tag:blogger.com,1999:blog-8764541874043694159.post5620818194956297589..comments2024-03-28T07:33:46.151+00:00Comments on Coppola Comment: Probability for geeksFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-8764541874043694159.post-48412239454017960902018-01-17T04:09:32.327+00:002018-01-17T04:09:32.327+00:00I think your description of the routing mechanism ...<br />I think your description of the routing mechanism is wrong. The network you describe would be considerably more sophisticated than the actual implementation.<br /><br />Currently there are two aspects to it - route discovery, and then the route definition. Route discovery is easy - there isn't any!<br /><br />Currently each node is required to hold a "map" of the entire network topology, this is built by every node on the network broadcasting its availability through the network - each node then also broadcasts its available channels and shares it public keys.<br /><br />With the network map available then the route itself can be predetermined by the originating node - either automagically, or manually - it'd be up to the software implementation.<br /><br />Once the route has been created by the original node it then wraps up the required data in an "onion" packet - with a layer for each node on the route. Each layer is encrypted (hence the sharing of public keys) so it can only be read by the relevant hop on the route. The unencrypyted data contains the information about the transaction and the address of the next hop - as the "onion" is unpeeled it makes its way through the network until it reaches the final node.<br /><br />This means that many of the issues you've describe here simply won't, or can't happen - issues like recursion can be ruled out as the route is predetermined. Basically, Murch is correct, but its due to a lack of sophistication, not a clever solution. The issues you describe are real, and haven't been solved.<br /><br />The big issue here is that this isn't at all scalable, holding a map and manually building a route from a few hundred nodes might be simple enough, but at the level of use they aspire to its simply not practical. I believe the aspiration is to implement automatic routing using something along the lines of BGP (Border Gateway Protocol), which is the protocol used to build routing information on the internet, but it seems a fair way off.<br /><br />If you know your network protocols then LN at the moment is basically NetBUEI, and they need TCP/IP. Anonymoushttps://www.blogger.com/profile/08318984043796290306noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-35654903274842131712018-01-17T03:31:06.662+00:002018-01-17T03:31:06.662+00:00This comment has been removed by the author.Anonymoushttps://www.blogger.com/profile/08318984043796290306noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-21519542947191399012018-01-12T14:20:00.236+00:002018-01-12T14:20:00.236+00:00Correct. Liquidity problems are only a sign that t...Correct. Liquidity problems are only a sign that the true problem, individual income, is much lower than it normally is, and individual income is pitifully and chronically scarce even under "good" economic times. The velocity of money is really just that, an indication of commercial liquidity. People and astonishingly even economists think its additional individual income because the classical story of it that depicts the hotelier taking $20 to the baker who takes the same $20 to the butcher, candlestick maker etc. However the description is fallacious because whatever money circulates back into the economy is BUSINESS REVENUE NOT INDIVIDUAL INCOME and business revenue must be expensed against all business costs until a relatively small percentage of it is finally distributed as individual income....and that not only is woefully inadequate it does not go up significantly even if "good" times are on. What? Does the entrepreneur immediately give everyone a raise just because his/her revenue went up 10%. Think again. The whole crypto thing is another rabbit hole distraction from the real problem which is the chronic and increasing scarcity of INDIVIDUAL INCOME.Anonymoushttps://www.blogger.com/profile/10115431758912669755noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-75753579652411790652018-01-12T14:17:41.541+00:002018-01-12T14:17:41.541+00:00Its amazing how the Bitcoin system consistently cr...Its amazing how the Bitcoin system consistently creates and generally throws up far more problems than it was ever intended to solve. <br /><br />All it originally was created for was as a system of micro-payments that eliminated the role of trusted 3rd parties to mediate disputes in order to supposedly reduce transaction fees. <br /><br />But it turned out that all the trusted 3rd parties entities and systems within the ecosystem of e-commerce (Amazon, Ebay, PayPal, customer product review systems etc) are absolutely vital to e-commerce functioning at all as they effectively help produce the trust within the system which allows it to operate in the first place without our having to endlessly research every individual on-line seller before making a purchase and for them to trust their customers in turn. <br /><br />I've been a heavy user of e-commerce since the mid 1990s and never had any problems using 3rd parties which I trust. I don't think banks or Visa themselves have ever really acted as mediators within such systems and I would suggest that Visa's costs largely come from running state of the art data centres with built in earthquake and hurricane protection, huge back up electricity supplies and complex anti-fraud and theft systems alert to actively protecting customer's funds from illegal or unusual transactions. For the few cents Visa charges for a transaction this seems a reasonable deal but I wouldn't complain if regulators found that banks were charging a premium on such services and forced them to make them cheaper. <br /><br />It makes one wonder if Nakomota ever used e-commerce at all when he dreamed up this insane problem creating 'solution'. Bitcoin was never fit for purpose from the word go and no programmer with any experience of true enterprise scale computing where transactions run into the trillions would ever have