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Topics - zack

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Off Topic / youtube video for Flying Fox blockchain
« on: June 14, 2016, 02:10:32 pm »
This video goes over the innovative features in Flying Fox.

Off Topic / Proof of Stake optimization
« on: June 11, 2016, 04:23:49 pm »
I am trying to increase the readability of this document. I would appreciate any questions about what doesn't make sense.

Design / Incentives / Game Theory / Reputation security model
« on: May 22, 2016, 07:55:28 pm »
"Rep" or "Reputation" is the currency that is owned by the members of the oracle. If you want to participate in the oracle, you have to buy rep from someone who already has it.

Augur's security model says that the rep owned by the oracle has to be worth more than all the outstanding shares in all the markets that the oracle judges over.

As Paul Sztorc talks about in this essay:
The cost of locking up 1/2 of all the coins is very expensive. It is as expensive as the interest rate applied to the locked up coins.

My hope is that it is possible to use rep worth 1 to judge over markets worth 100. A > 1/100 ratio.
Is my dream impossible?

Here is the reasoning Augur is using the justify their > 1/2 ratio:
If the oracle lies, the value of rep will drop to zero.
The oracle will only lie if the profit exceeds how much they lose in rep.
The maximum profit is smaller than the value of all the outstanding shares.
You can only steal one side of a bet, bets that are very unequally probable are most profitable to attack.

Design / Incentives / Game Theory / Paying the oracle
« on: May 18, 2016, 02:33:22 pm »
The oracle needs to be over-paid, or else they will steal.

Paying the oracle a trading fee wont work, because any altcoin can participate in gambling without paying the trading fee.

One way to solve this is to crowdfund a payment for the oracle before the oracle agrees to provide judgement over a decision.
That way oracles will only judge over things that pay a high enough fee.

Design / Incentives / Game Theory / drivechain
« on: May 17, 2016, 03:40:33 pm »
Paul Sztorc made this video about how blockchains can interact destructively.

His central argument: when miners allow the creation of a sidechain, they need to use the same caution as a soft-fork.
Support for this argument:
* Since oracles are paid by trading fees, sidechains create a free-rider problem. Participants on the sidechain can bet in hivemind markets without paying fees.
* It is possible to make a sidechain for stealing bitcoins from the main chain.

His arguments apply to alt-coins in the same way they apply to sidechains.
It is impossible for bitcoin miners to stop someone from creating an altcoin.

At this point it would seem that blockchain prediction markets are an impossible goal.
Anyone can make an altcoin to ruin it for everyone.
Read a little more, hope is not lost.

=== Focusing on the "free rider" problem.

Paul has previously claimed that hivemind will solve the free rider problem in general. He talks about it on page 14 of the applications document:

Here is a meme illustrating Paul's contradictory claims.

Flying Fox is being designed under the assumption that Truthcoin dominant assurance contracts do solve the free rider problem. So we don't collect fees from gamblers at all. Instead, a dominant assurance contract is used to raise money to pay the oracle to make a new market.

===Focusing on the "sidechain steals 1% of coins" problem.

If bitcoin was a flavor of delegated proof of stake consensus, like Flying Fox, then the sidechain attack to steal 1% of the coins would fail.
If some miners started participating in an attack like this, the users would stop delegating power to those miners.
Ambiguity isn't enough to protect the miners.
Users will demand the miner include a transaction from the designated frozen list. Failure to comply means the miner will lose their power.
Even if there is only a 10% chance that a miner is participating in an attack, that would be enough justification for people to stop delegating power to that miner.

Paul has made a very convincing argument for adding DPOS characteristics to blockchain consensus.

Outside Work / SVD alternatives
« on: April 16, 2016, 06:06:07 pm »
I heard that Augur was using some other algrithm instead of SVD.

making SVD deterministic, and having it be a part of an erlang release for flying fox is very difficult.
Existing SVD algorithms use mutable lists, which erlang does not have.
The C version isn't deterministic.

So I rolled something similar to SVD that is easy to write in erlang.

I let oracle participants choose between 4 things. true/false/need more time/bad question.

I use the weighted mode to decide which of the 4 is correct.

Next I calculate new weightings for each oracle participant. Every question they got wrong lowers their power to 9/25ths what it was before.
Unless they choose "need more time" and the outcome was true/false, or if they choose true/false, and the outcome was "need more time". In those cases their power only lowers to 3/5ths what it was before.

