Profits, Performance, Trust & Efficiency

[bytemaster]

Dan， I support you

bytemaster, enough with the alias new accounts

[mint chocolate chip]

Dan， I support you

bytemaster, enough with the alias new accounts

[MixPioneer]

Dan， I support you

[gulu]

I don't think centralization is a good idea.

The cryptocurrency grave yard is littered with centralized schemes. Make no mistake that there is enough pressure already IMO on I3 to be indicted for securities violations, whether that is the case will be up to a court to decide. You have taken steps to stop the regulators from stopping your work, but they can arrest you and accuse you at any time. They know they have a better than 80% chance to get a conviction at trial, just because of the psychology of an authority saying you did something wrong. I can deal with that element of centralization, but just barely.

I think that any trustee that reveals their identity and lives in a country with strong financial regulations, such as the US, will go to jail for operating with out a license, selling securities with out a license, conspiracy to commit security fraud, money transmission without a licence, running a money services business without a license, the litany of charges will go on forever in some cases.

This will basically only leave trustees in countries where regulations are lax to operate the trustee scheme. This type of system will ensure that wall street and most of main street will not participate. This is bad for my and others' investment in PTS,AGS, and BTS. I will not participate in such a scheme, I believe the only reason that Bitcoin is any different than any prior is because of the blockchain decentralization invention. You are literally taking the greatest invention of the century and throwing it out the window for centralized control. Make no mistake you are taking a step backward.

If you are serious about this thing you have created, you would spend the time to do it right. Satoshi took years crafting his system, you can't take a few extra months?

This is something which could happen but how likely is it to happen? Bitshares aren't securities anymore than objects in WoW are securities. That isn't to say there wont be regulation, but if they were to target that it would be seen as petty. It's similar to gambling sites.

From wiki:
A security is a tradable asset of any kind.[1] Securities are broadly categorized into:
debt securities (such as banknotes, bonds and debentures),
equity securities, e.g., common stocks; and,
derivative contracts, such as forwards, futures, options and swaps.
The company or other entity issuing the security is called the issuer.

Your selling a derivative, your calling it bitUSD, bitEUR, bitBTC, it's a security to the SEC. The SEC will try to enforce this, they have no desire to see this project come to pass. The more decentralized the better. It is in the best interest of the project to consider the issue. The only reason that the SEC has not cracked down on Bitcoin is because it stands by it self in a category not classified here.

Bitshares on the other hand, is using "marketing terms" such as the word "shares" and "Exchange" which imply a security, its trading consists of elements directly in conflict with the above definition, that being debt security in the form of bitUSD and it sells derivative contracts on those debt securities.

The best way to deal with the SEC is to assume they will take the least favorable side you can imagine. They often do.

BitUSD isn't an actual derivative. It's not any more a derivative than a poker chip is a derivative. How is it that poker chips are consider poker chips but BitUSD is considered a derivative? And if both are digital, and no contracts are used to guarantee it, I don't see where the SEC or the law has any say in something which is entirely virtual.

If a legal contract is written or if someone tries to redeem BitUSD for real USD then you might have a point. BitUSD isn't USD in anything other than name though. It's not an actual contract.

I'm not a lawyer, I'm just giving my interpretation.

"The SEC will try to enforce this, they have no desire to see this project come to pass."

If Bitcoin is not a currency, and if Bitcoin is not a stock, what gives the SEC any authority over it? It's digital property from what the IRS says. If Bitshares isn't an actual stock backed by an actual company then what business does the SEC have in this space?

Is the SEC going after Second Life next? How much authority do they have? Will they go after people using poker chips and monopoly money too? I'm not saying they cannot interpret the law in a way to try and stretch their power, I'm making a point that it's wrong for them to do it.

They are the securities and exchange commission while Bitshares is more like a gambling program that people run to bet on stuff. It's not real money and the only way I could see them making it into something real would be if it centralized around Invictus. Invictus actually was a corporation so that is one area they might try to use.

You've highlighted a legitimate problem with the trustee scheme though. It will make regulators want to find the trustee and go after whoever is in that position and that is why I said it was a risk to be the trustee.

If there must be a trustee in my opinion the best way to do it is to put a public face on Bitshares and let someone be a public trustee. No anonymous trustee, no hiding, no trying to be sneaky, all of that will attract regulators like a magnet. If the trustee is public and willing to go to jail or court to defend Bitshares that actually would look better politically.

I don't think people in the United States would like to see innocent people being put in jail for inventing new technologies. If the United States is willing to do that then it may change the culture of Silicon Valley.

