In Defense of Consortium Blockchains

in eos •  last month

Every so often someone decides to write an article attacking Delegated Proof of Stake (DPOS) on some basis. The most resent example is @anonymint's article claiming DPOS can't internet-scale.

Before I go on to address Anonymint's claims, I feel it is important that people realize that everything in life has design tradeoffs and the secret is to make the best tradeoffs. In order to make the best tradeoffs you must look at the entire picture. You cannot attack an idea in a vacuum, everything must be compared to something else. Furthermore, if comparisons are to be made they should be against accurate descriptions of working alternatives and not against theoretical alternatives for which there is no known nor proven implementation.

Consortium Blockchains vs Proof of Work

In his blog, @anonymint claims that "permissioned" blockchains such as Tendermint and DPOS create overlords. The claim is that overlording "whales" can extract higher and higher rents. This claim cannot exist in a vacuum, but must be compared to alternatives of which Proof of Work is presented. What we know is that Fiat Whales control the majority of the hash power and that they hold the network ransom for fees. They use their control over block production to profit at the expense of everyone else.

The claim is that Proof of Work is "Open Entry"; however, to believe that one must ignore economic barriers to entry. For example, no one can enter the proof of work game unless they can mine profitably. Mining profitably means economies of scale and ultimately alternative revenue streams derived from the political power the miners possess. Many governments in the world can trivially make mining unprofitable for all free market actors. They can do this will relatively little capital cost because all mining profits or losses are based upon the margins. Since governments are not concerned about direct economic profit and can realize gains by defending their monopoly, all proof of work systems will be dominated by our current fiat overlords who use their fiat printing presses to subsidize and control cooperative miners.

Furthermore, no minority can create their own smaller consensus system without risk of abuse by the mining powers that be. All one needs to do is look at the mining attacks between BTC and BCH to see how this unfolds.

What we can conclude from this is that mining is a dead-end, winner takes all, system. Once economies of scale optimize a mining algorithm that algorithm cannot be used by any minority which is at odds with the mining powers.

Liveliness and the 1/3+ attack

One of the criticisms levied by @anonymint is:

colluding malevolent 33% of the stake can permanently and irreparably shutdown the blockchain

This statement is an example of one of many misunderstandings of existing DPOS systems, such as Steem. DPOS as it was originally designed for BitShares uses the longest-chain rule. Because DPOS limits the frequency a block producer can produce, the chain with the most participation will eventually become the longest chain. This means that stake holders can vote out malicious actors even if 51% are malicious, so long as their exists at least 1 honest producers willing to accurately tally an election on a temporarily minority fork. The "bad fork" will start out at 2/3 speed, and the honest fork will be operating at 1/3 speed. Once an election occurs on the 1/3 network it will gain speed to 3/3 and eventually overtake the "bad guys".

This is still the underlying "rule of DPOS" on STEEM and BitShares and everything else is simply establishing a high probability of irreversibility.

Importance of Minimizing Finality Latency

Bitcoin never reaches finality and without timely finality inter-blockchain communication is not practical. Imagine all consensus systems as a substitute for digital signatures. Now imagine if every time a user signed a transaction it took 1 hour for 99.9% certainty (6 blocks) and the transaction was never truly final. At some point society needs to make a decision to either accept the signature and "transfer the money" or reject the signature and not transfer it. If the signature is eventually invalidated then the money shouldn't be transferred; however, if the product has shipped or the "exchange made", then it isn't possible to fairly unwind the transfer.

We need to accept things as final even if there is some potential they could be wrong or be fraudulent because higher level processes cannot advance until lower level processes are final. The cost finality approaches infinity as the certainty demand approaches 100%. At some point, the cost of additional certainty is greater than the loss if it turns out to be fraudulent.

Because finality is critical for inter-blockchain communication and inter-blockchain communication is fundamental to ultimate internet-scale solutions, we can conclude that stating nothing is ever final is not an acceptable solution. Furthermore, latency in finality dramatically impacts inter-blockchain communication for real world applications. If we must have finality, then we should have it as quickly as possible.

Bitcoin accepts 6 blocks as "final" which means that 5 mining pools vote on which transactions are final. Even if miners could switch pools in the event that a pool was corrupt, they are unable to identify the corruption or switch within the 1 hour window of finality. This is even without considering the potential corruption at the hash-power distribution level.

If we are going to rely on 5 mining pools, then we might as well let them sign off on things in seconds rather than waiting an hour or more. The resulting security will be the same, but the latency will be dramatically reduced.

Conclusion

Perfecting any single dimension of a problem will come at the expense of the whole and reduce overall volume (value). The optimum solution will maximize the volume by carefully observing the 80/20 rule: 80% of the benefits (value) are achieved by 20% of the effort (cost). Furthermore, no system exists in a vacuum and therefore all security analysis that ignores the larger environment is incomplete and likely misleading.

Security must always consider the use of physical threats, the use of short selling to invert POS incentives, and the potential for alternative income streams.

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What are your thoughts on the level of influence large SP holders have over the top 20 witness ranks? The @freedom / @pumpkin account comes to mind. I've been doing a monthly report on witness voting engagement, and I've left out the SP from the Steemit account or Steemit employee accounts because they aren't currently involved in the voting. That said, if they were to vote in 11 witness to support a fork they wanted but the community did not (as an example), that would be bad, right? If they have the power to do that, but choose not to, then we are still somewhat stuck in terms of trusting they will act in the best interests of their investment (and the community). Until there are a lot of developers working on the STEEM blockchain outside of the Steemit company, they do represent some level of systemic risk, correct? At the very least, they (and other high SP holders) need to be trusted to make decisions which align with the community under a DPOS model.

But, as you said, maybe this is the best we can do right now and nothing can be evaluated in a vacuum. If there's nothing better, I'll be happy with what we have, but I'll still push to make improvements where we can.

