Wednesday, July 20, 2016

Proof of stake correlate with vote power, at least not anonymously

Post to github

Voting by POS is like lobbyists influencing the government. It protects or increases assets without regard to the long term health of the economy. For a coin, "health" means "used in the marketplace" or "long term value" (which are probably mutually dependent). These are abstract ideas too far away for the vast majority of stake holders who are looking at their bank account. Stock holders are biased towards short-term profit at the long-term expense of the company. Laws had to be put in place to stop it: public disclosure of who the largest stakeholders are and how much they have. The rest of the shareholders demand they restrict themselves to if and when they can cash out. These are not even options for Zcash, so voting by number of shares held as in stocks is not a good idea.

Paying to vote would be better, like the largest taxpayers deciding where government spends its money. Government is no more than code (law) directing the proper use a currency (legal tender for taxes, court, and the marketplace). People in this space need to realize coders=government, stakeholders=voters, and nodes=banks. Voters pay taxes to the government and fees to the banks. The only difference is that computers are infinitely more efficient and reliable than brains.

A short-term investor is less likely to spend money to vote. Money gained from the vote should be invested to increase the value of the coin (like taxes for gov). Helping merchants accept it is an obvious possibility, as is paying more to researchers/coders. Destroying the voting coins is possible, but limited quantity coins are already enough of a marketplace disaster that I would not encourage it. (Markets need constant value in order to keep contracts, wages, and prices valid in the same way science needs units and conversion factors to stay the same. )

Coders/researchers/economists should be the law makers, like Plato's elite philosophers, in designing the constitution. Voters can work out details and future problems. The goal is to make the game fun, fair, and long-lasting. The winning team should not be given extra power to change the rules in the middle of the game. The winning team should even be penalized so that the games remains a distributive network, unless they want to end up playing by themselves, with no external value.
My sensitivity to seeing it [coin issuance curve changes] is partly based on decision-makers being large holders of the coin in quantities unknown even to each other. The rest of this paragraph is against this type of proof-of-stake voting, an issue I posted on yesterday #1112 The complexity of the tech issues in Zcash makes the founders de facto stock-like insiders despite it being open source, insiders that may have a preference for short-term gain at long term expense and not regulated to prevent this expectation. Explicit voting by size of stake is bad because it is a bias for short term holding value at expense of long-term marketplace-use value, which is the basis of long term holding value. Under the pretense of having an unbiased interest in the long-term health of the coin is worse. Proof of stake voting with noble pretenses underlies Bitcoin's woes. "Our developers will not mine". But how will you know? I am not really concerned about this major concern, but the laws have not caught up and the company could accidentally do things that would normally be illegal if it follows a path that is intuitively good. Voting by size of stake is a bias towards a chain letter. Doing it secretly is a bias towards ponziness. Does Satoshi's abandonment of the project indicate awareness of a conflict of interest as a large anonymous stakeholder / insider that should be illegal? Would him selling without disclosure normally be illegal and this is the reason he has not sold any?

All things considered, I think the company should explicitly state its contract with society (what the coin must always be) in its principles of organization, self-referentially unmodifiable, with a copy-left inheritance requirement in the event of a buyout, rigidly connected to and defining the "Zcash"
trademark. The target audience of the contract would be with future holders of the coin, not current holders. Then add it to the blog and code, before launch.

ETH giving release names seems more necessary because the system's philosophy and understanding of itself is still changing. This is why I have very little interest in it. I would like an asset. I want them to succeed in replacing government and banking. But I still want an asset I can understand that is not connected to complexity and self-identity confusion, let alone "Turing-complete security holes".
Both supply curve and name changes give an impression of "instability". Name changing is more of an issue with me because it implies the coin's identity is changing. That's great for improving products who's primary features are changing. They need to change identity in order to advance. But Zcash should have a rigid, limited, stated philosophical identity like Excel and Powerpoint instead of CPU-like name changes. I think Zcash is trying to be anonynous, secure, bitcoin quantity and at least similar curve, distributed mining as much as possible, and fast and efficient as much as possible. Since these features should only improve and without substantial change or any foreseeable addition, names seem to add only confusion as to what the name means (is it one of many products under a Zcash company umbrella? Has the coin changed it's anonymizing or hash method?) and gives an impression of changeability. Of course everyone wants the product to improve the stated goals, but not to otherwise change. A major anonymizing or hash algorithm change is a detail that should fall under Zcash "2.0" or whatever release notes.

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