4 ms·

Their assumption of 2 channel roll-overs per year per person is quite likely far too low. In their comparison they basically state that a person would be partic

Their assumption of 2 channel roll-overs per year per person is quite likely far too low. In their comparison they basically state that a person would be participant in a channel roll over per 3650 transactions made. This seems to be overly optimistic considering that the acceptable credit card chargeback rate is 1%. 36 times per the rate of channel roll overs. In addition even nicely working channel has to be created. So even without anything like chargebacks assuming 3650 transactions per year on a single chain seems to be extremely optimistic. It might reduce spam on the network though. Bringing us from the 240G blocks into 24G blocks (Based on the well known Stetson-Harrison method). A fine improvement, but doesn't really seem to be a silver bullet for the scalability issues.

moe 12y ago
This seems to be overly optimistic considering that the acceptable credit card chargeback rate is 1%. 36 times per the rate of channel roll overs. That may be true. But even when multiplied with your proposed factor 36 it still looks very promising: ~4.7G blocks, ~108Mbit/s, 252T/yr for full blockchain archival. In fact, that looks almost too good to be true for a blockchain with 7 billion participants. Did I make a mistake in my math? Keep in mind that (if I understand it correctly) these are only the requirements for miners ("supernodes"). Mere mortals would largely operate off-chain (and SPV) with near-zero bandwidth and storage requirements.
- sharpneli 12y ago
  Even if it would help that much the original issue with scalability still remains. It's not feasible for any individual to validate the blockchain. Maintaining a full node is going to be expensive. So even in the best case it would be "Instead of scaling ridiculously badly bitcoin scales only horrendously badly". A natural solution for this, if we really really want to get cryptocurrencies to work, would be to basically have a cryptocurrency per nation or so, with different PoW function to avoid shifting asics around. The only reason Bitcoiners want a person in Argentina to keep a Finnish potato sack purchase in their books is just to pump up the value of their 'investment'. Every solution made in relation to Bitcoin is made from the viewpoint that if it would make any current Bitcoin holders potentially miss out on global domination it's ignored. Even if it would actually work better.
  - moe 12y ago
    It's not feasible for any individual to validate the blockchain Huh? The above numbers are well within the reach of most western individuals even today. A rented server in the $50/mo range can trivially plow through ~100Mbit/s of SHA256 verifications. 250T of storage on spinning rust can be rented for ~$1000/mo from e.g. Hetzner (and obviously a fraction of that if you roll your own). By the time a Bitcoin adoption of 7 billion users becomes anywhere near realistic you will probably have this kind of storage and CPU capacity in your Smartwatch.
    - XorNot 12y ago
      >By the time a Bitcoin adoption of 7 billion users becomes anywhere near realistic you will probably have this kind of storage and CPU capacity in your Smartwatch. If this type of processing power became true, other things would become untrue. For example the cumulative hash-breaking power of the world would be much, much higher. Also we'd have effectively limitless energy sources (how are you powering that multi-core smartwatch?) And it would still be a much better use of resources to do literally anything else for currency.
      - moe 12y ago
        the cumulative hash-breaking power of the world would be much, much higher Why would the "cumulative hash-breaking power" grow somehow disproportionally to the general computing power? how are you powering that multi-core smartwatch? Likely in the same way as your current multi-core smartphone?
        XorNot 12y ago
        Because the Bitcoin hash function doesn't change, can't change, without effectively wiping out Bitcoin. Which is a bad thing for a currency in general. Which means SHA256 is getting weaker proportional to all power in the world - since confidence in Bitcoin depends on the idea that it can't break - not that "only people using it can't break it". Of course, this is already true anyway - the largest mining pool has been large enough to carry out 51% attacks for a while now, even before it was shown you could do it with much less power. >Likely in the same way as your current multi-core smartphone? Battery technology hasn't gotten appreciably better in a decade. And even if you could get enough power, how do you handle the heat? And even assuming all that...you then run into the problem above. The power of every other computer in the world will be a lot higher.
pash 12y ago
If I'm reading the slides right, longer chains of transactions on a side channel do not increase risk, so it's innappropriate to imply that a more heavily used side channel introduces risks comparable to credit-card chargebacks. Each party to the side channel has a multisig transaction signed by the other parties involved, so if one party cheats (or fails to comply for innocuous reasons), then any party can shift the entire chain of transactions to the blockchain without risk. So the only reason you don't want side channels to persist for too long is that each party has to keep around more and more information as the number of transactions over the channel increases; that's burdensome in its own right, but it also likely means that a side channel naturally decays over time, as the probability increases that one of the parties involved drops out or loses track of information. So you don't want to roll over side channels too many times, but it's not a matter of risk of trust. This really is a very simple and elegant solution. Basically, it recognizes (1) that cryptographic verification of intermediate transactions only needs to be shared among the parties involved, rather than among the entire network, and (2) that any sequence of transactions among a sub-network of parties can be considered as a string of intermediate transactions. And (3) it requires no trust because the entire sequence of transactions can be moved onto the blockchain by any party at any time.
- sharpneli 12y ago
  Sure. I simply meant that the assumption that an average person participates only in 2 chains per year and performs 3650 transactions in one chain is really far fetched. Consider the amount of transactions you do. Basically every party becomes a single side channel which requires some activity in the actual blockchain. It would reduce the amount of transactions that are the style of "My local supermarket which I visit every other day" but not anything else.
  - pash 12y ago
    This technique can be applied to created side channels among any connected sub-network of Bitcoin users, so if we're able to build good technology to figure out when to create a side channel (and with whom), it's likely that a large fraction of all transactions could be moved into side channels. It really does have very good potential for scaling the Bitcoin network by an order of magnitude, or two or three. Combined with increases in the block-size limit, this technology and others are increasingly making it seem like scalability is unlikely ever to be a real problem for the Bitcoin network. (And file that under great problems to have.) Recently I've seen scalability cited as a demerit of the Bitcoin network more and more by people who don't keep up with the technology and the community developing it—and less and less by people who do. Good progress is being made. But I agree with you that the rough assumptions the authors used to quantify this technique's potential to scale the network don't make much sense.

