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Price speculation
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Author Topic: Price speculation  (Read 4507396 times)

v39453

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Re: Price speculation
« Reply #24580 on: September 06, 2015, 12:48:35 pm »

So if Alice is trying to cheat by making the funding tx invalid

The known problem is the refund transaction being invalid, not the funding transaction. Bob quits, and Alice has no valid refund transaction.  (I didn't read your protocol carefully, but there is a fundamental problem with a refund transaction, at least at the moment.)
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jl777

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Re: Price speculation
« Reply #24581 on: September 06, 2015, 01:03:25 pm »

So if Alice is trying to cheat by making the funding tx invalid

The known problem is the refund transaction being invalid, not the funding transaction. Bob quits, and Alice has no valid refund transaction.  (I didn't read your protocol carefully, but there is a fundamental problem with a refund transaction, at least at the moment.)
If Bob quits, then how does that invalidate the refund transaction?

Alice creates funding tx and doesnt broadcast this until she is satisfied that the refund tx (and phased tx) are all valid.

Funding tx -> Refund tx, but also Bob can spend the Funding tx -> Bob's spending

But in the latter case, the pubkeyhash is revealed and Alice can approve the phasedtx

Alice creates the funding tx, Alice broadcasts the funding tx, the refund tx uses the funding tx as its input. If Bob bails after he signed the refund tx, then Alice would wait for her refund tx to mature and then submit it. By giving control over the funding tx to the party that relies on it, I think this is they key reason that my protocol works. Having NXT involved in the process acts as a sort of an independent third party as it makes Bob's side totally atomic and with one side totally atomic it is possible (just barely) to make Alice's side secure.

So what is the fundamental problem?

James
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v39453

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Re: Price speculation
« Reply #24582 on: September 06, 2015, 01:18:16 pm »

Alice creates funding tx and doesnt broadcast this until she is satisfied that the refund tx (and phased tx) are all valid.

Bob changes the funding txid (even if it is not Bob's transaction). This can happen even after the transaction has been broadcast, but not included in a block. This problem doesn't make this kind of scheme unusable, but a little risky, similar to accepting a 0 confirmation payment.

I only watched a Youtube video about this some time ago, so I don't have all the technical details. There might even be a fix to this later this year.
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jl777

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Re: Price speculation
« Reply #24583 on: September 06, 2015, 11:35:29 pm »

Alice creates funding tx and doesnt broadcast this until she is satisfied that the refund tx (and phased tx) are all valid.

Bob changes the funding txid (even if it is not Bob's transaction). This can happen even after the transaction has been broadcast, but not included in a block. This problem doesn't make this kind of scheme unusable, but a little risky, similar to accepting a 0 confirmation payment.

I only watched a Youtube video about this some time ago, so I don't have all the technical details. There might even be a fix to this later this year.
Please tell me how Bob can change the funding txid? Alice created this txid spending her funds going to a 2of2 multisig address. The only way I see this is if Bob does massive search of tx to make a different transaction have the same txid (similar to cracking a passphrase).

Now in my scenario Alice has the signed and valid refund txid in pocket, Bob doesnt even have the signed 2of2, so the only way bob can spend the funds is using the normal way, but that discloses the pubkeyhash.

Unless you can come up with concrete and realistic attacks, what you are saying is "i heard from some guy that another guy said this sort of thing wont work"
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neofelis

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Re: Price speculation
« Reply #24584 on: September 07, 2015, 01:16:48 am »

 I love NXT. I have no idea what you guys are saying with the above transactions, but I know it's really cool & you all must be really smart.

NXT has to be the future. :)

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v39453

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Re: Price speculation
« Reply #24585 on: September 07, 2015, 05:40:21 am »

Alice creates funding tx and doesnt broadcast this until she is satisfied that the refund tx (and phased tx) are all valid.

Bob changes the funding txid (even if it is not Bob's transaction). This can happen even after the transaction has been broadcast, but not included in a block. This problem doesn't make this kind of scheme unusable, but a little risky, similar to accepting a 0 confirmation payment.

I only watched a Youtube video about this some time ago, so I don't have all the technical details. There might even be a fix to this later this year.
Please tell me how Bob can change the funding txid?

