tag:blogger.com,1999:blog-43011736510184567582024-03-12T20:53:29.971-07:00Economics, A.I., physics, & evolutionZawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.comBlogger233125tag:blogger.com,1999:blog-4301173651018456758.post-48620256109761605612023-01-17T19:09:00.002-08:002023-01-21T11:17:15.477-08:00Confederacy of Dunces: Ignatius Reilly modeled after Samuel Johnson?<p>I wonder if Ignatius Reilly was modeled more on Samuel Johnson than Don Quixote or Thomas Aquinas. Johnson lived in the 1700's where Ignatius may have felt more at home. Johnson was hopelessly married to London. He was slovenly, pious, and grotesque (identified and unidentified physical maladies, suspected of having Tourette syndrome). His father died when he was young & he married a woman twice his age. He was famous for his literary intellect, wit, brutal honesty, and devotion to religion. The work that made him famous was an English dictionary that was the premier dictionary for 170 years until the Oxford English Dictionary. Here are a few entries where he let his wit & humour influence the work:</p><p><br /></p><p>Pension. 'An allowance ... generally understood to</p><p> mean pay given to a state hireling for treason to his</p><p> country.' </p><p>Oats. 'A grain which in England is generally</p><p> given to horses, but in Scotland supports the people.'</p><p>Excise. 'A hateful tax levied upon commodities, and</p><p> adjudged not by the common judges of property, but wretches</p><p> hired by those to whom excise is paid.'</p><p><br /></p><p>Relevant excerpts from Boswell's biography on Johnson:</p><p><br /></p><p>After dinner, our conversation first turned upon Pope. Johnson said, his characters of men were admirably drawn, those of women not so well. He repeated to us, in his forcible melodious manner, the concluding lines of the Dunciad. While he was talking loudly in praise of those lines, one of the company ventured to say, "Too fine for such a poem:—a poem on what?" JOHNSON, (with a disdainful look,) "Why, on dunces. It was worth while being a dunce then. Ah, Sir, hadst thou lived in those days! It is not worth while being a dunce now, when there are no wits."</p><p>....</p><p>To the utter astonishment of all the passengers ... he defended the Inquisition, and maintained, that 'false doctrine should be checked on its first appearance; that the civil power should unite with the church in punishing those who dared to attack the established religion'</p><p>...</p><p>'Some people have a foolish way of not minding, or pretending not to mind, what they eat. For my part, I mind my belly very studiously, and very carefully; for I look upon it, that he who does not mind his belly will hardly mind anything else.' ... Yet I have heard him, upon other occasions, talk with great contempt of people who were anxious to gratify their palates ... nor would he, unless when in very high company, say one word, or even pay the least attention to what was said by others, till he had satisfied his appetite, which was so fierce, and indulged with such intenseness, that while in the act of eating, the veins of his forehead swelled, and generally a strong perspiration was visible. To those whose sensations were delicate, this could not but be disgusting; </p><p>...</p><p>He was so much displeased with the performances of a nobleman's French cook, that he exclaimed with vehemence, "I'd throw such a rascal into the river," and he then proceeded to alarm a lady at whose house he was to sup, by the following manifesto of his skill: "I, Madam, who live at a variety of good tables, am a much better judge of cookery, than any person who has a very tolerable cook..."' When invited to dine, even with an intimate friend, he was not pleased if something better than a plain dinner was not prepared for him. I have heard him say on such an occasion, 'This was a good dinner enough, to be sure; but it was not a dinner to ASK a man to.' On the other hand, he was wont to express, with great glee, his satisfaction when he had been entertained quite to his mind.</p><p>...</p><p>About this time he was afflicted with a very severe return of the hypochondriack disorder, which was ever lurking about him. He was so ill, as, notwithstanding his remarkable love of company, to be entirely averse to society, the most fatal symptom of that malady. Dr. Adams told me, that as an old friend he was admitted to visit him, and that he found him in a deplorable state, sighing, groaning, talking to himself, and restlessly walking from room to room. He then used this emphatical expression of the misery which he felt: 'I would consent to have a limb amputated to recover my spirits.'</p><p>Talking to himself was, indeed, one of his singularities ever since I knew him. I was certain that he was frequently uttering pious ejaculations; for fragments of the Lord's Prayer have been distinctly overheard. </p><p>...</p><p>His sincere regard for Francis Barber, his faithful negro servant, made him so desirous of his further improvement, that he now placed him at a school at Bishop Stortford, in Hertfordshire. </p><p>...</p><p>at last silenced her by saying, 'My dear Lady, talk no more of this. Nonsense can be defended but by nonsense.'</p><p>...</p><p>Concerning americans in 1769:</p><p>'Sir, they are a race of convicts, and ought to be thankful for any thing we allow them short of hanging.'</p><p>...</p><p>On the superiority of Irishmen over Scottsmen, of whom he always spoke very ill of in front of his good friend and biographer Boswell, who was Scottish. </p><p>"You are almost the only instance of a Scotchman that I have known, who did not at every other sentence bring in some other Scotchman [of literary importance]. ... The Irish are not in a conspiracy to cheat the world by false representations of the merits of their countrymen. No, Sir; the Irish are a FAIR PEOPLE;—they never speak well of one another. "<br /></p><p>...</p><p>He thought portrait-painting an improper employment for a woman. 'Publick practice of any art, and staring in men's faces, is very indelicate in a female.' ... "Would not a gentleman be disgraced by having his wife singing publickly for hire? "</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEh75lqCN81JYhADYZrlYl3b8cwVhIoZlnllu6Fd8UB9F5HzRZYSBpXMJUjVDffALBdVJ1OVuu945LthFv4F-VmcZ2hHXxZwy3iOoHlhBNim7Mfln6ONLXo7bb8NJL-SNNXqKKI1I6rFv5RkOPI6PWJ8X7KtzcJ7yuU4uUScwvh7xLKHuCXk8pHKDJcUyQ" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="512" data-original-width="617" height="414" src="https://blogger.googleusercontent.com/img/a/AVvXsEh75lqCN81JYhADYZrlYl3b8cwVhIoZlnllu6Fd8UB9F5HzRZYSBpXMJUjVDffALBdVJ1OVuu945LthFv4F-VmcZ2hHXxZwy3iOoHlhBNim7Mfln6ONLXo7bb8NJL-SNNXqKKI1I6rFv5RkOPI6PWJ8X7KtzcJ7yuU4uUScwvh7xLKHuCXk8pHKDJcUyQ=w497-h414" width="497" /></a></div><br /><br /><p></p>Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-56288919688108932502019-03-09T01:36:00.004-08:002020-02-21T09:47:53.347-08:00Reverse Nakamoto Consensus <div>
<div style="text-align: center;">
<div style="text-align: left;">
<b>Abstract</b><br />
<b><br /></b></div>
</div>
POW consensus is problematic due to 51% attacks. Even BTC is potentially vulnerable as it shifts from rewards to fees.[1][2] Much higher security can be obtained by replacing hashrate with stake-rate in a way that adheres to Nakamoto consensus, preventing POS problems. POW security comes from a high ratio of dedicated to non-dedicated hashrate. Dedication is achieved by <i>capital</i><b> </b>investment in equipment that isn't useful for other purposes, including other coins. Electrical and depreciation costs reduce security by reducing the amount of speculative capital spent on equipment.[2][3][4] Capital in stake is potentially as dedicated as capital in equipment and there is 50x more capital in stake available for securing the chain.[5] But stake does not produce a hashrate in proportion to the capital. Hashrate proves the capital in equipment was occupied during the vote, preventing the capital from voting twice. A Verifiable Delay Function (VDF) can be used to provide a time denominator to get stake-rate, preventing the need for stakers (as in traditional POS) to have time locks that require registration and centralization. Another difference between equipment and stake capital is that stake capital is on the chain prior to the leader elections (aka lotteries) whereas equipment capital proves its existence <i>during</i> each election. This difference results in POS systems having to deal with grinding attacks that can taint randomness in leader elections. The solution is to reverse Nakamoto consensus by beginning with a nonce that all stake-miners must use and ending with block creation. POW must still be used to create and distribute coins (stake) because the only known proof of unique identity that's necessary in distributed consensus is proof of cost. The amount of proven cost is proportional to the amount of "identity weight" necessary in decentralized elections and lotteries. Two difficulty algorithms must be used: one for the above reverse Nakamoto POS-VDF that provides consensus on transactions and one for the POW that creates and distributes coin. Interestingly, the POW for coin creation can utilize a rental market and waste electricity, both of which decrease security when POW is used for consensus. Isolating coin creation with self-hashing txns allows solo POW mining, making pools obsolete. Isolating consensus with reverse POS-VDF can copy BTC's deflating emission rate, but it can also enable a truly stable-value coin (without reference to a fiat). Stakers are not paid for securing the consensus because running a node is the only cost and because paying for consensus results in centralization (such as pools, private ASIC manufacturing, and node centralization in POS). "Freedom (aka decentralization) is not free" and "paying voters to vote subverts the vote."<br />
<br />
This is a simplified and updated version of my previous <b><a href="https://zawy1.blogspot.com/2019/03/a-virtual-pow-to-prevent-51-attacks.html" target="_blank">VDF-POS-POW article</a></b> that gives greater detail in some areas. See also <a href="https://github.com/zawy12/difficulty-algorithms/issues/42" target="_blank"><b>POW Consensus as Registered Voters with Digital Signatures</b></a> for how Nakamoto consensus can be viewed within the framework of classical Byzantine consensus.<br />
<br />
<b>Time-occupied equipment in POW & POS-VDF prevents double-voting.</b><br />
<b><br /></b>
POS is clumsy because it requires registration, time-locks, and placing the stake at risk in order to keep stake from "double-voting" in block-leader elections. This is not a problem in POW because the equipment is automatically time-occupied in elections in a way that makes it costly to double-vote. A VDF may help POS by keeping the stake time-occupied in the same way.<br />
<br />
<b>Reversing Nakamoto consensus is needed because stake is already on the chain.</b><br />
<b><br /></b>
When the VDF is used in an obvious, straightforward way (as in Chia), the random number output by the VDF that elects the leader can be hacked because its seed can be varied without cost (a grinding attack). All POS has this problem that must be dealt with. But randomness without a taintable seed comes natural to POW. This is because the POS stake (or Chia's space) is on the chain prior to elections whereas POW equipment value is off-chain, proving its existence during each election. The solution is to reverse Nakamoto consensus, beginning with a nonce the staking "miner" can't choose, and ending with block creation.<br />
<br />
<b>Capital in POW & POS substitutes for identity to prevent Sybil attacks.</b><br />
<b><br /></b>
Backing up, the<b> capital</b> required to establish stake (POS) or equipment (POW) substitutes for establishing unique identity when participating in block-leader elections. We need proven unique identities (or substitute it with proof of capital) to prevent Sybil attacks. But proof of capital alone does not prevent that "identity" from voting twice over time in a future or past election. As discussed above, POW handles this automatically, but POS needs a VDF. The stake in this POS-VDF does not need to be put explicitly at risk (as in other POS systems) for the same reason POW equipment is already "at risk" of losing value if there is enough collusion to conduct a 51% attack. But POS-VDF requires orders of magnitude more collusion in terms of capital required (compared to POW) to conduct an attack if the majority of coin holder participate in block-leader elections.<br />
<br />
<b>Electrical costs reduce POW consensus security</b><br />
<b><br /></b>
In the above I only mentioned the capital cost of POW equipment, so I need to<b> </b>address a common misconception that electrical costs are part of POW security. It is well-established in research that electrical and depreciation costs reduce POW security to the extent they reduce capital that could have been spent on mining equipment that will not be able to find alternate sources of revenue. Proof of security in POW comes from a high ratio of dedicated to un-dedicated hashrate, and only mining equipment that can't find alternative sources of revenue can be assumed to be dedicated. If proof of electrical costs were the only source of security, a 51% attack that costs half the reward+fees would be enough to gain 100% of the reward+fees and enable additional profits from double spending. But expensive, electrically-efficient equipment like ASICs that will recoup their costs over many blocks is very expensive to compete with. BTW<b><a href="https://twitter.com/BobMcElrath/status/1178292812233748481"> I've argued with Bob McElrath</a></b> over this view.<br />
<ul></ul>
<div>
<b>POW for Generating Coin with Self-hashing TXNs</b><br />
<b><br /></b>
This eliminates the need for pools. Coins in this scheme are created by POW using a self-hashing txn that replaces coinbase txns. Block headers have a difficulty/block (aka a maxTarget/target) for consensus and a difficulty/coin (aka a maxTarget/coin/target) for coin creation. A self-hashing txn has a destination address, a block height that is close to the block in which it will be included, the quantity of coin being mined, and a nonce. The miner hashes the txn while changing the nonce until the hash is < Target*coin /maxTarget/requestedCoin. Validators confirm the txn meets this requirement before accepting a block that includes it. The POW for coin creation can and maybe should be the "opposite" of the ideal POW for consensus. It can and maybe should focus on proving electricity (or depreciation) was wasted instead of proving the most capital in non-depreciating equipment. The goal is to minimize and equalize the barriers to entry, not giving an advantage to proprietary equipment. But a problem is that some locations have free electricity. Whatever the case, hopefully a rental market will equalize the barrier to entry.<br />
<br />
<b>Stable without a peg to any fiat</b><br />
<b><br /></b>
The above coin generation can be based on a standard exponential decrease like BTC. A part of BTC fluctuations is the result of sudden halvings (it jumps after halvings), so a continuous equation can be used:<br />
<br />
h = height<br />
T = target solvetime<br />
HalfLife = HL = 4*365*24*3600; // 4-yr half life in seconds<br />
TotalCoins = TC = 21E6;<br />
// Replace T/HL with half life in blocks if you want.<br />
RewardPerBlock = T*TC*ln(2)/HL*0.5^(h*T/HL)<br />
<br />
However, the protocol could allow the staking POS-VDF winners of blocks to increase or decrease the difficulty per coin in the block after theirs by 0.01%. If the stakers (coin holders) want a stable-valued coin, a stable-valued coin will result. If they attempt to make the value of their holdings increase by making difficulty per coin too hard too quickly, they can't expect new adopters who will have a stable-valued clone to choose from. If they make difficulty too easy, the value of their coin holdings' will drop from inflation and again late adopters will not like the coin. Their best option seems to be to simply seek a store of value, allowing all future newcomers the same cost of entry, automatically adjusting for Moore's law.<br />
<br />
<b><a href="https://github.com/zawy12/difficulty-algorithms/issues/40">A Simple DAG can be used to get fast confirmations</a></b><br />
<br />
<b>Reverse Nakamoto Consensus</b><br />
<ul>
<li>Normal POW sequence is </li>
<ol>
<li>Get random seed from previous block (it's hash)</li>
<li>Create block, out of many options</li>
<li>Suffer a delay</li>
<li> Determine nonce & length of delay. </li>
<li>Create random seed for next block (it's hash)</li>
</ol>
<li>vPOW sequence is </li>
<ol>
<li>Get random seed from previous block (it's VDF-output) </li>
<li>Determine nonce ("Seed") & length of delay</li>
<li>Suffer the delay</li>
<li>Create block, out of many options</li>
<li>Create random seed for next block (it's VDF-output)</li>
</ol>
</ul>
<b>VDF definition (Verified Delay Function)</b><br />
<ul>
<li>Stakers calculate: <b>setup(security parameter, TimeDelay) = pp</b> </li>
<li>5 GHz servers calculate time-delay function: <b>eval(pp, seed) = a unique y & proof π</b> </li>
<li>Validators: <b>verify(pp, y, seed, </b><b>π) = True or False</b></li>
<li>I can the y value "VDF-output".</li>
</ul>
</div>
<ul></ul>
<b>Reversing Nakamoto Consensus:</b><br />
<ol>
<li>Staker hashes a concatenation of an existing UTXO (that is at least 500 blocks in the past) & the previous block's VDF-out to get a Seed. He normalizes a hash of the Seed for a 0 to 1 value to get a RandValue. </li>
<li>ST = solvetime = 2*RandValue*TargetSolvetime*Difficulty/(UTXO qty)<br />
Note: this is better than a Poisson by having a flat probability distribution. This allows faster (but smaller) blocks because it prevents an excess of collisions in solutions for fast solve times that the Poisson causes. </li>
<li>Stakers with fast STs calculate VDF's pp=setup(security parameter,ST) & send pp & Seed to a fast VDF server to cause a delay in calculating eval(pp,Seed) which returns y = VDF-output & π proof</li>
<li>If staker is first, he creates the block. The header includes the UTXO, staker's signature for proof the UTXO is his (requires spending UTXO to a new UTXO?), previous block hash, the seed, VDF-output & π, and merkle root. If he is allowed to select a timestamp instead of simply adding the solvetime to the previous block (which will cause block time to get far away from real time which should not be a problem), a grinding attack becomes possible which I address below.. He hashes the header once to get the block hash.</li>
<li>Notice the private key of the UTXO connects the block to the proof of "work" (sum of difficulties for the POS-VDF), but the block is not part of the VDF randomization seed. This is a practical way of seeing why reverse Nakamoto consensus works and is better than other POS..</li>
<li>Validators confirm validity of all the header's elements. </li>
<li>If a miner sees two or more different blocks with the same VDF output and correctly signed by the winner, he only works on the first valid block he sees. See "Multiple block attack" below.</li>
</ol>
<b>Notes:</b></div>
<div>
<ul>
<li><b>Precision errors in VDF</b> are corrected by difficulty because stakers assign the timestamps.</li>
<li><b>Exploiting the VDF </b>This is probably the biggest security risk. VDFs are new and if an attacker finds a way to speed it up 100x or 1000x, a fork to fix it will leave the chain prior to the fork vulnerable.</li>
<li><b>Randomness is preserved. </b>Current and previous stakers can't control solvetime or VDF-output. Randomness comes from staker (instead of miner) population and previous VDF-output, so it can't be tainted (subject to grinding).</li>
<li><b>Chain work rule remains sum of difficulties.</b> CAP & Byzantine problems are solved as in POW. The chain with highest sum of difficulties wins because it proves the largest number of stakers were present (fewest network partitions) and double-voting (rewriting history) is not possible w/o going through equal time-cost multiplied by stake.</li>
<li><b>Stake-key re-use</b> of old keys that the attacker has bought from old stakers to do a medium to long range attack (since the staker selling his keys had better have spent his UTXOs) is not possible because the attacker has to still wait on the VDF cycles. </li>
</ul>
<div>
<b>Multiple UTXO grinding attack is stopped by 500 block rule.</b></div>
<div>
An attacker can privately mine duplicates of a block and create many different UTXO's for the same input coin (stake), which can enable him to affect the seed to randomness infuture blocks, increasing his chances of having a fast solvetime. This is alleviated by not allowing recent UTXOs. This is a little like a time-lock, which I claimed could be eliminated by reversing Nakamoto consensus. It is needed to prevent a grinding attack which I said was not possible. The theoretical foundations I gave are not in error because to do the reverse Nakamoto consensus perfectly, the seed for the VDF would have to go all the way back to the POW-based self-hashing transaction that created the coin as opposed to the UTXOs. But that is not practical because it means most generated coins can never be transferred if we want secure consensus. Notice the typical POS staker registration that would cause a large communication overhead and/or centralization is not needed for this "time lock".<br />
<br />
<b>Attacker trying multiple VDF-outputs</b><br />
Nodes can compare who has the fastest VDF time before the VDF has to be performed so they might be able to weed out alternatives before they propagate very far. But if an attacker can see many VDF-outputs for slightly longer solvetimes he can try all of them to see which ones will allow him to have a faster solvetime, so that the sum of his solvetime and the previous solvetime that was slightly faster than the other one other miners are building on will be faster than the "main" chain. A 20% miner considering 5 different VDF-output can significantly increase his odds of finding blocks. Chia's solution is for everyone is to consider all the fast alternatives but I have studied this aspect yet. </div>
</div>
<div>
<br />
<b>Timestamps are subject to grinding</b><br />
<br />
By selecting a timestamp between > 10 different values, miners can increase their chances of winning the block <i>after</i> the next block by > 10x (timestamp affects next difficulty which affects the seed after that block). It's possible to require the timestamp to be set to the previous timestamp plus the VDF calculated solvetime even if VDF solutions are faster or slower than expected. This can be done in a scheme where stakers who win blocks adjust a factor in the block header (by say 0.001%) that keeps the VDF solvetimes close to real time. This is different from difficulty's affect on solvetimes which will respond a lot faster. This works as long as it does not affect the solvetime for the next say 100 blocks, which I'll discuss below. This scheme is necessary if the VDF-POS-POW scheme is to be used with a DAG. The timestamp grinding solution below requires step-like difficulty changes instead of "continuous" which DAGs need to rank txns to prevent double spending.<br />
<br />
If miners must be allowed to set the timestamp, let's consider the consequences. Choosing a timestamp does not affect a miner's chances for the 2nd generation (the next block) more than anyone else because it does not change the seed to that block, but it does affect the seed to the block after that (the 3rd). So a miner can run many parallel VDFs for all the timestamps he can assign, and for <i>each </i>of those VDF-outputs he does it again, and then again for the 3 generation. This allows him to choose optimum solvetimes for 3rd and 4th generation (he can see the solvetime for his 4th before having to suffer it). 100 different timestamps could possibly affect the output of a fast-responding difficulty algorithm, giving the attacker 100x higher stake. Doing this for 3 generations would require 100^3 = 1 M parallel VDFs which might be feasible. By this scheme he can't affect the 1st or 2nd generations, but he multiplies the power of his stake by 100 in 3rd generation. If a largish staker gets a lucky fast solvetime in the 1st generation, he can be sure he will also get 3rd and 4th blocks by this method, giving him a 50% chance to get all 4 blocks if he has 25% stake-rate (this is a 2x effect because he does not control 1st or 2nd generation solvetimes). Chia may have a worse situation where the 2nd generation can be affected by an assigned timestamp.<br />
<br />
To address this, Chia is using a 28 hour delay in difficulty in a 4.5 day averaging window. Delaying a response in difficulty like this, as a large percentage of the averaging window, causes catastrophic oscillations unless it's the largest coin for a POW. This occurred in nearly all Cryptonote/Monero clones which had only about a 1.5 hour delay with a 1 day averaging window. This is not a delay like BTC's two weeks. BTC applies the calculated difficulty immediately after the 2-week calculation, so it's not the kind of delay that causes oscillations. <a href="https://twitter.com/zawy3/status/1150089312320589825">I informed Chia in Twitter</a> about this. This warning applies if their "farmers" have a profit motive like POW, or if they're not the largest coin for their proof of space, but they are, so they should be safe, but it seems like a better option should be tried. My scheme here has no rewards, so stakers are not motivated to come and go so I could use Chia's method, but I would like to avoid it.<br />
<br />
If miner's can assign timestamps, and Chia's method is not used, BTC's algorithm (<a href="https://github.com/zawy12/difficulty-algorithms/issues/30">without the Zeitgeist and timespanLimit attack holes</a>) can be used and adjusted every 200 blocks. But the difficulty should only be allowed to increment in tranches like +/- 5%, 10%, 15% to reduce the amount of grinding. Otherwise a big staker could get several blocks at the transition. If difficulty could be set to 100 different options, then a 25% staker could have a 70% chance of getting perhaps 10 blocks. This is done by not choosing the fastest solution, but by choosing a solution that would result in the next 10 blocks being solved quick on average (requiring 100 concurrent VDFs at the beginning and having to re-write the public chain because it will take some time).<br />
<br />
Another way to restrict the grinding is to make the timestamp range that nodes allow (FTL and MTP) as tight as possible.<br />
<br /></div>
<div>
<b>Multiple block creation attack stopped</b><br />
The other "attack" is a direct result of reverse Nakamoto consensus. The winning block is formed AFTER the winner is determined. In other words, the winner can immediately create hundreds or thousands of valid blocks after winning, and submit them to different parts of the network. The solution is for all miners to simply accept and work on only the first valid block they see for that VDF output. The "mutated" blocks will all have the same VDF output, so miners seeing these block will get different solvetimes by selecting a different block. The chain work rule will naturally sort out any problems. Rejecting all similar valid blocks that have the same VDF output does not work because a duplicate could be delayed and nodes would have to reject the current chain back to that point.<br />
<br />
[1] See equations 7 and 8.<br />
<a href="https://s3.amazonaws.com/tld-documents.llnassets.com/0013000/13402/bis%20report.pdf">https://s3.amazonaws.com/tld-documents.llnassets.com/0013000/13402/bis%20report.pdf</a><br />
<br />
[2] See page 13<br />
<a href="https://faculty.chicagobooth.edu/eric.budish/research/Economic-Limits-Bitcoin-Blockchain.pdf">https://faculty.chicagobooth.edu/eric.budish/research/Economic-Limits-Bitcoin-Blockchain.pdf</a><br />
Thoughtful PhD reviewers consider it simple and correct:<br />
<a href="https://medium.com/orbs-network/the-economic-limits-of-the-blockchain-847f79b452db">https://medium.com/orbs-network/the-economic-limits-of-the-blockchain-847f79b452db</a><br />
