Topic: MasterCoin: New Protocol Layer Starting From “The Exodus Address” - page 98. (Read 448462 times)

I was explaining earlier in this thread how to turn arbitrary data into into valid pubkeys to get around that issue.

In addition Mastercoin would be very smart to retain (encrypted) data embedding in pay-to-(script|pubkey)-hash outputs as a backup, and in addition to that, make it possible to embed them in P2SH scriptSigs.

That presumes additional checks on pubkeys are not coming down the pipe, which is also awful presumption / advice.

hijacking the blockchain ~green light from Gavin?lol hmmm i wonder how many copy cats are going to jump at the chance to be the next mastercoin?  

Not anymore: Eligius won't mine anything that looks like it's storing data these days. I'd have to check with Luke, but I think the rules are currently that only IsStandard() scriptPubKey's will be mined, although P2SH scriptSigs can be non-standard.


Frankly I think that's awful advice in the case of Mastercoin and similar systems, precisely because they can get away with using standard transaction to achieve their goals.

Why risk having the reference client maintainers reject your transaction standard if you don't have to?

Note that http://eligius.st/~wizkid057/newstats/pushtxn.php will push a non-standard, fee-bearing transaction into Eligius-mined blocks.

Thus there is no requirement to fit the mold of a "standard" transaction that is relayed by most.

Typically the development process looks like

• Design the best transaction format
• Write software, prove it works on testnet
• Test on mainnet through manual miner submission, like the Eligius URL above
• Now you have a proven use case, and time has passed proving that your concept remains interesting to some user base somewhere
• Submit a patch to bitcoin/bitcoin.git, adding that transaction as a standard transaction

Some of these steps may be done in parallel, of course.

A lot happened while I was gone! Loads to read up on so I might be premature with my responses.

I am not against making the public keys look as much like 'real' keys as possible but in the end I wonder how much it will really help. If pools want to stop mining Mastercoin then can do so by simply ignoring any transactions that include a Mastercoin Exodus output. They wouldn't even need to check the public key.

However since we want to create valid public keys anyway we can just as well use Retep's proposed method instead of brute-forcing our way to a valid key.

With the message from jgarzik I think we should formalise the requirements for public keys and require that they are valid ECDSA points. This means that the following transactions would become invalid.


I think it's safe to retroactively make these changes since I believe these are all test transactions made by developers.

Before continuing overall development we should probably let J.R. make some decisions how we want to continue; brute-force a valid looking key based on the current spec or rewrite it to use Retep's system.  



I had a bug in my code that somehow did something weird with sequences. It should be fixed now and this transaction should properly show. Thanks for the report

My argument is it would not have the same momentum. Infrastructure without incentive or momentum wont be sustainable.

Mastercoin's crowdfunding provides incentive to develop it. Mastercoins are like stock/shares in the Mastercoin project allowing us to track the value of the Mastercoin protocol to the community and discover a price.

The issue of how to encode Mastercoin in the blockchain, blockchain bloat from altcoins trying to use the Mastercoin model, those are real issues. But I don't think Mastercoin owners will ever deem their Mastercoins worthless and I don't think Mastercoins are worthless because they have a function.

The criticism was that Mastercoin prices could fall through the floor but if that happened how would you have an escrow? So if someone released a Masterclone with free Mastercoins which do not have to be purchased how would the escrow work? What would back the goldcoins so that the supply of the gold coins can be precisely controlled?

If there are too many goldcoins they get destroyed. If there are too few goldcoins they get created. The escrow is the source of value for gold coins and the escrow gets it's source of value from Mastercoin which gets it's source of value from whatever people used to purchase the Mastercoins or whatever work people did to earn them. So if you made a clone system where you have infinite Mastercoins and they are distributed for free then how would you use those worthless Mastercoins as a source of value for the escrow? I don't understand how it would be possible.

I do think Mastercoins might be highly volatile but I don't see how it could easily fall below 1BTC per Mastercoin. I don't see how something built on top of Bitcoin and can hold the value of Bitcoin, Litecoin, Primecoin, USD or anything else, and which has far more functionality and potential market cap than BTC could be worth less than 1 BTC. The only way would be if the clone of Mastercoin somehow could duplicate the escrow system with empty Masterclones and I don't know if that is possible.

Basically why would I trust a currency created with an escrow of infinitely divisible valueless coins when Mastercoins have a price and I know exactly how much they are worth and that tells me how much it weighs on the value scale. So 1 Mastercoin is equal to 4 gold bars? Now the escrow system can work. Just like if you had a vault with fake gold in it you could probably fool a bunch of people into trusting it but if you know the original Mastercoin vault has real gold in it why would you choose the vault you know has fake gold? Because it's cheaper?

