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I find the proposal that Bitcoin may want to setup central authorities (that can be federated) to support 2-way sidechains more. A lot of the Bitcoin luminaries

by mpyne 12y ago

I find the proposal that Bitcoin may want to setup central authorities (that can be federated) to support 2-way sidechains more. A lot of the Bitcoin luminaries now seem to be coming around to the idea that regulation is OK and that trusting authorities (instead of just math) isn't the end of the world. But that raises again the question of why one would use a value-transfer system designed to be wasteful of electrical power (with the amount of waste going up as Bitcoin price goes up) instead of a distributed network that handle secure value storage/transfer as efficiently as possible. E.g. patio11 has described such a system (Stellar, https://www.stellar.org/ https://www.stellar.org/) and while I don't know enough about Stellar to speak intelligently about it, even without Stellar there's good ol' fiat-based networked systems. Visa alone can handle 47,000+ tranx/sec vs. Bitcoin's 7. It seems to me that Bitcoin's unique strengths have been reduced to international remittance use case, and even that appears subsumed by Stellar (and if Stellar doesn't pan out, by existing money remittance services who can easily drop their cost below the equivalent cost to transact in Bitcoin, unless Bitcoin suffers an extreme price drop). The only other area I see is that Bitcoin will become simply a digital commodity (a virtual gold or silver), but if this happens the price speculation would destroy the usefulness of Bitcoin as a unit of account and as a means of efficiently exchanging value.

maaku 12y ago
> A lot of the Bitcoin luminaries now seem to be coming around to the idea that regulation is OK and that trusting authorities (instead of just math) isn't the end of the world. That definitely deserves a citation needed. Accepting regulation? Yes, sure. "Trusting authorities (instead of just math)"? Absolutely not. If you are ok with that, then why use bitcoin at all? A simple ledger on a central server works just fine and saves a lot of trouble. The federated two-way peg is at best a temporary measure. The first most obvious improvement is to conjunctively add the SPV security trustless peg as well, such that using a peg requires signatures of the functionaries AND a valid proof. Then the worst they could do is freeze your coins, which we're still not happy with. Another improvement not in the paper is to spread the functionaries out into multiple jurisdictions and selected from multiple distrustful groups. E.g. it would be nice if there were functionaries in Iran and China as well as the U.S. and Europe. > E.g. patio11 has described such a system (Stellar) Stellar's consensus algorithm (the same as Ripple's) is broken by design. It will not work as advertised, and provides little better security than the existing fiat system.
- pa2013 12y ago
  Can you say a bit more about what's wrong with Ripple's consensus algorithm? Or link to a critique?
  - kanzure 12y ago
    > Can you say a bit more about what's wrong with Ripple's consensus algorithm? Or link to a critique? https://wiki.ripple.com/Consensus#More_Details https://wiki.ripple.com/Consensus#More_Details https://ripple.com/wiki/Unique_Node_List https://ripple.com/wiki/Unique_Node_List Something like ".... ripple consensus is local, the cost to join is zero, membership is defined by who trusts you.." but I'm forgetting the exact link where this is fleshed out.
  - socrates1024 12y ago
    My opinion is the Ripple consensus algorithm doesn't yet meet the security claims its stated to in their whitepaper. There's an ongoing discussion here: https://forum.ripple.com/viewtopic.php?f=2&t=7801#p56432 https://forum.ripple.com/viewtopic.php?f=2&t=7801#p56432
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by mpyne 12y ago

maaku 12y ago

> A lot of the Bitcoin luminaries now seem to be coming around to the idea that regulation is OK and that trusting authorities (instead of just math) isn't the end of the world. That definitely deserves a citation needed. Accepting regulation? Yes, sure. "Trusting authorities (instead of just math)"? Absolutely not. If you are ok with that, then why use bitcoin at all? A simple ledger on a central server works just fine and saves a lot of trouble. The federated two-way peg is at best a temporary measure. The first most obvious improvement is to conjunctively add the SPV security trustless peg as well, such that using a peg requires signatures of the functionaries AND a valid proof. Then the worst they could do is freeze your coins, which we're still not happy with. Another improvement not in the paper is to spread the functionaries out into multiple jurisdictions and selected from multiple distrustful groups. E.g. it would be nice if there were functionaries in Iran and China as well as the U.S. and Europe. > E.g. patio11 has described such a system (Stellar) Stellar's consensus algorithm (the same as Ripple's) is broken by design. It will not work as advertised, and provides little better security than the existing fiat system.

pa2013 12y ago
Can you say a bit more about what's wrong with Ripple's consensus algorithm? Or link to a critique?
- kanzure 12y ago
  > Can you say a bit more about what's wrong with Ripple's consensus algorithm? Or link to a critique? https://wiki.ripple.com/Consensus#More_Details https://wiki.ripple.com/Consensus#More_Details https://ripple.com/wiki/Unique_Node_List https://ripple.com/wiki/Unique_Node_List Something like ".... ripple consensus is local, the cost to join is zero, membership is defined by who trusts you.." but I'm forgetting the exact link where this is fleshed out.
- socrates1024 12y ago
  My opinion is the Ripple consensus algorithm doesn't yet meet the security claims its stated to in their whitepaper. There's an ongoing discussion here: https://forum.ripple.com/viewtopic.php?f=2&t=7801#p56432 https://forum.ripple.com/viewtopic.php?f=2&t=7801#p56432

deleted 12y ago

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