Author Topic: Graphene Could Help Guarantee the Reserve Holdings of Cryptocurrency Exchanges  (Read 3062 times)

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Offline BunkerChainLabs-DataSecurityNode

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We would have to enter into agreement with the exchanges.. but by sidechaining BTS itself it would eliminate the need for exchanges to keep huge reserves of BTS.

But they will still keep huge BTS reserves and vote with them.

No they wouldn't. All they would have is the sidechain token equivalent. They would hold no actual BTS.

Review the processes I described again. I sort of didn't want to get into this because it is complicated and difficult for people to understand until you can see it working in front of you.
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Offline yvv

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We would have to enter into agreement with the exchanges.. but by sidechaining BTS itself it would eliminate the need for exchanges to keep huge reserves of BTS.

But they will still keep huge BTS reserves and vote with them.

Offline emailtooaj

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The difference between a proof-of-work sidechain and Graphene is that the multi-sig trustees on the Graphene chain cannot buy their way into power, but rather they are subject to shareholder voting. In order for any funds to be stolen or diverted, at least 15 out of the 20 independently chosen and voted for operators would have to collude with each other in a very public way

IMO your article has a vary rational approach but, take into account what we're experiencing with the Yunbi voting situation and how it's single handily shutting down worker funding.  This easily could apply towards the idea you've laid forth. Where an "exchange", or equivalent,  can brute force the "trustees" out and dismantle the whole system.
I'm going to shamelessly plug the "Modular Wallet" idea I've been preaching about,  which I believe will help lessen the chances of a brute force vote attack (Yunbi style) and potentially make these "Reserve Holding" idea become a reality! 


@CryptoPrometheus   +5% +5% +5% +5% +5% for a great article!

Actually if we can get exchanges adopting the use of our sidechain solution, that would solve things like Yumbi and Polo. It would stop exchanges from holding the voting power along with the coin.

How so exactly?
Unless I misunderstood the article,  my understanding is the "trustees" would operate as a separate "witness/group" outside of the normal BTS chain Witnesses, but staying within this community... a private chain of sorts that operates in conjunction with the main BTS chain? 
If that's the case, then my statement regarding "brute force voting practices" stands correct and applies for the same "Exchange" abuse we're facing currently.  Yes/No?  The voting power would remain within the BTS chain.

Now, if you're talking about "forking" the BTS code and breeding a new side chain, then I suppose some fixes could get made and alleviate "brute force voting" issues.
But then the question becomes, who has stake in this new side chain that's operating it outside the current BTS community? 
Is any share dropped to current BTS holders?
Do you share drop onto Brownie.PTS holders?
Why would anyone trust a new, separate BTS side chain clone with their BTC, ETH, etc, etc. outside of the current BTS network?

This is how I kinda view the side chain idea...
Take the modern day car for example. 
We know that ONE central computer (called the PCM) runs and monitors all operations in making a car run.
From the Air/Fuel mixture, to the Spark Plug timing, to the Cam Shaft timing, to the Gas Pedal Sensors, etc. etc.
That being said, lets take two of these components in this system,  the Air/Fuel mixture and the Spark Plug timing.
Now let's now break it down from having only ONE computer running both functions into TWO separate computers... one computer per functions and/or tasks. 
Ok, now that we have TWO separate computers running, what happens if one dies out, breaks or goes hay-wire?
Let's assume it's the Air/Fuel computer that fails and craps out!!   At this point you just have ONE of two units operating, the Spark Plug computer.
The engine has failed to run correctly due to the defunct computer maintaining the Air/Fuel mixture...so guess what? 
Our engine stops!  Because (as we all know) engines  won't run just by igniting air! 
Also in this scenario,  if the engine were to keep running "dry" (due to lack of fuel in the mixture which also "lubricates" the combustion chamber from the burn off) then there will be a high probability of internal "unseen" damage that would occur.
Stuff like burnt out spark plugs, piston rings damage, valve damage and/or head warping. 
If everything was running off ONE computer (as a car does today) then YES it could still fail!   But because everything would shut off instantly from that failure, there would negligible damage done to the entire engine... if any. Other than needing to replace a dead computer lol. 
Once the main computer got replaced (and if it contained the exact code inside as the previous) then chances are very high that the engine will fire back up and run like new again!

Let's take this analogy and put it into the context of side chains, realizing that money and human interaction are now being thrown into the mix.

