Author Topic: DACs vs. Firms (Are DACs useless?)  (Read 29483 times)

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Offline toast

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Could you respond to this point?

Quote
> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.

Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?

The only argument against one blockchain to rule them all is efficiency and resistance to centralizing forces. I think we disagree about the premise here, no?
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Offline AsymmetricInformation

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To me it seems like you are contradicting yourself because you say "DACs are useless" and then describe how and when DACs are not useless.
You're right...I wanted an attention-grabber and lost control of the thesis for a moment. It should really say "Are OTHER DACs useless?". I just thought that, since I was posting it here on BitsharesTalk, the inferred meaning would be accurate. The one on my forum has a different title.

This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.

Yes, SHA-2 are expected to be resistant to quantum computing… we will see what happens in practice… example: some people were aiming for GPU resistant coins… months later the GPUs were mining happily much faster than the CPUs… life is the best judge I guess…
I actually have no expertise in this area, but someone told me that because Bitcoin uses the hash of a public key, it dodges this quantum computing bullet somehow. Moreover, he said q-r algorithms already existed, which could easily be swapped in.

Offline bitmeat

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I'm curious about your quantum computing resistant coin.  Any details on how you achieved it ?
One can make use of so call Lamport Signatures which are quantum proof but large!

What I did and seems to work is very similar to Lamport Signatures except for it's freaking small!!! :)

Offline bitmeat

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To me it seems like you are contradicting yourself because you say "DACs are useless" and then describe how and when DACs are not useless. I think you think that we think of DACs as "normal company + blockchain". Reading from the past (now that I read it I realize I excluded the most important part of all three examples there which is *corruption* of the centralized entity): https://bitsharestalk.org/index.php?topic=3488.msg43785#msg43785

> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.

Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?

Must have not expressed myself clearly. I'm saying DACs are hard. But they are my preference.

I was in a way delusional, what I expected from bitshares was a platform in which anyone can make a proposal and others can fund if they like it. More like kickstarter. In other words I expected that Invictus will NOT control the funds. Instead they will make proposals like everyone else and compete for the funding. I was wrong, my bad. So that's why I started looking into creating such a platform as a thought experiment at first.

As far as quantum computing resistant goes, Bitcoin already is IF and it's a big if, if you don't reuse the same address. That said AGS is like the worst with respect to being quantum resistant. But any time I raise the question of making AGS liquid I get dirty looks. Fine. Let's have our funds locked because you see according to Stan - that's the investor crowd that will never sell.

If I said DACs are useless I was being sarcastic, I'll have to go back and see what I wrote. Been a long night :)

Offline tonyk

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This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.

Yes, SHA-2 are expected to be resistant to quantum computing… we will see what happens in practice… example: some people were aiming for GPU resistant coins… months later the GPUs were mining happily much faster than the CPUs… life is the best judge I guess…

What I mean is –let the life/market decide for both the DACs and the quantum resistant problems.
« Last Edit: June 10, 2014, 02:31:08 pm by tonyk »
Lack of arbitrage is the problem, isn't it. And this 'should' solves it.

Offline toast

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To me it seems like you are contradicting yourself because you say "DACs are useless" and then describe how and when DACs are not useless. I think you think that we think of DACs as "normal company + blockchain". Reading from the past (now that I read it I realize I excluded the most important part of all three examples there which is *corruption* of the centralized entity): https://bitsharestalk.org/index.php?topic=3488.msg43785#msg43785

> The prediction market concept is flexible enough to contain functions for gambling, insurance, and portfolio replication (currency exchange), as well as other functions.

Right, and if I can have lower fees than Truthcoin for my currency exchange by having a special-purpose blockchain (delegates would have lower bandwidth/storage requirements), shouldn't I make my own blockchain and out-compete truthcoin on that one particular area?

« Last Edit: June 10, 2014, 03:22:13 pm by toast »
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Offline AsymmetricInformation

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You don't really go into the problems with "firms".