committed themselves or their organizations to such an inappropriate open, distributed physical and logical architecture. For disruptive and distributed, just say disorganized and generally irresponsible as no-one with the Bitcoin ecosystem even has the slightest clue as to how much power this monster is consuming. Bitcoin simply cannot scale to the kinds of global disruptive usage that have been claimed for BTC. I'm not even sure that global, finance and disruption are three words that you really want to see in the same sentence.Shadow of the Glasshttps://www.blogger.com/profile/07757685323929111861noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-45845224198033507882018-01-12T13:26:33.586+00:002018-01-12T13:26:33.586+00:00As legacy electronic banking is double entry, tran...As legacy electronic banking is double entry, transactions across the central bank settle instantaneously due to simultaneous posting. So do transfers within the same bank. <br /><br />I don't really buy the argument that liquidity problems only arise in a long-term credit system. Lightning payment routes depend wholly on people being willing to allow their funds to be used to settle payments about which they know nothing. If the system allowed people to refuse, liquidity would dry up. Lightning devs seem to think they can solve this problem by denying people the right to refuse to settle other people's payments. But even with coercion, it is possible that for some payments there could simply be no route, if people kept payment channel funds at the bare minimum. I'd call that a liquidity problem, personally. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-10523671865194572862018-01-12T11:55:06.964+00:002018-01-12T11:55:06.964+00:00For a full-reserve payment system you just need li...For a full-reserve payment system you just need liquidity = payment volume within 1 settlement cycle, allowing a capacity slack multiple (so that you don't run at 100% on average).<br /><br />The faster the settlement cycle, the less liquidity is needed. Legacy banking was 1 day or more, probably getting better now. In crypto currency we're talking minutes, worst case say 1h for Bitcoin, and that's not written in stone. Legacy electronic banking (no blockchain needed) can technically probably go down to a few minutes easily.<br /><br />Take worldwide petty transactions volume for your settlement time, times capacity slack, times your market share, that's the liquidity requirement for your payment system. It's all spare change at the scale of the financial system.<br /><br />Fractional reserve and abundant liquidity is needed for a long term credit system with maturity transformation (whether that's at all useful is another debate) but certainly not for funding the flow of a few minutes' worth of coffee payments.cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-14983464114565269592018-01-12T11:41:35.123+00:002018-01-12T11:41:35.123+00:00The amount of credit risk in this system is massiv...The amount of credit risk in this system is massive. Trust-free, it isn't. I'm amazed people can't see that. <br /><br />Oh, and it turns out that they are now planning to introduce a Fat Controller. Identify and test payment paths up front, then automatically route payments via intermediate channels without the consent of the owners of the funds in those channels. This is a legal minefield, but they seem to think they can set up a nice smart contract that will make it impossible for people to object to their funds being used for payments about which they know nothing. Money launderers' paradise. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-4491966413061343102018-01-12T08:13:49.005+00:002018-01-12T08:13:49.005+00:00This comment has been removed by the author.Shadow of the Glasshttps://www.blogger.com/profile/07757685323929111861noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-30365277449067199372018-01-12T08:13:33.414+00:002018-01-12T08:13:33.414+00:00It seems too much for a system to expect one to wa...It seems too much for a system to expect one to waste time having to coerce one's friends into supporting a simple transaction such as buying a cup of coffee. Also what is the legal status if one becomes implicated in money laundering or other such crimes by 'innocently' helping out in the transaction chain?Shadow of the Glasshttps://www.blogger.com/profile/07757685323929111861noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-13785500634859379572018-01-10T17:15:08.680+00:002018-01-10T17:15:08.680+00:00Different game, but.....yes!Different game, but.....yes!Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-24321672429054788192018-01-10T17:14:19.195+00:002018-01-10T17:14:19.195+00:00I do think liquidity is an issue, for the reasons ...I do think liquidity is an issue, for the reasons that I gave. Pre-funding does not solve liquidity problems. Indeed it creates them. Fractional reserve banking exists because liquidity is too restricted in a full reserve system. <br /><br />But I agree the real problem is decentralisation. There is no way a fully decentralised network can possibly work - or even exist for long. Fyookball's point was essentially that the system would naturally tend to oligopoly, with payments routed via large, liquidity-rich hubs. My point is that this effectively recreates the existing system, with its weaknesses. Pre-funding does not solve this problem. <br /><br />I don't think it is possible to have total pre-funding (full reserve), full decentralisation and abundant liquidity. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-32634277147349595752018-01-10T07:37:53.485+00:002018-01-10T07:37:53.485+00:00I'm no big fan of Lightning, seems over compli...I'm no big fan of Lightning, seems over complicated compared to just having big blocks, but the alleged problems don't seem real.<br /><br />What is a channel? It's basically like a correspondent banking relationship, with a security. The details differ but we could reduce it to a 1-of-2 multisig address for simplicity: to open a channel Alice and Bob each send say 1 BTC each to that address (on-chain). 