📅 Original date posted:2017-06-22
📝 Original message:Hi Erik,
I don't think that your design is competitive. Why would users tolerate
a depreciation of X% per year, when there are alternatives which do not
require such depreciation? It seems to me that none would.
Paul
On 6/20/2017 9:38 AM, Erik Aronesty wrote:
> - a proof-of-burn sidechain is the ultimate two-way peg. you have to
> burn bitcoin *or* side-chain tokens to mine the side chain. the size
> of the burn is the degree of security. i actually wrote code to do
> randomized blind burns where you have a poisson distribution
> (non-deterministic selected burn). there is no way to game it...
> it's very similar to algorand - but it uses burns instead of staking
>
> - you can then have a secure sidechain that issues a mining reward in
> sidechain tokens, which can be aggrregated and redeemed for bitcoins.
> the result of this is that any bitcoins held in the sidechain
> depreciate in value at a rate of X% per year. this deflation rate
> pays for increased security
>
> - logically this functions like an alt coin, with high inflation and
> cheap transactions. but the altcoin is pegged to bitcoin's price
> because of the pool of unredeemed bitcoins held within the side chain.
>
>
>
> On Tue, Jun 20, 2017 at 7:54 AM, Paul Sztorc <truthcoin at gmail.com
> <mailto:truthcoin at gmail.com>> wrote:
>
> Hi Erik,
>
> As you know:
>
> 1. If a sidechain is merged mined it basically grows out of the
> existing Bitcoin mining network. If it has a different PoW
> algorithm it is a new mining network.
> 2. The security (ie, hashrate) of any mining network would be
> determined by the total economic value of the block. In Bitcoin
> this is (subsidy+tx_fees)*price, but since a sidechain cannot
> issue new tokens it would only be (tx_fees)*price.
>
> Unfortunately the two have a nasty correlation which can lead to a
> disastrous self-fulfilling prophecy: users will avoid a network
> that is too insecure; and if users avoid using a network, they
> will stop paying txn fees and so the quantity (tx_fees)*price
> falls toward zero, erasing the network's security. So it is quite
> problematic and I recommend just biting the bullet and going with
> merged mining instead.
>
> And, the point may be moot. Bitcoin miners may decide that, given
> their expertise in seeking out cheap sources of power/cooling,
> they might as well mine both/all chains. So your suggestion may
> not achieve your desired result (and would, meanwhile, consume
> more of the economy's resources -- some of these would not
> contribute even to a higher hashrate).
>
> Paul
>
>
>
>
> On 6/19/2017 1:11 PM, Erik Aronesty wrote:
>> It would be nice to be able to enforce that a drivechain *not*
>> have the same POW as bitcoin.
>>
>> I suspect this is the only way to be sure that a drivechain
>> doesn't destabilize the main chain and push more power to miners
>> that already have too much power.
>>
>>
>
>
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Paul Sztorc [ARCHIVE] /
npub10t…w9uu9
2023-06-07 18:03:01
in reply to nevent1q…mrzn
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npub10tqt6wdc2neye0cxwyphtre6n5uccgur94khtqjdry9wxhrvywlq6w9uu9Published at
2023-06-07 18:03:01Event JSON
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"content": "📅 Original date posted:2017-06-22\n📝 Original message:Hi Erik,\n\nI don't think that your design is competitive. Why would users tolerate\na depreciation of X% per year, when there are alternatives which do not\nrequire such depreciation? It seems to me that none would.\n\nPaul\n\nOn 6/20/2017 9:38 AM, Erik Aronesty wrote:\n\u003e - a proof-of-burn sidechain is the ultimate two-way peg. you have to\n\u003e burn bitcoin *or* side-chain tokens to mine the side chain. the size\n\u003e of the burn is the degree of security. i actually wrote code to do\n\u003e randomized blind burns where you have a poisson distribution\n\u003e (non-deterministic selected burn). there is no way to game it...\n\u003e it's very similar to algorand - but it uses burns instead of staking\n\u003e\n\u003e - you can then have a secure sidechain that issues a mining reward in\n\u003e sidechain tokens, which can be aggrregated and redeemed for bitcoins.\n\u003e the result of this is that any bitcoins held in the sidechain\n\u003e depreciate in value at a rate of X% per year. this deflation rate\n\u003e pays for increased security\n\u003e\n\u003e - logically this functions like an alt coin, with high inflation and\n\u003e cheap transactions. but the altcoin is pegged to bitcoin's price\n\u003e because of the pool of unredeemed bitcoins held within the side chain.\n\u003e\n\u003e\n\u003e\n\u003e On Tue, Jun 20, 2017 at 7:54 AM, Paul Sztorc \u003ctruthcoin at gmail.com\n\u003e \u003cmailto:truthcoin at gmail.com\u003e\u003e wrote:\n\u003e\n\u003e Hi Erik,\n\u003e\n\u003e As you know:\n\u003e\n\u003e 1. If a sidechain is merged mined it basically grows out of the\n\u003e existing Bitcoin mining network. If it has a different PoW\n\u003e algorithm it is a new mining network.\n\u003e 2. The security (ie, hashrate) of any mining network would be\n\u003e determined by the total economic value of the block. In Bitcoin\n\u003e this is (subsidy+tx_fees)*price, but since a sidechain cannot\n\u003e issue new tokens it would only be (tx_fees)*price.\n\u003e\n\u003e Unfortunately the two have a nasty correlation which can lead to a\n\u003e disastrous self-fulfilling prophecy: users will avoid a network\n\u003e that is too insecure; and if users avoid using a network, they\n\u003e will stop paying txn fees and so the quantity (tx_fees)*price\n\u003e falls toward zero, erasing the network's security. So it is quite\n\u003e problematic and I recommend just biting the bullet and going with\n\u003e merged mining instead.\n\u003e\n\u003e And, the point may be moot. Bitcoin miners may decide that, given\n\u003e their expertise in seeking out cheap sources of power/cooling,\n\u003e they might as well mine both/all chains. So your suggestion may\n\u003e not achieve your desired result (and would, meanwhile, consume\n\u003e more of the economy's resources -- some of these would not\n\u003e contribute even to a higher hashrate).\n\u003e\n\u003e Paul\n\u003e\n\u003e\n\u003e\n\u003e\n\u003e On 6/19/2017 1:11 PM, Erik Aronesty wrote:\n\u003e\u003e It would be nice to be able to enforce that a drivechain *not*\n\u003e\u003e have the same POW as bitcoin.\n\u003e\u003e\n\u003e\u003e I suspect this is the only way to be sure that a drivechain\n\u003e\u003e doesn't destabilize the main chain and push more power to miners\n\u003e\u003e that already have too much power.\n\u003e\u003e\n\u003e\u003e\n\u003e\n\u003e\n\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20170622/3ba60e24/attachment.html\u003e",
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