Topic: DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?) - page 61. (Read 91167 times)

I'll come back to this later as I'll have to compress core elements of a 40+ page unfinished white paper into a forum post.  That will take some time to do.

You aren't capturing the realistic effect of a 51% attack. Society is not going to allow all historic blocks to be replaced. Politically impossible. Instead the viable attack is insidiously changing the protocol going forward, such as censoring transactions which violate some government edict, e.g. forcing every transaction to be stamped with its government KYC identification number (a la 666).

You are going to have trouble with your definitions of 'new' and 'existing' in a distributed p2p system. This is why we have POW in the first place, because the concept of time cannot be used to categorise these.


I highly doubt this is true. I'd love to hear how you think you've solved it.

Only the shortest chain needs to be destroyed (which is devastating to those who were already paid on that chain), or both forks can continue operating and everyone can spend their coins on both forks (so no one is harmed). Instant global 100% inflation. No big deal since everyone is debased the same percentage.

Forks are not so devastating if they only happen due to rare unavoidable reasons that can't be created to anyone's advantage (e.g. once every 20 years), and not just a frequent occurrence which would lead to chaos and destruction of crypto currency.

Indeed, but my focus was on P alone (and also not to confuse other readers).



I'm not disputing the 51% rule, no system can eliminate it, ever!  However the consequences of it occurring in Bitcoin and other cryptos is truly disastrous due to the reasons I posted.

The best case scenario any system can hope for is that the actor with 51% majority can influence future events only, not the past!  Because at least then, in the event of a complete system failure, you still have a true historical record of fact which can be trusted up to the point of failure.

Seems that is a Consistency (as you said the LCR can rewrite all the blocks under 51% control) and Access violation (and the 51% attacker can't censor the block solutions from the 49% and censor any transactions), not just a failure of Partition tolerance. But it can also be interpreted as a failure due to not being able to tolerate a 49% partition and thus the longest chain rule kicks in.

I am still reading the remainder of your post.

However note that in the following linked thread:


I pointed out that the 51% rule is fundamental to any consensus system, thus you will not avoid this in your design either:

Initial distribution doesn't matter. We know the outcome of the longest running PoS system ever: Capitalism's 1%.

I'm in this 1%, not complaining for myself. Just for the other 99

Edit: OK, maybe 2%

Note afaik it is not clear if Ghash.io didn't just break itself into multiple Sybil pools. The insoluble, inviolable mathematical fundamental remains that pools are concentrated control. And the political factions of Bitcoin rise up to keep the decentralization delusion alive so that we can delude ourselves more.

It is only necessary to maintain the illusion of decentralization coupled with massive gold rush fever every 2 years or so with price bubbles, in order to keep alive this delusional concept that miners are aligned to permissionless commerce.

Miners are aligned to usury, government, and fulfilling Bitcoin's role of "mining the investors" and fooling us all into wasting our scarce time on a flawed concept, when we should be trying to find a real solution for permissionless commerce before it is too late.

Don't you see how rapidly the world governance is coming into existence now? We have the UK now pushing to eliminate all encryption. We have China forcing everyone to join a social network for credit rating which forces people to banish those who do anything the Communist Party deems objectionable.

The miners can not fight this global trajectory and why should they? They piggyback on the trend of society and take their pay for being good servants to their bankster masters.

Afaics, the only paradigm that could fight this trajectory ('entropy' as you say) is a grassroots paradigm that disrupts the fundamental economic flaws in Bitcoin.


Yep. But even the claimed political action of current Bitcoin community to reduce pool concentration is more of a masturbation to sustain our delusion. We didn't really accomplish anything in terms of the fundamental flaws and the economics that insure Bitcoin will end up centralized. I will explain below why your erroneous optimism is a delusion.

Hey due to the way you write I can detect you are smart, so this is not a personal attack on you. I have also allowed myself to be deluded at many times in my life. Let's try to be more frank and objective. We are men. That is our role. Don't let our emotional dreams impact our analysis. What is the factual truth here?


I will instead claim the outcome always relies on economics. Human behavior is actually a derived effect from economics. Economics of resources determines how human behavior adapts.


It is the economics of how people derive their incomes and needs, that drives human behavior.

To get the sort of human behavior we want, then the humans need to find that permissionless commerce is buttering their bread but socialism is not. Refer to my prior post where I pointed out that if forking can viable, and masses discover those who are in permissionless commerce are earning more income than those in socialism, then suddenly they stop being dumb as shit. Animals are dumb as shit when they are fat and have all their needs met. I was pointing out to my gf and her sister how they have almost entirely forgotten how to carry a pail of water or produce anything on a farm, since they been living with me they can just play on facebook all day.