It's almost like going off the gold standard. Mastercoin represents the gold standard because it's based on real value that developers, investors and the community as a whole put into it. The Masterclone would just be some copy without being backed by anything of real value so it could be considered cheap money but it doesn't seem very intuitive to me why people would choose that.

Maybe we can pay a higher mining fee ( on msc transactions) so that they will include it

The same isn't true of a Bitcoin replacement, as you would start off with no miner or pool support, and would have to offer some sort of incentive to have people mine your coins instead of Bitcoin.
Mastercoin is sitting on the Bitcoin blockchain, with no infrastructure of its own.
That could be cloned instantly, and have exactly the same infrastructure support.

Well, the problem is you want blocking Mastercoin to be something that has to be done explicitly, through blacklists; that's politically more difficult to do than measures that are aimed at parasitic consensus systems in general.

One issue I forgot to mention is that address re-use may be discouraged in the future - transactions that pay scriptPubKeys that have been used recently might be discouraged. That every Mastercoin transaction pays to the 1exodus address is a problem. (though it does mean you can make an SPV client for mastercoin, at least SPV at the bitcoin level)

Thanks for the offer, but part of the deal with that anonymous patron was that I remain un-invested in Mastercoin and thus preserve my independence. It's the same thing I did with Litecoin for their 0.8 audit: I didn't accept any Litecoins up front as payment until my audit was complete on the basis that if I found something bad, the readers of the audit would want me to have no incentives not to reveal the problems.

Keep in mind that the Bitcoin Foundation does not control Bitcoin, right now at least. As an example at least %8.5 of the hashing power right now, Eligius, won't accept transactions to SatoshiDice or the  "correct horse battery staple" address. Eligius also uses non-standard fee rules, and will mine transactions with output values less than the dust limit. BTC Guild, 27% of the hashing power, also ignores the dust rules. I take advantage of this for timestamping stuff all the time, and there are enough nodes and miners out there that ignore the dust rules that all I have to do to get those transactions mined is disable the IsDust() test on my client.

The Bitcoin Foundation "officially" allowing mastercoin transaction may or may not have any effect at all on whether or not you can get them mined. Most likely IMO is you'll always be able to get them mined, regardless of what form they take, although it might take awhile and you may have to pay a fair bit to do so. It's possible that won't be true in the future though: Gavin has advocated that miners only accept blocks that contain nearly only transactions that they themselves would have mined, and further more contain nearly only the transactions that they were going to mine themselves. The logic behind this works on a number of levels: for instance if you only mine blocks that contain the transactions you yourself would have mined, you can make zero-conf transactions safer because miners who mine double-spends (even accidentally due to an attacker tricking them into doing it) will get their blocks rejected. Another aspect is how it can help shut out miners who mine "too few" transactions in their blocks, maybe because they have a low-speed internet connection and can only afford to mine the highest profitability, highest fee transactions. It also makes it easier to impose top-down rules on miners, perhaps because some transactions are considered "spam" or there's a desire to impose blacklists. (remember how you only need support of 50% of the hashing power to impose rules via block discouragement; right now that's BTC Guild, GHash.IO, and Eligius having control) Gavin also said he wants a very fast 6-9 month cycle of deliberate hard-forks, something that would very much centralize control around the Bitcoin Foundation.

More immediate inconveniences are how bare CHECKMULTISIG scriptPubKeys may be made non-standard in the near future in the reference client. (I've advocated this myself) I think you can say most of the dev team supports the idea to keep data out of the UTXO set, and make it more expensive to get data into the blockchain at all. Gavin and Mike don't like that idea last I heard, but don't assume their opinion actually counts for much. You should support stuffing Mastercoin data in P2SH transactions. (by that I mean the scriptSig spending a P2SH txout) Doing this also makes you immune to gmaxwell's P2SH^2 idea, and the overhead isn't big.

Speaking of, so a good way to think about this stuff is that there's always some cost to put data in the blockchain. Now if you are doing a standard transaction, the way Bitcoin intended, your cost is FeePerKB * 1. If you're doing something else, like a MasterCoin transaction where you need to go to a bunch of effort to encode it, your cost is FeePerKB * k. The overhead associated with, say, stuffing data into bare CHECKMULTISIG's makes your k higher, so you're basically paying more per transaction that if you were doing plain-old Bitcoin transactions.

