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0 sats \ 8 replies \ @nerd2ninja 27 Jul 2023 \ on: Bitcoin Staking: Unlocking 21M Bitcoins to Secure the Proof-of-Stake Economy bitcoin
Lightcoin, I know I said I wanted to not be so mean to you, but now I'm remembering the reason I was so mean to you, is because you like to post absolute shitcoinery.
That is not a meaningful critique, and really just makes you look small minded.
I didn't think you were being mean, but it's interesting to know that was your intention. Thanks for your honesty.
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What? You really need me to go through the whole shindig? "If you're not trying to be money, why do you need a coin?" The scam of insiders getting a pre-mine and dumping on retail? That these non money use cases can be better done without a global state? Or was it specifically that you wanted me to go into the absolute joke that is proof of stake as a "security" mechanism?
There's so much to tear into here, and these things have been talked about ad nauseam. You'd know what the criticisms are already if you were paying attention. Its just that I don't feel the need to really copy and paste all of those links that tear all of those things down in detail for something so obviously poorly cared for.
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"If you're not trying to be money, why do you need a coin?"
In the case of PoS chains the native asset is for staking. Sometimes the asset is also used to pay fees, so treated as a kind of "local currency", or "coin", I suppose you could call it... but sometimes not! e.g. on the Interlay blockchain, users can pay fees with iBTC rather than INTR (the chain's native staking asset).
The scam of insiders getting a pre-mine and dumping on retail?
Some PoS assets probably have been created for this purpose, while others were created as part of good faith efforts to create value. (I would consider the INTR asset previously mentioned an example of the latter -- though please do not take this as an endorsement in the broader sense!) Your assumption of bad faith -- that the intentions of PoS asset creators can only be bad faith -- is unfair, and suggests that you haven't really done the research. But this is also not surprising given the priors you have expressed here.
That these non money use cases can be better done without a global state?
Some people prefer the tradeoffs of global state instead of state channels or CSV protocols or whatever other alternative. But sure, go ahead and make the case! Just know that if you really want to succeed you will probably need to actually build a working product, since we are talking about live products competing in the marketplace, not hypothetical thought experiments.
Or was it specifically that you wanted me to go into the absolute joke that is proof of stake as a "security" mechanism?
In the least condescending way physically possible for you, sure, I would be interested in your security analysis of the Babylon staking protocol described in the whitepaper I linked to. That is why I posted it here, to get good faith comments on the proposed approach so we can improve the collective knowledge of the bitcoin community.
There's so much to tear into here, and these things have been talked about ad nauseam. You'd know what the criticisms are already if you were paying attention.
I am well aware of the criticisms of the things we're talking about here. I didn't say that I didn't! I just said that your comment was not a meaningful critique, and I stand by that. Your comment was a lazy ad hominem. I expect better.
Some of the critiques of PoS chains are valid, some of them are not. ime many Bitcoiners have a relatively shallow and superficial understanding of the things in altcoin-land that they critique. Then again, all too often they also have a shallow and superficial understanding of bitcoin, as well! Like a broken clock, they can be right twice a day, since they occassionally pick up a good soundbite from their favorite bitcoin podcast, but the rest of the time they are factually wrong, and it reflects poorly on them and hurts the overall reputation of the bitcoin community. (I wish people were judged strictly as individuals but that's not how it works in these kinds of tribal social environments, unfortunately).
I attribute this ignorance I encounter to, on one hand, a lack of technical knowledge in general, and in the case of the more technical-but-wrong crowd, it is due to ignorance of the state of the art, either by choice, or by circumstance, since it takes a lot of time to stay on top of the latest research discussions. I am trying to bridge some of this divide by posting high-signal research that I think is relevant to the bitcoin community.
In this case, Babylon (the team who authored the paper I linked to) has made some important and positive contributions to improving PoS security. Anyone who is knowledgeable about the low level nuances and tradeoffs involved in the design and implementation of these protocols would recognize that if they took the time to understand.
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Brandolini's law, also known as the bullshit asymmetry principle, is an internet adage coined in 2013 that emphasizes the effort of debunking misinformation, in comparison to the relative ease of creating it in the first place. The law states the following:
The amount of energy needed to refute bullshit is an order of magnitude bigger than that needed to produce it.
That is why I didn't put much effort in my first comment. As I can see that you really want a real mental engagement rather than mindlessly hype nothing burgers up for unjustified reasons as I'm so much more used to, fine, we're doing this. You shouldn't be mistaken though, I and many Bitcoiners were shitcoiners first, and became Bitcoin only after learning our lessons.
