Post
Topic
Board Development & Technical Discussion
Re: Blockchain-Free Cryptocurrencies: Framework for Truly Decentralised Fast Txns
by
iamnotback
on 10/11/2016, 08:54:27 UTC
Btw, I don't understand why that paper failed to cite the prior art of Iota's and Sergio Demian Lerner's DAGs.

Don't forget Byteball, a new consensus algorithm and private untraceable payments using DAG, no POW, no POS! Wink
https://bitcointalk.org/index.php?topic=1608859.0

...

The innovation claimed is that everyone can agree on 11 of 12 centralized supernodes to order the transactions, thus we wouldn't need PoW nor blocks if this claim were true and desirable.

... where the 12 supernodes will be controlled by one entity (even pretending to be 12 entities via a Sybil attack). Because the users will never be able to agree on any evolution away from the 12 by forming a consensus on an exact 12, since they are only allowed a mutation of 1 at a time. And any higher rate of mutation would make it implausible to define a total order.

The Byteball design is conceptually worse than (D)PoS from the analytical perspective that says the practical ability to change the top-down controlling entities is what differentiates (D)PoS from Byzantine fault tolerant federated designs (<-- watch linked video from 17:00 until 22:45), except that perspective assumes that a majority of the stake can't be induced to collude to deviate from Nash equilibrium (w.r.t. to control over and thus outcomes from those ordering nodes in (D)PoS) which seems myopic because in reality the omnipresent power-law distribution of wealth insures the whales own greater than 50% of the stake and if the minnows are not individually economically incentivized thus are operating with "altruistic-prime" with an undersupplied-good opportunity cost which is the power vacuum of political economics (and intuitively any individualized economic incentive will always be captured by economies-of-scale as exemplified by selfish mining, begetting the inviolable power-law distribution outcome).

This reason (as well the lack of scaling robustness) are weaknesses; and (D)PoS is worse than Satoshi's design w.r.t. to Nash equilibrium because no value is extracted (such as not spent on an external resource in proof-of-work) thus 51% nothing-at-stake attacks are inexorable, as well as free when you can short the token on an exchange. However, these "wolverine federated systems in an illusory democratic sheepskin" are more computationally efficient than systems which employ proof-of-work.

IOHK has proved security for a PoS system, but the assumption remains that the majority of the stake is not colluding to violate the Nash equilibrium and a majority of the stake remain online at all times. I don't see what IOHK's PoS accomplishes which isn't already accomplished by DPoS? Is it more objective w.r.t. to violations of Nash equilibrium since in DPoS the majority of the stake can be offline so can't observe first-hand any violations? DPoS is presumably provably secure if a majority of the delegates adhere to the Nash equilibrium.

So in summary, we can hide "wolverine federated systems in an illusory democratic sheepskin" and gain computational efficiency. But the security problems (or more realistically the economic centralization problem since large stake holders need insidious means as there isn't sufficient shorting liquidity for them to scorch their earth) shift to the power vacuum of political economics and the inviolable power-law distribution of wealth (beget by economies-of-scale). Yet Satoshi's design also has these centralization problems due to the power vacuum of political economics and the inviolable power-law distribution of wealth (beget by economies-of-scale).

Will anyone find another class of solution which provides long-term stable resistance to the centralization inherent in the power vacuum of political economics and the inviolable power-law distribution of wealth (beget by economies-of-scale)? Is (D)PoS already more realistically resistant to insidious effects of centralization of vested interests "stake" than Satoshi's design?

This is the Holy Grail we seek because centralized ecosystems don't scale due to the stifling politics and vested interests. In my opinion (which is probably an analysis many others share), this is what is holding back Bitcoin lately.