Colored Coins have a real advantage here, because they are standard transactions and the data they need to represent matches that model perfectly. MasterCoin transactions on the other hand aren't, so you're paying a premium. Fortunately they're likely to be more valuable per transaction, so the premium is affordable, but you don't want to make a standard that isn't flexible.

Colored Coins have another big advantage too: they aren't global. In MasterCoin every transaction must be visible to every other MasterCoin user, which conversely means that every transaction is identifiable, and thus censorable with blacklists. Colored Coins are independent of each other, so those blacklists need to include up-to-date genesis transactions for every colored coin out there, and logic to follow them. Even worse is that some colored coin schemes hide what transactions are involved completely, preventing you from knowing anything at all unless you were a participant in the particular transaction. Now if you used a commit + reveal scheme, Mastercoin could be more censorship resistant, but there's a lot of issues with making such schemes work. (I'll try to talk about them in my paper that killerstorm mentioned eventually)

Finally, one last point: scalability. It'd be really convenient for some people in this community if we could set transaction costs to "reasonable" level - perhaps a penny each - through top-down control (like I mentioned above) regardless of what transaction volume Bitcoin sees. The problem with this idea is there will always be limits on maximum transaction volume due to the limits of technology, even without a blocksize limit. Stuff like Mastercoin, Colored Coins and timestamping, is really scary to these people because it involves use-cases with transactions that can easily be far more valuable to their users than standard payment-oriented transactions; people routinely pay $20 per trade brokerage fees when trading stocks without blinking an eye. Given that blockchain space is a market, it's easy to see how these very high value uses could crowd out the low-value payments that some people in this community are more interested in. Heck, just look at how the Multibit and Android Bitcoin wallet developers refuse to even add the ability to set transaction fees based on the idea that it's ridiculous to have people "fight" for block space, and that miners should just create bigger blocks. (even at the expense of their own profitability) Every application for the Bitcoin system that isn't payment-oriented is a threat to these people unfortunately, which is probably why they push so hard for things like insecure merge-mining systems.

The same could be said about Bitcoin. The momentum means businesses will be built up around Mastercoin and everyone will be looking at what Mastercoin is doing. Free isn't as good as profitable and people want to make money. Bitcoins are expensive but people buy them as an investment because the price continues to rise up. You could release a version of Bitcoins now and start over but all the businesses built around it and all the current Bitcoin stakeholders aren't going to put their support into that.
I'm betting that if you own Mastercoins and they are rising in price you're going to stick to it. So yeah you'll be loyal if you own Mastercoins because it's like owning stock. New people might not care about owning Mastercoins but the latest software updates will go to Mastercoin first and whatever copies it will always be playing catch up.

I'm not saying its impossible. In theory a large corporation could try to create a corporate Mastercoin and launch it as a free alternative but other than that I don't see how you can get the momentum without paying people to develop it. You're saying a bunch of programmers developing it for free will be as motivated as people who work on Mastercoin for a living. If you got a lot of Mastercoins and you don't have to worry about money anymore you're going to do a better job programming than a part time hobbyist. My argument is that momentum will build to a point where the people who are established early in Mastercoin will never have to work doing anything but improve Mastercoin. I'm betting that those people will be loyal and will be dedicated to keeping the value of the Mastercoin stock high. I consider the Mastercoins as a type of stock. I also think you will need some kind of coin whether it be free or not, and I don't see why anyone would switch to a new coin due to it being free for the reason that a new coin if its free cannot be seen as an asset. An asset is something you can purchase and watch its value increase over time, while if the coin were free it's not really an investment so how would it attract speculators in the first place?

The reason is Mastercoins are something people can use to track the value of the Mastercoin project. The ability to attract the value of the project has value to speculators. If Mastercoin didn't have a price and it were built up using Colored Coin or some alternative we would just have a user defined currency or smart property created within Colored Coin called "Mastercoin" which people would be trading to determine the true value of the Mastercoin project. Speculators are going to want to speculate on that regardless. So even if a new competitor or Colored Coin came about we would still have people trading Mastercoins within Colored Coin or within that competitor product. I don't know that the price would be as high with competition if the competition were able to keep up with the development but someone would for sure create a way to track the value of the project because that is the reason why these technologies are built.
For an IPO maybe you're right but thats not all Mastercoin can do. Colored Coin can do that and you have a point. Mastercoin can let you create a bitUSD. How do you create a bitUSD if it doesn't have something to give it value?