If he has a node, and the transaction goes through that node and gets included in a block.
 
https://en.bitcoin.it/wiki/Transaction_Malleability

"Thus, while uncommon, it is possible for a node on the network to change a transaction you send in such a way that the hash is invalidated."
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jl777

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Re: Price speculation
« Reply #24586 on: September 07, 2015, 06:13:46 am »

Alice creates funding tx and doesnt broadcast this until she is satisfied that the refund tx (and phased tx) are all valid.

Bob changes the funding txid (even if it is not Bob's transaction). This can happen even after the transaction has been broadcast, but not included in a block. This problem doesn't make this kind of scheme unusable, but a little risky, similar to accepting a 0 confirmation payment.

I only watched a Youtube video about this some time ago, so I don't have all the technical details. There might even be a fix to this later this year.
Please tell me how Bob can change the funding txid?

If he has a node, and the transaction goes through that node and gets included in a block.
 
https://en.bitcoin.it/wiki/Transaction_Malleability

"Thus, while uncommon, it is possible for a node on the network to change a transaction you send in such a way that the hash is invalidated."
"it is not safe to accept a chain of unconfirmed transactions under any circumstance because the later transactions will depend on the hashes of the previous transactions"

That is why I wait for the funding transaction to be CONFIRMED, meaning Alice sent it to the network and it is in the blockchain unmolested. At this point I am not aware of any way for the txid of a confirmed transaction to be changed unless there is a blockchain reorg.

Bob doesnt do anything commital until the funding transaction is confirmed. Once it is confirmed, its txid cant change under any but some significant blockchain event and if bob worries about such things he can wait for 3 or 6 confirmations.

So I repeat, please find specific issues with my protocol:

1. Alice sends txid of funding tx to Bob
2. Bob signs a 2of2 multisig transaction timelocked into the future refunding Alice
3. Alice signs and broadcasts the funding tx into the blockchain after verifying refund tx is proper
4. Bob waits until it is CONFIRMED (and therefore not malleable anymore)
5. Bob spends the funds revealing the pubkey that allows Alice to approve the NXT phased tx

If all stops after 1, nothing happens
If all stops after 2, nothing happens

After 3:
Either Bob spends the funds or he doesnt. In the former case, we go to 5. If he doesnt then Alice waits until the timelock is over and submits the refund tx.

Please tell me specifically how the malleability of the fundingtx, refundtx or bobs spendtx can affect the protocol. It is no so complex a protocol, just 5 steps. Let us assume neither Alice nor Bob are mining BTC blocks and fiddling with the txids.

James
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v39453

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Re: Price speculation
« Reply #24587 on: September 07, 2015, 07:14:42 am »

So I repeat, please find specific issues with my protocol:

1. Alice sends txid of funding tx to Bob
2. Bob signs a 2of2 multisig transaction timelocked into the future refunding Alice
3. Alice signs and broadcasts the funding tx into the blockchain after verifying refund tx is proper

The funding transaction goes through Bob's node, Bob changes its txid and disappears, refund tx becomes invalid, and Alice loses her money. Bob can later try to extort Alice to sign a transaction to return half to Bob and half to Alice.

It's probably not a problem at the moment, but if a service that is vulnerable to a malleability attack becomes more popular, attackers might appear. Mt. Gox initially blamed their losses on malleability (true or not).
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xchrix

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Re: Price speculation
« Reply #24588 on: September 07, 2015, 07:17:22 am »

NXT price is low right now.. that ok. but why is our volume low too? at these prices people should buy like crazy! look at the bitshares trading volume on poloniex - 1000 BTC.. and NXT has about 20 BTC...
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jl777

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Re: Price speculation
« Reply #24589 on: September 07, 2015, 07:34:31 am »

So I repeat, please find specific issues with my protocol:

1. Alice sends txid of funding tx to Bob
2. Bob signs a 2of2 multisig transaction timelocked into the future refunding Alice
3. Alice signs and broadcasts the funding tx into the blockchain after verifying refund tx is proper

The funding transaction goes through Bob's node, Bob changes its txid and disappears, refund tx becomes invalid, and Alice loses her money. Bob can later try to extort Alice to sign a transaction to return half to Bob and half to Alice.

It's probably not a problem at the moment, but if a service that is vulnerable to a malleability attack becomes more popular, attackers might appear. Mt. Gox initially blamed their losses on malleability (true or not).
I changed the protocol so Bob only gets the txid and not the unsigned funding tx bytes.

