Topic: is trollcoin (bytecoin) unwittingly the solution to bitcoins scalability issue? (Read 7298 times)

Anon136, we have been here a long time... remember $0.11? We also know that Satoshi originally intended lots and lots of competing *coins. These are all based on competitive systems, vying for the same "Master", Lord of the Coin, if you will. There is another form of value that everyone fails to acknowledge, you need to step back from economics and monetary-based systems and remember the precursors of money. It's a Trust system that can validate the honesty of the vendor/buyer instantaneously. That is what never got finished.
Bytecoin is exactly what Satoshi wanted. Landscape, territory for these *coins to explore/evolve in. We don't all have to be coders/miners, they can be single-minded - brilliantly single-minded, but the opening of *coins is needed. It gives something for us "non-coders" something to discuss. Have you ever wondered why the Bitcoin protocol was never completed? Competition begins @home.

I may have misunderstood but it seems that when you boil it down to its essence what you are talking about is a decentralized cryptocoin exchange. A decentralized cryptocoin exchange would be very helpful indeed.

So I've been thinking a lot about the scalability issue, and perhaps I've got a solution. It's not elegant, but it might be a solution.

I should preface this by saying that I do not have a degree in computer science nor a background in distributed systems or cryptography, and I should not be taken seriously. I have contributed a total of zero lines of code to anything Bitcoin-related. Those of you who do know what you're talking about: please shoot this full of holes as appropriate.

With that out of the way: one of the proposed solutions to scalability is centralization, which is undesirable because it trades Bitcoin's best features for convenience. Another is the multi-chain solution, which is undesirable because it makes already hard-to-use Bitcoin even more confusing to newcomers, and makes price-setting very hard.

I propose a hybrid of both. Rather than a central institution, a central blockchain that ensures commission-free, stable exchange rates between an unlimited number of compatible blockchains.

Let's call it MasterCoin.

This is quite different from any other coin that has ever existed. It is mined like any other coin - this is, of course, where the computational power comes from - but you cannot execute peer-to-peer transactions with it short of giving someone else access to your  wallet. Instead, one pool of alt-coins is maintained at a single, public address on the blockchain of every compatible alt-coin. This is where chain "compatibility" comes in: the associated blockchains must recognize this pool of coins, and execute disbursal from it based on the instructions from the MasterCoin blockchain (meaning compatible coins must constantly poll the blocks in the MasterCoin chain). Obviously no coins like this exist yet, so they would need to be created (or existing coins would need to be dramatically overhauled).

The only things you can "buy" (or sell) with MasterCoin are these alternative coins. The trade prices will be dynamically handled by supply/demand algorithms and published in every block. Once MasterCoin becomes established, these coin reserves will permit free and fair exchange between any two coins, since the shrinking of one coin reserve will result in a dramatic price spike. A mature MasterCoin should be able to handle market swings gracefully, just like a traditional forex market.

This allows prices to be confidently denominated in MasterCoin. The currency actually used to pay debt is irrelevant, since all compatible coins are made fungible.

Any thoughts?

yes infact the vast majoirty of my money is being bet on the idea that someone will find a 1 chain solution. I just put a very small amount into bytecoin and litecoin on the off chance that this does not happen. I call it a lottery ticket investment, small chance for payoff but massive payoff if things do play out so that we need multiple chains.

yes with 10mb blocks we could handle a visa like load probably, but there is every reason to expect that bitcoin could someday eclipse visa in prominence.

If I were to rely on the multiple coins solution, I'd be concerned about someone finding a technical one-chain solution to the problem. Then everyone would switch to whichever subcoin was most popular, and people holding the other coins would be screwed.

I'm a little unclear on the problem: couldn't one handle VISA-level loads on a residential connection?
https://en.bitcoin.it/wiki/Scalability#Network
Should I update something on that page?

sure.

Users could chose to run 1 blockchain as a full node then run a litenode for the other. That way ordinary people without specialized internet connections could contribute to the strength of a network. If we had only 1 chain instead of 2 with blocks that were twice as large than only people with specialized internet connections could run a full node this would lead to undesirable centralization.

notice as death and taxes pointed out, businesses would probably need to run 2 full nodes and so would need a specialized internet connection.

I am confused. How does having more coins create more mining resources? If there were ten bitcoin clones and the transactions are being done across them, it will still take the same amount of mining no? Or am I misunderstanding?

Yes i know about pruning. Im not talking about the problem of the size of the blockchain. im talking about the limitation on the total number of transactions a miner can receive and thus record in a 10 minute period based on bandwidth limitations. That is if bitcoin became the dominate currency of the world, there would be so many requests for transactions that a miner couldn't possibly download them all as fast as they were being relayed.

There is two solution.

1) The elegant one is compression and/or simplification. Making the blockchain forget all transactions and keeping last one.
For example:
Guy1 gives Guy2, 2BTC
Guy2 gives Guy3, 1 BTC
Guy2 gives Guy4, 1 BTC
Guy3 gives Guy4, 1 BTC
Now, all of that should be compressed, we don't need the track of the money, we can say: "well today Guy4 has 1BTC, doesn't care where it comes from". We must watch out if this can be exploited, of course.

