What does Blockchain 2.0 mean for Bitshares X and other Invictus DACs?

[tonyk]

So ... are we screwed?


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If you have just come up with the best beer in the world and 1 mo. before you have actually produced it for all of your 500 customers in your local pub to try it, Budweiser comes with a bear that is 75% of what you offer but will be available in 20Mil stores for 1Bil customers –what do you do? Stop and do not deliver your beer? No you just mention the 25% difference in your favor and go on hoping what will eventually matter is the 25% better quality not the smaller exposure you will initially get.
In other words only time will tell what matters more – better product or better initial market position…

[bitbro]

So ... are we screwed?


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[wasthatawolf]

The only way Bitshares X even works is by having a significant external trade volume of Bitshares themselves to USD, bitcoin, etc. in order to establish the margin requirements for the various BitAssets within the chain.  The total value of all BitAssets is limited to a fraction of the total value of Bitshares.  I see this is one of the biggest challenges Bitshares will have to overcome because with the volatility of altcoins we currently see in the market, automatic margin calls could be triggered often enough to turn people off to the whole idea.  If it was backed by Bitcoin, there would be less volatility and a much higher ceiling for total BitAsset value.

So you're right, in a sense, because Bitshares X would essentially become Bitcoin X.  I just don't know if that's necessarily a bad thing.

One difference here, is that demand for BTS could be driven by demand for the BitAssets, whereas side chains work the other way around.

If someone wants BitUSD, he or she will need to buy some or buy some BTS and create some. With side chains, one most likely already has bitcoins, otherwise why all the hoopla?

The only thing that changes here is that Bitshares are replaced by Bitcoin.  I don't see how BitAssets driving demand for either really affects my previous statement. 

Once Bitshares X is availabe, price discovery of Bitshares will have a major effect on the BitAsset market as it will likely be extremely volatile.  Bitcoin, while volatile in its own right, is still the most stable and universally accepted cryptocurrency.  Using Bitcoin as the base asset should provide enough price stability to allow this asset market the opportunity to succeed right out of the gate.

[JoeyD]

With regard to side chains, per se, if the units issued on the side chains are pegged to bitcoins in whatever proportion, then the side chains have to be justified by their technical merits. That pretty much puts an end to the altcoin market as we know it now.

The vast majority of altcoins are just legal replacements for pyramid schemes. Get in early, pump up the price, and hope that you get out before the thing crashes. Some have non-trivial features that set them apart from the rest. Some, like dogecoin take on a life of their own, and no harm done.

Put the altclones on sidechains, and their prices are tied to bitcoin prices, removing the whole point of their existence.

If I disregard the POW-dependency and the fact that this might hurt me plenty financially (I did mine and buy some alt-coins) I gotta admit I find the concept itself rather brilliant and can't help myself grinning at the idea. I rather like the fact that this lowers the barriers for complete freedom of choice and innovation and can't help having a bit of admiration for the idea. It also puts to shame a number of people I've heard complaining how all alt-coins were diluting the bitcoin space and then proposing an alt-coin of their own.

Sorry if I sound a bit sadistic, but the bitcoin-price crashing and openssl-bug locking me out of my altcoin-exchange while this news gets out apparently is effecting me more than I expected. Apparently I'm not as rationalistic as I thought I was.

[CWEvans]

They are so focused on proof of work they are missing the obvious.  The entire premise of their innovation is that we need this large centralized proof of work system to be secure against government... once it becomes clear that you cannot outspend government on hash power things will change and people will flood to DPOS systems.  Perhaps bitcoin will upgrade.

I still contend that the security vulnerability on the side chains is a non-starter.

One of the reasons for the fixation on POW is that it is proven technology, while POS—even though one-vote-per-share has a much longer history—is still a novelty. This is driven by the pervasiveness of the 'coin' metaphor. Breaking through that, I expect, will involve recruiting a new generation to this field and spinning them up on the share metaphor, rather than relying on bitcoiners to convert. Thus, BitShares could be the 'MacOS' to Bitcoin's 'MS-DOS'.

With regard to side chains, per se, if the units issued on the side chains are pegged to bitcoins in whatever proportion, then the side chains have to be justified by their technical merits. That pretty much puts an end to the altcoin market as we know it now.

The vast majority of altcoins are just legal replacements for pyramid schemes. Get in early, pump up the price, and hope that you get out before the thing crashes. Some have non-trivial features that set them apart from the rest. Some, like dogecoin take on a life of their own, and no harm done.

Put the altclones on sidechains, and their prices are tied to bitcoin prices, removing the whole point of their existence.

The only way Bitshares X even works is by having a significant external trade volume of Bitshares themselves to USD, bitcoin, etc. in order to establish the margin requirements for the various BitAssets within the chain.  The total value of all BitAssets is limited to a fraction of the total value of Bitshares.  I see this is one of the biggest challenges Bitshares will have to overcome because with the volatility of altcoins we currently see in the market, automatic margin calls could be triggered often enough to turn people off to the whole idea.  If it was backed by Bitcoin, there would be less volatility and a much higher ceiling for total BitAsset value.

