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Stellar Smart Contracts

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Re: Stellar Smart Contracts

#91

Post by decentralised »

keymone wrote: post #74
novaleaf wrote: post #70

Earlier quoted context omitted.

I think what @decentralised is arguing isn't that PoW is wasteful, but that there are certain by-design inefficiencies that outsiders consider a waste from an economics standpoint. (A high economic cost to perform PoW) Certainly you could argue that this economic cost is necessary and therefor not wasteful. Indeed I agree that it is central to the idea.

direct quote from him: "There are plenty of consensus protocols that don't waste energy" i'm not entirely sure what do you consider inefficiencies in PoW, it is by design supposed to convert energy into a proof that similar amount of energy was spent producing the proof. the only inefficiency involved is how far we are from Landauer limit. ultimately i don't think it matters which specific hashing algo is used - ther…

PoW uses energy to produce blocks in a process known as mining that consists of trial and error attempts at producing a “special” hash that meets a given difficulty target expressed in the number of leading zeroes. The difficulty target reflects the speculative work needed to produce valid blocks at regular intervals given the available hashrate. When more hashrate is added to the network the difficulty adjusts such that on average the block interval is kept around 10 minutes.

The product of PoW's work is largely wasted since all hashes produced for a given block height, other than the next valid blockhash, have no value and are discarded with the winning miner being paid the full block reward for its work. This means that not only are the hashes useless but they are also expensive to create and return 100% of the reward to the winning block producer at the cost of all other block producers. Bitcoin’s hashrate is what I refer to as an “economic firewall” in that it becomes increasingly more expensive to acquire the hardware needed to control a significant portion of the network's hashrate (eg: 51% attack), or even mine a single block, the more interest there is in the block reward tokens. Having said that, there is no causality relationship between the cost of producing blocks with PoW and the token’s price which is set in open markets were no single Exchange or a “bitcoin ceo" is a counter-party.

In other words, PoW keeps a blockchain safe because it’s wasteful and expensive. Only someone who can afford to run a mining rig would join and its costs are not covered unless their blocks are added to the canonical chain.

If the consensus protocol performed useful work, the incentive to "mine" on this chain would not only the block reward but also include ulterior motives so attackers could try to produce invalid blocks and their effort would still be justified by the value of the work done.

Hope this helps. Find me on telegram if you want to keep this discussion up, I'm always happy to discuss cryptoeconomics.

Re: Stellar Smart Contracts

#92

Post by carleverett »

jillesvangurp wrote: post #75
felipeccastro wrote: post #68

Earlier quoted context omitted.

That was very informative, thanks! I was having the same impression about Ethereum, that the ecosystem was becoming wider and ever more complex, but still not very practical to actually use. How does Stellar compare to EOS? AFAIK EOS uses the same approach of federation / trusted nodes, and is also a platform for smart contracts, so it would be interesting to see a comparison.

I haven't got much experience with EOS. My feeling is that they are a bit newer to the scene than stellar in terms of adoption/traction. They only launched this summer and stellar has been gaining traction since late last year so they are a bit ahead on that front. Regardless of what you pick, you are taking a leap of faith in long term viability/stability of what you pick. We went for stellar because we saw some tra…

What do you define as traction? CoinMarketCap shows EOS trading at significantly higher daily volumes than Stellar.

Re: Stellar Smart Contracts

#93

Post by polynomial »

j0hnM1st wrote: post #57
decentralised wrote: post #40

Earlier quoted context omitted.

There are plenty of consensus protocols that don't waste energy but I think it's important to understand why PoW relies on an unproductive algorithm. Mining fulfils two roles: - identity management: To identify who is a trustworthy block producer in an anonymous and trustless network, mining introduces a cost to the block generation process and we use a game theory assumption that it serves as a barrier for attackers…

> There are plenty of consensus protocols that don't waste energy but I think it's important to understand why PoW relies on an unproductive algorithm. DPoS consensus used by Bitshares/STEEM & EOS seems to the most advanced among the models and they also have the highest TPS

Replacing mathematically provable cryptographic assurances with a human fallible cabal of BPs hardly seems like an advancement.

In any case, Bitshares TPS was less due to DPoS and owed more to the limitations of what tx were supported.

Ethereum chose to support greater contract flexibility which turned out to be what the community of users wanted more, at least then.

We've yet to see a real solution to the problem of having to tradeoff performance for decentralization (while keeping security.)

Re: Stellar Smart Contracts

#94

Post by unmole »

unmole wrote: post #33
vntok wrote: post #12

Earlier quoted context omitted.

It is, yes. Most transactions that occur daily across the whole world involve trivial amounts of money. If I want to sell you a 300€ dishwasher, for example, I can either require cash, ask for a check/bank transfer and pray it doesnt bounce, or involve a 3rd party whom i trust in which case I will have to forego a % fee for their escrow service, maybe 30€. With a smart contract, I can now be sure the buyer's funds ex…

> funds exist and are locked before we meet What does locking funds entail?

In the hypothetical dishwasher example, what is the buyer's incentive to lock up funds before even physically inspecting the item? What is my recourse if a spiteful seller refuses to agree to releasing my funds if I decide not to go through with the purchase?

I'm not being facetious. I'm trying to understand why one would need to use an escrow service for something like this.

Re: Stellar Smart Contracts

#95

Post by root_axis »

keymone wrote: post #64
decentralised wrote: post #63

Earlier quoted context omitted.