<a href="https://www.aier.org/article/sound-money-project/economic-limits-bitcoin">https://www.aier.org/article/sound-money-project/economic-limits-bitcoin</a><br />
<a href="https://promarket.org/founder-blockchain-discusses-new-research-inherent-limitations-bitcoin/">https://promarket.org/founder-blockchain-discusses-new-research-inherent-limitations-bitcoin/</a><br />
<a href="https://twitter.com/jenniferdoleac/status/1011052217980391424">https://twitter.com/jenniferdoleac/status/1011052217980391424</a><br />
<br />
[3] Even Nick Szabo tweeted about the importance of capital in equipment, and keeping a high ratio of dedicated equipment.<br />
<a href="https://twitter.com/NickSzabo4/status/1092891074555633664">https://twitter.com/NickSzabo4/status/1092891074555633664</a><br />
<br />
[4] Alt coins intuitively are aware of this definition of security: they have frequently reduced total hashrate in an attempt to increase the dedicated to non-dedicated hashrate. They try to find a unique POW and try to avoid anything that increases non-dedicated hashrate like ASICs, Nicehash, and botnets. They seem to always regret merged mining.<br />
<br />
[5] It was estimated in the above paper that BTC mining equipment cost up to $2 B in June 2018 when the market cap had dropped to $130 B.<br />
<br />
<br /></div>
<div>
</div>
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com3tag:blogger.com,1999:blog-4301173651018456758.post-30946696261889501222019-03-02T03:28:00.004-08:002020-11-12T11:34:16.614-08:00Fixing POW problems with a POW-VDF-POS-DAG scheme<h2>
Introduction</h2>
This is a coin design that combines a lot of ideas to prevent common POW problems and enable it function as a stable value currency (without any reference to fiat) instead of just an asset. It isolates the functionality of POS, VDF, POW, and DAG methods to optimize their individual potential.<br />
<ol>
<li><b>Block creation:</b> Hash-rate is replaced with stake-rate to simulate POW mining equipment for higher-security Nakamoto consensus & efficiency. VDFs are used to give a time-denominator for stake-rate. A potentially important discovery is that reversing Nakamoto consensus seems to prevent PoS problems.<a href="https://twitter.com/zawy3/status/1109070701544255488" target="_blank">These 4 tweets summarize it.</a></li>
<li><b>Coin creation:</b> Solo mining for coin creation and distribution is by regular POW equipment in self-hashing transactions. This prevents pool centralization. It does not influence block-creation consensus. </li>
<li><b>Dynamic coin parameters: </b>Consensus vote winners (block creators) are able to slowly adjust coin parameters (coin emission rate, block size, block time, and fees) up or down by 0.02% per block in block headers, reducing developer power. </li>
<li><b>Stable value:</b> I argue that coin holders will initially vote for coin inflation, but settle on a stable-value (without reference to a fiat like other "stable" coins), in accordance with a store of value asset evolving into a stable-valued currency. This replaces arbitrary coin emission schedules with an economic intelligence (a feedback mechanism).</li>
<li><b>Fast Finality: </b>See the<b> </b><a href="https://github.com/zawy12/difficulty-algorithms/issues/40" target="_blank">DAG article </a>.("finality" only applies if stake is not concentrated >40%)</li>
<li><b>High transaction rate:</b> See the DAG article.(If CPUs can validate 50 TB chains)</li>
</ol>
<b>Problems not addressed:</b><br />
<div>
<ul>
<li>Lack of BTC privacy and anonymity</li>
<li>POW waste is still used to generate & distribute coin</li>
</ul>
<b>Security assumptions:</b></div>
<div>
<ul>
<li>Honest stakers > attacking stakers.</li>
<li>VDF works and is not hacked</li>
<li>Old stake keys are not sold en masse for an attack.</li>
<li>Reverse Nakamoto consensus can overcome a "multiple block" problem.</li>
<li>Coins for staking are in wallets on active nodes instead of cold storage. This could be changed.</li>
</ul>
<div>
<b>How this is not like regular PoS</b></div>
<div>
<ul>
<li>Like POW, there is only 1 message per vote, the block header.</li>
<li>There's no stake registration or masternodes</li>
<li>There's no time lock on stakes</li>
<li>There's no stake-at-risk</li>
<li>There's no need for grinding attack protection [correction: difficulty needs to be done carefully to prevent grinding of timestamps ]</li>
<li>There's no need for a random beacon</li>
<li>There's no subjectivity</li>
<li>There's no fake-stake attack</li>
<li>There no "rich get richer" problem with stake</li>
</ul>
</div>
<h2>
Contents</h2>
<ul>
<li><b>Part 1: Theory & Discussion</b></li>
<ul>
<li>Overview: how stake value differs from equipment value</li>
<li>Importance of <i>time</i> (not waste) in Nakamoto consensus</li>
<li>Time in distributed consensus networks</li>
<li>The physics of generating randomness from POW & VDF equipment </li>
<li>Future Work: Converting to a DAG</li>
<li>Why POW coins <i>lower</i> hashrate to <i>increase</i> security</li>
<li>POW security comes from risk of equipment value loss (not waste)</li>
<li>Hashrate is ideally low-entropy/second production, not joules/second waste</li>
<li>Replacing hash-rate with stake-rate by assigning stakes a <i>time</i> denominator</li>
<li>Chia's VDF as the time denominator</li>
<li>VDF definition</li>
<li>Why stake-rate POW requires reversing Nakamoto consensus</li>
<li>Splitting coin creation from consensus prevents pool centralization</li>
<li>Do not pay voters (stakers) to vote (stake). Freedom isn't free.</li>
<li>Getting stable value by letting stakers be the Fed</li>
</ul>
</ul>
<ul>
<li><b>Part 2: Details of reverse Nakamoto Consensus</b></li>
<ul>
<li>Overview</li>
<li>Details</li>
<li>Notes</li>
</ul>
</ul>
<ul>
<li><b>Part 3: Coin Specifics</b></li>
<ul>
<li>Solo-mining with self-mining txns</li>
<li>Stake-controlled parameters in block headers</li>
<ul>
<li>hashes/coin required to get coin</li>
<li>Block Size & block time</li>
<li>Fees</li>
</ul>
<li>Block Header</li>
<li>Self-staking txns</li>
</ul>
</ul>
<h2>
Part 1: Theory & Discussion</h2>
</div>
<div>
<h3>
<b>Overview: How stake capital differs from equipment capital</b></h3>
Papers have shown (and I'll demonstrate it below) that electrical costs do not affect POW security and even <i>decreas</i>e it to the extent it reduces up-front equipment investment. The source of security comes from expected equipment value loss plus social reputation losses (if a miner attacks) being greater than the gains from an attack. But why can't we replace "equipment value" in POW with "coin value" in PoS? Why does PoS (but not POW) require a lot of complexity due grinding attacks, the need for a random beacon, an increase in centralization, and/or require stakers to register participation? Why are most coins lowering hashrate in order to get higher security? Why are coins trying to avoid NiceHash & ASICs which should make mining & its marketplace more optimal?<br />
<br />
POW equipment is an engine that produces hashes/second but stakes don't. It wastes energy doing so only because mining equipment is not ideally efficient.. The difference between equipment value (a <i>stake</i>) and coin <i>stake</i> is that equipment stake is <i>occupied</i> during the hashing of a block. It can't double-vote at zero cost like coin stake. The equipment engine being "real" is deeply connected to proving the uniqueness of the bits in transactions (blocking double-spends). <b> </b><i>Equipment is value that is occupied over time while stake is just value. </i>Value in both POW and PoS is used to solve cyberspace's identity problem, preventing Sybil attacks on consensus votes. Stake has value and uniqueness, but that's not enough to cast a unique vote. Time in the denominator of hashrate is what proves the equipment value did not double-vote without double cost during or after the vote. This article shows how to create a simple stake-rate that can replace hash-rate, avoiding PoS problems and complexity to get better security and less waste than POW.<br />
<br />
POW is great for creating and distributing coins (value), which I'll retain. The equipment may or may not waste electricity. The cost of buying and operating equipment is a relatively consistent amount of waste of value in the real world that puts value on the chain. But waste (and I'll argue even paying voters to vote in consensus) reduces the security of coming to an honest and accurate consensus. So I'll use waste to create value on the chain, but use efficient consensus to transfer it.<br />
<br />
<h3>
<b>Importance of <i>time</i> (not waste) in Nakamoto consensus</b></h3>
<a href="https://github.com/zawy12/difficulty-algorithms/issues/42" style="font-family: "times new roman", "segoe ui emoji", "segoe ui symbol", symbola, emojisymbols;" target="_blank"><b>Here is my background article</b></a><span style="font-family: "times new roman" , "segoe ui emoji" , "segoe ui symbol" , "symbola" , "emojisymbols";"> </span><span style="font-family: "times new roman" , "segoe ui emoji" , "segoe ui symbol" , "symbola" , "emojisymbols";">to show how Nakamoto consensus fits within classical Byzantine fault tolerance, and how any classical consensus mechanism that proves a chain of votes had the route of fewest partitions must similarly use an eventual and probabilistic scheme. </span><br />
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Nakamoto consensus ("POW") is amazing in that it uses only 1 message per block (the solved block itself) from a single miner to to show he won the election process, and to announce the difficulty for the next election. A sequence of these shows any newly-joining node which chain has had the fewest network partitions (the largest vote participation). In discussing distributed networks that need to reach consensus agreement to a fact, I say "vote" or "voter" instead of hash, stake, or node (of a distributed system of voting nodes not blockchain nodes) because it immediately and more precisely conveys the goal of and commonality between these other terms. Traditionally (in a distributed network of nodes trying to reach consensus), voters need to register, prove their participation in each vote, and communicate back and forth to declare they agree on the consensus. This is an enormous amount of communication. In contrast, everyone in Nakamoto consensus immediately agrees to a block by seeing if the hash solved the puzzle, without registering (it's permissionless). POW replaces the communication complexity with local computing. As I discuss below, POW does not need to waste energy any more than the traditional method. Both require time. For a given amount of latency, more communication among more nodes requires more time. In POW terminology, a time cost enables a randomization in the election of a block leader with smallish likelihood of colliding with a concurrent winner. Instead of a communication overhead to prove unique identity and presence of nodes (in a traditional distributed network) during that time period, miners prove a hash cost. The hash cost is each hash's claim to unique identity. POW does not require the existence of electricity & depreciation costs. It works optimally on up-front equipment-only costs. This is the same as up-front stake costs except POW has a time cost where the equipment must prove its existence during the vote. Stake in POS can have a cost and the initial stake itself can be created by POW. This proves unique identity, but it has no time cost <i>that proves the identity voted only once during each vote</i>. This inability results in complexity in PoS schemes. They have to bend over backwards to inject a source of randomness to elect a block leader, but a properly functioning election process generates its own randomness.<br />
<br />
<h3>
Time in distributed network consensus </h3>
In the next two paragraphs, a single hash (or the smallest unit of a stake) serves as a single "voting node" that's participating in reaching consensus. We can't identify individual "miners" or "stakers", so we treat individual hashes or stakes as "individuals" in the consensus vote.</div><div><br /></div><div><b>Update: </b></div><div>CAP theorem & tradeoff triangle combined to show bandwidth is the limitation:<div>(C+P+PL) * N * LL = O</div><div>C & P are bytes per round per voting node to prove Consistency (Correctness) exists on the largest Partition of voting nodes.</div><div>PL = payloand = txs / round / voting node.</div><div>LL = Low Latency = fast finality = Availability = Scalability = rounds/second</div><div>O = Overhead = bytes/sec required</div><div>Scalability trilemma's "security" means C & P are proven. N = number of nodes = number of independent voters with equal voting weight = decentralized. With non-equal weight it has lower decentralization but allows faster LL. </div><div>In POW, the C and P byte requirements are incredibly low at 1 header per round and needing only a few headers, and N (distinct miners) can be small. Mining is not necessarily decentralized but it does not need to be: the security is achieved by the profit motive of miners not wanting to lose more value in their equipment than they can gain by colluding. POW is able to move the C&P bandwidth requirements off the network to computation.This frees up O for transmitting more txs.</div><div><br /></div>Older text: </div><div><br />
In distributed consensus, the <b><a href="https://towardsdatascience.com/cap-theorem-and-distributed-database-management-systems-5c2be977950e" target="_blank">CAP theorem</a></b> says we can't have Consistent data that is immediately Available to every node, and have network Partition tolerance all at the same time. If each variable can vary 0 to 1 from worst to best, you can think of this theorem as C*A*P = 0.5 so that one of them has to be 0.5 to enable the other two to be 1. This is not a literal mathematical fact but my way of thinking about how the variables are constrained. So we have to have a <b>time cost</b> (lower A) to get more Consistent data and more Partition tolerance.<br />
<br />
The<b> <a href="https://github.com/ethereum/cbc-casper/wiki/FAQ#what-is-the-tradeoff-triangle" target="_blank">tradeoff triangle</a></b> says we can't have fast finality (the C*A in CAP), Low Overhead (fewer bytes/second/transaction), and a large number of Nodes (voters) at the same time. To reveal if this is just a restatement of the CAP theorem I use (C*A)*1/(O/N) = 0.5 where P = 1/(O/N) = the inverse of Overhead per Node. This seems to be a claim that partition tolerance is easier with many voters (Nodes) and less communication (Overhead). If we require a given level of Consistency, we can use a higher <b>time cost </b>(1/A) to lower fast finality (C*A) in order to get higher attack tolerance (higher P = N/O). Time cost enables POW to maximize this ratio. This might be mathematized another way: C/T = O/N where T=1/A = time. Faster finality equals more communication per node. More completely:<br />
<br />
Another limitation, again related to the CAP theorem, is the <b>scalability trilemma</b> which means we can't have scalability, security, and decentralization. It's a restatement of the tradeoff triangle where scalability means number of possible transactions which means lower communication overhead per transaction when given a limit on network bandwidth (which includes the time cost to validate). Decentralization simply put means many nodes and security means the finality in "fast finality" can be trusted.<br />
<br />
By having a time-range in which a winner can be found, it's uncommon for two more valid winners to announce themselves at about the same time. The size of the blocks and network latency place a lower limit on the time range a vote in POW needs to occur (to reduce the frequency of "simultaneous" winners).<br />
<br />
<u>Time isn't everything:</u> In the above CAP and tradeoff triangle discussion, there's an assumption that Sybil attacks are not being performed. To some extent the nodes are assumed to be independent actors (or at least not colluding to attack the consensus results). The <b>value cost </b>of equipment stake or coin stake addresses the Sybil/identity/uniqueness problem. Time cost prevents the same identity (based on value) from double-voting based on time as opposed to faking identity to double vote.<br />
<br />
<h3>
<b>Physics of randomness from POW & VDF <i>equipment</i> </b></h3>
POS without VDF faces a deep problem of where to get a random number for electing the winner in a consensus vote. Generating the random number is the <i>reason</i> POW equipment and VDF equipment (<i>with</i> POS) is needed. The number of options (states) needed to elect a winner is limited by physics to equipment efficiency*energy*time. POW has an efficiency loss at converting energy to hashes while VDF has an efficiency loss at ensuring a computation took a number of clock cycles, so it can be a lot more efficient in establishing consensus through random selection of winner. The max number of states (at the quantum level) in the perfect POW or VDF equipment is <a href="https://en.wikipedia.org/wiki/Margolus%E2%80%93Levitin_theorem" target="_blank">energy*time/4/h</a>, which is extremely small.<br />
<br />
Decentralized consensus requires equipment that can change state. VDF clicks with time and POW generates a hash. VDF assumes there is a max clock rate which is a source of weakness in the conversion my argument depends on, but it may have a fundamental limit such as 10 GHz possibly radiating too much energy from the line traces in the ICs. Each hash is a unique identity that isolates the winner in both space (the location of the equipment) and time (which vote it won). The lowest theoretical energy cost per block to elect a winner is joules = 4*h*N/T where N = number of candidates in the election and T = how long the election takes. Presence of attackers does not increase this cost because there is no way to hash faster except to spend more <i>upfront</i> costs to have more equipment that can start with a different nonce. This is a cost which function like a provable unique identity. The <i>election's</i> equipment cost is zero per election if there is a large number of elections for which the equipment is used. So protection against attacks is like a "potential" energy cost (stored, not wasted as heat except for the initial expense and consequent heat) to participate in elections, but the <i>election</i> cost is the "kinetic" (heat, aka randomization) cost of elections whose lower limit is 4*h*N/T. In other words, capital costs are the source of BTC's security, not rolling costs such as wasted electricity. This has been repeatedly shown in research <a href="http://faculty.chicagobooth.edu/eric.budish/research/Economic-Limits-Bitcoin-Blockchain.pdf" target="_blank">such as this article</a>, but popular twitter pundits do not seem aware of it.<br />
<br />
In both POW and this POS-VDF-POW scheme, POW proves a unique identity. Using POW for identity in consensus allows temporary identities to vote by "off-chain" POW equipment. POS-VDF-POW uses POW to create a stake for the POS which becomes an on-chain identity. POW consensus voters are more like mercenaries than citizens. In a mature and ideal marketplace, which may likely be the case as we shift from rewards to fees, POW mining should be rentable (like a mercenary) which makes 51% attacks easy and profitable on their own in addition to enabling double spending.attacks.<br />
<br />
By using stake derived from the <i>cumulative hashes </i>(aka cumulative difficulty) in the coin's past (as opposed to <i>current </i>POW hashrate (difficulty) for say 6 blocks) as the <i>proof of citizenship in each election</i>, POS-VDF can require <i>much</i> more equipment "energy" (equipment plus electrical expenses) to establish unique identity for voting than POW. This is why it should be a lot easier to attack with 51% hashrate in POW than with 51% total hashes (stake) in POS-VDF, if all holders of the coin ("citizens") are voting (staking). Some day POW should be be rentable.<br />
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BTW, POS without VDF requires time-locking the stakes to function like a VDF. It's inferior because it does not block long-range attacks.<br />
<h3>
<b>Converting to a DAG</b></h3>
See <a href="https://github.com/zawy12/difficulty-algorithms/issues/40">https://github.com/zawy12/difficulty-algorithms/issues/40</a></div>
<h3>
Why coins <i>lower</i> hashrate to<i> increase</i> security</h3>
ASICs, botnets, NiceHash, and Merge Mining are examples of increased hashrate (HR) that usually decrease security. This is because security is based on:<br />
<br />
<div style="text-align: center;">
<b>(X equipment HR)/(non-X equipment HR) > 50%</b></div>
<br />
Where X can be described as staked, non-colluding, or dedicated equipment. Coins do things to lower the non-X portion which decreases the total HR but increases security. To increase the X (to be sure it is "staked"), it might be morally or culturally motivated to not attack, but it's better if the X is at risk of loss in order to prevent 51% of the miners from naturally colluding (which can evolve without communication) to harm the other 49% and users (see next section).<br />
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It's difficult if not impossible to keep the non-X equipment portion low and to keep the X portion from colluding. All coins who do not depend on a central control system can be attacked (for example, the Chinese government could force its miners to harm BTC). If stake-based consensus were possible without its usual drawbacks, it could be much more reliable in keeping the ratio above 50%.<br />
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<h3>
POW security comes from risk of equipment loss (not waste)</h3>
The "rolling costs" of equipment depreciation and electricity costs are not in the previous equation. They even decrease security by decreasing the reward+fees that miners can spend on equipment. This up-front cost keeps them dedicated, assuming they do not have a more profitable coin to turn to. If equipment depreciation could be minimized (Moore's law bypassed), even more value could be spent on up-front equipment costs. If large equipment owners attack the coin, and the coin is the largest for that POW, then their equipment value decreases (if the coin loses value due to the attack). This is why Chinese miners do not collude to do 51% attacks on BTC. All this can be summarized in a second equation that determines POW security.<br />
<br />
<div style="text-align: center;">
<b>(current+future equip value lost in attacking) > (attack profits)</b></div>
<br />
If you do not agree with the above, here are appeals to authority (aka references): <a href="http://faculty.chicagobooth.edu/eric.budish/research/Economic-Limits-Bitcoin-Blockchain.pdf">A popular research paper</a> last year and <a href="https://twitter.com/NickSzabo4/status/1092891074555633664">Nick Szabo has said</a> pretty much the same thing.<br />
<br />
<h3>
Hashes/second is low-entropy/second production, not joules/second</h3>
It's clear you can spend more on equipment to spend less on electricity. Hashes do not theoretically require any energy, except for <a href="https://en.wikipedia.org/wiki/Margolus%E2%80%93Levitin_theorem" target="_blank">Bremermann's incredibly low physical limit</a> (Energy per bit change = h/4/second => 1.5 watts to switch 100 quadrillion perfectly efficient transistors at 10 quandrillion Hz). This shows a measurable amount of energy is not a fundamental to equipment operation, but only in manufacturing it, which is a <i>value</i>. Likewise in this new consensus mechanism, a "stake-rate" to replace hash-rate will not require energy, but it does require energy in its creation. Hashing looks for low-entropy solutions, so POW equipment is an engine that produces lower-entropy/second instead of joules/second. Hashing requires energy only because our equipment is not yet close to the ideal. Stake-rate in this system will also produce lower-entropy/second and it is already at the ideal. Wasted energy puts value on the chain. Low-entropy production produces consensus. BTW, lower entropy increases net available work (energy) in systems at a given temperature, so it may have a value that can be viewed as<i> </i>energy<i>,</i> but I think that's a red herring.<br />
<h3>
<b>Replacing hash-rate with stake-rate by assigning stakes a <i>time</i> denominator</b></h3>
I've shown the perfect POW equipment does not waste energy other than in its creation, so that the hashes/time it produces can be equated to equipment value. I've shown stake value can't replace equipment value in solving the identity problem for voting. But we can look at the hash/time output of equipment and replace hash value with stake value and give the stake a time denominator by forcing it to be occupied (in time) during a vote to prevent double voting. To force stakes to be occupied, we need the VDF function in the next section. We can't simply use a time-lock or tighten the FTL and MTP limits on timestamps. There is a random number seed (and it's modification during each block provided by the indeterminacy of the wide voting population) that needs to pass "<i>through</i> the stake-time marriage" during the vote (during the block-leader selection process).<br />
<br />
<div>
<h3>
Chia's use of VDF is Not Like This</h3>
</div>
Chia was started by BitTorrent creator Bram Cohen and has at least $3.3 M in funding. They are developing and paying $100,000 in competition for optimizing their <u>Verified Delay Functions (VDF)</u>. A VDF requires many sequential steps that can go only as fast as the computer's clock. They are supposed to be the ultimate in non-parallelizable functions, except they also provide a way for validators to prove the "miner" (farmer) expended the time. I was directed to them after tweeting about the importance of time if we want to use stakes, and the VDF was exactly what I was looking for even though I did not know what I was looking for. All I knew is that I needed a time denominator to create stake-rate as opposed to hashrate. I was not even thinking about needing a way to validate a time delay and a random output as proof the delay was suffered. It helped congeal my thoughts and made this article possible, solving POW's 51% attack problems and greatly simplifying POS. But I am doubtful Chia's proof of space is as good as using POS. <br />
<!--They are not using reverse Nakamoto consensus and therefore have a problem with grinding (the seed to their VDF randomness), which I warned Bram about in March 2019 (which he did not heed or respond to, except to incorrectly claim they would follow Nakamoto consensus and their VDF would provide sufficient randomness). Their complex solution to the grinding attack in their July 2019 paper results in requiring a difficulty algorithm that delays its response a lot, causing a positive feedback loop in "farmer" motivation that will cause explosive oscillations if their farmers are anything like POW miners (which they are supposed to be). The algo is much more dangerous than Cryptonote's which all small coins had to abandon due to the cut and lag that caused this type of delay. Their section on BTC's "4" is pointless since an attacker would have to spend 30% more hashrate to get 1.5% more blocks. Bram blocked me on twitter for annoying him with these complaints. I am not complaining because I was going to keep bothering him until he retracted the Chai white paper and fixed the problems because Chai is ruining the reputation of their fantastic idea of using VDFs. They have not yet specified how they will issue coin. They need to use POW to generate and distribute coin and probably not even reward farmers for space.--><br />
<ul></ul>
<h3>
Why stake-rate POW requires reversing Nakamoto consensus</h3>
<div>
