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Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

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Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#191

Post by billytetrud »

hypertele-Xii wrote: post #135
aazaa wrote: post #107

> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. ... This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the auth…

I don't get it. Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions. Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere? If double spending is ever detected from a party, that party is dis-trusted by…

But how would someone know later which transaction is valid? Like, a new entrant to the network gets two transactions spending the same input, without a block chain to determine ordering of transactions, this new entrant wouldn't know which was actually spent. Both transactions could have subsequent spends, so that is also not a way to determine which is the one to follow. You can't decide to follow neither, because it's possible (even likely) that the person who owns those coins now was not the person who tried double spending them.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#192

Post by Marazan »

hypertele-Xii wrote: post #135
aazaa wrote: post #107

> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. ... This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the auth…

I don't get it. Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions. Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere? If double spending is ever detected from a party, that party is dis-trusted by…

There is no such thing as dis-trusted.

Bitcoin is "trustless". There is no trust of any form.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#193

Post by billytetrud »

kerkeslager wrote: post #169
hypertele-Xii wrote: post #135

Earlier quoted context omitted.

I don't get it. Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions. Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere? If double spending is ever detected from a party, that party is dis-trusted by…

There are two solutions you're proposing, each of which has problems: 1. You're introducing a requirement that all parties who wish to participate in the network must have diverse connections to the network. In practice many nodes do not meet this requirement. If a new node connects to only a few nodes, those nodes may return conflicting chains. With PoW, a longer chain has significantly more computational effort beh…

> On PoS, there's no such limitation

There is no significant computational effort needed, but it is incorrect to say that PoS protocols do not limit the number of blocks that can be created. Most PoS systems do in fact have such a limitation.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#194

Post by danbruc »

KallDrexx wrote: post #168
aazaa wrote: post #107

> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. ... This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the auth…

> The problem proof-of-work solves is double spending, That doesn't seem to be my understanding. In my mind the problem proof of work solves is how quickly new blocks can be generated, thus limiting the supply of new blocks and giving an incentive to move the head pointer to an agreed upon next value (by granting coins to the miner who was able to compute the value). Double spend is solved due to the single branch tr…

In my mind the problem proof of work solves is how quickly new blocks can be generated [...]

There is actually no real point of rate limiting the creation of new blocks, why not generate them as fast as possible and therefore execute transactions as quickly as possible? This certainly needs some more thought, you do not want miners spamming empty blocks or blocks full of their own fake transactions, you can not provide a fixed block reward, and whatnot. But in general the mining rate limit is a limitation and not a feature.

Proof of work has nothing to do with that, any system that can encourage everyone to agree on the next block does the same prevention of double spend.

Sure, proof of work establishes consensus and any consensus algorithm could be used. But Bitcoin is anonymous, so you do not know how many parties are there that need to agree and therefore a simple vote based consensus protocol does not work. You have to prevent a malicious user from casting a million votes and changing the consensus branch as they please. How do you do that? You make casting a vote hard, you make them, for example, waste a lot of clock cycles to do so.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#195

Post by Scarblac »

rep_movsd wrote: post #161
xwolfi wrote: post #144

Earlier quoted context omitted.

What I fail to understand, and thanks to your explanation, is why not use a central trusted ledger which would synchronize all transactions. It could surely work at the current speed of bitcoin and relieve the entire planet of the energy cost of bitcoin, providing the same safety that no double spend could happen. All you'd need is a small private army, a few lawyers, an historically accepted jurisdiction, and you'd…

This is called the state backed banking system. Eventually they will make all your money digital. They will track everything you buy. Then at the very least they will sell your information to advertisers, and at worst retain totalitarian control over all your purchasing power. Its already happening in China - the state has the power to prevent people from travelling etc. based on their "social credit" The US is makin…

> Eventually they will make all your money digital. They will track everything you buy.

Which is why Bitcoin starts out doing exactly that by default?

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#196

Post by billytetrud »

kerkeslager wrote: post #169
hypertele-Xii wrote: post #135

Earlier quoted context omitted.

I don't get it. Suppose a bad actor tries to double spend. They have to cryptographically sign both transactions, so the whole network will eventually receive knowledge of both transactions. Why can't the network simply wait for some duration of time before accepting a transaction, to verify that no double-spends propagate from elsewhere? If double spending is ever detected from a party, that party is dis-trusted by…

There are two solutions you're proposing, each of which has problems: 1. You're introducing a requirement that all parties who wish to participate in the network must have diverse connections to the network. In practice many nodes do not meet this requirement. If a new node connects to only a few nodes, those nodes may return conflicting chains. With PoW, a longer chain has significantly more computational effort beh…

> transfer my coins to another address, and then use my original, "trusted" address to validate a chain of blocks

Any new entrant would be able to clearly see the transaction on one of the chains and from that can determine that the chain not containing that transaction but instead using that output to mint blocks is the cheating block chain. Your attack wouldn't work.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#197

Post by billytetrud »

kerkeslager wrote: post #166
bouncycastle wrote: post #140

Earlier quoted context omitted.