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At one point there was a proposal to technically allow accounts to permanently forfeit their right to vote for witnesses. I presume this was to reduce the need for trust, but it looks as though it may have been implemented, but never actioned.

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Oh, that's a great idea. I've heard similar suggestions about having massive SP accounts lock up their funds in timed smart contracts so they physically couldn't dump on the market, even if they wanted to. I heard someone say the Ripple organization is doing something along those lines. Stuff like that may help increase trust and transparency for Steemit.

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It's called 'Decline Voting Rights':
https://github.com/steemit/steem/issues/324

I checked a few weeks ago though, and none of the big accounts have opted to use it at this stage.

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Interesting to see the comments there. With the 13 week power down (instead of the previous 2 years), it does seem like SP could just be moved to other accounts to get around this quite easily, but yeah, in theory it makes a lot of sense.

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Yeah, I think it's a shame they felt the need to reduce the power down period. It encourages short-term thinking all around.

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13 weeks is still an eternity in the cryptocurrency space, but yeah, I signed up and invested with a full understanding of the two-year commitment. I would have been okay with keeping it in place. Others argue it scared investors away.

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It definitely made me not interested. Too much commitment. I came back when the time frame was shortened.

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This became a lot less useful when the power down time was changed from two years to 13 weeks. Now even if an account has permanently given up voting rights, the stake can be moved to a new account that hasn't (and it isn't even necessary to wait until all the stake has been moved; a potentially-large amount of influence can be regained in just one week).

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Yes, I see what you mean.

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I was going to mention that, but I had already gone off on too many tangential points. But since you mentioned it…

And readers note we’re referring to STEEM on this particular power-down delay issue, not EOS.

Remember at BCT I was strongly objecting to that change, both because it allowed some whales to cash out faster and because it changed the incentives and game theory.

I remember one of the arguments in favor of the change was that those whales who were not interested could get out and that it would stop penalizing short-term speculators which were deemed necessary to support the price and marketcap. I felt the argument conflated two separate concerns: the lockup of minted tokens and the debasing of those who were not powered up. I felt instead the debasement could be taken from everyone who was powered up also. Most of those who are powered-up received free (minted) tokens and get voting and curation rewards power from powering up. The design was too asymmetrical in my view. But one of my blog posts pointed out that I came to realize the entire voting paradigm was a design flaw. So then I punted on the debate and started to think about other paradigms for accomplishing the goals of onboarding and such.

I reiterate that IMO Steem has been a very valid and important experiment. I am happy it was created and that I was able to participate.

P.S. It’s an aspect that I would want to restore in any altcoin project I may launch, but it will be done with quite a different method which is going to surprise everyone I think.

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If they have the power to do that, but choose not to, then we are still somewhat stuck in terms of trusting they will act in the best interests of their investment (and the community).

Flies always come to honey. It's impossible for whales' stake to remain honest, because if they do not grab the power vacuum, then someone more ruthless will step into their place and dilute their stake. I explained one possible attack mechanism in my blog for the most ruthless to take over the chain. This is a inviolable fact of political economics.

What you do not understand is they are already doing the attacks, but the attacks are obfuscated such as using socket puppets to hide how they are siphoning the minted STEEM to themselves and taking over the blockchain even more so than is evident from your analysis. Of course no one can prove or disprove it, because that is the nature of sockpuppet (i.e. Sybil) attack on the resources.

Until there are a lot of developers working on the STEEM blockchain outside of the Steemit company, they do represent some level of systemic risk

It is forever a risk and a reality, and no amount of diversity of developers will change it, because the power-law distribution of wealth and resources is inviolable. There is plenty of research on this. Google can help you find it.

At one point there was a proposal to technically allow accounts to permanently forfeit their right to vote for witnesses.

That would not mitigate the problem because power-law distribution is fractal, meaning it will reappear in the remaining stake that was not forfeited. Period.

Also presumably the stake when spent would lose that restriction, otherwise fungibility is destroyed. So permanent revocation of voting rights is impossible (or foolish).

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What I don't understand is how is this better in PoW blockchains? I think that's what @dan was getting at, primarily.

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I answered that already in my other comment.

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bees come honey, not flies . . . at least as the expression goes!
: )
"Like bees to honey!"

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Where I’m from in the South where there are a lot of flies (and ants) at picnics, it’s “flies to honey”.

Normally we’re not using honey to attract bees. We using honey to attract prey, e.g. ‘honeypot’, or there’s some annoying thing we don’t want to attract which wants our honey.

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A nice piece good job @dan

@lukestokes as you said "maybe this is the best we can do right now and nothing can be evaluated in a vacuum. If there's nothing better, I'll be happy with what we have"

It obviously the case

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It obviously the case

Not for much longer. 😉

You and Anonymint have been debating these issues since before Bitshares. I remember reading on Bitcointalk.

My opinion on Proof of Work is it favors TOTAL Proof of Work. Eventually botnets run by AI will do all the mining, probably by stealing CPU cycles. If government can come up with Stuxnet they can figure out a botnet to own Bitcoin. I think it is actually only a matter of time before humans are no longer profitable to be involved in mining because human labor has a cost while botnets don't require any human labor.

Proof of work in my opinion WILL be ungovernable once the block reward halving, difficulty increases, etc, push all the humans out of the mining roles. But hey maybe that was the idea all along? To be ungovernable by any human and let the AI control the whole of POW.

If Bitcoin is supposed to have mining for 50+ more years there is no way in hell human beings will be running mining farms by then. The whole industry will be automated, so we have to consider what that might mean right now. Personally I favor hybrid Proof of Work+Proof of Stake networks, as Total Proof of Work is not ideal.

I know these posts may make me unpopular or look like a lunatic but no one else is willing to post anything about the AI angle to POW. Demand for unlimited efficiency increases due to years of block reward having etc, put market forces on a certain evolutionary trajectory.

