Idea that just came to me to deal with the problem of micropayments

[Stan]

Bitcoin is trustless, bitshares is not.

That quote is IMHO not correct ...
BitShares makes a trade-off .. it reduces the trustlessness and gains efficiency ..
but when you compare the "trustlessness" of bitcoin you will notice that pooled mining killed it for bitcoin ..
if everyone was solo-mining bitcoin would be unbeatable in terms of trust ..

How many entities do you trust to sign half the blocks?

Bitcoin:                  3 self-appointed, CEO's for life
BitShares:           51 elected delegates you can fire in 10 seconds
BitShares 2.0       N elected witnesses you can fire in 1 second where voters choose N

Which is more trustless?

[monsterer]

Could you appease the nerves and explain why this is "safe"?
How hard is a double spend?
Is the basic idea that a delegate would get voted out "instantly" if they cheated?
How easy is it to undo bad-things, and go back to the true-chain?

It's safe because you trust the delegates. If you don't trust the delegates, then it isn't safe. A delegate can only by voted out manually, so the danger zone is between the time when they start causing problems and the time when they get voted out.

Undoing bad things is automatic, as long as 51% of the delegates are not under control of the same attacker.

However, as a merchant, if you accept and process transactions during the period in which a delegate is attacking the network, you can be exposed to loss - especially entities such as shapeshift.io, metaexchange and blocktrades which take the network's advice on 1 block confirmations.

[xeroc]

only needs 1 confirmation to be named as such, which is entirely official.

Could you appease the nerves and explain why this is "safe"?
How hard is a double spend?
Is the basic idea that a delegate would get voted out "instantly" if they cheated?
How easy is it to undo bad-things, and go back to the true-chain?

ask your self this question:
if you were the subsequent delegate to build a block upon some block that does follow the rules? would you build upon it?
if so .. what do you think the delegate after your block will do with YOUR block then?

[Permie]

only needs 1 confirmation to be named as such, which is entirely official.

Could you appease the nerves and explain why this is "safe"?
How hard is a double spend?
Is the basic idea that a delegate would get voted out "instantly" if they cheated?
How easy is it to undo bad-things, and go back to the true-chain?

[monsterer]

bitcoin transactions are confirmed once there are put into a block .. same thing as in bitshares .. whether they are in the blockchain FOR SURE .. depends on whether they are ignored in a fork or not ..

Being in a block and being confirmed are not the same thing. 'Confirmed' means safe to spend, 1 confirmation is one step towards this goal. The bitshares protocol has 'confirmed' == 1 confirmation, which means official policy is to trust the delegates.

[xeroc]

Code: [Select]

s/BitShares/Bitcoin/
s/delegates/miners/
same thing

Really not sure what you're implying there, but I'm taking a guess that you're saying delegates are the same as miners, which is entirely inaccurate - the principal reason (there are many others) is this:

*) Miners have an ongoing block production cost, which makes producing fake history, or double spending expensive, whereas delegates have no such ongoing cost.

I understand your view. My position was more from the security perspective than from the economical point of view.
Also, keep in mind that in bitshares, misbehavior can be punished by downvotes such that the delegate pay stops .. trying to double spend will result in your block being skipped by the subsequent delegate. Hence, you don't get your delegate pay. You are right that there is no cost associated with that directly, but there is a reputation and a profitable delegate position to be lost ..

edit: if you're saying that bitcoin transactions are confirmed after 1 confirmation, you are also incorrect. There is no official statement to this effect - however, if you look in the bitshares code base you will find that nominally a confirmed transaction only needs 1 confirmation to be named as such, which is entirely official.

bitcoin transactions are confirmed once there are put into a block .. same thing as in bitshares .. whether they are in the blockchain FOR SURE .. depends on whether they are ignored in a fork or not ..
to be certain the tx stays in the blockchain in bitcoin is guaranteed with 99.99% probability after 6 confirmations ..
this is different in bts. From the wiki (http://wiki.bitshares.org/index.php/FAQs#How_does_DPOS_get_by_with_1_block_recommended_confirmation_versus_BTC.27s_6_block_recommendation.3F)

How does DPOS get by with 1 block recommended confirmation versus BTC's 6 block recommendation?

    * The probability of a FORK after a block has been produced is very low. < 0.01% where as Bitcoin has 25 orphans in the last 22 days (about 1 per day - Dec 3,2014) which translates into 0.7% of blocks are orphaned.
    * We are normally at 100% delegate participation and when we are less than that it is more often because a delegate was DOWN and didn't produce a block than because they produced a fork.
    * Forks are almost always resolved within 30 seconds.
    * When a fork is produced it is very likely that all delegates have seen and processed your transaction and thus no alternative transactions can be broadcast and the next delegate is almost certain to include your transaction.
    * All delegates are much more trusted than miners.

So after 1 block (10 seconds) Bitshares is mathematically over 70x less likely to orphan than Bitcoin after 1 block (10 minutes). After 3 blocks (30 seconds) any random orphan will have been resolved and the probability of alternative chains is much lower .000001 than Bitcoin. By the time Bitcoin gets to .7% orphan probability (1 block) BitShares has 60 blocks which would have a probability of being orphaned 1*10^-120.

