8 ms·

BitsharesX Catapults to No. 3, Leaves Ripple Behind

27 points by tinkerrr 12y ago

ghshephard 12y ago
The 10 second confirmation time seems to solve a major problem with Bitcoins for casual transactions - the need to wait 30 minutes before you are certain that you've actually been paid. Another win is the emphasis on Transaction fees as the mechanism to incentivize people to ensure the integrity of the block chain, and note transactions.
- tinkerrr 12y ago
  True. That's a big part towards the move to proof of stake systems. Some people argue that the 'delegates' can collude to destroy the system, but this is more of a problem in Bitcoin, where just two major mining pools can collude to double-spend. In addition, since delegates are 'voted' by the people holding the currency, if anything funny is noticed people will immediately withdraw their votes (they have an economic incentive to do so), and thus the delegate ceases to be a delegate anymore and cannot extend the blockchain.
  - brighton36 12y ago
    Of the many problems with Proof of Stake, "Centralization" and the trivial-ness of a rollback are probably the two largest. (Though the "nothing is at stake" argument is very compelling) It's likely that Stake-chains are a wonderful way to run a company. It's probable that Stake-chains won't secure enough trust to maintain 'platforms' amongst anonymous and antagonistic holders. IMO
- brighton36 12y ago
  In PoW chains 10 second confirmations are a bug, not a feature. If Bitcoin's confirmation times were 10 seconds, you would have 1/60th the amount of hashing power/energy securing a block to the chain, which would be trivial to compromise. The solution to instant confirmations are in the form of 'latency insurance', underwritten by a trusted provider. This is implemented in Bitcoin via BIP70. It will provide 'instant' transactions.
  - maxerickson 12y ago
    So are those trusted providers going to be cheaper than Visa? Not just cheaper than what Visa charges merchants today, cheaper than what Visa can charge and still make money.
    - brighton36 12y ago
      Yes. Probably they will be free. Bitpay offers BIP70 for free to its merchants.
      - maxerickson 12y ago
        So that means they build the cost into their pricing, right?
        brighton36 12y ago
        Yes. If you want a more exact number, it's probable that the charges will be significantly less than typical miner tips. It may even be absorbed by miners in order to give the miner a better lead-time on entries in the mempool.
JamesArgo 12y ago
I never took Bitshares seriously. I thought their licensing strategy was insane so I dismissed them. Then I read their delegated proof of stake paper. It's one or the more rational, practicable alternatives to POW I've seen proposed.
- tinkerrr 12y ago
  What's their licensing strategy? Are you talking about the fundraising (Angelshares/Protoshares)? If you are, it sounds fair to me that the people who funded the development and project early on, before a final product was ever released, should be rewarded. Besides, the "licensing" is just a social consensus, not a legal one. The project is all open source. Agree with the Delegated Proof of Stake paper. It's well written and well implemented as well. Going forward, I am sure quite a few other projects in this space will adopt the idea.
- aaron-lebo 12y ago
  http://bitshares.org/delegated-proof-of-stake/ http://bitshares.org/delegated-proof-of-stake/ ...a link for anyone wanting more information about DPOS.
coinburgers 12y ago
Here's a good analysis of the (highly-questionable) economics of BitShares: http://prestonbyrne.com/2014/08/17/dont-walk-away-run/ http://prestonbyrne.com/2014/08/17/dont-walk-away-run/
- tinkerrr 12y ago
  Not sure if someone wrote a rebuttal. The author does get quite a few things wrong. I guess we'll find out soon enough. The markets for BitAssets are going to open this week, and a pure-prediction market will take over soon thereafter. There's a 'backup' strategy of centralized price-feeds instead of prediction markets that's published by a majority of the delegates if the market isn't able to maintain the peg or is easily manipulated.
  - querybitnap 12y ago
    http://prestonbyrne.com/2014/08/24/what-goes-up/ http://prestonbyrne.com/2014/08/24/what-goes-up/
- jabgrabdthrow 12y ago
  Check out the discussion in the comments here. The article you linked has effectively only one argument: that BitUSD will not maintain the peg in the event of a flash crash in BTSX value. The author and the lead developer of BTSX have a back-and-forth which clarifies the whole situation. http://prestonbyrne.com/2014/08/24/what-goes-up/ http://prestonbyrne.com/2014/08/24/what-goes-up/
  - querybitnap 12y ago
    Do you really need any more an argument than that?
    - jabgrabdthrow 12y ago
      Of course not, if you think it's likely don't put your money in. Even Bitcoin's rapid price drops in the past have not been fast enough to have triggered a peg break. And you're trading the risk off against the risk of a bank haircut or account freezes or what have you. Again, to be clear: I am not encouraging anyone to put their money into this.
philrapo 12y ago
I actually think this calculation methodology for "market cap" is flawed. The whole notion of market capitalization comes from the equity markets. It's calculated based on the total number of shares issued by the corporate treasury -- not the public float of an equity. (Public float means the number of shares that are released into public markets). When a public company does a secondary offering and releases more shares, that clearly doesn't result in an increased market cap. The market already knew that those shares existed, even if they weren't publicly traded yet, and things are priced accordingly. The convention for BTC and cryptocurrency in general seems to be to calculate market cap based on the total number of BTC that have been mined so far (~13mm). That's like the float. I'd argue that we should be using 21mm to calculate BTC market cap, since that's effectively what the "bitcoin treasury" has authorized. (To follow the anology, I think of BTC as doing a small secondary offering every 10 minutes.... but the market already knows this information and prices things accordingly. It should not result in an increasing market cap every time a new block is mined). Accordingly, I'd argue that this is a more accurate representation of market cap (view by total supply): http://coinmarketcap.com/currencies/views/market-cap-by-total-supply/ http://coinmarketcap.com/currencies/views/market-cap-by-tota... You can find a lot of stocks in the market with a very low float. For example, Pandora and LinkedIn only IPO'ed ~9% of the total shares.[1] i.e. The float is ~9% but the market cap is calculated based on the full 100% shares that are authorized by the treasury, even if they are held by the company and not publicly traded. The market still knows that those shares exist and can be released to the market at a future date. [1] http://online.wsj.com/news/articles/SB10001424052702303936704576399821664370538 http://online.wsj.com/news/articles/SB1000142405270230393670... disclaimer: i work on the ripple project
- goodside 12y ago
  And what about altcoins that issue an unlimited number of coins at a fixed annual inflation rate? If we price them as you describe, their value is infinite. The correct strategy is somewhere in the middle. Shares with pre-programmed future distribution (as happens in traditional mining-based coins) should contribute less to the calculated market cap as they recede further into the future, using some discount function that produces a finite, reasonable present value for coins with unlimited exponential growth of the coin supply. For coins with a central authority issuing distribution, the function has to be weighted by the credibility of the authority's plans. If some coin authors convince you that some portion of their coin will never enter circulation (e.g., if they publicly destroy them by sending to a vanity address so improbable that they could not possibly have a corresponding private key), you should drop those coins from your calculation of the cap entirely. If they merely promise to only release the coins slowly over many years, as with Ripple, your estimate of the market cap varies substantially based on how much you trust Ripple.
legohead 12y ago
remember when aurora coin skyrocketed to the top of the list?
- oco101 12y ago
  It is true but BitshareX it is not a coin it is a virtual vault it is so much more then any coin out there it is a DAC. You have a business model you have dividends, delegates etc. The mechanism behind it brilliant it the peg it is working this will be huge.
- deleted 12y ago
  [deleted]

