Topic: Spin-offs: bootstrap an altcoin with a btc-blockchain-based initial distribution - page 17. (Read 53566 times)

yeah, i thought about that too.

but i know you're smart enough to know there could be other unpredictable knock on effects such as loss in confidence in the system not to mention feedback technical effects unforeseen.

That sounds great to me. My bitcoins become more valuable.

Sidechains will require hard coded changes to the Bitcoin protocol, not just scrypt.

Sidechains have this Tron-Like Effect on people.  they envision a fast paced system where bitcoins are zooming back and forth btwn sidechains at free will and with no consequences.  they forget that some of those riders went over the edge or the freeway they were riding on self destructed.  they fail to recognize that bitcoins were designed to work within the Bitcoin Network and time has proven that to be successful.  thru a technical attack on a sidechain, any bitcoins caught on that sidechain will be lost according to Adam.  plus, their function in that sidechain network won't "fit" in the same way that they do in the Bitcoin network, imo.  there will be bitcoins lost in any sidechain that fails.  is that acceptable?  what feedback implications will that have on Bitcoin?  what effects will changing the scrypt coding have?

does this seem simple to you?:

Greg:

A good chunk of it is up to the sidechain, so I don't think there is a single crisp answer.

I'm going to be terribly unfair here: I say unfair because it may look like I'm giving you a wall of complex, ill defined arguments, and suggesting you need to defeat each one. The fact of the matter is that there cannot be a single security story for all sidechains and thinking in this space is still developing. So I'm going to summarize the tools I've been thinking about to boost sidechain security beyond SPV levels. Some of them may be bad, and I'm not suggesting you should need to defeat all of them— I'm basically listing them to convince you that there is a lot of space here to build security better than "not being dicks", though perhaps not ideal for all applications.

But before I do, I want to suggest two thoughts:

The first— How sure are we that in the long run Bitcoin security is any better? We know that today vast majority of miners (people with hashing hardware) do not validate anything, we know that the vast majority of merchants do not validate anything, we know that the majority of end users do not validate anything. Yet validation is stupidly cheap today, and so what happens if its necessary to uncap the blocksizes and validation becomes expensive? Validation has basically perfect centralization gains (validate once instead of N times). What happens as the subsidy fades to nothing?

The second thought— What security is actually required? There are many applications for Bitcoin, they don't all have the same security requirements. There are people doing low value unconfirmed transactions today. They already can be pretty easily ripped off with the help of miners— can't some of these transactions move to a solution with reduced security even if no methods are deployed to increase security?

One of my goals for sidechains is that they may act as a pressure relief value so that floods of very low value (and low security requirement) transactions do not necessarily force all of Bitcoin security to the low level justified by these transactions.

Now on to increasing sidechain security beyond the SPV-ish level that you get from the basic sidechain idea, for each one I'll list the tool and what I consider to be it's main weakness:

(0) If a sidechain is universally used, then miners could enforce its correctness as a soft-forking change to Bitcoin (e.g. reject blocks that contain an invalid sidechain proof), and validators could adopt it too. At that point the security story is the same as Bitcoin's. This is weak in that it removes the loose coupling and freedom for full nodes to not validate a sidechain they don't care about. But it seems strictly better than just making the soft forking change in Bitcoin directly, since you're not forced to do so before anyone is even using it yet.

(1) My CoinWittness
 
post describes using ZK-SNARKS to construct compact proofs of correctness that could be used to convince people a sidechain spend is valid. This is weak in that it really cutting edge cryptography and the prover part takes a lot of resources but the verifier is trivial and if its used its purely additive in security.

(1a) It's possible to efficient proofs of valid execution in an interactive challenger model without invoking any novel crypto at all
 
. Basically the sidechain proof generator encodes a transcript of his verification process and commits to it. Then if his verification was wrong, a challenger shows up with a different commitment, and there is a log() communications process to decide which of the competing claims are valid. Because this is interactive, however, this is weak because if >50% of the Bitcoin hashpower blocks it they can hide the fraud proofs. It's also weak in that while the fraud proofs are log2() they can get somewhat large and the sidechain must implement its validation in a transcript producing model.

(2) The definition of the sidechain can specify a federation of parties that must threshold sign blocks (including, perhaps, updates to the federation list). This is weak because it creates a (distributed) point of centralization around the federation.

(2a) The definition of the sidechain can require that the spends are signed by systems running the verification code on remote-attest hardware (like arm trustzone). Then anyone can spin up a verifier and the security is tractable to the integrity of the remote attest and intel/amd/etc keys. This is weak in that no one has great confidence in the strength of remote attest . Though if it can be combined with (2) for purely additive security.