If Mastercoins have no value, if they are empty, how would we use them to create something which has value like bitUSD?
While I don't fully understand Mastercoin yet, it seems to make sense that in order to create value you must have something of equal or of greater value. Value doesn't just come from thin air. So Mastercoins have value and you can put that value behind anything and create an altcoin but if it didn't have value then how do you guarantee that the usercoins or altcoins created have value and how do you manage the price? bitUSD has to track exactly to the price of USD which means that it has a fairly precise value. So just like a scale something backing it has to precisely track the real world value of USD and I don't know how you do that without having something behind it. I don't see how Mastercoin could be completely free because some Bitcoins will have to be used to give it value at some point but I could be wrong.

Provide more detail on how escrow can be done with a completely free Mastercoin.
Mastercoin allows users to create user defined currencies by using Mastercoins as escrow. This means value isn't created or destroyed as far as I can tell. It's transferred from the Mastercoin into the user defined coin. How do you do that if Mastercoins are completely free and anyone can have as many as they want?

It wont get expensive. People will just use less of them. The question is what makes you think it can be done completely for free? How do you do escrow or back a currency for free? If you're creating goldcoin how can you do that with a free Mastercoin? If it's possible to do that then you have a point.
That isn't true. Colored Coins are not exclusively built into the Bitcoin blockchain and do not work the same way. Which implementation of Colored Coins are you talking about?

If just 1 satoshi were used then it would definitely be cheaper than Mastercoin. But would it be better?
Let's say you want to make a bet, how do you make a bet if you don't risk anything? How exactly will those user defined currencies which start out like that gain any value? Explain to me where the value would come from if not backed by something else? If people don't have to spend any valuable Mastercoins to give value to it then where does the value come from?

Explain your system in detail please.


Miners provided security but Bitcoin mining isn't as decentralized as Litecoin. It's not the only reason people stay on the Bitcoin blockchain. People are using Bitcoin because more businesses accept Bitcoin whether Bitcoin is better or not.

The argument you're making is that a stream of Mastercoin clones will come along and reduce the value of Mastercoin down to nothing. The clone, and the clone of the clone, and the clone of that clone, etc. The bigger problem would be whether or not the Bitcoin blockchain could handle all that traffic.

Wow!  This guy is huge.  We need him on board. 

Peter - if you give me a MSC address I'll kick down 50 MSC just for that very useful post.  Further, I'll challenge other MSCers to do the same next time we get this kind of excellent feedback which certainly makes this project go down a better path.

Exactly.  I am baffled as to why the bitcoin foundation wants to limit use.  Who cares if Mastercoin ends up doing a million transactions per second - we pay the same as anyone else.  Are they admitting that the blockchain cannot support high volume use? - then bitcoin is doomed. 

Sorry guys, should be all resolved now (and yes they look like valid transactions).

Masterchest-engine threw an exception that wasn't trapped so it was waiting for acknowledgement.  Root cause; running the whole thing (SQL 2008R2 included) on a t1 micro instance on AWS (~600MB RAM, yes I was asking a bit much ).  I'll clean up the exception handling in that routine and bring it down and clone to a more powerful instance when I have a mo.


Padding is just the most obvious example   I'd been focusing so heavily on making the keys ECDSA valid points I hadn't considered other forms of censorship & if Peter is correct about what the pools are doing, then ideally we obfuscate the whole key so it's indistinguishable from any other.


JR has stated a core goal of remaining censorship resistant which necessitates a design that does not require any permission/allowances (though of course it would be fantastic to have their support).  As for the 'buying' aspect, we're paying fees just like any other user of the blockchain - we'd like a miner to include our transaction and we thus pay them a fee to do so.  As reward halving decreases the amount of bitcoins mined per block, transaction fees are going to be an increasing part of a bitcoin miner's revenue stream so more transactions for bitcoin is not necessarily a bad thing if done the right way (which is exactly what we're trying to do).

Thanks!

This implicitly suggests that Mastercoin is not being designed by technical programmer types.  I claim BS.  That Mastercoin has brilliant funding - doesn't exclude the possibility that great programmers will use excellent technique in its development.  Why don't those colored coin proponents just get on the train.  Colored Coin is dead.  Now just move the talent that was unfunded at colored coin over to help the Mastercoin project.

What is the issue here?  Why do colored coin guys have to be such haters?

Maybe we can just do random padding (instead of all 0 paddings).  Then just test if its valid.

Another option is to ask bitcoin foundation to allow msc data transaction.   ( like telcos buying cell phone frequency from the government.)

Masterchest.info seems to be missing the 2 most recent Mastercoin transactions (each 50 MSC).
Both mastercoin-explorer.com and masterchain.info are showing these transactions.

I guess that's just a delay with masterchest.info and not a problem with the actual transactions, right?