From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id 6E496727 for ; Fri, 23 Jun 2017 14:51:23 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-oi0-f51.google.com (mail-oi0-f51.google.com [209.85.218.51]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 1685C20A for ; Fri, 23 Jun 2017 14:51:21 +0000 (UTC) Received: by mail-oi0-f51.google.com with SMTP id b6so26679647oia.1 for ; Fri, 23 Jun 2017 07:51:21 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20161025; h=mime-version:in-reply-to:references:from:date:message-id:subject:to :cc; bh=OX9Lgc/6rwxJ2c55duOKMaREksK5SVEQ6VOJnNK3Hag=; b=YuXujoigK14rixLB59lfcU8ZdTfqrnGh6ujuTW0Fdnt/DdDjz1Y3NIvKv96pnw1B8A jHmOf1LdMQ6Ql4qXWS2LmoKjBDNFvvvWFxxCz3zInuvVKzsKQd54lnyvP+CFevajdB2s FPKwUlbYW83h0KGjnjje8kYWa4HwInCWPfnrHP24zU79fujQ1wnRqd01Z7LjNcbBIkFK q0oEIG/VhHmDHhXKG7RfHErYcdZR1/UPxkz1WZ2gUnUItauo5ZVemoFAtks9ZKntqqLV oD0Ru2P5s4ow0v1Q8Ctu5Im3FxugU5HGQuwJPAs6zCHUziecGEIhJN5XTyN6FWE53MI5 Q7PA== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20161025; h=x-gm-message-state:mime-version:in-reply-to:references:from:date :message-id:subject:to:cc; bh=OX9Lgc/6rwxJ2c55duOKMaREksK5SVEQ6VOJnNK3Hag=; b=FK9aPJxZGWzBcOjkPfaK+5SElmbQqIIJSz6ErWDT2yg9NSXTRO1Pa9OtQygDFq/Loy SFfClUGfoj8Jws3BvUwCnj40TeYq+cx4OHuSS0xLtxucxncvtP/iBPTymwTi3f9+Ssko SPpQG3qfGEja3svxXRregWbXkQ1LcAIGwkCnzX529t64+7PUcPJKvQ59vIeURKvGX4y4 iCyB7AU+jWBJG+u8Np0eHvK2MJpuZS+QupxjZwEZmyeaTae04c2gTJ3CHtceOiJHVplX xuAXfSQ8gu/eWm+ixuGZBekVnZWpKfgFGjhrIw9wTevcpwldMsVjn2B4+bIGPD++/1zH 75lg== X-Gm-Message-State: AKS2vOydyHZ1AJBMyQqlgGtNvuSdLnP9bhtHWA4MmQh82atUmUdBI7Xk 9zelVFxhM6D0di/vaUVfqiI26aTE79M/jQw= X-Received: by 10.202.252.87 with SMTP id a84mr4656491oii.190.1498229481215; Fri, 23 Jun 2017 07:51:21 -0700 (PDT) MIME-Version: 1.0 Received: by 10.157.43.100 with HTTP; Fri, 23 Jun 2017 07:51:20 -0700 (PDT) In-Reply-To: References: <24f2b447-a237-45eb-ef9f-1a62533fad5c@gmail.com> <83671224-f6ff-16a9-81c0-20ab578aec9d@gmail.com> <6764b8af-bb4c-615d-5af5-462127bbbe36@gmail.com> <33d98418-10f0-3854-a954-14985d53e04b@gmail.com> From: Moral Agent Date: Fri, 23 Jun 2017 10:51:20 -0400 Message-ID: To: Erik Aronesty Content-Type: multipart/alternative; boundary="001a113b1506051d790552a1bc32" X-Spam-Status: No, score=-2.0 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID, DKIM_VALID_AU, FREEMAIL_FROM, HTML_MESSAGE, RCVD_IN_DNSWL_NONE autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org X-Mailman-Approved-At: Fri, 23 Jun 2017 14:52:53 +0000 Cc: Bitcoin Dev Subject: Re: [bitcoin-dev] Drivechain RfD -- Follow Up X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Fri, 23 Jun 2017 14:51:23 -0000 --001a113b1506051d790552a1bc32 Content-Type: text/plain; charset="UTF-8" >Miners who are able to deal with the bandwidth caused by drivechain coffee transactions will profit from these transactions, whereas smaller and more geographically distributed miners will not. Those miners will, in turn, build faster ASICs and buy more electricity and drive out smaller players. I think you are conflating 3 different (though overlapping) groups: 1. Block header generators. These need 'good internet' meaning very low latency, reasonable bandwidth, good place in network (e.g. FIBRE or mining backbone). They need reliable computers with enough RAM and CPU to validate prior blocks promptly and immediately assemble new blocks. 2. Hashers. These need cheap electricity, access to economical uses of waste heat, cheap mining hardware. e.g. IOT electric water heater. 