Quote from: TPTB_need_war on February 10, 2016, 07:56:14 AM

...
Several rebuttal points:

a) In fact most of the Bitcoin use relies on 0-confirmations. I've been selling BTC to rebit.ph lately, and the transactions confirm within seconds of the transaction being sent.

b) As I wrote before and you ignored, even relying on multiple confirmations may be within the normal variance window for orphaned chains.

c) An attacker can drive the normal variance window upwards as high as he wants to. This is the analogous mistake/myopia you Monero guys made on your math for what you erroneously claimed fixed the block chain size Tragedy of the Commons.

d) You ignored my point about ongoing 51% attack which is not an ephemeral fork but rather is the longest chain.

Sorry! There is no such objectivity in Satoshi's PoW other than the longest chain rule (LCR). Period!

Eventually you will learn to respect the research I've done on this matter.

You have done some valuable research; however in many cases your conclusions simply do not apply. I am going to deal with (c) which in fact relates to the following post:

Quote from: TPTB_need_war on January 18, 2016, 08:53:22 PM

Quote from: ArticMine on January 18, 2016, 05:32:49 AM

Quote from: ArticMine on January 16, 2016, 08:27:26 PM

Quote from: TPTB_need_war on January 16, 2016, 08:07:06 PM

ArticMine PMed me after I wrote that flaming post, and said he would reply after studying my posts. He has not yet replied. Does that mean I am correct and there is no solution for Monero. I think so.

It is fundamental. Afaics, you'd have to completely rewrite Moaneuro. Tongue

Rewrite Monero, is not necessary at all but some documentation on how the Cryptonote adaptive blocksize limits actually work is needed, especially given the formula in section 6.2.3 of the Cryptonote Whitepaper is wrong. https://cryptonote.org/whitepaper.pdf. My response will come in time.

I will start by examining the Cryptonote Penalty Function for oversize blocks. This is critical to understand any form of spam attack against a Cryptonote coin. From the Cryptonote whitepaper I cited above the penalty function is:

Penalty = BaseReward (BlkSize / M_N - 1)²

The new reward is:

NewReward = BaseReward - Penalty

Where M_N is the median of the blocksize over the last N blocks
BlkSize is the size of the current block
BaseReward is the reward as per the emission curve or where applicable the tail emission
NewReward is the actual reward paid to the miner
The Maximum allowed blocksize, BlkSize, is 2M_N
The penalty is only applied when BlkSize > (1 + B_min) M_N Where 0 < B_min < 1 In the Cryptonote whitepaper B_min = 0.1.

The error in the Cryptonote Whitepaper was to set NewReward = Penalty

For simplicity I will define:
BlkSize = (1+B) M_N
BaseReward = R_base
Penalty (for a given B) = P_B
NewReward (for a given B) = R_B

The penalty for a given B becomes:
P_B = R_baseB²
While the new reward for a given B becomes:
R_B = R_base(1 - B²)
The first derivative of P_B with respect to B is
dP_B / dB = 2R_baseB

In order to attack the coin by bloating the blocksize the attacker needs to cause at least over 50% of the miners to mine oversize blocks and for an expedient attack close to 100% or the miners to mine oversize blocks. This attack must be a maintained over a sustained period of time and more importantly must be maintained in order to keep the oversized blocks, since once the attack stops the blocks will fall back to their normal size. There are essentially two options here:

1) A 51% attack. I am not going to pursue this for obvious reasons.

2) Induce the existing miners to mine oversize blocks. This is actually the more interesting case; however after cost analysis it becomes effectively a rental version of 1 above. Since the rate of change (first derivative) of P_B is proportional to B the most effective option for the attacker is to run the attack with B = 1. The cost of the attack has as a lower bound R_base but would be higher, and proportional to, R_base because miners will demand a substantial premium over the base reward to mine the spam blocks due to the increased risk of orphan blocks as the blocksize increases and competition from legitimate users whose cost per KB for transaction fees needed to compete with the attacker will fall as the blocksize increases. The impact on the coin is to stop new coins from being created while the attack is going on. These coins are replaced by the attacker having to buy coins on the open market in order to continue the attack. The impact of this is to further increase the costs to the attacker.

