Topic: A PIN and PoS powered second layer proposal (Read 306 times)

you do mention the coin x. and you concentrate on stake coin x, you are describing an altcoin not a second layer. so dont keep describing your system as a second layer.

its important to mention your coin x and your private blockchain of 35 individuals that clubbed togethr to create it as your asking about the security/trust outside customers have in that group.

but with that said as a private blockchain for 35 entities to manage. if they are peered together as independant individuals that do not know, or are not working/friendly with each other. where they are looking for a way to view each others trade history so that they can aggregate funds upon a request then PoS has advantages because if an individual was mischievous then that person would suffer if the penalty is real assets

but here are the issues
the stake needs to be real btc. not the private blockchain coin that are created and destroyed per session at the click of a mouse. as the internal ledger could be messed with, altcoin stake vanishing. because where the person that gained the btc and handed out the altcoin premine at that session is always the winner
EG i can create a altcoin with 6 trillion coins. sell a few to people and then just delete the network leaving customers with nothing but an error. meanwhile i sip martini's on a tropical island bought with peoples btc

those in power must be majority independant and stranger to eachover. because if they were all in some friend/work relationship with each other and offering outside customers a service involving trusting those in power. then there is no point in having PoS as the powerhouse are colluding anyway and the outsider customers have no way to stop them

think about it. who provides the code logic that proves,disproves a signature is valid.. the group. who holds the real btc the group, who has control of the ledger, the group. and all the customer has is an api access to ask/beg for mercy and alot of blind hope/trust that the group are not colluding

its like many private blockchains that want to allow outside customer use, it then requires outside oversight, which normally would be where independant oversight has the majority to prevent the group from just deleting their ledger collectively and leaving customers with an error and no real btc

If you insist that this is a centralized organization, then just treat it like that.

Now we can discuss, is it secure to use such a multisig and PIN to secure this centralized wallet?

So 35 entities with a fat enough wallet pay an entrance fee to a private organization offering an alt coin for the power to route the majority of Bitcoin transactions?

As is that sounds like centralized off-chain transactions with extra steps.

Nobody is talking about any coins, we are requesting technical discussions over a possible second layer solution, with a simple assumption that the PoS is secure enough. That's why I never post any links or name of the system. Because I know that people will just focus on a coin without actual technical discussions.

Anyway, this is PoS, who need to buy this coin are those nodes, about 35 entities, not average users. Treat it as a much more transparent and better bank for BTC. I never talk about any coins and try my best to avoid discussions on altcoins.

To provide a good enough service, or just a little better service than central exchanges or anything else. Please just focus on the multisig wallet and PIN security.

altcoins/ other networks are not second layer.
playing with X coin or millisats is not playing with btc.

the whole term 'second layer' is just some crap PR drummed up to try to say their network should get the same fame as btc, but without earning it the hard way BTC did over 10 years.

take this topics proposal. people need to BUY the stake X coin
basically saying all altcoins should be 'second layer' of btc [facepalm]

whats next start calling a banknote from the 19th century actual gold in paper form...?

Changed the title as a second layer proposal.

so now the stake is paid for altcoin..
on this closed ledger within the multisig group(factory) those 35 managing the ledger, multisig can collude. meaning they set what happens to funds.

again you keep forgetting in a closed blockchain managed by 35 full nodes they have full control of the alt chain and also what happens to the funds of the multisig.

also. you said initial coin distribution of xxx. so are you now misdirecting from a private chain within a colluding group and instead being some mass public chain outside the group of 35... i ask this because if you want a mass public chain. there is already one, its called btc. plus having a mass public chain defeats the topics proposal

if your only talking about a private chain within the group. then the group set the rules and there is no way to make the group lose stake because they are the ones evaluating the rules and auditing thier data so they can just claim the real btc when it broadcasts back to btc chain by pretending nothing nasty occured on THEIR private chain

even in the lightning network the rules are in flux as 2 people connecting together can set their own rules for what happens between them..

.. im starting to think your not trying to solve something lightning related. but just be another public altcoin creator where people have to buy your altcoin to get in. yea i picked up on your premine. and i picked up on your 'spend bitcoin to get xxx'.

To describe how a typical PoS works, we name the staking coin XXX. And please note that, this is a true PoS system, not DPoS.

At first, in some initial coins distributions, the nodes spent lots of BTC to get enough XXX. In this distribution, the nodes put enough trust into the PoS system.

Then those nodes stake their XXX to manage the multisig BTC wallet and validate transactions. Their XXX will be slashed if some node do evil things, so they lose money. The XXX will be zero if most of the nodes do evil things together, so they all lose money.

Most PoS coins, e.g. EOS, Cosmos, are not true PoS and cause people to misunderstand how a PoS system works.