3. ASIC manufacturers. These need lots of capital, etc. It might be helpful to keep these three groups distinct in your mind and conversation, and to use the protocol as a crowbar to pry them into separate people, or at a minimum make it economically possible to participate in one role without needing to participate in the other two. If different, geographically and politically dispersed groups are helping perform these functions, it aids decentralization. On Fri, Jun 23, 2017 at 10:19 AM, Erik Aronesty via bitcoin-dev < bitcoin-dev@lists.linuxfoundation.org> wrote: > > They would certainly not be cheap, because they are relatively more > expensive due to the extra depreciation cost. > > This depends on how long you expect to keep money on a side chain and how > many transactions you plan on doing. Inflation is a great way of paying > PoS / PoB miners - that cannot introduce issues with consolidation. If > you design the inflation schedule correctly, it should be balance > transaction costs *precisely*. Indeed, you can calculate the exact amount > of inflation needed to guarantee that a side chain is always exactly 10 > times cheaper than bitcoin. > > >As I posted to bitcoin-discuss last week, I support UTXO commitments for > sidechains. > > Indeed, I think side chain nodes should always be fast-synced from 6 month > old commitments and thus be ephemeral, cheap, and *never *appropriate for > long term storage. This would provide the best possible incentive > structure to keep the main chain secure, paid for with high clearing fees, > etc. > > > I don't think that blind merged mining messes with the main chain's > incentive structure > > The critical issue is that we cannot introduce protocol changes that > *further *incentivize geographical and institutional consolidation. > Miners who are able to deal with the bandwidth caused by drivechain coffee > transactions will profit from these transactions, whereas smaller and more > geographically distributed miners will not. Those miners will, in turn, > build faster ASICs and buy more electricity and drive out smaller players. > I think this is *abundantly *clear, and is the primary motivation > behind preserving block size limits. > > If this premise is false (which it may be), or is skewed so as to damage > bitcoin as a whole (could be as well), then that needs to be demonstrated > *first*. > > The lightning model does the opposite of this. Miners watch fees > increase and coming from an *orthoganal* protocol that cannot cause further > centralization. > > One problem is that the main chain also *must* grow in response to > bandwidth, or the disadvantages of using the main chain will weaken > financial support and hashrate securing it. I believe this is also true, > and that a "balancing act" will be Bitcoin's norm until we adopt something > like BIP103 - which provides a steady and appropriate growth. > > > > > > On Thu, Jun 22, 2017 at 4:30 PM, Paul Sztorc wrote: > >> Responses inline. >> >> On 6/22/2017 9:45 AM, Erik Aronesty wrote: >> >> Users would tolerate depreciation because the intention is to have a >> cheap way of transacting using a two-way pegged chain that isn't controlled >> by miners. Who cares about some minor depreciation when the purpose of the >> chain is to do cheap secure transactions forever? >> >> >> Thus far you've claimed that these transactions would be "cheap", "[not] >> controlled by miners", and "secure". >> >> They would certainly not be cheap, because they are relatively more >> expensive due to the extra depreciation cost. >> >> I also doubt that they would be free of control by miners. 51% hashrate >> can always filter out any message they want from anywhere. >> >> For the same reason, I don't understand why they would be any more or >> less secure. >> >> So I think your way is just a more expensive way of accomplishing >> basically the same result. >> >> >> Add in UTXO commitments and you've got a system that is cheap and >> secure-enough for transfer. storage and accumulation of a ledger... before >> moving in to the main chain. >> >> >> As I posted to bitcoin-discuss last week, I support UTXO commitments for >> sidechains. >> >> Seems better to me than messing with the main chain's incentive structure >> via merged