Reference

  1. https://steemit.com/crypto-news/@dana-edwards/will-an-artificial-intelligence-ultimately-become-the-global-mining-cartel-ai-as-mining-monarch
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@dana-edwards this is the same way I see POW too. Hard to see it going away anytime soon but at the very least POW/POS hybrids are more ideal and sustainable in time. The other day I wrote an article that briefly talks about the Evolution of the Blockchain, referring to hybrids and POS being the new norm. https://steemit.com/cryptocurrency/@hedge-x/the-evolution-of-blockchain-has-just-begun-the-path-to-trillion-dollar-protocol-currencies

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there is always the dark side of the moon present, but I do agree, bitcoin is far from decentralised, I do favor dan's statement here when you compare PoS and PoW, but you do make another important point, I'm not sure how AI will run a minenet the whole talk on AI will be unfolding in the years to come, all we have is fiction for now, I do think people should seriously consider and reconsider their ideals and goals for the future. I don't see AI and automation as that great of a advancement, it only makes people less valuable, bunches up a lot of resources for infrastructure and development that later totally blow out any humans out of the water, I don't really see things getting better since the internet was around and even before that, sure I do see tradeoffs but a lot of culture and value is lost in the process, so if we are going to be having a network that runs itself from AI first off someone has to release it and second it has to be worthwhile.

I don't see a way at the moment it will benefit anyone since either it has to serve someone who can be targeted or it won't be controlled and people do fear that, loosing control xD...

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Botnets exist today and mine today, this is not fiction. That said, if we assume AI will become more advanced like we do with CPUs becoming more efficient then yes eventually there is a tipping point. Bitcoin will not be mined by human beings in 2100 as there is no in my opinion it will take AI that long to figure it out. AI does not have to be AGI, but can be narrow insect level intelligent AI, and that alone would be enough for a botnet to take over mining. The thing about Bitcoin, it could evolve into a fully autonomous agent while POS or DPOS will always be semi-autonomous until the stakeholders are bots.

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Wow! Glad to meet you. I'm one of those people who think PoW+PoS as the best model and I have a history of not shutting up about Dash. Taking a hint of Delayed PoW of Komodo, I've thought of having PoW as a Service. If you need to attack Komodo which use the Equihash mining algorithm, you need to break Bitcoin's SHA-256 hashpower too which makes KMD much more secure than BTC.

I know that PoW is inefficient.But are we and should we really be done with PoW? Digital didn't make analog go away. It gave a new meaning to analog tech. Robots never destroyed any jobs. We just had to rethink and re-allocate human labor. It's time we look at PoW with a different eye.

The defining feature of PoW is that it is a brute force system. Software or computer networks can be meddled with. In 2010 92 billion Bitcoins were brought to existence because of a software bug. It was fixed of course. I'm not a programmer. So correct me if I'm wrong. DPoS is still vulnerable to a Ethereum like software hacks. There is no brute force layer an attacker has to go through. This concerns me a bit. Again; not a programmer. Correct me if I'm wrong.

To hack komodo, one needs to brute force Bitcoin first. What if other blockchain projects adopted a similar system? The networks will obviously be extra secure. This is especially important to newer kids on the blog.

This leads me to propose PoW as Service model. It won't really be a given service; but more of an adopted one. When more and more projects start depending on a specific PoW coin for an extra layer of security, then that PoW blockchain itself will have more value just as Ethereum increase in value when more and more ICOs stat using ETH. This can turn into a positive feedback loop. We could end up with one popular PoW coin per mining algorithm.

IMHO the single best candidate for the job is Dash. I'm not a professional cryptographer. I know that SHA-256 is part of the SHA-2 cryptographic hash function initially designed by the NSA which is a branch of world's greatest agressor and privacy invader that is called "the land of the free". It does worry me at times. I know X11 is relatively very efficient and it use 11 hashes. SHA-1 has already been broken. SHA-256 won't be that easy. But breaking 11 should be much harder even if they aren't as good as SHA-256 on their own. It is also worth mentioning the next iterations of this algorithm which are X13, X14, X15, and X17.

Now what if various blockchain projects start implementing dPOW (delayed proof of work) for added security. Personally I see a far better future for Dash compared to Bitcoin. The Hashrate has been growing crazy fast for dash.. The overall community has great harmony and it's a project with excellent fundamentals even though X11 isn't much time tested. Maybe that'd work in favor and give the algorithm some extra years before it's broken. I don't have a crystal ball (a major drawback of my life). I can only take informed actions.

And I think using existing PoW mining as an extra layer of security leading to better valuation for PoW coins would be an excellent thing for the blockchain community. Don't just dump the old; Recycle them!

Hopefully I added something valuable to the discussion :-)
Happy steeming!
@vimukthi

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I think POW guarantees security based on economic assumptions. I think those economic assumptions as you say, only protect against the obvious brute force attack. I think true security requires looking at things statistically and no I do not think POW is more secure than hybrid POW+POS, not is it more efficient for stakeholders. What I mean is POS provides for more evovability in governance than POW.

I could go in on this topic but I would rather let Dan communicate on the technical side of things because he is one of the main innovators in POS. My opinion is that while I like DPOS, I have my own model of how things can or should be, based on what some people might think of as "sci fi" if I tried to describe it today. All I can say is what looks like sci fi if described right now will not look like sci fi in 5 years, and all the topics I discuss are in development, even if we do not see the fruits for up to 5 years.

The botnets, the agent based ai, the post I wrote on autonomous negotiators, these will be in the crypto-space probably in the next year or two. AI is coming and will merge with blockchain and this in my opinion is unavoidable because they have so much synergy and will make trillions in profit.

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I'm very interested to know about your "sci fi" model.
AI is certainly begging to be connected with the blockchain. But the development must be kept open source. There could be private implementations but closed source AI could be worse than a FEDcoin.

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@dana-edwards AI lacks entropy and thus will never autonomously dominate the universe. Please understand that humans necessarily make irrational decisions (e.g. based on emotions and hormones and incomplete local information reasoning), because otherwise the species would not be resilient.

