bitcoin [...] can be scaled but only at the cost of reducing its decentralization [...then...] most people will be pool mining without validating what they're mining, and then defacto control remains unavoidably central. [...] then become defacto policy points and they'd just as well sign contracts and stop mining.
and keep in mind that the so called 'big names' in Bitcoin actually favor this route because it's a scenario that can be capitalized on. Thus we repeatedly hear solutions of this sort from those looking to commercialize various aspects of Bitcoin. Even IBM has been hanging around lately. Bitcoin is quickly morphing into a traditional payment network.
Other than the committed tx defense, if they try to centralize it, and introduce dispute resolution, taint tracing as an analog of credit scoring, they will damage fungibility, increase transaction costs via the credit scoring management tax they extract, and the payment repudiation they may seek to introduce. Eg take a look at this
http://www.forbes.com/sites/kashmirhill/2013/11/13/sanitizing-bitcoin-coin-validation/Hi Adam,
There was a thread about this on this forum:
https://bitcointalk.org/index.php?topic=332918.0 Clearly the 'Bitcoin Business' wants to move this thing in this direction. At best, we'll be left with something like SWIFT or ABA. If transaction costs rise to or above the general costs of using eg. Paypal, you will see a drastic reassessment of Bitcoin's business case, and BTC exchange rate.
It's really about the way this business sector is constructed. It's not really about vending software per se, because the systems vendors are in bed with the banks and they dont simply deliver technology, they deliver privilege and part of that tactic is making sure that most people do not have access to the basic tools of finance. Most people never realize how much money banks make off transaction fees. If you want to build a financial exchange there are really only one or two companies you can go to. I used to be a infrastructure consultant for AIG on Wall St. btw.
Confidence Chains aims to change all this. You can run full fledged exchanges on them, and intend to deliver this functionality as open source.
Its based on significant misunderstands about bitcoins value proposition - destroy its fungibility and the costs float up to meet credit cards and paypal.
Im not sure its based on misunderstands. Probably a better term is
'based on a undermining of Bitcoin's value proposition'. This subversion of Bitcoin's values has been going on for some time now.
If they want to certify users, they should do that as optional KYC, AML certificates that regulated merchants in respective jurisdictions can request, which are attached to wallets/identities, not to fully fungible coins. The certificates should be non-transistive they attest to the identity of the funds. They should be optionally sent - if the recipient does not request it, it is privacy destructive and a security risk to send identifying information to unregulated businesses and individuals.
[...Confidence Chains...] my system solves all these problems by eliminating PoW and instead granting the ownership of the chain to new kind of layout. Any kind of assets can be traded and other financial features can be employed with no problems of scalability or cost of computing equipment. You lose the so-called 'zero trust', gain performance, and keep the distributed nature of the block chain. You don't have to do transactions 'off chain', everything gets fully committed very quickly.
I put some comments about confidence chains idea on the thread about it:
https://bitcointalk.org/index.php?topic=317114.msg3581752#msg3581752I think it has the same problems as other consensus systems like ripple, and the existing banking infrastructure in terms of sybil attack (identity theft), reputation management (equivfax etc) and fraud (when people prove unworthy of their default reputation, succeed in committing identity theft, or commit fraud).
These are issues bitcoin mining is intended to defend against. Most attempts to save the cost of mining reinvent ripple and come to the realization that mining is performing a critical security function. Mixed PoW/PoS of PPCoin maybe an exception.
Adam
Thanks for the comments. I'll respond to the Confidence Chains points in the other thread just to keep things readable. This isn't a Confidence Chains thread and I try to be respectful on this forum. You make some salient points.
go here to follow this discussion:
https://bitcointalk.org/index.php?topic=317114.new;topicseen#newthanks Adam,
-bm