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Topics - Ander

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General Discussion / BTER IS WORKING! :)
« on: March 16, 2015, 05:00:50 pm »
I withdrew all (well almost all) my BTS successfully! 

Keeping a small trading position because its been very profitable buying this big dumps the past week.  Though maybe after this people wont need to dump it so hard so it wont be as profitable. :)

In rgcyrpto's blog, he states that the most effective way for us to promote bitshares is to provide useful services to people.  This makes an enormous amount of sense.

Given that the community most likely to be early adopters of bitshares is the bitcoin community, and this should be our early target.  So the question is: what service can bitshares provide to them?

Consider the mindset of a typical bitcoiner, what do they want?
* They want real bitcoins, where they have access to their own keys.   This is critical.  They dont want goxBTCs, IOUs from an exchange that they cannot verify is not running a fractional reserve, etc. 
* They want to be able to trade between bitcoins and fiat safely, without risk of the exchange thy use being hacked. 
* They dont want competitor altcoins which attempt to be the ultimate currency to succeed and replace bitcoin.  But altcoins which are perceived as working with bitcoin, not competing: other applications of blockchain technology which support bitcoin are given a pass.

How can Bitshares position itself to be successful in the bitcoin community, given these things? 
The answer is of course the Decentralized Exchange, but with an important twist.

I said before that bitcoiners want REAL BTC.  That is, they want to control their own keys to bitcoins, and be able to verify that they do not have IOUs in a system which is actually running a fractional reserve (such as MtGox ran for years after they were first hacked).

The bitcoin community would love a true decentralized exchange that they do not have to trust.  The problem is that we do not yet fulfill all of their needs.  When someone uses the bitshares decentralized exchange, they can get exposure to the price of bitcoin via bitBTC, but they cannot buy actual BTC that they are given actual private keys to, and this is what the bitcoiners really want.  They want to both have private keys, and be able to trade into fiat.

The bitshares decentralized exchange can provide the trade into fiat part fairly easily.  The crypto community is not attached to real USD or CNY or whatever, and bitUSD/bitCNY/etc are perfectly fine as a replacement, if there is sufficient liquidity and market making such that someone can provide an instant conversion service at close to no spread (like what btc38 is doing, allowing deposits of bitCNY as if they were real CNY). 

The trickiest part of this is: How can we provide people with the actual private keys to real bitcoins, if they buy on the bitshares decentralized exchange?  Is this achievable?   Could it be done either now, or with the development of a new feature?   I remember that the devs worked on a feature to allow people to send bitcoin to a bitshares address.   This could be part of the puzzle.

Is there a way for a bitcoin private key to be securely stored within the bitshares blockchain?  Such that it could be traded among people for bitUSD, and then accessed with one's bitshares private key, allowing someone to take control of their bitcoin that they buy on an exchange?

This could be the first highly profitable DAC.  Bitfinex, Okcoin, Huobi etc are all very profitable. 
Imagine if Bitshares itself could become like them, allowing people to trade real BTC, and capture a piece of this market.

The Bitshares DAC could take a small percent of every trade, in the form of either BTC and/or bitUSD.  It could undercut the other exchanges in terms of fees while providing decentralization.

It could take the profits gained through these trades and distribute them among all BTS holders as dividends, becoming the first truly profitable DAC.  Either by dividing the actual BTC among holders, or by taking the bitUSD received as fees, converting to BTS, and burning the shares, causing the others to be more valuable.

The BTS market cap would need to grow to support the higher volume of bitUSD/bitCNY etc that is being used to trade the BTC.  The BTS value would be supported by real profits paid to holders.

I do not know if this is possible, now or later, or what it would take to achieve it.  I dont have the means to realize this, but the community as a whole might, so I present this to you as an idea.  Is this possible?  Is this something we should be working towards, either now or in the future after more features are developed?

Thanks for reading!

TL;DR: We need to become an exchange like huobi/bitfinex/etc, have people trade real BTC on the bitshares blockchain, give them access to the real bitcoin private keys, securely on the blockchain in some way, and provide a safe decentralized exchange for real BTC.  Profits generated from trading would be paid to BTS holders.

General Discussion / What in the hell just happened on bter
« on: February 13, 2015, 07:30:18 pm »
Seriously.  I got filled at 3200.

Two explanations I can think of:
1) Very very desperate bear.
2) Someone hacked bter's BTS supply and dumped it.

