Re: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)
TPTB_need_war, why would anybody secure your currency if mining is unprofitable?
Because they want to send a transaction to the block chain.
If you making mining unprofitable, won't you lose the honest miner's incentive to win the block reward rather than to double spend?
Profitability of mining has nothing to do with the miner's economics of double-spending. All the miner can do is try to win the longest chain race to orphan a minority hashrate chain. The only way to double-spend with mining power is either a Finney attack (which requires payees to be stupid and accept insecure 0-confirmation transactions) or by spending to the minority hashrate chain and then building your own majority hashrate chain with the double-spend. Whether the mining is profitable or not, is irrelevant to having sufficient hashrate to accomplish the above double-spend attacks. One might try to argue that making the mining unprofitable will lower the network hashrate, but I already offered the solution to that upthread (every transaction MUST include PoW). One might argue this lowers the threshold of security as compared to Bitcoin, but this is only because Bitcoin pays more for security. We can make it unprofitable and still pay more up to the limit of the PoW being submitted with transactions. If you can't grasp this in your mind, wait for my white paper. I won't explain it further now.
Yes exactly, transaction verification has to be profitable, and the reward prevents double spends. Mining in Bitcoin is not profitable on average, but there is a competition. However the unsolved problem: how to create a system where supply (blocksize more or less) adapts to demand? It makes sense to have a fee market, but nobody really proposed something which explains how this might work, in my opinion. A system doesn't need 5000 nodes. 50-100 nodes have enough reliability. In Bitcoin what matters anyway is the hashpower, not number of nodes. Most of these things can be much better understood from the perspective of 2008, not 2010+. Satoshi wanted the system to be as open as possible to maximise chance of success. In 2016 it is much more clear where the problems are.
What do you mean by 'transaction verification'?
The word mining in Bitcoin mixes to issues: validation of transactions and creation of money. Also the word miners isn't compatible with a true Peer-to-Peer system. In any case, the important part is that doing the verification is profitable. Another word for the work these nodes do is auditing. It's the computer analog of a person checking the accounting statements in double entry book-keeping system. The blockchain is similar to the invention of double entry book-keeping by Luca Pacioli in 15th century Italy, and the use of clay tablets in Ancient Babylon to preserve contracts. Imagine a world without paper, how do you know that two people agreed on something ex-post? The invention of the blockchain allows for the first time in history to store completely immutable data. However when Bitcoin developers claim signatures can be stored independently of the blockchain, it might be that the Bitcoin blockchain is not that immutable after all. Overall the goal is to preserve some record which is completely indestructible, such that the record of ownership is completely secure. With fiat money not only are the ledgers in the hand of the nation state, but those ledgers are very hard to audit. Most people use fiat money every day, but the number of people who check the books of their central bank is small indeed. If one understands these things, it is clear that it is a certainty that in the future these public ledgers will be widely used.
You are incorrect on the point that mining has to be profitable. You lack imagination and subscribe too much to academic research and do not think out-of-the-box.
You also incorrect to assume that those doing the PoW have to be the ones doing the verification.
The word mining in Bitcoin mixes to issues: validation of transactions and creation of money.
Transaction validation has a very low cost associated with it compared to finding a hash; regular nodes also do transaction and block validation, and this is designed to be trivial, so I'm still not sure what you mean by making transaction validation profitable?
The bolded phrase can be incorrect if there are unbounded number of verification nodes. Refer to my upthread post for the reasoning and I quoted only the conclusion as follows:
To solve this problem we need to make the cost of what is burned when submitting a transaction greater than the cost of cumulative network verification costs.
If you think anybody will be willing to secure the network without direct incentive especially after Bitcoin introduced mining incentive, you are in delusion.
I think you are very incorrect with this thinking - currently people spend "hours every day" creating content on Facebook or other such things for *zero profit*. Why on earth would they do that?
If you can simply get those people to run a (presumably low-power requirement) node then you will be able to secure a blockchain without needing block rewards at all (effectively it is your cost to be a part of a social network).
From what i can gather it's even simpler than that. They'll need to contribute to securing the network in order to send a transaction.
Correct. Thanks.
From what i can gather it's even simpler than that. They'll need to contribute to securing the network in order to send a transaction.
Provided that the "proof" is not going to be a big hassle then that makes sense, however, having a very "cheap proof" will make it much easier to mount a Sybil attack.
Sybil attack what? You send a transaction and you attach a minimum PoW share. PoW (longest chain rule) by definition can't be Sybil attacked, as it is just a means of unambiguously choosing an arbitrary ordering.
If your purpose is to shill for IOTA then I guess we have nothing more to discuss (it's unfortunate that it is simply impossible to create a topic on this forum about tech without shills for some alt coming along and trying to hijack it).
LOL, you made my day. patmast3r shilling for Iota is a very funny thing.
I don't know how my post could possibly be misinterpreted as shilling but let me just say that I chose IOTA because it is the only project I know of that uses a system that is at least remotely similar to the one that TBTB seems to be proposing (i.e. unprofitable mining and every user does the "mining").
But don't forget we discussed upthread that Iota (and any DAG) can't allow the payer to sign the PoW and thus it can't force a round-trip latency cost on outsourcing the PoW to ASIC farms. Thus in theory the mining hashrate in Iota will centralize over time the same as for Bitcoin.
Judging by how IOTA seems to be doing it it's not a big hassle, just a "small" PoW that a client has to attach to it's tx. Afaik the network will be depended on a constant stream of "honest" txs yes.
The problem with this is spam. IMO you cannot make the PoW easy enough for IoT devices while preventing desktop PCs from spamming the network; see this topic for more discussion on the subject:
https://bitcointalk.org/index.php?topic=1331522.0
There is no adverse cost in my system to more transactions. The more transactions, the more PoW, the better. Spam my design and you make the network more secure! Thus your definition of spam does not apply to my design. The key improvement I make is to remove the block size problem entirely.
It seems to me that transaction fees represent the only usable, endogenous spam prevention mechanism.
It seems to me you lack the imagination and creativity to paradigm shift the problem space, hehe.
How much is 40 bytes of Bitcoin blockchain space worth? That depends on supply and demand (and the value those bytes can carry). Satoshi never solved this problem and just used subsidies. There ought to be some proper process by which it is determined how much a certain transaction should cost. Bitcoin's design does not allow for this properly and all Altcoins have followed this path. It has to do with nodes being able to leaving the network at will. The nodes should be obligated to stay on the network for longer, so that the overall fault-tolerance can be measured accurately. Interestingly also to observe that one can maximize the total value, by allowing financial derivatives to be processed. Instead of sending and receiving coins, the far more profitable market is to allow arbitrary value to be transferred.
Transaction fees are likely too limited a concept, since they only reward short-term behaviour on a per-block basis. I suggest something like provider fees which can be made dependent on other factors also, in particular the number of other nodes, current demand and transaction type.
Transaction fees are likely too limited a concept, since they only reward short-term behaviour on a per-block basis. I suggest something like provider fees which can be made dependent on other factors also, in particular the number of other nodes, current demand and transaction type.
Correct the solution is provider oriented. I am impressed. You have a strong insight just from knowing the research whereas my insight comes from my own creativity and thinking (instead of reading the research of others). There is no other way. And this introduces centralization, but another of my key epiphanies was that I could control centralization with decentralized PoW. This the permissionless, decentralized attribute is retained.
IMO transaction fees should probably be paid per output.
Probably. In Iota PoW is paid per input/output.
Whereas in my design the PoW is orthogonal to the provider fee market.