses to malevolent delegates.
I'll need to rely on experts in this area to find the optimal solution, but just wanted to add my view. Bytemaster is yet to comment, and may allay some concern.
Finally I would like to strongly encourage bytemaster to test significant changes like this with the community first - at a minimum, by forming groups of trusted community members that can provide feedback on different policy areas. Why not take advantage of the depth of expertise at hand?
68
General Discussion / Re: Financial analysis comparing Bitshares and Bitcoin
« on: July 07, 2015, 05:10:34 am »
Its great to have analysis like this and I'd like to see much more in future regarding BitShares' economics.
I'd suggest some changes in treatment, although its arguable what the optimal treatment is for some of these things.
BTC holders do not receive any transaction fees as revenue as they all go to miners. The dilution is an expense though, resulting in net loss and negative P/E. For BitShares, I personally would treat the fees as revenue, and the delegate pay (dilution) as expenses. So again EPS and P/E is negative.
I'm not sure BTC and BTS are strictly comparable though. BTC is positioning itself as free-market money, so there are other transactional metrics of value to owners, such as those shown here... https://blockchain.info/charts. BTS is positioning itself as a profit-making enterprise, so there are other financial metrics of value to its owners, such as revenue growth, exchange transaction growth, active user growth, and once we have 2.0, compositional metrics such as UIA growth and establishment fees, and referral fee splits.
I'd suggest some changes in treatment, although its arguable what the optimal treatment is for some of these things.
BTC holders do not receive any transaction fees as revenue as they all go to miners. The dilution is an expense though, resulting in net loss and negative P/E. For BitShares, I personally would treat the fees as revenue, and the delegate pay (dilution) as expenses. So again EPS and P/E is negative.
I'm not sure BTC and BTS are strictly comparable though. BTC is positioning itself as free-market money, so there are other transactional metrics of value to owners, such as those shown here... https://blockchain.info/charts. BTS is positioning itself as a profit-making enterprise, so there are other financial metrics of value to its owners, such as revenue growth, exchange transaction growth, active user growth, and once we have 2.0, compositional metrics such as UIA growth and establishment fees, and referral fee splits.
69
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 07, 2015, 04:35:54 am »Thanks.We just need our own version of Lightning network for micropayments.If the Bitcoin Lightning network is feasible, and allows full scalability of Bitcoin, what does that mean for the strategic positioning of the bitShares network in the market? Are the two networks mutually exclusive, or can they interact to leverage their relative strengths in different applications?
The lightning network is only useful for transfers of funds between users (so it won't be useful for smart contracts and markets). And even then it is most beneficial if users tend to stick with one asset (e.g. BitUSD) and for smaller amounts (so it is perfect for microtransactions). Furthermore, because of the small block intervals and high TPS of BitShares, it allows the settlement period for the BitShares lightning network to be much smaller (we could handle everything settled once per day for everyone).
I'm not sure what you mean by the networks being mutually exclusive. And I don't see what Bitcoin's relative strength would be other than the fact that it (currently) has the stronger network effect.
What I meant by mutually exclusive seems to be what you are inferring - that, current network size aside, Bitcoin has no redeeming features that BitShares will not dominate, so there is no long term reason for co-existence. You might be right - I would find this outcome surprising though, given the constant evolution on all sides.
70
General Discussion / Re: Greek referendum
« on: July 07, 2015, 02:28:22 am »
Interesting discussion! This is only my view today, which could change tomorrow!
Allow an ideal free system to evolve from any initial power or wealth distribution, and over time it will naturally approach a power law distribution, where most is in the hands of a minority. But as long as all agents are free and non-violent, this is a reasonable outcome, including the existence of monopolies, that still only survive in the private market as long as they satisfy the needs of other people. In principle, those at the top of the power/wealth distribution are those that have and continue to serve society's demands the best. The resulting spread comes down to differences in skill, effort and unavoidably, luck.
That's all in principle. The problem is that an element of those with the most power will always seek to cement that power through depriving the choices of those without it, and will bend and reform the system to meet this purpose. Thus even a theoretically sound system ends up being corrupted by human nature. You can alternatively set up a system where power is maintained more equally, but such a non-equilibrium can only then be sustained by the force of an authority (e.g. socialism), which is then a contradiction that will ultimately be exploited.
