Topic: [Announce] Project Quixote - BitShares, BitNames and 'BitMessage' - page 21. (Read 48297 times)

Kudos on the post and I'm sure Daniel is going to have a great deal of fun thinking about your points . This is how a great product is built.

Kudos on the innovative concept of BitAsset (#5 below), as this is the first time I've seen that idea. The P2P exchange in #4 was already proposed by others, yet this is the first time I've seen it proposed as a way to decentralized the same protocol for an altcoin (obvious, but that point didn't register in my mind until now).

1. I have a superior name for your coin (and the domain names too). Forget "Bit" that is so copycat and lost in a sea of similar name permutations. I've demonstrated marketing skills in the past with 335,000 web sites published with my Cool Page as verified by AltaVista circa 2001. Brandable names express meaning and are dissimilar from everything already in use, e.g. when I "Google", I am "goggling". When I "Yahoo!", I am "hurrah! I found it on the web".

2. Why C++ yuk!? If you used Scala (3 times less verbose than Java), and stub in C for performance only where needed (through the JNI), then I might contribute coding (maybe even for free) instead of creating my own altcoin. No way I am going back to 1990s with C++. Been there, done that. Hey that was 15 years ago when I wrote Cool Page in C++!

3. The coindesk article claims, "BitShares aren’t designed to be spent with merchants in the same way that bitcoins are". Where in the whitepaper does it say that BitShares can't be sent to another keyname? Even if that was the intention, it is trivial to create a new BitAsset named BitSharesAsset which is the value of 1 BitShares. Thus BitShares is a new currency unit, so this is an altcoin.

4. Your whitepaper says that BitShares may have multiple chains. Thus BitShares from different chains would have different values and are only fungible by using the cross-chain transaction, i.e. P2P exchange. Thus I think they should also have different names, e.g. BitShare-Chain___.

5. BitAsset isn't concisely summarized in the whitepaper. Let me take a stab at it, while simultaneously improving the design of it. A BitAsset is designated to mirror the percentage price moves (not the exact same price) of some real world asset. The designation of which asset is made by the creator of a BitAsset, who also names it if it hadn't already been created by others. More copies of a named BitAsset, e.g. BitUSD, can be created in this same way, and the same name is reused. The creator either wants to take a long position on the BitAsset so makes a bid offer, or wants to take a short position on the BidAsset so makes an ask offer. The offer is made in units of BitShares. When a counter party makes a matching ask or bid respectively, the BitAsset is created and the BitShares from both parties are deposited into the blockchain, thus the collateral is initially 2x the market value of the BitAsset. As new copies of that named BitAsset are created, the market value fluctuates according the settlement of bid/ask by miners as described in the whitepaper. If the market value increases 50% above the short position's deposited collateral, the miner issues a margin call against the short. Whereas, if the market value decreases 50% below the long position's deposited collateral, the miner issues a margin call against the long. The BitAsset is retired at the cost of abs(market value - collateral) and the excess collateral is returned to the short or long respectively. These threshold's appear to be an arbitrary design decision? The short and long owners can independently (or each other) deposit extra collateral at any time to avoid a margin call.

6. I assume that long and short owners can sell their position at any time thus transferring it to another keyname (i.e. anonymous entity)?

7. Can the short and long enter an algorithmic contract to exit the position at a preset expiration date?

8. What is the redeemable concept? Do you mean to say the long or short can close their position at any time without permission of the counter-party? How can that be fair?

9. In the margin call, the BitAsset is destroyed, so what happens to the collateral of the counter-party which did not receive a margin call? If it goes to them, why are they forced to redeem their BitAsset prematurely? Wouldn't a better design be let the BitAsset remain for the counter-party? Also why does the redeemed money go to the dividend pool (for that BitAsset or all BitShares?) and not to counter-party, so that the counter-party gets some leverage?

10. There is the risk that the market value moves to more than 100% of one-side of the collateral before than the miner can issue the margin call. There is no default here, it is just the redeemed money is not as great as it should be. If the redeemed money was going to the counter-party instead of the dividend pool, then the counter-party would lose some real-time time-preference, but this isn't designed to a be a real-time trading system any way.