(3) Proof of Stake-ish federation: Have utxo in the sidechain provide public keys which are used to build threshold signatures that must sign the proofs. This is nice in that in the few-users case it degrades to perfect security, but at large sizes it may be hard to make both efficient and reliable.

(4) Econonmic incentives for honest mining can be created by techniques like bonding the creation or having some fee deferral tokens. Adam has thought more about ideas in this space than me. I generally think the economic incentive approaches are tricky to reason about.

I don't think this list is exhaustive, but it's some things I've been thinking about in terms of trying to making the design on the bitcoin side generic enough that sidechains are free to innovate in their security story too. Sidechains could implement zero or more of these approaches and potentially even change them through there life— e.g. boostraping in a federated-signing model but with a pre-programmed transition to more decenteralized security if/once that sidechain has grown enough.

Cyperdoc, I am very impressed.  You've already got two more influential people (Adam Back and Greg Maxwell) to consider the idea of spin-offs.

The question we need more consensus on is how will community behaviour change based on the new economic incentives from spin-offs?  I personally expect spin-offs to shift wealth in aggregate from alt-coins into the blockchain, not to siphon wealth from bitcoin to the spin-off.  I don't really see how the later is possible.

Like you said, it takes a hammer to alts that represent no useful innovation. 

my ongoing discussion with Greg Maxwell on Reddit:

Greg:  All that is particular premine proposal that rewards existing Bitcoin holders. It doesn't really address any of the things sidechains are hoped to be useful for, in particular it can only produce competing systems which will then have to fight over the little network effect we have. It's also still a get rich scheme for the creators of the altcoin (but instead they hope to buy up coins from people who don't care for nearly nothing, and then pump the heck out of the coin).

cypherdoc:

i disagree.

its helpful to picture both Sidechains and Spin offs (altclones) as a series of parallel chains running vertically (or horizontally if you prefer) centered on the Bitcoin blockchain. instead of the on/off ramps connecting the chains being technically based, as you are proposing, the on/off ramps are economic in altclones. this lets the free market link the chains seamlessly thru exchanges presumably. note that these exchanges don't have to deal with fiat or the regulations that go with that. the important thing is that these altclones are not connected technically to the Bitcoin protocol with all the risks that go along with that. look what havoc a minor change like the 0.7 to 0.8 caused via the block fork last year. you seem to trivialize the description of sidechains down to just a couple minor code changes in scrypt but fail to account for the numerous economic chain reactions that result from that. i'm not a coder, nor an expert in cryptography, but from what i've read so far from you, your proposal seems much more technically complex than i think you're letting on. i see that as a major risk for Bitcoin. at least with altclones, the protocol is totally walled off and has no risk. BTC stay in the Bitcoin network where they belong. an altclone reduces the altcoin down to a simple evaluation of it's merits as an innovation and will make that judgment from an economic standpoint, not risking a technical failure of the whole system that could occur from your proposal.

i also see no economic motivation for a dev to create a sidechain, unlike with an altclone.

the important thing to remember about altclones is that their birth will distribute the altcoins amongst existing Bitcoin holders which gives the altclone an immediate user network effect and allow Bitcoiners to welcome and assess the altclone on its merits as opposed to a threat. b/c of all the scamcoins that have arisen, we have entered a zero sum game situation where the scamcoins have been siphoning off much needed capital from Bitcoin. both proposals will eliminate that i think we agree.

altclones are not a guaranteed get rich scheme as you are describing b/c the dev has much more to consider now and will be forced to introduce an altcoin based on merits only since he cannot immediately profit from an individual premine or IPO only then to dump. b/c he has the most "insider knowledge" of his altcoin's merit, he can be rewarded by scooping up any coins dumped by naysayers from the skeptical Bitcoiners who dump their free coins once the free market for trading opens. even then he can't dump b/c the opening prices for these coins will probably be in the pennies. he'll have to keep working at the code and improvements to make his fortune grow. this is a reasonable economic risk that a dev should have to make.

let us not forget Satoshi's message from the genesis block:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."

from that, and his numerous posts, i deduce that Satoshi's main goal is to remove power from the banks.  any cryptocurrency that helps facilitate this would be supported by Satoshi, even if it is an altclone.

I can agree with your premise in bold, but can't see how this can suffocate innovation. If you try and convince me and I hope you don't try I'll still hold of judgment until a scientific study is conducted in the wild/ market.  