So power struggles are not a problem of which system, as all systems converge eventually toward abuse of power, which in the end is only corrected by a revolution, with a new optimism, beginning a cycle anew. The technology (e.g. block-chains) only allows different kinds of systems to be tried, but it does not offer any panacea to these basic problems. Different systems will come and go, and the debates over which labels are best will continue. Some systems are less corruptible for longer than others, which is about the best we can aim for.
As I see it, the only lasting solution left is not a system at all, but a very human characteristic - learned wisdom.
Allow an ideal free system to evolve from any initial power or wealth distribution, and over time it will naturally approach a power law distribution, where most is in the hands of a minority. But as long as all agents are free and non-violent, this is a reasonable outcome, including the existence of monopolies, that still only survive in the private market as long as they satisfy the needs of other people. In principle, those at the top of the power/wealth distribution are those that have and continue to serve society's demands the best. The resulting spread comes down to differences in skill, effort and unavoidably, luck.
That's all in principle. The problem is that an element of those with the most power will always seek to cement that power through depriving the choices of those without it, and will bend and reform the system to meet this purpose. Thus even a theoretically sound system ends up being corrupted by human nature. You can alternatively set up a system where power is maintained more equally, but such a non-equilibrium can only then be sustained by the force of an authority (e.g. socialism), which is then a contradiction that will ultimately be exploited.
So power struggles are not a problem of which system, as all systems converge eventually toward abuse of power, which in the end is only corrected by a revolution, with a new optimism, beginning a cycle anew. The technology (e.g. block-chains) only allows different kinds of systems to be tried, but it does not offer any panacea to these basic problems. Different systems will come and go, and the debates over which labels are best will continue. Some systems are less corruptible for longer than others, which is about the best we can aim for.
As I see it, the only lasting solution left is not a system at all, but a very human characteristic - learned wisdom.
71
Technical Support / Re: Idea that just came to me to deal with the problem of micropayments
« on: July 07, 2015, 01:11:51 am »We just need our own version of Lightning network for micropayments.If the Bitcoin Lightning network is feasible, and allows full scalability of Bitcoin, what does that mean for the strategic positioning of the bitShares network in the market? Are the two networks mutually exclusive, or can they interact to leverage their relative strengths in different applications?
72
General Discussion / Re: Announcing Brownie Points (BROWNIE.PTS)
« on: July 06, 2015, 10:55:01 pm »
I aim to constructively assess, challenge, educate, and promote new perspectives, whether appreciated at the time or not.
73
General Discussion / Re: Announcing Brownie Points (BROWNIE.PTS)
« on: July 06, 2015, 07:56:50 am »
BROWNIE.PTS could also be used as the initial seed for reputation-based credit when we establish such a market (or at least one factor in setting initial credit limits). The un-collateralised portion of any loans is always at risk of non-payment, and is effectively backed by the borrower's reputation. Fraud is unlikely where the reward for non-payment is greater than the amount already contributed to the community, because there is disincentive to compromise the good reputation that has been so hard-earned.
74
General Discussion / Re: ABN Trade forks ripple, creates own trade network without XRP
« on: July 03, 2015, 10:57:36 am »
More big boys starting to move...
http://cointelegraph.com/news/114717/citi-develops-3-blockchains-with-own-citicoin-token
http://cointelegraph.com/news/114717/citi-develops-3-blockchains-with-own-citicoin-token
75
General Discussion / Re: Paper: The approach of the School of Austrian Economics to external effects
« on: July 03, 2015, 10:51:36 am »I have observed the Bitcoin / Crypto Economy Space now for a while and so got in touch with libertarian theory. I am personally very interested in theories about social interaction. I thought a lot about the ins and outs of libertarian theory in a relatively unstructured way until I finally wrote that paper which deals with the very broad concept of externalities.Interesting piece. FYI there was another interesting forum discussion on externalities a while ago in this thread... https://bitsharestalk.org/index.php/topic,13338.0.html
I hope you enjoy reading it! Feel free to discuss it. I like the free way things are discussed on this forum
You can find it here: http://consensus-analytics.com/publications/
If you like it share it
