Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li via bitcoin-dev]

Hi ZmnSCPxj,


On Mon, Jan 29, 2018 at 9:32 PM, ZmnSCPxj wrote:
>What ensures that a paper money with "10 Dollar" on it, is same as 10
coins each with "1 Dollar" on it?
>This is the principle of fungibility, and means I can exchange a paper
with "10 Dollar" on it for 10 coins with "1 Dollar" on it, because by
government fiat, such an exchange is valid for all cases.
>What ensures that btc.0 and btc.1 are indistinguishable from a human
perception?

This is a good question. Does anyone think about why the bitcoins generated
from different blocks have the same value? Some of them are still
distinguishable ( if they are not combined with others sent out).  Would
the bitcoins that can be traced back to the block where it was generated
be worth different from others ?   If one day Satoshi released
his/her/their bitcoins  , would the bitcoins from the first several blocks
mined by Satoshi be worth more?

I think for fungibility, it is not like either it has fungibility or it has
no fungibility. There should be a value of fungibility (e.g. from 0 to 1)
that can be measured or evaluated.

Chaofan
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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li via bitcoin-dev]

The human perception of difference will be eliminated.
Will your bank tell you whether your balance means coins or paper money?
If wallets and exchanges only show the total amount of btc rather than
btc.0 and btc.1, there is no human perception difference.

Also note that one valid address is automatically valid on the other chain,
which means you can send money through any one chain. As long as one has
the private key, he/she can get the money anyway. So there is no difference
between number of merchants. The merchant ‘s address is valid on both
chains.

The exchange cost would be trivial. People don’t need to exchange two same
thing.

Chaofan



On Mon, Jan 22, 2018 at 10:57 PM Eric Voskuil  wrote:

> On 01/22/2018 04:38 PM, Chaofan Li via bitcoin-dev wrote:
> > Miners are most likely to be  equally distributed between the two almost
> > same chains.
>
> This is irrelevant as miners don't determine the utility of a money,
> they anticipate it. However you don't have to accept this to recognize
> the error of the argument below...
>
> > If one chain is faster, according to the difficulty adjustment scheme,
> > it will become more difficult to mine.
>
> Mining difficulty controls the block period, not miner return on capital.
>
> > The two chain should have similar chain generation rates with similar
> > difficulty and similar length.
>
> This is the consequence of the presumed common regulation of the block
> period. It matters not how useful are either of the monies.
>
> > or the miners will be attracted to the chain easier to mine,
> > and more miners will make the chain generation rate increase and then,
> > after difficulty adjustment, harder to mine.
>
> You are conflating difficulty with profitability. These are not the same
> thing. A chain can be more difficult and less profitable and the
> reverse. Profitability is controlled by competition, as it is in all
> markets. Competition is controlled by the cost of capital, which is in
> turn controlled by time preference. Mining seeks the same level of
> profitability for any coin, regardless of how difficultly. This applies
> to all industry - difficulty does not regulate profit, it's just a cost.
>
> > Equilibrium will be achieved.> All the above are based on one
> assumption: the two chains have the same
> > value initially or miners believe they will  have  the same value
> finally.
>
> Actually the opposite is the case. Even if we could start at a point of
> perfect equality, the smallest change in the number of merchants or
> human perception of the money (as examples), would lead one to be
> slightly better. All things being equal that alone would lead to
> elimination of one money in favor of the other.
>
> One money is inherently better than two, as there is an exchange cost
> between them. In the absence of exchange controls the better money gets
> used, and in this case that can simply be the result of a slightly
> larger network (or perception of it).
>
> e
>
>
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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal (Chaofan Li)

[Chaofan Li via bitcoin-dev]

Miners are most likely to be  equally distributed between the two almost
same chains.
If one chain is faster, according to the difficulty adjustment scheme, it
will become more difficult to mine.
The two chain should have similar chain generation rates with similar
difficulty and similar length.
or the miners will be attracted to the chain easier to mine,
and more miners will make the chain generation rate increase and then,
after difficulty adjustment, harder to mine.
Equilibrium will be achieved.

All the above are based on one assumption: the two chains have the same
value initially or miners believe they will  have  the same value finally.
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Re: [bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal

[Chaofan Li via bitcoin-dev]

Hi ZmnSCPxj

I dont think they need to be ENFORCED to be worth the same.
If the two chains’ algorithms are the same , except some identifiers (eg.
btc.0 btc.1）, they have no reason to have different value. If so, the
market will adjust the value.

Also, the total supply can be the same. The amount in blockchains  is just
some numbers. The  wallet can display correct amount, according to the
identifiers.

The voluntary split is also backward compatible with old version
transactions, they can be treated as tx for both chains and included in
both chains later. For new version Tx after fork, some identifiers must be
added , to mark the tx is for that chain only. The miners need to choose
one chain to mine.