1-of-2 means that either of them can spend the 2 BTC. If one of them thinks the other party has defaulted, they can pay themselves the security, thereby destroying the channel (the other party monitors that the security remains unspent on chain).<br /><br />The routing problems (how to find the end point, how to avoid infinite loops, etc) are the same as internet routing, which is a more or less a solved problem (I'm told IP routing is not mathematically sound, but it works okay).<br /><br />How does a payment work for an intermediary? When you receive a payment request, if any of your correspondents knows a route to the end recipient you send it there, if not, you reply "not for me". In the former case, you forward the reply from your correspondent, either a "not for me" (or equivalently a time out) or the proof of payment (something signed by starbucks). If you see the proof of payment you credit your internal balance for your correspondent (and you have a credit upstream). If the balance with a correspondent gets close to a channel security (up or down) you settle it: if it's in your favour you pay the correspondent on-chain to take it back to 0, if it's owed to you, you check on-chain your correspondent has settled. It's where a channel can fail: if the channel is "full" (pending balance close to security) and you don't pay, the other side will claim the security and break the channel. It can also fail if the other side steals the security, which is why you need some trust to exist before establishing a channel. There's an incentive not to break the channel because you lose reputation and a perpetual stream of future lightning micro-fees.<br /><br />Liquidity is not really an issue because the problem we're trying to solve is payments where the on-chain fee is above a certain pain threshold, and the channels need not be much bigger than the minimum on-chain payment above the pain threshold (which defines how often you settle).<br /><br />Where there's a difficulty is when we want decentralisation: trust is probably a natural oligopoly in that you'll probably end up with everyone having channels to bitpay, so that most payments go punter->bitpay->vendor, or through a handful or bitpay-style operators.cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-41011670038009100532018-01-10T03:10:58.686+00:002018-01-10T03:10:58.686+00:00On the internet a packet are sent once (unless it ...On the internet a packet are sent once (unless it fails) down a single path selected out of multiple paths by routers and routing tabels. If one route fails it will be sent down another route.<br /><br />If all packets were sent everywhere the whole edifice would collapse in a second.<br /><br />The transaction costs for Bitcoin render it too expensive for small payments like a coffee, even if you buy at Starbucks. And unless you are prepared to pay a higher rate to have your transaction prioritised it could be sitting in the mempool for hours or even days until the miners decided to process it.<br /><br />Without a utility value, and to call Bitcoin a store of value is laughable, yep, Bitcoin is a bet for all the wannabee rich quick.RPhttps://www.blogger.com/profile/17695303458973909485noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-19615124208545981842018-01-09T23:37:00.179+00:002018-01-09T23:37:00.179+00:00This LN solution seems bonkers unless Starbucks is...This LN solution seems bonkers unless Starbucks is at Mornington Crescent. :-)polit2khttps://www.blogger.com/profile/08184279620350984044noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-51328452309794560122018-01-09T23:36:24.083+00:002018-01-09T23:36:24.083+00:00Dear Frances,
Regarding you challenging post, t...<br />Dear Frances,<br /> Regarding you challenging post, two points.<br />How does your lightening system differ from the original concept of the internet? Back in the eighties, with the "gopher", I was told that the system was explicitly designed (by the US military) as a bomb-proof system. A message message was sent out simultaneously on all available channels. When it found an open 'node' it was received, and a reply sent to stop further sends. If the node was the addressee the package was read. If not the addressee, it was retransmitted, again on all available routes, till a destination was found. If the message was too big for a 'packet', it was sent as multiple packets, which had to be stitched together at the destination, but not before. I suppose I was correctly informed.(?)<br /> We do not get emails twice, and the do arrive quite fast, so the present system does seem to work. But if that is not fast enough for the bitcoin people, then a refinement may be needed. I can imagine something like a brain (or what I suppose a brain to be like), so that pathways that are used ofter get faster and faster (get 'favoured status'). <br /><br />My second point is that I thought bitcoin was only for gamblers. Or buying black diamonds, or guns. Wrong?<br />--<br />Ian West, 9 Thenford road, Middleton Cheney, Banbury, OX17 2NBIan Westhttps://www.blogger.com/profile/11114198240241657138noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-54035486196901079662018-01-09T20:51:46.949+00:002018-01-09T20:51:46.949+00:00Ha! Lehman Brothers, that's a good and funny o...Ha! Lehman Brothers, that's a good and funny one! What we need to be very careful about is that we don't leave ourselves open to the final integration and coalescence of the dominating paradigm of Debt Only into the system which is what I believe is the real covert agenda behind bitcoin and crypto-currencies instead of better and more efficient monetary administration and distribution. <br /><br />wisdomicsblog.com<br /><br />Systems were made for Man, not Man for Systems.Anonymoushttps://www.blogger.com/profile/10115431758912669755noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-83074424025893168102018-01-09T19:57:12.941+00:002018-01-09T19:57:12.941+00:00Please contact me via email: edo.fazlinovic@gmail....Please contact me via email: edo.fazlinovic@gmail.com<br />About #XRB aka Raiblocks<br /><br />For a story you can ping @zackshapiro on twitter.<br />He is core dev of #XRB @raiblocks and verified twitter user and have real life profile avatar, not like me tho. :)Anonymoushttps://www.blogger.com/profile/07761781521575265592noreply@blogger.com