mining. >> >> >> I don't think that blind merged mining messes with the main chain's >> incentive structure. Miners are free to ignore the sidechain (and yet still >> get paid the same as other miners), as are all mainchain users. >> >> Paul >> >> >> On Thu, Jun 22, 2017 at 9:27 AM, Paul Sztorc wrote: >> >>> Hi Erik, >>> >>> I don't think that your design is competitive. Why would users tolerate >>> a depreciation of X% per year, when there are alternatives which do not >>> require such depreciation? It seems to me that none would. >>> >>> Paul >>> >>> On 6/20/2017 9:38 AM, Erik Aronesty wrote: >>> >>> - a proof-of-burn sidechain is the ultimate two-way peg. you have to >>> burn bitcoin *or* side-chain tokens to mine the side chain. the size of >>> the burn is the degree of security. i actually wrote code to do >>> randomized blind burns where you have a poisson distribution >>> (non-deterministic selected burn). there is no way to game it... it's >>> very similar to algorand - but it uses burns instead of staking >>> >>> - you can then have a secure sidechain that issues a mining reward in >>> sidechain tokens, which can be aggrregated and redeemed for bitcoins. the >>> result of this is that any bitcoins held in the sidechain depreciate in >>> value at a rate of X% per year. this deflation rate pays for increased >>> security >>> >>> - logically this functions like an alt coin, with high inflation and >>> cheap transactions. but the altcoin is pegged to bitcoin's price because >>> of the pool of unredeemed bitcoins held within the side chain. >>> >>> >>> >>> On Tue, Jun 20, 2017 at 7:54 AM, Paul Sztorc >>> wrote: >>> >>>> Hi Erik, >>>> >>>> As you know: >>>> >>>> 1. If a sidechain is merged mined it basically grows out of the >>>> existing Bitcoin mining network. If it has a different PoW algorithm it is >>>> a new mining network. >>>> 2. The security (ie, hashrate) of any mining network would be >>>> determined by the total economic value of the block. In Bitcoin this is >>>> (subsidy+tx_fees)*price, but since a sidechain cannot issue new tokens it >>>> would only be (tx_fees)*price. >>>> >>>> Unfortunately the two have a nasty correlation which can lead to a >>>> disastrous self-fulfilling prophecy: users will avoid a network that is too >>>> insecure; and if users avoid using a network, they will stop paying txn >>>> fees and so the quantity (tx_fees)*price falls toward zero, erasing the >>>> network's security. So it is quite problematic and I recommend just biting >>>> the bullet and going with merged mining instead. >>>> >>>> And, the point may be moot. Bitcoin miners may decide that, given their >>>> expertise in seeking out cheap sources of power/cooling, they might as well >>>> mine both/all chains. So your suggestion may not achieve your desired >>>> result (and would, meanwhile, consume more of the economy's resources -- >>>> some of these would not contribute even to a higher hashrate). >>>> >>>> Paul >>>> >>>> >>>> >>>> >>>> On 6/19/2017 1:11 PM, Erik Aronesty wrote: >>>> >>>> It would be nice to be able to enforce that a drivechain *not* have the >>>> same POW as bitcoin. >>>> >>>> I suspect this is the only way to be sure that a drivechain doesn't >>>> destabilize the main chain and push more power to miners that already have >>>> too much power. >>>> >>>> >>>> >>>> >>> >>> >> >> > > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists.linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > > --001a113b1506051d790552a1bc32 Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable
>Miners who are able t= o deal with the bandwidth caused by drivechain coffee transactions will pro= fit from these transactions, whereas smaller and more geographically distri= buted miners will not.=C2=A0=C2=A0 = Those miners will, in turn, build faster ASICs and buy more electricity and= drive out smaller players.