Edit: Not possible.

General Discussion / Come_from_beyond's screenshot from the future
« on: February 05, 2015, 11:57:53 pm »

I would like this future world. :)
Many cool easter eggs hidden in that image as well.  So many things seemed surprisingly realistic.

I have realized something huge.  Paid delegates is probably the most important and most beneficial feature of Bitshares.  More important even than Bitassets! 
I’m pretty sure that Rune realized this several months ago, and I thought I understood why they were a big deal when he explained it, but actually I was still missing some of the pieces.  And now that I’ve put it all together I just had a mindgasm. :)

You see, paid delegates do more than just support the development and promotion of Bitshares. They do that too, which is super important, but they ALSO make Bitshares with DPoS paid delegates the most secure crypto coin that has ever been devised: *the most expensive crypto to attack*.  More expensive than Bitcoin even, once at the same scale.

First let’s imagine that you want to attack Bitcoin, what do you need to do?   You need to acquire 51% of hashing power.  So you go out and spend a ton of money on miners, then you make your attack.  You spend a ton of money and you hurt bitcoin.  (Maybe you are a hostile government with a ton to gain if you can keep bitcoin down for a long time and continue to print your own currency).

After the attack other people manage to get some more hashing power, and they get you back under 51% again, and bitcoin rebounds.  But guess what, you still have all of your hardware that you used to launch your first attack!  You buy some more, get 51%, and attack again. 

Once you are so heavily invested into crushing Bitcoin, you can keep on hitting it and you just pay electricity costs.

Now imagine you want to attack Bitshares instead.  Ultimately, what you need to do is similar, you need to gain control of X% of all delegates (this may not still be 51%, but there is some number that you will need). 

There are several possible avenues open to you.  First, you can acquire enough stake in BTS to vote in all your own delegates, and then attack.  This is by far the most expensive kind of attack, and it would give all the money you spend to BTS holders.   As Bytemaster says, if you do this, the community can recover by forking the code, cutting out the hostile stake, and continuing on as before, while also accepting your generous donation.

The second avenue is to do the above, but try to sell your BTS after electing delegates but before attacking, the so called Nothing at Stake attack.   Bytemaster addressed this here:

Every set of 101 blocks (or roughly 17 minutes of time) is considered a snapshot, and after that these blocks cannot be changed.  Someone attempting to create a false chain deeper than that would have their block rejected automatically for not matching the snapshot.  Thus, one would have 17 minutes to sell their stake and launch the attack.

In 17 minutes you could dump a ton of BTS, but you would only get a fraction of your value back.  First you would empty out all the orderbooks.  In general there are about 25 million or less BTS on the ask on btc38 and bter, and a lot of that isn’t anywhere near the current price.  So that’s about 1% of the total supply of BTS, and then you are selling for essentially zero.  Then the traders who are actively online at the time will put in orders at cheap prices, trying to take advantage of the crash, and you’ll be able to sell into those as well.  You’ll get some more out of this, but given that you have less than 17 minutes, not very much. 
If you needed 10% of the total BTS stake to elect all your delegates, you’ll probably lose 80-90% of the money you put in in this dump.  If you need more stake than that, you would lose even more.

Finally, the most realistic and least expensive avenue of attack is the Sybil attack.  You would perform some combination of buying stake/electing your delegates, or fooling BTS holders into electing your delegates, not knowing that they are all controlled by you and ready to collude to attack Bitshares.   Then you would sell any stake you acquired over a period of weeks in order to not lose value, and then final launch your attack.

It is in this form of attack that paid delegates rises to our defense.    Prior to paid delegates, we have had at least one (minor) instance of a Sybil attack:  User ‘sfinder’ managed to get 5 delegates elected, and he became hostile to Bitshares.   Fortunately he couldnt really do much with only 5 delegates.

Now, in the era of paid delegates, we have a lot of delegates which are being *heavily scrutinized*.  Every paid delegate is under the watchful eye of shareholders, demanding that the see evidence that the delegate has the best interests of Bitshares at heart.
We have already voted out one paid delegate, blackwavelabs, who the community noticed was not providing updates, and we were not sure if he was creating any value.