Mining is not at all accessible to the masses, but that is a detail that can be addressed with web browser clients. The economics are the real fundamental.


Thanks. Well I am only going to continue if there can be a genuine significant paradigm shift improvement over what we currently have with Bitcoin. I am not into trying to fool anyone or hype something. I want a coin I can go promote to permissionless commerce and know all my marketing efforts won't be wasted when it breaks.

I am interested in the real fundamentals.

There are some very smart developers around here. They just need the right direction. But I must fight against the concept that Bitcoin is any where near good enough. (and for many reasons, not just permissionless End-to-End Principle failure, also include that instant transactions via Lightning Networks will hand the masses to the corporate oligarchy and other insoluble flaws)


Back to Economics 101. The marginal producers are the first to go. The block halving will hand a greater percentage of the hash rate to the hydropower mining farms (and Larry Summers' 21 Inc) whose costs are probably below $50 per BTC. Bitcoin is designed to slowly transition to corporate control. Even Satoshi admitted that.

And those who think riding that trend is in their benefit, my thinking is they don't really have good foresight of where this shit is going to end up real bad for humanity real fast. We are talking about years, not decades.

And most BTC investors will end up losing, not gaining. The banksters are cleverly mining all of us via their funding of the mining farms. We are just stupid cows.

Perhaps the big problem we have to face is about the initial distribution, i am agree with superiority of pos system above the pow, but how can you make a fair initial distribution for avoid the whales to have a big portion of total coins and make most of stake blocks and get richer meanwhile small stakeholder get poor ...today i have not a answer to it

"DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)"

Crypto Bullion (CBX) now has PoSP (Proof-of-Stake Participation) which can equal Increased Decentralized Network Participation.

Also looking at a combined Proof-of-Value Network to equal Independent Decentralized Price Discovery through Participation.

A "Shield and Spear Paradox" of "Digital proof of ownership" - https://bitcointalksearch.org/topic/m.11901786

Arguably, against your opening gambit, such a 'solution' helps somewhat against centralization, although the (perceived) issue of 'scalability' perhaps remains.

Much work to be done still from a technical standpoint, although I thought that you might find this interesting.

Great thread BTW OP.

indeed, it seems that the flaws presented above assume there is inevitable entropy towards an unregulated tragedy of the commons. I would argue, however, that due to the inherent value of the decentralized system (i.e., if it loses that property it loses that value), that those creating the system would modify their behavior. Indeed, this has occurred with that one pool backing off of 50% nethash, and in general this is the concept that the economic incentive of maintaining the value of the system functions as the regulating mechanism of the commons. (granted, the network functioning in this fashion requires an awareness of the decentralized concept, so your argument of the dumb masses sort of wrecks this "solution". I mean, how would this manifest? If mining centralization caused a significant drop in value, who would actually connect the dots, and what would be done to fix it? Unknowns.)

Granted, this is not a pure solution - as in, it relies on human behavior. But ultimately these all rely on human behavior at some point. Cryptocurrencies have created an impressive gap between human behavior and the distribution, creation, and transaction of money - functions of value transfer systems that have heretofore been intricately coupled to human behavior. I would argue that it is very difficult, if not impossible, to create a gap between human behavior and the operation of the infrastructure that makes it possible.

Ultimately someone needs to turn it on and plug it in (and learn a lot of linux).

Finally, this isn't to discourage your efforts to improve the technology.


I think the current manifestation of professional mining will evolve as bitcoin shifts to lower block rewards. We really have no idea what the next halving will bring, nor the next one. I wouldn't be surprised if a majority of net hash gradually shifts back to the enthusiasts from the mining centers. The big corporate mining farms will shut down, the manufactures running these farms will liquidate their hardware, the hardware will flood the market and be distributed extensively.

For example, imagine that a million users are earning a good income doing business based in permissionless commerce the government would like to eliminate (such as the Big Pharma corruption I exampled upthread), and so they fork away from the masses's block chain when the governments is able to use their control of Coinbase et al (imagine a world government level of cooperation).

So then everyone can spend their coins on both forks. If there is this genuine Coasian barrier that forces the existence of a second fork, then the government can play Whack-A-Mole until they realize that the masses are catching on to the opportunities of freedom and individual empowerment.

The point being that doing such a fork would be nearly infeasible in Satoshi's design because all those who move in mass action are not going to be supplying PoW mining in Satoshi's design (thus the new fork can be easily attacked). The economics are not conducive in Satoshi's design for maintaining the fight for permissionless commerce.

This is the sort of ideal I want to work on! If I can be convinced I am not working on bullshit, I will be more inspired.