The only working method of using VDF-delayed stake I could find required reversing the consensus process by starting with a nonce and ending with block creation. If it's not done this way, grinding attacks and/or contamination of the randomness occurs. From a theoretical standpoint, it had to be done backwards because POW takes time to prove equipment value. <i>Time comes before the proof of value.</i> But in stake-rate POW, the stake's proof of value must come before the time-delay calculation because we have to use the stake's quantity to determine how much time it should be delayed compared to other stakes of different quantity. Surprisingly, this conflict can be resolved by running the consensus backwards. In other words, we can view the consensus as going backwards in time, so that the time delay still comes "before" the proof of value, as in POW. But we still get to use the stake quantity to properly adjust the time delay.<br />
<br />
BTW, doing block creation at the end allows the staker to create many different blocks quickly, but it does not allow a grinding attack because the block hash is not our seed for randomness. We use the output of the VDF as the seed for the next block. As in POW, our random adjustment to the previous seed comes from the population of value-weighted voters (hashers or stakers).</div>
<br />
<h3>
Splitting coin creation & consensus removes pool centralization</h3>
POW's proof of waste is still used in this scheme to put value on the chain. Splitting them has a tremendous benefit. It enables solo mining via self-mining txns that prevent the need for pools. See Coin Specifics section.<br />
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<h3>
<b>Do not pay voters</b><b> to vote. Freedom isn't free.</b></h3>
Paying stakers to stake could cause an unwanted concentration of wealth, but there are other reasons to believe they shouldn't be paid, and shouldn't need to be. Cryptography enables security without cost. We don't have to pay for a vault. Similarly, I hope to show decentralized consensus without cost is possible, other than operating a node. If coin holders want to keep their value, they better run a node. "Freedom isn't free." Voters should vote. They are more honest if we don't pay them to vote, but we need to try to make it inexpensive to vote. The ethos in the community should be "run your own node, or the coin's going to be attacked." Schemes that do not need us to run nodes to cast our votes are schemes that sacrifice freedom (that is, they sacrifice decentralization).<br />
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Full-time staking might be motivated with 2% interest per year to off-set an across-the-board 2% demurrage, but I will not try to pursue that route. It might help prevent large stakers from concentrating wealth. It would act like an efficient lottery (your odds are even) for small coin holders (a few lucky small holders get a big payout while many unlucky ones lose the 2%).<br />
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<h3>
Getting stable value by letting stakers be the Fed</h3>
Each block winner can increase or decrease the difficulty that is used for the self-mining txns (see below). This will indirectly determine coin emission rate. Ostensibly coin holders will set difficulty low to begin with to get coin cheaply and increase it later to limit coin inflation. So hopefully there will be a shift from "store of value" to "currency". I believe they will eventually decide on stable value. The emission rate <i>should</i> be more intelligent by letting coin holders dynamically determine it instead of arbitrarily setting it at coin creating.<br />
<br />
Moore's law prevents us from using a constant difficulty to keep stable value. Difficulty increases precisely with price over the short term when coin emission rate is fixed. But due to the unpredictability of Moore's law and other advances, price would decrease if difficulty is constant for a long time due to inflation. We need an oracle to adjust for Moore's law and software changes. We do not want the centralization of off-chain oracles. Coin holders (stakers) may serve as an ideal decentralized oracle to make the adjustment on the chain as they are forming blocks.<br />
<br />
A cryptocurrency has no inherent long-term value without stable value. A long-term holder (staker) realizing this will vote for stable value. If the majority of stakers try to increase the difficulty too much to get better returns, they will eventually lose value from insufficient users wanting to use it as a currency.<br />
<br />
The coin's white paper and devs may need to only <i>recommend</i> that block winners set the difficulty to track constant value so that it always costs miners 1 dollar in terms of year 2020 to get 1 coin (stable value in terms of 2020 dollars). There may be a desire by purchasers and users for it to track the dollar even as the dollar slowly devalues so that a wider audience immediately has a reference for its value. But there's no mechanism for determining that desire and holders (stakers) would not be willing to respond to it anyway.<br />
<br />
A stable-valued currency occurs when coin quantity remains proportional to GDP/velocity. For example, assuming constant velocity, if $1 B is spent a week and total coin quantity is $100 B, and if $2 B/week is spent a year later due to a larger GDP, then coin quantity should become $200 B or it will be valued 2x more, which is harmful to it as a currency because that would invalidate contracts (prices and wages) and law that are expressed in terms of the coin. I would like to incorporate this knowledge as part of the difficulty adjustment, assisting (or counteracting) staker decisions. If the txn volume per week per total coin qty is increasing, I don't have a metric to determine if the increase is from a real GDP increase or if velocity is increasing, so I don't know if coin emission rate should be higher or lower. If I knew, how is the target GDP/velocity chosen? How much should coin emission rate increase to avoid too much lag on the one hand and oscillations on the other?. The fees on txns should discourage a manipulation of the metric with do-nothing txns. Transactions would be unconscious fee-weighted votes on a difficulty adjustment. Stakers could revolt by omitting txns, but that would destroy the value of their stakes.<br />
<br />
The minimum unit should be 0.001 coin because 1/10th of a penny is dust and the txns/sec limitation in this technology is severe. This is the value of a Satoshi at 1 BTC = $100,000.<br />
<br />
<h2>
Part 2: reverse Nakamoto Consensus</h2>
This enables stake-rate to replace hash-rate. A Verifiable Delay Function (VDF) is used to get the time denominator for stake-rate. Since equipment value (hash-rate) requires time to prove its value during the vote, time comes before the proof of value. But stake value is used to adjust the time delay in stake-rate, so stake value comes before time. This prevents the value from demonstrating to the chain that it did not vote twice.This is remedied by doing the consensus backwards. This prevents problems normally seen in PoS<br />
<h3>
<b><a href="https://zawy1.blogspot.com/2019/03/reverse-nakamoto-consensus.html">This rest of section has been superseded by this article.</a></b></h3>
</div>
<div>
<br /></div>
<div>
<ul></ul>
<h2>
Part 3: Coin Specifics</h2>
<div>
<ul></ul>
</div>
<h3>
<b>POW to generate & distribute coins</b></h3>
POW waste is still needed to fairly distribute coin. We can use <b>self-hashing txns to enable solo mining </b>(aka self-mining txns). People could use their own mining equipment or rent NiceHash. The self-hashing txn consists of a destination addr, a difficulty that determines how many coins will be obtained based on the difficulty_2 (hashes/coin, see below) that is in the block header, a block number that is 20 blocks into future, and a nonce. The amount of coin he gets is determined by the a difficulty_2 setting in the block header in where his txn is included. Miner hashes the txn until the nonce solves the difficulty that's in the txn. After he releases it, hopefully a staker will include it in the next 20 blocks. The staker must confirm the nonce is a solution and that the txn was not previously submitted in the past 20 blocks. This allows stakers time to include it while preventing the need to check for the same txn in the distant past. If the stable value idea is not used, a regular difficulty algorithm is used to determine emission rate just like regular POW. Either way, pools are obsolete. Txn fees will prevent too many mining txns, so there is no minimum. <a href="https://medium.com/@antsankov/pt-2-ecip-1049-why-ethereum-classic-should-adopt-keccak256-for-its-proof-of-work-algorithm-24052ea6eed1" target="_blank">Keccak256</a> may be a good choice of POW. The ideal POW is one which "everyone" has equal access to (not giving an undue advantage to botnets or undisclosed specialized ASICs. A POW with a good ASICs on the open market would be good.<br />
<br /></div>
<div>
<h3>
Coin holders adjust coin parameters</h3>
<div>
A block creator can change the numerically-valued parameters up or down 0.02% from previous block. For example, if a fee is 0.1%, then a single block can increase it to 0.10002%. If 60% of block-winners (stakers) want fees to be 2x higher and 20% stakers vote against them, it will take N = 8665 blocks (30 days with 300 second blocks) to make the change. The equation is: N = log(2)/log(1.0002)/(0.6-0.2). This is the same as if 40% are voting for the increase while 60% are silent.<br />
<br />
Block headers will have fields under the control of stakers for mining difficulty, block size, block time, fees per byte, and fees per coin in txns.</div>
<h3>
Block Header</h3>
</div>
<div>
<ul>
<li>Same as BTC, except no nonce.</li>
<li>Consensus-related:</li>
<ul>
<li>a reference to Stake txn (its "address")</li>
<li>VDF-value "y" & proof π</li>
<li>Signature of block header with stake key</li>
</ul>
<li>Block winner controlled coin parameters</li>
<ul>
<li>Difficulty2 target for self-mining (nBits type)</li>
<li>Max block size in 100 kB (3 Bytes)</li>
<li>Target solvetime (3 Bytes) 3 bytes needed for voting accuracy</li>
<li>txn fee per byte (3 bytes)</li>
<li>txn % fee per coin (3 bytes)</li>
</ul>
<li>Total coin quantity mined (7 bytes)</li>
</ul>
<div>
<ul>
<li>Foundation wallet address for fees (34 bytes) ? Modifiable by who?</li>
<li>Code URL (probably Github) ? Modifiable by who?</li>
</ul>
</div>
<h3>
<b>Initial settings in block headers </b></h3>
Consensus vote will slowly modify these in every block.<br />
<ul>
<li>difficulty = $0.05/coin </li>
<li>block time = 300</li>
<li>max block size = 4 MB</li>
<li>% fees = 0</li>
<li>fees / byte = 0.001</li>
<li>dev or foundation address</li>
</ul>
<ul></ul>
<h3>
Self-staking transactions?</h3>
Not believed to be necessary, but self-staking txns could validate double-spends and allow two parallel blocks to merge to form a much higher chain work block. Every transaction would supply 1x stake-at-risk. Stake is lost if txn is spent twice. This has faster finality at a cost of only being able to send 1/2 the remaining coin in a txn</div>
<div>
<br /></div>
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-35678742464853250142019-02-28T07:29:00.002-08:002019-09-06T14:21:11.560-07:00Consistent value in various contexts is the source of money's propertiesAn ideal money has the same value in all relevant contexts or "dimensions". The numerous properties ascribed to money are just referring those contexts.<br />
<br />
The purpose of a thing is more fundamental to defining it than its properties. For example, ask a person where the chair is in a picture of a forest and he'll know it's the log or stump, but an A.I. won't be able to find legs or a back. Consider the purposes of money authors have mentioned:<br />
<ul>
<li>Medium of exchange</li>
<li>Unit of account</li>
<li>Store of value</li>
</ul>
Less frequently mentioned:<br />
<ul>
<li>Deferred payment (a unit of debit or credit)</li>
<li>Legal tender (e.g. a unit of account in contracts)</li>
</ul>
Value is inherent to all of these, and stability in value is obviously also important. If you add "consistent" or "stable" before them it makes sense and sounds idealistic or even redundant.<br />
<br />
<div>
Here are 15 properties I was able to find, taking the liberty of adding the word "value":<br />
<ul>
<li>Stable value in time</li>
<li>Stable value in different locations</li>
<li>Divisible value</li>
<li>Fungible value (aka "Uniform")</li>
<li>Portable value</li>
<li>Durable value</li>
<li>Acceptable value (aka "Convenient")</li>
<li>Trustworthy value ( aka "Confidence")</li>
<li>Liquid value (this is vague and encompasses most of the others)</li>
</ul>
"Consistent value in every way" seems to be an accurate summary. I found two properties which are kind of oblique or re-enforce the others..<br />
<ul>
<li>Limited in Supply (re-enforces stable value and trustworthy value)</li>
<li>Long history of acceptable value (re-enforces trustworthy / confidence in value)</li>
</ul>
There is another property:<br />
<ul>
<li>Has value in itself</li>
</ul>
This might be a circular reference, or it breaks money out of a different circular reference "money has value because we agree it has value". This property is saying it should have value because we can use it for something besides exchange. It refers to something like copper, silver, food or vodka (a unit of exchange when the USSR was falling apart). Coins have had this property off and on. For maybe 2 or 3 decades, the copper in a penny was worth about a penny. Then there are silver and gold coins. So the trades in these types of money are also barter.<br />
<br />
<b>Barter, energy, and cryptocurrencies</b><br />
Continuing on about this final property: it always has taken a lot of energy to get silver and gold. Similarly, POW cryptocoins waste energy to "prove their worth". But the worth in metals is also like stored energy (literally, metals can be burned to get a lot of energy out, but being able to use them saves energy). Especially silver: it's biggest use right now is in solar cells. Buying silver is akin to buying potential energy. The "inherent" value in a barter-type money is the amount of economic "energy" (possibly literally) it can produce or save, but all the other properties only demand that the "value" is the amount of energy it can control through mutual agreement. If you could bottle up electrical energy in different quantities that could be easily extracted by anyone and could transfer it over the internet, that would probably be the perfect money.<br />
<br />
<b>Importance of stable value to contracts</b><br />
Contracts (including wages and prices) are just an agreement between economic players. In order for an economic system to be intelligent, it seems a constant value is as important as keeping the definition of a kg of wheat constant.<br />
<br />
<b>Currency quantity should track GDP</b><br />
If the "real" GDP of the currency being used increases, then the amount of currency in circulation must increase in order to maintain stable value. This is if the GDP is increasing from the economy getting more efficient, or if production increases, or if the currency is being demanded by previously "external" economic actors like the rest of the world increasingly using your currency. GDP increases from simply printing more currency (inflation) has to be subtracted from the "real" GDP. If the real GDP is trying to grow and the currency is not increased with it, it slows the growth rate by strangling trade. Increasing the amount of currency ahead of time can help the GDP to grow, but if too much currency is produced, inefficient decisions are made with the excess currency, leading to a future reduction in GDP. For example asset prices can artificially rise while inflation is kept low so it can seem like everything is fine, but this leads to a boom-bust cycle in assets.<br />
<br />
The "real" GDP can be viewed as a net energy that is acquired and used over time. It is used to sustain (maintain) and increase itself (the economy). But the net energy is not necessarily physical joules (or how efficiently they are used, hence "net"). We may place higher value on things that can't be measured with physical energy. For example, we may print more money to increase the apparent GDP (since the money quantity is higher) that actually reduces "real" (joule-based) GDP. An example of this is wanting an even distribution of joule-based wealth more than total joule-based wealth. In other words "efficient" use of the joules may not be a physical conversion efficiency. But I will assume "real" GDP refers to net work energy in joules.<br />
<br />
To keep constant value the quantity of the currency needs to be in proportion to the amount of power (energy per time) the infrastructure can produce, provided the currency's velocity (turnover rate) is constant. So the quantity of money divided by the time it takes the money to "turnover" (its 1/velocity) should remain proportional to the productive power of the infrastructure, which indicates the currency is in units of joules. That is, (money qty)*(velocity) = (net work energy in joules) / (time). But since constant value depends on (money qty)*(velocity) it does not strictly connect money to constant value as in coins with inherent value.<b> The solution is to make money proportional to the infrastructure that creates the GDP. </b>That infrastructure is an engine that has a net work output per time. It took energy to create the infrastructure, so it's like a potential energy. So money can retain units of joules like the infrastructure and yet be directly connected to a joules/time.<br />
<br />
The amount of currency in circulation should "lead" that power. For example, if a new discovery is going to increase efficiency and needs a large capital investment, an amount of currency needs to be <i>created</i> immediately in proportion to the expected benefits of the discovery and loaned to those who will profit from the discovery. If the discovery increases real GDP as expected and thereby the loaned (created) money is repaid, the issuing authority (like a government) can spend it without inflation. If the venture fails and it's not repaid, there is inflation. Doing it this way pulls marginally unemployed infrastructure into action and/or causing slight temporary inflation that "steals" relative power from other sectors to get the discovery up and going quickly. Intellectual property, culture, and resource depletion affect the efficiency of the infrastructure's production and the efficiency of its use, so knowing the changes in the "power" for the purpose of increasing or decreasing the currency to keep constant value is not easy. We can make an initial error in estimating the true watts of production for the purpose of determining the amount of coin to issue, but it's OK is we are consistent in that error consistent (initial accuracy can be bad, but long term precision should be good). We only need to know that the amount of coin is staying proportional to the power of production, provided the velocity has not changed. "Net work energy" is clearly defined in physics but we may not want to turn the net work output of our GDP infrastructure into fun heat energy. Evolution indicates we "want" to create more infrastructure that will capture more energy in the future to build more sustainable infrastructure, more quickly. A currency-issuing authority that guides its market in that direction the best is the one who will have the dominant currency. We might want more fun heat energy, but in the end the infrastructure that seeks to expand itself will dominate, pushing for a currency issuing authority that assists it in controlling assets (including people) to this end, eliminating liabilities (including people) along the way. China's rise and strict control of trade and currency is not an accident. USSR's fall in 1989 was a wake up call that economics is important, causing them to intelligently guide macroeconomics. The square caused the government to fear its people which is the opposite of the U.S. government which acts with ignorant impunity as a result of the wealth that resulted from winning the currency war. We've printed an excess for free foreign labor as fast as the increasing world GDP could absorb it, greatly slowing inflation, but reducing our own infrastructure.<br />
<br />
A lot of currency is created as banks follow rules set out by governments to create it out of thin air using the asset and the credit-worthy borrower's promise to repay as assets in the banks books that offset the thin-air money.<br />
<br />
<b>Economics as an A.I.</b><br />
Economic systems economize limited resources with competing (evolving) agents. Part of programming interacting A.I. agents is to create a currency that gives access to CPU time and memory space (I'll assume CPU time is primary concern). The quantity of the currency turnover per time must be proportional to CPU calculations per time. Each calculation requires energy and expansion of the A.I. system would mean gaining access to (creating or stealing) more CPUs (infrastructure). So a perfect parallel can be made between a specific type of A.I. and economics.<br />
<br />
<b>Slow inflation may be practical, violating constant value</b><br />
How to increase and decrease the quantity of currency to assist the survival and expansion of the infrastructure is not obvious. It may be necessary to violate constant value. For example, there's a long history of erasing past debts as a way remove the "1%" from having too much power (see Michael Hudson's "<i><a href="https://armstrongeconomics-wp.s3.amazonaws.com/2015/10/Debt-Cancellations.pdf" target="_blank">The Lost Tradition of Biblical Debt Cancellations</a></i>"). A 2% annual inflation puts pressure on large holders of the currency to invest the capital in the economy directly or via loans, or lose their value if they don't. </div>
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-7753380835604130632019-02-18T15:45:00.001-08:002019-10-01T02:55:26.630-07:00The Problem with Avalanche (BCH & Ava)[<br />
<br />
update #3. Here's my rant in a comment to their Sept 26, 2019 dev meeting<br />
<br />
Avalanche is not a consensus mechanism for two related reasons: it does not quantify the voting population or detect network partitions. Not having Sybil or eclipse protection is not as big of a problem. It proves consensus only among its peers without knowing what the wider network thinks, even if it has Sybil & eclipse protection. It does not meet the "agreement" requirement mentioned in Wikipedia to be called a consensus mechanism. See Leslie Lamport's requirements for consensus and Coda Hale's "You Can’t Sacrifice Partition Tolerance" as an example of a researcher getting exasperated with people calling algorithms like Avalanche a consensus mechanism. Nakamoto consensus was Earth-shattering in its ability to get consensus in a distributed permissionless setting with Sybil, Eclipse, and partition resolution (not just detection via slow solvetimes). VDF-POS is the only alternative (POS alone requires more excessive bandwidth as centralization & permission are increased). If you find something better like centralized staking for post-consensus, then you do not need Nakamoto consensus because you're unconsciously doing POS where Avalanche gets fast "consensus" at the cost of ruining partition detection which means you must let a real consensus mechanism override it. I bugged deadalnix & Emin about this 9 months ago and their position is "partitions are rare". That's true, but if you get Sybil protection, you can still have an eclipse problem and more importantly it means it must not be the final say in consensus. Even if you let POW override it, when you get close to something working you'll realize a simpler semi-centralized technique using classical consensus will work better because Avalanche is only useful for quickly resolving the opinion of a large set of voters. If you have a large set, your Sybil protection is going to require a lot of communication. A Sybil solution may also contain partition & eclipse protection, but keep in mind this conjecture: you can't carry Sybil etc protection over to the speed of Avalanche in a way that maintains the combination of protection, speed, and a level of decentralization that exceed POS + classical methods. Maybe there is a reason the Avalanche researchers want to be anonymous. They are clearly well-published, so why hide when publishing this? If you use a smaller set of voters, I think you'll find a better solution such as semi-centralized mempools using classical consensus to prevent double spends. So merchants would trust the mempools for small-valued txns but realize they are not a guarantee like the actual blocks. If all nodes agreeing on individual txns are used, then Avalanche can be used, but it's only a suggestion for merchants and miners. To avoid full-blown POS that makes the consensus part of POW pointless, you would just not worry about Sybil protection, so POW would retain the right to over-rule the centralized mempool or node-based Avalanche. The potential for preventing 51% attacks can only be achieved if you are basically subtly switching to a POS coin, not using the POW as consensus. It makes no sense to keep Nakamoto consensus if you're going to overrule it with pre- and post- consensus. You can just use POW in self-hashing txs to generate and distribute coin and just throw Nakamoto consensus out the window. VDF-POS as I've described is the only other option.<br />
<br />
If you want fast consensus that maintains Nakamoto consensus, use a DAG. See the issue in my github for how to do a DAG.<br />
<br />
<br />
]<br />
<br />
[<br />
Update #2. I recently learned BCH may allow past 100 block winners to be a committee to participate in Avalanche to confirm txs. This is to provide Sybil protection which was my main complaint below. However, Avalanche's main benefit in speed with little communication by sampling only your peers, hoping they are connected to a much larger network. With only 100 blocks (and maybe only 20 actual distinct mines or pools in the committee), there seems to be little to no advantage over classical consensus methods which will have the advantage of proving consensus instead of hoping for it. Avalanche is not a consensus mechanism because it does not prove agreement between all non-faulty nodes (see Wikipedia). It can't know if a majority consensus has been reached because it does not quantify membership participation. It does not know if the network is split (as in a DoS or eclipse attack that can be combined with a double spend) with each side giving different results. All it knows is if your immediate peers agree. See this tweet thread for more of my more recent comments on Avalanche and 0-conf<br />
<a href="https://twitter.com/zawy3/status/1174006755925417986">https://twitter.com/zawy3/status/1174006755925417986</a><br />
<br />
]<br />
<br />
<br />
<br />
[ update #1: I believe BCH and Ava are using Avalanche advantageously in this way: if the recipient is confident there is not a 51% attack or network partition in progress, then he can be a sure double spend will not be allowed. But it invites 33% Sybil attacks on nodes (either locally or globally) to trick nodes into pre-approving txns that POW will have to overturn. The difference between a DAG and Avalanche is that a DAG measures network hashrate integrity by having lots of blocks solved quickly. Neither avoids POW's 51% problem. ]<br />
<br />
The problem with Avalanche is that it assumes a high level of node participation (the "membership" must not change too much, section 3.7). So there's no protection against network partitions. It assumes the network remains largely intact and does not say what happens when the minority side comes to a different conclusion. There's no mechanism to tell which is the larger side. The authors said they would address this in a later paper, which is harder to do than Avalanche itself. It achieves Consistency and Availability but assumes there is no network Partition. Ava and BCH said partitions are not part of the real world, but if they were not a big issue, Nakamoto (POW) consensus did not need inventing.<br />
<br />