PoW can never be dominated by botnets because infectable computers do not have ASICs that reach even 1/1000th of the computing power the latest ASICs which are always distributed first to TPTB (i.e. the Zionists) because they control the latest technology (e.g. 14nm currently) chip fabs.

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I don't know what physics you refer to but nothing in the universe as I understand it "lacks entropy". Intelligence in the human, in the non-human animal, or in the AI, is physically equivalent as we currently understand physics at least. That being said my point is that mining does not actually require human emotions or any high order thinking. Mining by way of Proof of Work is a 'set it and forget it' situation.

On top of it being 'set it and forget it', it also promotes automation by design. Block reward halving happen every 4 years and this promotes increasing efficiency indefinitely. The logical way efficiency is increased is by cost reduction of the business operations. Eventually the inefficiency will be the human beings and the botnets will be the most efficient mining businesses until eventually a fully autonomous botnet is released.

Tell me why this will not happen? It is happening already. People have been finding hidden miners on websites all over the place. It is starting to become ubiquitous and even Intel is mentioning releasing a chip with a miner built in. Once the ASIC is built into the Intel CPUs, and the AI chipset built into the GPU, well how long before what I predict to happen becomes reality?

Assuming all computers will not have ASICs in 5-10 years is ridiculous. They all very well could have ASICs if it is profitable for Intel. I doubt it will even take 5-10 years, we might begin seeing these chips next year.

The one point you used to refute my hypothesis is that the current chipset is 14nm? But you do realize due to physics we will reach a maximum efficiency for chips pretty soon. When this happens the only way to scale is more chips not more efficient chips.

Reference

  1. https://www.marketwatch.com/story/nvidia-more-bullish-on-cryptocurrency-than-amd-2017-08-10
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I don't know what physics you refer to but nothing in the universe as I understand it "lacks entropy".

A vacuum is one example.

On top of it being 'set it and forget it', it also promotes automation by design.

The engineering and research quest to produce smaller and smaller transactors is not capable of being automated. It requires the random occurrence of ingenuity. I am not going to write a treatise on this here.

The logical way efficiency is increased is by cost reduction of the business operations.

For mining it is mostly all about the electrical efficiency of the ASIC chips.

Once the ASIC is built into the Intel CPUs

These can never be even orders-of-magnitude as efficient as the dedicated, state-of-the-art ASIC chips.

But you do realize due to physics we will reach a maximum efficiency for chips pretty soon.

Malthusians never defeat human (nature's) ingenuity.

Paradigms will change as necessary, e.g. quantum computing, etc.. The ingenuity race will not cease.

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That is where you are wrong. Chip design can and is already automated. Algorithm generation is also already automated. Even program synthesis (programming) is automated.

If we have a prediction market are you telling me you are willing to bet against AI being able to automate the mining industry within the next 20 years?

And my point about chips is there is a physical limit beyond which no chip can become more efficient. There will be a final ASIC design and once that design is found there will be no need to continue to innovate there because physics cannot be improved beyond the optimal design. This will happen for sure in our lifetime. So once the final design is produced it becomes a matter of how many chips you have as the "new currency" of POW rather than how efficient of a chipset you have. Even blogging on Steemit is not future proof because algorithms can blog too and soon AI will be able to do it better than people so why would I think I can blog for much longer? I see the writing on the wall.

References

Van Berkel, S., Turi, D., Pruteanu, A., & Dulman, S. (2012, July). Automatic discovery of algorithms for multi-agent systems. In Proceedings of the 14th annual conference companion on Genetic and evolutionary computation (pp. 337-344). ACM.

  1. https://en.wikipedia.org/wiki/Electronic_design_automation
  2. https://en.wikipedia.org/wiki/Program_synthesis
  3. http://futurecontent.co/automated-content-can-algorithms-write-your-content/
  4. https://en.wikipedia.org/wiki/Genetic_algorithm
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Chip design can and is already automated. Algorithm generation is also already automated.

You're citing automation of existing technology, not the new innovations that have been required along the way to keep Moore's law advancing, such as Intel's 3D transactions, etc..

I have already stated the facts and provided a link to where I have explained it in much greater detail. You are free to believe anything you want to. It will still not make it correct.

Please go interview someone knowledgeable at Intel to become more aware of the reality. For example just reading a story about how difficult it was for Intel to release the latest generation CPUs and the human ingenuity it required to sort out various issues with the smaller transistors. In short, you're oversimplifying your assumption about the capabilities of AI.

As well, you do not comprehend the generative essence which is the entropy argument (which insures the capabilities of AI will never replace/dominate the necessary imperfection and randomness of nature). And I have no desire to try to explain it further to laymen (beyond what I already linked to), who have some fantasy about what they saw on Star Trek.

Even blogging on Steemit is not future proof because algorithms can blog too and soon AI will be able to do it better than people so why would I think I can blog for much longer? I see the writing on the wall.

Any intellectual activity that requires the randomness of ingenuity will remain the domain of humans. Remember for example humans can leverage AI against AI. AI is a replicated low entropy tool for humans. Every human is biologically unique. That random imperfection can't be captured by AI, because AI is top-down replicated phenomenon.

To the extent that AI ever does become randomly imperfect and unique like humans (i.e. if it truly becomes alive), then it will lose it's illogically postulated ability to form a universal total order (i.e. imperfections require partial orders). Humans can compute just as fast as AI can, we use computers to do it. I already explained why the notion of AI autonomously directing itself faster than humans directing AI is low entropy and thus not dominant.

In short, Kurzweil is selling snake oil.

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Hey man, I know you are smart and everything but if you want people to listen to you stop talking to them like they are idiots.

If you swallow your pride and check your ego you will get much more acomplished. I like the subject matter you discuss but the way you present it is not pleasant to read and comes off more like you have a personal grudge than knowledge to share.

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Perhaps the forcefulness of my factual exposition is due to trying to explain it nicely dozens of times already in the past and realizing that humans are necessarily hard-headed.

