Proof of Stake
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Even before Bitcoin there were tons of attempts at implementing cryptocurrency, and none of them worked. It was Bitcoin that hit the jackpot for some reason, just like how human beings beat all the odds to become the top of the food chain on earth.
I am not saying it's impossible, I just don't like how all this movement is driven by VCs, just like how all the "Uber for X" companies were driven by VCs, powered by naive entrepreneurs who thought just copycatting a successful model to a different domain would make them rich.
I just think in most cases these copycat projects have no soul and that's why they fail, just like Uber for X companies never become Uber.
It kind of reminds me of the early days of the Internet when you didn't get "Internet" you got AOL, or CompuServe, or whatever. All these companies wanted to control the network you connected into with their own branding. Eventually those companies all died and everyone realized that an open Internet with no one company controlling it at the core was the way things would go.
But aren't we moving back that direction? Now your local business doesn't have a website, they have a facebook.
Turns out? people like walled gardens just fine, it's just that it's not as easy as it looks to build a walled garden and a last mile transport network.
These companies we're talking about are basically trying to "become the Internet" (not something that builds on top of the Internet)
My point, though, is that people really do like the walled garden idea, even if none of the transport providers alone could have pulled it off.
The internet is different from the PSTN network that connected you to CompuServe because if Facebook controlled your last mile the way AOL did, you'd need to coordinate with Facebook when you wanted to upgrade to the latest DSL or cable or what have you. The idea here is that once we got DSL and other "run gigabit ethernet over a series of rusty coat hangers that we have twisted together" level technologies, (I think it's fucking amazing that DSL works at all) in one location, one technology is going to work way better than others, and those other technologies might work way better in other locations. In walla walla you might get twice the speed on compuserve, while in San Jose, AOL might give you 4x the speed, if AOL and CompuServe ran their own networks. (to torture the metaphor)
Of course, if you made the last mile technologies like DSL and Cable switch the endpoints of their connections as quickly as you can switch endpoints on a PSTN, sure, that would have solved the problem, too. But... really, that's kind of what the internet does.
I think this is why walled gardens that include the last mile keep failing; the last mile is largely hard based on physical geography, and the walled gardens are hard based on your preferences, which often don't match up with your geography.
I think that's why walled gardens are doing so much better now than they were in the '90s; these days, one set of companies focuses on the last mile, (and everyone has, comparatively speaking, astoundingly good last-mile access) and then a completely different set of companies can set up walled gardens to cater to various preferences, and the people that like that walled garden don't have to share a geography.
I actually remember seeing a post about it here in 2009 and initially dismissing it because I didn't think it would gain enough traction and didn't take the time to understand how it was different than previous digital cash schemes.
Bitcoin price didn't even hit $1 USD until the spring of 2011. It's true that Satoshi has a lot of Bitcoin but so does anyone who was there in Jan 2009 and had the vision to realize that Bitcoin was something fundamentally different and put effort into mining it.
Compared to the way a lot of these other blockchains are being launch Bitcoin was by far the most egalitarian in the way coins were/are distributed. Most other coins retain a huge share of coins for the founding organizations through pre-mining schemes and other shenanigans.
There's nothing egalitarian about that. Even if he told the world and tried to be fair, that's more money than any person should ever own.
It just happened that it took time for people to catch on and join his mining efforts.
He could have cashed out a long time ago for a large profit but those early coins attributed to him have never moved.
If he still have the keys. I don't think he does, but who knows. I would have at least spend some of the btc by now if I was in control of 1 million coins with a current value of more than $700 million...
First there is nothing wrong with copying another idea and trying to improve it. In a marketplace where lots of people are doing this, yes many of the attempts will be lame. Some will be very interesting.
Bitcoin can be improved in many ways, for example to reduce the amount of energy required to mine it to avoid environmental damage, or to add more contract features, or just for fun (e.g. Dogecoin).
I don't think it is like Uber for X at all. It's more like bringing out a new programming language. It's a Ruby and a Python and a GO when you have C++ already. C++ got there first so we could settle on that and say it won. And no more programming languages for X.
Well, first of all I don't think it's "maybe just me", looking at the thread here.
Also I do agree nothing's wrong with copying other's ideas. I was criticizing the money driven nature.
Also I think your programming language analogy is great. I agree.
I just don't think the success will come from anyone who follows a narrative from VCs or anyone whose motivation is to make money from this gold rush.
I get your point, but isn't Uber Airbnb for cars?
In my opinion this never never ends up performing better than the original idea because of exactly the question the guy asks: ".. another fast growing industry?" AirBnb started when there was 0 market for something like AirBnB, Uber started when there was 0 market for something like Uber. That's why they are where they are now. If it was so obvious, it would have been already tackled by other large companies that are looking to expand their business and AirBnb and Uber wouldn't have a chance.
Like I said, I am not saying it's impossible. I just think VC-driven approach is not a good idea. Actually, I think the final technology that will succeed--be it Bitcoin or its alternative--will not have raised any money from VCs.