Local Currency
The start of this video by Wendover Productions explains the purpose of "World Reserve Currency". Local Currency is an exchange barrier, so countries use the World Reserve Currency (US dollars) to trade for any other currency they may need to work with. The reason countries even have their own currency rather than just using US dollars everywhere locally is because of power. No country wants to cede power to another country by having their economy subject to the monetary policy of some other country, and yet even with this half measure of only using it as a reserve currency for foreign trade, they cede power anyway. Germany is basically in charge of the Euro, and the US is basically in charge of the world because no one wants to be sanctioned by the SWIFT system and lose access to the currency they need for foreign trade (this may be changing with the onset of BRICS, but only time may tell)
So the problem with introducing new coins into this mix, is that it serves as a trade barrier, but its done anyway. The only reason for why is power. These companies who make these tokens want to be able to print tokens in order to "fund development", when they could just be taking Bitcoin in exchange for their service in the first place.
"If you're not trying to be money, why do need a coin?" is actually a reference to a post I made a long time ago which had that title. In that post, I mentioned how Arcade city, a rideshare company just trying to create a genuine product for people to use, felt scammed by the developers who told them of the wonders creating their own coin would bring their company. Even when not done with malintent, creating an incompatible coin is not a net economic benefit.
As far as wrapped Bitcoin goes, that is another topic, and is not covered within the scope of what I mean by "why do you need a coin?" For that I will delve into how non money use cases can be better done without a global state. However, your only retort to that is to create a working product. The problem with this mindset, is that no one uses this shit. I mean sure people use TOR rather than Maidsafe and they are basically the same concept, and sure people torrent movies rather than store them in Sia, and sure people use NOSTR rather than something built on Akash or any other web3 media we've heard of. Surprised I know what these things are? You shouldn't be. You shouldn't have assumed I didn't do the research. Its like I said, Bitcoiners tend to be people who learned their lesson from shitcoins, not people who just have information disparity to get through.
The Babylon Staking Protocol
This one time, for the sake of this discussion, I will tear apart this paper, but do not expect me to delve into every paper you post here. I'll refer again to Brandolini's law as to why. They tend to be pure wastes of time.
Straight off the bat, what this does not solve, is minority shareholder protections which is a known issue in holders of stocks of companies and given that these are unregistered securities, obviously the same problems apply.
Solend users voted to "grant emergency power to Solend Labs to temporarily take over the whale's account."
The paper doesn't seem to say this specifically or maybe it does and I just wanted it to say it more expressly, but it seems the reward for this stake is not Bitcoin, because people aren't paying Bitcoin for these services. It seems instead to be the shitcoin that the Bitcoin staker is meant to be securing. The problem with this, is while in theory a premine can't result in a founder of VC having more stake and thereby rug pulling a bunch of Bitcoin for themselves, in reality, the common premine scheme means that founders and other insiders have a lot of money in general and can rug pull Bitcoin when they want to exit, in addition to selling off a bunch of pre-mine, by simply using the slashing mechanism. This paper is about securing "startup chains" afterall.
It is shown that if there is a safety violation in this modified protocol, then more than 1/3 of the stake has signed two blocks at the same height using EOTS [9]. This leads to the extraction of the private keys of those stakers
But this shit happens all the time on a chain that aims for an average of 1 block every 10 minutes! To have this happen on these chains that decided that not taking bandwidth into consideration for block propagation among participants....well, I suppose you solve that problem by just requiring everyone have high bandwidth and that there are very few participants in the network, but then that creates its own problem. Fewer participants means fewer targets to footprint, enumerate, and exploit, but then if we remember we're dealing with a proof of stake system here, that's already the case. Just target the largest shareholders.
What I wrote before I got to "9.6 Bitcoin timestamping"
This Babylon control plane for Bitcoin based timestamps is something they don't go into as much as I need them to, but it looks like a central point of failure in and of itself. I could assume the way it works is that every user runs their own node, the system is able to deconflict for when there is 1 block reorgs somehow, but given chains I've reviewed in the past, that might be giving them too much credit.
Okay, now lets see how this mechanism actually works. Okay so we are actually recording data hashes to the Bitcoin mainchain proper. Where are the Bitcoin for the transaction fees coming from though? We have Bitcoin in this system, but its being used for stake, so where does the Bitcoin for fees come from?