The necessity of irrationality was alluded to in my exposition.

Also take in account that @dana-edwards is declaring that I am wrong, and she/he clearly did not even take the time to go read all the linked explanation I provided my first polite post before he/she responded declaring that I am wrong.

I understand very well her/his fantasy and misunderstanding. I have explained this point numerous times over and over and over again. The disease of the propaganda about the AI Singularity is at the same level of junk (false) science as human caused global warming, feminism, oestrogenizing vegetarianism & fat-free diets, and other absolute bullshit propaganda that people believe.

Btw, I have no animosity towards @dana-edwards. I am friendly with everyone, but w.r.t. to factual debate, I have the responsibility to present my knowledge in a way that the other side actually takes notice of the facts. Unfortunately the nice and soft approach was not working with her/him. Yet I think my last response is not mean-spirited. Just trying to be forceful enough with the facts to penetrate the cranium and emotional centers of the brain and reach the pre-frontal cortex where the logic circuitry is.

Thanks for your feedback. I hope my explanation satisfies you to some degree.

Dan, you still talk over my head with most stuff as you know LOL, but I am doing my best.

I am not from your coding genius world but I get a charge out of the fact a guy like me, gets to interact, use things you built, and be alongside you, and it grieves me seeing people mudsling stuff against you, I kind of view you like a brother now.

I've written twice this week again on BTS and about you and @stan and what you have done, here is mine from tonight, with this TETHER mess -- and try to express how I feel about BTS and your projects being undervalued and underused/underappreciated across the board.

God bless ya my Liberty brother. I believe in you. We can encourage people daily.

I finally learned how to do this LOL, so here it is (:

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Should I feel jealous or grateful (or starkly indifferent) that you don’t feel like my brother?

Mudslinging or factual peer review? Is every scientist that finds flaws in a scientific research paper a mudslinger?

You might want to clean up that brown stuff on your nose. Especially if the person you’re idolizing ends up being prosecuted as a scammer for selling “useless tokens” which were really investment securities trading on exchanges allowing profit expectations.

humm great post and thanks for making it count, I just learned of @anonymint and from a quick glance on his post I do see some merit in his claims, nothing I would comment on for the time being.

I'm happy EOS work is on schedule, I do remember you were even ahead at some point :) I'm looking forward to your next successful venture.

On DPoS I think it's just politics in the end of the day, it doesn't have to be a hard steal of the chain, just a soft collusive draining of the value, which in a way I have seen here, sure it's free-market and open, buuuut you also have loan sharks, vote selling and buying, all kind of points to no point, before quality was on focus or at least that was what was hinted at, now it's money talking...

I do see a lot of merit behind @lukestokes comment, whales are kind of picking witnesses, it will be a while before it get's decentralised, and scaling is yet to be tested, decentralised politics is a new thing :D I was also thinking along the same lines, I'm not sure how it can scale, but that is a topic for another time, when I'm more prepared and have maths or philosophy to back up my claims :) no need to void theorise, which does sound like a great band :D hahah nobody has thought it up :)

Sure DPOS isn't perfect at all but it is still working better than POW in most real life implementations and as you said above considering the big picture let to very different results than from only considering a part of the big picture when we are about to simulate systems.

I might wonder what are you thought concerning the HashGraph protocol when it come to the point discussed above?

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Sure DPOS isn't perfect at all but it is still working better than POW in most real life implementations

I agreed that Steem is/was a valid experiment, but I do not think ecosystem network effects are spreading as fast for DPoS as for Bitcoin. Because I do not trust the whales of Steem, so I would never invest my developer effort in making apps for it. Look how just one or two whales were able to destroy all the rewards that 100s of voters gave me. I could be wrong about that assessment of how fast the Steem ecosystem is growing. We'll see...

That is not a meritocracy. And I am going to try to do something about this.

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Hybrid systems a working quite well
DPOS stability depend on chaotic parameters such as token distribution following sociology and market patterns.

Consensus in block production is different than reward on post in Steem but it is linked.

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please explain how the whales were able to destroy your rewards? and what that has to do with POS vs POS? If anything it seems like a problem with Steem, an application, not POS, a consensus protocol. in neither case would whales be able to force those kinds of things at the protocol level

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please explain how the whales were able to destroy your rewards?

On some controversial blogs I wrote, I had dozens or hundred+ votes with some rewards and then one or two whales come in and flag my post because they don’t agree with what I have to say and thus all my rewards were erased to $0. The downvoting or flagging feature should be for content-free posts or spamming. If many readers (not all) like my post, it is growing an audience thus helping Steem grow, then it is stupid to penalize me. A blog site can’t be a place where every group agrees with every other group. Diversity of audiences has to be allowed. Spreading a totalitarian mayonnaise on diversity is the antithesis of resiliency, decentralization, scaling, and success.

and what that has to do with POS vs POS? If anything it seems like a problem with Steem, an application, not POS, a consensus protocol.

You’re not connecting the dots. But I understand block chain technology + game theory is complex. I live and breathe this stuff so I am exposed to many bits of information that you haven’t likely contemplated.

POS suffers from the problem that it can’t distribute tokens. So the voting scheme was designed for Steem as a way to overcome that inherent weakness. But as I have pointed out, the voting scheme can never be objective or fair or a meritocracy. It will always devolve into a whale monopoly on tokens and thus also a monopoly on the consensus.

With EOS, they decided to sell the tokens over a year period to simulate the costs of spending on mining. But unfortunately in my analysis thus far that renders the “useless tokens” to be investment securities, but note IANAL. Also some evidence (also here and here) has been presented that perhaps the “useless” EOS token sale is being gamed in various ways.

