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NXT POS and Bitshares DPOS
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Author Topic: NXT POS and Bitshares DPOS  (Read 26541 times)

devphp

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Re: NXT POS vs. Bitshares DPOS
« Reply #60 on: August 04, 2014, 11:17:40 am »

One person can run more than 1 delegate. But he would make that public then. Delegates are mostly people from the forum or publicly known individuals like Adam B Levine. So it would be unlikely to get votes from shareholders if you set up a sock puppet account on the forum and campaign with this to be a delegate of which people don't know that is is run by the same individual that also runs another delegates under another forum name. So it is possible for 20 people to run the 101 delegates if the shareholders vote this way.
The question is whether this is more centralized than the few major stakeholders that find most of the blocks in NXT. It was discussed here before whether economies of scale will lead to centralization of NXT forgers, see https://nxtforum.org/general-discussion/nxt-pos-vs-bitshares-dpos/msg71586/#msg71586 We agreed that it is an open question. You might also want to look at this https://bitsharestalk.org/index.php?topic=5564.0;all (the OP + some new arguments have been added recently).

Economic incentives are the tx fees the delegates - the same with NXT.

Well, the difference is, DPOS doesn't make a conscious effort to make it more decentralized, while NXT does. And as distribution of NXTs among users gets better with time (less whales, more dolphins), the number of stakeholders who forge blocks should increase too. There is also a correlation to the price of NXT, higher price incentivizes more NXTers to forge.

In Bitshares DPOS, which I find interesting and worthy of attention too, developers sort of admitted their defeat as far as decentralization aspect goes, and set themselves on a predefined number of delegates, which will probably work out to an even smaller number of real persons behind those delegates, since there is an issue of trust as you say.

Tx fees in Bitshares are very low too, from that comparative table I've seen, there is no way tx fees alone can be an incentive at this point, until there are significantly more txs.

Of course, it's still too early to make final judgements and conclusions, let's wait a year, it should get more clear then.
« Last Edit: August 04, 2014, 11:42:39 am by devphp »
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allwelder

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Re: NXT POS vs. Bitshares DPOS
« Reply #61 on: August 04, 2014, 01:18:23 pm »

BTS---In practice BitShares isn't a distributed system, it is more like coordinated synchronized time shared centralized system. ---BM.
https://bitsharestalk.org/index.php?topic=5402.msg72829#msg72829

NXT---fully decentralized.
It is not that simple and black and white. In the end there is probably not that much difference in terms of decentralization.
So,BM,the inventor of BTS is just kidding according to you.
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ChuckOne

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Re: NXT POS vs. Bitshares DPOS
« Reply #62 on: August 04, 2014, 02:57:52 pm »

BTS---In practice BitShares isn't a distributed system, it is more like coordinated synchronized time shared centralized system. ---BM.
https://bitsharestalk.org/index.php?topic=5402.msg72829#msg72829

NXT---fully decentralized.
It is not that simple and black and white. In the end there is probably not that much difference in terms of decentralization.

As far as I remember, the delegates can be anonymous, too. People just say that it will be unlikely because other will not vote for them.

So, it is basically the perception only. We in Nxt could do the same as well and educate people not to lease out to anonymous people. But I think that is not an issue currently.

Am I right about this assumption?
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delulo

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Re: NXT POS vs. Bitshares DPOS
« Reply #63 on: August 04, 2014, 07:25:24 pm »

Of course, it's still too early to make final judgements and conclusions, let's wait a year, it should get more clear then.

Agree 100%

I am not here to promote anything. I wanted to spark of a quality discussion an analyze the two approaches as rational as possible.

I am a bitshares as well as a NXT holder.... I am mostly on the bitshares forum because you can find a lot of critical and constructive discussions. I appreciate the difference of perspectives of different communities!
« Last Edit: August 04, 2014, 07:33:49 pm by delulo »
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delulo

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Re: NXT POS vs. Bitshares DPOS
« Reply #64 on: August 04, 2014, 07:29:53 pm »

BTS---In practice BitShares isn't a distributed system, it is more like coordinated synchronized time shared centralized system. ---BM.
https://bitsharestalk.org/index.php?topic=5402.msg72829#msg72829

NXT---fully decentralized.
It is not that simple and black and white. In the end there is probably not that much difference in terms of decentralization.
As far as I remember, the delegates can be anonymous, too. People just say that it will be unlikely because other will not vote for them.
So, it is basically the perception only. We in Nxt could do the same as well and educate people not to lease out to anonymous people. But I think that is not an issue currently.
Am I right about this assumption?
Your assumption that delegates can be anonymous is correct! I assume though that shareholders will value and trust those delegates more that are out there with their real identity. It is a market for votes...
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ChuckOne

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Re: NXT POS vs. Bitshares DPOS
« Reply #65 on: August 04, 2014, 07:37:21 pm »

Thank you. That makes even more sense now.