27 points by tinkerrr 12y ago

The 10 second confirmation time seems to solve a major problem with Bitcoins for casual transactions - the need to wait 30 minutes before you are certain that you've actually been paid. Another win is the emphasis on Transaction fees as the mechanism to incentivize people to ensure the integrity of the block chain, and note transactions.

tinkerrr 12y ago
True. That's a big part towards the move to proof of stake systems. Some people argue that the 'delegates' can collude to destroy the system, but this is more of a problem in Bitcoin, where just two major mining pools can collude to double-spend. In addition, since delegates are 'voted' by the people holding the currency, if anything funny is noticed people will immediately withdraw their votes (they have an economic incentive to do so), and thus the delegate ceases to be a delegate anymore and cannot extend the blockchain.
- brighton36 12y ago
  Of the many problems with Proof of Stake, "Centralization" and the trivial-ness of a rollback are probably the two largest. (Though the "nothing is at stake" argument is very compelling) It's likely that Stake-chains are a wonderful way to run a company. It's probable that Stake-chains won't secure enough trust to maintain 'platforms' amongst anonymous and antagonistic holders. IMO
brighton36 12y ago
In PoW chains 10 second confirmations are a bug, not a feature. If Bitcoin's confirmation times were 10 seconds, you would have 1/60th the amount of hashing power/energy securing a block to the chain, which would be trivial to compromise. The solution to instant confirmations are in the form of 'latency insurance', underwritten by a trusted provider. This is implemented in Bitcoin via BIP70. It will provide 'instant' transactions.
- maxerickson 12y ago
  So are those trusted providers going to be cheaper than Visa? Not just cheaper than what Visa charges merchants today, cheaper than what Visa can charge and still make money.
  - brighton36 12y ago
    Yes. Probably they will be free. Bitpay offers BIP70 for free to its merchants.
    - maxerickson 12y ago
      So that means they build the cost into their pricing, right?
      - brighton36 12y ago
        Yes. If you want a more exact number, it's probable that the charges will be significantly less than typical miner tips. It may even be absorbed by miners in order to give the miner a better lead-time on entries in the mempool.