Since I am not planning any $2 billion pre-functional “useless token” sale money grab, nobody needs to trust me for anything. The entire point of decentralized ledgers is they should be trustless and permissionless, but your leader seems to not think so, since DPoS is permissioned and requires trusting the whales.

http://www.foxnews.com/us/2017/10/23/wrongful-conviction-no-surprise-to-kansas-black-community.html

WICHITA, Kan. – Rose McIntyre says she wonders whether her refusal to grant regular sexual favors to a white detective prompted him to retaliate against her black son, who spent 23 years in a Kansas prison for a double murder he didn't commit.

Rose McIntyre recounted in her affidavit that Golubski coerced her into a sexual act in his office in the late 1980s and then harassed her for weeks, often calling her two or three times a day, before she moved and changed her phone number.

"He had total power, and I was terrified that he would try to force me again to provide sexual favors," she said in the affidavit. "I also knew that there was no one I could complain to, as Golubski was known to be very powerful in the community and in the police department."

Golubski was so involved with black female prostitutes and drug addicts that he fathered children with some of them, according to an affidavit from retired police officer Ruby Ellington, a 25-year Kansas City police department employee.

The above is an example why trusting anyone or group with authority is dangerous.

Good point, @dan !

Add source of the image you copy pasted from google search. You most likely copied it from wikia.

Interesting

🔥Wonderful 💔and ⚡very💧 informative💲 post
I ⚡resteemed and 💯% upvoted 🌊your post

Well done! @dan Your opinions and advice here are will help community.

I've been under the impression that Moore's law would eventually cause greater decentralization of mining. Once mining hardware efficiency doubles every 18 months (instead of going up by orders of magnitude) the pressure to upgrade hardware will abate and regular users will be able to mine again. The question is whether this math will provide enough of a balance at some time in the future or whether we have a better alternative such as DPoW (distributed proof of work) or maybe Iota's tangle...

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One of the problems is that capitalization required to keep Moore's Law advancing at sufficient economies-of-scale keeps the state-of-the-art fabs under the control of the banksters (aka the Zionists). Thus via those means and others they will continue to have first access to the highest efficiency and lowest (even free charged to the collective) power costs. I agree with Dan's assessment that supranational TPTB will control mining. I disagree with him that nation-states will control it.

IMO, Bitcoin was clearly created by the Zionists to destroy the nation-states and usher in their control of the NWO. I covered some of the technical features that Satoshi designed as more evidence of this. See my past blogs and comments for the details. I grow weary of repeating myself and digging up past posts of mine from my voluminous archives.

I and others claim IOTA does not reach consensus without their centralized Coordinator. They've been challenged to remove it and have not. Or perhaps they will if they secretly control enough sockpuppets of stake to maintain the same dominance that Coordinator provides. In short, my study of the Tangle algorithm concludes it does not converge without centralized control.

Thank you @dan! I really enjoy reading anything you post. Keep up the good work, you've got lots of fans here!

I agree with your opinion but one benefit of Proof Of Work is that it is good for attracting new people into the world of new blockchain ventures, easily without asking them for upfront investment as in case of POS.

They can do this will relatively little capital

Thanks for contributing to the struggle to be free from the money masters.

I really like that you have not totally walked away from Steemit. Your opinions and advice here are much appreciated.

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How is spending all his time promoting and developing a $2 billion “useless token” EOS money grab not totally walking away?

I mean I understand why he did what he did, but why sugar coat it? He left for greener pastures.

Or am I missing some relevant fact?

Well done. Thanks for sharing such an amazing post.

That's a great idea,
Very helpful. Thanks.

Just want to say hi! Wish you a good day!


I don't understand DPOS but believe in you.

Well done! @dan

Nice content and very interesting. Thanks.

Upvote Resteem

"The most resent example", is that a typo?

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Most likely a double entendre.

Consortium Blockchains very nice group,

Excellent post . thanks for sharing
((((( Resteem Service))))))

Good job @dan and i like

Good jop friend.
i am a newcomer in steemit.
I need support and help from you.
I hope you are happy with helping me.
thanks.

Thank you for writing about a complex subject in a way a newbie like me can understand. We appreciate you :)

Wonderful 💔and ⚡very💧 informative💲 post

Congratulations @dan, this post is the most rewarded post (based on pending payouts) in the last 12 hours written by a Superhero or Legend account holder (accounts hold greater than 100 Mega Vests). The total number of posts by Superhero and Legend account holders during this period was 28 and the total pending payments to posts in these categories was $804.44. To see the full list of highest paid posts across all accounts categories, click here.

If you do not wish to receive these messages in future, please reply stop to this comment.

You sir @dan taught me that , "We need to accept things as final even if there is some potential they could be wrong or be fraudulent because higher level processes cannot advance until lower level processes are final." ..

would be very happy when we join the friends.
Good post @dan
Information best

With my experience on Steem, and what I see going on with the miners(BTC vs BCH) I believe we still have to search for solution....
While the economies of scale tip Delegated Proof of Stake as it may be a longterm solution to the energy challenges miners may face, DPOS is still very much influence by Human Nature which would always act in their own self-interest.....
I believe the challenge moving forward is removing that human nature while maintaining the economic incentive to encourage participants....

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I believe the challenge moving forward is removing that human nature while maintaining the economic incentive to encourage participants....

My (yet unpublished) research has been all about trying to achieve that goal.

I have also agreed that DPoS has been useful as an interim transaction volume scaling solution for experimentation with blockchain applications.

My issue lately has been with the lack of honesty and material facts disclosures to investors (for both Steem and EOS) about flaws.

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Quite interested in that work, so I await your work...

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FYI, I've been very slow due to suffering from disseminated Tuberculosis (since 2011 but only diagnosed in January 2017 because who the fuck knows what disseminated TB is when they have no cough and when the doctors in the Philippines have no clue either). And who the fuck has energy to go running around in the traffic hell of 3rd world Asia trying to deal with derelict doctors when one has no energy, has diarrhea, etc.. And when one doesn't have health insurance nor the funds to return to their home country. Headed out of the Philippines and back to the USA (first return since 2006) soon to determine if I still have TB or not and if yes, then what sort of additional treatment I need to get back to 100% energy level. TB basically means the mental energy level is akin to being shit faced drunk on Tequila much of the waking hours. It varies on different days and different times of the day. In short, it turns what used to be a 14 hours per day intense coder into a few hours per day weak coder, some days no production, and an occasional very productive day. The immune system is always attacking and in flux. I'm currently supplementing Artemisia after completing a 6 months antibiotic regimen which cured the chronic diarrhea but did not entirely fix the discombobulated mental energy level issue.