Rule #1 of understanding computers, start by seeking out to disprove what its engineers assert
When you've successfully proven or disproven those assertions, you've proven you fully understand the system
Okay, but assuming this system has Bitcoin for transaction fees and the logic is consistent in that majority of the stakers have to actually sign for a valid transaction to even get through, (which again our rule for understanding computers is to assume every assertion is wrong, but for the sake of not spending more time than I already don't care for we're breaking this rule) very good that's the way you would want to do it. Via a hash of the data and not the entire dataset.
Okay and that's all I care to comment on. Good acknowledgement towards the end
a) if the bridging logic running inside the secure hardware relies on critical information obtained from external sources, the security of such a bridge is reduced to that of the external component; and b) if a security vulnerability in the code running inside the secure hardware is exploited, the security enhancement provided by the hardware could be rendered ineffective.
And its such a good acknowledgement because this was particularly the kind of vulnerability I was looking for. Where there's this external source that the system is just trusting to provide honest information and not act maliciously. I've seen that a few times. Overall, it just needs to overcome the problems that are inherent in proof of stake that are typically glared over as just a fact of life.
I am interested in this covenant scheme they mentioned in the paper that didn't require a softfork though. THAT's what you should have posted.
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Alright so with that out of the way, I want to talk about why I'm pissed at you enough to start being rude. Its because like I said, Bitcoiners tend to be people who were shitcoiners first and you just act like we've been in this Bitcoin bubble this whole time just unaware of what's going on and that isn't the case. Most of us, at least Bitcoiners from class of 2017 on, got fucking scammed. Even the coins we thought of as being pretty good like Ethereum, Neo was a big one for me, Pivx was a big one too oh man Monero all these coins we thought were legitimate we learned by being burned and learning a few things about how they work, that they're illegitimate. So every time I see a push for some coin I either see a victim who doesn't know better or in your case someone who is just outright scamming, because you're technical enough to know better or you should be, because it seems to me that you've dug your nose so far into how things work that you haven't bothered to ask "why would someone use this". So I just see the people who fooled me in you and that's why I'm mad at you.
I'm probably won't go that in depth on shitcoinery again. There is way too much of it, and precious time is better spent working on Bitcoin instead.
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So the problem with introducing new coins into this mix, is that it serves as a trade barrier, but its done anyway. The only reason for why is power. These companies who make these tokens want to be able to print tokens in order to "fund development", when they could just be taking Bitcoin in exchange for their service in the first place.
As I said, in PoS chains the main purpose of the native token is not for currency, it is for staking. The use as a "local currency", as I called, for paying tx fees is secondary and, in my view, redundant, since BTC can be used as the currency for paying tx fees. (I have long been a proponent of the view that the market for money converges on one due to network effects, that bitcoin is the best money ever invented, and therefore making an altcoin is a short-term decision.)
For that I will delve into how non money use cases can be better done without a global state. However, your only retort to that is to create a working product. The problem with this mindset, is that no one uses this shit.
Billions of dollars worth of assets locked in DeFi and various other global state-based contracts and applications that aren't possible with bitcoin Script is a lot more than "no one".
You shouldn't have assumed I didn't do the research.
I didn't make that assumption.
do not expect me to delve into every paper you post here.
Then don't comment on my posts.
Straight off the bat, what this does not solve, is minority shareholder protections which is a known issue in holders of stocks of companies and given that these are unregistered securities, obviously the same problems apply.
What is an unregistered security?
it seems the reward for this stake is not Bitcoin, because people aren't paying Bitcoin for these services
It can be decided on a case by case basis how stakers are rewarded. If the chain has coinbased rewards, then it will be coinbase rewards + tx fees. If the chain only has tx fees then it will only be tx fees. And as I mentioned in my last post, some PoS chains, like Interlay, allow users to pay their mining fees using BTC (a bridged form of BTC in that case, called iBTC).
The problem with this, is while in theory a premine can't result in a founder of VC having more stake and thereby rug pulling a bunch of Bitcoin for themselves, in reality, the common premine scheme means that founders and other insiders have a lot of money in general and can rug pull Bitcoin when they want to exit, in addition to selling off a bunch of pre-mine, by simply using the slashing mechanism.
Ignoring that PoS chains aren't inherently pre-mined, even if there is a premine, how can the pre-mine holders "rug pull bitcoin" and "sell off a bunch of premine" "by using the slashing mechanism"? How exactly is that supposed to work?