I went to several Bitcoin meetups and noticed how a lot of people are talking about "compliance", which is important, but I don't think the true success will come from any entity that's restricted by all these social boundaries and the need to make money.
> Is it just me or does all this "Blockchain doesn't have
> to be Bitcoin" ideology sound like "Uber is worth
> billion dollars. Let's build an Uber for X"?
I don't think it's fair to write off this article as "just another Bitcoin copycat" when it really is about something completely different.
It should be noted that every Proof of Stake altcoin has eventually collapsed, and there are arguments that this is inevitable: https://download.wpsoftware.net/bitcoin/pos.pdf
The real problem here, as with spam, is the ability to generate large numbers of anonymous identities cheaply. Zuckerberg figured this out a long time ago; hence Facebook's "real names" policy.
There is no single ordering of transactions. Exchanges (which are distinct entities, i.e. decentralized) are legally required to report their trades, but the order actually happens at independent places.
What is centralized is the record of ownership of the shares. All publicly tradable shares in the US are in a technical sense owned by Cede & Co., a partnership related to the DTCC. When shares change hands, all that happens is an entry in the database at the DTC.
Since we're talking about the blockchain, it's interesting to know how this system is secured. The mechanism is that both parties report the expected transactions to DTCC, which ensures they match before the money changes hands. The trade that happens during market hours is only the agreement to trade, and the actual delivery happens three days later.
With proof of work, you can only mine on any one block. You make sure this is the last block in the chain because otherwise you'd need to mine 2 blocks in a row to convince everyone. This ensures it is really hard to rewrite history. With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction.
Proof of stake: the mechanism to secure the coins, uses the coins it's trying to secure. Circular.
Proof of work is simpler to describe and implement, which is attractive. Joining, then leaving, then joining and catching up is easy. Blockchain reorgs are easy.
Compare the length of Bitcoin's whitepaper and any PoS whitepaper, or the cited link even.
It'd be interesting for the author to share his intuitions for why it might be better.
I think the term you're looking for is 'bootstrapping'. Once we have enough cryptocurrency via PoW, we can (and only then) implement PoS.
For example, PoS is typically signature based. What's to stop me from making more signatures after the fact? And how can a newbie tell which signatures I made first?
These are hard problems, and they aren't the only ones, and solving the bootstrapping issue alone is not sufficient.
Circular, self-referential. Works great until it doesn't, then fails catastrophically. Most people don't think about the kind of risks that have low odds of occurrence but drastic consequences when they do occur (coughGFCcoughFukushimacough), especially not when blinded by $$$ in their eyes and/or the idea of being part of the next big thing.
One interesting line of research in the field is in ways to anchor the security of the system or value of the network to something external. PoW does this by anchoring the value of the token and the security of the network in the cost of electricity. There are other experiments going on trying to anchor it to a basket of fiat currencies, for example, or other forms of cryptographic randomness. PoW I think will remain the most robust, but worth experimenting.
This would force people to have physical objects (RAM or HDD) to mine, but doesn't consume the massive amounts of energy that POW mining consumes.
(i.e. you only need the storage to mine a block, not longterm)
The way I'm envisioning it each "tick" randomly X blocks are picked, and the more storage you have the more likely it is you will be picked (potentially more than once).
Seems it would use a lot of bandwidth or computation when calculating hashes.
I was thinking something like write a bunch of random numbers to disk, and prove that you have the ability to retrieve any of them at will.
This is obviously not a complete solution. I was asking if anyone knew of any such system.
A positive, not negative, feature of the system is you must be able to rewrite all the storage each time. So the faster your can write the more blocks you win, but also the more storage you have the more blocks you win (and it's a tradeoff between them).
It's an interesting idea.
The result so far has been really potent. On the Sia network today, raw storage (pre-redundancy) costs about $0.30 per TB. Performed intelligently, you only need about 2x redundancy, putting the total cost at less than 1/10th of Amazon glacier.
I project that as the network grows, demand will catch up to supply more and the price will settle closer to $2 / TB / Mo for raw storage.
I can answer any questions.
The core premise is that you fill your drive with a special type of random data (can't use useful data, therefore it's still wasteful!) that you then perform checks on regularly.
There's Burstcoin, which best I could tell has some substantial flaws, though I'm not sure anyone has ever taken the time to prove it. (Burstcoin is small and therefore not super worthwhile to break).
Then there's Spacemint, which is not yet complete but has some strong progress. I've gotten to talk to them, and best I could tell they were aware of most of the major weaknesses of their protocol, which generally is a good sign. At that point they still required an external source of secure public random numbers, which is not an easy problem to solve without introducing trust or PoW. But maybe the protocol is further along by now.
https://www.google.com/url?q=https://eprint.iacr.org/2015/52...
In most schemes I'm aware of, the nodes are storing useful data. But perhaps you are suggesting that they store arbitrary data, e.g. deterministically generated data?