As far as the spirit of Nxt is concerned (being a multi-layer system), having real-world identities published could be another level on top of the completely anonymous system now.

Do you think Nxt could benefit from such increased transparency about who are the hub owners?
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eimon

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Re: NXT POS vs. Bitshares DPOS
« Reply #66 on: August 04, 2014, 09:07:06 pm »

I wouldn't bother to vote..
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ChuckOne

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Re: NXT POS vs. Bitshares DPOS
« Reply #67 on: August 04, 2014, 09:11:22 pm »

I wouldn't bother to vote..

How come?
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eimon

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Re: NXT POS vs. Bitshares DPOS
« Reply #68 on: August 04, 2014, 09:24:31 pm »

I wouldn't bother to vote..

How come?

Who has the time to vote on who forges the blocks for their cryptos? I'd rather just leave it up to an automated system and avoid the chore of researching a bunch of campaigning forgers to figure out which ones are the most trustworthy.
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ChuckOne

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Re: NXT POS vs. Bitshares DPOS
« Reply #69 on: August 04, 2014, 09:26:23 pm »

How would such automated system work?
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eimon

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Re: NXT POS vs. Bitshares DPOS
« Reply #70 on: August 04, 2014, 09:36:09 pm »

How would such automated system work?

Isn't that how POS works? How is the NXT forging process not automated?
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delulo

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Re: NXT POS vs. Bitshares DPOS
« Reply #71 on: August 04, 2014, 10:20:05 pm »

Here is how I see it:
NXT started out as a non-delegation Proof of Stake (see my OP, it is a comparison of delegated vs. non delegates POS), meaning it was not possible to lease your forging power to a pool. Then NXT has added the leasing feature, I figure because it is more secure to not vote with the account where your whole stake is + because some forgers have a too small stake to take the hassle having a machine online 24/7.
Now with NXT which pool you lease to depends on how much the pool you lease to gives you as a kickback. With DPOS such pools (in DPOS called "delegates) are the default option but like with NXT you can also vote for your own delegate and get all the tx fees (equals a stakeholder in NXT that leases to himself). So basically it is just that the default options are twisted for NXT and Bitshares. Therefore saying one system is by default completely centralized and the other one is not is not that realistic. Some degree of centralization is unavoidable with Bitcoin, NXT or Bitshares (economies of scale is the reason: We discussed this before and came to the conclusion that it is difficult to assess how big the effect is). Both systems are quite similar actually. As the delegation/leasing is the default option there is a lot you can do with it apart from determining who is forging: You can vote for delegates that not only are trustworthy to forge blocks, you can also vote for delegates that promise to develope the ecosystem with the tx fees those delegates get.

If delegates /pool operators are publicly known with their real world identity they have more of an incentive to stay honest - they have more to loose.
 
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toast

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Re: NXT POS vs. Bitshares DPOS
« Reply #72 on: August 23, 2014, 11:07:57 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?)

Having even 1 delegate would still be "decentralized" if stakeholders had instant reaction time. 101 is just an arbitrary number where we guess the tradeoff where 1% marginal decentralization is not worth the extra incurred cost at the network.
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2Kool4Skewl

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Re: NXT POS vs. Bitshares DPOS
« Reply #73 on: August 23, 2014, 11:46:50 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?)

Having even 1 delegate would still be "decentralized" if stakeholders had instant reaction time. 101 is just an arbitrary number where we guess the tradeoff where 1% marginal decentralization is not worth the extra incurred cost at the network.

This "theory" is based on the fact that all validators need to make a profit off forging to continue forging.  This is flawed.  People will run nodes not because they will make a profit from forging but because they have a business that requires NXT to operate and that business makes a profit.

Why are you posting this in multiple threads?  Are you a Bitshill?
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We are the descendants of Bitcoin.  We are the continuation of the cause it started, but that perished with its centralization.
An economic system is a manifestation of an ideology.  What was lost, we shall reclaim.
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toast

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Re: NXT POS vs. Bitshares DPOS
« Reply #74 on: August 24, 2014, 12:07:18 am »

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?)

Having even 1 delegate would still be "decentralized" if stakeholders had instant reaction time. 101 is just an arbitrary number where we guess the tradeoff where 1% marginal decentralization is not worth the extra incurred cost at the network.

This "theory" is based on the fact that all validators need to make a profit off forging to continue forging.  This is flawed.  People will run nodes not because they will make a profit from forging but because they have a business that requires NXT to operate and that business makes a profit.

Why are you posting this in multiple threads?  Are you a Bitshill?

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.
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ThomasVeil

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Re: NXT POS vs. Bitshares DPOS
« Reply #75 on: August 24, 2014, 12:22:41 am »

Fine, suppose they don't need to make a profit,

That is the stated core reason for making this whole thing up though.