moe 12y ago

This seems to be overly optimistic considering that the acceptable credit card chargeback rate is 1%. 36 times per the rate of channel roll overs. That may be true. But even when multiplied with your proposed factor 36 it still looks very promising: ~4.7G blocks, ~108Mbit/s, 252T/yr for full blockchain archival. In fact, that looks almost too good to be true for a blockchain with 7 billion participants. Did I make a mistake in my math? Keep in mind that (if I understand it correctly) these are only the requirements for miners ("supernodes"). Mere mortals would largely operate off-chain (and SPV) with near-zero bandwidth and storage requirements.

sharpneli 12y ago
Even if it would help that much the original issue with scalability still remains. It's not feasible for any individual to validate the blockchain. Maintaining a full node is going to be expensive. So even in the best case it would be "Instead of scaling ridiculously badly bitcoin scales only horrendously badly". A natural solution for this, if we really really want to get cryptocurrencies to work, would be to basically have a cryptocurrency per nation or so, with different PoW function to avoid shifting asics around. The only reason Bitcoiners want a person in Argentina to keep a Finnish potato sack purchase in their books is just to pump up the value of their 'investment'. Every solution made in relation to Bitcoin is made from the viewpoint that if it would make any current Bitcoin holders potentially miss out on global domination it's ignored. Even if it would actually work better.
- moe 12y ago
  It's not feasible for any individual to validate the blockchain Huh? The above numbers are well within the reach of most western individuals even today. A rented server in the $50/mo range can trivially plow through ~100Mbit/s of SHA256 verifications. 250T of storage on spinning rust can be rented for ~$1000/mo from e.g. Hetzner (and obviously a fraction of that if you roll your own). By the time a Bitcoin adoption of 7 billion users becomes anywhere near realistic you will probably have this kind of storage and CPU capacity in your Smartwatch.
  - XorNot 12y ago
    >By the time a Bitcoin adoption of 7 billion users becomes anywhere near realistic you will probably have this kind of storage and CPU capacity in your Smartwatch. If this type of processing power became true, other things would become untrue. For example the cumulative hash-breaking power of the world would be much, much higher. Also we'd have effectively limitless energy sources (how are you powering that multi-core smartwatch?) And it would still be a much better use of resources to do literally anything else for currency.
    - moe 12y ago
      the cumulative hash-breaking power of the world would be much, much higher Why would the "cumulative hash-breaking power" grow somehow disproportionally to the general computing power? how are you powering that multi-core smartwatch? Likely in the same way as your current multi-core smartphone?
      - XorNot 12y ago
        Because the Bitcoin hash function doesn't change, can't change, without effectively wiping out Bitcoin. Which is a bad thing for a currency in general. Which means SHA256 is getting weaker proportional to all power in the world - since confidence in Bitcoin depends on the idea that it can't break - not that "only people using it can't break it". Of course, this is already true anyway - the largest mining pool has been large enough to carry out 51% attacks for a while now, even before it was shown you could do it with much less power. >Likely in the same way as your current multi-core smartphone? Battery technology hasn't gotten appreciably better in a decade. And even if you could get enough power, how do you handle the heat? And even assuming all that...you then run into the problem above. The power of every other computer in the world will be a lot higher.

pash 12y ago

If I'm reading the slides right, longer chains of transactions on a side channel do not increase risk, so it's innappropriate to imply that a more heavily used side channel introduces risks comparable to credit-card chargebacks. Each party to the side channel has a multisig transaction signed by the other parties involved, so if one party cheats (or fails to comply for innocuous reasons), then any party can shift the entire chain of transactions to the blockchain without risk. So the only reason you don't want side channels to persist for too long is that each party has to keep around more and more information as the number of transactions over the channel increases; that's burdensome in its own right, but it also likely means that a side channel naturally decays over time, as the probability increases that one of the parties involved drops out or loses track of information. So you don't want to roll over side channels too many times, but it's not a matter of risk of trust. This really is a very simple and elegant solution. Basically, it recognizes (1) that cryptographic verification of intermediate transactions only needs to be shared among the parties involved, rather than among the entire network, and (2) that any sequence of transactions among a sub-network of parties can be considered as a string of intermediate transactions. And (3) it requires no trust because the entire sequence of transactions can be moved onto the blockchain by any party at any time.

sharpneli 12y ago
Sure. I simply meant that the assumption that an average person participates only in 2 chains per year and performs 3650 transactions in one chain is really far fetched. Consider the amount of transactions you do. Basically every party becomes a single side channel which requires some activity in the actual blockchain. It would reduce the amount of transactions that are the style of "My local supermarket which I visit every other day" but not anything else.
- pash 12y ago
  This technique can be applied to created side channels among any connected sub-network of Bitcoin users, so if we're able to build good technology to figure out when to create a side channel (and with whom), it's likely that a large fraction of all transactions could be moved into side channels. It really does have very good potential for scaling the Bitcoin network by an order of magnitude, or two or three. Combined with increases in the block-size limit, this technology and others are increasingly making it seem like scalability is unlikely ever to be a real problem for the Bitcoin network. (And file that under great problems to have.) Recently I've seen scalability cited as a demerit of the Bitcoin network more and more by people who don't keep up with the technology and the community developing it—and less and less by people who do. Good progress is being made. But I agree with you that the rough assumptions the authors used to quantify this technique's potential to scale the network don't make much sense.