---

The professional miners' are aligned to paying back the loans they incurred to buy mining farms. Frankly I think your post is delusional. Get a grip on economics. Usury (debt) enables the banksters to take entire control of the economics of mining and charge the costs to the collective.

This is the fairytale lies crap that leads so many of us to be ideological fools. I want to kill this. I am so tired of these lies.

I hope you realize that the per BTC costs of some of the mining farms running off 2 - 4 cent electricity in WA State, USA, are probably sub-$50 per BTC.

And by aligning with government edicts and takeover which the dumb masses (and socialism) will be on board with, they are not shooting their own foot, rather maximizing the sustainability of their income source.

Sorry if I am so forceful, but I have heard these sort of rationalizations for the past 3 years and I think it is time we stop being delusional, don't you?

This reminded me "Decentralised Currencies Are Probably Impossible But Let’s At Least Make Them Efficient"...

I also am thinking along the lines of the last three posts and I also still want to reply to CoinHoarder's post upthread.

But before I respond to your 4 posts, I want to first discuss what are the real threats or problems with pools, because I think analysing this helps to understand how my idea for improving Bitcoin might play right into the theme of your 4 posts. Thus it does appear we are making some progress on mutual understanding. Thank you for the very thoughtful discussion.

Afaics the biggest flaw of pooled mining is that there is always an economic incentive to mine with a pool (in Satoshi's design) that has a double-digit percentage of the network hash rate, because otherwise revenue for miners declines (in scenarios). This is fundamental mathematics. Miners can in theory move their hashrate away from pools who are doing malfeasance, but it remains that 50% of the hashrate will always be concentrated into roughly less than a dozen or so pools. Thus pools are an easy target for government regulation and takeover control of the mining of Bitcoin. Or the natural mathematical tendency is for pools to form an oligarchy.

But more than that is that miners aren't users. They are people who invest in specialized hardware for a return on the investment. Thus their interests are not aligned to the interests of permissionless commerce economically (even though it might be ideologically, the fact is that over time mining will concentrate to those who maximize economic return from mining). Thus miners really don't have an incentive to fight government takeover. They will acquiesce because economically (mathematically) they must.

Whereas if users were the ones submitting at least 50% of the proof-of-work (and not doing so for profit but because they must with every transaction), then in theory their interests are aligned with permission less commerce so one would hope they would move away from pools that are doing malfeasance. But even then we know most of the masses are apathetic and clueless (e.g. will let Coinbase, MtGox, and Cryptsy store their coins), and thus they could maybe still be fooled, but at least then the issue isn't economically doomed but rather an education issue.

Also it can also be possible that the smartest minority forks away from the dumb masses and any malfeasance they might be doing on destroying permissionless commerce. For example, supporting Lightning Networks is dumb as shit if you want permissionless commerce because it can only work reasonably smoothly if run by an oligarchy of corporate providers. If the economics doesn't always drive the same failure again after forking away from the dumb masses, then perhaps my thread from 2013 No Money Exists Without the Majority can be proven incorrect.

So I am contemplating that the real threat to permissionless commerce are fundamental problems with Satoshi's design that would make forking away from it mathematically implausible:


Iota has attempted to go down this route and eliminated pools and mining for profit. But as I said, I think they introduced a Byzantine fault.

It can and is working, but perhaps not ideally. What we can say with certainty is that cryptocurrency will always be less efficient than a centralised service, but that doesn't mean it is untenable in general.

Completely decentralised, maybe it is (like FTL space travel). You could be 100% spot on, I'm not arguing that. However, maybe the notion of a completely decentralised currency is also flawed.

Since you genuninely seem to care for the common good, please consider what's more important to everyone: Perfection or improvement?

I could argue that the notion of value/power always leads to some centralisation or other. There is no technical fix to that, simply because: We have computers that can beat your computers.

On a practical level for overall improvement, the question becomes what implementation keeps centralisation in check as much as desirable.

I apologize for not reading the entirety of every post, but my opinion / thoughts are as follows:

one can consider a crypto currency network fully centralized if it is impossible to participate in the network without human-granted access.

once can consider a crypto currency network decentralized if it is possible to participate in the network by simply plugging in.

I.e., in these proof of stake / delegated / whatever, there is a human factor. An entity agrees to something. I get stake by buying it. I get delegate supervote powers somehow.

In PoW, you get hardware, you connect to the network.

the trick in keeping the PoW decentralized is to keep the hardware itself decentralized.

Note I added point #3 as why PoS is MUCH less secure than PoW.

Basically this boils down to the same conceptual tradeoff as the post where I replied to ArticMine, in that allowing decentralized participation enables unbounded conditions (which is a flaw) but centralizing participation also leads to another set of flaws.

Crypto currency is flawed as a concept. Appears it can't work.