11. It is presumed that the market will try to maintain the market value of the BitAsset proportional to the price changes in its designated asset. I have some doubt in this concept. Has it ever been tested before? Economics 101 says price is determined where the marginal supply and demand curves meet. Ignoring the proposed dividends relative to interest or leasing rates of designated assets, and relative value of holding an asset proxy in a decentralized digital store versus holding the real asset, the supply is the distribution of people who think the price will go down, relative to the premium and time-preference offered. The demand is the distribution of people who think the price will go up, relative to the premium and time-preference offered. Thus if you want the BitAsset to track the designated asset, then the expiration period should be relatively short, so that the secular price trend of that asset is not biasing the supply and demand and instead you have fairly balanced expectations for relative exchange (BitShares <-> designated asset) price moves in either direction over the short-term. I am not confident that I have captured all the math that would apply. Should we be looking at models of options, e.g. Black-Scholes?

12. Kudos on determining market price from the bid/ask that don't settle (due to positive bid/ask spread), i.e. the marginal supply and demand, as that is correct economic theory of price. And also because as you say the transactions that do settle (due to zero or negative bid/ask spread) could be transactions to self if also control the miner with winning PoW block (although they incur a transaction fee, and probably also capital gains tax if the system isn't perfectly anonymous). But couldn't a miner also exclude bid and asks, thus manipulating the market price? This appears to be a major flaw in the design.. I don't have idea for a solution yet.

13. Why canceling bid/ask takes 24 hours when blockchain becomes secure after roughly 6 blocks, e.g. 60 minutes?

14. Dividends allow idle capital to not invest in mining, we want to maximally secure the blockchain.


...to be continued, I have more analysis and thoughts to share on this...

P.S.  I am age 48, math, engineering, computer science, entrepreneur, and deep conceptual thinker.

LOL. (If you see a connection between my quotes I missed it.)

The answer is no - you need to maintain the law so that there is always some space around you. Unfortunately a lot of people don't see that, though, and are comfortable as long as anything they currently like to do is legal.


That's why you have to be extra careful with what you say. (I will stop picking now )

Just crank up the parameters until it uses the amount of memory you want it to.

IIRC this has been discussed somewhere before. Changing algorithm would be a great solution but what if voters don't want to move on until it's too late?  E.g. ASICs are coming up but most CPU miners are at the RAM limit.

I hope you do. We will work on it, too.

There might be situations where everyone wants to just get out (bank run, loss of trust in BitUSD). Will it not break then?

Yeah, thats the problem with digital communications things said out of frustration have a way of haunting you long after they would have otherwise been forgotten.  Unfortunately, the context is often forgotten as well.

If you have a suggestion for parameters to Scrypt that you think would achieve the goal I am open to it.  After all, I am not tied to any particular algorithm just the goal of decentralization.

Depends upon how the algorithm is changed every couple of years.   Obviously current hash power would have to 'vote' to move to new a hashing technique.  

BitMessage & Namecoin are great proof of concepts.  Yes, they are solving the problem in similar way.   We think we can offer a better user experience with better scalability.  

If BitShares fall in value relative to BitUSD then those who are short will face a margin call where they are forced to accept the lowest ask.

Example:
Initial Condition:
Sam:  1 BTS
Alice:  1 BTS
$1 USD = 1 BTS

Sam decides to short, alice goes long...
Sam:   2 BTS held in blockchain-escrow backing 1 BitUSD
Alice:   1 BitUSD

Time passes....
$1 BitUSD = 1.5 BTS
Miner forces Sam to accept lowest ask... 1.6 BTS per USD
Alice (or someone she traded with) was the one asking 1.6 BTS / BitUSD

Result:
Sam:  .4 BTS
Alice:  1.6 BTS

Of course, all BitUSD is fungible and the miner could have just as easily covered the margin with a new short position... in which case the result would be:

Sam: .4 BTS
NewShortOwner:   3.2 BTS held in block-chain escrow backing $1 BitUSD

Notice... the price as a result of the margin call went above market value (1.5) to 1.6... thus profit opportunity for new short.   Of course, rapid movements would result in a short squeeze which will bring in new capital.

What if the law is crafted to not leave any room IN BETWEEN? Should we try get slimmer to have some freedom?

Nah, pretty sure here that's not what he meant. Also you have to admit that other post on Github was not so nice.


Why not use Scrypt with proper parameters (unlike Litecoin)? It was created to solve the problem at hand.

The problem with changing the algorithm every year or so is that it could bend the system towards centralization.


