Let me muddle the water a little bit

After all, this is a forum for freedom.

We already know from history and theory that socialism is a dream. Now the question is, is decentralization also a dream?

[quote=“maka, post:1, topic:2531”]After all, this is a forum for freedom.

We already know from history and theory that socialism is a dream. Now the question is, is decentralization also a dream?[/quote]

Of course it is. Realistically speaking, it’s impossible to attain perfect decentralization. There will always be loci that attract a greater proportion of power and influence than areas of the network, so while practical decentralization is a reasonable expectation, it would be unrealistic to believe that the network will ever be entirely safe from meddling.

Now, with that out of the way, I believe that decentralization doesn’t need to be complete for the crypto-currency experiment to be valid. Significant decentralization is better than centralization, when it comes to protecting the individual nodes.

Very nice reply:-)

However, if that is the case, then 51% of whatever is just a matter of time, right? In the era of electronic networking, the time it takes probably will not be too long, let’s say a few years. For example, what prevents banks from appearing in a peercoin economy? They don’t even have to mint for you, they can just promise higher interest. And if banks appear, very likely there will be a LARGE one surpass 51% at some point.

I’m a hardcore peercoiner btw, as some of you already know. I actually am not so sure decentralization is a dream. Maybe it can be done. Our minds are decentralized, our DNA are decentralized (although there are twins:-). I can imagine in some sci-fi plot that if human being is to be mass produced or brains being connected one day then even these things will be put into doubt. But that will be long way to go and may never become reality if there is some mechanism harnessing this kind of human nature.

Maybe there is an extremely good solution, we just need to think really hard.

[quote=“Ben, post:2, topic:2531”][quote=“maka, post:1, topic:2531”]After all, this is a forum for freedom.

We already know from history and theory that socialism is a dream. Now the question is, is decentralization also a dream?[/quote]

Of course it is. Realistically speaking, it’s impossible to attain perfect decentralization. There will always be loci that attract a greater proportion of power and influence than areas of the network, so while practical decentralization is a reasonable expectation, it would be unrealistic to believe that the network will ever be entirely safe from meddling.

Now, with that out of the way, I believe that decentralization doesn’t need to be complete for the crypto-currency experiment to be valid. Significant decentralization is better than centralization, when it comes to protecting the individual nodes.[/quote]

However, if that is the case, then 51% of whatever is just a matter of time, right?

On the contrary. While I do believe that total decentralization is impossible to achieve, I expect that if there’s going to some form of “centralized attack” against the Peercoin network, the window for it to be viable is closing rapidly. Unless it’s being well hidden, the statistics show that the distribution of coins amongst holders is spreading, not contracting. Couple that with the community’s efforts to increase the number of active nodes that are minting, the network’s security is going to stay strong and get stronger over time.

If a bank or a state-actor attempts to buy 51% of the available stake, the cost to do so will not be a fixed cost, so there’s going to be a massive speculative increase in the price of available coins because of the demand.

Possible? Sure… anything is possible. Probable? Not at all.

They don’t have to buy the stake, they can just promise higher interest and a lot of people will save their peercoin into the banks, just like what they do in fiat economy. Because keeping a node will cost some efforts and require technology knowledge, if peercoin goes mainstream, the majority of the user base will try to use centralized service to keep their peercoin.

I see your point; on the surface stake pooling and/or proxy holders do represent a potential threat. Minting rewards would need to be such that consolidation would cost more to execute than the profit gained in the attempt.

I agree it is totally possible to collect 51% coins if financial institutes start to take cryptocurrency deposite. Even today one of the exchanges produces 25% of Peercoin blocks.

There are a few different themes running in this thread.

One theme is embodied in the question: Is decentralization possible? Well outside of the obvious flexibility of definitions, such as, is an ant colony centralized or distributed? Ant colonies work toward centralized goals, highest perhaps being survival and reproduction of the colony, with diverse sub goals and differentiation of individual members, workers, warriors, breeders, etc. and all are these basic simple individual organisms apparently independently working in a distributed manner, but together toward highly organized goals and achieving these goals with seemingly intelligent behaviour that is far more intelligent than any single simple distributed, decentralized ant could possibly do. The individual ant is not likely to be aware that it is even a member of a colony. Centralized or distributed? And the colonies are territorial, thus distributed, or is there a higher centralized view of orderliness in the colonies territorial distribution?