POW's magic is in selecting chain history with the least sum of partitions (via highest cumulative work) with only one voting (hashrate) member (miner) per election (block) needing to communicate that he won, and everyone immediately agreeing without even communicating an acknowledgment. The next vote begins without any other communication. The size of the voting membership (hashrate) is also determined from those single winning announcements, which set a variable for the next election to get an accurate average block time. It's an amazing achievement. An enormous amount of communication overhead is avoided by making the voters work. No membership list is needed because POW does not prove there was no partition. It only proves the chain had the route of least partitions, assuming a 51% attack has not or will not occur.<br />
<br />
If there is a network partition with Avalanche that coincides with conflicting spends on each side of the partition, the network is permanently forked. There's no mechanism to tell nodes which fork is correct unless it defaults back to POW. But if it defaults back to POW, the hidden chain's double-spends will overwrite the Avalanche-approved txns. BCH said their implementation will allow miners to include txns that Avalanche has not voted on (and not required to include Avalanche-approved txns...both as a way to claim POS is not superseding POW). This means there is no protection against a double spend because the attacker only needs to get one block on the public chain to include txns that did not receive Avalanche approval, paving the way for double-spends on the hidden chain.<br />
<br />
I've tried to come up with ways to "repair" Avalanche with membership metrics that will enable it to detect network partitions. Fast finality, if not all basic POS, requires proof of sufficient network integrity. If centralization is to be avoided, the nodes must independently conclude the necessary percentage of voting members are known to be participating. This is not trivial. I assume Casper and Dfinity are solving this problem in complicated (suspect) ways. I'm attempting my own design in a future post.<br />
<br />
<br />
<br />
<br />
<br />Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com1tag:blogger.com,1999:blog-4301173651018456758.post-18650799726491306312018-09-09T03:31:00.000-07:002018-09-26T10:28:53.802-07:00Zipf's law: causes & derivable from ParetoI specified the relationship between Pareto and Zipf distributions in wikipedia:<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-EdnVpbbFJks/W5T1PGY9R4I/AAAAAAAAFt8/QoekjbViQM8eShR148hXKqHT9e8XMlegwCLcBGAs/s1600/zipf_pareto_connection.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="399" data-original-width="613" src="https://3.bp.blogspot.com/-EdnVpbbFJks/W5T1PGY9R4I/AAAAAAAAFt8/QoekjbViQM8eShR148hXKqHT9e8XMlegwCLcBGAs/s1600/zipf_pareto_connection.gif" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<b><br />
</b> <b>Wikipedia's excuse for Zipf's prevalence:</b><br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://4.bp.blogspot.com/-Ege8zfnpLa8/W5TpuJxdP9I/AAAAAAAAFtw/NLPizYmY9l8itK4nj995YhIttag5I27twCLcBGAs/s1600/zipf_reasons.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="172" data-original-width="573" src="https://4.bp.blogspot.com/-Ege8zfnpLa8/W5TpuJxdP9I/AAAAAAAAFtw/NLPizYmY9l8itK4nj995YhIttag5I27twCLcBGAs/s1600/zipf_reasons.gif" /></a></div>
<br />
<b>Preferential Attachment</b><br />
A simple, common, and possibly accurate view is that there is a preferential attachment ("the rich get richer") going on, e.g. people are more strongly attracted to large cities because there are more opportunities. A common math example for preferential attachment is the Yule process.<br />
<br />
<b>Yule process</b><br />
This is one of the best contenders for explaining Zipf's law and other Pareto (power law) distributions. In biology, the number of species in a genus (or members of a specie?) seems to follow a <a href="https://en.wikipedia.org/wiki/Yule%E2%80%93Simon_distribution" target="_blank"><b>Yule process</b></a> that results in a Pareto (power law) in its long tail. This process says a new specie is more likely to form in proportion to the number of species in that genera. It's a simple "the big get bigger in proportion to their size". It assumes that no species die out. If that condition were included, its tail probably dies off quicker, which is seen in realistic data. Overall, this process gives a hump, or at least a dip at the front end, that is commonly seen in real-world data in their log-log plots. Zipf's law is rho = 0.<br />
<br />
<b>Deviation of Front and Tail from straight-line log-log plots</b><br />
A simple power law such as Pareto (the continuous form of Zipf's) is a straight line on a log-log plot. But most real data forms a hump, possibly more than the Yule process. So the front and tail ends dip down from the straight line. The preferential attachment idea is amenable to this: after cities get beyond a certain size, there are drawbacks. If it's not beyond a certain size, there's no benefit to from the limited ability to cooperate. If a word is used too often, it's not conveying information. If a word is used too rarely, no one understands it. So a double Pareto has been suggested, to cover the front and back tails, but it gives too much of a sharp hump in the middle, so it seems a triple Pareto (power law) would be better. But in many cases, a primary Pareto with a secondary Pareto for the head or tail adjustment might be close enough to the best possible.<br />
<br />
<b>BTW, <a href="https://en.wikipedia.org/wiki/Zipf%E2%80%93Mandelbrot_law" target="_blank">Zipf-Madelbrot</a> </b>is simply a slightly more general form of Zipf's law, throwing in another constant that might be used to create a more general Pareto distribution (continuous form) by scaling it in a way that results in a CDF =1 at infinity.<br />
<br />
<b><a href="https://arxiv.org/pdf/cond-mat/0412004.pdf" target="_blank">This chapter</a> </b> by a physicist is excellent.<br />
<br />
<a href="https://arxiv.org/pdf/1001.2733.pdf" target="_blank"><b>This paper</b></a> says Zipf law works because it is half way between order and disorder. It normalized entropy per character is 1/2, half the maximum possible. (At N=100 it's 0.37 and at N=1,000 it's 0.44, using normalized entropy = H(CDF)/log(N) in a spreadsheet).<br />
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<br />
<br />
<b>Other possible explanations for Zipf's law</b><br />
Zipf's law usually refers to systems that have an exponent of s = 1. The reason for this simple 1/rank is considered a mystery for a long time. A lot of theories have been proposed (two possibilities are mentioned above, but I don't know if they were s = 1).<br />
<b><br /></b>
<a href="https://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong"><b>An IEEE article</b></a> (with more comments <b><a href="https://spectrum.ieee.org/computing/networks/metcalfes-law-is-wrong/making-the-connection">here)</a></b> claims many experts say Metcalf's law should be that the "value" of the network is N*log(N) instead of N^2 and that this gives rise to Zipf's law. N^2 assumes the value of every additional connection is the same with every node connected to every other node. Log(N) allows loss in efficiency of the connections as the number of nodes increases. They point out the harmonic sum 1+1/2+1/3+ ... 1/N =~ ln(N) + 0.577. This is not surprising since the integral of 1/x is ln(x).So the network gives ln(N)+0.577 value to each of the N nodes, so the total network value is N*[ln(N)+0.577]. But the node math can't be converted (at least directly) to words and city populations because the nodes have an equal number of connections and the same distributions. Maybe ideas (for words) or occupations (for city populations) could be treated like nodes. Maybe cities or words could be treated as different networks.<br />
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<br />
<br />Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-24103080938803611312018-09-04T14:28:00.007-07:002022-09-03T18:25:21.055-07:00Analaogy between Gravity/Momentum and Magnetism/ElectrostaticsThere is a bewildering array of different ways to find mathematical analogies between mechanics and electromagnetism. <a href="http://www.feynmanlectures.caltech.edu/II_12.html" target="_blank">Feynman discusses analogues to electrostatics</a>, stating at least that part of the analogies is possibly merely the result of everything needing to be calculated in terms of space, and since vector math is the best way to deal with it, the equations will naturally come out similar. (The vector math of curl, divergence, and gradient should show up a lot.) For a simple example, the 1/R^2 rule shows up a lot. It is the strength of something at a distance R from a point source of some quantity. The source is emitting "rays" of some sort that spread out as you get further from the source. If the quantity we're interested is proportional to the number of rays per surface area of an imaginary sphere of radius R, then we have a 1/R^2 rule. It shows up in gravity, electrostatics, sound intensity, and the probability P per second of getting hit by a bullet from a madman (point source) firing N bullets per second in completely random 3D directions. <br />
<br />
<a href="https://en.wikipedia.org/wiki/Mechanical%E2%80%93electrical_analogies" target="_blank">Wikipedia has a bunch of analogies</a> between mechanical and electrical systems but the most natural one seems to be the first one mentioned, the <b><a href="https://en.wikipedia.org/wiki/Impedance_analogy" target="_blank">Impedance_analogy</a>.</b> It's presented as 4 different substitutions, but it looked like there should be a simple source of the relationships. I noticed simply replacing charge movement (current) with "meters movement" (velocity) would derive the relationships. Replacing charge with meters is a bizarre idea which could explain why respectable sources do not seem to mention this connection.<br />
<br />
Two basic electricity equations are:<br />
<br />
V = L di/dt<br />
i = 1/J dV/dt<br />
<br />
V = volts<br />
L = inductance<br />
i = q/second<br />
q = charge<br />
1/J = C = capacitance<br />
<div>
<br />The charge => meters substitution gives valid analogous relationships:<br />
<br />
F = M dv/dt<br />
v = 1/K dF/dt<br />
<br />
F = force<br />
M = mass<br />
v = x/second<br />
x = meters<br />
K = Hook's law<br />
<br />
These equations extend to valid energy equations:<br />
E = 1/2 J q^2 (capacitive energy)<br />
E = 1/2 K x^2 (spring energy)<br />
E = 1/2 L i^2 (inductive energy)<br />
E = 1/2 M v^2 (kinetic energy)</div><div><br /></div><div>Separating a capacitor's plates by distance x does not result in the spring equation. The analogy works because as a charge q is moved the distance across a capacitor's dielectric, there's not only a V force it's resisting, but it's presence once it's there increases the voltage for future charges trying to move against it. </div><div><br /></div><div>The most interesting possibility is a deep parallel between L and M because L is just the result of how charge flows. It creates a self-interacting magnetic field and magnetism (in a non-quantum world) can be derived from q and relativity, i.e. L is not a thing in and of itself in the way we normally think of mass being something "real". L is just the result of q being forced to flow in a self-interacting way We know the kinetic energy is also the result of relativity increasing the mass as velocity increases. Is mass just as fictitious as L? It's interesting that inductors are in the same shape as a spring. Is mass in some sense have a capacitor shape? We know in relativity the distance shortens in the direction of travel. This leads to the idea than areas of like charge are like capacitor plates being pushed together and this is the source of how extra energy is being stored when you accelerate a mass. Inertia would just be the force needed to push like charges closer together, although the plate view is not supposed to be the correct view because as I mentioned capacitor energy is not the result of plates pushed together. </div><div><br /></div><div><div>The above are the integrals over either a charge or distance. In other words, these are the derivatives of the above:</div><div><br />V = J*q<br />F = K*x<br />magnetic flux = L*i<br />momentum = M*v</div></div><div><br /></div><div>J = 1/C is the difficulty with which q can move onto the capacitor, and K is the difficulty with which "distance can move onto a spring". Similarly Mass and inductance are difficulty to increasing v and i.<br /><br />i is to magnetic flux what v is to momentum. We think of pushing charges through inductors, so maybe we should think of moving meters through mass instead of moving a mass through meters. <br /></div><div><br /></div><div>Two more equations to point out:</div><div><br /></div><div>E = F*x</div><div>E = V*q</div><div><br /></div><div><b>Electrical: </b>Moving charges are confined in a spatial arrangement that we call an inductor. If we try to accelerate them, we encounter a push-back. If we overcome the push-back so that they move faster, it will cause the inductor to have a higher internal energy. (The inductor can be thought of as a superconducting toroidal type.</div><div>
<br />
<b>Mechanical: </b>"Moving meters" are confined (via charges?) in a an arrangement we call mass. If we try to accelerate them, we encounter a push-back from their "self-inductance". If we overcome the push-back so that they move faster, it will cause the mass to have a higher internal energy.<br />
<br />
To go deeper, I would like to insert v in place of i in Maxwell's equations because Einstein said Maxwell's equations are a great filter for weeding out false theoretical ideas because all relativistic ideas are subject to them. But a straight substitution into Maxwell's equations would seem to have a problem. Maxwell's equations are all about spatial relationships. Throwing in an extra spatial dimension to replace charge seems drastic. Do I exchange an x and q instead of replace the q?<br />
<br />
Notice in the all the charge equations above, meters were not present except implied in say J or L.<br />
<br />
Will it require somehow replacing the 3D spatial system of the equations with some kind of 3D charge system? To be clear, this means there would be some sort of 3D "charge-space". I was once told spatial dimensions are the result of quantum spin and I know spin is at the charge level, so I did a quick Google search for "spin charge" which showed electrons consist of 3 quasi-particles. Are the 3 quasiparticles related to charge in a way that is analogous to how the 3 spatial dimensions' are related to mass? <br />
<br />
Maxwell's equations can be derived from the idea of point charge emitting rays of force in 3D space, and them using relativity to generate the magnetic pair of equations. Magnetism = a relativistic effect of charges (Feynman and Schwartz cover this, but I didn't learn it from school, but came across it in a 1930's Encyclopedia Britannica before looking for it elsewhere). Magnetism is perpendicular to the movement of charge in space. </div>
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-7561576442852168592018-08-30T15:27:00.002-07:002018-09-05T07:26:09.752-07:00Chinese threat of > 50%The biggest potential of BTC in the near term is for banks to view it<br />
as good as gold, and hold it accordingly, especially as the dollar<br />
collapses from the U.S. not having a manufacturing base (7% of the<br />
population) and the world no longer needing to finance the US.<br />
military by cycling their trade surpluses into U.S. treasuries that<br />
make the deficit spending possible that makes the military possible.<br />
The dollar house of cards should fall fast because the world "needs"<br />
the last remaining support column, U.S. consumption, less and less.<br />
<br />
But BTC is not tenable as a replacement currency if the Chinese<br />
government can tell >50% of miners what to do, or produce enough<br />
mining equipment to get that >50% in a dozen months. They are so<br />
aggressive with solar (with its collapsing costs), no one will be able<br />
to compete with them in electricity. But their ability to be cheapest<br />
mining community has given the Chinese government a zero-cost<br />
infrastructure they can take over at any time. If BTC stands in the<br />
way of the the RMB copying the dollar's play book, they will have no<br />
qualms in using the mining power at a loss to quash it. Only by<br />
squashing it will they be able to dictate trade terms to the rest of<br />
the world in the same way the U.S. military & dollar enabled the U.S.<br />
since even before 1971. Their ability to control BTC's POW should reduce European<br />
and U.S. banks' desire to rely on BTC as if it were gold.<br />
<br />
BTW, I do not mean to downplay BTC's importance by equating it with gold: when the<br />
dollar-led fiat bubble collapses, gold-like stuff should shine as it has at the beginning of any monetary collapse and wars.<br />
<br />
The Chinese control the BTC mining equipment, and has the cheapest electricity. The shift<br />
to fees does not change anything: China will still have the<br />
POW that can dictate what the ledger says, choosing<br />
txns more easily than the U.S. has been able to place embargos on countries that get<br />
out of line. They need to only act like the U.S. for it to be a disaster for most of us.<br />
<br />
The Chinese government may have little interest in BTC,<br />
even if leaving it alone would be their best option. (It would be<br />
because they have the manufacturing base and everyone rising together<br />
would allow them to rise higher than the U.S. IMF/world bank play book allowed us).<br />
But no government or people seems to have been that enlightened when<br />
they have had such a large edge. It seems like they may follow the U.S.<br />
and U.K empires' and guide the world towards the RMB, first<br />
by being the world's greatest producer with the greatest trade<br />
surplus, and then by letting the manufacturing base slip away via the drug<br />
of currency "surplus" and trade deficit.<br />
<br />
BTC can't go against the desires of China to an extent that's greater<br />
than China's unwillingness to dictate terms to its mining community. That<br />
does not seem like a very great barrier. So BTC playing a supporting role to RMB dominance is a real possibility thanks to "might is right" POW mining. <br />
<br />
Bitcoiner's are all about capitalistic free markets and no welfare state, and yet they have a "kumbaya" feeling for a worldwide community-without-government consensus to define a world currency. But at its core is POW which is not a popular vote, or a vote for what's best for the world. It's based on power. If that power gets concentrated, then evolutionary rules replace consensus. If China remains strong enough to maintain > 50% and if its government acts in a way to coordinate its miners, the rest of the world will be proven evolutionarily weak. It will be an example of really free market weeding out the weak, thanks to the absence of a world government that might have protected the weak via laws and a power outside of the blockchain.<br />
<br />
Can BTC be made to prevent China from dictating the POW results?<br />
There is such acrimony shown to forked clones that have so little<br />
community and dev support, it would seem no one believes a<br />
state-sponsored clone, backed by a tweet army, would have much trouble<br />
in replacing BTC. China is the only one who could do this in addition<br />
to POWing the real BTC into worthlessness.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com1tag:blogger.com,1999:blog-4301173651018456758.post-86872565739134809372018-08-28T04:33:00.001-07:002018-08-28T04:33:53.330-07:00Chinese investment in Africa<span style="background-color: white;"><span style="color: #292f33; font-family: HelveticaNeue, Helvetica Neue, Helvetica, Arial, Verdana, sans-serif;"><span style="font-size: 14px; white-space: pre-wrap;">Much of the Chinese investment in Africa is probably good for Africa, like some of the West's investment in the 3rd world. But the instances of over-charging for infrastructure development (such as the Railway the FT mentions) creates an indebtedness that is also reminiscent of the U.S. model, especially the IMF/world bank play book, as long as the debt to China is in RMB or USD. Debt in local fiat is far better for Africa, as it gives them the option of printing away (inflating) the debt, giving a fiat to China that China can only off-load by spending on things from that same country, employing it's people and businesses. The "inflating away" is not a a total cheat because China can use it to gain some control over that country's people. But it does motivate china to not make bad loans, motivating them to remain interested in the productive success of whatever the loans were for, so that the debt does not need to be inflated away.</span></span></span><br />
<span style="background-color: white;"><span style="color: #292f33; font-family: HelveticaNeue, Helvetica Neue, Helvetica, Arial, Verdana, sans-serif;"><span style="font-size: 14px; white-space: pre-wrap;"><br /></span></span></span>
<span style="background-color: white; color: #292f33; font-family: HelveticaNeue, "Helvetica Neue", Helvetica, Arial, Verdana, sans-serif; font-size: 14px; white-space: pre-wrap;">Africa investment in USD is alternative to risky U.S. treasury debt. They have to offload excess USD from U.S-China trade imbalance. They can't buy U.S. stocks & real estate. To repay loans, Africa will give resources to China, exported on those same over-priced railways.</span><br />
<span style="background-color: white; color: #292f33; font-family: HelveticaNeue, "Helvetica Neue", Helvetica, Arial, Verdana, sans-serif; font-size: 14px; white-space: pre-wrap;"><br /></span>
<span style="background-color: white; color: #292f33; font-family: HelveticaNeue, "Helvetica Neue", Helvetica, Arial, Verdana, sans-serif; font-size: 14px; white-space: pre-wrap;">If most the money (RMB or USD) is spent on Chinese intellect or labor, they don't even lose the money "loaned"...it goes back to China....so the resources are obtained for the cost of the infrastructure in a way that keeps their trade surplus.</span><br />
<span style="background-color: white; color: #292f33; font-family: HelveticaNeue, "Helvetica Neue", Helvetica, Arial, Verdana, sans-serif; font-size: 14px; white-space: pre-wrap;"><br /></span>
<span style="background-color: white;"><span style="color: #292f33; font-family: HelveticaNeue, Helvetica Neue, Helvetica, Arial, Verdana, sans-serif;"><span style="font-size: 14px; white-space: pre-wrap;">China is graduating 10x more engineers per year than U.S. and building about 10 tons per year per U.S. citizen in its infrastructure. If it continues to grow 3% per year faster than U.S. for the next 40 years (as I expect), that will be 1.03^40 = 3.2x bigger than it is now, compared to U.S. They are not likely to lose their empire edge as fast as Spain, U.K., and U.S. did in prior centuries because they really understand the economics and importance of protectionism better than we ever did. They will not let their manufacturing base slip away as easily as the U.S. did. </span></span></span><br />
<span style="background-color: white;"><span style="color: #292f33; font-family: HelveticaNeue, Helvetica Neue, Helvetica, Arial, Verdana, sans-serif;"><span style="font-size: 14px; white-space: pre-wrap;"><br /></span></span></span>
<span style="background-color: white;"><span style="color: #292f33; font-family: HelveticaNeue, Helvetica Neue, Helvetica, Arial, Verdana, sans-serif;"><span style="font-size: 14px; white-space: pre-wrap;">But even China is irrelevant compared to on-going rise of the machines.</span></span></span>Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-20984861597036683732018-08-16T12:06:00.002-07:002018-12-30T16:54:08.404-08:00Microscopic gravity-powered mechanical computerThis post can be of general interest, but I need it as background reference material for a future article about cryptocurrencies.<br />
<br />
<b>A mechanical, gravity-based bit</b><br />
Let's say that a bit in our system is a ball in a box instead of electrons stored on a capacitor or magnetic domains stored on a ferro-magnetic material. A 0 or 1 is if the ball is or is not in the box. For our ball to remain in the box, it must have at least a 50% chance of not being bumped out of the box by thermal agitations. This is the basis of Landauer's principle. The energy needed to do this according to the principle is E1 = k*T*ln(2) where k = 1.38E-23 = Boltzmann's constant and T = absolute temperature in Kelvins. At room temperature T = 300 so that <b>E1= 3E-21</b>. This is very close to a van der Waals force, which is an attraction so weak it's not considered a bond. Hydrogen bonds are the weakest of attractions called bonds and are not considered permanent in water, due to the polar nature of water and thermal agitations. They are from 2x to 20x stronger. So the Landauer limit is unrealistically low. Covalent bonds are about 200x stronger, and ionic bonds are about 400x to 2000x stronger. In a computer we need a LOT more reliability than 50% chance of the ball being in the box. If we use E2 as our energy barrier, frequency of a bit escaping out is f = f0 * e^(-E2/E1). See Arrhenius equation (E1 for this part should be k*T, 30% larger than k*T*ln(2)). f0 is the frequency of thermal vibrations in the crystal which is on the order of 10THz for silicon, the structure I'll make this CPU out of. 10 THz is a great overestimate of what I'll need because the balls I'll use are bouncing off the surface so that only a portion of the vibrations are imparting energy. Let's say I'll make it a nice big CPU with really high reliability. Say 100 million NAND gates with about 2 energy wells per gate and Ill allow 1 error per 10 years, so I want "f" error rate = 1 per 10yr*8670 hrs/sec*3600 sec/hrs*100 million gates*2 wells/gate.Rearranging gives E2/E1 = -ln(f/f0). For these numbers, I get E2 needs to be > 70 * E1. E1 here is 30% less than my E1=k*T*ln(2), so E2 > 100 * E1. so it appears the strength can be like a weak covalent bond, which makes sense, assuming covalent bonds in air at normal T & P conditions almost never break.<br />
<br />
If the ball has a mass in kg of "m", then the height "h" of the walls in meters has to follow the E2 = mgh equation to determine the h necessary to store the ball in the box (g=10 for gravity on Earth). If I use <b>balls that are 50 billion atoms of gold</b>, E2 = 100*3E-21 = 50E9*1.66E-27 kg/amu*198 amu/goldAtom*(g=10)*h. Solving gives <b>height of wall = 1.8 microns. The diameter of the ball is 1.2 </b>microns.<br />
<a href="https://3.bp.blogspot.com/-3u9ka9xVI_k/W3V5mpu2CjI/AAAAAAAAFi8/veDHzFgyAgkBhiNAjJaoGoe-evJ9uWeSgCLcBGAs/s1600/Clipboard.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="100" data-original-width="100" src="https://3.bp.blogspot.com/-3u9ka9xVI_k/W3V5mpu2CjI/AAAAAAAAFi8/veDHzFgyAgkBhiNAjJaoGoe-evJ9uWeSgCLcBGAs/s1600/Clipboard.gif" /></a><br />
<b>Mechanical NAND Gate</b><br />
<b><br /></b>
This will show that a logic circuit making the simplest single calculation must use the same amount of energy as storing a bit. This is obvious if you already understand entropy and its relation to energy because 2 bits of energy come in and 1 goes out, so the other bit must have turned into heat. That's the minimum energy expenditure for a logic function, not counting esoteric reversible logic.<br />
<br />
But that's not enough for my goal. My goal is to show the fundamental physics basis of all the deep parallels between economics and computing.<br />
<br />
A single type of many different gates (like NAND, XOR, Toffoli, Fredkin, etc) can (and have) form a complete computer. The NAND is the usual one used, so I'll use that one. I only need to design a single NAND gate for my purpose, and let others decided how to use them to build a computer.<br />
<br />
The balls shown are defined in the bit section above. The pink lines are tubes that return the balls to a pump (not shown) that returns them to the top.<br />
<br />
I accidentally made an AND gate instead of NAND gate, but this will show the general idea. This is lacking in detail that I could only fix by building a physical model or with 3D software.<br />