You concern of open source is only viable if you believe in the notion of IP or that information can remain proprietary. In a system where information / knowledge is accumulative and free to those who invest in learning it, duplicating others innovation can be seen as competitive and overall destructive, a spin-off makes that point mute, as it doesn't undermine the former by copying it, it makes the innovation accumulative by supporting it's base.

I assume the point you are making that you'd like input on is the following:



Money functions as both a means of exchange and a store of value.  What I think you fail to realize is that these are two seperate things: bitcoin as the network of nodes, miners and associated source code is the "means of exchange," whereas bitcoin as the entries in the unforgeable global ledger known as the blockchain is the "store of value."

The free market will naturally choose the best payment network (means of exchange) run from the most legitimate ledger (store of value)¹.  I expect that for the forseeable future, the market will decide:

     best payment network = bitcoin's network
     most legitimate ledger = bitcoin's blockchain

But now let's perform a thought experiment by considering a future where the community no longer perceives that the bitcoin network is the best payment network.  My intent here is to show that it does not logically follow that the community will abandon the most legitimate ledger at the same time--in fact, the economic majority will strongly favour retaining the same ledger as it is already perceived as legitimate and that is where their wealth and records are stored.  

For our thought experiment, consider the proof-of-stake coin NXT.  Image somehow that NXT slowly demonstrates to the cryptocurrency community that PoS is preferable to PoW².  So how would this play out?

The community will be overflowing with clones and spin-offs, several of them trying to redistribute value from the blockchain ledger in a way that they perceive to be "more fair."  There will be a great deal of confusion and the market cap of most the PoS clone coins will be very small.  

Let's assume that Satoshi is (a) alive, (b) has all his keys, (c) is a rational individual that works for his enlightened self-interest.  What could he do?

And herein lies the other thing I think you fail to realize: Satoshi has more economic power than any of us.  

It is in Satoshi's best interest to get behind one of the spin-offs that follow my principle, because he will retain the same % of wealth and the ledger is already perceived as legitimate by the economic majority.  If a certain spin-off looks like it already has a head start, he can get behind that, or he could simply launch his own.  But at some point, there will be discussion in the community that Spin-off Y based on Block XXXXX is preferable.  

Satoshi puts up a bid-wall at say, 1 : 10,000 and a few people dump to him (perhaps those in favour of deleting Satoshi's coins).  He then moves the bid-wall up to 1 : 1,000 and a few more people dump to him (those who favour deleting Satoshi's coins go "all in.")  The rest of us start to realize the dynamics at play.  Spin-off Y is about to become legitimate.

Now every one who didn't dump has a risk-free way to try an increase their percentage of the pie.  Speculators scramble to purchase coins of Spin-off Y and very quickly Spin-off Y becomes legitimized.  

The only re-distribution of wealth was as follows: those who tried to remove value from Satoshi by dumping the spin-off the community supported would lose wealth.  Those that realized what was happening and purchased spin-offs from those in favor of re-distribution would gain wealth.  And very importantly, the vast majority of the community who remained impartial and did nothing retain the exact same % of wealth.  

Remember, Satoshi has a lot of coins.  If the "stampede" into Spin-off Y doesn't occur at 1 : 1,000, Satoshi can keep moving up the "peg" until it does.  The longer this process takes, the richer Satoshi becomes and the poorer become those who fought the process in favour of re-distribution.    

Also note that just the fact that Satoshi could do this means that he may not even have to.  We will all do it for him.



¹My definition of the terms "best payment network" and "most legitimate ledger" are not subjective or ambiguous.   I am defining the term "best payment network" to mean the one most adopted by the community, and the term "most legitimate ledger" to be the ledger that actually gets used by the economic majority.

²Something I highly doubt will ever happen.

We shouldn't rely on personality. For all we know, Satoshi died months ago, and his keys just now fell into the hands of his heirs, who have different personalities and goals. Or maybe a thief broke into his home and stole his paper wallet. Satoshi's past behaviour may not be a good predictor of what a new owner will do in future.

from Adam Back on Reddit to me:



cypherdoc:  this is an example of an elegant, simple economic solution to the altcoin problem and a way to weed out (in?) true innovation: https://bitcointalksearch.org/topic/spin-offs-bootstrap-an-altcoin-with-a-btc-blockchain-based-initial-distribution-563972
     
i'd be interested to hear your opinions on it.

Adam:  yeah that is fiendishly clever. Its still an alt however, with a sort of soft-premine (disguised premine) by just giving them to everyene then buying them early for real money at low prices.

I still think alts are fragmentary and its better to build on network effect.

Sorry but i do not agree.