PoW is not the only way to solve double spending (and make sure that the blocks are ordered in a particular timeline), in PoS it is solved by randomly choosing which validator will create the next block according to an algorithm that all the nodes follow. So there's no race to find the next block, the block producer is known in advance. What's more, in PoS, you have guaranteed finality, meaning that after a certain a…

There are a bunch of ways in which you're not exactly correct here. First, you're describing a very particular implementation of PoS. Not all PoS implementations include slashing. This isn't a mere technicality: the most popular implementation of PoS (as measured by market cap) is Cardano's and it doesn't include slashing. And not all PoS implementations involve randomly choosing a validator. The bigger problem here…

> you're describing a very particular implementation of PoS.

It's silly to say PoS doesn't work when what you really mean is that some badly designed PoS systems don't work. Slashing is a solution to a problem. It's honestly irrelevant if some PoS systems don't do slashing.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#198

Post by m3kw9 »

aazaa wrote: post #107

> The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. ... This passage reflects a deep-seated, widespread misunderstanding of how/why Bitcoin works. I suspect the auth…

He did mention 51% attack which implies double spend.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#199

Post by billytetrud »

kerkeslager wrote: post #166
bouncycastle wrote: post #140

Earlier quoted context omitted.

PoW is not the only way to solve double spending (and make sure that the blocks are ordered in a particular timeline), in PoS it is solved by randomly choosing which validator will create the next block according to an algorithm that all the nodes follow. So there's no race to find the next block, the block producer is known in advance. What's more, in PoS, you have guaranteed finality, meaning that after a certain a…

There are a bunch of ways in which you're not exactly correct here. First, you're describing a very particular implementation of PoS. Not all PoS implementations include slashing. This isn't a mere technicality: the most popular implementation of PoS (as measured by market cap) is Cardano's and it doesn't include slashing. And not all PoS implementations involve randomly choosing a validator. The bigger problem here…

> I can stake coins, unstake them, and then spend the coins. Now I've got a free license to mine blocks without risk of slashing

Except you won't because you'll have to wait so long to be able to use the old coins that you'll miss the window of opportunity. Also, it doesn't matter because you need > 50% of the actively minting coins in order to succeed anyway. And if you had that, you don't need to worry about being slashed at all.

Re: Cryptocurrency Blockchains Don’t Need to Be Energy Intensive

#200

Post by jl2718 »

danbruc wrote: post #45

The fundamental problem that needs to be solved is voting power allocation. You have a group of people that wants to use a cryptocurrency and you want to allow everyone to voice his opinion about what transaction are valid and should be recorded and which are not so that you can determine the consensus. Your first problem is to decide who gets to vote. Does everyone get to vote or do you have to participate in the sy…

> For the example of proof of work the assumption is that every human can own and dedicate about the same amount of computing power.

I'm not aware of anybody proposing that bitcoin would be a democratic protocol. There were other proposals that were intended to be democratic, but this was explicitly rejected for bitcoin. You might say that bitcoin was intended to be computationally secure against democracy itself.

> Everyone else now trusts the miners on the basis of aligned incentives

Not really. It's on the basis of cost. Let's say you want to reverse a transaction. First you have to have >50% of the network hash power, which means you need to procure >100% of the current hash rate. That would take at least 2 years and $10B. But let's say you bought 300% of the network hash rate, so you own 75% of it. Great. Now you're two years behind, and at 75% it will take you 4 years for your fork to catch up, so 6 years total. Congratulations, now you've caught up and have the longest chain. Oops, nobody cares; only the main chain coins can be traded for coins, cash, goods, or services. You just spent a huge amount of money to prove that there is no such thing as a 51% attack on a UTXO blockchain.

BTW, not so for a stateful blockchain like ETH/ETC. 51% can take control immediately. The difference is that verification on a stateful blockchain doesn't require proof of origin, just consistency with state. A 51% attacker can easily manipulate the state if they maintain control long enough, just by broadcasting their chosen state to any incumbents. Sure, they could do full verification, but, nobody does that. Most full nodes take a while just to sync from the snapshots, never mind genesis.

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