We'll see...

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Sorry to hear about your condition... wish you the best keep fighting

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I was banned again on BCT (probably EOS insiders bribing the mods) so I read your PM but wasn’t able to reply. I’m going to experiment with high dose IVC. I’m going to receive an MRI in two weeks to try to pinpoint what is going on. Work is proceeding. The main problem is the brain fog which can strike at any time and persist which I best described as ‘stupor’ and ‘discombobulated’.

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Hope the treatment goes well mate - I have heard good things about it without ever having first hand experience or knowing anyone who has... Another suggestion I can confidently recommend is Colloidal silver (see here article re: TB...http://thesilveredge.com/silver-nanoparticles-are-a-potent-anti-tuberculosis-drug.shtml#.WjG5tFWx9FQ)... I use this guys products (http://www.phion.com.au/?s=colloidal+silver&post_type=product) as my cousin has visited his operation as well as claiming his pro-biotics and natural anti-biotics are superior to any on the market. They're in Aus but deliver (I have no business affiliation with them) if you decide to experiment with other potential remedies. Good luck :)

Botnets exist today and mine today, this is not fiction. That said, if we assume AI will become more advanced like we do with CPUs becoming more efficient then yes eventually there is a tipping point. Bitcoin will not be mined by human beings in 2100 as there is no in my opinion it will take AI that long to figure it out. AI does not have to be AGI, but can be narrow insect level intelligent AI, and that alone would be enough for a botnet to take over mining. The thing about Bitcoin, it could evolve into a fully autonomous agent while POS or DPOS will always be semi-autonomous until the stakeholders are bots

I feel it is important that people realize that everything in life has design tradeoffs

You watched too much Full Metal Alchemist, mate ;D

I suggest everyone use busy.org to access the Steem blogs, not Steemit.com, because for example just one spiteful dolphin-whale (e.g. @chryspano) downvoting my blog (the blog of mine Dan is responding to) or comment can censor it entirely from Steemit.com, but not from busy.org. Note that using busy.org won't prevent one or two spiteful whales from removing my rewards received from 100s of voters, as a few whales have done on some of my controversial blogs.

Daniel congratulations on your hard work and accomplishments. Somehow I still believe you're sincere about the ideological pursuit in spite of the premeditated whale money grabs for both EOS and Steem. Psychologically I think you justify your money grabs and potentially securities law violations with your ideological quest. Both EOS and STEEM have been sold by the insiders (aka affiliates) to USA persons thus likely fall under SEC jurisdiction (STEEM being an obfuscated ICO with a premediated sneakyfastmine), regardless of what your attorneys have advised. SEC head Clayton warned earlier this month that all token sales are securities. Unfortunately I do not think that ideological rationalization of breaking the law is going to work out well for you. I am just stating what I believe to be the facts. For example, I commented on BCT about you and I had a similar frustration with divorce and perhaps somewhat similar motivations for entering this technology area.

@dan wrote:

What we know is that Fiat Whales control the majority of the hash power and that they hold the network ransom for fees.

Note I also criticized proof-of-work in my blog:

@anonymint wrote:

Well Satoshi’s proof-of-work has an analogous design weakness in that as significant revenue for miners comes from transactions fees as the protocol block reward declines and transaction volume increases, the incentive for the consensus to converge is lost and requires a colluding oligarchy, which of course will also extract maximum rents in either blatant ways such as constrained block size causing higher and higher fees, or obfuscated trickery for extracting rents.

I also wrote:

Byzantine Generals Problem has no perfect solution. Byzantine agreement is an approximate solution with the flaws of a liveness threshold and a safety margin and lacking permissionless and trustless properties. Proof-of-work is another approximate solution which does not have liveness threshold, is permissionless and trustless up to the lower safety margin of 50% attack. However, proof-of-work has another economic flaw which I mentioned in my blog.


@dan wrote:

The claim is that overlording "whales" can extract higher and higher rents. This claim cannot exist in a vacuum, but must be compared to alternatives of which Proof of Work is presented.

Afaics, the salient difference is that the nothing-at-stake means DPoS can be attacked, gamed, and controlled at no market competitive cost, thus any relatively small-capitalized group of scammers who are lying about material facts can leverage up and create a $2 billion money grab (even obfuscating the ways the insiders are accomplishing an obfuscated winner-take-all grab of the ICO as I documented in my blog) from a speculative bubble. Note I see ongoing posts at BCT about the suspicious activity that might possibly be indicative of the insiders are obfuscating the buying of the EOS ICO from themselves.

Whereas, proof-of-work requires a massive amount of capital to scam with because as you stated, it is competitive and open to all comers possessing hashpower. Do you really think TPTB are going to let you eat from their hand without corrupting you or destroying you in the end game with for example global securities regulation law. The Zionists (note I didn't write Jews) who presumably control the only 14nm ASIC fabs are likely the clients behind the curtain of the largest Chinese miners. They also clearly executed 9/11 (just study the damn facts as an engineer), so that will give you some indication that they have supranational power. So you're correct that PoS does enable a proliferation of deceptive hype and speculative bubbles that will end as toast (or controlled by the same TPTB who control proof-of-work) with the insiders walking away with the loot after they've paid off TPTB. What a wonderful innovation you have there.

I wrote:

My issue is that you and Dan are misrepresenting the facts.

Attackers can’t come back over and over again like they can on PoW and other chains.