Quote
then neither does any other system.

It depends on the costs. Bitcoin has massive costs and rising. So they do need high fees. They've put themselves in a corner.
Normal POS forging costs are negligible. Why would two dollar per month loss matter?

Quote
Point is, somebody has to incur the costs, and eventually the number of people that are willing to incur the costs will decrease.

Why? Is there any evidence or even logic behind this?
Evidence to the contrary: The number of forgers for NXT has risen so far.
Logic to the contrary: If I can forge on any machine, and I have to run the software anyways for normal usage - then everyone can forge. Should that alt be used in every store, then basically every cash register can forge.

Payoff: Even without fees, a working safe system has huge benefits.

Quote
All such systems centralize.

Why? What is "such systems"? It always depends on lots of factors.
Nature for example is full of wonderfully decentralized systems.
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2Kool4Skewl

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Re: NXT POS vs. Bitshares DPOS
« Reply #76 on: August 24, 2014, 12:52:25 am »

Fine, suppose they don't need to make a profit,

That is the stated core reason for making this whole thing up though.

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We are the descendants of Bitcoin.  We are the continuation of the cause it started, but that perished with its centralization.
An economic system is a manifestation of an ideology.  What was lost, we shall reclaim.
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toast

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Re: NXT POS vs. Bitshares DPOS
« Reply #77 on: August 24, 2014, 12:58:06 am »

Fine, suppose they don't need to make a profit,

That is the stated core reason for making this whole thing up though.

Suppose they don't need to make an "explicit" profit but it needs to be worth their while to be running the node. The number of people for whom it is worth their while will decrease.

Quote
Quote
Point is, somebody has to incur the costs, and eventually the number of people that are willing to incur the costs will decrease.

Why? Is there any evidence or even logic behind this?
Evidence to the contrary: The number of forgers for NXT has risen so far.
Logic to the contrary: If I can forge on any machine, and I have to run the software anyways for normal usage - then everyone can forge. Should that alt be used in every store, then basically every cash register can forge.

Payoff: Even without fees, a working safe system has huge benefits.
Cost to the network scales linearly with the number of validators. Your evidence doesn't mean much because none of these systems are at any scale worth talking about. Even bitcoin is only at around 5 tps, I'm talking about on the order of 2,000 tps.

Quote
Quote
All such systems centralize.

Why? What is "such systems"? It always depends on lots of factors.
Nature for example is full of wonderfully decentralized systems.
All consensus protocols where you must validate each transaction. Nature has plenty of decentralized systems which do not need to reach consensus about a shared state.
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2Kool4Skewl

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Re: NXT POS vs. Bitshares DPOS
« Reply #78 on: August 24, 2014, 01:11:59 am »

Fine, suppose they don't need to make a profit,

That is the stated core reason for making this whole thing up though.

Suppose they don't need to make an "explicit" profit but it needs to be worth their while to be running the node. The number of people for whom it is worth their while will decrease.

It's worth their while to forge because they have to run a node to process business transactions.

Bitshares is intentionally capping the network at 101 forgers.  Why would you impose a self-limitation?  It seems like flawed thinking.
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We are the descendants of Bitcoin.  We are the continuation of the cause it started, but that perished with its centralization.
An economic system is a manifestation of an ideology.  What was lost, we shall reclaim.
"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

toast

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Re: NXT POS vs. Bitshares DPOS
« Reply #79 on: August 24, 2014, 01:53:29 am »

Fine, suppose they don't need to make a profit,

That is the stated core reason for making this whole thing up though.

Suppose they don't need to make an "explicit" profit but it needs to be worth their while to be running the node. The number of people for whom it is worth their while will decrease.

It's worth their while to forge because they have to run a node to process business transactions.

Bitshares is intentionally capping the network at 101 forgers.  Why would you impose a self-limitation?  It seems like flawed thinking.

For every increase in cost there is a decrease in number of willing forgers. At some scale there it is more expensive to run a node than the risk premium for outsourcing the job of full validation. We just have not reached that scale yet so it is not visible - heck you can even run a bitcoin full node for $40/month.

At some bandwidth/RAM requirement level it switches from "intentionally capping" to "intentionally decentralizing past what you need". Look at the graphs I posted above, you can only argue "it will never reach a scale/cost ratio to where 101 is the sweet spot" and not "that trend doesn't happen".

That said, if it turns out 101 is not the sweet spot, it could be changed. We have no reason to think it is greater than 101 and in fact I suspect it is less. Again, having a single forger would still be decentralized if you assumed very active stakeholders.

Right now BTC has effectively 2 forgers that control the network, but people still call it decentralized. Why? Because it's a social consensus and not a technological one. All you need is for a single block producer to be able to suddenly stop producing blocks and for the network to recover from it.
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