[monsterer]

Code: [Select]

s/BitShares/Bitcoin/
s/delegates/miners/
same thing

Really not sure what you're implying there, but I'm taking a guess that you're saying delegates are the same as miners, which is entirely inaccurate - the principal reason (there are many others) is this:

*) Miners have an ongoing block production cost, which makes producing fake history, or double spending expensive, whereas delegates have no such ongoing cost.

edit: if you're saying that bitcoin transactions are confirmed after 1 confirmation, you are also incorrect. There is no official statement to this effect - however, if you look in the bitshares code base you will find that nominally a confirmed transaction only needs 1 confirmation to be named as such, which is entirely official.

[xeroc]

Bitshares protocol says, nominally, that transactions are confirmed after 1 confirmation. This means you are trusting individual delegates to speak for 100% of the network.

Code: [Select]

s/BitShares/Bitcoin/
s/delegates/miners/
same thing

[monsterer]

It depends on how you define "trustless" .. bitcoin has some 10+ mining pools

Bitshares protocol says, nominally, that transactions are confirmed after 1 confirmation. This means you are trusting individual delegates to speak for 100% of the network.

[xeroc]

My current thinking is that bitcoin is indeed trustless, and therefore has a market in which bts cannot compete.
A single mining pools does not currently control >51%

It depends on how you define "trustless" .. bitcoin has some 10+ mining pools

bitshares has 101 delegates .. to be fair let's reduce this to 50 individuals (run the machines/have several delegates in control)

For me, and because 50>10, the bitshares network requires less trust ..

A single honest node on the network should detect any cheating.

holds true in bitshares too .. plus all delegates verify all other delegates ..

Another thing to consider is that hosting a full-node has the greatest benefit to large entities with big business dependent on the bitcoin blockchain, and these entities are still yet to move into the space. The cost of a full node isnt worth it to most bitcoiners, but it certainly will be to players yet to enter.

*agreed*

[Permie]

Bitcoin is trustless, bitshares is not.

That quote is IMHO not correct ...
BitShares makes a trade-off .. it reduces the trustlessness and gains efficiency ..
but when you compare the "trustlessness" of bitcoin you will notice that pooled mining killed it for bitcoin ..
if everyone was solo-mining bitcoin would be unbeatable in terms of trust ..

My current thinking is that bitcoin is indeed trustless, and therefore has a market in which bts cannot compete.
A single mining pools does not currently control >51%
A single honest node on the network should detect any cheating.

Another thing to consider is that hosting a full-node has the greatest benefit to large entities with big business dependent on the bitcoin blockchain, and these entities are still yet to move into the space. The cost of a full node isnt worth it to most bitcoiners, but it certainly will be to players yet to enter.

BitShares makes a trade-off .. it reduces the trustlessness and gains efficiency ..

This is why I think bts will dominate consumer finance. There are lots of financial applications that dorequire trust, if bts is the most efficient in any one of them then it's got a very bright future.

Bitcoin cannot both remain trustless and include price-feeds and contract enforcement at the protocol level. Prices require an external entity, and can therefore never be trustless.
I believe there are two key markets that will be disrupted by cryptocurrency.
The store of value market and the investment market.
For reasons I shall explain I do not believe a single system can efficiently fill both of these niches.
Two cryptocurrencys, one in each market, will become the major systems in the future. Bitcoin (store of value) and BitShares (investment).

I do not think that BitShares will "kill" Bitcoin due to the tenets of Game Theory, the foundations upon Bitcoin is built.
If the first game-theory-dependent cryptocurrency fails, what does that say of the prospects of an alternative?

Therefore an external exchange is required for a decentralized derivatives market. The prevailing exchange will be the one that is most efficient and least risky.
Maximum efficiency will come from a cryptocurrency with settlement and price finding mechanisms at its core.
Fractions of a second count in derivatives markets and the trade-execution time saved by implementing these features at the protocol level is a huge advantage. Traders need assurances that their trades cannot be reversed, so the quicker the network can come to a consensus and finalize all transactions the better. A purpose-built cryptocurrency for a derivatives market will come to this consensus much faster than bitcoin can and be publicly auditable on a blockchain in real time.

[xeroc]

Bitcoin is trustless, bitshares is not.

That quote is IMHO not correct ...
BitShares makes a trade-off .. it reduces the trustlessness and gains efficiency ..
but when you compare the "trustlessness" of bitcoin you will notice that pooled mining killed it for bitcoin ..
if everyone was solo-mining bitcoin would be unbeatable in terms of trust ..

[monsterer]

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.

Bitcoin is trustless, bitshares is not. The difference in ideology might sound insignificant, but it has a lot of meaning in the cryptocurrency community and in practice we have yet to see how a sybil attack would actually be handled in bitshares.

[starspirit]

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.

Thanks.
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.

[arhag]

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.