Au contraire, the antithesis is more true. Because of the nothing-at-stake problem, proof-of-stake can be attacked over and over again at no cost. Y’all presume not, because y’all implicitly assume an oligarchy in control of voting (whether you realize it or not if you’re not knowledgeable about the political-economics science of voting). I described in my blog one of the possible attacks against DPoS employing shorting by whales. And TaPoS does not eliminate such attacks. Whereas, it requires an expenditure of electricity to attack proof-of-work

And you're not addressing the fact that if TPTB rubber hose or otherwise influence or take out the small number of whales which possess 50+% of the stake (which is true due to the power-law distribution of wealth regardless if there was no scamming by insiders), then there is no way to get an objective consensus ever again. I will get into this more below, because you still do not understand Byzantine math.


@dan wrote:

Mining profitably means economies of scale and ultimately alternative revenue streams derived from the political power the miners possess. Many governments in the world can trivially make mining unprofitable for all free market actors.

But no single government nor grouping of governments can shut down mining completely. You continue to fail to understand/acknowledge that the liveness threshold issue does not apply to proof-of-work.

What we can conclude from this is that mining is a dead-end, winner takes all, system.

I also explained in my my blog (and links in it) that DPoS is also a dead-end, winner takes all, system. True that numerous DPoS chains can be created, all of them each a winner-take-all dead-end. I fail to see any claimed improvement that DPoS provides w.r.t. to overlords (DPoS does provide a performance benefit).

Actually it is very depressing that current blockchain technologies are headed for oligarchies. Why do you think I continue to work on researching/developing fundamental technological innovation and not rushing to grab $2 billion with a technology which is clearly a dead-end.

I would not feel comfortable misrepresenting material facts and taking $2 billion in investment (intentionally obfuscated as "useless token" sales and intentionally apparently not doing any KYC!!) in such a convoluted global securities law and anti-money laundering law regulation environment.

@dan wrote:

This means that stake holders can vote out malicious actors even if 51% are malicious, so long as their exists at least 1 honest producers willing to accurately tally an election on a temporarily minority fork.

Daniel, that is mathematically incorrect. You have enough money now. Go hire a PhD to explain my blog to you properly. I'm not going to repeat myself.

Apparently you're not understanding the conceptualization of the marbles in jars example and why nothing can be objectively concluded when the liveness threshold is exceeded. You're not conceptualizing it holistically. Given I have already tried to explain it in my blog to a layman, I think rather than trying to explain it again and again, it is better for your team to hire someone to explain it to you. Or have that PhD come here and refute me.

Once an election occurs on the 1/3 network it will gain speed to 3/3 and eventually overtake the "bad guys".

This is still the underlying "rule of DPOS" on STEEM and BitShares and everything else is simply establishing a high probability of irreversibility.

It doesn't matter how many times you repeat this incorrect understanding, it will never be correct.


@dan wrote:

Bitcoin never reaches finality and without timely finality inter-blockchain communication is not practical.

Your argument distills to that proof-of-work has slow confirmations. Because as you presumably know, DPoS is also never final (i.e. has probabilistic finality), because of the nothing-at-stake problem. DPoS employs TaPoS (which you invented) to create probabilistic finality w.r.t. to the nothing-at-stake issue.

So please be honest and conclude that both PoW and PoS reach probabilistic and social consensus (i.e. Vitalik's "weak subjectivity" concept) on finality. I agree DPoS has much faster confirmations if the oligarchy in control doesn't leverage the nothing-at-stake vulnerability. Since your 0.5 second claim relies on 0-confirmations then it is faster than Bitcoin's (perhaps 15 seconds) 0-confirmations but it is not accurate to compare it to 1 hour. You're misrepresenting the facts again. As for transaction volume scalability on chain, I concur that DPoS has a significant advantage compared to Bitcoin.

If we are going to rely on 5 mining pools, then we might as well let them sign off on things in seconds rather than waiting an hour or more. The resulting security will be the same, but the latency will be dramatically reduced.

Incorrect. The security model is not equivalent. I explained it in my blog and retouched on reasons in this comment.

Also I debunked this 5 mining pools hype/misrepresentation of the technological facts in my debate at BCT with @chryspano.

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Regarding the securities regulation and STEEM, apparently they were advised by Gary Ross a former US Treasury official.

I did some analysis of securities regulation w.r.t to EOS’s token sale.


Note I see ongoing posts at BCT about the suspicious activity that might possibly be indicative of the insiders are obfuscating the buying of the EOS ICO from themselves.

Also here and here.


Everything on EOS’s securities regulation violations all in one place, including the Nov. 5 date of my prediction it would skyrocket in price:

https://bitcointalk.org/index.php?topic=2208231.msg26059539#msg26059539

However after reading all the logic again, I’m actually happy I did not buy it. I think even buying it could end up causing clawbacks from the SEC.

I would really folks stay away from ICO-issued tokens at this time.

Sorry to be off topic, but as you are a really big whale, (not even a minnow here) A Friend could use some whale help.

Please Help - - - https://steemit.com/steemit/@michelle.gent/i-writer no ONE person should be able to dictate how much a person earns on post. And I apologize for using this method to contact you.

A great post I enjoyed reading it. Keep the good work up!

WOW! Excellent!

You can find Russian version of this post HERE


Русская версия тут

Happy Thanksgiving Day
From SE Asia :)

hola @dan como estas? queria saludarte y felicitarte por tremenda cuenta que tienes queria saber si por favor podrias ayudarme en mi cuenta estaria realmente gradecido ya que hago steemit para salir adelante en fin por muchos factores te escribo espero leas mi mensaje alli te dejo mi humilde voto y ya te sigo...

orig_63735.jpg

Dear @dan.
Below guys,
@ngc
@newsflash
@nextgencrypto
@ozchartart
@berniesanders
they keeping downvote Our attendent event posting everyday in Kr tag. the attendant posting:
https://steemit.com/kr/@redbanana/11-27-steem
It reason gang down vote make us injured any reason. but we can talk them. How can we make stop them? please help us.