I think you are con= flating 3 different (though overlapping) groups:

1. Block header generators. These need 'good internet' meaning = very low latency, reasonable bandwidth, good place in network (e.g. FIBRE o= r mining backbone). They need reliable computers with enough RAM and CPU to= validate prior blocks promptly and immediately assemble new blocks.=

2. Hashers. These need cheap electricity, access to= economical uses of waste heat, cheap mining hardware. e.g. IOT electric wa= ter heater.

3. ASIC manufacturers. These need= lots of capital, etc.
It might be helpful to= keep these three groups distinct in your mind and conversation, and to use= the protocol as a crowbar to pry them into separate people, or at a minimu= m make it economically possible to participate in one role without needing = to participate in the other two. If different, geographically and political= ly dispersed groups are helping perform these functions, it aids decentrali= zation.

On Fri, Jun 23, 2017 at 10:19 AM, Erik Aronesty via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wr= ote:
> They would certainly not be cheap,= because they are relatively more expensive due to the extra depreciation c= ost.

This depends on how long you expect to keep money= on a side chain and how many transactions you plan on doing. =C2=A0 Inflat= ion is a great way of paying PoS / PoB =C2=A0miners - that cannot introduce= issues with consolidation. =C2=A0 If you design the inflation schedule cor= rectly, it should be balance transaction costs *precisely*. =C2=A0 Indeed, = you can calculate the exact amount of inflation needed to guarantee that a = side chain is always exactly 10 times cheaper than bitcoin.

>As I posted to bitcoin-discus= s last week, I support UTXO commitments for sidechains.

= Indeed, I think side chain nodes should always be fast-synced from 6 month = old commitments and thus be ephemeral, cheap, and never appropriate = for long term storage.=C2=A0 This would provide the best possible incentive= structure to keep the main chain secure, paid for with high clearing fees,= etc. =C2=A0=C2=A0

>=C2=A0I don't think that blind merged mining messes with th= e main chain's incentive structure=C2=A0

The criti= cal issue is that we cannot introduce protocol changes that=C2=A0further= =C2=A0incentivize=C2=A0geographical and institutional consolidatio= n.=C2=A0 Miners who are able to deal with the bandwidth caused by drivechai= n coffee transactions will profit from these transactions, whereas smaller = and more geographically distributed miners will not. =C2=A0 Those miners wi= ll, in turn, build faster ASICs and buy more electricity and drive out smal= ler players. =C2=A0 I think this is abundantly clear, and is the pri= mary motivation behind preserving block size limits. =C2=A0=C2=A0

If this premise is false (which it may be), or is skewed so as to dama= ge bitcoin as a whole (could be as well), then that needs to be demonstrate= d first.=C2=A0

The lightning model does the= opposite of this. =C2=A0 Miners watch fees increase and coming from an *or= thoganal* protocol that cannot cause further centralization. =C2=A0=C2=A0
One problem is that the main chain also *must* grow in response to ba= ndwidth, or the disadvantages of using the main chain will weaken financial= support and hashrate securing it. =C2=A0 I believe this is also true, and = that a "balancing act" will be Bitcoin's norm until we adopt = something like BIP103 - which provides a steady and appropriate growth.
=




On Thu, Jun 22, 2017 at = 4:30 PM, Paul Sztorc <truthcoin@gmail.com> wrote:
=20 =20 =20
Responses inline.

On 6/22/2017 9:45 AM, Erik Aronesty wrote:
Users would tolerate depreciation because the intention is to have a cheap way of transacting using a two-way pegged chain that isn't controlled by miners.=C2=A0 Who cares about = some minor depreciation when the purpose of the chain is to do cheap secure transactions forever?