My colleague and I wrote a paper about something like this a while ago. We called it "proof of capacity." The basic idea is that you deterministically generate a bunch of hashes based on some seed. Then, at a later time, you are "challenged" to return one of the hashes. Pretty standard so far, but here's the trick: you aren't asked to return, say, the hash at index i. Instead, you are challenged to provide the hash lexicographically closest to some random hash X. This obviously requires sorting the generated hashes, which is why you can't just regenerate them on the fly. And you can get a rough estimate of the node's capacity by seeing how close their hash is to hash X: the more capacity, the more hashes, and thus the closer their hash will approach X.
You are missing the elephant here. POW doesn't consume massive amounts of energy. It consumes the amount of energy the network will pay for. If RAM becomes POW, you'll see hundreds of factories stacked with RAM bars.
That way you will reduce waste on mining while still having security coming from it.
This problem has been very well studied and there are not any simple solutions available. Many academics believe that it's fundamentally impossible.
With "Proof of <wildcard>" you're essentially abstracting out how a community participates.
Proof of Work exists to demonstrate good will by saying "This person works to participate and add value in the community" There is a buy-in a degree removed from the coin.
Proof of Stake sounds like it just removes the work someone must do from the system and says "If they have money, they can buy in to the community without work".
It's like saying: Instead of people putting in the work to contribute to the community through effort the community finds valuable (i.e. Proof of Work, e.g. Karma), we're going to let people just buy karma and trust that they have the community's best interest in mind.
While this gives anyone the ability to buy into the community and participate in the consensus, this sounds like the opposite of what I want in a community, because these people don't have to work to demonstrate their value to the community that exists.
Another issue is this doesn't encourage liquidity, it encourages people to hoard their coins/currency to participate. This might drive the price of the coin up I guess.
Ethereum doesn't have a 'set amount' that will ever be released like bitcoin. They'll release coins indefinitely. Does this mean you'll have to participate in purchasing coins indefinitely to continue to participate to have a larger voice as the value of your coins gets diluted?
There might also be the problem of who controls the coins might always maintain a majority, since the tokens/coins are just issued, there is no real work required to obtain them. That's a little weird and totalitarian and not utilitarian.
You have causality backwards: the difficult changes based on the price of the currency. If the price goes down, people will simply mine less.
With proof of work, you can only mine on any one block. You make sure this is the last block in the chain because otherwise you'd need to mine 2 blocks in a row to convince everyone. This ensures it is really hard to rewrite history.
With proof of stake, nothing is preventing you from 'mining' on multiple base blocks on the same time. Anytime you spend a coin and get the goods, you might as well try and see if you can 'mine' 2 new blocks to erase your transaction.
I've seen proposed solutions that combine these 2. Basically, a block then requires both proof of work and proof of stake. This doesn't help (much?) with electricity costs, but helps somewhat with centralization of power.
Ethereum's proof-of-stake approach appears to solve the "nothing-at-stake" issue, see the Mauve paper for more details: http://vitalik.ca/files/mauve_paper.html
TL;DR of their approach is that if you mine off-chain blocks they can get later-on included by other (PoS-)miners via the "dunkle" mechanism. If this happens there's a penalty for the original miner who mined a block that didn't make it into the current chain.
[1] I'm ignoring hippiecoins based on the labor theory of value.
I want to believe that PoS is not simply an attempt to get something for nothing, but I think that maybe it's attempt to get money to work twice. In PoW, the work is done to get coins. In PoS, the work is done to get fiat or whatever, then exchanged for PoS, and then put to work mining, but the value was created outside the PoS system and now it's not clear where additional work is taking place to fuel block validation. I haven't decided 100% that it's a scam, but it is definitely complex and confusing.
The mental model that I'm still stuck with is that PoW is like normal combustion engine... ASICs being high-displacement V8s, while PoS is like some kind of complex perpetual motion machine.
You can combine this with encryption and erasure coding to create a near-perfect marketplace for cloud storage that's very competitive, private and secure, and extremely reliable.
Here's a good place to get started for more technical information:
http://forum.sia.tech/topic/107/interesting-threads
Our network today sells storage for less than 1/10th the cost of Amazon S3.
http://www.coindesk.com/how-peercoin-got-a-boost-from-bitcoi...
Well, it works at small scale, hasn't been validated at large scale yet. The entire Bitcoin community is undergoing a schism right now over a disagreement related to mining.
The mining part has worked fine.
But I don't think you'll find many of the developers agreeing with the idea that the mining has worked just fine. It's horribly centralized, and while it gets better and gets worse, at its best it's "jeez this is really centralized and I don't feel comfortable at all" and at it's worst it's "only two entities who happen to be in the same legal jurisdiction need to collaborate to do a 51% attack on the network, oh yeah and they are already collaborating in other nontrivial ways".
Miner centralization is still a huge issue for Bitcoin.
That's a fair call, there is a little too much faith in the large pools being "rational" participants.