You should write a paper first about all the problems with centralized entities and then you would have your own critique of your work.
The paper is about DACs relative to firms. I only examine the differences. Perhaps is you who is the hack reader?

I think DACs are superior for virtual entities which have to operate across multiple jurisdiction. The law just cannot keep up with technology. So why would you want to artificially slow the rate of innovation by going with a firm when you can build a DAC without permission and apologize later on?
SilkRoad was a firm, not a DAC. Legal compliance cannot explain the role of DACs.

Innovate and then apologize rather than fear to innovate and have the species go possibly extinct as a result. No one needs permission to make a DAC
See above, you are being illogical.

and it can run independent of human operators someday while a firm will never be able to do that.
This is simply false. As I wrote, Bitcoin is supported by human owner-operators who enjoy the use of the software and economic benefits of money. The employees look and act different but they still directly fulfill that role.

Simplify the thesis and the argument you are trying to make.
Bitcoin's success may never be replicated. It may have qualities/advantages which uniquely apply to money.

II even have a prototype for a quantum computing resistant coin.
I'm curious about your quantum computing resistant coin.
This is off-topic, but did you know that, as long as you don't re-use addresses, Bitcoin is already quantum-computing proof.

Offline xeroc

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I'm curious about your quantum computing resistant coin.  Any details on how you achieved it ?
One can make use of so call Lamport Signatures which are quantum proof but large!

Offline gamey

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I'd like to see a system in which the keys of a DAC don't need to be held by a centralized entity. That's all.

What Invictus is doing is good, but not great. Things can be improved 10x. But anytime I raise the questions I'm tagged as a "non-believer" and a FUD spreader. I'm just looking at the natural progression of the space. Nothing wrong with expecting more, especially, when I see it is possible.

I'm not in a position to go work on these ideas full time at the moment. But may be I should. So far every experiment I did for fun is showing promising progress. I even have a prototype for a quantum computing resistant coin.

 DACs don't have centralized keys held by centralized entities. AFAIK.  If so then it wouldn't be a DAC ?

I'm curious about your quantum computing resistant coin.  Any details on how you achieved it ?
I speak for myself and only myself.

Offline CLains

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Simplify the thesis and the argument you are trying to make.
« Last Edit: June 10, 2014, 12:59:24 pm by CLains »

Offline bitmeat

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Let me clear something up as well - I am looking at how I would do things differently, had I been starting BitShares from the beginning.
It is clear that Invictus is doing exactly what they promised to do, and they have not set the expectations this high.

So here is how I would do it:

1. I would make the funding only a % pledge amount. Say 5%. I.e. you pledge 5% of your donation, but only buy the full amount once the system is up and running (within 3 months of the start). Yes, this would require actually building a DAC that allows cross chain decentralized exchange. Yes, it is possible. However I wouldn't even expect donations, I'd probably do a proof of burn instead. This also gives better incentive on making my own asset worth something.

2. Then I would create projects and proposals for bettering the system, which would be funded by the owners. I would NOT accept "donations" in PTS or BTC. (let's face it, that's just a term masking the fact that they are doing an IPO). It would be all through assurance contracts, and the funds would not only be available to spend as I see fit. Yes, Invictus has stated that they will spend the funds AS THEY SEE FIT. My opinion is that this is still old school mentality.

3. I would also build restrictions in the system, such that any funded project has limits on spend. i.e. it has predefined milestones, and limits on how much you can spend per day, unless voting approves it (sometimes there is a need)

In any case, I might just have to get these prototypes to a more complete stage and present them for peer reviews. Because until people see what my vision is and how it works, I'm just my own echo chamber and come off as FUD, when really I'm just looking at how I would improve things. I see so many possible improvements, but it is clear that Invictus is not willing to make drastic changes, and perhaps that is a good thing, as it is risky, and also clear that the investors in Invictus don't want them to make changes. So, Invictus will deliver on what they set out to do. And I should shut up and go back to the drawing board. :)

Offline fuzzy

To me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.