 Thus far you've claimed that these transactions would be "chea= p", "[not] controlled by miners", and "secure".

They would certainly not be cheap, because they are relatively more expensive due to the extra depreciation cost.

I also doubt that they would be free of control by miners. 51% hashrate can always filter out any message they want from anywhere.

For the same reason, I don't understand why they would be any more or less secure.

So I think your way is just a more expensive way of accomplishing basically the same result.


Add in UTXO commitments and you've got a system that is cheap and secure-enough for transfer. storage and accumulation of a ledger... before moving in to the main chain.

As I posted to bitcoin-discuss last week, I support UTXO commitments for sidechains.

Seems better to me than messing with the main chain's incentive structure via merged mining.

 I don't think that blind merged mining messes with the main chain&#= 39;s incentive structure. Miners are free to ignore the sidechain (and yet still get paid the same as other miners), as are all mainchain users.

Paul

On Thu, Jun 22, 2017 at 9:27 AM, Paul Sztorc <truthcoin@gmail.com> wrote:
Hi Erik,

I don't think that your design is competitive. Why woul= d users tolerate a depreciation of X% per year, when there are alternatives which do not require such depreciation? It seems to me that none would.

Paul

On 6/20/2017 9:38 AM, Erik Aronesty wrote:
- a proof-of-burn sidechain is the ultimate two-way peg. =C2=A0 you have to burn bitcoin *or* side-chain tokens to mine the side chain. =C2=A0 the size of the burn is the degree of security. =C2=A0 = =C2=A0i actually wrote code to do randomized blind burns where you have a poisson distribution (non-deterministic selected burn). =C2=A0 =C2=A0there= is no way to game it... it's very similar to algorand - but it uses burns instead of staking

- you can then have a secure sidechain that issues a mining reward in sidechain tokens, which can be aggrregated and redeemed for bitcoins. =C2=A0 the result of this is that any bitcoins held in the sidechain depreciate in value at a rate of X% per year. =C2=A0 this deflation rate pays for increas= ed security

- logically this functions like an alt coin, with high inflation and cheap transactions. =C2=A0 bu= t the altcoin is pegged to bitcoin's price because of the pool of unredeemed bitcoins held within the side chain.



On Tue, Jun 20, 2017 at 7:54 AM, Paul Sztorc <truthcoin@gmail.com><= /span> wrote:
Hi Erik,

As you know:

1. If a sidechain is merged mined it basically grows out of the existing Bitcoin mining network. If it has a different PoW algorithm it is a new mining network.
2. The security (ie, hashrate) of any mining network would be determined by the total economic value of the block. In Bitcoin this is (subsidy+tx_fees)*price, but since a sidechain cannot issue new tokens it would only be (tx_fees)*price.

Unfortunately the two have a nasty correlation which can lead to a disastrous self-fulfilling prophecy: users will avoid a network that is too insecure; and if users avoid using a network, they will stop paying txn fees and so the quantity (tx_fees)*price falls toward zero, erasing the network's security. So it is quite problematic and I recommend just biting the bullet and going with merged mining instead.

And, the point may be moot. Bitcoin miners may decide that, given their expertise in seeking out cheap sources of power/cooling, they might as well mine both/all chains. So your suggestion may not achieve your desired result (and would, meanwhile, consume more of the economy's resources -- some of these would not contribute even to a higher hashrate).<= br>
Paul




On 6/19/2017 1:11 PM, Erik Aronesty wrote:
It would be nice to be able to enforce that a drivechain *not* have the same POW as bitcoin.

I suspect this is the only way to be sure that a drivechain doesn't destabilize the main chain and push more power to miners that already have too much power.









_______________________________________________
bitcoin-dev mailing list
bitcoin-dev@lists.= linuxfoundation.org
https://lists.linuxfoundation.org= /mailman/listinfo/bitcoin-dev


--001a113b1506051d790552a1bc32--