So you're right, in a sense, because Bitshares X would essentially become Bitcoin X.  I just don't know if that's necessarily a bad thing.

One difference here, is that demand for BTS could be driven by demand for the BitAssets, whereas side chains work the other way around.

If someone wants BitUSD, he or she will need to buy some or buy some BTS and create some. With side chains, one most likely already has bitcoins, otherwise why all the hoopla?

Regardless of the merits of this particular idea, the fact that this idea has seemingly come out of left field is what we should be concerned about.

That belongs on a billboard.

It isn't your pieces or your opponent's pieces on the chessboard that you should worry most about; it's the invisible pieces that get you, when you aren't looking.

[mint chocolate chip]

Regardless of the merits of this particular idea, the fact that this idea has seemingly come out of left field is what we should be concerned about. The reality is that there is in all likelihood a great number of ambitious projects being developed which are unknown. It is not going to be the Mastercoin, Counterparty, Ethereum etc. competition that we know about that are going to give BitShares a run for its money, its going to be the unheard of at this moment ideas/projects/products that burst onto the scene that will. It has been almost a month since the Ides of March, most of us have been waiting patiently since then. It is going to get increasingly more worrisome that at some point in the near future, we are going to be faced with many competing ideas.

[wasthatawolf]

I see this as hugely beneficial to Bitshares X.  If Bitshares X was implemented as a side chain, the functional difference would be that all BitAssets are backed by bitcoin instead of bitshares.  Wouldn't this only help strengthen the Bitshares X model by allowing a much lower barrier to entry (direct transfer of bitcoin into the Bitshares X side chain) and a much more stable base asset?

What you are suggesting is actually why this could be a threat to Bitshares X.  If Bitshares X was implemented as a side chain, it wouldn't be Bitshares X; it would be a competitor to Bitshares X that replicates its features (except those inherent in its POS structure) and has the benefits you speak of.

The only way Bitshares X even works is by having a significant external trade volume of Bitshares themselves to USD, bitcoin, etc. in order to establish the margin requirements for the various BitAssets within the chain.  The total value of all BitAssets is limited to a fraction of the total value of Bitshares.  I see this is one of the biggest challenges Bitshares will have to overcome because with the volatility of altcoins we currently see in the market, automatic margin calls could be triggered often enough to turn people off to the whole idea.  If it was backed by Bitcoin, there would be less volatility and a much higher ceiling for total BitAsset value.

So you're right, in a sense, because Bitshares X would essentially become Bitcoin X.  I just don't know if that's necessarily a bad thing. 

[bytemaster]

In effect btc mining pools would own the whole industry and decide which side chains live or die.   Such centralization will not be accepted by most.


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Thats a nightmare! And to be really honest I wouldn't be suprised if for some reason the "most" would accept such centralization at the "end"... because of GREED of course... give them money and you see how ethical barriers will collapse... YES I am not optimistic and all conspiracy theories come to my mind again... 

I don't think this proposal should be taken lightly and indeed the fear of mining centralization might not be enough of a selling point to put bitcoin to sleep permanently. If this projects succeeds it will probably add huge value to bitcoin, apart from mining-centralization (majority might not even care about that) this would solve just about any critique anyone could have against Bitcoin.

I've been reading some comments of Dr. Adam and others on reddit on this topic, but the majority does not seem to believe that this will give too much power to miners. Actually I got the impression that apart from them not really seeing mining centralization as a large problem (because of current generation asics are no longer profitable enough), they also see it as a way to hedge against miner-centralization as well, because the side chain can apparently be in any other POW/POS form and possibly over a way out of the current mining-model. For the short term they consider the danger of 51% attacks negligible given enough confirmation-time for the migration.

Dr. Adam even mentions being able to implement things like Ethereum or Ripple as a side-chain without the premine and also lists just about every coin distribution-model and POW/S-model as doable on a sidechain. On top of all this Dr. Adam does have quite a track-record in the cryptocurrency space (inventor of bitcoins POW plus he seems to already have funding, cypherpunk contacts and the attention of the bitcoin core-devs) and thinking back the discussion thread on bitcointalk between Counterparty/Mastercoin and btc-core-devs, the latter were doing their utmost to point people to this solution as well. So I'm expecting quite some developer lifting power from the industry being put behind this idea.

Again I don't think this project should be dismissed lightly, this has the potential to be a very big deal. It does not have to be negative either, since this adds value to the btc-AGS-funds as well, provided the supply lasts through the current dip.

Lets assume for a second that the government officially blessed Bitcoin as a currency and then grew the blockchain to support.  They keep it fair and open and suck a lot of people in.  Then they pass a law that requires accounts to be frozen.  The major pool operators and mining operations comply because they have all been subverted and because the blockchain size has grown so large and the network effect is so great no one can setup a new pool without being exposed to the regulators.

There is no reason to fear blockchain 2.0 because market competition will continue to exist as people compete on efficiency, fees, and privacy. 