It at this point where we see the critical importance of a tail emission since if R_base = 0 this attack has zero cost and the tragedy of the commons actually occurs. This is the critical difference between those Cryptonote coins that have a tail emission, and have solved the problem, such as Monero and those that do not, and will in a matter of time become vulnerable, such as Bytecoin.

Afaics, the above does nothing to remove/ameliorate the Tragedy of the Commons in Satoshi's mining algorithm[1], except if viewed as short-term solution while no miners have a significant percentage of the network hash rate.

The problem is that as I explained for Ethereum, as transaction rate scales up and thus the block reward is dominated by fees, then unless there is a uniform distribution of hashrate amongst all full node miners (which is of course impossible since not everyone can locate their mining equipment next to a hydropower plant with 2 - 4 cents electricity or for that matter perhaps free subsidized electricity in corrupt environs such as China), then those miners with more hashrate will have lower costs of verification. Thus they will be more profitable and can buy more hashrate faster than the other miners. Thus mining will entirely centralize over time, because the economics are designed to centralize mining. So since mining will centralize, then attaining 51% of the mining power will be guaranteed and thus the above algorithm can do nothing to stop miners from spamming the block chain size by paying transaction fees to themselves. But of course with 51% of the hashrate, they can do anything they want, except up to the limits of what public perception will tolerate. I am assuming of course that transaction fees in a free market will reflect actual (marginal) costs and that verification cost will be significant relative to other costs such as bandwidth.

There is also afaics a math flaw in ArticMine's analysis. Unless N is very small, then a miner with a significant but less than 51% hashrate is going to win a block in most every N set, and thus they can hit the 2 * M_N hard limit every time (or what ever rate of increase they deem most cost effective according to the Penalty cost being a function of a square), gradually ramping the median block size up over time. Thus the spam attack is not avoided, rather it just takes longer. And again I had pointed out that by shorting the coin, they can potentially recover their lost block rewards and profit. And if N is very small, then the likelihood that a miner can win all N blocks with less than 51% hashrate increases. Also it is not clear to me from ArticMine's specification if N is overlapping meaning a FIFO queue? But I doubt that makes any difference to my conceptual math point (note I have not written down the equations to precisely quantify this alleged flaw).

Also the 2 * M_N hard limit means that block chain can't handle transient spikes in transaction load, e.g. such as would be required by Lightning Networks (which has sort of a garbage collection overhead which manifests has large spikes in transaction load).

Conceptually at the highest-level semantic model of the generalized essence, an anti-aliasing filter on transaction rate can't ameliorate the fact that a spam transaction is indistinguishable from a non-spam transaction.

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. That both solves the economics of the first paragraph above and it also removes the need to limit the block size in any artificial way other than the burn cost. But in my design, I don't waste the burn cost and instead apply it to security in the form of unprofitable mining. Note that the only way to limit culmulative network verification costs is to centralize mining. And this is why I wanted to give up, because I didn't see any solution that didn't centralize mining. But then I realized the design I had for intra-block partitions can centralize while remaining controlled by decentralized PoW, thus effectively still decentralized. And this is why I say you will have to completely rewrite Monero (at least the consensus design portion of the block chain code).

[1]	I introduced this concept in 2013 in my thread Spiraling Transaction Fees and I nailed the block size as the fundamental issue in my last post in that 2013 thread.

Quote from: luigi1111 on January 18, 2016, 09:35:35 PM

Quote from: TPTB_need_war on January 18, 2016, 08:40:16 PM

Quote from: luigi1111 on January 18, 2016, 08:25:13 PM

Bumping up against the hard limit is probably wastefully expensive for this "attack"

What expense?

Quote from: TPTB_need_war on January 18, 2016, 07:56:15 PM

[...]mining equipment next to a hydropower plant with 2 - 4 cents electricity or for that matter perhaps free subsidized electricity in corrupt environs such as China[...]

You're suggesting mining is (or can be) free? That's absurd. Even if it were free, this attack still costs you the reward.

I am suggesting the State (or those corrupt who control it) can charge the cost of mining to the collective (think the Three Gorges Dam that wrecked environmental devastation downstream, upstream and derivative effects all over China). I have made this point numerous times. And apparently (after everyone said I was crazy), it came true in China and if true was a factor that enabled China to capture an estimated 67% of the mining and 51% attack Bitcoin. Documentation of these statements is in my vaporcoin thread.

