On Sat, Jun 27, 2015 at 1:34 PM, Peter Todd <pete@petertodd.org> wrote:
On Sat, Jun 27, 2015 at 01:25:14PM -0400, Michael Naber wrote:
> Global network consensus means that there is global network recognition
> that a particular transaction has occurred and is irreversible. The
> off-chain solutions you describe, while probably useful for other purposes,
> do not exhibit this characteristic and so they are not global network
> consensus networks.

Hub-and-spoke payment channels and the Lightning network are not
off-chain solutions, they are ways to more efficiently use on-chain
transactions to achive the goal of moving assets from point a to point
b, resulting in more economic transactions being done with fewer - but
not zero! - blockchain transactions.

Off-chain transaction systems such as Changetip allow economic
transactions to happen with no blockchain transactions at all.

> Bitcoin Core scales as O(N), where N is the number of transactions. Can we
> do better than this while still achieving global consensus?

No, Bitcoin the network scales with O(n^2) with your above criteria, as
each node creates k transactions, thus each node has to verify k*n
transactions, resulting in O(n^2) total work.

For Bitcoin to have O(n) scaling you have to assume that the number of
validation nodes doesn't scale with the number of users, thus resulting
in a system where users trust others to do validation for them. That is
not a global consensus system; that's a trust-based system.


Why does it matter what the "total work" of the network is? Anyone who is participating as a node on the network only cares about the resources required to run their own node, not the resources everyone else needs to run their nodes.

Also, no assumption needed, it is quite clear that the number of nodes is not scaling along with the number of users. If anything it appears to be inversely proportional.
 
There's nothing inherently wrong with that, but why change Bitcoin
itself into a trust-based system, when you can preserve the global
consensus functionality, and built a trust-based system on top of it?

--
'peter'[:-1]@petertodd.org
0000000000000000007fc13ce02072d9cb2a6d51fae41fefcde7b3b283803d24

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