Recent posts
#41
Design / Incentives / Game Theory / A critique of paul's drivechai...
Last post by MattGoldenberg - May 23, 2016, 04:19:26 PMHey Paul,
A couple of days ago took some time to respond to your drive chain video. The main critiques are :
1. You can't have permissionless innovation without permissionless implementation, because innovation requires interaction with the market.
2. The parasite contract attack can't succeed at bankrupting the real oracle, because it requires the real oracle to always get paid.
3. The type of trust you're talking about (trusting that the system won't fail) is different than the type of trust Ethereum is going for (trusting that people won't control the system for their own gains). Both types of trust can be created with blockchain technology, and neither is the "right way" to use the technology.
4. The voting mechanism for smart contracts is a fragile way to prevent feedback loops, because it's impossible to foresee all problems beforehand. Furthermore, miners aren't chosen for their ability to foresee these problems, but instead for their computing power.
5. A permissionless smart contract system is antifragile because many defenses to feedback loops can be created, and over time only the good mechanisms will survive.
I go deeper into these arguments in my video here:
https://www.youtube.com/watch?v=qPyiVgRGeHk
Would love your thoughts!
Best,
MAtt
A couple of days ago took some time to respond to your drive chain video. The main critiques are :
1. You can't have permissionless innovation without permissionless implementation, because innovation requires interaction with the market.
2. The parasite contract attack can't succeed at bankrupting the real oracle, because it requires the real oracle to always get paid.
3. The type of trust you're talking about (trusting that the system won't fail) is different than the type of trust Ethereum is going for (trusting that people won't control the system for their own gains). Both types of trust can be created with blockchain technology, and neither is the "right way" to use the technology.
4. The voting mechanism for smart contracts is a fragile way to prevent feedback loops, because it's impossible to foresee all problems beforehand. Furthermore, miners aren't chosen for their ability to foresee these problems, but instead for their computing power.
5. A permissionless smart contract system is antifragile because many defenses to feedback loops can be created, and over time only the good mechanisms will survive.
I go deeper into these arguments in my video here:
https://www.youtube.com/watch?v=qPyiVgRGeHk
Would love your thoughts!
Best,
MAtt
#42
Design / Incentives / Game Theory / Reputation security model
Last post by zack - May 22, 2016, 07:55:28 PM"Rep" or "Reputation" is the currency that is owned by the members of the oracle. If you want to participate in the oracle, you have to buy rep from someone who already has it.
Augur's security model says that the rep owned by the oracle has to be worth more than all the outstanding shares in all the markets that the oracle judges over.
As Paul Sztorc talks about in this essay: http://www.truthcoin.info/blog/pow-cheapest/
The cost of locking up 1/2 of all the coins is very expensive. It is as expensive as the interest rate applied to the locked up coins.
My hope is that it is possible to use rep worth 1 to judge over markets worth 100. A > 1/100 ratio.
Is my dream impossible?
Here is the reasoning Augur is using the justify their > 1/2 ratio:
If the oracle lies, the value of rep will drop to zero.
The oracle will only lie if the profit exceeds how much they lose in rep.
The maximum profit is smaller than the value of all the outstanding shares.
You can only steal one side of a bet, bets that are very unequally probable are most profitable to attack.
Augur's security model says that the rep owned by the oracle has to be worth more than all the outstanding shares in all the markets that the oracle judges over.
As Paul Sztorc talks about in this essay: http://www.truthcoin.info/blog/pow-cheapest/
The cost of locking up 1/2 of all the coins is very expensive. It is as expensive as the interest rate applied to the locked up coins.
My hope is that it is possible to use rep worth 1 to judge over markets worth 100. A > 1/100 ratio.
Is my dream impossible?
Here is the reasoning Augur is using the justify their > 1/2 ratio:
If the oracle lies, the value of rep will drop to zero.
The oracle will only lie if the profit exceeds how much they lose in rep.
The maximum profit is smaller than the value of all the outstanding shares.
You can only steal one side of a bet, bets that are very unequally probable are most profitable to attack.
#43
Design / Incentives / Game Theory / Re: Paying the oracle
Last post by zack - May 22, 2016, 07:37:16 PMIt looks like augur is prepared to use dominant assurance contracts to gather the funds to pay oracle.
Their oracle can get paid both ways.
Their oracle can get paid both ways.
#44
Design / Incentives / Game Theory / Re: Paying the oracle
Last post by zack - May 22, 2016, 02:43:16 PMAugur has a very simple solution to this problem.
The person who proposes a decision to the oracle needs to pay money to the oracle.
Even if there are zero trades and zero trading fees, the oracle still gets paid to judge on the outcome.
The person who proposes a decision to the oracle needs to pay money to the oracle.
Even if there are zero trades and zero trading fees, the oracle still gets paid to judge on the outcome.
#45
Design / Incentives / Game Theory / Re: Paying the oracle
Last post by zack - May 20, 2016, 05:59:43 PMThere is a whole class of altcoins that Hivemind can't coexist with.
That is the same thing as saying: "There is a whole class of attacks that Hivemind is vulnerable to".
If you used dominant assurance contracts instead of trading fees, then you could coexist with any other blockchain.
You would welcome and encourage the existence of "parasite contracts". It allows your blockchain to specialize on judgement, and someone else can specialize on trading.