"BTCST, formerly known as First Pirate Savings & Trust, is an unincorporated
entity with no brick and mortar presence. The BTCST investments Defendants offered and sold to the investing public as alleged herein constitute “securities” as defined by Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)] and Section 3(a)(10) of the Exchange Act [15 U.S.C. § "

"Any investment in securities in the United states remains subject to the jurisdiction of the SEC regardless of whether the investment is made in U.S. dollars or a virtual currency. In particular, individuals selling investments are typically subject to federal or state licensing requirements."

https://www.sec.gov/litigation/complaints/2013/comp-pr2013-132.pdf

Oh believe me, BitUSD is no poker chip. It will compele head-to-head with USD, which is the success thatwe are striving for. And there will be companys' stock issed on Bitshres ME. I have to agree with cryptosig that the only reason they have not tackled Bitcoin is because they are not able to. By "they", I mean governments/central banks. So be as decentralized as possible.


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[GaltReport]

Well, this round-robin "Board of Directors" does sound better than a single "Trustee"/"Timekeeper", but the move away from some sort of PoS implementation leaves me much less comfortable with BitShares.  I have refined some of the ideas that I've come up with and posted on this board earlie

Define PoS... I have kept the spirit of PoS and added a simple delegation... it is like mining pools without the barriers to entry or the risk of trusting your coins to someone else.   

I reviewed the rest of your proposal and find it very interesting but still suspect that is suffers one of the biggest problems to overcome: it is too complex to analyze all potential attacks.    It also suffers from the fact that it is more costly (bandwidth, blockchain size) due to the overhead of proof-of-connection and these costs make it less competitive. 

I think the key is to remove the randomness from the equation and increase the size of the board of directors until you are sure it is decentralized enough.    One though on increasing the size of the BOD is to have every BOD member post collateral equal to the earnings from 100 blocks.  If they fail to produce a block on schedule or voluntarily resign with enough notice then they lose 100 blocks worth of pay.   With this setup you could increase the size of the BOD to a minimum 1% of the votes.    You also cause anyone running for a BOD position to promise better than 99% uptime or they will lose money.   If you do this though then the round-robin technique would have to be adjusted to be proportional to the number of votes you have.   I may have to make it proportional anyway so that shareholders are fairly represented... but perhaps by not making it proportional shareholders will be encouraged to diversify who they support least they reduce their influence.

...I believe in you and your ability to brain-muscle your way through the various problems with PoS.  I think you're one of the few people in the world who could get it right.  ...

I agree with this!



From what I can understand, the overall idea is a good compromise significally improving the speed/usability of the application.

[bytemaster]

See new thread on board if directors vs mining pool opps


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[yellowecho]

Can we get a summary of the newest way the trustee functionality will operate?

Having not read all the previous pages, it seems having 51% vote would be somewhat unstable.  MemoryCoin voting didn't work out so well .. and what happens in the event of rapid trustee changes at a 51/49 split?  Couldn't votes flip-flop rather quickly leaving the system unstable during transition?

[CWEvans]

I don't think there is any gray area when it comes to decentralization. Either you are, or you are not. There is no partial compromise.  Since most people will be operating within the borders of existing government laws, true decentralization wil never be achieved. You must do what you think is best.

Granted, one finds pure decentralization and pure laissez faire nowhere in the world. However, there are shades of centralization.

By embracing the model of a protector trust, Bytemaster is embracing an existing set of traditions that works remarkably well in the real world for people who benefit from real wealth.

Count me among those who are comfortable with doing what is known, but much more efficiently, and not letting the perfect be the enemy of the good-enough.

[GaltReport]

What separates bitshares DACs from other alt coins is that bitshares DACs are designed to be profitable.  If using a metronode system means that transaction speed goes from 5 minutes to under 30 seconds, it becomes more attractive to traders.  Faster transactions mean more transactions, and more transactions mean more dividends from fees.

 

[luckybit]

I want to make one thing clear, I do not attempt to manipulate public opinion as suggested above by introducing something very centralized so my slightly more decentralized solution will be selected.   If I were any other man I might be offended by such insinuation.

My real challenge here is that I know several things for certain:

1) Proof of Work is not just unprofitable, it results in the worst kind of centralization and control.
2) Proof of Stake systems are more experimental and only Nxt has a pure proof-of-stake system.
3) Ripple is a form of consensus where you trust a set of nodes not to collude, but where growing this set of nodes from 5 nodes all controlled by Ripple to 1000's of nodes in a manner that doesn't fork the network is an unresolved issue.   Effectively Ripple is a club that gradually adds members and these members collectively agree to reach consensus.   Ripple uses a complex algorithm for this club and if the core members of the club go one way then the shareholders (XRP) have no say. 

So I am sitting here trying to innovate solutions that are better than everything that has gone before and this involves deep thought about the nature of the problem, the risks involved, etc.   Fortunately the DAC metaphor gives us the answers we need.

1) We want to give shareholders a way to delegate their vote to a key that doesn't control their coins 'so they can mine'.
2) We want to maximize the dividends shareholders earn
3) We want to minimize the amount we must pay people to secure the network.
4) We want to maximize the performance of the network
5) We want to minimize the cost of running the network (bandwidth / CPU / etc)

So the key is that the shareholders remain in control.  If they remain in control then it is decentralized and as much as I hate voting on anything, when it comes to shared ownership of something like a company it is the only viable way.  Fortunately if you do not like who is running the company you can sell and this market feedback causes shareholders to vote more rationally than citizens.   