If you have Two separate chains running (two computers in this case), one operating BTS and the other a Side Chain (which is running BTC and/or other coins),  if either one breaks down, gets shut down or gets compromised, the whole system is at risk.  It gets out of wack and eventually the enitre system will break down and create one big nasty mess!   
Getting this system up and running again after such failure will take double the work load (and to some extent trust) in getting everything fixed as it was before the said failure, what ever it may of been.
In addition to that,  would anyone (who are rational and smart ) take the risk to trust a side chain by uploading their BTC value (or other crypto) onto one computer with hopes that it properly relays this info onto computer number two?
In other words, if I'm looking for a way to deposit my BTC directly into my BTS account... what are the benefits of going through a Side Chain compared to any centralized exchange that's currently running today?   That's still a TWO computer approach, isn't it?
Yes, for arguments sake the Side Chain will have it's advantages due to it running on a block chain (Graphene technology in this case) but who are it's stake holders?
How do we know that the elected Witnesses running the Side Chain won't collude (because of possibly poor initial stake distribution) and run off with the BTC? 
How do we know the Side Chain won't fail, go defunct or completely go off line at some point? 
How do we know there won't be voting attacks on the side chain like we're seeing on the main BTS chain with Yunbi?

IMO adding side chains introduces way to many points of failure,  just for an attempt at getting BTC (or any other digital asset) easily convert onto the BitShares eco-system... while still considering it 1:1 backing.   

Let me bounce back to the car analogy...
So what if there was only ONE robust computer running the entire show.  Those points of failure diminish dramatically.
If we viewed the current BTS Witnesses as the "ECU" then wouldn't it make sense to have them run and maintain both BTS chain and the BTC wallet... and possibly other wallets in the future? 
With this approach,  if something were to fail then we could correct and reset the whole system with minimal internal damage.
In addition, we won't have to rely on two sets of teams to properly communicate and correct the situation.  Everyone would be working bugs within one ledger/chain.
The other benefit of having  BTS Witnesses running the BTC wallets is that BTS votes, stake and community stay in house under one roof and not getting diluted.
Another obvious benefit with this approach is we'll be recognized as a TRUE exchange, not just a derivative exchange.
The BTS network will hold BTC directly and we then would truly have 1:1 backing... which will open up a BOAT LOAD of other possibilities and new users!!
So if we can have BTS Witnesses run/maintain the BTC wallet address, would it then make sense to have the "trustee's" Multi-Sig for BTC withdraw and deposit transactions? Is this possible?
I've mentioned a similar scenario that's  located in another thread with my "whiteboard" pics...


Any how...back to your statement Data. 
Yes, having exchanges use the Side Chain could possibly "ease",  not eliminate current Brute Force Voting which is going on within the BTS chain. 
But in actuality,  I think we're only amplifying or doubling up the potential voting abuse powers.  The same Brute Force ability is just being ported over onto the Side Chain,  allowing them the option of dual attacking both the main BTS chain and any new Side Chains using Graphene tech unless voting weight has been modified.

BTW- Sorry everyone if I've high jack this thread  ;D
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Offline BunkerChainLabs-DataSecurityNode

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The difference between a proof-of-work sidechain and Graphene is that the multi-sig trustees on the Graphene chain cannot buy their way into power, but rather they are subject to shareholder voting. In order for any funds to be stolen or diverted, at least 15 out of the 20 independently chosen and voted for operators would have to collude with each other in a very public way

IMO your article has a vary rational approach but, take into account what we're experiencing with the Yunbi voting situation and how it's single handily shutting down worker funding.  This easily could apply towards the idea you've laid forth. Where an "exchange", or equivalent,  can brute force the "trustees" out and dismantle the whole system.
I'm going to shamelessly plug the "Modular Wallet" idea I've been preaching about,  which I believe will help lessen the chances of a brute force vote attack (Yunbi style) and potentially make these "Reserve Holding" idea become a reality! 


@CryptoPrometheus   +5% +5% +5% +5% +5% for a great article!

Actually if we can get exchanges adopting the use of our sidechain solution, that would solve things like Yumbi and Polo. It would stop exchanges from holding the voting power along with the coin.

I'm not seeing how sidechains would solve the exchange voting problem.  Please explain.  Thanks.

We would have to enter into agreement with the exchanges.. but by sidechaining BTS itself it would eliminate the need for exchanges to keep huge reserves of BTS.

So say we had an agreement with Polo to start sidechaining BTS and you wanted to trade your BTS on Polo.

You send the BTS to your polo address. That address got generated through our sidechain and your BTS got sent to the sidechain network and issued a BTS sidechain token to polo. That BTS is more secure and locked up than their own operations can ensure. The token we send them representing BTS is 1:1.

This also makes for a very fast and liquid bridge between the DEX and Polo, so there will be some awesome arbitrage opportunities.

Now keep in mind in this setup you will lose your BTS voting rights, but the exchanges don't get them either. It just goes into limbo in the sidechain.