Anyone wishing to launch a Sybil attack by getting many delegates elected in the current environment faces a very, very hard task.  Paid delegates create a significant amount of competition for delegate slots that was not present before, and as Bitshares scales, this demand scales with it.  A Bitshares which increases to an order of magnitude greater price will have many more than 101 individuals and organizations trying to become delegates.  It will be very hard for a malicious entity to execute a Sybil attack and get even a few paid delegates into office, much less 51 of them!

And once they get some delegates in office, it is hard for them to KEEP them in office, if they are a malicious entity.  Because BTS holders demand REAL Proof of Work!  We demand that our miners demonstrate that they are doing Work on behalf of Bitshares.  Not just cryptographic mathematical calculations like in Bitcoin’s Proof of Work, but actual HUMAN level work, that we can see.  Nonperforming delegates will be voted out fairly quickly in a competition intensive environment!

As a result, performing a Sybil attack would be immensely hard.  Anyone wishing to get 51 delegates elected would need to be doing 51 delegates worth of Proof of Work in promoting and building Bitshares, to remain in office until they can execute their plan. 

Finally, obtaining these delegate slots requires a good reputation.  In a future environment where 101 other organizations have good reputations and are working to build Bitshares, if you want to get your 51 delegates elected you will need to develop 51 delegates with even BETTER reputations than some of them, or manage to fool us all 51 times in a short period of time.  Fool me once, shame on you, fool me 51 times and we deserve to have Bitshares be attacked.

With Bitcoin, you executed your attack, and then you still have your hardware to provide hashing power to help you do it again, you only lose electricity costs.  But with Bitshares paid delegates, after you issue your attack, you destroy the reputation of every single delegate you use in your attack, that you worked so hard to build up.  Bitshares recovers after a time and then you are back where you began, voted out of all your positions, all your identities and reputations tarnished.   To attack again you would need to start over.  Bitshares is resilient.  It survives.

To remain a paid delegate, the individual or organization running the delegate must show TRUE Proof of Work.  Proof at a human level.  Proof that they are working for the benefit of Bitshares, as validated by human shareholders.

Bitcoin’s Proof of Work does provide security, but it is expensive.
Bitshares’ original DPoS with delegates that were hardly paid anything at all and not well scrutinized was cheap, but had vulnerabilities to Sybil attacks, if one entity could gain control of enough delegates while we weren’t paying attention.

Bitshares new DPoS with paid delegates adds resilience to Sybil attacks by giving shareholders a very strong incentive to thoroughly and continually investigate all delegates, and rally together to cut out any perceived malicious or parasitical agent.  While it is once again expensive like Proof of Work, the money contributes directly to paying for the development and promotion of the Bitshares ecosystem, such that it becomes a viral entity with the 101 most qualified business partners invested in its success! 

Paid delegates is the true Proof of Work.  Prove to us constantly that you are providing Work for Bitshares or be replaced in a highly competitive, reputation based environment.  Maintaining a good reputation is hard and requires effort.  Performing a Sybil attack and maintaining the reputation of enough fake identities to attack Bitshares is much, much harder!

When we look at Bitshares this way, it fulfills the ultimate promise of crypto: an ultra secure store of value.  While this requires a cost, just like in Proof of Work, our security algorithm provides a massive advantage: 101 entities and business partners devotes to the viral promotion of Bitshares.  These entities constantly compete with each other and others hoping to get into the club to provide the most value in a darwinian process where those who fail to be efficient enough in creating value are replaced.

The fact that Bitshares also has and will tons of other amazing features like Exchange, Vote, and DNS, and will make money through these uses, is icing on the cake.

Some more final notes:
•   At various points I suggest that you could attack Bitshares with 51 delegates.  I don’t actually know if this number is the right number, I have seen estimates both higher and lower.  Replace 51 with X delegates instead.
•   It is important that we are vigilant in inspecting standby delegates as well.  If a malicious entity got its delegates #102-152 ready in line, it could wait until some event got shareholders angry at current delegates and then get elected when we removed approval from them, then execute the attack.  Standby delegates matter as well and must be investigated.
•   Any time in which we see large and rapid delegate turnover we should be worried and extra vigilant!  It is possible at such times that all the new delegates are being voted in by a malicious entity who is going to dump their shares and then attack.  Be extra vigilant in times of high delegate turnover!