Clearly, if you look at nature and evolution of species, nature is highly decentralized with millions of widely distributed species competing and cooperating in coevolving complexity to what end? Surprise. Survival and reproduction of interacting vastly complicated species. Distributed? Or, serving a centralized overall purpose?

Another example the brain - centralized or decentralized? Obviously, parallel widely distributed neurons, but not completely decentralized, as there are super connected neurons and many problem specific organized areas which compete and cooperate to find higher orders of centralized control, and ultimately make you and me.

Yes decentralization is possible, in degree, it is just more complicated than the things humans have been able to design and create so far. This is the wonder of the great invention of the distributed blockchain. A decentralized, highly distributed public ledger in which all widely distributed blockchains are in exact agreement with each other on all accounts that are more than a short time back in history. The decentralization of Bitcoin great as it has been, in my opinion, is failing. Proof-of-Work, giant intellectual breakthrough that it was, is suffering the unintended consequence of the hardware hashing arms race, thus the critical component of verifying blocks (how the distributed blockchains are coordinated and advanced) has been increasingly centralized into fewer and fewer miners and even fewer mining pool managers. Proof-of-Work is inherently centralizing over time. Good try, better luck to the human designers, inventors and engineers on the next go around.

Version 2, Proof-of-Stake is far more decentralized in the long run. We still need to work out some security issues while validating newly created blocks and incentives for all to do such. But, I believe this is achievable.

It was mentioned earlier in the thread that “banks” could arise to centralize these processes. I believe that if the design for validating new blocks is done carefully then centralization will not happen. It was mentioned that banks could just offer a higher rate. My question to this conjecture would be: what would they pay the higher rate with? In a fractional reserve system banks can pay high interest because they are allowed to create currency from nothing. On a large scale, in the future, if they are paying interest in crypto they cannot do this. If they cannot make money from nothing, they cannot pay more than they make.

On 51% buy in: unlike PoW, Proof-of-Stake has perfectly aligned interests. The attacker becomes the owner. No owner that destroys its own value will survive for long. Proof-of-Stake systems ultimately will survive and reproduce in the best natural distributed fashion.

great great post!
i suggest to use it somehow in ppc’s advantage :wink:

Well written except this part -

Banks can still run on fractional reserve with crypto currencies, legally or illegally, depending on the law. For example a bank could issue bank notes (i.e. cash) backed by a cryptocurrency, and are allowed by the authority to print more notes than actual coins it has… just like it was with USD when it was “backed” by gold reserve.

Banks can earn fees from services and invest and in principal pay interest with fees and profit of investment. Fractional reserve isn’t needed.

you mean something like nxt is doing?
working with fees without inflation?
but i would like to see the banks trying to merge fiat and crypto economy :))

Interesting and informative reply:-)

First, ant colony most definitely is centralized. If you kill the queen, without a princess the colony will die off over time. Most complex systems are distributed, that doesn’t mean they are decentralized. I don’t know much about human brain, maybe it is more decentralized than people used to believe. I remember there is report that a brain with a specific area cut off reclaims the correspondent function through other areas. But the brain is obvious a highly specialized organ with different area responsible for different functions.

I like your idea to compare with natural world. Maybe we can get some inspirations there.

As for the ‘bank attack’:-), I can think of several scenarios.

Example 1, banks promise 1.5% interest per year. You save peercoins there and can retrieve peercoins with interest in the form of peercoin any time you want. Statistically the users will not retrieve their peercoins at the same time so the banks only need to keep a fraction of their possession in the form of peercoin. They can make investments with the rest peercoins. They gain, so they are able to pay you back with the 1.5% interest. Say they keep 80% of peercoins to mint and use the rest 20% to invest, if the bank is large enough, their minting power could surpass 51% of the whole network.

Example 2, banks promise 0.9% interest per year. Yeah, they don’t even have to beat you in terms of the interest. A lot of people are afraid of computer stuff. They don’t have the skill and patience to maintain a minting node. They also have great security concerns about their peercoins, like what if they are stolen, what if the computer is broken, what if I can’t find my wallet backups, etc. Now there is third party service help to store your peercoins there, even with a little less interest, many people may find themselves satisfied with the solution.