After several voluntary splits , the Blockchain basically become a
blocktree, new blocks are added to the leaves(eg. btc.00 btc.01 btc.10
btc.11 ), providing even more capacity.

Chaofan


On Mon, Jan 22, 2018 at 5:13 AM ZmnSCPxj  wrote:

> Good morning Chaofan Li,
>
> What enforces that bitcoin A is worth the same as bitcoin B?  Or are they
> allowed to eventually diverge in price?  If they diverge in price, how is
> that different from the current situation with Bitcoin, BCash, Bitcoin
> Gold, Bitcoin Hardfork-of-the-week, and so on?
>
> Regards,
> ZmnSCPxj
>
>
> Sent with ProtonMail <https://protonmail.com> Secure Email.
>
>  Original Message --------
> On January 17, 2018 3:55 PM, Chaofan Li via bitcoin-dev <
> bitcoin-dev@lists.linuxfoundation.org> wrote:
>
>
>
> Here I propose a simple method to solve the scalability issue of
> blockchain.
> It is more like a financial trick rather than a technical solution.
>
> The technical part is very simple:
> Split ( hard fork ) the blockchain into two or more blockchains (e.g. two
> blockchain A and B), voluntarily.
> The two blockchains are the same except for some identifiers to
> distinguish the two blockchains.
> The coins on one blockchains cannot be sent to the other one or interfered
> by the other blockchain (  considering so many hard forks in the last year,
> the replay protection should work in this situation)
> Everyone get double bitcoins. Each has half  value of original one
> bitcoin.
> Then, we have two almost same blockchains and the capacity of the original
> blockchain is doubled theoretically.
> When sending coin, the wallet should select one blockchain randomly and
> try to send through only  one blockchain (If there is enough bitcoins)
> I think it is a  possible solution, if the community realize  no
> previously owned asset value  is lost.
>
> The method is inspired by the stock split
> <https://en.wikipedia.org/wiki/Stock_split>.
> When a stock share is split, for example into two shares, the price halves.
> The market capitalization remains the same.
> There is no dilution of every shareholders' total assets.
>
> The bitcoin often emphasizes that the total coin supply should not be
> changed.
> If the total supply increases, the value of a single coin will be diluted.
> That is true.
> However, the bad part of inflation of fiat money is not  diluted value of
> every unit of fiat money caused by total supply increase.
> The problem is the increased supply is not delivered to everyone
> proportional to their previously owned money.
> The increased supply is released through debt expansion.
> The people that can borrow more money with low interest ratio (during QE,
> it was nearly 0) can invest  and get profit.
> Or they don't even need to pay back the debt. The debt is left to
> government, which might never pay back the debt, and some  get more money
> from government.
> Others' money are diluted.
>
> With voluntary split of bitcoin, dilution of anyone's bitcoin assets won't
> happen.
>
>
>
>
>
>
>
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[bitcoin-dev] Blockchain Voluntary Fork (Split) Proposal

[Chaofan Li via bitcoin-dev]

Here I propose a simple method to solve the scalability issue of blockchain.
It is more like a financial trick rather than a technical solution.

The technical part is very simple:
Split ( hard fork ) the blockchain into two or more blockchains (e.g. two
blockchain A and B), voluntarily.
The two blockchains are the same except for some identifiers to distinguish
the two blockchains.
The coins on one blockchains cannot be sent to the other one or interfered
by the other blockchain (  considering so many hard forks in the last year,
the replay protection should work in this situation)
Everyone get double bitcoins. Each has half  value of original one bitcoin.
Then, we have two almost same blockchains and the capacity of the original
blockchain is doubled theoretically.
When sending coin, the wallet should select one blockchain randomly and try
to send through only  one blockchain (If there is enough bitcoins)
I think it is a  possible solution, if the community realize  no previously
owned asset value  is lost.

The method is inspired by the stock split
.
When a stock share is split, for example into two shares, the price halves.
The market capitalization remains the same.
There is no dilution of every shareholders' total assets.

The bitcoin often emphasizes that the total coin supply should not be
changed.
If the total supply increases, the value of a single coin will be diluted.
That is true.
However, the bad part of inflation of fiat money is not  diluted value of
every unit of fiat money caused by total supply increase.
The problem is the increased supply is not delivered to everyone
proportional to their previously owned money.
The increased supply is released through debt expansion.
The people that can borrow more money with low interest ratio (during QE,
it was nearly 0) can invest  and get profit.
Or they don't even need to pay back the debt. The debt is left to
government, which might never pay back the debt, and some  get more money
from government.
Others' money are diluted.

With voluntary split of bitcoin, dilution of anyone's bitcoin assets won't
happen.
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