Similar to what MoA said: Bitmessage (http://bitmessage.org) has Namecoin ID integration now. Also there is NameID (http://nameid.org), a Namecoin based login system. And there is a working Namecoin TLS Firefox plugin to replace certificate authorities. There is more coming but I won't tell as I am afraid you will stuff it all into Bitshares.  


So that means the BitUSD are squeezed out if BitShares drop in value? How much will the collateral be?


Hope you will succeed, Cryptocoinland needs a decentralized exchange.

I'd rather discourage ASICs. Aside from the centralization issues they seem to be a waste of development effort and resources for a highly specialized "make work" type application. Also, since they are manufactured and deployed in batches, they create discontinuities in the mining curves. A steady stream of CPUs entering the mining pool is a lot smoother. Unlike ASICs, CPU systems can be re-purposed and run other applications.

Discouraging domain squatting is also a good thing. Will this network evolve to have anonymization and encryption like TOR?

BTW: the sooner we have a decentralized secure email system the better. that alone will give you huge PR!

Rather than prevent ASICS, I want to promote decentralization and if we can get decentralization with ASICS then I have no problem.

Preventing squatters is just a side effect, I want to promote the highest economic allocation of business names.

I have higher goals than DNS, but DNS is just one aspect of it.

If this could be merge mined with bitcoin I think both the project and miners would benefit.

I am working with Ian to get us on ciyam because it looks very promising as a way to decentralize our development process an invite participation of the community.   By October there should be plenty of tasks for you on there.

We certainly attempt to give credit to anyone who's ideas we leverage and build upon.    We did not go back and review all of the proposed names but as far as I know there is no current BitDNS or BitNames project and the names are rather obvious.   We have certainly given Namecoin, BitMessage, and Bitcoin ID credit for their inspirations.   We will not be running with any name in use by an existing project when we launch without the blessing of the existing owners.

As for why we are not using Namecoin:

1) Bandwidth requirements and storage requirements are too great for our 'account' system and it will not scale like we want for 1 billion accounts.
2) Domain squatting has not been solved with Namecoin and namecoin violates some of our economic axims against price fixing.  We have solved the domain squatting issue for the most part.
3) People don't want to 'pay' for a login name
4) Tight integration will allow a better user experience.

We haven't put together a full white paper for the designs of our DNS and Name system yet, but I have talked about the concepts in other threads on this forum.

Namecoin project is already doing many of these parts ... how will bitnames and bitdns be different/improvement? ( I note you are using names others have suggested back in 2011, are you affiliated with them somehow?)

Also, I haven't read the white paper but it is honest and typical to provide proper attribution when extending the seminal concepts, ideas and works of others. If you haven't done from day one, with the sincere intention to do so, it can be a source of FUD rot that when planted at the very beginning will only fester and corrode the project forever. Just so you have been warned.

Oh lala, Looks like something I'd be interested in, I'll have to wait till I full fill my other contracts before I start this one. I will be available by October if someone wants to give me a ping by that time if this project hasn't been started. I constantly lurk on ciyam so if you post it there no need to ping I can keep track of the status naturally.

Looks like an interesting project and CIYAM Open https://ciyam.org/open would be happy to list this project "fee free for life" (as one of the first 10 projects to be listed) if you are interested in using a task workflow control system (please view the slideshow at http://ciyam.org to see how this works).

The project Moneychanger is listed and has attracted a few developers who will have much of the skills that this project requires (and am sure would be interested in working on tasks for BTC when they have completed their current work).

Welcome to PM me for further details.

I have just posted the latest algorithm for the proof of work that we will be reviewing closely. 

Some notes: 
- I reduced the memory requirement to 8 MB so that I could achieve the target of 0.25 sec / hash on a 2.3 Ghz Core i7 single thread.
- The function has a unpredictable runtime which should choke many data-parallel systems like GPUs which must idle cores on branches.
- It uses AES to randomly encrypt and re-encrypt random bytes spread across the buffer, you cannot determine ahead of time which bytes will be needed.
- The inner part of the algorithm cannot be made parallel in any manner because every step depends upon the prior step in a cryptographically secure way.


This code should be peer reviewed to check for security flaws. 

I'm already enthused on the possibilities, most interested in the nuts 'n' bolts of mining to be prepared with an optimized platform when it starts since this is one of the shortest lead items per your announced schedule.

Give it time. There is quite a bit to digest in your white paper.

Mining is interesting and all, but I really thought there would be much more discussion about the revolutionary nature of BitUSD and BitGold as well as options and shorts.