Example 3, the government is trying to kill peercoin. It is behind a bank which offer 1.5% interest. So instead of paying sky high price to buy up half of market cap, all it needs to do is to pay a 0.5% price of half the market cap without even stirring the market price.

Example 4, an exchange becomes very popular that many users send their peercoins there in the hope they can earn more.

I have an impression that money tends to attract money…

This post is not to discourage people, but rather to raise some concerns so we can make our beloved cryptocurrency even better.

[quote=“NewMoneyEra, post:8, topic:2531”]There are a few different themes running in this thread.

One theme is embodied in the question: Is decentralization possible? Well outside of the obvious flexibility of definitions, such as, is an ant colony centralized or distributed? Ant colonies work toward centralized goals, highest perhaps being survival and reproduction of the colony, with diverse sub goals and differentiation of individual members, workers, warriors, breeders, etc. and all are these basic simple individual organisms apparently independently working in a distributed manner, but together toward highly organized goals and achieving these goals with seemingly intelligent behaviour that is far more intelligent than any single simple distributed, decentralized ant could possibly do. The individual ant is not likely to be aware that it is even a member of a colony. Centralized or distributed? And the colonies are territorial, thus distributed, or is there a higher centralized view of orderliness in the colonies territorial distribution?

Clearly, if you look at nature and evolution of species, nature is highly decentralized with millions of widely distributed species competing and cooperating in coevolving complexity to what end? Surprise. Survival and reproduction of interacting vastly complicated species. Distributed? Or, serving a centralized overall purpose?

Another example the brain - centralized or decentralized? Obviously, parallel widely distributed neurons, but not completely decentralized, as there are super connected neurons and many problem specific organized areas which compete and cooperate to find higher orders of centralized control, and ultimately make you and me.

Yes decentralization is possible, in degree, it is just more complicated than the things humans have been able to design and create so far. This is the wonder of the great invention of the distributed blockchain. A decentralized, highly distributed public ledger in which all widely distributed blockchains are in exact agreement with each other on all accounts that are more than a short time back in history. The decentralization of Bitcoin great as it has been, in my opinion, is failing. Proof-of-Work, giant intellectual breakthrough that it was, is suffering the unintended consequence of the hardware hashing arms race, thus the critical component of verifying blocks (how the distributed blockchains are coordinated and advanced) has been increasingly centralized into fewer and fewer miners and even fewer mining pool managers. Proof-of-Work is inherently centralizing over time. Good try, better luck to the human designers, inventors and engineers on the next go around.

Version 2, Proof-of-Stake is far more decentralized in the long run. We still need to work out some security issues while validating newly created blocks and incentives for all to do such. But, I believe this is achievable.

It was mentioned earlier in the thread that “banks” could arise to centralize these processes. I believe that if the design for validating new blocks is done carefully then centralization will not happen. It was mentioned that banks could just offer a higher rate. My question to this conjecture would be: what would they pay the higher rate with? In a fractional reserve system banks can pay high interest because they are allowed to create currency from nothing. On a large scale, in the future, if they are paying interest in crypto they cannot do this. If they cannot make money from nothing, they cannot pay more than they make.

On 51% buy in: unlike PoW, Proof-of-Stake has perfectly aligned interests. The attacker becomes the owner. No owner that destroys its own value will survive for long. Proof-of-Stake systems ultimately will survive and reproduce in the best natural distributed fashion.[/quote]

So what can we do?

I agree it is totally possible to collect 51% coins if financial institutes start to take cryptocurrency deposite. Even today one of the exchanges produces 25% of Peercoin blocks.[/quote]

It is possible to work that way:-)

[quote=“seki, post:9, topic:2531”]great great post!
i suggest to use it somehow in ppc’s advantage ;)[/quote]

about the coin interest stuff check bter exchange. they are giving interest in any coin you keep there!
it is like a bank :smiley:
i don’t know if other exchanges are doing this but you see it can happen actually :stuck_out_tongue:
even in nxt that has no inflation!