Just thinking out loud, I have not looked at the process for this.. but there might be a way that when BTS is sent to a specific exchange like I just described it is a separate process and when it gets executed it doesn't send the BTS out of your wallet but locks it up with the witnesses/trustees and issues the token representation on the exchange you sent it too. If we can manage to create something like this then you can ALSO vote with your balance possibly. Again.. thinking out loud.. not sure if there is something that might get in the way of this.

Hope this helps clarify.
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Offline tbone

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The difference between a proof-of-work sidechain and Graphene is that the multi-sig trustees on the Graphene chain cannot buy their way into power, but rather they are subject to shareholder voting. In order for any funds to be stolen or diverted, at least 15 out of the 20 independently chosen and voted for operators would have to collude with each other in a very public way

IMO your article has a vary rational approach but, take into account what we're experiencing with the Yunbi voting situation and how it's single handily shutting down worker funding.  This easily could apply towards the idea you've laid forth. Where an "exchange", or equivalent,  can brute force the "trustees" out and dismantle the whole system.
I'm going to shamelessly plug the "Modular Wallet" idea I've been preaching about,  which I believe will help lessen the chances of a brute force vote attack (Yunbi style) and potentially make these "Reserve Holding" idea become a reality! 


@CryptoPrometheus   +5% +5% +5% +5% +5% for a great article!

Actually if we can get exchanges adopting the use of our sidechain solution, that would solve things like Yumbi and Polo. It would stop exchanges from holding the voting power along with the coin.

I'm not seeing how sidechains would solve the exchange voting problem.  Please explain.  Thanks.

Offline BunkerChainLabs-DataSecurityNode

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The difference between a proof-of-work sidechain and Graphene is that the multi-sig trustees on the Graphene chain cannot buy their way into power, but rather they are subject to shareholder voting. In order for any funds to be stolen or diverted, at least 15 out of the 20 independently chosen and voted for operators would have to collude with each other in a very public way

IMO your article has a vary rational approach but, take into account what we're experiencing with the Yunbi voting situation and how it's single handily shutting down worker funding.  This easily could apply towards the idea you've laid forth. Where an "exchange", or equivalent,  can brute force the "trustees" out and dismantle the whole system.
I'm going to shamelessly plug the "Modular Wallet" idea I've been preaching about,  which I believe will help lessen the chances of a brute force vote attack (Yunbi style) and potentially make these "Reserve Holding" idea become a reality! 


@CryptoPrometheus   +5% +5% +5% +5% +5% for a great article!

Actually if we can get exchanges adopting the use of our sidechain solution, that would solve things like Yumbi and Polo. It would stop exchanges from holding the voting power along with the coin.
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Offline emailtooaj

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The difference between a proof-of-work sidechain and Graphene is that the multi-sig trustees on the Graphene chain cannot buy their way into power, but rather they are subject to shareholder voting. In order for any funds to be stolen or diverted, at least 15 out of the 20 independently chosen and voted for operators would have to collude with each other in a very public way

IMO your article has a vary rational approach but, take into account what we're experiencing with the Yunbi voting situation and how it's single handily shutting down worker funding.  This easily could apply towards the idea you've laid forth. Where an "exchange", or equivalent,  can brute force the "trustees" out and dismantle the whole system.
I'm going to shamelessly plug the "Modular Wallet" idea I've been preaching about,  which I believe will help lessen the chances of a brute force vote attack (Yunbi style) and potentially make these "Reserve Holding" idea become a reality! 


@CryptoPrometheus   +5% +5% +5% +5% +5% for a great article!

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Offline yvv

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ask @BunkerChain Labs how this "trust based system" was recently gamed (putting someone in charge of fees (and more) while he works on a competitor chain)....

How this is being gamed? It is still not late to vote him out, the community just needs to make a move. Is not this is how consensus network supposed to work?

Offline yvv

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so if we somehow forget those 2 above ( :) ), POW is far more decentralized fair and trustless...

In reality a POW network is controlled by cartel with overwhelming mining power. I would not call it decentralized and fair.

Offline CryptoPrometheus

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So to sum it up... DPOS is the more logical decision right now....
"Sidechains can be implemented on DPOS  in a way that is superior to any other consensus algorithm. "
the superiority over any other consensus algo is just.... wrong/false... fan boy-ism... just a joke really.
Let's get real...let's call a spade a spade...and let's for sure decide to stop living in the clouds of our own dreams... not too many new followers up there anyway.
So... "The more logical decision right now" does not equal "superior"

And "Decentralized" does not equal "Trustless"

Good to know the precise semantics of my brief op have been properly analyzed.  ;)
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Offline tonyk

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Sidechains can be implemented on DPOS in a way that is superior to any other consensus algorithm.
False... actually very false

@tonyk, can you please elaborate?  Thanks.

