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NXT POS and Bitshares DPOS
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Author Topic: NXT POS and Bitshares DPOS  (Read 26485 times)

jl777

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Re: NXT POS vs. Bitshares DPOS
« Reply #120 on: August 24, 2014, 07:47:09 pm »

IDK if anyone posted this excerpt yet but I feel like it is critical:

wiki (dot) bitshares (dot) org/index.php/DPOS#Scalability

tl;dr  ALL consensus protocols centralize at scale. How well do you manage it? Does yours squeeze out small players (or do they have to do it at a loss like with BTC or soon PPC... and eventually NXT?)
So the argument is that as the scale grows, the costs of forging rise to the point where few can afford to be altruistic about it. When that happens, the number of forgers will be proportional to the income from forging. If Nxt has more than 101 forgers, it will be because the Nxt transaction fees are higher than Bitshares.

One question I have about this: won't the costs be bursty? I'm assuming transparent forging: that is, that most transactions are sent to the few nodes most likely to forge the next block. In this model, there will be a base cost from running a full node: you need to maintain a full copy of the block-chain and relay transactions. If you are also a forging node, there will be the additional cost of occasionally forging a block. Every so often, you'll receive a deluge of 7,000 transactions per second for a minute or so, and your node needs to be able to handle that load.

According to Bitshares, if we double the number of forging nodes, we need to double the transaction fees. I agree that twice as many people will be paying the base cost. However, the number of people paying the burst cost will stay the same, because the number of blocks per day won't change. A given node will have to handle the deluge of transactions half as often. Won't that be cheaper for the individual nodes? The internet is used to bursty loads and you can often arrange to only pay for the capacity you are using, while you are using it.
dont forget NXT value will grow as usage grows, so if double the traffic, very likely NXT is worth close to double
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ChuckOne

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Re: NXT POS vs. Bitshares DPOS
« Reply #121 on: August 24, 2014, 09:14:36 pm »

Yes, I am a bitshill.

Fine, suppose they don't need to make a profit, then neither does any other system. Point is, somebody has to incur the costs, and eventually the number of people that are willing to incur the costs will decrease. All such systems centralize.

I would not say so. It depends on how big those costs are.
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Brangdon

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Re: NXT POS vs. Bitshares DPOS
« Reply #122 on: August 25, 2014, 10:41:54 am »

dont forget NXT value will grow as usage grows, so if double the traffic, very likely NXT is worth close to double
Yes; that's independent of the number of forging nodes, though. Bitshares are saying that if the number of forging nodes doubles, the income for each node will halve, because the same number of NXT will be divided between them. That's unrelated to the traffic level, or the value of 1 NXT.

It's also independent of the currency; Bitshares are arguing that if we have more forging nodes for a given number of transactions, it will be because our fees are higher. Even if NXT is worth more, presumably the same applies to Bitshares so it cancels out.

7,000 tps for 60 seconds is about 420,000 transactions per block. Assuming no altruism, the real-world value of an average NXT transaction fee will be 1/420,000 times the real-world cost of processing a block, whatever that comes out to in NXT. Maybe it will be low enough that lowering it further won't matter; I don't know.
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