Author Topic: Merockstar's Ramblings  (Read 3112 times)

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Offline Empirical1

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I think BM's article is pretty powerful stuff.


End result is that decentralization has a cost proportional to the number of validators and that costs do not disappear.  At scale these costs will centralize any system that does not support delegation.   We should design this kind of centralization in from the beginning so that it can be properly managed and controlled by the users instead of evolving in some adhoc manner as an unintended consequence.

 +5% That's pretty much a slam dunk for the DPOS level of decentralisation & kind of solves the whole de/centralisation argument in general.

Leased forging isn't too far away though..

Leasers are essentially voting for 'delegates' with their stake. They are also getting paid via their 'delegates' without doing any work. In order to be more competitive the leasers in NXT will have to accept less and they're not doing any work so it's a possibility. It's obviously an example of evolving in an adhoc manner with unintended consequences but I'd like to know a few key points that make it inferior.

Edit: What I mean is I know all their metrics are inferior to DPOS (Cost, Confirmation time, TPS etc.) but is that something they can tweak by giving leasers less and adopting 'some' of our approaches or do people think they are they realistically going to have to upgrade to DPOS Blockchain or be left behind.

« Last Edit: July 11, 2014, 02:42:22 am by Empirical1 »

Offline Agent86

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Can someone explain the process, risks, rewards, etc of delegating your forging power in NXT?

havent studied it in depth, but from passing glances at the nxt forum people talk like "leasing" your forging power to somebody else is risk free. you still hold your coins, the only risk is that the guy running the pool could run off with tx fees (forged nxt).

wanting a comparison?

EDIT: durr. yes you are, "the scalability of DPOS vs POS vs POW when it comes to decentralization"
Thus the process of leasing is like dpos prior to approval voting.   At scale the pools will have to eliminate kickbacks to cover costs and remain compatible. 

Question:  can you lease your stake to more than one pool? 

No, with leasing in NXT you can only lease to one account and that account gets the forging rewards.  The only benefit of a pool is really to get a more consistent reward in small increments but you would have to trust the pool to send the payments back to you.

I suspect most smaller holders won't bother with forging because they have to run their computer all the time to do it, even though they don't need to risk their key.  If people end up using pools, there is no size limit, and that could also be a centralization problem.  This can also lead to controlling the network by giving nice rewards to people who lease their forging power to you.

The other problem is their source of randomness... I think they were trying to depend on the "random" act of people stopping and/or starting forging in a 24hr period to get a random number to determine the order of forging.  I think they have considered moving to a source of randomness like ours but haven't done so.  I think they recognize some weaknesses and want to switch to "transparent forging" but again still haven't officially done so.  I'm no NXT expert and if I get time I could look into it more but they are sure to correct us if we make a comparison.

I believe there were some other issues at other points such as the probability to forge a block isn't exactly proportional to your balance and slightly favors larger balances.

Offline bytemaster


Can someone explain the process, risks, rewards, etc of delegating your forging power in NXT?

havent studied it in depth, but from passing glances at the nxt forum people talk like "leasing" your forging power to somebody else is risk free. you still hold your coins, the only risk is that the guy running the pool could run off with tx fees (forged nxt).

wanting a comparison?

EDIT: durr. yes you are, "the scalability of DPOS vs POS vs POW when it comes to decentralization"


Thus the process of leasing is like dpos prior to approval voting.   At scale the pools will have to eliminate kickbacks to cover costs and remain compatible. 

Question:  can you lease your stake to more than one pool? 






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merockstar

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Can someone explain the process, risks, rewards, etc of delegating your forging power in NXT?

havent studied it in depth, but from passing glances at the nxt forum people talk like "leasing" your forging power to somebody else is risk free. you still hold your coins, the only risk is that the guy running the pool could run off with tx fees (forged nxt).

wanting a comparison?

EDIT: durr. yes you are, "the scalability of DPOS vs POS vs POW when it comes to decentralization"
« Last Edit: July 10, 2014, 10:07:05 pm by merockstar »

Offline bytemaster

Can someone explain the process, risks, rewards, etc of delegating your forging power in NXT?
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

merockstar

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you got it BM. I'll see what I can come up with.

Offline bytemaster

I would love to see you write something about the scalability of DPOS vs POS vs POW when it comes to decentralization.


Green is Income
Yellow is Profit
Blue is Cost

Assuming a fixed validation cost per transaction and a fixed fee per transaction, there is a limit to the amount of decentralization that can take place. 

Assuming the validation cost exactly equals the fee a network is completely centralized and can only afford one validator.
Assuming the fee is 100x the cost of validation then the network can support 100 validators.

What you will quickly see is that systems like Nxt and Peercoin must have very excessive fees if they would like to maintain the illusion that everyone can be a validator and earn fees at scale.    What this means for Nxt / Peercoin is that anyone with less than 1% stake cannot validate profitably unless their fees are higher than our DPOS chain. 

So if these chains assume 100 is to centralized and start promoting they have 1000 validators then their fees must be 10x.  If they grew to be the size of bitcoin ($10 B) then only those with $1M worth of coin could validate profitably and most would consider that an elite club.    If they reduce the minimum stake to be a validator to $1000, then their fees would be 10,000 times higher than our fees.   

Now we assume that every one with less than the amount required to validate doesn't participate and we assume a "reasonable" distribution of wealth, you will quickly see that unless they have insane fees, there will only be a handful of people with enough stake to validate profitably. 

What we can conclude from this is that the only way for POS to work is to delegate it.  In the case of Nxt they can pool their stake by some means and ultimately this will end up like DPOS prior to approval voting with a variable number of delegates.   Those doing the delegating wouldn't actually receive any income like you see with mining pools because the validation expenses will be consuming the vast majority of the transaction fees.

End result is that decentralization has a cost proportional to the number of validators and that costs do not disappear.  At scale these costs will centralize any system that does not support delegation.   We should design this kind of centralization in from the beginning so that it can be properly managed and controlled by the users instead of evolving in some adhoc manner as an unintended consequence.

 
« Last Edit: July 10, 2014, 08:34:06 pm by bytemaster »
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.