It is shown that if there is a safety violation in this modified protocol, then more than 1/3 of the stake has signed two blocks at the same height using EOTS [9]. This leads to the extraction of the private keys of those stakers
But this shit happens all the time on a chain that aims for an average of 1 block every 10 minutes!
No, it doesn't, because bitcoin miners don't sign blocks. (I assume you're referring to the bitcoin chain here.)
What I wrote before I got to "9.6 Bitcoin timestamping".... Where are the Bitcoin for the transaction fees coming from though? We have Bitcoin in this system, but its being used for stake, so where does the Bitcoin for fees come from?
You could just... read the paper that was cited in 9.6 https://eprint.iacr.org/2022/076
Okay and that's all I care to comment on.
that's it? this is you "tearing the paper apart"? this really was a waste of everyone's time.
very good that's the way you would want to do it its such a good acknowledgement
:thumbs-up:
Neo was a big one for me, Pivx was a big one too oh man
... wow
So every time I see a push for some coin
I'm not pushing for any coin...? Other than BTC ofc.
So I just see the people who fooled me in you and that's why I'm mad at you.
Projecting your insecurities and trauma on other people simply because they're interested in things outside of your narrow overton window is not healthy. Get help.
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As I said, in PoS chains the main purpose of the native token is not for currency, it is for staking. The use as a "local currency", as I called, for paying tx fees is secondary and, in my view, redundant, since BTC can be used as the currency for paying tx fees. (I have long been a proponent of the view that the market for money converges on one due to network effects, that bitcoin is the best money ever invented, and therefore making an altcoin is a short-term decision.)
So it sounds like you'd like to scope out exactly what you find to be acceptable and what you don't find to be acceptable. Your paper certainly didn't. Happy to see we've scoped this down a bit.
Billions of dollars worth of assets locked in DeFi and various other global state-based contracts and applications that aren't possible with bitcoin Script is a lot more than "no one".
Unfortunately, I can see you've decided to include decentralized in name only as part of that scope. I was avoiding DeFi, because I felt it would have been a bad faith example.
You see these as product market fits, but they're scam market fits because they're markets fundamentally built on lies, but its also another mechanism to gain an exit event. Just like how SBF of FTX took out loans from Alameda using FTT as collateral, so too, do scammers take out loans against coins with near 0 market liquidity and abandon the "collateral" because it never had value anyway.
You seem to want to keep going "Yeah but if you didn't look at real life, and you looked at hypotheticals it could be good" but it can't. Debt on an appreciating asset makes that asset harder to pay off, unless you're using it as collateral. So what good faith token or coin are you going to take on the other side of that loan? A dollar certificate issued by a dollar custodian? "DeFi". A coin that relies on an price API (central point of failure). George Soros got famous off of breaking that mechanism:
https://www.investopedia.com/ask/answers/08/george-soros-bank-of-england.asp
I was going to go into more details about the technical failures of specific "DeFi" marketplaces, but Hitchens's razor, rather than spending all that time disproving, how about you spend time proving.
Quick blurb on the minority shareholder problem. You sell the shitcoin, (or use "DeFi"). You now have dollars. Guess what you can do with dollars? Buy Bitcoin. So you got Bitcoin. You got WAY more Bitcoin than the aggregate of the average user because you've already scammed so many people before them. You rug pull everyone, sell the Bitcoin back for dollars (or don't).
Now instead you could assume a system where 50 fortune 500 companies are staking and therefore that isn't going to happen, but then that's a mere 50 fully regulated targets. Actually 50 is a really good faith example. POS systems tend to have way less than that. Then there's hot wallet risk and on and on and on and on. Shit is a waste a time.
When you already have problems at a high level like that, how and why do you muster the energy to keep digging into lower level technical details?
Now, as far as "Don't comment on my posts if you're not going to read my links". You know I'm not going to let you just post misleading security models promote markets built on lies or put another way, to go around scamming people unencumbered.
I already should have posted less. I don't know why you've come to the conclusions that you have. Are you yourself trying to come up with some scam? Did you just fail to think critically of these systems? Are you just surrounded by other people who think this way and as a result of that bias fail to question the validity of the use cases of these systems? Please assume all assertions of all the systems you're interested in are wrong and seek to actively disprove them. You might end up proving them in the process and thereby understand those systems.
To another commenter, you asked "What shitcoinery". I don't want that question to go unanswered. Here's a screenshot from your paper