One very real issue for alt-currencies that don't peg to Bitcoin is that market liquidity is a bitch. By almost all standards current global Bitcoin liquidity is already very, very low. Too low for many transactions that come across my desk at least. There are a lot of reasons for that low liquidity, but to try and float a new pair for which the likely initial counter-asset is going to be Bitcoin means minuscule liquidity. Peter On Sat, Jul 13, 2013 at 2:53 AM, Jorge Timón wrote: > Sorry about that. > Maybe more important, what's wrong with bitcoin and zerocoin being > different currencies with an exchange rate completely decided by the > market instead of trying to force 1:1 ??? > > > On 7/13/13, Jorge Timón wrote: > > I'm not sure I understand the whole proposal, but it seems to me that > > having different characteristics, bitcoins and zerocoins would be > > different currencies. > > I don't see the need to peg zerocoins to bitcoins. > > It is great to have an anonymous p2p currency, maybe some bitcoin > > users that use bitcoin because of the transparency they allow (public > > funds expenditures could be more transparent than they have ever been) > > don't like this hard-fork. Well, maybe this is not the main reason, > > but I think this could be highly controversial. > > Maybe everybody likes it, but can you expand more on the > > justifications to peg the two currencies? > > If you're requiring one chain look at the othe for validations (miners > > will have to validate both to mine btc) you don't need the cross-chain > > contract, you can do it better. > > > > Instead of doing this: > > > > https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains > > > > You could do something like this: > > > > https://bitcointalk.org/index.php?topic=31643.0 > > > > This very idea has been proposed recently by othe people, but I can't > > find where. > > > > The problem with this is of course scalabilty. Once you do it for what > > chain, why not the others? > > You can't validate 100 chains to mine bitcoin even if they're all > > merged mined: that's asking miners too much. > > If zerocoin enjoys this privilege why not, for example? > > > > As some of you may know, Mark Friedenbach and I are working on a > > protocol modification to support issuance of arbitrary assets. Would > > be something like colored coins but better, we're calling it > > FreiMarkets. Of course these assets are not p2p like bitcoin or > > freicoin themselves: they have a centralized issuer. > > But if you allowed to sacrifice real bitcoins (as opposed to IOUs > > denominated in BTC like you have, for example, in ripple) so they > > appear in Freicoin's chain and turn them back, you could have p2p > > bitcoins inside Freicoin's chain. > > Maybe ripplers want that too. If FreiMarkets prove to work well on > > freicoin and be scalable enough, maybe a lot of scamcoins apply the > > hardfork too and they want to have p2p btc in their chain as well. > > > > Maybe I could have explained this without even mentioning FreiMarkets, > > but my point is that you're asking for a lot like it was nothing. > > Zerocoin-bitcoin fungibility hardfork is opening a little pandora's > > box. Are we ready? > > > > I was waiting for others to comment and I'm surprised that no one else > > has made any objection yet. But if no one's going to point out the > > controvery that is so obvious to me, I feel almost like a > > responsability to act like a Devil's advocate here. > > So if you make bitcoin and zerocoin fungible, I want bitcoins to be > > transferrable to freicoin's chain. And I warn you there will be many > > more people asking for the same thing on other chains. What criteria > > will we have to say yes or no? > > More > > > > > > > > On 7/12/13, Peter Todd wrote: > >> On Fri, Jul 05, 2013 at 04:01:40PM +0200, Adam Back wrote: > >>> Do people think that should work? It seems to me it should with > >>> minimal, > >>> bitcoin changes. I think the rule for either-or mining should be as > >>> simple > >>> as skipping the value / double-spend validation of the blocks that are > >>> zerocoin mining blocks. Obviously zerocoin blocks can themselves end > up > >>> on > >>> forks, that get resolved, but that fork resolution can perhaps be > >>> shared? > >>> > >>> (Because the fork resolution is simply to accept the longest fork). > >> > >> Yeah, there's been a lot of doom and gloom about zerocoin that is > >> frankly unwarrented. For instance people seem to think it's impossible > >> to make a blockchain with zerocoin due to the long time it takes to > >> verify transactions, about 1.5 seconds, and never realize that > >> verification can be parallelized. > >> > >> Anyway the way to do it is to get out of the model of large blocks and > >> think about individual transactions. Make each transaction into its own > >> block, and have each transaction refer to the previous one in history. > >> (zerocoin is inherently linear due to the anonymity) > >> > >> Verification does *not* need to be done by every node on every > >> transaction. Make the act of creating a transaction cost something and > >> include the previous state of the accumulator as part of a transaction. > >> Participants verify