2) There will be services who offer the full blockchain for a monthly fee. NEVER USE THEM. Keep the blockchain on your computer, or wait for free services who provides the blockchain like Electrum client does.
If we accept to pay to use blockchain, a lot of services like that will emerge, that is a bad thing. Remember my words.

I think it will get creamed by ASICs at some point.  After that, I think it will eventually recover, or another chain will emerge on identical software.

Still trusting a third party.  No MtGox will run absolute full nodes for every chain they trade (just like any other major business).  If you are going to implicitly trust a third party you don't need a secondary chain.  Just process bitcoin transactions off chain and major processors will do daily balancing on the blockchain (much like banks balance via bank wires today).

Ah well then instead of a litenode they could use a service like the ewallet service that is provided by blockchain.info for one chain and a full node for the other chain.

also if you are running some sort of business where you actually need to run 2 full nodes you can buy two internet connections.

Lite nodes are reduced security any business with significant volume across both chains will need to be running both nodes.  When MtGox starts trading LTC for example they aren't going to run a LTC lite node.  No they are going to have a full node running for BTC & LTC.  Still realtime bandwidth is not the critical resource for crypto-currencies.  Bandwidth you don't use is just wated but storage requirements are eternal.  Yes storage capcities will rise but so will bandwidth and storage & CPU capacity will remain the bottleneck.    People complain about how long it takes to sync Bitcoin full node now, sometimes up to 24 hours.  6GB in 24 hrs = 70 kbps.  Obviously most people aren't running on sub 70 kbps links.  The bottleneck isn't bandwidth.

Obviously if a single entity with a normal internet connection was capable of running both chains with a full node there would be no point in having 2 chains... since they could just run the 1 and include twice as many transactions. Obviously in this future scinario people would chose 1 chain to run as a full node and run the others as a lite node.

if half the people on earth run a full node on chain a and a lite node on chain b and the other half run a lite node on chain a and a full node on chain b than both would be perfectly secure. Why do you think this would not be the case?

Well that is the thing it DOESN'T address any problem.  Period.  For it to complement Bitcoin a significant number of nodes would need to run full nodes of BOTH chains.  For things like multi-chain clients with currency conversion to exist it would require an exchange for example to run full nodes of both chains to handle deposits, conversions, and withdraws.  

So that brings up two issues:
a) If exchange X can run full nodes of Chain A & Chain B then there is no bandwidth savings over running a full node on Chain A (having 2x the tx volume).
b) If Bitcoin is limited to y tps then to scale to 1000x that would require not just chain A & chain B but chains A .... ZZZ.  

BTW I am not saying Bitcoin will be the end all of crypto-currencies or that a system of complimenting Bitcoin by offlloading smaller lower value transactions can't exist I am just pointing out that the idea of parallel identical chains provides absolutely no added utility.  Bytecoin was simply a joke, nothing more.  It will be destroyed by ASICs or get pump and dumped and end up in the crypto scrapbin like other clones.

i understand that there are a dozen other possible scenarios that could address this problem other than alternative blockchains. The alternative blockchain is a gamble on the very real albeit small possibility that no better solution arises. Hence why you can get multiple of thousands of bytecoin for a single bitcoin.

Yeah lets see if Bitcoin can acheive the popularity of say PayPal before talking about new world reverse currency.  Honestly nobody has any idea of how popular Bitcoin will become over the next couple years and I have long believed Bitcoin (like most revolutionary technologies) is on a decade plus timeline to mass adoption.

BTW FedWire system transfers ~$600T (not a typo) annually and has a tx rate of ... ~7tps.  It is certainly possible in one of many scenarios Bitcoin evolves to become a store of value currency backing an entire next generation of crypto-currencies optimized for speed and low resource usage.  It is also possible the block limit will be raised in some fashion as miners realize that long term profitability would come from keeping the resource scarce but not too scarce.  Moon dust is far more scarce than Gold but Gold is a more useful currency.  Another possibility is some next generation currency which is more efficient with critical resources* replaces Bitcoin as the primary crypto-currency.   None of those require a bitcoin clone though.



* A ledger based crypto-currency which prevents tx which are unlikely to be spent again (through fee structure), encourages low cost UXTO reduction, and periodically trims the tail of the blockchain (i.e. super blocks with much higher difficulty) could possibly scale to much higher limits than what it possible with Bitcoin.

look guy, if bitcoin supplants the usd as the world reserve currency 10mb will not even be close to enough bandwidth to support that number of transactions without pushing fees into the triple digits. We are not speculating on bytecoin for the present we are speculating on the potential for its necessity in some distant future where crytocurrency is used for the majority of all trades in the world.

Where do you get the idea that tx bandwidth is a major limitation?  Most miners use pools, certain those bandwidth limited do.

100 tps (roughly 2x PayPal) * 400 bytes (average tx size) = 40 KBps.  Yeah not GB/s or TB/s but KB/s.  Now a miner will need to receive tx and send out the block and send to multiple peers but with the raw tx flow being 40 Kbps even a 10 Mbps connection provides sufficient headroom.  Bandwidth for tx was never a critical resource.  ByteCoin solves absolutely nothing.  Under your scenario ByteCoin would work in conjunction with another chain so any full node is likely going to need to be a full node on both chains meaning bandwidth requirements equal the sum of tx flows on both chains.

i saw the private message. Unfortunately, even as a person who is moderately technically included and does understand how bitcoin works, your message looked like french to me =(.