<br />
The left-side balance goes down only when there are 2 balls on the left side. It's not shown, but the input has two slots. Only 1 is shown because we are looking at the side view. The output can also have more than 1 output. The balls being stored at the top is a system-wide potential energy well that powers the computer, like voltage drives electrons. There is a rectangular counterweight on the balance equal to the weight of 1 ball. If 2 balls come in on the inputs, causing the left balance to fall, closing the output . If only 1 ball comes in the top, it is basically back up to its initial level, and there is a mechanism to roll them out of the way to clear the gate for the next computation.<br />
<br />
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The green and red bars represent walls that go up and down (valves). CPUs are engines going through a cycle, so it's natural they have valves. They have to be synchronized with a clock. They go down to let previous balls out.. They close after all balls have had time to get in place, in the entire computer. They can weigh much less than the balls and can be mechanically linked so that thermal vibrations cancel each other in trying to raise and lower the individual valves.<br />
<br />
The cycle is: green valves open, balance resets. Green valves close, red valves opens. Red valves close. Inputs applied to "highest-level" NAND gates, which has a cascade effect of triggering all the NAND gates that it should. It takes some time to propagate as the appropriate balances fall. Repeat (green valves open).<br />
<br />
Each level is the "well" that makes sure we know what state the balls are in: they are deep enough that we know the balls will not bounce out. When 2 balls come into the inputs, the balls fall two levels. This is a total of 4 units of energy calculated in the previous section that gives me a guaranteed bit, so in 1 cycle, 4 units were used. If no balls come in, zero. If 1 ball comes in, 1 unit. There are 4 possible states: 0 balls, 1 ball in "left" side, 1 ball in "right" side, and both balls. According to Landauer limit, it should average 1 unit of energy, and here I have used (0+1+1+4)/4 = 1.5 units. One way to help is to let only 1 ball out at the bottom when 2 balls come, so the other can be helped to get back up 1 of the two levels. A more complicated design and arguments might be able to use the counterweight in a might help further.<br />
<br />
There are two balls at the top which help push balls into the top compartment when the red valve goes down. This means I have to raise the balls a little more than the top floor. There needs to be at least as many as the number of red valves. The deeper the top layer of balls, the faster they will be pushed into place, enabling a faster computer but requiring more energy since the balls have to be raise higher. Also, the computer has to wait on the balls to fall which depends on force of gravity. If they were magnetically pulled down to fall faster, this would make it faster, but again require more energy. Also, the wedges needed to get the balls out will force it to require a deeper gravity, again requiring more energy per gate per operation. This seems to show a connection to the <b>Margolus–Levitin theorem</b> aka <b>Bremermann's limit</b> which says a bit can transition from one state to the next with a combination of more energy and more time.<br />
bits = 4Et/h<br />
where E = energy, t = time, and h =Planck's constant. So if E is higher, the time per bit can be less.<br />
<br />
<b>Clock Speed: </b>The central clock will have a massive ball raised and lowered based on the clock that provides the energy to raise and lower the light-weight green walls..The clock speed is based on how quickly the balls can fall h which is based on h = 1.8 micon = 1/2*g*t^2 which gives t = 0.007 seconds on Earth where g=10. A clock cycle is at least 2x this which makes this a 750 Hz machine. I could have chosen heavier balls to get an h as low as 1 nm which gives 28 kHz.<br />
<br />
<b>"Transistor" Density?</b><br />
Four transistors are needed to create a NAND gate. It looks like my NAND gate will take up about 10x30 microns. This gives me about 1.3 million "transistor equivalents" in 1 cm^2 of material.<br />
<br />
<b>Memory</b><br />
Memory may be built more simply, but two NAND gates can be wired as a flip flow to create bit storage.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-19458060312053178572018-07-25T05:40:00.003-07:002018-07-25T05:52:25.391-07:00Jeff Hawkins & Numenta brain theories catching up with mine <br />
=====<br />
In response to https://medium.com/@Numenta/the-secret-to-strong-ai-61d153e26273<br />
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I believe you're getting close to discovering the postulate I posted to your old forum about 7 years ago (after reading your book and watching your video of a helicopter) is probably true. 6 degrees of freedom are necessary to see movement of 3D objects in 3D space. My postulate is that the cortex is 6 layers because it is modelling this. The cortex is like millions or billions of groups of 6 equations (each minicolumn?) constantly receiving 6 unknowns and immediately solving to form a 3D world perception. This theory makes an observational prediction that I researched, confirmed, and I believe posted to your forum. I thought "what animal might see a 2D world?" The first thought is ants. An additional piece of potential observational evidence came to mind: wasps are very close cousins to ants. Sure enough, ant eyes have only 2 layers of neuronal support, while wasps have 6 because they see objects and fly in 3D. Going back to the wiki equation for degrees of freedom, you'll find only 2 degrees of freedom are needed to solve for a 2D world. Ants "see" and handle 3D objects with their feelers and two front legs....both of which have 6 layers. The exact number of layers in their brains may be debatable, but I'm in the ball park of the truth.</div>
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There are no integers in physics except for the 3D of space and fractional spins, which I'm told are the deeper basis of 3D space. These integers are deeply suspicious. Einstein and Bertrand Russell agreed that physics can be ultimately no more than a reflection of our minds. You argued against going down this rabbit hole that no great thinker has been able to come out of, and yet you are close to shedding light on it. 10 layers are needed to model movement of 4D objects in 4D space. What we see as velocity of an object would be seen as a static object to such a brain. Accelerations would velocities. Mass and energy would probably be defined differently, and I believe E=mc^2 in 4D space would be E=mc^3.</div>
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My response to https://medium.com/@Numenta/the-thousand-brains-model-of-intelligence-f1a70a6adf9c</div>
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<span style="color: #2a2e2e; font-family: "helvetica neue" , "arial" , sans-serif;"><span style="font-size: 15px;">It sounds like you’re describing a holographic model of the brain, which is very far from new terminology, but your model s *literally* a holographic model of the physical world. [This again parallels a very new and profound view of the universe, the holohgraphic Universe, further adding support to Einstein and Bertrand Russell's viewpoint.]</span></span></div>
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<span style="color: #2a2e2e; font-family: "helvetica neue" , "arial" , sans-serif;"><span style="font-size: 15px;">Each mini-column in a column might be forming an opinion as to a part of an object's position and movement in space-time (the objects might be as nebulous as things like "Microsoft" and "love", not just physical objects with physical mass in physical space, but still restricted to a 3 dimensions of "position" like microsoft's relation to other companies, but keeping probably keeping the time dimension unchanged). Each mini-column might be gathering data from other columns outside its own, different from other sister mini-columns, trying to form an opinion. They then maybe take a local kind of vote within their column to draw a conclusion.</span></span></div>
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-89758684621542494912018-07-21T07:31:00.002-07:002018-07-25T10:11:24.396-07:00Thoughts on Chamassee also a previous post of mine that's similar to chamas:<br />
https://www.blogger.com/blogger.g?blogID=4301173651018456758#editor/target=post;postID=5025527914896973587<br />
<br />
Posts to Chamapesa telegram:<br />
<br />
I think the biggest potential here is nested chamas going up a heirarchy for larger-scale investment and governance. The leader of a chama would form a chama with other leaders, all the way up to a global scale like city-county-province-nation. The heirachy would need the ability to tax sub-ordinate chamas for building of mutually beneficial infrastructure such as roads, education, and utilities (especially telecom). But then a check and balance system like the U.S. government would be needed as the taxes could be diverted to enrich and entrench the heirarchy.<br />
===========<br />
Zawy, [20.07.18 08:17]<br />
Rewarding users to gaurantee others seems like it may cause expansion in an unhealthy way. The unwanted bias may be small, but it may not exceed the benefit. It's paying to extend trust, but trust should flow the other way, from users to the app. If 10 chamas guarentee each other up to their total assets, then can each chama issue an inter-chama currency equal to their individual assets plus the guarantees so that the total system is like 10x reserve banking. As in U.S. mortgage lending, the chama would hold a promissary note from the borrower of the inter-chama-currency as an asset to balance its books. The borrower can then spend it to employ the inter-chama members or other locals accepting it who have the app but are not in a chama. The champesa app on the non-chama locals phone would validate that the currency is backed appropriately. A former chama member could buy his way back in by working for the currency. The borrower's business collects local fiat of the inter-chama currency to pay off the loan. At the end, the extra inter-chama currency equals the increase in inter-chama real assets.<br />
<br />
Zawy, [20.07.18 08:24]<br />
But the reserve multiplier does not increase unless the guarantees are changed. The guarantees in this scheme would need to automatically reduce if the assets decrease. Notifying locals of the excessive reserve before accepting the currnecy would need to be part of chamapeas so that its reputation is not hurt.<br />
================<br />
<br />
Zawy, [20.07.18 08:17]<br />
Rewarding users to gaurantee others seems like it may cause expansion in an unhealthy way. The unwanted bias may be small, but it may not exceed the benefit. It's paying to extend trust, but trust should flow the other way, from users to the app. If 10 chamas guarentee each other up to their total assets, then can each chama issue an inter-chama currency equal to their individual assets plus the guarantees so that the total system is like 10x reserve banking. As in U.S. mortgage lending, the chama would hold a promissary note from the borrower of the inter-chama-currency as an asset to balance its books. The borrower can then spend it to employ the inter-chama members or other locals accepting it who have the app but are not in a chama. The champesa app on the non-chama locals phone would validate that the currency is backed appropriately. A former chama member could buy his way back in by working for the currency. The borrower's business collects local fiat of the inter-chama currency to pay off the loan. At the end, the extra inter-chama currency equals the increase in inter-chama real assets.<br />
<br />
Zawy, [20.07.18 08:24]<br />
But the reserve multiplier does not increase unless the guarantees are changed. The guarantees in this scheme would need to automatically reduce if the assets decrease. Notifying locals of the excessive reserve before accepting the currnecy would need to be part of chamapeas so that its reputation is not hurt.<br />
<br />
Zawy, [20.07.18 08:59]<br />
It sounds like the chamacoin is exclusively a control / profit / encouraged_expansion mechanism, not directly helping the chama. Large, early-adopting Chamas will need more Chamacoin in storage. I don't think it should be like this: neither large nor early adopting should benefit (pyramid accusation). It sounds like a huge speculation motivater for the early chamas. I think the Chamacoin should expand as it's use expands. Chamas could be paid to join in proportion to the guarantee provided by the existing chamas. You are loaning them chama to get started based on your trust of them. If the new chama sells its chamacoin on the open market, the chamacoin gaurantee is burned. If the market price of chamacoin decreases or increases, existing holders of chamacoin should have a percentage of their existing coin decrease or increase in order to keep constant value. a 2% inflation rate might be good, maybe going to the devs. 2% inflation is a slow system-wide debt cancellation that effectively replaces the ancient traditions of jubilee (periodic erasure of all debts to dis-empower the entrenched wealthy). At 2% inflation, the welathy have to invest wisely or lose value from trying to keep a store of value without putting it to use for a societal good. So you don't change fees or conversion rates. You expand and contract the chamacoin.<br />
<br />
Zawy, [20.07.18 09:27]<br />
I think the ICO should sell Solidus shares for ETH or BTC which is then used for ERC-20 / chamacoin and salaries and founder's reward, which is distributed 1/3 now and 1/3 per year via nLocktime for 2 years. Chamas would dictate the fees the devs receive. Solidus should be employed by the chamas. The connected chamas would vote as a whole how much your "governing tax" should be.<br />
<br />
Zawy, [20.07.18 09:54]<br />
Chamas could then write inter-chama contracts in terms of a constant-value chamacoin. Large, trusted chamas are paid more to enter the system. The 2% per year of total assets might be enough to support Solidus. That leaves the question of "how can the fees be used to improve trust, trust metrics, and expansion" which would help both the existing chamas and solidus. (but not paying member or chamas to enter any more than existing chamas are putting skin in the game. The fee is a tax that should build infrastructure..a given heirarchy of Chamas (built out of leaders from the subordinate chamas) could choose their own tax rate and the chamas at the top would function as local "government" building roads and education<br />
<br />
Zawy, [20.07.18 10:07]<br />
Maybe the heirarchy and/or peer-level chamas would vote to set conversion rates between the chamacoin to make sure the assets/chamacoin ratio for each type of asset is accurate.<br />
=============<br />
That last paragraph saying the chamacoin will be used for trade between chamas tells me everything I siad about increasing and decreasing the supply of chamacoin is the way to go. ERC-20 tokens can be made minable with a difficulty adjustment, so it can be accomplished automatically, but 51% attacks are possible. So it seems the chamas have to check each others' assets to make sure the amount of reserve chamacoin they hold is proportional to those assets. This way the chamacoin is fundamentally a measure of the value of assets under the control of the chamas. As the assets increase system-wide, more chamacoin has to be minted in order to keep constant value so that their inter-chama contracts remain valid. It can be given to the devs, to existing chamas in proportion to current chamacoin holdings, or to attract new chamas. If the chamacoin starts being used as a local currency or attracts the interest of westerners due to stability, then its market price increases, so the difficulty setting or solidus, or a vote from the chamas could detrmine how much chamacoin to mint in order to keep constant value so that their contracts remain valid. The expansion in the use of the coin outside of the chamas increases its demand, and the chamas get to use the minted ccoin to buy more assets from the local community for free...it's a dividend payout for creating a succesful constant value currency that the external world wants. This is exactly what the U.S. has done with the dollar since 1971. Solidus only needs to take the smallest of cuts, like 0.1% to be massively successful. It should focus on serving the chamas, and stay away from as much patriarchal / colonistic stuff as possible. The videos imply this is the initial direction. But anytime solidus sets a parameter value, a red flag should go off. The parameters, except for the 0.1% should be set by the chamas, but the apps should faciliate education in the chamas about what the big goal is.....for example, why minting too much goes against the constitution, or social contract they are making with the external world. (constant value and letting any valid chamas join just as easily as the first chamas)<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 08:37]<br />
The currency quantity should be proportional to the number of "joules" in the assets (under the coin's control) that society has expended to get them. More precisely, the current "joule" value of the assets. So economizing agents such as people competing to control the assets society posesses is simplified to trying to obtained the currency, enabling them to focus on and measure their "local" immediate goals, enabling an invisible hand to work for the larger common good.<br />
<br />
Zawy, [21.07.18 08:38]<br />
society in the above means "the society of law" (interacting contracts) that are deonominated in the currency<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 08:37]<br />
The currency quantity should be proportional to the number of "joules" in the assets (under the coin's control) that society has expended to get them. More precisely, the current "joule" value of the assets. So economizing agents such as people competing to control the assets society posesses is simplified to trying to obtained the currency, enabling them to focus on and measure their "local" immediate goals, enabling an invisible hand to work for the larger common good.<br />
<br />
Zawy, [21.07.18 08:38]<br />
society in the above means "the society of law" (interacting contracts) that are deonominated in the currency<br />
<br />
Zawy, [21.07.18 09:06]<br />
Explosions in real GDP only occur when currency is not deonomited in gold. Societies falling apart turn to gold. By enforcing a gold-like coin as a currency, growth is stifled. It's going to be more complicated for chamas to understand the fees and everything if the value of chamacoin is changing relative to the local currency. It would be nice if chamas of different countries could directly trade contracts based on their value in Chamacoin. Turning to the dollar as an international standard has drawbacks as demonstrated by BRICs trying to get off of it. Chamacoin could be pegged to the dollar, or maybe a year-2018-dollar and adjust according to a basket of commodities. If the GDP of the chama-system increases, then more chamacoin would have to be printed in order to keep constant value. This seems simlper, not more complex.<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 08:37]<br />
The currency quantity should be proportional to the number of "joules" in the assets (under the coin's control) that society has expended to get them. More precisely, the current "joule" value of the assets. So economizing agents such as people competing to control the assets society posesses is simplified to trying to obtained the currency, enabling them to focus on and measure their "local" immediate goals, enabling an invisible hand to work for the larger common good.<br />
<br />
Zawy, [21.07.18 08:38]<br />
society in the above means "the society of law" (interacting contracts) that are deonominated in the currency<br />
<br />
Zawy, [21.07.18 09:06]<br />
Explosions in real GDP only occur when currency is not deonomited in gold. Societies falling apart turn to gold. By enforcing a gold-like coin as a currency, growth is stifled. It's going to be more complicated for chamas to understand the fees and everything if the value of chamacoin is changing relative to the local currency. It would be nice if chamas of different countries could directly trade contracts based on their value in Chamacoin. Turning to the dollar as an international standard has drawbacks as demonstrated by BRICs trying to get off of it. Chamacoin could be pegged to the dollar, or maybe a year-2018-dollar and adjust according to a basket of commodities. If the GDP of the chama-system increases, then more chamacoin would have to be printed in order to keep constant value. This seems simlper, not more complex.<br />
<br />
Zawy, [21.07.18 09:08]<br />
I guess gold is OK if the value at the time is constant (the expanding GDP using is not large compared to the amount of gold avalable)<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 08:37]<br />
The currency quantity should be proportional to the number of "joules" in the assets (under the coin's control) that society has expended to get them. More precisely, the current "joule" value of the assets. So economizing agents such as people competing to control the assets society posesses is simplified to trying to obtained the currency, enabling them to focus on and measure their "local" immediate goals, enabling an invisible hand to work for the larger common good.<br />
<br />
Zawy, [21.07.18 08:38]<br />
society in the above means "the society of law" (interacting contracts) that are deonominated in the currency<br />
<br />
Zawy, [21.07.18 09:06]<br />
Explosions in real GDP only occur when currency is not deonomited in gold. Societies falling apart turn to gold. By enforcing a gold-like coin as a currency, growth is stifled. It's going to be more complicated for chamas to understand the fees and everything if the value of chamacoin is changing relative to the local currency. It would be nice if chamas of different countries could directly trade contracts based on their value in Chamacoin. Turning to the dollar as an international standard has drawbacks as demonstrated by BRICs trying to get off of it. Chamacoin could be pegged to the dollar, or maybe a year-2018-dollar and adjust according to a basket of commodities. If the GDP of the chama-system increases, then more chamacoin would have to be printed in order to keep constant value. This seems simlper, not more complex.<br />
<br />
Zawy, [21.07.18 09:08]<br />
I guess gold is OK if the value at the time is constant (the expanding GDP using is not large compared to the amount of gold avalable)<br />
<br />
Zawy, [21.07.18 09:39]<br />
A house insurance group in the U.S. could loan chamacoins to kenya chamas who promise a return of 7% per year instead of the 5% per month they charge each other. We are penalized 30% if we call in the note early. For example, we convert dollars to chamacoins the first two years and have an excess of funds, so we loan it out for a profit. But it has to be a stable coin pegged to US. dollars so the U.S. holders know how much value they have. We would hopefully not need to worry about itemizing the capital gains on exchange trades, other than the 7%.<br />
<br />
Zawy, [21.07.18 09:51]<br />
The cross-chama activity seems like the primary attraction to using the app. I was hoping it was possible to treat a "sister chama" in the app exacly like just another member of the chama, to make it easier for everyone to understand what's going on (and simplify the programming). The only way I would loan to chamas in kenya is if I don't have to deal with the risk of loss due to chamacoin price changes. It seems like solidus could print and sell chamacoins when the price goes high, and buy when it goes low.<br />
<br />
Zawy, [21.07.18 09:56]<br />
I can't be a member of a chama in kenya? The app requires members to be physically present? What was the benefit of that?<br />
<br />
Zawy, [21.07.18 07:36]<br />
I've described two sources of a change in value: the assets that are under control of the chamacoin and external demand for it (in effect more external assets are falling under its control). There is a 3rd aspect that could eventually become a problem.<br />
<br />
Zawy, [21.07.18 08:10]<br />
The chamas could evolve into an elite class by controlling more and more assets faster than new members join. The existing chamas might eventually vote to try to make it harder to join once the chamacoin becomes a desirable currency. The chamas would find it more profitable to act like the U.S. and big banks (harking back to U.K and bank of London) and we'd have a situation like today: rather than allowing people who love your currency to join your country (chama system), you "enslave" them simply by printing more coin in proportion to the increase in the assets that are coming under control of the coin. So the app might be like an enforcer of egalitarian constitutional law (new entrants have equal rights in joining due to their love of your coin). Or have competing app clones that prevent a completely dominant coin from arising. I believe Hayak said competing currencies were the best we can do. This implies competing countries, i.e. different imlpementations or parameter settings of chamapesa for groups of chamas who have selected different different system-wide rules. I've already described this "enslaving" aspect as a benefit that will help motivate new members to join: they will see existing chamas getting more wealthy due to the coin being demanded outside the chama, enriching the chama. So it seems to be needed to an extent for expansion. Existing chamas will need more members and other chamas less and less due to increasing wealth as the coin is adopted. It may be that the app should not prevent the initial Chama members from becoming the controlling dominant members of local society. But if they go that route, chamacoin would not be able to replace the dollar as they will be stifling their local society's growth and expansion of the coin's use. A chamcoin that does not expand in proportion to the assets it controls is not a currency.<br />
<br />
Zawy, [21.07.18 08:31]<br />
I don't think there's much of a learning curve for the chamas except to understand how to generalize what they're already doing to a wider set of contracts. It's not just chamas that crypto people would have a hard time understanding, but your ideas on ricardian contracts and trust are beyond their scope. Someone like Vitalik would need to motivate more crypto people to get involved. But like I'm saying, I have a fundamental problem with the current chamacoin plan like I do with bitcoin: they are an asset like gold, not a currency, and assets prices are not necessarily a part of the real economy. gold is good only in stable or declining economies....i.e. they are good only if the quantity of assets under its control is stable or decreasing. So you're going to have to constantly adjust settings tied to chamacoin to be able to expand, and I have not seen in your comments any reference to the importance of interacting contracts all being deonominated in a single stable curerncy.<br />
<br />
Zawy, [21.07.18 08:37]<br />
The currency quantity should be proportional to the number of "joules" in the assets (under the coin's control) that society has expended to get them. More precisely, the current "joule" value of the assets. So economizing agents such as people competing to control the assets society posesses is simplified to trying to obtained the currency, enabling them to focus on and measure their "local" immediate goals, enabling an invisible hand to work for the larger common good.<br />
<br />
Zawy, [21.07.18 08:38]<br />
society in the above means "the society of law" (interacting contracts) that are deonominated in the currency<br />
<br />
Zawy, [21.07.18 09:06]<br />