If I am correct (and obviously I think I am :P), Invictus is a Central entity that formed to create the DAC toolkits and develop their own DACs to start and compete in the market.  I do not recall them ever saying anything about being a DAC themselves, though.
+Invictus/Bytemaster/Stan stated several times that invictus is a part of the bitshares ecosystem
+AGS/PTS is just their way of distributing initial shares, legal issues have nothing to do with DACs in general but with invictus holding the keys for the Angel addresses!

Being part of the bitshares ecosystem does not make Invictus a DAC does it?  I thought they focused specifically on building the toolkit and then creating their own DACs (Bitshares brand). 

Interested in clearing this up. 
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Offline bitmeat

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I think DACs are superior for virtual entities which have to operate across multiple jurisdiction. The law just cannot keep up with technology. So why would you want to artificially slow the rate of innovation by going with a firm when you can build a DAC without permission and apologize later on?
That was my point - even Invictus the "champions" of DAC, had to create entities, and then deal with complications. I'm not judging, just pointing out that a true DAC was not their first choice for their operation.

Innovate and then apologize rather than fear to innovate and have the species go possibly extinct as a result. No one needs permission to make a DAC and it can run independent of human operators someday while a firm will never be able to do that.
Correct. However Stan recently made a post stating the opposite, saying that "better to ask for forgiveness, than permission" was a bad idea.
Again - not judging, just showing that they are not truly embracing and eating their own dog food. However I'm hoping that will soon change.

DPoS isn't the only possible design for a DAC. I also don't think every DAC has to have a blockchain. MaidSafe may actually be a DAC too if they can get it running properly and it doesn't have a blockchain.

Like I said, there are many ways to innovate in the area. Block-chain is probably going to be viewed as an outdated technology not long from now.

It all depends on if you take the strict definition of a DAC or a loose definition. In the strictest definition MaidSafe lacks transparency because we cannot see all the transactions but it fits everything else.

Why do you need to see all the transactions? In fact that's why it's the perfect solution - it solves privacy concerns as well. So long as you have proof that you own your amounts, why do you care to see other transactions?

Offline luckybit

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Good write up! I believe that DACs have not evolved yet. Tools will become better, new systems will be tested/proven. It will take a much longer time than people expected.

I found it quite bizarre that Invictus would preach DACs, yet they have 2 legal entities and complain about "regulatory issues around making AGS liquid".

To me a true DAC is not controlled or owned by any legal entity. It is owned and controlled by voted delegates. Delegates in turn are incentivized to do what is expected of them, and even punished if they do what isn't expected.

I think DACs are superior for virtual entities which have to operate across multiple jurisdiction. The law just cannot keep up with technology. So why would you want to artificially slow the rate of innovation by going with a firm when you can build a DAC without permission and apologize later on?

Innovate and then apologize rather than fear to innovate and have the species go possibly extinct as a result. No one needs permission to make a DAC and it can run independent of human operators someday while a firm will never be able to do that.

DPoS isn't the only possible design for a DAC. I also don't think every DAC has to have a blockchain. MaidSafe may actually be a DAC too if they can get it running properly and it doesn't have a blockchain.

It all depends on if you take the strict definition of a DAC or a loose definition. In the strictest definition MaidSafe lacks transparency because we cannot see all the transactions but it fits everything else.




« Last Edit: June 10, 2014, 11:21:11 am by luckybit »
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Offline luckybit

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Hello,

I've written a short essay on the Truthcoin forum (I am the designer of Truthcoin, if you didn't know) which takes the probably-unpopular position that DACs are actually inferior to firms.

I'm positing here to get some feedback from (who I assume will be) my harshest critics, and refine these initial ideas.

http://forum.truthcoin.info/index.php/topic,90.msg195.html

I guess I'm hoping the conversation will take place there, as the forum is new and needs more posts, but I'll take whatever I can get.

Inferior in what way?
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