We might be arguing about the meaning of words here but the work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement. I suppose you know how consensus algorithms work, but if you don't I'd suggest you start by reading this https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoec... . If cryptoeconomics is interesting to you I can also…

> arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficu…

Waste is the security mechanism. Since the hash results are wasted it is risky to mount an attack on the network; if the hash results were not wasted then the cost of mounting an attack would be mitigated by the value inherent in useful work produced by the algorithm. Your rebuttal actually supports this conclusion because "useful work" would become the "common denominator" cost built into securing the network thus bringing us right back to where we started (i.e. a situation where wasted work is the only useful kind for securing the network)

Re: Stellar Smart Contracts

#96

Post by tinco »

keymone wrote: post #64
decentralised wrote: post #63

Earlier quoted context omitted.

We might be arguing about the meaning of words here but the work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement. I suppose you know how consensus algorithms work, but if you don't I'd suggest you start by reading this https://medium.com/@jpa_of_snc/consensus-casper-and-cryptoec... . If cryptoeconomics is interesting to you I can also…

> arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficu…

Just that something is effective doesn't mean it's efficient. For years the lightbulb was the most effective way of producing light, and we took for granted that it cost a lot of energy. But you would be a fool if you claimed it wasn't wasteful just because the product (light) is so valuable.

Bitcoin mining is wasteful, it literally produces waste, and there is no proof at all that it is an optimal way if achieving security, in fact I feel there are signs that point towards the contrary.

Re: Stellar Smart Contracts

#97

Post by keymone »

decentralised wrote: post #91
keymone wrote: post #74

Earlier quoted context omitted.

direct quote from him: "There are plenty of consensus protocols that don't waste energy" i'm not entirely sure what do you consider inefficiencies in PoW, it is by design supposed to convert energy into a proof that similar amount of energy was spent producing the proof. the only inefficiency involved is how far we are from Landauer limit. ultimately i don't think it matters which specific hashing algo is used - ther…

PoW uses energy to produce blocks in a process known as mining that consists of trial and error attempts at producing a “special” hash that meets a given difficulty target expressed in the number of leading zeroes. The difficulty target reflects the speculative work needed to produce valid blocks at regular intervals given the available hashrate. When more hashrate is added to the network the difficulty adjusts such…

you're not telling me anything i dont know. you're just using wrong words to describe things.

PoW's work is hashes and they are discarded. PoW's product is valid block signatures and transitively - blockchain security. something is wasteful if the product is worthless. discarded hashes are worthless but valid signatures aren't worthless.

if somebody was running bitcoin miner and discarding all hashes - their work would have been a waste. people running bitcoin miners with purpose of finding valid blocks aren't wasting anything by definition:

wasteful ˈweɪstfʊl,ˈweɪstf(ə)l adjective (of a person, action, or process) using or expending something of value carelessly, extravagantly, or to no purpose.

there is purpose and value in bitcoin mining.

Re: Stellar Smart Contracts

#98

Post by keymone »

root_axis wrote: post #95
keymone wrote: post #64

Earlier quoted context omitted.

> arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficu…

Waste is the security mechanism. Since the hash results are wasted it is risky to mount an attack on the network; if the hash results were not wasted then the cost of mounting an attack would be mitigated by the value inherent in useful work produced by the algorithm. Your rebuttal actually supports this conclusion because "useful work" would become the "common denominator" cost built into securing the network thus b…

> Waste is the security mechanism

not really, consumption of energy is. and even if we accepted this weak statement, how does it follow that PoW is therefore wasteful? waste isn't the product of PoW, valid blocks are.

Re: Stellar Smart Contracts

#99

Post by keymone »

tinco wrote: post #96
keymone wrote: post #64

Earlier quoted context omitted.

> arguing about the meaning of words here isn't that the most important thing? > work in PoW is it's output and the hashimoto algorithm in PoW discards all computed hashes that fail to meet the difficulty requirement you've used few specific words in your comments: "work" and "product". i agree that work in PoW is hashing and most of hashes are discarded, but product of PoW is the signature that satisfies the difficu…

Just that something is effective doesn't mean it's efficient. For years the lightbulb was the most effective way of producing light, and we took for granted that it cost a lot of energy. But you would be a fool if you claimed it wasn't wasteful just because the product (light) is so valuable. Bitcoin mining is wasteful, it literally produces waste, and there is no proof at all that it is an optimal way if achieving s…

> But you would be a fool if you claimed it wasn't wasteful just because the product (light) is so valuable.

you're missing the fact that bitcoin difficulty adjusts. ultimately bitcoin mining is an activity that converts energy into blockchain security. market establishes the required level of security by assigning value to bitcoin. if you replace bitcoin algorithm to anything more "efficient" - it will simply mean that miners will churn through more iterations of hashing but amount of energy consumed will not change because it's dictated by the market.

> Bitcoin mining is wasteful, it literally produces waste

wrong. bitcoin mining produces blockchain security. waste (and more correctly - energy consumption) is just the mechanism.

Re: Stellar Smart Contracts

#100

Post by polynomial »

leifg wrote: post #3

> As a reminder, smart contracts are created using code. Code can contain bugs or may not perform as intended. Be sure to analyze and agree upon all possible edge cases when coming up with the conditions and outcomes of the smart contract. Predicting all possible edge cases of a piece of software has been proven to be very hard in the past (there have been software bugs that literally killed people). Why would I ever…

The contract equivalent of a software bug is called a residual, an area of research Oliver Hart earned a Nobel in economics for, and subsequently applied as a model for understanding smart contracts and their shortfalls.

You are correct, it would be madness to let software alone manage a legal contract, which Hart showed was impossible to free of residuals. A smart contract can be seen as an abstraction from the legal contract underpinning it in order to self-execute where residuals do not arise.

The devil in the details resides of course in the specific contract implementations.

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