This is not about letting early adopters of BTC remain BTC rich. That's fine they were there early they took the opportunity they are now rich.

However alts are a NEW separate opportunity. The BTC whales are no more early adopters of alts than anyone else. They therefore do not automatically deserve to have alt coins " reserved for them" for doing nothing more than anyone else. That very notion trying to spin this as the fairest way for everyone is not going to wash with most people.

Your statement those that are BTC rich are rich....yes great that's fine. Has no bearing on what i was saying.

So let me just get a yes or no answer...

Are you saying if you have 10% of all BTC you should have 10% of the new alt chain?  If you have 0 BTC you will get 0 altcoins?  yes or no?

If yes..

It will be very hard to try and argue that it is more fair than the other 2 methods of distribution i mentioned before.

Also these worthless alts?? LTC, Ripple? doge? they do not influence you wealth?

Nobody that is not BTC rich will consider going for new alts whose distribution is mapped according to the btc chain.

This would only be seen as a good idea on the BTC forum.

I'm not saying that it's not a good idea for crypto but it certainly isn't the fairest way of distributing alts.

I really like the idea of bootstrapping other experiments off the bitcoin endowments.

I'd first considered endowment reuse in the context of a crypto-catastrophe (restarting a new currency, using an old checkpoint of endowments) or coin-civil-war (irreconcilable differences which lead to two long-lived incompatible chains, descending from some common parent). But of course the technique doesn't need to be limited to such crises; it can help other experiments bootstrap with a broad audience of proven cryptocurrency adepts.

Obviously the idea is generalizable to making a distribution that's any scaling, truncation (in time or values), partial-randomization, or other function of Bitcoin endowments, as others have mentioned.

However, I think there's another supercharged variant that's possible, that I haven't seen mentioned yet. It'll seem wacky at first, but give it some thought... it may help cement the spincoin into a certain beneficial relationship with the 'seed coin' (usually Bitcoin).  

The variant:

Rather than picking a magic checkpoint, at which the spincoin distribution (for a single genesis moment) copies the parent seedcoin, issue the spincoin as a continuing, perpetual dividend from seedcoin holdings across all time, including the past, and the future (as it arrives).  

As an example, let's call our theoretical spincoin Sumcoin, and the seedcoin Bitcoin.

Imagine that for every block-tick you've held bitcoin-satoshis, you would be entitled to an equal number of base sumcoin-units. You'd redeem them with a specific claim(bitcoin-txo, start-block, end-block) action in the spincoin chain. Did your key(s) control a 10,000 satoshi output for exactly 200 blocks? Sign your spinclaim for that holding period, get 2,000,000 sumcoin-units. (Of course, that same range of holdings can only be spinclaimed once.)

That is, the Sumcoin endowments are the integral of the mother-Bitcoin holdings. If you held Bitcoin in the past but sold it all, you can still claim some Sumcoin (as long as you've retained your keys). That is, the incentivized audience for Sumcoin is everyone who's ever held Bitcoin. And, as long as you continue to hold Bitcoin, you get a stream of Sumcoin, claimable on demand.

Of course, there's far more Sumcoin numerically, and indeed its total issuance is growing by the size of the total Bitcoin endowment every block. But that's all just a giant factor larger than Bitcoin, and completely constant/predictable in both its magnitude and to which actors it accrues.

Once all Bitcoin is issued, Sumcoin's inflation is similar to Dogecoin, a small constant amount each period. That is, unlike inflating fiat monies, it doesn't use unpredictability, or closeness to the monetary-authority, to achieve surprise redistribution.

If there is a benefit to a permanently-but-predictably inflating currency, as many have conjectured, Sumcoin might best capture that benefit in a manner complementary to Bitcoin – because it's a linked funhouse-mirror-twin of Bitcoin. (That is, it might fill this niche better than coins with demurriage or other forms of permanent inflation, and other arbitrary initial distributions.)