Additionally once our DPOS system is in place and proven we can propose an upgrade to bitcoin to replace Proof of Work.   Once we have BitUSD then it doesn't matter how big the chain is as long as it has a minimum amount of support.         

They are so focused on proof of work they are missing the obvious.  The entire premise of their innovation is that we need this large centralized proof of work system to be secure against government... once it becomes clear that you cannot outspend government on hash power things will change and people will flood to DPOS systems.  Perhaps bitcoin will upgrade.

I still contend that the security vulnerability on the side chains is a non-starter.

[smiley35]

Maybe a dumb question, assuming the Bitcoin 2.0 blockchain did work as described...

If Bitshares X wanted to hedge by having a Bitcoin 2.0 linked-blockchain too. Couldn't we take a snapshot of Bitshares X? Then give BTS X holders (Via current private keys) their current BTS X share in the new BTS X Bitcoin 2.0 Blockchain in exchange for Bitcoin dust.

Now all Bitshares X holders have their same BTS X share in the Bitcoin 2.0 linked-blockchain so the market can choose and we won't be affected?

Of course someone could start a clone from scratch but that is pretty hard as you'd need a development & marketing team, industry connection, + targeted community to compete with BTS X bitcoin 2.0 blockchain that honoured BTS X holders.)

From what I understand no. If you wanted to have a stake in the BTS-BTC chain the best you could do is buy more bitcoin.

[Empirical1]

Maybe a dumb question, assuming the Bitcoin 2.0 blockchain did work as described...

If Bitshares X wanted to hedge by having a Bitcoin 2.0 linked-blockchain too. Couldn't we take a snapshot of Bitshares X? Then give BTS X holders (Via current private keys) their current BTS X share in the new BTS X Bitcoin 2.0 Blockchain in exchange for Bitcoin dust.

Now all Bitshares X holders have their same BTS X share in the Bitcoin 2.0 linked-blockchain so the market can choose and we won't be affected?

Of course someone could start a clone from scratch but that is pretty hard as you'd need a development & marketing team, industry connection, + targeted community to compete with BTS X bitcoin 2.0 blockchain that honoured BTS X holders.)

[sumantso]

Some discussion here https://bitcointalk.org/index.php?topic=395761.msg6148769#msg6148769

Personally, I feel our first mover advantage should be enough. Of course, that depends on how quickly we can have a user friendly and attarctive product along with proper marketing.

[JoeyD]

In effect btc mining pools would own the whole industry and decide which side chains live or die.   Such centralization will not be accepted by most.


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Thats a nightmare! And to be really honest I wouldn't be suprised if for some reason the "most" would accept such centralization at the "end"... because of GREED of course... give them money and you see how ethical barriers will collapse... YES I am not optimistic and all conspiracy theories come to my mind again... 

I don't think this proposal should be taken lightly and indeed the fear of mining centralization might not be enough of a selling point to put bitcoin to sleep permanently. If this projects succeeds it will probably add huge value to bitcoin, apart from mining-centralization (majority might not even care about that) this would solve just about any critique anyone could have against Bitcoin.

I've been reading some comments of Dr. Adam and others on reddit on this topic, but the majority does not seem to believe that this will give too much power to miners. Actually I got the impression that apart from them not really seeing mining centralization as a large problem (because of current generation asics are no longer profitable enough), they also see it as a way to hedge against miner-centralization as well, because the side chain can apparently be in any other POW/POS form and possibly over a way out of the current mining-model. For the short term they consider the danger of 51% attacks negligible given enough confirmation-time for the migration.

Dr. Adam even mentions being able to implement things like Ethereum or Ripple as a side-chain without the premine and also lists just about every coin distribution-model and POW/S-model as doable on a sidechain. On top of all this Dr. Adam does have quite a track-record in the cryptocurrency space (inventor of bitcoins POW plus he seems to already have funding, cypherpunk contacts and the attention of the bitcoin core-devs) and thinking back the discussion thread on bitcointalk between Counterparty/Mastercoin and btc-core-devs, the latter were doing their utmost to point people to this solution as well. So I'm expecting quite some developer lifting power from the industry being put behind this idea.

Again I don't think this project should be dismissed lightly, this has the potential to be a very big deal. It does not have to be negative either, since this adds value to the btc-AGS-funds as well, provided the supply lasts through the current dip.

[liondani]

In effect btc mining pools would own the whole industry and decide which side chains live or die.   Such centralization will not be accepted by most.


Sent from my iPhone using Tapatalk

Thats a nightmare! And to be really honest I wouldn't be suprised if for some reason the "most" would accept such centralization at the "end"... because of GREED of course... give them money and you see how ethical barriers will collapse... YES I am not optimistic and all conspiracy theories come to my mind again... 

[liondani]

Transaction speed is the deal breaker. 


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and if they make the exact same think with litecoin or another altcoin that is faster and ofcourse wide accepted ?

[bytemaster]

In effect btc mining pools would own the whole industry and decide which side chains live or die.   Such centralization will not be accepted by most.


Sent from my iPhone using Tapatalk