"Bob changes its txid" -> now is not possible ahead of time as there is not a practical way for him to even know what inputs the funding tx is using, so he cant make any duplicate.

You also forgot to add that Bob has to recreate a tx that is similar enough to original, but with a different txid and then to get this mined into the next block.

I found: https://bitcointalk.org/index.php?topic=303088.0 where it describes this issue in detail. If BTC is under a global random malleability attack, then it is best to not be trading. But even if this is the case, as long as Bob is not the attacker, the trades will complete.

So, at first this is not an issue at all, but as it gets bigger maybe it becomes a target. Let us hope that by then BTC will make it so that third parties cannot modify the txid. By pushing the tx via blockchain.info/pushtx and the local node, Bob wont be able to get his hands on it until it has propagated.

James
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MrCluster87

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Re: Price speculation
« Reply #24590 on: September 07, 2015, 10:46:48 am »

Google Android Pay: How Will Customers Benefit?: https://www.youtube.com/watch?v=urvsek7fsws

A Quick Look at Android Pay: https://www.youtube.com/watch?v=QutLfu-fGmc


Pay close attention to the 2nd video; rewards cards and loyalty points could be set up over the Nxt Monetary System...

Using Android Pay Before It's Released: https://www.youtube.com/watch?v=U97X6HaLITU
« Last Edit: September 07, 2015, 10:54:48 am by MrCluster87 »
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jl777

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Re: Price speculation
« Reply #24591 on: September 07, 2015, 11:30:26 am »

while we wait for bitcoin to fix third party malleability (it is quite horrible this is still there after all these years!) I will add an optional arbiter account that can change the multisig to 2of3.

This allows alice to claim a refund in the event (and only in the event of txid malleability)
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SafeFund

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Re: Price speculation
« Reply #24592 on: September 07, 2015, 05:50:44 pm »

Nxt has had a pretty bad month, but i think we hit the bottom at a strong support zone of 3500 satoshi.

http://coinmarketcap.com/currencies/nxt/#

I think the price can only go up from here, given that so many new startups, and interesting NXT assets pop up, that it will put a big demand on NXT currency.
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farl4bit

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Re: Price speculation
« Reply #24593 on: September 07, 2015, 07:11:56 pm »

Nxt has had a pretty bad month, but i think we hit the bottom at a strong support zone of 3500 satoshi.

http://coinmarketcap.com/currencies/nxt/#

I think the price can only go up from here, given that so many new startups, and interesting NXT assets pop up, that it will put a big demand on NXT currency.
+1  :)
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lucky88888

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Re: Price speculation
« Reply #24594 on: September 08, 2015, 12:52:47 am »

if you want to be super rich then you need the big balls or hardwork to support it. You don't get rich just being lucky, you'll loose it sooner or later.

if your here for the tech/decentralized future then there is nothing to complain as things are moving forward with new tech and ideas coming into crypto frequently.
it have to happen, we will evolve into the next stage of futuristic civilization. (google michio kaku)

Anyway for me it's get big or get nothing, it will be one helluva ride!
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box1413

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Re: Price speculation
« Reply #24595 on: September 08, 2015, 06:51:43 pm »

There is no bottom here where you have mega whales that bought NXT at the entry price.

good for redistribution...
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bcdev

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Re: Price speculation
« Reply #24596 on: September 08, 2015, 06:57:34 pm »

There is no bottom here where you have mega whales that bought NXT at the entry price.

good for redistribution...
No. The best distribution is on top of the bubble, not on the bottom. On the bottom whales buy, so distribution gets worse.
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Cassius

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Re: Price speculation
« Reply #24597 on: September 08, 2015, 06:59:58 pm »

Anyone explain why takeup for XT is so low? I thought there was a deal with the Chinese.
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xchrix

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Re: Price speculation
« Reply #24598 on: September 08, 2015, 08:21:46 pm »

bcdev is right. there are only few smart people  ::)
let the whales collect the coins and then pump the price. everybody who is smart is collecting cheap coins over time.

There is no bottom here where you have mega whales that bought NXT at the entry price.

good for redistribution...
No. The best distribution is on top of the bubble, not on the bottom. On the bottom whales buy, so distribution gets worse.
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Kiomansk

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Re: Price speculation
« Reply #24599 on: September 09, 2015, 05:25:04 am »

How would we define an NXT Whale atm?
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