Explosions in real GDP only occur when currency is not deonomited in gold. Societies falling apart turn to gold. By enforcing a gold-like coin as a currency, growth is stifled. It's going to be more complicated for chamas to understand the fees and everything if the value of chamacoin is changing relative to the local currency. It would be nice if chamas of different countries could directly trade contracts based on their value in Chamacoin. Turning to the dollar as an international standard has drawbacks as demonstrated by BRICs trying to get off of it. Chamacoin could be pegged to the dollar, or maybe a year-2018-dollar and adjust according to a basket of commodities. If the GDP of the chama-system increases, then more chamacoin would have to be printed in order to keep constant value. This seems simlper, not more complex.<br />
<br />
Zawy, [21.07.18 09:08]<br />
I guess gold is OK if the value at the time is constant (the expanding GDP using is not large compared to the amount of gold avalable)<br />
<br />
Zawy, [21.07.18 09:39]<br />
A house insurance group in the U.S. could loan chamacoins to kenya chamas who promise a return of 7% per year instead of the 5% per month they charge each other. We are penalized 30% if we call in the note early. For example, we convert dollars to chamacoins the first two years and have an excess of funds, so we loan it out for a profit. But it has to be a stable coin pegged to US. dollars so the U.S. holders know how much value they have. We would hopefully not need to worry about itemizing the capital gains on exchange trades, other than the 7%.<br />
<br />
pesa mic, [21.07.18 09:41]<br />
[In reply to Zawy]<br />
Cross chama loans is a great use case.<br />
<br />
Just to build on your example<br />
<br />
Could be a diaspora chama investing back home<br />
<br />
Investment could be a loan with a 7% return on loan to a chama in makueni with a farm project going on<br />
<br />
Zawy, [21.07.18 09:51]<br />
The cross-chama activity seems like the primary attraction to using the app. I was hoping it was possible to treat a "sister chama" in the app exacly like just another member of the chama, to make it easier for everyone to understand what's going on (and simplify the programming). The only way I would loan to chamas in kenya is if I don't have to deal with the risk of loss due to chamacoin price changes. It seems like solidus could print and sell chamacoins when the price goes high, and buy when it goes low.<br />
<br />
Zawy, [21.07.18 09:56]<br />
I can't be a member of a chama in kenya? The app requires members to be physically present? What was the benefit of that?<br />
<br />
Zawy, [21.07.18 10:41] An important requirement of the constant value I've described seems to be that the assets "backing" the chamacoin quantity do not merely exist in the chama, but need to be "contractually encumbered" in an amount expressed in the coin. I guess the chamacoin itself does not need to be the constant value coin.<br />
======<br />
I have spent $1 to thousands on a shipments fom China or India via western union, usually based on their existence on Alibaba with a few users reporting good results. I don't use the Alibaba system for any sort of protection. We just chat to reach an agreement. The result is getting items at 3/4 or less the price of ebay, aliexpress, or Amazon. But usually the reason I use it is because the items are not available anywhere else. I would not be able to trust a chama as much, unless it is part of a heirarchical chama system where the top level is like Amazon or Alaibaba top-level management. They could have a lot of trust-points built up from other American customers. Idealistically, those americans would be in a similar interconnected group of chamas so their reviews can be trusted, as opposed to me having to rely on a central for-profit database (alibaba) to not be "hacked" for good reviews. We would similar costs in transmitting money if exchanging dollars for chama.<b> The Chamacoins are not constant value, so they can't be a part of savings, but a speculative bet/investment. Partly "bet" because the structure is pyramidic which in my theoretical perspective probably benefits early adopters in some way at the expense of late adopters rather than being a straight-forward capital investment that benefits society from the extra real capital. Repeating myself more briefly: Limiting quantity in and of itself may not create real physical capital for society. There's no added potential energy (infrastructure) or kinetic energy in proportion to the early adopters profit, unless the limiting of quantity adds an intellectual property to society that makes more efficient use of existing or created societal Potential + Kinetic energy. So you must have a belief that limited quanity inherently and directly increases real societal intellectual property or admit it's not beneficial to society as a whole (i.e. it's an unethcial characterisitc), assuming you believe like me that more available P+K energy per person is the only measurable "good" we can rely on. For example, less crime and more ethical behavior increases this number because those are intellectual properties that increase efficient use of the energy, and are therefore add to the "free energy" (lower entropy) that Schrodinger cited as the answer to "What is Life?". I have only one suggested possibility for how limitde quantity can be an intellectual property to society: by relying on greed, it advances itself in order to create a greater good. This seems to be a very tenuous ethic. So my theory is that the chamacoin as a currency strangles its own growth in exchange for massive profits early on. I can't prove this logically other than the foregoing because you can change the fee structure. But at least it looks like there is more direct evidence than my large-scale view point: the minimal strangling would be from reduced transparency via complexity and the additional required trust of Solidus. I started typing only to try to mention there might be a way for Solidus to generalize its ideas to include my transactions with China (replace things like Amazon, Ebay, and Aibaba). It seems to me they are just centralized databases that encourage indentity and trust for the execution of Ricardian contracts. I see no reason why you can't include a currency that's capable of replacing the centralized creators and mediators of the value metric (U.S. dollar and pay pal/exchanges) that is core to those contracts. Although your software development would be a point of centralization of the protocol (but not actual data) that would replace them.</b><br />
<br />
My original intent was to point out I am like a client to an alibaba chama. I am not a chama of one because they do not need to extend trust to me or identify me, So there are one-way-trust transactions that the app should encourage. By shooting two orders of magnitude above Solidus's current goals, the app should be that much simpler.<br />
=========<br />
From my viewpoint, what I've said is simple. My brain does not work that well so I've had to compress ideas so that they fit inside. I am forced to apply Occam's razor more often. But compression (Occam's razor) has been said to be equivalent to intelligence. Your description of Ricardian constracts seems much more general than a specific name implies, so I think of it "non-smart crypto contracts". We're stuck with the "smart" contract name instead of "computer-deterministic" contracts, but it makes a good joke-like meme. This new name could have a huge marketing benefit. Maybe the goal of the chamapesa app is to be a suite of smart contracts that enables a suite of non-smart contracts. The chama as an entity is foced/enabled by the app to adhere "smart contracts" (the app's protocol). I'm taking a big liberty here calling the app programming a suite of smart contracts, but maybe the programming can or should go in that direction. The programming at least utilizes ERC-20. So the chama is forced/enabled to act like a predictable machine for reliable connections with similar "machines". Internally the machine is human So the mechanized chamas can orgainze and focus (via constant currency) the non-cyber, non-smart contract world of people.<br />
==== begin chama connection to A.I. ===<br />
I want to add an A.I. connection here in addition to my grand physics connection viewpoint. The chama, thanks to the app, has the potential to act like a machine-level economic agent in a system of cooperating and competing agents. People have tried to program these agents on computers for A.I. purposes to achieve goals (usually to increase "intellectual property" but thereoretically machines could be programmed to nicrease their access to more computing hardware and electrical energy). But it's good to point out a larger parallel: neural and bayesian nets emulate the brain with great success. Both of these consist of connected "nodes" with "weightings" (aka probabilities) between the nodes in order to take complex data and classify (compress it). The parallel to brains is nuerons with weightings determined by synapses. I think of chamas as the nodes and the contracts between them as the connections. Some nuerons have more contracts with other nuerons. The rate of electrical signals passing between the nodes or neurons is like the rate of money moving between chamas. Food energy and electrical energy are universal constant valued currencies between the nodes. Companies are like nodes. Companies work out the complicated trust issues with its employees internally.<br />
== Begin chama parallel to brain. ===<br />
People are like synapses: the synapses are complicated, messy, and very fluid in their individual weightings, but they are precisely where the metal hits the road. Non-smart contracts are in the synapses. Smart contracts are the longer-term inputs and outputs (dendrites and axons). Dendritic inputs have a large number of synapses, while axonic ouptuts are fewer and reach much futher (to the leaders of other chamas).<br />
=== End connection with brain ====<br />
==== end connection with A.I. ====<br />
In brains and A.I., there is a limited amount of infrastructure and energy to utilize. Even world GDP does not change that much, so a near-constant amount of currency is the rule in these systems. But a rapidly expanding business model that seeks to expand the number of nodes under its scheme either has to be subservient to a larger scheme, or issue its on currency in proportion to its quickly rising "GDP" (rate of synapse firing). I previously said it needs to be proportional to existing assets under its control (under contract?). Either rate of transaction value transmission (synapse firing rate) is (or should be made to be) proportional to these assets, or vice versa, or I was wrong and currency in existence needs to be based on transaction value rate. Asset value can get disconnected from the real economy due to speculation. Fees can help by discouraging fictitious transactions that could seek to increase the amount of currency issued.<br />
<br />
Brains and A.I. seek to get more efficient at classifying aka compressing data which results in using less resources to achieve the same goals. There is intellectual property in the connections. But evolving economic systems not only seek to economize, but to expand. Economize => expand => economize => expand. A top-level governing mechanism like the Chamapesa app might be designed to use the individual's greed to enabling it's expansion in order to "take over the world". It could come at a cost to the individual. Or the individuals might find more immediate profit in designing the app in a way that slows the expansion. But the hope is that expansion can be done in a way that helps the app expand in a way that helps the individuals and the whole of human society. Experience shows that intelligent cooperation and competition between everyone results in maximal benefit to at least the system itself, if not the individual's in it. Individuals seek to do no work which is contrary to being a part of the most powerful economic system that will replace other systems. China might be an example of a system using the devaluation of its currency in order to motivate its people to work harder, replacing other systems that allow more laziness. I think of the highest evenly distributed wealth per person as a desirable good which is something like my vision for chamapesa seeks, but it's not necessarily compatible with what evolution (physics) seeks.<br />
<br />
=== Going off-topic into Evolution, Entropy, and Rise of the Machines ==<br />
Evolution creates economizing systems made of durable, replicating devices that acquire and use energy, emitting more and more entropy to the universe while trying to increase the mass under its control which is accomplished by creating mass with the lowest entropy per mass (or per mole). Low entropy per mass or atom is approximately equal to the hardness of the substances. Stone tools were the first machines. It is not a coincidence that stones have a very low entropy per atom compared to biology. Even lower entropies per atom are achieved with silicon, carbon nanotubes, and metals.Cement is probably about like rocks. Silicon and carbon nanotubes have the lowest and this is directly realted to why they are (or will be) crucial in thinking machines and solar energy: they can command and control not just other atoms like rocks and ions and molecules like brains do, but also electrons. The movement of electrons on on thinking machines is replacing the more cumbersome movement of ions and molecules in brains. The difference in actual weight of the items being moved in the modelling of the external world's much larger objects is what makes computers much more efficient than brains. Our internal biology was not capable of smelting metals for use in order for brains to guide electrons. The metals and metalloids (silicon, germanium), by being very low entropy per atom, allow command and control of electrons. As a side note, cryptography relies on high entropy (randomized bits) to prevent command and control from outsiders. Now we're slowly getting into the world of directing q-bits.....and the reduction in entropy per atom theory holds: we have to make the systems extremely cold in order to exist in the fewest states per atom (lower entropy). My final point on this is that the physics of evolution implies it's not our happiness that is the end goal,. but a rise of the cold, hard machines.( And that the increasing emission rate of entropy as a result of this activity may be what underlies or directly enables the increasing rate of expansion in the Universe. )<br />
<br />
=== Encouraging Competition and Openness within the Chama===<br />
Getting back to my point: it would be good if Chamapesa could use A.I. ideas to optimally organize chamas and their relation to members in order to economize and grow. A.I. parallels may fail on at how to grow rapidly because they are all about economizing existing resources. One possibility may have a difficult sell: maybe Chamas should encourage competition between members and reward them accordingly. This is probably a very touchy realm in things like companies where it would not be in A.I. (as evidenced by salaries not being common knowledge and politics). But it appears that in an idealistic chama, all members would have access to all information and there not be any "evil" politics. The app could encourage more professionalism in the Chama, another example where the architectural design of the Chama app can be influenced by governed economics and A.I. experience: in both there is a definite effort to avoid becoming trapped in "local solutions".<br />
<br />
=== "Government" in the app to Discourage non-optimal relationships ===<br />
Democracy uses 1 vote per person to subvert the brutality of an overly free market that can lead to an excessively small and excessively wealthy class. The unequal wealth distribution can result from things monopolies even if every individual transaction is honest and fair. This can occur even if the government remains ideal and free of the adverse effect of lobbies and cronyism. It's not clear to me that a single super wealthy ruler and everyone else being slaves would not automatically (mathematically) result from a completely free, fair, and honest market place, especially since such a things means the slaves could not steal from or kill the master. So we invented democracy to enforce progressive taxation (which includes real estate taxes) for the purpose of financing socialistic welfare for things like roads, education, and police (the rich have to pay more than their fair share so that the poor can use these things for free). The end result is a wider middle class that is capable of working more efficiently and paying for more commodity production which enables a bigger military force and more more diversity and intelligence in production, both of which enables it to replace the prior systems such as kingdoms. Obviously, the democratic vote should not carry the socialism too far: the smart wealthy need to have control of a lot of wealth in order to invest smartly. In terms of chamas, they should be prevented from developing monopolies that hurt other groups of chamas. There is a parallel in A.I. The above is a good description of non-optimal localized solutions. A.I. usually has to "redistribute the wealth" in different ways.<br />
<br />
== jumping back to deep and off-topic parallels ==<br />
Higher commodity production would be like an A.I. that works to acquire more computing resources. Commodities can be broken down into kinetic (oil, gas, food) and potential (steel, cement) energies. Computing resources can be broken down into CPU (kinetic) and memory (potential) energies. Memory bits are actually and really a potential energy according to Landuaer's principle Obviously CPUs need electricity which is kinetic, but like oil refining and cars, a CPU is a pre-existing infrastructure than accepts and converts energy for use. The kinetic/potential breakdown begs the question og "why 2?" and I suspect it has to do with the space-time duality<br />
<br />
Addendum thoughts:<br />
=== more lessons from the brain ===<br />
Groups of synapses in brains called segments make predictions (Jeff Hawkins, Numenta). I've said the Ricardian contract is like a synapse, but in my review of Numenta's HTM, I found synapses to seem to parallel people in a company, organized into divisions (called "segments" of synapses in the brain). People have transactions within their divisions a lot, with such a fuzzy and enforceless "contracts" (agreement) being made in each interaction. So the parallel might be that members of chamas are like segments and contracts are like synapses. Chamas wuold be individual neurons. Synapses can be formed and eliminated very quickly, like contracts, and the money and products/services flowing through them are the electrical signals. The social transactions occurring in a chama will far outweigh the actual contractual transactions (including simply money transfer). Aren't all transactions ultimately sourced from a prediction we are making? . The products and services are given in exchange are like nutrient that strengthen local "synaptic" connections. Is there some way the app should help people improve their predictions, or help the money signal go and down up the hierarchy better?<br />
<br />
I will continue along this line, but it's unlikely anyone remaining will be interested. But a dreamy architecture may provide other ideas that might actually be implementable without much effort. <br />
<br />
<b>Can chama interaction be like a brain?</b> (no one can or should be too interested in the rest of this post ....kind of a personal note from which i might pick up later)<br />
The app must be the DNA, aka the governing constitution, that designs synapses, segments, neurons, and columns. We know maybe 25% of how the columns generally work. We don't need much of the details because they're specific to biology to which we do not need to adhere. I'll repeat the architecture of the brain and see if it can be programmed into a "chama app". Synapses (contracts) have signals (usually money) flowing in 1 direction. Actual use strengthens the synapse, probably pulling in enough nutrients (physical commodities) and food energy (energy commodities) to create even more local synapses (like a successfully animal breeding, sex aside, or a successful division of a company getting more company resources). I originally thought (above) that people would therefore be segments of synapses, but maybe people should be at the neuron level and chamas at the cortical column level. This is because neurons in the same column can have synapses between them, but neurons will not have synapses between it's own dendrites and axons. This also shift the scale upward to make my goal a lot less ambitious and gives people more credit, moving them to the neuron level rather than mere single-prediction segments. So far, I've not brought anything to the chama app design table in this analogy, but now I'll try. A key to the higher-functioning mammal brain is 6 layers of neurons, capable of modelling 3D objects in space-time, where "objects" might be as nebulous as companies and love, as we've no doubt capitalized on what the mammalian brain is required to perceive to extend it to wider domains. Animal brains seem to group into 2 and 6 layered brains, coinciding with crawling (2D) and flying (3D) insects that require 2 and 6 degrees of freedom to model 2D and 3D worlds. No animals have the 10 layers necessary for 4D spatial perceptions, so I would not shoot that far, yet. So if we build a chama app that guides members to form a 6-layered hierarchical "column" like the brain, then (if our design is correct) the contractual interactions (synapses) forming the hierarchy may evolve into something more efficient than if there were no guidance on the hierarchy. Hierarchy is a bad terminology because the 6-layered cortex is much more complex than top down. It is more like 'assigned tasks'. There are also mini-columns within columns.<br />
<br />
Now let me reduce the dreaminess and show how the analogy may already exist in a company. A division in a company (a minicolumn in a brain, or 6 people out of say 30 people in a chama) might have 6 workers: a marketer, a lawyer, and an accountant (acquirer of capital?), and 3 corresponding engineers that specialize in modifying widgets to point in one of these directions. In physics, the 6 degrees of freedom are needed to define 3 dimensions of translation (movement) and 3 possible rotations (the engineers) of an object. The object would be a widget or service within an economic space-time. The space would define its distance and orientation to other widgets or services in the marketplace, which changes with time. Could legal, marketing, and accounting correspond to 3 spatial dimensions? Are they, or can they be made to be, orthogonal like they need to be for the most efficient computaton? Can we rotate our widget and move it along one or more of these dimensions, so we can get out of a crowded marketplace of similar widgets? Is there a better set of 3 dimensions? Are our brains limited to 3 orthogonal dimensions in economic space-tmie? The weight of the widget in these dimensions is how much it's married to its current position (this requires each widget to define its current position in a static frame of reference, with other widgets moving to or from it, otherwise I would have to assign it a velocity). A very heavy widget would warp the economic space-time around it.<br />
<br />
Besides the above questions, this may fail many quick checks of sanity. For example, most companies need only 1 lawyer, 1 marketer, and 1 accountant for even a wide variety of products. But then again, does this imply an optimal division in a company would need very specialized experts for a particular type of widget? Should technology (and its corresponding engineers) not be dimension, or is it just the mechanics or details that satisfy the other dimensions?Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-69658921639592032312018-02-27T10:33:00.000-08:002018-02-27T10:33:16.373-08:00Herbie the love bug and rise of the machinesThe 1969 Disney movie "The Love Bug" seemed to hit the nail on the head via the philosophizing of artist Tennessee Steinmetz played by Buddy Hackett who has a very likable speech impediment. <br />
<br />
<br />
- Well then, if everything you say about this car is true, it's already starting to happen.<br />
- What's starting to happen?<br />
- Us human beings. We had a chance to make something out of this world. We blew it. Another kind of civilization is gonna take a turn ... I'm sitting up on top of this mountain, right?<br />
- Right.<br />
- I'm surrounded by these gurus and swamis and monks, right? <br />
- Right.<br />
- I got some contemplation goin'. I see things like they are. I coulda told you all this was comin'.<br />
- What's coming?<br />
- Jim, it's happening right under our noses and we can't see it. We take machines and stuff 'em with information until they're smarter than we are. ... Pretty soon, you know what? The machine starts to think it is somebody. .... You follow me?<br />
- Yeah. I think you were up on that mountaintop too long.<br />
- You're not listenin' to me.<br />
- Don't lose your grip, old buddy. This little car didn't do one thing tonight that can't be explained...<br />
- I don't think you got the picture.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-12170908528784207682018-01-26T08:06:00.000-08:002018-01-26T08:22:54.397-08:00Fundamental limits of computingMoore's law has almost come to a halt in our typical computing devices. By "typical" I mean based on silicon and non-reversible synchronous computing. Reversible computing might achieve a lot more, but it is a suspect idea due to quantum-based dispersion of precision in moving forward and backwards. Switching to something like carbon nanotubes could extend the limits, but those and any other material will still have limits based on causes like those below. Asynchronous computing has no limit, but breaking tasks up into parts for disparate computing has fundamental problems. On the other hand, brains are mostly asynchronous and capable. <br />
<br />
The computing limit for irreversible synchronous non-quantum silicon computing is based on:<br />
<br />
1) A logic device requires a certain minimum number of atoms.<br />
<br />
2) Heat per bit change is released in irreversible computing, aka Landauer's principle, Q = T*k*ln(2). <a href="http://rspa.royalsocietypublishing.org/content/royprsa/early/2011/01/07/rspa.2010.0577.full.pdf">There may be a way around this.</a> This does not change the basic limit in entropy cost that will ultimately come at an energy cost, but it might be capable of computing without a local increase in heat.<br />
<br />
3) Probability of error increases as the energy we use to store or transmit a bit gets near Landauer's limit. I think the probability of error per computation or transmission is based on e^(-E/Q) where E is the energy per bit used to transmit or store the bit and Q is Landauer's limit. A modest 100 M transistor 3 GHz device would have an error every hour if E is 40x Q.<br />
<br />
4) The speed of light is limited.<br />
<br />
5) Atoms break apart if they get too hot.<br />
<br />
6) The amount of heat a cold sink can extract out of a computing device is limited, even if it is only 1-layer thick.<br />
<br />
In order for transistors to change state in step with each other, the distance across the chip is limited by the speed of light and the processor speed. The faster the processor, the smaller the chip has to be. For example, if the longest trace from the clock input to a remote transistor is 4x the chip die diameter and every transistor has to acquire the needed state in 1/4 a clock cycle, then the max diameter at 3 GHz owing to speed of light is 3E8 m/s / 3 GHz / 4 / 4 = 6 mm. This is approximately what is seen in current chips. Since the number of transistors increases as diameter squared, and the available size limit due to speed of light increases linearly with decreases in speed, more synchronous computing can be done with slower chip speeds. This also reduces the heat problem so that more layers of transistors can be used. This is why chip speed is not increasing. To take advantage of this (if we wnet to a slower speed), going to more channels (128 and higher instead of 64 bit) or more cores would be needed. More cores is currently the method that takes advantage of the largest die diameter allowed by the speed of light. A 3 MHz chip could do 1,000x more computing at a cost of 1,000,000x more transistors. It would not need to be 6 meters per side as this implies because it needs to dissipate 1,000x less energy per second which means it could be more layers thick. <br />
