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Miners Aren’t Friends

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Re: Miners Aren’t Friends

#51

Post by konschubert »

barbegal wrote: post #37
nspassov wrote: post #2

To my limited understanding of Ethereum and Bitcoin, the network already has rules in place to punish nodes that misbehave or cheat. In the case of Bitcoin, that is part of layer 1 so it is independent of any application layers and thus it should always be at the core of the network. With PoS cheating is likely to become a bigger issue [1], since with PoW the miners who get punished will have wasted their time and el…

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible c…

Here is how I understand the argument made in the first link:

If you give people a certain block reward, say 1$ per year, then the capital they are willing to invest to gain that reward will be 1$ divided by the worldwide rate of capital returns at the given risk level.

The argument is that it doesn't matter if we are dealing with capital that is locked away in mining hardware + lost as electricity or in a smart contract. The total amount of "economic work" locked away will be the same.

I think that's correct. Proof of stake is not cheaper for the short-term economy than proof of work.

But what about the long term? 100 years? The kind of time frame that investors don't worry about, but we as mankind should?

I guess what I'm saying is that locking away capital today maybe has less long term damage than wasting extreme amounts of energy.

Re: Miners Aren’t Friends

#53

Post by barbegal »

konschubert wrote: post #40
barbegal wrote: post #37

Earlier quoted context omitted.

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible c…

How about using stock markets? They are of course vulnerable to some amount of manipulation, but with a good algorithm that could be rendered sufficiently costly to become impractical.

They are probably as good as we have today but even they could be manipulated if large amounts of money was on the line. I can't see any way of introducing algorithms to make it more difficult to manipulate though.

Re: Miners Aren’t Friends

#54

Post by mhluongo »

barbegal wrote: post #37
nspassov wrote: post #2

To my limited understanding of Ethereum and Bitcoin, the network already has rules in place to punish nodes that misbehave or cheat. In the case of Bitcoin, that is part of layer 1 so it is independent of any application layers and thus it should always be at the core of the network. With PoS cheating is likely to become a bigger issue [1], since with PoW the miners who get punished will have wasted their time and el…

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible c…

Publicly verifiable randomness is possible without relying on astronomical events. Check out threshold relay by the Dfinity team (which we're porting to Ethereum), or RandHound and RandHerd [1].

1 - https://eprint.iacr.org/2016/1067.pdf

Re: Miners Aren’t Friends

#55

Post by Casseres »

AlwaysBCoding wrote: post #33
corford wrote: post #19

Earlier quoted context omitted.

I don't understand the economic argument for personal mining (I totally get it from a fun, geeky PoV if making money isn't the primary goal - it's how I got started in crypto). A GTX1070 costs about $800. At $4/day, it will take you 200 days to make back your principle (ignoring power costs, difficulty scores going up etc. - in reality it will obviously take you even longer to cover your costs). If you had put that s…

If you're buying stuff on darknet markets it's nice to be able to do it with freshly mined coins that don't have transaction histories associated with them.

Or use Monero which doesn't have transaction histories associated with it.

Re: Miners Aren’t Friends

#56

Post by barbegal »

RoboTeddy wrote: post #46
barbegal wrote: post #45

Earlier quoted context omitted.

That's all well and good but who manages the security deposit?

The system itself, e.g. the code of a smart contract. Example implementation: https://github.com/randao/randao

So the randomness providers secure the deposit of their own randomness. The circularity of the system means it won't work in practice. RANDAO is secured by the proof of work miners.

Re: Miners Aren’t Friends

#57

Post by drtr »

cjbprime wrote: post #42

Nice article! Here's another type of failure with its solution: * You want to register a domain name on the blockchain and associate it with your address, so you submit "register foo". * The miner sees it, and inserts an earlier transaction registering foo to them instead. Solution: * You register the hash of foo, which registers the plaintext encoded by that hash, then wait until the transaction is accepted publicly…

Sure. Register encrypted domain name and a one-time public key. Next block, reveal private key.

Re: Miners Aren’t Friends

#58

Post by anigbrowl »

IT's capitalism in its purest form. The work done is work n the physical sense of production, but from a labor perspective it ends up as a constant rote of attrition and self negation - people gt interested in coins to make a quick buck and take it easy, but either drop or spend all their time, energy, and money racing for a slice of the pie while producing little of value - in this case, trust tokens which may or may not turn out to be valuable later. The rewards always go to people who were there early and had excess capital to spend on buying, or could mine easy pickings and then let someone else take over the grind.

Oddly the mining analogy reminds me most of Eve Online, which has a professionally tuned in-game economy and where you basically have a graphic representation of everything mentioned in the article, including the tedium and energy of mining, the endless technological arms race (designed to make you invest as much time as possible or buy credits to leapfrog other players), and pointless destruction of wealth - intra-player conflict is where most of the action and excitement is because the exploratory aspect of the game is only as interesting as it yields new technology that gets recycled back into the arms race.

Perhaps the solution is a medium of exchange that doesn't use absolute units, but is a function of your ability to pay.

Re: Miners Aren’t Friends

#59

Post by konschubert »

RoboTeddy wrote: post #41
barbegal wrote: post #37

Earlier quoted context omitted.

Proof of stake doesn't work in practice unless we can find a source of randomness that is globally available, non-influencable and everyone can agree on [1]. At the moment, that source of randomness is completely elusive. It might be possible to create a random source from some form of binary astronomical event which can be widely verified but it would have an incredibly low bit rate of new randomness. One possible c…

Can imagine a protocol for generating randomness to some arbitrary security level (at the expense of locking up security deposits): (1) Anyone can decide to become a 'randomness provider' by putting up a large security depsoit (2) Every epoch (some number of blocks), each provider chooses a private random number and commits to it by publishing its hash (3) During the next epoch but, each provider publishes the random…

> If you're worried about bribing attacks over all providers, recognize that all we need is a single altruistic provider to keep the system safe. Altruistic behavior may be rare compared to selfish behavior, but I think we can usually rely on its nonzero presence.

You also need to be sure that the others don't ignore the single altruistic source.

In a byzantine system, you can't distinguish if somebody is offline or if the others are silencing him.

Re: Miners Aren’t Friends

#60

Post by xucheng »

runeks wrote: post #11

> Again, let’s design a simple smart contract. This time Alice wants to play a guessing game. Alice puts 5 Ether in her contract. That ETH goes to the person that guesses closest to the number she’s thinking of. Alice calls commit with the hash of the number, so she can’t change her mind. Anyone else can call guess to submit a guess. After 2 blocks Alice calls reveal to tell everyone what the number is. This scheme i…

> Alice’s commit transaction needs to specify some block height after which further guesses are ignored, and then publish the “reveal” message some (safe) number of blocks after this.

I think this is unsafe as well. Noted that since everyone can verify the real answer, there is no point for Alice to reveal it. As a result, as soon as anyone submits the correct answer, the miners can cheat and replace the answer as their own.

After some degree of thinking, I find that it is quite difficult to design a secure smart contract such guessing game. I haven’t find a way can fulfill all following security properties: (a) the Alice has to pay for the first person who finds the correct answer; (b) that person can only collect reward after showing the the correct answer; and (c) the miner cannot cheat.

I wonder if anyone has a solution for the above problem. Also, if such solution exists, we can actually use it to implement the RSA challenge [1] in smart contract.

[1]: https://en.wikipedia.org/wiki/RSA_Factoring_Challenge

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