In this proposal we assume the PoS is secure,  and discuss the potential flaws in the multisig wallet and PIN.

the purpose of LN factories is so that users dont need to be full nodes and just be litewallets, api calling the factory to check session validity, open/close sessions. where the factory checks close sessions, agregates the funds and re-assigns new offchain tx's to use for peoples new channels all without touching the btc blockchain.
bold part below shows you know there is a separate power dynamic going on

but i really do have to laugh when you said 'All the BTC in this network are from users other than these nodes'
by the stake being customer funds. then the fund managers lose nothing, as its not them having to put up and funds

the stake is contained and used in the factory multisig.. used on the ledger of the factory.... not the btc chain
as noted aswell by charging a fee the fund managers have signature authority to add such a fee..
by the factory managers being in control, it doesnt matter where the funds came from. it matter who gave the customer the deposit address.. thus again by it being the funds manager owning the ledger and handing out the deposit addresses. the customers are at risk of not getting funds back. because they are stuck at the whims of the factory

.. imagine it like using paypal. but paypal said:
'customers please deposit a security premium used as a penalty if we defraud you. oh by the way we control and hold the funds and we do the record keeping and the accounts and give you access to atleast let you think your playing with real funds
yep millipaldollars in our ntwork are not real dollars. so if we defraud you, were taking the insurance premium too..'.. not only was i laughing that you suggest users who are already at the whims of 3rd party pay the stake, not only laughed that you knew the 3rd party had control of the ledger and all transactions separate to users access. but also that you didnt consider that users would not like to pay fee's just for some 3rd party to hold funds.. and thats before even going into the technicals of PoS

All the BTC in this network are from users other than these nodes, if they stake something valuable, then the users can trust more or less that these nodes won't do evil things. If they did, their stake will be slashed.

what the OP seems to be offering is a way to create a distributable ledger within the concept of an LN factory(small group of multisig linked funds managers)

issues with PoS is simple. for this group to even agree to become a factory, means thy are already colluding..
by already colluding and their sidechain ledger is solely theirs (100% in their hands) so whats the point of stake.. its not like they can lose it. as they control the entire chain and where the stake goes

they might aswell just have a 30 of 35multisig and just sign each block with that, no stake required

The stake funds are native currency, the node doesn't need to trust each other, they just trust the stake. In this proposal, bitcoin chain doesn't need to change anything. The network can be seen as a simple bitcoin multisig wallet managed by public nodes, based on a new valuable currency stake.


The current bitcoin standard limits a maximum 15 signatures for a transaction, it's enough if we have only 21 nodes for this PoS network. And Bitcoin is hoped to deploy the Schnorr signatures and MAST, they will enable much better multisig support.

And the user is not a part of this Bitcoin multisig, they trust the 31 full nodes to do the multisig.

There is a native currency for this PoS network. There are two rewards.

1.  When BTC is locked into this network, people can transfer it free within this network, and when transfer out of this network, there is some BTC fee charged.
2. The native currency.


Transactions are being stored by the PoS network. It is a DAG, similar to the side chain to Bitcoin.

We're all happy with you posting your github link here (everyone here knows what github is) - it might give us an insight into the architecture you're thinking of.

I'd assume there'd be a fee system like we have for the current lightning network, even if it's just a few sats.
Do nodes also have to trust each other with the staked funds (otherwise the main bitcoin chain would have to be changed to encorporate something like decred has with staking pools with a 1 of 2 multisig but the coins can't be spent by either node until the contract is over and the coins are awarded to the first address in the multisig - this'll be hard to encorporate on the bitcoin blockchain).

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IF the user were an additional part of the network then I could see this working out but multisig atm is limited to only 15 signatures (if I'm not mistaken, unless that's just a soft limit software like electrum encorporates?)

Define "some coins". What exactly is being staked by the PoS node? Is it Bitcoin? If it's Bitcoin, how are the stakers being rewarded if there's (1) no fees and (2) no currency issuance?

Also please clarify how the transactions are being stored. Is it a blockchain that more or less acts as a side-chain to Bitcoin? Or a wholly different approach?

I want this thread to be a technical discussion, so I didn't post any link in case it maybe seems like an ad. I will PM you the github link.

There are incentives in the PoS, the nodes staking some coins and would be slashed if they did evil things.

But I don't want to discuss the general PoS drawbacks here, there are already many discussions about PoS security. We can just assume this PoS system is secure enough and discuss the security of the multisig and PIN system.

Can you post the Github? Or a white paper?

I'm not a technical person, but I have friends who can take a look see.


What would be the incentive, as a security measure, if someone was to stake something valuable, Bitcoin, in the "POS layer"? Do we need to trust the stakers?

It's true you might have to go through other places for a channel but if you think about a supermarket/grocery store that you go into daily or a few times a week, you can open a channel directly with their node or open a channel with a node from the town you're in in order to make sure you don't need many hops between nodes.

There's a bit of a trust issue with your system too, if those 36 people know each other then they might take anything deposited.. Even a 20 of 36 multisig issue might have problems if there is something big enough at stake... Its a good start for a system but I don't see it being particularly safe
 

I totally agree with the drawbacks of a PoS system and SMS, but in this proposal we just assume they are good enough and discuss the flaws besides the PoS and SMS.

And compared to current lightning network, its speed is good enough, because it has only 35 nodes. Also a usable lightning network will need to have many channels, so a transaction may also need to flow in many nodes.

Moving Bitcoin transactions to a highly centralized PoS side-chain-like blockchain does not sound especially enticing to me.

One of the upsides of LN is that not every individual transaction has to be stored on every single node. If these transactions simply get moved to a secondary PoS-based side-chain-like blockchain you have the same scalability problems as Bitcoin's main-chain (ie. blocksize and blockchain growth) -- except you moved it to a mere handful of nodes (ie. the suggested 35 nodes).

One of the main reasons why Bitcoin's blocksize is relatively small is as to enable it being run on as many nodes as possible. If we'd be fine that the Bitcoin blockchain is only running on a total of 35 nodes we'd already have upped the blocksize a few orders of magnitudes ages ago. In this regard the suggested PoS side-chain-like blockchain seems to be simply big blocks with extra steps.

Even if you'd have non-staking nodes beyond the suggested 35 nodes the issue of on-chain scalability still persists. Given large enough transaction throughput no non-staking nodes would exist due to operational cost.