I use the new weightings to re-calculate the outcomes of each decision.
This is the final outcome.

Is this a reasonable alternative to SVD? Are there any negative repercussions to doing this?
Should I have the constant 3/5ths be a variable based upon the number of things they are betting on or the number of oracle participants?

Outside Work / Reputation value
« on: March 13, 2016, 10:45:33 pm »
The validators need to be over-paid.
So about how much should the market cap of reputation be?

For Augur, the market cap is around $40 million right now.

What volumes of trading are we expecting on the prediction markets? What is the market price for making a trade? 1%? 0.1%?

Outside Work / Lightning Network
« on: March 13, 2016, 03:20:52 am »
The Lightning Network is implemented in the development branch of Flying Fox.

Here is a passing test-case that proves it.

Off Topic / I am selling Augur REP
« on: March 03, 2016, 01:57:38 pm »
I was involved in augur's development, and will own some of the REP when it launches.
I want to sell it for bitcoin now.
We can use a 2 of 3 multisig like Hedgy as our escrow, so you don't have to trust me. I am willing to lock up some of my bitcoins too, to show you I am not wasting your time.

We could use the price off gatecoin:

Design / Incentives / Game Theory / state channels
« on: February 20, 2016, 03:47:57 am »

a state channel is like the channels that make up the bitcoin network, but they contain arbitrary state. The 2 participants of the channel can make bets with each other without wasting space on-chain.

Before this new discovery, if there was a dispute the entire contract is published on-chain, and computed over.

With this new design, only a single word of the code gets revealed, and a single moment of state.
If the code is X words long, closing the channel involves log(X) transactions.

This new design for channel state will allow us to do more intense computations. Opening up the possibility for anti-arbitrage smart markets like koeppelmann suggests. It will be affordable to compute intense SVDs off-chain.

Maybe it is time for bitcoin hivemind to move the oracle resolution off-chain.

Design / Incentives / Game Theory / SMPC does NOT work.
« on: February 01, 2016, 09:34:25 pm »
As Vitalik explains on his blog:
"The requirement of trust on the participants is also an onerous one; note that, as is the case with many other applications, the participants have the ability to save the data and then collude to uncover at any future point in history. Additionally, it is impossible to tell that they have done this, and so it is impossible to incentivize the participants to maintain the systemís privacy; for this reason, secure multi-party computation is arguably much more suited to private blockchains, where incentives can come from outside the protocol, than public chains."

Truthcoin oracles will not work. There is an attack that costs very little.
Bribe the oracle participants to lie. Commit to paying them dependent on the attack failing.
They will all lie for you, and you don't have to pay any of them.

Off Topic / consensus method even cheaper than POW
« on: February 01, 2016, 03:24:42 pm »
I am a big fan of this essay:

It helped me realize how expensive it is to lock money into bonds. This essay makes it obvious that the Casper POS being designed for ethereum will be more expensive compared to POW.

I have invented another consensus method based on the lightning network. It is more affordable than any other method, by far.

I need help from the community to make this document more readable.

General / truthcoin yellow pages
« on: January 30, 2016, 09:40:58 pm »
I am trying to find a way to bootstrap Truthcoin into existence, to give the coins initial value.

How about a google-maps integrated website, and we use Truthcoin oracle to ask about bus routes and what businesses operate at each address.

Business owners can propose their store as a bet, and pay money to fund the oracle.

I wrote about it here:

Off Topic / truthcoin and the end of the nation state
« on: December 31, 2015, 01:51:37 pm »
We wont pay taxes much longer.

I know several dozen people who will honestly tell me whether they filed taxes, and facts about how they filed in the last few years.
With this information, I could train an oracle to report on facts about arbitrary people's taxes.
Once such an oracle exists, it becomes possible to offer a new type of insurance.
People who don't like taxes would buy this insurance. To continue getting coverage, they have to reduce how much taxes they pay.
If the IRS tries to punish them for refusing to pay enough, then the insurance will cover the cost.

Once we train an oracle to report on who the IRS is punishing, then this insurance can be 100% on the blockchain, There will be no central authority who could turn it off.
Anonymous traders will offer insurance coverage because they expect to make a profit.

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