One major way we could improve trading: We should have batch auctions with uniform pricing.
That is the same thing as saying: "There is a whole class of attacks that Hivemind is vulnerable to".
If you used dominant assurance contracts instead of trading fees, then you could coexist with any other blockchain.
You would welcome and encourage the existence of "parasite contracts". It allows your blockchain to specialize on judgement, and someone else can specialize on trading.
One major way we could improve trading: We should have batch auctions with uniform pricing.
#46
Design / Incentives / Game Theory / Re: drivechain
Last post by zack - May 20, 2016, 05:48:00 PMQuote from: psztorc on May 20, 2016, 03:50:14 PM
This is discussed in the blog post "Oracles are the Real Smart Contracts".
The argument in "Oracles are the Real Smart Contract" seems to be about turing completeness, but the attack I am talking about doesn't require turing completeness at all. Any cryptocurrency that lets you make bets based off bitcoin/hivemind's state is good enough.
Quote from: psztorc on May 20, 2016, 03:50:14 PM
the altcoin would not have sufficient mining power.
Mining power doesn't matter. A government sponsored blockchain could be the attacker.
Their authority doesn't come from mining, it comes from law and enforcement and the format they accept taxes in.
For example, if Mexico decided to move the peso onto a blockchain, and they taught their blockchain to be aware of bitcoin and hivemind's state, then anyone in Mexico could make bets without paying trading fees.
The market cap of Mexican peso is high enough to be a problem.
Ethereum is popular today, but don't get too distracted by it. Anyone can make an altcoin.
Quote from: psztorc on May 20, 2016, 03:50:14 PM
Yes, you do need meatspace information, to set the Schelling Indicator.
One of us is confused about something.
Most types of crowdfund do need meatspace information. Because we usually crowdfund something in meatspace. Like having a new song written by a famous artist. We only pay the artist if the song actually gets written.
One type of crowdfund does not need meatspace information. If the crowdfund is a success just by virtue of the money having been raised, then we don't need any meatspace info. The blockchain already knows how much money was given to the crowdfund.
We can raise money to pay the oracle without collecting any trading fees.
#47
Design / Incentives / Game Theory / Re: Hivemind Lightning Network...
Last post by zack - May 20, 2016, 05:29:50 PMA numeric example:
You and I have a channel on hivemind, we each put $1000 into it. We make 100 bets over a year-long period, each with a $1 fee, so there are $1900 left in our channel, all of it is on your side, because you kept winning bets more than me.
We each lock $100 into an ethereum contract promising to settle the hivemind contract at a sequence number of 1, and with the final balance of $1949 on your side, and $50 on my side.
The total amount of time $200 was locked up on ethereum is as long as it takes to close the channel on hivemind.
Case 1, we are both honest. on hivemind you get $1949, and I get $50, on ethereum we each get our $100 back.
Case 2, exit scam:
After we make the agreement on ethereum, I try to finalize the hivemind contract at the step where I had $950 and you had $1049, (after I had lost the first bet).
The ethereum contract locks our $200, and refuses to give it back.
You provide the guilt transaction. Hivemind gives you $1900, and it gives me $0.
You and I have a channel on hivemind, we each put $1000 into it. We make 100 bets over a year-long period, each with a $1 fee, so there are $1900 left in our channel, all of it is on your side, because you kept winning bets more than me.
We each lock $100 into an ethereum contract promising to settle the hivemind contract at a sequence number of 1, and with the final balance of $1949 on your side, and $50 on my side.
The total amount of time $200 was locked up on ethereum is as long as it takes to close the channel on hivemind.
Case 1, we are both honest. on hivemind you get $1949, and I get $50, on ethereum we each get our $100 back.
Case 2, exit scam:
After we make the agreement on ethereum, I try to finalize the hivemind contract at the step where I had $950 and you had $1049, (after I had lost the first bet).
The ethereum contract locks our $200, and refuses to give it back.
You provide the guilt transaction. Hivemind gives you $1900, and it gives me $0.
#48
General / Re: Download error
Last post by psztorc - May 20, 2016, 03:54:33 PM> resolved
Good! Yes, usually people find the following advice to be helpful:
https://github.com/bitcoin-hivemind/testnet-canonical
Good! Yes, usually people find the following advice to be helpful:
https://github.com/bitcoin-hivemind/testnet-canonical
#49
Design / Incentives / Game Theory / Re: Hivemind Lightning Network...
Last post by psztorc - May 20, 2016, 03:53:24 PM> Pairs of traders can participate in hundreds of trades, then close their channel as if they had only participated in one trade.
Those trades involve trust. And therefore they reintroduce the likelihood of an exit scam.
> They lock coins on the ethereum side as a promise not to bring each other to trial.
Check the math with a numeric example.
Those trades involve trust. And therefore they reintroduce the likelihood of an exit scam.
> They lock coins on the ethereum side as a promise not to bring each other to trial.
Check the math with a numeric example.
#50
Design / Incentives / Game Theory / Re: Paying the oracle
Last post by psztorc - May 20, 2016, 03:51:34 PMYes, Ethereum and Hivemind (and Augur) cannot co-exist. Only one can exist.
Fortunately for me, Ethereum and Augur are badly designed, and live in a toxic no-criticism environment.
Fortunately for me, Ethereum and Augur are badly designed, and live in a toxic no-criticism environment.