So every shareholder gets to vote for someone to sign blocks in their stead (a representative if you will).  Anyone who can gain 5% or more of the votes can join the board.  No representative may have more than 20% of the delegated votes.  The representatives become a "board of directors" which take turns in a round-robin manner signing blocks.  If one of the directors misses their turn clients will automatically switch their vote away from them and eventually they will be voted off the board and someone else will join the board. 

So how is this different than Bitcoin?   In bitcoin the users must pick a mining pool and each pool generally has 10% or more of the hash power.  The operator of these pools is like a representative of the clients pointed at the pool.   Bitcoin expects the users to switch pools to keep power from becoming too centralized, but collectively 5 major pools control the network and manual user intervention is expected if one of the pools is compromised.   If a pool goes down then the block production rate slows proportionally until it comes back up.   Which pool one mines in becomes a matter of politics.

Therefore, I am expecting the same kind of behavior from users of BTS X except instead of having to point their hashing power at a pool, they merely change a setting in their wallet.  This setting can even be setup with a chain of command so that users do not have to think much about it.  Instead of only miners voting, everyone can vote.  Like bitcoin, if a representative goes down, block production will slow by a proportional amount until the representative comes back on line or users vote them out of office automatically.

The reason to avoid randomly selecting the representative from all users is the following:

1) high probability they are not online
2) attackers would gain control proportional to their stake without any peer review...
3) without any mining at all, the generation of a random number in a decentralized manner is impossible and thus an attacker could control the random number generation.

The benefits of the representative approach is that:
1) After fewer than 20 blocks ( 10 minutes or less ) almost everyone has indirectly ratified the block-chain through their representative in an immutable way.
2) block production can be much faster
3) no one can prevent transactions from getting included in the chain for more than 10 minutes... compared to bitcoin this is HUGE.

So from the perspective of decentralization I believe I have a design which achieves more than Bitcoin, Nxt, or Peercoin can hope to achieve with a much higher level of security in a much more rapid manner than previously possible.

I think you are onto something here and I now have hope that you can solve what seems to be the impossible problem. Solve this problem and Bitshares without a doubt will be the best technology today.

[G1ng3rBr34dM4n]

I started a new thread that includes just what people need to know based upon the results of this discussion.   

By the way I want to thank the community for helping me brainstorm and not jumping on me.  I can tell you all are getting to know me and learning that I am very open with ideas and willing to change from bad ones.

I really appreciate that you vet ideas here openly.  That's not easy.  I also support your constant efforts in iterating, revising, and growing your ideas. The transparency time and time again is what keeps me here.

Keep on keeping on!

[bytemaster]

Do you plan on implementing TaPoS later in a different system; maybe some DAC, PTS/AGS or even an altcoin? It would be a shame if this goes unused.

If you later transform PTS (and maybe AGS too) into a TaPoS currency with fast blocktimes (30 sec?), it can be used as a viable currency, which actually has some inherent value (instead of just speculative value). Of course, snapshots decrease the value, but after a certain time we would expect there will DACs being launched left, right and center and so price variation will be less bumpy (besides if you 'hoard' PTS you will get the new DACs anyways and so will not actually lose money).

When Nxt exchange starts working it will be interesting to see if they face any challenges regarding transparent forging. If I understand correctly, Bitshares Me would be a somewhat similar (at least a direct competitor).

TaPOS is implemented as part of the board system, though I suspect that it may be overkill and redundant. 

[sumantso]

Do you plan on implementing TaPoS later in a different system; maybe some DAC, PTS/AGS or even an altcoin? It would be a shame if this goes unused.

If you later transform PTS (and maybe AGS too) into a TaPoS currency with fast blocktimes (30 sec?), it can be used as a viable currency, which actually has some inherent value (instead of just speculative value). Of course, snapshots decrease the value, but after a certain time we would expect there will DACs being launched left, right and center and so price variation will be less bumpy (besides if you 'hoard' PTS you will get the new DACs anyways and so will not actually lose money).

When Nxt exchange starts working it will be interesting to see if they face any challenges regarding transparent forging. If I understand correctly, Bitshares Me would be a somewhat similar (at least a direct competitor).

[etherbroker]

I started a new thread that includes just what people need to know based upon the results of this discussion.   

By the way I want to thank the community for helping me brainstorm and not jumping on me.  I can tell you all are getting to know me and learning that I am very open with ideas and willing to change from bad ones.

Ok, thanks.

I wanted to say, that I did TRY t read it a few times before asking.

I think I am missing some technical knowledge. 

Thanks for making a new thread.

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[bytemaster]

I started a new thread that includes just what people need to know based upon the results of this discussion.   

By the way I want to thank the community for helping me brainstorm and not jumping on me.  I can tell you all are getting to know me and learning that I am very open with ideas and willing to change from bad ones.