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Author Topic: Economic Clustering  (Read 8711 times)

Come-from-Beyond

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Economic Clustering
May 21, 2014, 10:03:24 pm

I'd like to announce a new feature. Today I committed code related to Economic Clustering (EC). This concept is a development of the idea of Economic Majority introduced by Meni Rosenfeld.

In his notes BCNext states that EC solves the most critical flaw of Proof-of-Stake concept, according to the description this flaw is what others call "Nothing-at-Stake" problem. The 3rd part of the Plan contains such the words:
Quote
Mining in Nxt relies on cooperation of people and even forces it
That was said about EC.

The concept of economic clustering is quite simple. Words "economic majority" say enough to explain how it works. From technical point of view it means that if someone decides to rewrite the history of the blockchain he won't be able to include transactions of those who don't take part in the attack, because every transaction contains the id of one of the recent blocks. When Alice sends money to Bob in exchange for something she'll get what she wants only if Bob validates the transaction. And this can happen only if they are both on the same branch.

Forgers can't forge all branches at once, they are faced with a choice, an attempt to forge more than one branch will lead to their exclusion from one of the clusters.

The proposed technical solution will also be used for analysis of transactions to detect forks. This is one of the reasons why I decided to implement part of EC without waiting for complete TF. Another reason is that proposed solution should be peer reviewed. Recent hot debates on BitcoinTalk regarding Nothing-at-Stake show that people are paying a lot of attention to PoS cryptocoins. This is a good opportunity to get a lot of reviews.

Extra consensus rule mentioned in the 1st part of the Plan is a rule that defines choice of an economic cluster a node sticks too. I can't reveal all the details yet, we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...

martismartis

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Re: Economic Clustering
May 21, 2014, 10:15:56 pm

I thought this psychological experiment was already ended  ;D
But I see, it is not.

bitcoinpaul

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Re: Economic Clustering
May 22, 2014, 06:02:19 am

I thought this psychological experiment was already ended  ;D
But I see, it is not.

Well, CfB is part of that experiment ;D
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allwelder

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Re: Economic Clustering
May 22, 2014, 07:16:04 am

concept...
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farl4bit

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Re: Economic Clustering
May 22, 2014, 07:28:38 am

Interesting!

gs02xzz

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Re: Economic Clustering
May 22, 2014, 03:00:31 pm

we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...

This is something the community can help with. How far do we behind a good hubs/leasing forging nodes network required for the TF? Do you have any expectation for the time and size and numbers of the bubs the community should build to implement the TF?
Nxt Mission is to commercialize the crypto technology and build new commerce and society.

bitcoinpaul

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Re: Economic Clustering
May 22, 2014, 03:04:15 pm

we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...

I hope you are in talk with the committee or other experts of the Nxt community. Otherwise, nothing will happen...
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gs02xzz

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Re: Economic Clustering
May 22, 2014, 03:12:19 pm

we still need to build infrastructure of nodes and hubs and (this is more important) to form such a cluster...

I hope you are in talk with the committee or other experts of the Nxt community. Otherwise, nothing will happen...

I was thinking to make a proposal to the Infras Committee to create a bounty to reward leasing forging hubs if the hubs operate for a certain time and with a certain amount of Nxt and a certain infras capacity. Don't know what should be the "certain".
« Last Edit: May 22, 2014, 03:26:00 pm by gs02xzz »
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Come-from-Beyond

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Re: Economic Clustering
May 22, 2014, 03:41:27 pm

This is something the community can help with. How far do we behind a good hubs/leasing forging nodes network required for the TF? Do you have any expectation for the time and size and numbers of the bubs the community should build to implement the TF?

No numbers, when I feel that Nxt is strong enough I'll release the beast.

Come-from-Beyond

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Re: Economic Clustering
May 22, 2014, 03:42:12 pm

I hope you are in talk with the committee or other experts of the Nxt community. Otherwise, nothing will happen...

I don't talk with anyone. Community should do all the things.

bitcoinpaul

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Re: Economic Clustering
May 22, 2014, 03:54:28 pm

Ok, is the infrastructure committee aware of this and active in any kind?
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Come-from-Beyond

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Re: Economic Clustering
May 22, 2014, 04:07:01 pm

Ok, is the infrastructure committee aware of this and active in any kind?