JamesArgo 12y ago

I never took Bitshares seriously. I thought their licensing strategy was insane so I dismissed them. Then I read their delegated proof of stake paper. It's one or the more rational, practicable alternatives to POW I've seen proposed.

tinkerrr 12y ago
What's their licensing strategy? Are you talking about the fundraising (Angelshares/Protoshares)? If you are, it sounds fair to me that the people who funded the development and project early on, before a final product was ever released, should be rewarded. Besides, the "licensing" is just a social consensus, not a legal one. The project is all open source. Agree with the Delegated Proof of Stake paper. It's well written and well implemented as well. Going forward, I am sure quite a few other projects in this space will adopt the idea.
aaron-lebo 12y ago
http://bitshares.org/delegated-proof-of-stake/ http://bitshares.org/delegated-proof-of-stake/ ...a link for anyone wanting more information about DPOS.

coinburgers 12y ago

Here's a good analysis of the (highly-questionable) economics of BitShares: http://prestonbyrne.com/2014/08/17/dont-walk-away-run/ http://prestonbyrne.com/2014/08/17/dont-walk-away-run/

tinkerrr 12y ago
Not sure if someone wrote a rebuttal. The author does get quite a few things wrong. I guess we'll find out soon enough. The markets for BitAssets are going to open this week, and a pure-prediction market will take over soon thereafter. There's a 'backup' strategy of centralized price-feeds instead of prediction markets that's published by a majority of the delegates if the market isn't able to maintain the peg or is easily manipulated.
- querybitnap 12y ago
  http://prestonbyrne.com/2014/08/24/what-goes-up/ http://prestonbyrne.com/2014/08/24/what-goes-up/
jabgrabdthrow 12y ago
Check out the discussion in the comments here. The article you linked has effectively only one argument: that BitUSD will not maintain the peg in the event of a flash crash in BTSX value. The author and the lead developer of BTSX have a back-and-forth which clarifies the whole situation. http://prestonbyrne.com/2014/08/24/what-goes-up/ http://prestonbyrne.com/2014/08/24/what-goes-up/
- querybitnap 12y ago
  Do you really need any more an argument than that?
  - jabgrabdthrow 12y ago
    Of course not, if you think it's likely don't put your money in. Even Bitcoin's rapid price drops in the past have not been fast enough to have triggered a peg break. And you're trading the risk off against the risk of a bank haircut or account freezes or what have you. Again, to be clear: I am not encouraging anyone to put their money into this.

philrapo 12y ago

I actually think this calculation methodology for "market cap" is flawed. The whole notion of market capitalization comes from the equity markets. It's calculated based on the total number of shares issued by the corporate treasury -- not the public float of an equity. (Public float means the number of shares that are released into public markets). When a public company does a secondary offering and releases more shares, that clearly doesn't result in an increased market cap. The market already knew that those shares existed, even if they weren't publicly traded yet, and things are priced accordingly. The convention for BTC and cryptocurrency in general seems to be to calculate market cap based on the total number of BTC that have been mined so far (~13mm). That's like the float. I'd argue that we should be using 21mm to calculate BTC market cap, since that's effectively what the "bitcoin treasury" has authorized. (To follow the anology, I think of BTC as doing a small secondary offering every 10 minutes.... but the market already knows this information and prices things accordingly. It should not result in an increasing market cap every time a new block is mined). Accordingly, I'd argue that this is a more accurate representation of market cap (view by total supply): http://coinmarketcap.com/currencies/views/market-cap-by-total-supply/ http://coinmarketcap.com/currencies/views/market-cap-by-tota... You can find a lot of stocks in the market with a very low float. For example, Pandora and LinkedIn only IPO'ed ~9% of the total shares.[1] i.e. The float is ~9% but the market cap is calculated based on the full 100% shares that are authorized by the treasury, even if they are held by the company and not publicly traded. The market still knows that those shares exist and can be released to the market at a future date. [1] http://online.wsj.com/news/articles/SB10001424052702303936704576399821664370538 http://online.wsj.com/news/articles/SB1000142405270230393670... disclaimer: i work on the ripple project

goodside 12y ago
And what about altcoins that issue an unlimited number of coins at a fixed annual inflation rate? If we price them as you describe, their value is infinite. The correct strategy is somewhere in the middle. Shares with pre-programmed future distribution (as happens in traditional mining-based coins) should contribute less to the calculated market cap as they recede further into the future, using some discount function that produces a finite, reasonable present value for coins with unlimited exponential growth of the coin supply. For coins with a central authority issuing distribution, the function has to be weighted by the credibility of the authority's plans. If some coin authors convince you that some portion of their coin will never enter circulation (e.g., if they publicly destroy them by sending to a vanity address so improbable that they could not possibly have a corresponding private key), you should drop those coins from your calculation of the cap entirely. If they merely promise to only release the coins slowly over many years, as with Ripple, your estimate of the market cap varies substantially based on how much you trust Ripple.

legohead 12y ago

remember when aurora coin skyrocketed to the top of the list?

oco101 12y ago
It is true but BitshareX it is not a coin it is a virtual vault it is so much more then any coin out there it is a DAC. You have a business model you have dividends, delegates etc. The mechanism behind it brilliant it the peg it is working this will be huge.
deleted 12y ago
[deleted]