I already knew his critique to bitcoin wasn't accurate, so you didn't need to defend it. But I wasn't sure I was actually understanding his proposal and I thought it may work.
This is key I think. If you need an authority to create mintettes, we already have central and commercial banks.
On the other hand, if you allow anyone to become a mintette, I alone could create current_size_of_the_network + 1 new minettes and control the network.
As I suspected, this cannot work. Not needing the proof of work was to good to be true.
Thank you guys.
It leaves out the most important part of how to choose the group of "trusted" people.
This is key I think. If you need an authority to create mintettes, we already have central and commercial banks.
On the other hand, if you allow anyone to become a mintette, I alone could create current_size_of_the_network + 1 new minettes and control the network.
As I suspected, this cannot work. Not needing the proof of work was to good to be true.
Thank you guys.
He "kinda" explains it if you look at his first "paper" where he proves Bitcoin (and other decentralized currencies are impossible
)My summary of his logic process:
1) With 51% of hashing power attacker can completely steal every single Bitcoin (a falsehood BTW) thus Bitcoin protocol isn't viable.
2) To protect against that checkpoints are written into the client.
3) Those checkpoints can't be decided by proof of work because 51% could force a false checkpoint too.
4) Those checkpoints are written by a central authority (another falsehood as anyone can write a client w/ any checkpoint).
5) Thus Bitcoin is indirectly controlled by a central authority.
6) Since Bitcoin is controlled by a central authority simple be transparent and have that central authority nominate 500 or so nodes instead of creating checkpoints.
7) Those nodes no longer have need for proof of work and can use a simple ledger system
The value of the network is based on the consensus of the 500 nodes.In essence between the two papers he writes off not just Bitcoin as impossible but all decentralized currencies as impossible and thus one should "settle" for a distributed currency. Think eGold except instead of 1 central eGold server there would be 500 or so semi-independent eGold servers. While I agree it is better than eGold it is far far inferior to Bitcoin.
TL/DR version.
All consensus requires votes.
In a public election you care about individuals. 1 person = 1 vote. Central authority controls # of people so vote is fair.
In a corporation you don't care who the individuals are you vote the shares. 1 share = 1 vote. Exchange controls # of shares so vote is fair.
In Bitcoin we accept that we can't control entities in an anonymous network thus we make 1 hash = 1 vote. Anyone can "vote" even attackers however as long as the # of good votes = good hashes > # of bad votes = bad hashes the network will continue to operate.
An alternative being discussed would be a proof of share. 1 coin = 1 vote. That opens new kinds of issues but still you are always voting. You just need to decide what is a vote. In theory you could make a hybrid system where 1 hash or 1 coin or 1 verified identity = 1 vote. Or a layered system where to sign a block you need certain amount of hashing power, certain amount of coins, certain # of verified identities. Not sure how pratical those are but the concept hasn't changed: 1 x = 1 vote, 51% forms a consensus.