<br />
Based on the speed of light, the above was pretty good at predicting current chip diameter. Now I'll try to predict chips speeds based on Landauer's limit. I explained energy usage per bit needs to be at least 40x Q to have 50% chance of error every hour. It only needs to be 50x to increase that to 1 error every 100,000 hours. I'll assume in practice it is currently 100x. I see a 14 nm AMD Ryzen 7 1800X chip has 4.8 billion transistors (14 mm per side) and uses a max of 95 Watts. This is not an intel chip, but intel says a 14 nm die has a max of 105 C. I'll guess transistors actually reach about 150 C locally. It's 4 GHz. I'll guess the average transistor changes state only 1/4 the time (once per 4 clock cycles). So, 100x Landauer's limit times the number of transistors times the clock speed divided by 4 = 100*(150+273 kelvins)*1.38E-23*ln(2)*4.8E9*4E9/4 = 2 watts. Actually, if every transistor needs to be able to not an error in 100,000 hours with my 2x energy safety/inefficiency factor, then the 1/4 maybe should not be applied., giving 8 watts in a weird adjusted basis. They seem to be wasting 95/8 = 12x more energy than the limit of what they could. The limit here seems to be chip temperature. They've made it as fast as they could without "melting". They've made the dies as big as they could for that speed. Smaller chip processes allow a squared factor (or more) of less energy usage while allowing a squared factor of more chips per die of the same size. So they can continue to make them smaller at the same speed and the heat profile will not change. The 50x limit implies they could go SQRT(12) = 3.5x smaller with my 100x estimate of a hard limit. That would be down to 14/3.5 = 4 nm. This is far from the limit based on heat dissipation. My assumptions could have made it 1 nm. I see 5 nm is scheduled for about 2020. Since atoms are only 0.2 nm wide, that must be getting close to the size limit before they have to resort to slower processor speeds to enable larger dies (or more layers).<br />
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-67906832240850410472018-01-21T18:11:00.003-08:002018-01-26T04:42:11.405-08:00Compressing short textsI want to compress text to 512 bytes as much asp ossible for Zcash and Hush memo field.<br />
<br />
I didn't have any luck searching the internet on how to compress short texts....until I had finished doing it from scratch. Normal compression algorithms are not useful because they need to include various types of look-up tables in the data which can make small texts even bigger.<br />
<br />
I used Huffman-like look-up tables for the language at hand, using the known frequency of letters and words to make decisions, combined with other tricks based on knowing things like a capital letter will probably be a period. I used 2 bits to tell the decoder how many bits were about to follow depending on which table contained the word or letter to replace. 4, 6, 7, or 12 bits followed the 2 bits. The 4 bit table was for the 16 most common characters (e,t,a,i,o,l,s,n, <space> newline, period, comma, from memory). The 12 bit table was for less-common words. I had a table of 4096 words. A 6 bit table was for the rest of ascii-printable characters, and the 7-bit was for the most common words. <br />
<br />
But here's a better job of it in precise detail:<br />
https://academic.oup.com/comjnl/article-pdf/24/4/324/1039097/240324.pdf<br />
<br />
He and I got about compression down to about 45% of the original english files. He did it with only 250 words instead of 4096, so his method is really good. We're using almost exactly the same scheme, but he used only 4 bits for the most common letters which is why he was able to do as good with a lot less. It's hard to get better no matter how big the tables are, but my next improvement could be to follow his method exactly, but add another table for 4096 words with 12 bits after the 4-bit.<br />
<br />
His method has a big additional advantage: by the bits staying multiple of 4, a common procedure can be applied: Burrow-Wheeler transform (BWT) followed by move-to-front (MTF), then Arithmetic encoding (AC). BWT gets like-symbols closer together which enables MTF to more frequently assign a low-number position number. BWT and MTF do not do compression. AC does the compression following MTF to make use of the lower entropy due to more frequent position numbers. By itself, the BWT-MTF-AC method got the original file down to 60% using 4 bit sequences. It did not benefit my method because my odd-length method offsets the bits all the time, making 4-bit sequences more random. 4-bit sequences are better instead of byte for short messages because AC has to attach a "dictionary" to the data (i.e. a list of each symbol's count in the original) and 4 bits means I need only 16 counts up 256 if no symbol is more than 25% of a 1000 byte pre-compression text (since my goal is 512 bytes and I won't get more than 50% on text already pre-compressed). That means only 16 extra bytes needed verses 256 for 8-bits (I'll just list the count in a logical order of fixed length instead of including both symbol and count). MTF will be a little longer since the ranking on 1000 bytes will require a distance of up to 2000 for 4-bits instead of 1000.<br />
<br />
The 4-bit method is also immediately applicable to UTF-8.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-73017003948066956182017-12-27T05:56:00.002-08:002018-09-04T17:19:22.295-07:00Using difficulty to get constant-value dev feesI posted this to bitcoin-ml and bitcoin-dev mailists and to reddit and bitcointalk, but no one seems interested.<br />
========<br />
Has anyone used difficulty to get constant-dollar developer or node<br />
fees? Difficulty is exactly proportional to network hashrate, and<br />
network hashrate is closely proportional to coin price.<br />
<br />
Say a coin is currently $1.23 and someone wants to get a fixed income<br />
from the coin like $0.01 each time something occurs. To achieve this<br />
they could use a constant that is multiplied by the difficulty:<br />
<br />
fee = 0.0123 * difficulty_at_$1.23_per_coin / current_difficulty / reward_per_block_at_$1.23 * current_reward_per_block<br />
<br />
Dollar value here is constant-value relative to when the ratio was<br />
determined (when difficulty was at $1.23). If hash power is not able<br />
to keep up with coin price (which is a temporary effect), the value<br />
would be larger than expected. Otherwise, the real-world value slowly<br />
decreases as hashing efficiency increases, which may be a desired<br />
effect if it is for dev fees because software gets outdated. But<br />
Moore's law has gotten very slow for computers. Hashing should get<br />
closer to being a constant hardware cost per hash.<br />
<br />
To get constant value:<br />
Q1/Q0 = D0 / D1 * moores_law_adjustment<br />
Q = quantity of coin in circulation<br />
D = difficulty<br />
0 = baseline<br />
1 = current<br />
<br />
Electricity is more than half the current cost of hashing and<br />
could soon be 3/4 or more of the cost. Worldwide electricity cost is<br />
very stable and possibly the best single-commodity measure of constant<br />
value.<br />
<br />
Also, all coins for a given POW (if not in an even more general sense) will have the same factor above, adjusted only by multiplying by 2^(x-y) where x is the number of leading zeros in maxTarget for the other coin, and y is the number in the coin above. <br />
<br />
In a very idealized situation where the algorithms running on computer hardware control all physical resources with a certain constant level of efficiency, then any increase in the hardware capabilities (Moore's law) would be proportional to the increase in the efficiency of the economic system, so there would not be a Moore's law adjustment. This is hyper-idealized situation in the distant future, but I wanted to point out the quantity ratio with difficulty has deep roots.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-52612025885109650702017-11-21T01:24:00.001-08:002019-03-03T09:15:02.060-08:00Best difficulty algorithmI'm changing this as I find improvements. Last change: 12/1/2017.<br />
<br />
Newest information is here:<br />
<a href="http://https//github.com/zawy12/difficulty-algorithms/issues/3">https://github.com/zawy12/difficulty-algorithms/issues/3</a><br />
<br />
<br />
This first one appears to be the best all around:<br />
<pre># Jacob Eliosoff's EMA (exponential moving average)
# https://en.wikipedia.org/wiki/Moving_average#Application_to_measuring_computer_performance
# ST = solvetime, T=target solvetime
# height = most recently solved block
# N=70
# MTP should not be used
for (i=height - 10 to height) { # check timestamps starting 10 blocks into past)
previous_max = max
max=timestamp[i] if timestamp[i] > max
}
ST = max - previous_max
ST = max(T/100,min(T*10, ST))
next_D = previous_D * ( T/ST + e^(-ST/T/N) * (1-T/ST) )
</pre>
A word of caution with the above EMA: when converting to and from bits field (aka target) to difficulty, it is important to not make a consistently wrong "rounding" error. For example, if previous difficulty was 100,000, it is important that nothing in the code make it consistently +50 more or consistently -50 less (0.05% error). That would cause the EMA at N=70 to have 3.5% error in solvetime. At 0.5% error per block, there is 35% error in the solvetimes (difficulty is 30% too high or low). The error that develops seems to be based on about 1.005^70 = 41%. If half the time it is +1,000 too high and the other half -1,000 too low, then it's OK. just don't be consistently wrong in the same direction. Error in the value for e=2.7183 does not hurt it.<br />
<br />
In an simple average (SMA), a multiplicative error like this only causes a proportional error in solvetime, not a compounded error. <br />
<br />
There is a T/solvetime ratio in two places. It must be the same in both places. I don't know how it would be coded to give something different, but it's something to be aware of.<br />
<br />
==========<br />
The following attempts to make it smoother while having some ability to respond to faster to big hashrate changes.<br />
<pre># Dynamic EMA difficulty algo (Jacob Eliosoff's EMA and Zawy's adjustable window).
# Bitcoin cash dev(?) came up with the median of three to reduce timestamp errors.
# For EMA origins see
# https://en.wikipedia.org/wiki/Moving_average#Application_to_measuring_computer_performance
# "Dynamic" means it triggers to a faster-responding value for N if a substantial change in hashrate
# is detected. It increases from that event back to Nmax
Nmax=100 # max EMA window
Nmin=25 # min EMA window
A=10, B=2, C=0.37 # A,B,C = 10,2,37 or 20, 1.65 0.45,
# TS=timestamp, T=target solvetime, i.e. 600 seconds
# Find the most recent unusual 20-block event
for (i=height-Nmax to height) { # height=current block index
if ( (median(TS[i],TS[i-1],TS[i-2]) - median(TS[i-20],TS[i-21],TS[i-22]))/T/A > B
or
(median(TS[i],TS[i-1],TS[i-2]) - median(TS[i-20],TS[i-21],TS[i-22]))/T/A < C )
{ unusual_event=height - i + Nmin }
}
N = min(Nmax, unusual_event))
# now do the EMA shown above with this N
</pre>
Here's another algorithm that seems to be about as good as the EMA
<br />
<pre># Weighted-Weighted Harmonic Mean (WWHM) difficulty algorithm
# Original idea from Tom Harding (Deger8) called "WT-144"
# No limits, filtering, or tempering should be attempted.
# MTP should not be used.
# set constants
# N=60 # See Masari coin for live data with N=60
# T=600 # coin's Target solvetime. If this changes, nothing else needs to be changed.
# adjust=0.99 # 0.98 for N=30, 0.99 for N=60
# k = (N+1)/2 *adjust * T # there is not a missing N.
# height = most recently solved block
# algorithm
d=0, t=0, j=0
previous_max=timestamp[height - N]
for ( i = height-N+1; i < height+1; i++) { # (N most recent blocks)
max_timestamp=max(timestamp[i], previous_max)
solvetime = max_timestamp - previous_max
solvetime=1 if solvetime < 1
# for N=60, 10*T solvetimes drives difficulty too far down, so:
solvetime = 10*T if solvetime > 10*T
previous_max=max_timestamp
j++
t += solvetime * j
d += D[i] # sum the difficulties this is how WWHM is different from Tom's WT.
}
t=T*N if t < T*N # in case of startup weirdness, keep t reasonable
next_D = d * k / t
# limits on next_D do not need to be used because of the above solvetime restrictions
# but if you still want limits on D's change per block & expect max 5x hash rate
# changes or want to replace the solvetime restrictions, use
# limit = 5^(3/N)
# next_D = previous_D*limit if next_D > previous_D*limit
# next_D = previous_D/limit if next_D > previous_D/limit
</pre>
<br />Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-84272669965337093322017-11-13T09:01:00.000-08:002017-11-26T05:13:27.518-08:00Maximizing options as the basis of memory-less intelligenceThere seems to be some big news in A.I. and cosmology. To give an example of how far-reaching this idea is, view walking upright and the ability to use our hands as something that maximizes our options rather than something that gives us more power in any other sense. This simple algorithm can successfully play games without any training at all, other than defining "maximize future options" for a given set of rules. <br />
<br />
I am far from certain his general view is correct (or even expressed clearly enough to criticize. I still can't view it as anymore than a method of problem solving when his claims are much greater than that, but I can't exactly understand his claims. It sounds like he is saying things appear intelligent because nature somehow keeps options open.<br />
<br />
<br />
Ted Talk<br />
<a href="https://www.ted.com/talks/alex_wissner_gross_a_new_equation_for_intelligence">https://www.ted.com/talks/alex_wissner_gross_a_new_equation_for_intelligence</a><br />
<br />
General idea:<br />
<a href="https://physics.aps.org/articles/v6/46">https://physics.aps.org/articles/v6/46</a><br />
<br />
How it's good at playing atari without training:<br />
<a href="http://entropicai.blogspot.com/2017/06/solved-atari-games.html#more">http://entropicai.blogspot.com/2017/06/solved-atari-games.html#more</a><br />
<br />
On freedom in society making us more powerful:<br />
<a href="https://www.edge.org/response-detail/26181">https://www.edge.org/response-detail/26181</a><br />
<br />
Basic physics of causal entropy and intelligence<br />
<a href="http://www.alexwg.org/publications/PhysRevLett_110-168702.pdf">http://www.alexwg.org/publications/PhysRevLett_110-168702.pdf</a><br />
<br />
How it can predict the cosmological constant by following the anthropic principle:<br />
<a href="http://www.slac.stanford.edu/cgi-wrap/getdoc/slac-pub-12353.pdf">http://www.slac.stanford.edu/cgi-wrap/getdoc/slac-pub-12353.pdf</a><br />
<br />
<br />
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-13384273589249621342017-10-15T07:31:00.003-07:002017-11-04T02:05:06.164-07:00Smoothing coin release rate for bitcoin<br />
If a coin wants to implement a continuous reward adjustment to give the same number of coins released as the same rate as bitcoin use:<br />
<br />
C/block = 69.3*(0.5)^(-height/210,000)<br />
<br />
But to implement it in an an existing coin, it takes a little more work to find a solution:<br />
<br />
The halving events in BTC seem absurb in being such a powerful step function. Due to rounding error and trying to keep the same quantity of satoshis emitted every 4 years, it takes some effort to find a formula that exactly ends in 1/2 as many coins per block after 4 years (210,000 blocks) and gives the exact same number of Satoshis in those 4 years. Here's what I came up with.<br />
<br />
Once every 4 hours, starting half-way into a halving event, set coins awarded to <br />
<br />
BTC=C*int(1E8*A*B^(N/8750))/1E8 <br />
<br />
where<br />
<br />
C = number of coins supposed to be emitted in this halving event.<br />
A = 1.072026880076<br />
B = 0.46636556<br />
N = blocks after the 1/2-way point, up to 8750 when N goes back to 1 and C is cut in half.<br />
<br />
8750 is 4 years' worth of 4-hour periods. I didn't like 5, 7, or 10 hours because it is not a multiple of a day. 2 hours would have been harder to check in excel, having 2*8750 adjustment per halving. Other options were not an integer number of blocks. I guess 8 hours is an option.<br />
<br />
I guess it could be improved to not have to reset C and N every 4 years.<br />
<br />
I believe there is a starting point that is better in the sense that it results in a simpler equation that is good for all time, like ln(2) = 0.693 into a halving event or maybe 1/e into it or 1/e before the end.<br />
<br />
<br />
Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-68703508738666233242017-10-11T10:24:00.000-07:002018-03-24T03:08:39.554-07:00The ideal currency (new)This does not replace my previous ideal currency article that talks about a p2p coin that depends on "reputation" as the coin itself. I want to connect the lowering of physical entropy on Earth to currency.<br />
<br />
Previously I described how all characteristics of an ideal currency such as Nick Szabo's list (scarcity, fungibility, divisibility, durability, and transferability) can be derived from the desire to have constant value in space and time. The best measure of "value" results in a more specific definition: ideal constant value currency is proportional to the net work energy available per person. A legal system creates the relevance of the currency and guides system-wide goals. Otherwise it is an anarchy-type asset where individuals are not necessarily cooperating for a larger goal such as survival and promotion of a society. I'm not talking about that type of currency. The assumed legal system dictates how the energy may be used, which includes enforcing the concept of ownership of "the work energy assets" and enforcing law (settling disputes, collecting taxes, etc) <b>in<i></i></b> that particular currency (unless the transfer of other "work energy assets" in certain cases is more appropriate). Intellectual property does not have a visible net work energy that is proportional to its numerical value, but it ostensibly increases the net work energy available in other assets by making the use of them more efficient, even if only by entertaining people which may enable them to work better. Assets have a real net physical work energy, but in calculating how much more currency should be in the system due to those assets, the costs of anything such as intellectual property needed in its conversion to work should be first subtracted out. <br />
<br />
There is waste energy as heat when work energy is expended, and the amount depends on the form of the original energy. There is also wasted energy when work energy is expended to get other work energy where it is needed. These and other forms of waste are not included in the "net total work in the system per person" that I'm talking about. So, I can't say this work is exactly based on Gibbs free energy ( E = U + pV - ST) of a set of atoms in some system because that is measured before these wastes. Gibbs free energy is the precise definition of "available work energy". So what I'm talking about is the Gibbs free energy minus the waste which includes cost of the intellectual property. Gibbs free energy includes a subtraction from the total that is due to the energy having an amount of disorder (entropy) at a given temperature (S*T). In a sense, the waste and I.P. expense is like a pre-existing "disorder" (or inefficiency) in the assets. If the size of the system under a common legal and currency control is stable, the new total net work energy coming into the system in a given time is equal to the waste energy going out. The infrastructure that acquires the input energy is a potential energy that will be depleted over time as the infrastructure depreciates. Every asset is similarly a potential energy. So the net work energy I've defined is probably better viewed as a potential energy and new energy coming in and going out in a stable system keep that potential energy constant. If the incoming energy coming is greater than the waste going out, the potential energy of the system is increasing, which should be accompanied by an increase in currency. Also, if the I.P. costs in the system decreases, it is like the S*T part of Gibbs free energy decreasing, enabling more of the potential energy to be converted into work energy. This also demands more currency creation.<br />
<br />
The currency is proportional to the net work energy in the system, but not equal to it. All assets in a legal system should have a reference such as a document that defines the owner. The currency gains control of a portion of those assets (say, 10%) by owners having debts as well as assets which places a lien on their assets, so they do not exactly have full ownership of the assets they own. The debts may be expressible in other assets, but the legal system typically allows settlement in the currency. So not all debt is currency, but all currency is based on a debt. An immediate question I have is "Should the total debt-currency (as a percentage of the assets in the system) be constant?" My first guess is "yes" to keep things simple and therefore more measurable and predictable. <br />
<br />
The rest is highly suspect that I need to investigate further. I have it here for my future reference.<br />
<br />
coins = bytes = DNA = synapses => used to create economically beneficial arrangements of atoms and potential energy<br />
<br />
The usefulness of energy depends on the form it is in as well as the pre-existing order of the matter it needs to move. For example, oil in the ground is not as valuable as oil in a tanker. Gold in an vein is not as useful as gold in sea water. So the order in the mass of commodities has value like energy commodities due to making itself more amenable for energy to move. A.I. systems like evolution and economies use energy to move mass to make copies of themselves to repeat the process. More precisely, the historical position of mass and potential energy gradients cause matter to form self-replicating way. Genes, brains, and A.I. are not forces that do anything of their own free will, but they are the result of forces from pre-existing potential energy gradients that created them. They are enzymes that allow energy and mass to move in an efficient direction, not forces. The following is mathematically exactly true: Intelligence = efficient prediction = compression = science. I am referring to the "density" of each of these, not the total abilities. For example, science seeks to predict the most in the least number of bytes. The least number of bytes is known as Occam's razor in science and is the 2nd of two fundamental tenants of science. The first is that observations should have the potential to prove a theory wrong (falsifiability), and that those observations always support the theory (reproducible observations). So the 1st science tenant is prediction and the 2nd is compression or efficiency. Total currency in an A.I. system = bytes / time that are destroyed in CPU computations and memory writes. Every computation in a CPU and memory write to RAM or a hard drive generates heat and entropy. The theoretical minimal entropy per byte destroyed is S =kb * ln(2). kb is boltzmann's constant. The minimal heat energy created (the energy lost) is Q = Temperature * S. In economics, the "bytes" are "dollars" that represent energy spent like a CPU computation to create a mass of a commodity (like the storage of a byte). When we write to memory in A.I. we are creating value that can be used in the future. Typically the writes are assigning weights to the connections in neural nets or the probabilities to a Bayesian net or making copies of a gene in genetic algorithms. Bytes in evolution are DNA. The bytes in our bodies are cellular energy like glucose and energy stored in the crystals of DNA. Energy-based commodities are spent to create mass-based commodities that are used for an economic system to replicate (expand), just like evolution and A.I. Total currency is the total available commodities per economic cycle. Approximating a constant number of economizing agents like people or neurons in a brain or nodes in a neural net means that the currency is also a bytes per economic cycle per economizing agent. Agents compete for the limited number of bytes in order to increase the number of bytes per agent per cycle. Coins are bytes that represent a percent ownership of the total commodities available per economic cycle per person.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com1tag:blogger.com,1999:blog-4301173651018456758.post-50255279148969735872017-10-11T10:20:00.000-07:002017-10-11T10:20:46.646-07:00ideal cryptocurrency: This is jumbled, but I want to save it for future review to pick up where I left off.<br />
<br />
The general idea is for people to gain "reputation points" as their own personal coin by "giving" something away, someone receives and gives "reputation to you". It costs them reputation to give to you. So you want to give only to people you trust to stay within the system. You vouch for them and they vouch for you. You lose reputation if they cheat on others in the future. You keep each other's transactions on a blockchain, and those of your mutual nearest neighbors. Everyone will have a different blockchain, supporting your "local" buyers/sellers, who support you. Trust before a transaction is from a potential buyer/seller checking your past transactions and confirming with those people that your blockchain is correct and complete. The exchange rate for reputation depends on how close buyer and seller are in their network of connections. It should be possible to limit the amount of your transactions potential buyers/sellers can see, but your exchange rate will not be good if you are too secretive about your past. Transaction speeds to check everyone and proceed should be very fast, less than a minute. Your reputation could be recoverable from your "local network" if you lose your keys. Outsiders not wanting to disclose information about themselves will not be able to decrypt blockchains that contain your data.<br />
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Here's another "insane idea" to be added onto to the timestamp idea (again, not necessarily the stars). People get more coin by having more "friends". It might be a slightly exponential function to discourage multiple identities. Your individual coin value is worth more to your "local" friends than to "distant" friends. The distance is shorter if you have a larger number of parallel connections through unique routes. A coin between A and D when they are connected through friends like A->B->C->D and A->E->F->D is worth more than if the E in the 2nd route is B or C. But if E is not there (A->F->D) then the distance is shorter. More coin is generated as the network grows. Each transaction is recorded, stored, timestamped, and signed by you and your friends and maybe your friends' friends. Maybe they are the only ones who can see it unencrypted or your get the choice of a privacy level. Higher privacy requirement means people who do not actually know you will trust your coin less. Maybe password recovery and "2-factor" security can be implemented by closest friends. Each transaction has description of item bought/sold so that the network can be searched for product. There is also a review and rating field for both buyer and seller. For every positive review, you must have 1 negative review: you can't give everyone 5 stars like on ebay and high ranking reviewers on Amazon (positive reviewers get better ranking based on people liking them more than it being an honest review). This is a P2P trust system, but there must be a way to do it so that it is not easy tricked, which is the usual complaint and there is a privacy issue. But look at the benefits. Truly P2P. Since it does not use a single blockchain it is infinitely faster and infinitely more secure than the bitcoin blockchain. I know nothing about programming a blockchain, let alone understand it if I created a clone. But I could program this. And if I can program it, then it is secure and definitive enough to be hard-coded by someone more clever and need changing only fast as the underlying crypto standards (about once per 2 decades?)<br />