This post demonstrates why it is critical that we do NOT separate workers and block producer delegates!!  A low pay block producer delegate is a delegate that goes unscrutinized!  A high pay delegate is one that must always demonstrate proof of work.  It is precisely because we are paying so much attention to paiddelegates and their reputations, that Bitshares becomes secure against Sybil attacks.

This post is my reaction to the posts of DecentralizedEconomics on the bitcointalk forums, about Bitshares.  While I believe that Bitshares is much greater than the straw man version of it that he attacks, and our devs are far more honest than he believes (and more honest than most in crypto), I also believe that he has an important point, and he highlights one important weakness of Bitshares that we must correct. 

We must harness this criticism and make Bitshares even better!

I believe that having a known, fixed, future supply maximum is absolutely critical to a successful cryptocurrency.  This is the essential 'promise' of Bitcoin: There will eventually be only 21 million Bitcoins.  There is no central authority which can increase this limit.

We took a huge blow when we went from a 2 billion supply cap to a 2.5 billion and growing supply.  I'm not saying paid delegates are bad (they are amazing), and I'm not saying inflation is necessarily bad (it is necessary).  What I am saying is that not knowing for certain what the maximum possible number of coins will be at some point in the future undermines everything that it means to be a cryptocurrency.

Paid delegates are amazing, and they will sustain Bitshares going forward.  Paid delegates are the way that we hire talent, and reward them with equity.  If the price goes up, they scale and support even more development/marketing/promotion.  If the price goes down, and we have to cut back, and allow several paid delegate slots to support one developer, then we cut back. 

Paid delegates are not a problem, they are not what I am talking about here.  With paid delegates we have a known, fixed future maximum supply, as shown here:
Investors can look at this possible future supply and make rational decisions based on it.
I love paid delegates and think we should elect even more of them to promote and build Bitshares faster.

So what is the problem?

What we can never do again is to have another share supply increase like "the merger".  What this looks like to pretty much everyone is the following:
* Bitshares is clearly too centralized because the core dev group decreed by fiat that the share supply would increase, and it happened.  Therefore there is no guarantee of a supply limit in the future.

You can see this though in posts by people like DecentralizedEconomics and NewMine.  And while they only show one side of the story, their side of the story has a significant grain of truth to it.  We must change such that this is no longer true, and can never happen again, if we want to claim to be decentralized.

In the past, the dev team has said things such as "It is important that we are able to pivot, and that might require increasing the share supply". 

I think this stance must be abandoned publicly, and we as a whole community must decide that it will not ever be allowed, to the point that if it occurred we would all simply rebel and continue to support the old chain.

Paid delegates are enough.  If funds are needed desperately for a task, and the community agrees, then we could elect a bunch of paid delegates and fund it.  No additional unexpected inflation, ever again.  We must all agree that this poorly named "merger" was an event that happened in Bitshares past, but which can never happen again under any circumstances.  Because if it can happen again by dictates of a core group, then what DecentralizedEconomics says about Bitshares is actually true.

I say all of this with the utmost respect and admiration for our developers.  You all are the best!  It is okay to experiment and try things, but we must also analyze the consequences and make sure that we do not repeat mistakes.

So here is what we should all agree to.  A new social consensus, stronger than the last:
We will never allow any extra additional inflation of the BTS supply for any reason, and we will never increase the delegate payout above the amount in the current plan (Max 50 BTS per 10 second block, halving each 4 years).  Paid delegates are sufficient to fulfill Bitshares needs, and no other inflationary mechanisms will be added.

I am well aware of the idea that we do not think of Bitshares as a currency, and that BitAssets are the currency in our system.  Yet BTS must still remain a store of value, and it is important for a store of value to have a known, fixed supply limit.  This limit can increase over time, provided that it does so in a way that is known in advance (which we achieve with the paid delegates max block pay).

In any hard problem there are tradeoffs.  If we trade away the ability to create an increase in the supply of BTS in order to achieve <X>, we might lose flexibility.  But we also gain a lot of perceived stability, and a corresponding increase in market value.  And a higher market value makes the paid delegate inflation go a LOT farther and buy us much more.   I believe this tradeoff is worth it.  If we attain a higher market cap and get to where a paid delegate position can sustain a core developer, or even a team of developers, or a huge marketing campaign, then we will not be in a position where we will have to emergency inflate (and ruin the BTS value) to pay for something we need.  We could also run some 'emergency fund' paid delegates who would store up BTS which could be used for such events if the community approved. 