If the profit from shorting is greater than the reward, then it doesn't cost you anything. The free mining cost just makes it more likely you can sustain it long enough to reap your reward. How do we know the Chinese won't milk the investors while the block reward is high (mining at near $0 cost charging it the cost to the collective) and then also profit by shorting it all the way down from $1000.

We are bunch of naive geeks who are being reamed (mined) by savvy traders and strategists. These are no different conceptually than Rothschild's and Rockefeller's methods of yore. The players and technological field change, the game remains the same. (Yeah I am crazy conspiracy theorist whose analysis is always wrong)

Edit: haven't you been slightly suspicious of why the MSM publicized Bitcoin so much. That doesn't happen without the approval the global elite.

Quote from: TPTB_need_war on January 18, 2016, 10:35:58 PM

PoS(hit) can never be secure, because if it has a functioning markets (which it must in order to be widely adopted and liquid), then one can borrow stake, attack the coin (which requires much less than 51% to for example delay transactions by some N blocks where N is a function of percentage of coin supply held), and then pay back the borrowed coin with cheaply bought coin as the price collapses due to attacks. You could simultaneously short it (i.e. which you did when you borrowed the coins, but sell some for fiat before you attack) for profits. Alternatively borrow fiat (or other cryptocoin), buy stake and short to profit and pay back loan. Also PoS can't distribute new coins, thus eventually the coin supply shrinks asymptotically to 0.

With PoW, your borrowed mining hashrate would eventually reach end of contract and the coin would repair itself. And you'd need much closer to 51% to do damage. You would hope to be able to purchase the coin at cheap prices, wait for it to rise back up and then sell it for fiat to pay back your loan. Much less plausible.

However if you are up against the corrupt State that charges cost of PoW mining to the collective, then we're screwed with profitable PoW also, except I have the idea to use the unprofitable PoW of every person's computer in the world (with latency preventing them from farming out to ASIC), which seems might be even too much of an expense for China to hide the subsidization of.

You propose a tragedy of the commons on the premise that the block reward is dominated by fees. When I first read this response I stopped right at that point since a block reward dominated by fees is actually not possible in a Cryptonote Coin short of actually setting the fees in the consensus code. This I thought would be clear from my previous comments, but it appears this needs some clarification. First I refer to both of your 2013 posts in which both the case of a fixed blocksize (with fees theoretically going to infinity, in practice they are bound by transferring the value of the coin to the miners) and an infinite blocksize (fees go to zero) both fail. I do not dispute either of those scenarios, in fact I have no problem giving you credit for them since you came up with them before I did.

The reason the above two scenarios do not apply to a Cryptonote coin with a tail emission such a Monero becomes apparent when one considers the economics of the total block reward components of fees and base reward (new coin emission). If the total in fees per block significantly exceed the base reward then it becomes economically attractive for miners to burn coins to the penalty by mining larger blocks. The block size rises until the total fees per block fall below a level where it is uneconomic for the miners to pay the penalty by increasing the blocksize. This level is comparable to the base reward. It is at this point where the need for a tail emission becomes clear, since without the tail emission the total block reward (fee plus base reward) would go to zero.

The second claim is that a spam attack by a less that 50% subset of the miners is possible. As I explained I in the original post this is not possible since one has to either to purchase coins on the open market and pay them to other miners to burn them against the penalty or use hashpower to generate the coins and then burn them to the penalty. We are talking about the median not the mean. It is possible for a below 50% hashpower to raise the blocksize slightly by displacing empty blocks but this hardly constitutes a spam attack. The attacker would be spending say 40% of the cost of a 51% attack to raise the blocksize by say 40% and keep it there.

There is a double burn with Cryptonote. The first burn is the proof of work, the second burn is the coins that are paid to the penalty. This is fundamentally different from a coin such as Bitcoin.

Finally I will address the need to respond to changes in network demand, such as for example the Christmas shopping season. Here we are talking of a approximately 10x rise over the annual average a period of a month, with a peak on December 23. VISA has provided data on this. This can be easily be handled by a Cryptonote coin with N =100 and 2 minute blocks such as Monero.