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zawy [9:54 AM] <br />
Obviously the intent is to replace fiat, amazon, and ebay, but it should also replace FB. A transaction could be a payment you make to friends if you want them to look at a photo. The photo would be part of the transaction data. Since only you and your friends store the data, there are no transaction fees other than the cost of your computing devices. Your friends have to like it in order for you to get your money back. LOL, right? But it's definitely needed. We need to step back and be able to generalize the concept of reviews, likes, votes, and products into the concept of a coin. You have a limited amount dictated by the size of the network. The network of friends decides how much you get. They decide if you should get more or less relative power than other friends. (edited)<br />
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zawy [9:58 AM] <br />
It would not require trust in the way you're thinking. Your reputation via the history of transactions would enable people to trust you. It's like a brand name, another reason for having only 1 identity. Encouraging 1 identity is key to prevent people from creating false identities with a bot in order to get more coin. The trick and difficulty is in preventing false identities in a way that scams the community.<br />
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zawy [10:04 AM] <br />
Everyone should have a motivation to link to only real, known friends. That's the trick anf difficulty. I'm using "friend" very loosely. It just needs to be a known person. Like me and you could link to David Mercer and Zookoo, but we can't vouch for each other very well. That's because David and Zookoo have built up more real social credibility through many years and good work. They have sacrificed some privacy in order to get it. Satoshi could get real enormous credibility through various provable verifications and not even give up privacy, so it's not a given that privacy must be sacrificed. (edited)<br />
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zawy [10:07 AM] <br />
Right, it should be made, if possible, to not give an advantage to people because they are taking a risk in their personal safety.<br />
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zawy [10:15 AM] <br />
The system should enable individuals to be safer, stronger, etc while at the same time advancing those who advance the system. So those who help others the most are helped by others the most. "Virtuous feedback". This is evolution, except it should not be forgotten that "help others the most" means "help 2 others who have 4 times the wealth to pay you instead of 4 others with nominal wealth". So it's not necessarily charitably socialistic like people often want for potential very good reasons, but potentially brutally capitalistic, like evolution.<br />
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zawy [6:26 AM] <br />
It does not have to be social network, but it does seem likable social people would immediately get more wealth. It's a transaction + reputation + existence network. Your coin quantity is based on reviews others give you for past transactions (social or financial) plus the mere fact that you were able to engage in economic or social activity with others (a measure of the probability of your existence). There have been coins based on trust networks but I have not looked into them. It's just the only way I can think of to solve the big issues. If the algorithm can be done in a simple way, then it's evidence to me that it is the correct way to go. Coins give legal control of other people's time and assets. If you and I are not popular in at least a business sense where people give real money instead of "smiles" and "likes" like your brother, why should society relinquish coin (control) to us? The "smiles" might be in a different category than the coin. I mean you may not be able to buy and sell likes like coin. Likes might need to be like "votes". You would get so many "likes" per day to "vote" on your friends, rather than my previous description of people needing to be "liked" in order to give likes, which is just a constant quantity coin. Or maybe both likes and coin could be both: everyone gets so many likes and coins per day, but they are also able to buy/sell/accumulate them. I have not searched for and thought through a theoretical foundation for determining which of these options is the best. Another idea is that every one would issue their own coin via promises. This is how most money is created. Coin implies a tangible asset with inherent value. But paper currency is usually a debt instrument. "I will buy X from you with a promise to pay you back with Y." Y is a standard measure of value like the 1 hour of laborer's time plus a basket of commodities. Government issues fiat with the promise it buys you the time and effort of its taxpayers because it demands taxes to be paid in that fiat. This is called modern monetary theory.<br />
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zawy [6:40 AM] <br />
So China sells us stuff for dollars, and those dollars gives china control of U.S. taxpayers, provided our government keeps its implicit promise to not inflate the fiat to an unexpectedly low value too quickly, which would be a default on its debt. So your "financially popular" existence that is proven by past transactions of fulfilling your debt promises gives you the ability to make larger and larger debt promises. How or if social likes/votes should interact with that I do not yet know. But I believe it should be like democratic capitalism. The sole purpose of votes is to prevent the concentration of wealth, distributing power more evenly. This makes commodity prices lower and gives more mouths to feed, and that enabled big armies, so it overthrew kings, lords, and religions. Then machines enabled a small educated Europe and then U.S. population to gain control of the world.<br />
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[6:43] <br />
If my ideas ever solidify, I'll program it in Python.<br />
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The end game of currency will be a trust network where your reputation among friends and past buyers/sellers is the amount of currency you own to purchase things in the future. You can't lose your keys because your reputation is stored on the network. It's not centralized in any way like bitcoin, except for the protocol people should agree on. Complete anonymity is not possible, but only sociopaths don't have any friends and don't deserve any currency. A super-majority of friends can rat you out or give your keys back. You can't exchange with strangers until the network grows tentacles via 6 degrees of separation. You are penalized if a friend cheats and vice versa. You can have multiple identities but it means you would have to split friends among them, not getting any net benefit except fall-back security and dispersion to distant networks. There is no currency except how friends of friends of friends etc choose to score your reputation. There's no profit to being a dev or adopting early. There's huge profit in not being anonymous.<br />
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your productivity would show in high scores from things youve sold. As I mentioned last time I'm using "friends" losely. The guy in india who gets me cheap meds is a friend. I sent him bitcoin blindly and hope i get the products<br />
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[9:26] <br />
he and i benefit based on trust which is based on our reputation with each other<br />
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zawy [9:45 PM] <br />
Again, the network would have to really grow "grassroots" style among people like you and me. You and I have not trust with the bots sending us spam and whatnot, and we would not believe anything posted on bitcointalk unless we had a history of knowing someone<br />
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[9:47] <br />
the whole point is to solve these problems. I mean I have these problems in mind as a reason for designing it. I just havent worked on any of the details<br />
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[9:49] <br />
our computer would check a potential sellers network for connections to ours, and we buy nothing from them because the reliability settings we've chosen would indicate low reputation no matter how many friends they have simply because we and our friends have no experience with them. an interesting side effect is that you're more likely to do business with people you know.<br />
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[9:50] <br />
but in the beginning, we would trust strangers as much as we do people on ebay and openbazaar<br />
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zawy [9:53 PM] <br />
we are each basically issuing our own credits and debits like the tally sticks. We are issuing our own currency. The settings people choose depend on how much they score our reputation.<br />
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[9:54] <br />
so there would be 7 billion currencies and (7B)^2 exchange rates<br />
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zawy [9:56 PM] <br />
total currency should equal total energy controlled by the legal system divided by the number of people<br />
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and recovering lost coins is not possible. I'm talking about trying to get perfect even distribution and lightening speed pf the network everywhere and the ability to recover lost keys and potentially losing anonymity only among friends<br />
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zawy [10:02 PM] <br />
i mean i could be an anonymous person on the internet like Satoshi who has enormous reputation despite the physical body being unknown<br />
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your "blockchain" would be only a recorded of your friends transactions. so a buyer and seller's computer would request data from your past buyers and sellers (your friends) to take his own measure of your reputation score<br />
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zawy [10:07 PM] <br />
so I should really say friends, but that's the way it could start. Really maybe it's more likely to start with strangers you just have to trust like I do cpeople in india and china. So instead of "friends<br />
I should say "past buyers and sellers"<br />
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Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-65202077885648736032017-09-25T07:02:00.002-07:002017-09-25T07:02:05.331-07:00What's wrong with global warming?What’s bad about global warming? Plants generally love the doubling of CO2, possibly offsetting the destruction of marine life. Shifting of farmlands is probably not going happen faster than we can adapt, as evidenced by Netherlands (of all places) being 2nd largest exporter (in dollars) of vegetables. I read a study that concluded it has no impact on manufacturing. It appears solar cells for fueling cars and homes (with thorium reactors for night?) could stop the CO2 increases. Worse, I do not even see global warming as relevant. We will still continue destroying species at roughly 5,000 the background rate until we are left with only the ones we find economically relevant. But it’s not exactly “us” destroying biology. The “rise of the machines” makes other species irrelevant to the point of unintentional destruction. Even human thought and labor are already so irrelevant that it’s hard to imagine of what use humanity will be to our economic machine 50 years from now other than spending basic guaranteed income. Free money destroys culture and seems to create needless violence (research on the result of the past 50 years of U.S. welfare). Even now “the machines” don’t even need capital to suddenly change everything via 1 or 2 decent programmers and/or someone making good marketing decisions. I mention capital because it has always been thought of as the tool by which the machines and a few capitalists would enslave everyone else without government intervention. The tech that makes capital irrelevant could make everyone wealthier and more independent (for example: solar cells and hydroponic gardening packages for your backyard, not to mention peer-to-peer blockchain technology replacing governments and financial industry). But I do not believe the physics that governs evolution (closed thermodynamic system receiving energy and emitting energy and entropy to the universe) that results in economizing structures of lower and lower entropy per mole is going to forever blindly find it optimal to merely fulfill human desires. Even now thinking we are somehow in control is a suspect idea. We are merely one of the many resulting enzymatic pathways physics uses to move matter via potentials. The machines are vastly better than biology at every aspect of evolution: capturing energy from the sun, moving matter with that energy, having strong structures to do it, and to model and optimize future scenarios with thinking machines. It’s taking my children 4 hours a day for 6 years and ~100 grams of grey matter to understand spoken and written Chinese as well as 1 gram of silicon on my smart phone learned in 30 seconds. It’s because the low entropy per mole of silicon allows the control of electrons instead of ions in wet brains that weigh 40,000x more. Global warming is irrelevant because biology as we know it will soon be irrelevant.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-12730502829237268622017-08-24T13:04:00.001-07:002017-10-05T06:19:22.468-07:00BitcoinCash difficulty algorithm problemsBitcoinCash allows a drop in difficulty down to 1/4 if the last 5 blocks took > 12 hours. But the rise in difficulty takes 2016 blocks (two weeks if the difficulty matches hashrate) like bitcoin. They did this so that difficulty could drop quickly after the fork. But this asymmetry (long time to adjust up, but short time to adjust down) is causing unexpected feedback that will cause oscillations that could cause too many coins to be issued and the price go towards zero until there is a fork to fix it. <br />
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This is how it starts and why it gets worse: Assume price is stable and difficulty matches hashrate correctly. If for some reason price relative to bitcoin falls at the end of a set of 2016 blocks, some will jump ship but next difficulty adjustment will still be too high because it is a long averaging window. A short rolling averaging window would not have caused a problem (and does not even need the attempted BCH "fix" to get difficulty lower). But as it is, difficulty will be too high for the next block, so miners are still discouraged from mining. The slower issuance of coins may actually support price, but maybe he longer solve times, seen as a problem, can cause an even more negative effect on price. If price falls a little more due to this, the threshold of mining profitability may be passed, so a flood of miners could exit, causing really long solvetimes. This can cause the price to drop even further due to not being able to get transactions to go through. So REALLY long solvetime could occur. As soon as the 5 blocks take more than 12 hours, difficulty in the next 2016 set (only the 3rd in this sequence) will go to 1/4. remember difficulty in the 2nd block had actually dropped a little, so the 1/4 is not fixing an accidental 4x increase in difficulty. Suddenly, it is really profitable to mine, unless the price also dropped to 1/4. Let's say it had dropped to 1/2 or less. So the blocks will come at a fast rate. But as soon as that 2016 set ends, difficulty will be massive in the 4th set of 2016 blocks, and the price may be even lower due to people seeing the problem and due to too many coins being mined too quickly and sold. No longer have long solvetimes is "fixed" for that set, but it is only replace by the opposite problem. The 4th set will have very high difficulty and last maybe only 5 blocks as it will take too long to solve, then the 6th block will get the difficulty down to 1/4. If there was more than 4x increase in hashrate due to miners jumping on, then 1/4 downward change may not be a lower difficulty than it was in the 3rd set of 2016. The price should also be worse. These two effects may reduce the oscillation. But notice it depends on a huge number suddenly jumping on AND a worse price, and this is the best case scenario for reducing the size of the oscillations. The alternative of larger oscillations will also have a negative effect on price. So it's an unavoidable downward pressure on price. I saw a buy/sell opportunity in BCH and made good on it. This is actually looking like an impending buying opportunity, right before a fork that fixes it. <br />
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A huge part of this is that BCH miners can go back and forth to BTC. But notice large BTC miners have no place to go if there was a similar problem in BTC. It's kind of another reason 1 big coin naturally results. <br />
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edit: <br />
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Summary<br />
Causes:<br />
1) Asymmetrical math in how difficulty rises verses falls.<br />
2) There is a threshold to mining profitability, so that only a minor fall in price can cause many miners to jump ship<br />
3) Miners can switch back to BTC while waiting for the difficulty to fall which magnifies the problem caused by 2). <br />
3) 1 and 2 may not have been a problem if it was a short rolling average window to determine the difficulty instead of being like BTC and suddenly changing every 2016 blocks.<br />
4) This problem erodes price from reducing the quality of the coin by have 2 hour solvetimes if not issuing too many coins too quickly.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com0tag:blogger.com,1999:blog-4301173651018456758.post-63919747810463378392017-08-11T02:42:00.001-07:002017-08-11T02:42:28.848-07:00Strong Drink mix for Parkinson'sI have been putting together a really strong drink. I guess it's about $15 a day, with most of the cost being in the powder extracts, $2 to $3 per day each, straight from China in bulk.<br />
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12 oz pomegranate juice from Hispanic store (not the expensive POM)<br />
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added sweet concentrates:<br />
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black cherry concentrate 12 g<br />
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black molasses 12 g (sugar cane juice after most of the white sugar is removed)<br />
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Jallab 12 g (Arabic grape skin extract plus others)<br />
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powder 10:1 extracts:<br />
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blueberry extract 12 g (my eyesight sharpened enough to not need my barely-needed glasses in 4 days)<br />
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strawberry extract 12 g<br />
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apple peel extract 12 g<br />
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tangerine peel extract 12 g<br />
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Citrus flavonoids with animal studies in PD, bought from china in bulk.<br />
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These doses are 1/4 the human-equivalent doses because the studies are "shock" studies on the animals by which I mean they are very short term to see how the chemicals work in response to PD-like toxin challenges.<br />
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nobiletin 500 mg<br />
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naringin 300 mg<br />
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tangeretin 100 mg<br />
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Other stuff in pills with strong animal and epidemiological evidence for PD and ability to absorb and cross blood brain barrier (pills not in the drink):<br />
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black tea extract<br />
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green tea extract<br />
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grape seed extract<br />
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fisetin<br />
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(inosine to be added)<br />
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The American producer of patented fisetin is not clear that it is pure fisetin and the brand is hiding details about what it is, so I'll spend 1/3 as much to get pure fisetin from China and then sell the excess on ebay. Inosine in bulk is also 1/3 the cost from china.<br />
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Canola mayonnaise, the bomb!<br />
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Broccoli, Sardines, home-made very yeasty beer, olive oil<br />
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1 hour exercise, then drink it to absorb the sugar.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com1tag:blogger.com,1999:blog-4301173651018456758.post-41449977902276897572017-08-08T05:30:00.001-07:002017-08-08T06:11:46.778-07:00Potential value of bitcoin, empires, and taxesM3 is roughly "all cash". For US dollars, it's about $30 trillion. The rest of the world I'll estimate at $25 trillion because the Euro is about $12 T in USD. I expect bitcoin and alts to roughly follow this ratio, so BTC would be compared to dollars. so the max would be 30T/21M = $1.5M per BTC. As this happens, dollars all over the world will come flooding home making them worthless, so it's more important for Americans to switch early than in other countries, to maintain current lifestyle. The ability to print dollars and the growing world economy accepting them has been the biggest boon any country has ever seen. We were basically allowed to print them as fast as the world's economy grew. We spent half the surplus on a military which pushed and supported the use of the dollar, enabling stability and exchangeability in the same way MicroSoft "helped" software. Bitcoin is the Linux of money. Wealth will be more evenly distributed as the dollar monopoly in currency ceases.<br />
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Not just the U.S. but all governments will lose power to control if they lose control of the currency that their citizens demand. Countries enforce a currency by demanding taxes and legal disputes be settled in their dollars. Empires use currency to enslave other countries. So countries can start their own cryptocoin, enabling them to enforce law more directly and automatically extract taxes by being privy to every transaction. This would relegate BTC to replacing only gold for private holders, which is $7T, $350,000/BTC, but potentially a lot more since a lot of countries want to be more fair in international exchange instead of being stuck with the dollar. Gold is harder to move so there's a great desire to switch to BTC. Also, buying stuff directly from other countries instead of Amazon will need BTC, which is a "black market" as far as the U.S. government will be concerned. It takes away their power as the dollars come home. They can make it illegal to import things from other countries without dollars. The U.S. desperately needs dollars to stay out of the country. When foreigners like the Chinese government start giving us wads of dollars to get BTC, that is NOT the time to switch back to dollars. That is the end of the U.S. as the world power. That is when great powers fall: they spend too much on military to support a coin or gold, lose their skills at production due to enslaving people in the distant lands (via the coin supported by the military), then find themselves powerless as their coin collapses. In the case of Spain getting gold, they just spent it all, then the armada fell and Britain's superior skill at ship building took over. There is also the possibility that BTC will be a basis for establishing ownership of assets and enforcing smart contracts, again putting it well over the $1M/BTC range. I do not expect it to go over $500,000 in 20 years. If it reaches $100,000 it will be a primary way of buying $1M beach houses as old money finds itself increasingly poor and BTC millionaires start looking for something to do with their gains.<br />
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50x = $150k/BTC does not need BTC to be lucky. It only needs to be the best idea. When BTC reaches $150k it will be because it is starting to be used as an international standard for trade. It will be because dollars are coming home which will make them lose all their value. The U.S. government will then have to decide to cancel all social security and most government expenses (pollution, law, roads, retirements) and foreign debts, or print money (hyperinflation). That will not stop the inflation because there will be 3x more dollars inside the U.S. from foreigner not wanting them. If it takes 15 years, that will be 7% inflation plus our current 3%. 10% inflation is far from hyperinflation, but still a disaster. Actually the disaster was letting there be a "balance of payments" surplus the past 50 years which means more money going out (via free trade, military, and dept) than what was coming in. This results in erosion of the country's ability to support itself. Free trade is a disaster if it makes the balance of payments worse. The U.S. (like China) got out from under enslavement of a foreign currency by enacting trade tariffs. China's devaluation of currency is in effect a trade tariff on the external world's imports which forces its people to work harder and develop more skill. I believe the U.S. is sophisticated enough not to have hyperinflation. When it reaches $150k, it is NOT the time the sell, but a time to keep holding, unless you see a better option. But I think a capped-quantity coin is not a good solution and not the solution the rest of the world will want due to late-comers being at a disadvantage. But unless a new coin lets smartphones determine their own time via the stars or random or 3rd party consensus trust, and combine it with a local trust network to decentralize the coin (protecting it from big miners), BTC may be the best option. This is because all alts subject to 51% can be destroyed via simple forward-stamping timestamps, and if BTC miners are hodlers, they will soon find it more profitable to destroy alts than to mine, forcing more money into a few coins. They may even use their BTC value gains to buy more equipment to retain power by destroying alts instead of mining BTC. The miners may turn into BTC's military. This is what happens to all empires: they win by might is right until all the slave countries figure out a way to get out from under the coin that controls them. The coin is backed by a military. Coins are how governments exert control. Some argue BTC has no government, that devs are not really in control. However that may be, anyone who holds BTC will be the new lords, enslaving the late comers, backed by our military, the miners. At least this is our best-case scenario in our search for personal profit.Zawyhttp://www.blogger.com/profile/03727573717462028189noreply@blogger.com2