some subset of all transactions, and should they > >> find fraud they broadcast a proof. Optionally, but highly recomended, > >> make it profitable to find fraud, being careful to ensure that it's > >> never profitable to create fraud then find it yourself. > >> > >> Anyway Bitcoin is limited to 7tx/s average so even without probabalistic > >> verification it'd be perfectly acceptable to just limit transactions to > >> one every few seconds provided you keep your "blocksize" down to one > >> transaction so the rate isn't bursty. You're going to want to be > >> cautious about bandwidth requirements anyway to make sure participants > >> can stay anonymous. > >> > >> As you suggest creating zerocoins from provably sacrificing bitcoins is > >> the correct approach. The consensus algorithm should be that you > >> sacrifice zerocoins (specifically fractions there-of - note how I'm > >> assuming support for non-single-zerocoin amounts) and whatever chain has > >> the highest total sacrifice wins. One way to think about > >> proof-of-sacrifice is it's really proof-of-work, transferred. It also > >> has the *big* advantage that to double-spend, or for that matter 51% the > >> chain, you have to outspend everyone with a stake in the viability of > >> the blockchain: they can sacrifice their zerocoins to combat you. In the > >> case of a double-spend to rip off an online merchant the total amount > >> you could profit is the same as the total amount they would rationally > >> spend to stop you, and soon there will be collateral damage too > >> increasing the amount third-parties are willing to sacrifice to stop > >> you. You can't win. > >> > >> Of course, this does mean that even unsuccesful sacrifices need to be > >> costly. You can make this acceptable to users by allowing a sacrifice to > >> be reused, but only for the exact same transaction it was originally > >> committed to. > >> > >> Sacrifices in this manner are *not* proof of stake. You really are > >> giving up something by publishing the information that proves you made > >> the sacrifice as that information can always be included in the > >> consensus thereby taking away a limited resource. (your zerocoins) It's > >> more heavily dependent on jam-free networks, and doesn't play nice with > >> SPV, but zero-knowledge proofs will may help the latter. (you've got > >> Bitcoin itself to act as a random beacon remember) > >> > >> Speaking of, another similar approach is to take advantage of how a > >> Bitcoin sacrifice can be made publicly visible. Create a txout of some > >> value like the following: > >> > >> OP_RETURN > >> > >> Now even if you fail to publish your blocks, at least the whole world > >> knows how much they need to outspend to be sure you can't 51% attack the > >> network. This approach and not-btc sacrifices can go hand in hand too, > >> especially if nodes follow rules where they consider btc txout > >> sacrifices as "fixed" and only subject to change by the bitcoin > >> blockchain re-organizing. Advantages and disadvantages to both > >> approaches. (remember that visible tx's can be censored by miners) > >> > >> Sacrifice to mining fees may be acceptable in the future too, but only > >> if OP_DEPTH is implemented so as to not give Bitcoin miners bad > >> incentives. (the sacrificed coins should go to fees *months* or even > >> *years* after they have been sacrificed) > >> > >> Turning zerocoins back into Bitcoins is just supply and demand: sell > >> them. You'll always lose a bit given by definition the maximum exchange > >> rate is 1:1, but anonymity may be worth it. Others have written about > >> cross-chain trading protocols, and I'll point out they are easier to > >> implement if one chain has full visibility into what's happening on the > >> other; zerocoin is most likely to be implemented as an extension to the > >> bitcoin client itself. > >> > >> Finally if the transaction rate is too slow there's nothing wrong with > >> running multiple parallel zerocoin blockchains, although given the > >> usecase of moving your funds through zerocoin for anonymity, and using > >> the clean coins that come out the other side, there's no reason to think > >> the zerocoin chain transaction rate needs to be especially high anyway. > >> > >> -- > >> 'peter'[:-1]@petertodd.org > >> 0000000000000013b2f7ee77027f583b765ad9811dfe3d0adc801e295fd9acdf > >> > > > > > > -- > > Jorge Timón > > > > http://freico.in/ > > > > > -- > Jorge Timón > > http://freico.in/ > > > ------------------------------------------------------------------------------ > See everything from the browser to the database with AppDynamics > Get end-to-end visibility with application monitoring from AppDynamics > Isolate bottlenecks and diagnose root cause in seconds. > Start your free trial of AppDynamics Pro today! > http://pubads.g.doubleclick.net/gampad/clk?id=48808831&iu=/4140/ostg.clktrk > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists.sourceforge.net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development > -- ------------------------------ [image: CoinLab Logo]PETER VESSENES CEO *peter@coinlab.com * / 206.486.6856 / SKYPE: vessenes 900 Winslow Way East / SUITE 100 / Bainbridge Island, WA 98110