It is pretty simple actually.

POW is a superior system to POS (or DPOS) if not for:
- It wastefulness ( 100 computers doing useless stuff just so 1 computer actually wins the lottery and is given the block reward).
- it is slowness to come to a decision who the block producer is.

so if we somehow forget those 2 above ( :) ), POW is far more decentralized fair and trustless...
and given the right improvements to the protocol it can make completely trustless sidechain transfers based only on a signature and nothing else...while DPOS still relies on trust, voting  etc.... ask @BunkerChain Labs how this "trust based system" was recently gamed (putting someone in charge of fees (and more) while he works on a competitor chain).... humans cannot be trust period.


So to sum it up... DPOS is the more logical decision right now....
"Sidechains can be implemented on DPOS  in a way that is superior to any other consensus algorithm. "
the superiority over any other consensus algo is just.... wrong/false... fan boy-ism... just a joke really.
Let's get real...let's call a spade a spade...and let's for sure decide to stop living in the clouds of our own dreams... not too many new followers up there anyway.
« Last Edit: April 01, 2016, 05:45:56 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tonyk

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So, I guess it is more of a question. How " multi-sig" or  "cold storage " makes something "100% decentralized platform"  or "decentralized platform" for that matter. 1*

1* More to the problem at hand in this particular issue - one not strives for decentralized , as much as one strives for trust free solution.  Money backing assurances/bonds are the closest thing to trust... as far as  substitutes go , imho.

yeah, my choice of the word "decentralized" would have perhaps been better expressed by the word "trustless".

I like the idea of having bonded mulit-sig authorities...but how much money would they need to lock away for that to actually work? I mean, what's to guarantee that they don't ditch their deposit for a bigger slice of pie?

I have my extended  thoughts on that (granted buried under a pile of  posts regarding other issues and/or non issues at all) not more than a month back.
Anyway the point is - the assurance bond should be sufficient if it covers the average 1 day transfers ...say 5 to 10 times over (that is to say 5 -10 btc bond(s) for each 1 btc average daily total transfers).
so If we have 20 escrow-sidechain-agents acting as such, each one has to put 1/4 to 1/2 the daily transfer volume (o.25 to 0.50 BTC each) as a assurance bond in order to participate.
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline tbone

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Sidechains can be implemented on DPOS in a way that is superior to any other consensus algorithm.
False... actually very false

@tonyk, can you please elaborate?  Thanks.

Offline CryptoPrometheus

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So, I guess it is more of a question. How " multi-sig" or  "cold storage " makes something "100% decentralized platform"  or "decentralized platform" for that matter. 1*

1* More to the problem at hand in this particular issue - one not strives for decentralized , as much as one strives for trust free solution.  Money backing assurances/bonds are the closest thing to trust... as far as  substitutes go , imho.

yeah, my choice of the word "decentralized" would have perhaps been better expressed by the word "trustless".

I like the idea of having bonded mulit-sig authorities...but how much money would they need to lock away for that to actually work? I mean, what's to guarantee that they don't ditch their deposit for a bigger slice of pie?
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Offline tonyk

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If you have any suggestions, experience, expertise or even just opinions

Me personally... "Just opinions"...but then again  just opinions.... :)

Sidechains can be implemented on DPOS
True

Sidechains can be implemented on DPOS in a way that is superior to any other consensus algorithm.
[/b]
False... actually very false

We should be exploring every option to make this a reality!
I do not see anything wrong with exploring it.... as for making it a reality.... we should see what the exploration yields.

Right now, we have a decentralized ledger, but we are still trading centralized proxy tokens for other major blockchains (OPEN.BTC, TRADE.DODGE, METAEX.ETH, etc.).
Could not agree more with that!


We need to come up with a robust multi-sig cold storage token solution to offer our users, so we can finally be a 100% decentralized platform in every way.
I am not sure I followed the reasoning there....
even removing the pump up ,strong / unnecessary, PR or/trendy terms... does not help much :
"We need to come up with a multi-sig cold storage  solution to offer our users, so we can be a 100% decentralized platform ."

So, I guess it is more of a question. How " multi-sig" or  "cold storage " makes something "100% decentralized platform"  or "decentralized platform" for that matter. 1*

1* More to the problem at hand in this particular issue - one not strives for decentralized , as much as one strives for trust free solution.  Money backing assurances/bonds are the closest thing to trust... as far as  substitutes go , imho.
« Last Edit: April 01, 2016, 04:39:00 am by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.