I believe that we gain more value (ability for Bitshares to pay for things it needs), with a hard limit on its inflation rate.  We would have such a hard limit with the 50 BTS per block pay limit, and a community consensus to never add any other inflation.  The previous 25% inflation, and the panic it caused, resulted in a price drop form the 8000 sat range to 4000 sat, before recovering to the 5000-5500 range now.  (For this purpose I measure in satoshis in order to remove the effect of the crypto bear market form the calculation).  Inflating cost us about 1/3 to 1/2 of BitShares purchasing power, thus making paid delegates 1/3 to 1/2 less effective than they would otherwise have been at the higher cap.  The best way to achieve the goals of Bitshares is to support stability, growth, and a higher cap, which in turns increases the power of paid delegate positions.  We cannot achieve that desired stability if the threat of another big inflation forced through by a centralized power group in Bitshares looms over investors heads.

For this reason, I believe this is important to regain the trust of those we lost in the "merger", and to help grow our community going forward.  In the coming weeks, with the website relaunch, the release of version 1.0, etc, it is a good time to broadcast this message to the wider crypto community. 

Bytemaster can create whatever blog posts he wants about Bitshares being decentralized, and in terms of the technical specifications, this is true.  But one fact remains: If a centralized power group within Bitshares is capable of pushing through an inflation in the share supply, Bitshares is still too centralized! 

This is the problem we must remedy. 

Bitshares must become "sufficiently decentralized".

Devs should think about this and agree that paid delegates are enough to secure the future of Bitshares, and agree that they will never attempt to add more inflation.

The community should forge a new social consensus that we will not allow any powerful group within Bitshares to add more inflation to the share supply than the current known, fixed amount, for any purpose (even if we want to merge with Ethereum or whatever our silly dream is!)

We must vow to remain on the chain with the known, fixed supply cap, and not the fork where the supply has been greatly inflated.   Chalk the "merger" up to growing pains, and part of Bitshares history, just make sure it doesn't happen again.

A Bitshares with a strong consensus that the future supply cap is a hard cap is a Bitshares that is more stable, a better store of value, which attracts more investors and has a higher cap, which allows it to better support more growth efforts through paid delegates.

This Bitshares is one that can say truthfully that DecentralizedEconomics complaints are incorrect, and that the community of all stakeholders has the power here, not any centralized group.

Thank you for reading, and I appreciate your thoughts and feedback!

General Discussion / I think Dogecoin is about to have a large rise
« on: January 21, 2015, 07:03:50 pm »
Doge is currently at 69 satoshis, on Jan 21.   I just bought 5 BTC worth yesterday at 68-69.

All of the indicators are looking like Dogecoin is about to enter a large move upwards.  After finding a bottom at 50 sat, it handled the bitcoin crash well and now looks poised for a move over 100, possibly significantly higher.

Of course, BTS also looks like its going higher.  But if you have any money laying around in BTC or something, consider putting some of it into DOGE right now.  If we are correct, we can sell it within the next month for a significant gain and use the profits to buy up BTS and help drive it higher. 

In the past I have had MUCH more success predicting DOGE than predicting BTS.  I dont know why, but maybe its because the DOGE traders are less sophisticated, and this makes the chart much more clear.   They dont have people who have gone long bitUSD or bitCNY trying to manipulate the BTS price so they can make a profit on their bitUSD/bitCNY trades.

Anyway, this is just my opinion, you are responsible for whatever trades you make. :) 
Just don't be shocked if you see a +50% DOGE day soon. 

General Discussion / This thread in the bitcointalk forums is epic
« on: January 15, 2015, 09:56:19 pm »

Looks like its written by BTSTV.  He is claiming to be Roger Ver.  I am extremely skeptical of this claim, but it was a fun read. :D

General Discussion / The name of this forum is a typo. :)
« on: January 11, 2015, 10:46:21 pm »

Which will win?

General Discussion / Coinmarketcap is so hilarious right now
« on: January 09, 2015, 09:21:20 pm »
So, the price for NXT that is reported on the CCEDK exchange is off by a factor of 10 (its 10x higher due to a bug).  When it averages this price in to the rest of the NXT trade, it looks like NXT is up 70%.

As a result, every NXT asset is also "up 70%" right now.  Hilarious!

(Now time for fuzzy to tell us about his conspiracy theories).

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