In the large, the relationship could fortify Bitcoin's role as the permanent, undilutable equity shares of the cryptoeconomy, with frothy Sumcoin used for lower-value/higher-velocity consumptive transactions.

why do you think I need someone to do it may way so bad?  You are way off in the weeds.  I dont think that it necessarily NEEDS to be done, which is where youve been all off the whole time.  My point all along is that it would be risky for an innovative altcoin to include satoshis millions. 

but since your debate skills are so weak lets just leave it at this..  when some genius coder releases an innovative crypto and includes satoshis millions, then ill award you a cookie.  and ill bow to that coder cause he will have a huge set of balls between his legs.

thats all im saying, this whole discussion.  that a coder with an innovative crypto that has the possibility to take over BTC may think twice before including satoshis millions.  will satoshi ride the new altcoin's fortune?  or will he dump his holdings of the altcoin so as to allow BTC to reign?  thats all im saying, here, is that there is a hard decision here for someone with a novel new crypto wanting to use the BTC blockchain distrib.  satoshi so far seems to not care about cashing out all his BTC and getting mega rich.  so this lends credence to the thought that he cares more about BTC than fiat.  thus my position that he may crash a new altcoin that threatens BTC.

i have no clue why you seem to think im arguing something else.  and like I keep saying counterparty's was best for BTC anyways.

those are just examples i've thrown out which can be mutually inconsistent.  point being, we don't know what he will do or even what he has.  and we shouldn't care.

what's your problem here?  i'll say it for the umpteenth time:  go right ahead and issue your altclone minus Satoshi.  i don't care.  can you hear me?

i just think you'll lose for all the reasons i've tried to tell you.

Let's let the market decide, okay?


Because you are free to create your own distribution schemes, and go right ahead and start your own thread discussing them. Peter R has his scheme, which may or may not "work," but the only real way to find out is to try it. Proposing alternate schemes does not help test this one.

When you start confusing forking with stealing and theft, how much of that dribble am I supposed to quote? I quoted enough to show how confused you are.

The right to fork (and have your fork adopted by the community if the community should so choose), is a foundational and universally accepted tenet of open source. You really should go learn about it rather than continuing to so vividly demonstrate your ignorance.

the amount or % of altclones he has is irrelevant.  I say he may dump his altcoin holdings because BTC is his personal triumphant achievement and a novel altcoin (not some dump generic sha256/scrypt pumpndump coin) that begins performing very well would be a threat to BTC.  you even admitted to the fact that he has lots of BTC early on in the discussion when you said that "maybe we shouldnt piss him off" or something like that. then you flip flop.  You have flip flopped here twice on whether or not SN owns tons of BTC.  first you say he does and may dump it all if we piss him off.  then you try to make another argument based on that he probably doesnt and demand that I prove he does.  and then you switch back to saying he does.  You have pretty much lost all credibility for an argument, so unless you can make a stance and stick with it, any further argument on your end has zero merit unless you want to take a stance and stick with it.

i get the impression (but I may be wrong here) that you are looking at the term "altcoin/altclone" as a generic sha256/scrypt derivative that has nothing new to offer and is only designed for pump and dump.  If that is the case (may not be though) then sure,  give SN all he wants of those.  Im not concerned in the least with those.  its the coins that show technical merit that I am interested in.

sure, the OP will do his experiment with aether and it  will be very interesting.  Fortunately ive got quite a bit of liquidity I can move into BTC and participate in these schemes myself.  But like I said, I seriously doubt that a truly innovative altcoin will do it this way.  Counterparty's is the way to go in this regard.  And this is coming from someone that has never even owned any counterparty.

why do you suppose peter has not given any input in on my position?

Based on what I've learned from this thread, I now believe your question contains a logical fallacy and if removed turns your question into a truism.  As ghdp put it:


I think if you remove the spurious words from your question, you get the following statement


since "BTC-rich" is just another way of saying rich and "alt-coin rich" in an alt with little market cap is largely irrelevant to your wealth. 

This thread contains more discussion on the "I don't want to make early adopters rich" fallacy: https://bitcointalksearch.org/topic/i-dont-want-to-make-early-adopters-rich-517759

Hmmm ? innovation will come through the desire to become number 1 or even to survive in this market. This will suffocate innovation. Everything being open source i think causes some issues with the devs knowing full well all their work can be replicated at the touch of a button. That suffocates new innovation more in my opinion.

I will never support this kind of thing in crypto even if i had 10M BTC it simply is not fair.

Imagine this being suggested in any other market? crazy.

However if everyone wants it for some unknown reason then go ahead with it .... i see a LOT of critics waiting for it though.

Even basing it on LTC would be slightly more fair, a LOT more people had access to mine LTC. Although even that for the recent wave won't be seen as fair, and honesty it probably isn't.

Anyway that is just my personal opinion .... others must decide on what they think is fair. However asking for someone to describe how they feel it is unfair is laughable.... it is quite obviously less fair  for the reasons i have listed. Even if that does not explain or persuade you it is unfair, i have listed ways to distribute that are without doubt...more towards fair.

Nobody is arguing market distribution is not as important or even more important that POW mining. However still there are ways to get more alts into more hands that have paid the same amount that what you are proposing.