No clue. I handed over the unclaimed coins and forgot about the committees.

bitcoinpaul

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Re: Economic Clustering
May 22, 2014, 04:07:54 pm

Ok, is the infrastructure committee aware of this and active in any kind?

No clue. I handed over the unclaimed coins and forgot about the committees.

Yeah, wrong thread maybe. I didn't ask you :-*
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msin

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Re: Economic Clustering
May 22, 2014, 05:44:31 pm

Seems like an important step in TF, let's organize and get what we need to release the beast.

ChuckOne

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Re: Economic Clustering
May 22, 2014, 06:33:03 pm

Ok, is the infrastructure committee aware of this and active in any kind?

I am pretty sure it is as I am a member of it. ;)

Btw. we need more people that are willing to provide infrastructure. What I can see, there are almost all the same.

I trust you, bitcoinpaul, to be able to gather people and to encourage them to build hubs. Bounties are available at the InfCom.
« Last Edit: May 22, 2014, 06:36:05 pm by ChuckOne »

iruu

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Re: Economic Clustering
May 22, 2014, 06:36:35 pm

This doesn't solve 'nothing at stake' problem.
It only makes it a bit harder to do it. 
For NXT to be PoS, you need to count transaction from account x as confirmation (ie. better cumulative difficulty) of the exact block in which they appear and require them to be valid only in this exact block. 

Come-from-Beyond

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Re: Economic Clustering
May 22, 2014, 06:38:16 pm

This doesn't solve 'nothing at stake' problem.
It only makes it a bit harder to do it. 
For NXT to be PoS, you need to count transaction from account x as confirmation (ie. better cumulative difficulty) of the exact block in which they appear and require them to be valid only in this exact block.

Great, the 1st review. Now u should prove it to add some credibility to ur statement.

iruu

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Re: Economic Clustering
May 22, 2014, 06:54:25 pm

Ok, I'll explain more. 
You have 51% of the stake.

Block X: you sell your stake to B, block has to be generated by other 49% -> other blocks, validated by 49%
In NXT, B can't forge for one day, so you don't have to worry your 51% forging soon.

B waits for several confirmations and gives you money, then you create a fake blockchain, rewriting the first block without your transaction.
51% are enough to get lower cumulative difficulty after several blocks.

Bonus points for waiting to broadcast your selling transaction on a block in which you're first in queue for generation.

You made a double spend with nothing at stake, because you already sold it. 

Solution: your transaction must confirm its block and B must be able forge in the next block. 
If B is not able to forge, two blockchains are merely identical up to X. Then you have the advantage of additional 51% stake for the next day, which should be enough to force a fork during that time. 

I'm aware that this allows optimization of fee collection in current algorithm (or was it some previous version?), but this problem has to be solved in some other way, if NXT is to become a proof of stake currency. 
« Last Edit: May 22, 2014, 06:56:19 pm by iruu »

Come-from-Beyond

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Re: Economic Clustering
May 22, 2014, 07:02:15 pm

Ok, I'll explain more. 
You have 51% of the stake.

Block X: you sell your stake to B, block has to be generated by other 49% -> other blocks, validated by 49%
In NXT, B can't forge for one day, so you don't have to worry your 51% forging soon.

B waits for several confirmations and gives you money, then you create a fake blockchain, rewriting the first block without your transaction.
51% are enough to get lower cumulative difficulty after several blocks.

Bonus points for waiting to broadcast your selling transaction on a block in which you're first in queue for generation.

You made a double spend with nothing at stake, because you already sold it. 

Solution: your transaction must confirm its block and B must be able forge in the next block. 
If B is not able to forge, two blockchains are merely identical up to X. Then you have the advantage of additional 51% stake for the next day, which should be enough to force a fork during that time. 

I'm aware that this allows optimization of fee collection in current algorithm (or was it some previous version?), but this problem has to be solved in some other way, if NXT is to become a proof of stake currency.

U can't rewrite even 10 blocks back. Economic Cluster won't accept them.

iruu

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Re: Economic Clustering
May 22, 2014, 07:09:48 pm

That's not proof of stake, that's online consensus. 
Since you have the majority of nxt, new nodes will trust you. 
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